No Rules Rules summary

Hastings’s first eureka moment sprang from one of his lowest points as a CEO.

Netflix launched in 1998 and was doing pretty well. After three years, it had 400,000 subscribers. But while Hastings had learned some lessons from his previous company about running a start-up, he freely admits that Netflix wasn’t a great place to work.

When co-author and INSEAD professor Erin Meyer began consulting for Netflix, she was in for a nasty shock. Her very first job with Netflix was to deliver a keynote conference address to 400 managers from around the world. Halfway through, she divided the attendees into discussion groups.

As she observed, one woman beckoned her over and told her, in front of everyone, that the way Meyer was fielding answers from the international audience was undermining her message about cultural diversity. Meyer had been choosing people who raised their hands to answer her questions, which had an unintended result: only Americans got a chance to answer. She hadn’t taken into account that hand-raising might not be as common in other countries.

When employees feel comfortable speaking up when things don’t make sense, amazing things happen.

For example, in 2003, an employee pointed out that the company wasn’t tracking how many hours or days people worked, so why should it track how many days they took off? Good point, thought Hastings. So he abolished the official vacation policy. Since then, Netflix guidance regarding vacations has been: Take some!

The end of 2018 was pretty great for Netflix. The Netflix-produced film Roma had been released and hailed as a “masterpiece” by the New York Times. Bird Box had also been released, and within a week over 45 million households with Netflix accounts had watched it, the best first week ever for a Netflix original.

When Hastings called up Ted Sarandos, Netflix’s Chief Content Officer, to congratulate him, Sarandos said, “We’ve all picked well!” Hastings picked Sarandos, who then picked the best people, who then picked those excellent films to produce. As we learned earlier, this is what talent density is all about.

Adam Del Deo, the Netflix employee in charge of original documentary programming, was at the Sundance Film Festival in 2017 when he saw something so great it made him feel sick. The sports documentary Icarus was one of the greatest films he’d ever seen, and he wanted to buy it for Netflix. He felt sick because he would have to pay an incredible, unprecedented amount of money to obtain the film – as much as $4 million. Would his boss, Chief Content Officer Ted Sarandos, ever sign off on such a thing?

But when Del Deo asked his boss, Sarandos didn’t say yes or no. Instead, he set broad context and encouraged Del Deo to make the decision himself. “You’re the doc guy, not me,” Sarandos said. “We pay you to make those decisions. But ask yourself if it’s the one. Is this going to be a massive hit?”