Reed Hastings, Chairman and Co-Founder of Netflix

[Music] Reed welcome back to Stanford excited we are so excited to have you here at the gsv actually I heard a rumor that when you were here pursuing your Masters in computer science you also tried to enroll at the gsv what LLY engineer you know yeah I was uh uh got a degree in computer science and I was fascinated by what you guys have here and at the time you had an ability to cross list Occasionally U but I did not make the cut um and so I've always had this aspirational relationship where I want

to come back and now I kind of belong halfway so well Reed it turns out the jok's on us because people at the GSB really just want to be in a Netflix show Ah that's true no one no one could tell them that I was going to be a media executive exactly that was easy to say yeah but I mean it I mean so much so we actually put together our very own Version of one of Netflix's biggest hits can we show you the preview let's let's here all right let's do it there's a pitch

all at a school where the only achievement greater than becoming a Founder is joining a VC that funds Founders a secret society of free market fanatics triangle has devised the ultimate competition that will push them to their limits get [Music] Downstairs eight NBAs are chosen to face off against each other in a series of challenges student two is the market big enough I didn't do the reading but only one can walk away with the grand prize a big Tech offer in a cold job market from trauma dumping I I still don't have a [Music] job

to calendar blocking 5 minutes enough to establish an authentic relationship via coffee chat only one Can reach the view from the top welcome to the Stanford game which of you will change lives change organizations and change the world okay Bravo GSB you took the indictment of inequality and you turned it into your own Anthem I that is brilliant oh my gosh well Reed thank you for indulging us that was a lot of fun to watch and to watch you watch um but in all seriousness Reed it has been so incredibly inspiring to see what you've

Built with Netflix and I know that's only part of your story so let's start a little bit earlier when did you know you wanted to be an entrepreneur uh probably Junior High School um selling cinnamon sticks could take toothpicks and soak them in cinnamon oil and sell them for a nickel a piece um so it was those kinds of experiences that uh made me want to create things um and only later did I realize you have to sell them um but uh That was early on okay was that a unique experience or did that kind

of happen throughout your early life um no I would say I was always uh doing little projects uh most of which ended up being non-commercial uh but as an example uh when I was here at Stanford so this is uh mid 80s and back then you had a keyboard and a computer uh and a mouse and you'd have to take your hand off this to use the terminal and like it Slows you down a lot doing this and I realized oh my God there's a big Market in a foot Mouse and you could kind of

do this and control it and I almost dropped out of school to pursue do the foot Mouse um and I got a mechanical engineering student here to help design it and everything and I was totally committed this thing was going to be a monster but it it turns out that a your leg cramps and B it's very dirty environment and so after like two days It's gross as heck oh yeah um and it was a terrible idea but I was equally committed to that terrible idea as I was to Netflix okay so you know always

ahead Discerning not so much okay that's sounds painful but but ultimately fruitful for in in other ways um so you started before we get to Netflix you started your first company pure software yep what were some of the early lessons you learned from that experience that helped prepare you to start NetFlix um so uh pure softare was a technical company we did C and C++ programming tools um and I would say I only had one gear which is working hard so I had no sophistication and so anytime things got hard I would just try to

work harder um and and so I was programming all night trying to be CEO during the day looked and smelled like and um you know but I didn't know any way other than that to cope with the stress um and it was the products were Excellent and the sales doubled every year but we replace the head of sales every year for five years in a row for an enterprise software company this like a disaster we could have been so much more um so but I honestly just didn't know anything about business or organizations and so

