Netflix & Kill

How CEO Reed Hastings disrupted the subscription-entertainment industry and built a $170-plus billion empire.

- Hugh Garvey

By many accounts, Reed Hastings had lost his mind. The year was 2011, and the Netflix co-founder and CEO had just made a decision that cost him 8,00,000 subscribers in one quarter. The company’s stock price plummeted 35 percent. The market was punishing Hastings’ company for raising its subscription prices 60 percent, and splitting the streaming and DVD-delivery service into two separate subscriptions. The Huffington Post called the move “monumentally stupid,” and a headline on Mashable compared it to the ‘New Coke’ debacle.

This was what anyone would call, in polite terms, a teachable moment, and Reed Hastings was the rare leader who possessed the intelligence and humility to be taught. Within a month he had reversed the decision to split the service in two, but he kept the price hike. It turned out to be the right move. At the time, Netflix stock was trading at $77.50 a share. Today, it’s worth $400.