That Will Never Work: The Birth of Netflix and the Amazing Life of an Idea by Marc Randolph
Story of the early days of Netflix, from its founding in 1997 until its IPO in 2002. The author is a serial entrepreneur: after his previous company got acquired, he starts brainstorming new business ideas with Reed Hastings, the CEO of the company who acquired him. Together with a few employees from his previous company, they start Netflix, with the idea of sending DVDs to viewers by mail.
The day of launch, they immediately got a surge of traffic, crashing all the servers. However, despite a large volume of sales, customers were only buying DVDs from their web store and were unwilling to rent them. It took a while before they realized that a subscription model (charging per month) was better than charging per rental. After the dot-com bubble forced the company to layoff a lot of its employees, Netflix became profitable and had its IPO in 2002. Soon after, the author quit the company he founded because it was too big for him and he preferred working in startups.
Different chapters discussed various aspects of the early days of the startup: fundraising, networking in trade shows; negotiating agreements with data providers and hardware manufacturers; negotiating potential acquisitions by Amazon and Blockbuster (both of which fell through), etc. In the epilogue, he advises prospective startup founders to start experimenting in the real world, at least on a small scale; expect to fail a lot, and the end result will likely be quite different from the initial vision.
One interesting aspect was how different founding a startup in the 90s was from how it is today. Back then there was no cloud computing, so they had to raise funding and build everything from scratch; they built out a fully functional product and launched with a huge press release and immediately got a lot of traffic, which seems rare nowadays, where many startups launch with a barely functional product and take many iterations to get much user attention.