I would concentrate on product and trying to do that and ultimately you know we bought a bunch of companies Morgan Stanley took us public like it you know in the day of 1995 it Was a big success but it could have been so much more uh and so I I learned a ton of lessons of like doing things wrong and again fortunately we had amazing enough products that the company continued to grow despite the internal chaos uh but uh the lessons I learned is why we spent so much time in culture on Netflix wanting to

be different you know than the first company we will get to culture don't don't you worry about that but um you so I guess let's transition to how Netflix came to be not necessarily the full story but some of the things that happened early on um so Netflix starts in 1997 and from the beginning you were hyper focused on the customer how did you know or or figure out you know what your customer actually wanted especially as their needs evolved well in in 97 Amazon was off and running and it was clear that they were

likely to dominate buying and selling of things um but Rental was a two-way Logistics because you had to return the in those days the VHS cassette um and so I was looking at this because uh pure software had been acquired so I had some money and some time so looking for set of ideas um and then a friend told me about DVD uh which was very small and you could mail it for one stamp and so that turned into our digital distribution network uh because it's five gigabytes of data and you could mail it overnight

Um and so it was really built around the idea of streaming eventually you know we knew the internet was getting faster and faster um but it was going to take some time and DVD was a temporary device which is why we named the company Netflix you know internet movies rather than DVD by mail.com you know which was like the pets.com it was the thing of that day um so always thinking about eventually uh getting to streaming sure and there was a unique moment where um You had some challenges in in 2011 when you thought about

the decision point between DVDs and streaming um so for for those who don't know you made the decision to separate DVD and streaming services and there was some push back um at the time your stock dropped pretty significantly um customers canceled their subscriptions because prices doubled so what did you learn from that decision so to set some context we uh were DVD by mail business in 2002 we Went public um Blockbuster attacked us as they should they were a little bit late but we really were executing well uh they eventually declared bankruptcy uh first chapter

nine and then wonderfully chapter 7 uh and that was um in 2009 um so we're like full of steam energy we're getting into streaming we're opening up new countries um we're like running ahead and we realized oh my God this DVD thing Is going to hold us back um we had been thinking about streaming for 15 years okay since starting in '97 this was our moment and we were going to be the one if you if you think of all management teams how many are too cautious at preserving the current business and how many are

too aggressive at pushing into the new business obviously everyone's too conservative so we realized we had to be so aggressive that it should make the hair on the back of our neck stand Up okay because human nature is conservative and most very good men management teams were too conservative so the most radical thing we could think of was to dump the DVD business and so and it was 80% of our consumption Because the Internet was so slow back then and we didn't have streaming to the television you know a number of limiters um but we

came up with this idea and we knew it was going to be difficult because um you know we cared about the Customers we could see that but we thought it was still the right thing to do um and now there's a good test case where a management team too aggressive about leaning into the future um and that was us so we we leaned in and you're right that most customers did not care about streaming did not have streaming couldn't watch it on the television and so it was just too early yeah um and ultimately the

idea basically worked which is Netflix became Streaming and DVD shrunk year by year by year um but we overcorrected and we were overconfident you know we had had all these battles and various things and naysayers and so when you've had a lot of naysayers and then you were proven right then the next round of naysaying comes in and you're like ah whatever we've seen this before and this time it was too much uh and it and it was traumatic uh it felt roughly like you're driving and you get Distracted reading a text and you crash

and your kid in the back seats in the hospital like the kid being the company it wasn't dead but uh it was severely wounded our stock we was down 75% we had our first big layoffs uh it was everything that was horrible guilt uh that should be um of again trying to learn the lessons that most management teams are too conservative so therefore we knew we had to push it to The edge so it sounds like something you might have done differently is really understanding the balance of when to be a little bit more conservative

versus not you know you'd love to say you could do everything right but I would say say the the same aggressiveness that made us take on Blockbuster figure out these things got us in streaming got us in original content that aggressiveness part and parcel of it was you're going to go too hard some of the time so you Just want to make sure you have a balance sheet and a board of directors that can handle that um so I don't think it's a fair sure I wish we could have not made that mistake think of

it like then we would have won the Olympics and stuck The Landing okay and we didn't stick The Landing okay U but we got through it and we won and so one of the big things we had to do is not overcorrect like you know the company and employees were and the shareholders Were traumatized um so we did have to go a little bit more cautious in the short term uh but pretty quickly we got back to you know this is our play to run and we've got to run it um and I think that

was the right strategy even though it means that occasionally you're going to make an egregious mistake because you're moving so fast yeah that makes a lot of sense and I mean it's clear that it all worked out okay U thankfully looking at where we are now many of us here aspire To lead and build companies like Netflix and one of the most differentiated elements of Netflix is its culture to your earlier Point um very early on you put together a deck for your entire company called freedom and responsibility and it caught a lot of attention

how did you come up with this unique culture you know um I think everyone in this room is pretty dedicated to Excellence and to creating an amazing Set of teammates uh to then go build some business so I don't think it really wasn't uncommon it's that we were early in labeling it and saying team not family okay and saying no specifically you should organize around this idea that everyone has to fight for their job every year like it is in professional sports and in professional sports if you're going to win the Stanley Cup it's because

you've Assembled the most amazing group of hockey players that have ever been together and viewing our task in building organizations like a championship team and for 10,000 years the primary organizational unit of society has been family okay all the way through Kings and companies and family companies so so many assumptions we have are built around this 10,000 years of human history where organ ations and families are the same thing okay and It's only this patina of Corporations and that's a thin layer over that that's different and so we were the first ones to just lay

it out there to say adequate performance gets a generous severance package so 15 years ago that was a shocking statement to make okay and so then I think the deck really and and by which again is true in professional sports right you know so um we were just the first ones to say it up front uh that I think made the made the Difference so when you initially said it up front it sounds like you did get a lot of push back what were what were some of the initial reactions I mean that people had

when when you first put this out there I mean we humans value things in our kids so for example we value loyalty and you would hate to see like your kids be disloyal okay and it's like a really human value and so what does it mean if someone's working hard but isn't very effective what does it Mean to push them out you know is that a immoral or a disloyal act so those were some of the tensions and we had to get people to see us not judge us like a family in a family you

look after your siblings your parents your kids no matter what they go to jail they do it whatever right you're with them okay and then we have to recognize that's one sphere that's very important to us of relationship then there's another sphere which is the workplace and many Workplaces are family businesses and that's fine sometimes they're as dysfunctional as Ozark um you know and then it's like oh okay but uh again there's nothing wrong with it we just want to be a different kind of organization one whose primary value was excellence and we wanted to

be honest and fair and inclusive and thoughtful about how that got applied um but it was really around performance uh and again I think a lot Of firms were already doing this uh we were just Direct in stating it yes and one of the examples of this direct um culture is the keeper test so you have this keeper test that managers use why don't you tell us a little bit about it um it's pretty straightforward which is uh we had managers think through would they fight to keep someone if that employee of theirs was thinking

of leaving and if they didn't pass this keeper test we suggested giving them a Severance package now and trying to draw a new card of someone that you really would fight to keep so ultimately it's a manager's judgment we didn't have them like score people or rank people it's a manager's judgment on would they fight to keep this person because of what they added to the company okay so I understand that there's this keeper test and that adequate performance gets a great severance package but firing someone in A respectful way can be really hard so

I would love to just kind of Workshop this with you quickly if we can if I were the person you needed to let go can you demonstrate for the audience how you'd fire me can I hire you instead I uh let's think um okay what uh what job do you have some I am the vice president of content strategy okay I'll do a little bit shorter version for uh time but um Katie uh I Can see that you're really working hard and trying to make a big difference here uh if I'm really honest with you

if you uh quit to go somewhere else I wouldn't try to change your mind and the reason that that is is because of this type of thing the people that you've been hiring it give you you know maybe a minute of detail so enough that you can feel like there's something there but not like a club Beating you up we'll call that a minute um and I say you know this is really uh hard for you Katie I understand that um but my commitment to the you know the company is that if I wouldn't go

to change your mind um then I have to give you a severance package and the severance package is this and you know it's it's relatively generous uh typically like 9 months of compensation these days so it's a lot wow um and uh you know if you think about person X or Y um that are no longer you know at Netflix we all have great relationships with them and it's kind of like a professional sports team where it really sucks to get cut from the team but it's not an ethical judgment or a moral judgment or

a judgment of you as a person okay well thank you okay so that at least in my theory what we're trying to do is get away from you suck Yeah Okay and like you're a great person um in this particular situation um I'm being honest as opposed to being hurtful so one of the hardest things is to get managers to do the job which is why we ended up doing big Severance packages the severance package is a bribe to the manager to get the job done because manag managers almost by definition like people they're good

people people so they really don't like firing people but if there's a generous severance package Then it's not so bad and certainly that helps too on the person being let go um but again the subtle part is It's tricky in your firm to get managers to apply the keeper test yeah it felt very imp pae but also direct um and I could imagine how the severance package really helped with that do you have a perspective on you know a lot of people have said it should always be very concise straight to the point do you

have a perspective on like in general How long these conversations should typically last or if there are other things you may avoid in conversations like these um it depends on how much of a surprise it is and almost always it is a surprise because the person will have some protective layer where the manager thinks they've given lots of hints and you know uh but the person is still surprised and then it takes it's probably 5 or 10 minutes and then it's time to let them absorb for a little While and then they'll come back the

next day with questions about okay if I had done this contract versus this or if I had done that you know they're sort of trying to understand it more but I would say for the initial communication uh pretty short it is good okay very helpful well thank you so much for that demonstration Reed I think um just even looking at today's climate layoffs in Tech are on the rise and so it's really important for us as Future Leaders to Know both how to hire well and also how to fire well so really appreciate that demonstration

let's give a round of applause it's it's also great to tell stories of people who were let go and then change the industry uh Mike Bloomberg is probably one of the best known of that who got pushed out of solmer brothers and then formed um Bloomberg so right in the same industry and you know so uh the more it socialized with all of you as if it was In sports where it's not as much of a life kind of thing um it's a performance kind of thing at that situation uh the better okay very helpful

and you actually have released your book on culture no rules rules Netflix and the culture of reinvention now that you've kind of had a look back at what this culture has been and you've continued to have it happen in Netflix you've talked a lot about what's worked is there anything that Didn't I don't think we talked enough about love I think that great teams the players love each other uh and are warm and embracing and so it came across uh as very narrow and judgmental as opposed to uh kind of very loving and caring and

so um if I were to find a shorthand that I think would work even better it would be big-hearted Champions who pick up the trash so the Big Hearted is cu we want to be around people who are generous of Spirit and have a big heart and they do all kinds of things for people all the time and a champion is someone who's going to do the discipline to become great at their field and demands Excellence okay someone who doesn't just want to pass through life but wants to achieve something and then the who picks

up the trash is is the whole thing about responsibility so in your house you pick up the trash uh in a public restroom you know in a city you don't and where do You want to define the workplace and we want to be in a workplace where you feel a strong sense of responsibility and so of course narrowly you pick up a piece of trash but more broadly you do the right thing even when no one's looking that you're the kind of person who does that um and that shifts the expectations so again if I

were starting from scratch it would be big-hearted Champions who pick up the trash and I think if you can get people who aspire to that uh you'll Be able to build a very strong and resilient organization it sounds like there's just so much power in in working with people who have those same values and who are willing to do what others W essentially that's right yeah um well Reed I know we only scratched the surfish on culture there is so much more we could have gotten to but I do want to talk a little bit

about the future so so as a global company the stories that Netflix chooses To share will have an impact everywhere how do you think about that responsibility when deciding which stories to tell our primary responsibility is to our customers to entertain them I mean life for you guys life is great but as you well know uh you know most people work because they need the money um and they get done with work and they kind of just want to unwind and relax okay and our job is to provide the whole World entertainment and we take

that responsibility very seriously and that's the biggest Northstar we have and you know about uh four years ago we had a big controversy with Dave Chappel um and some of his humor uh uh feels um very threatening to trans people and from their point of view he's a evil force um to overs simpli uh and from his point of view he's a truth teller you know poking fun and things which is what comedians do um and That was very splitting in the company because we had not yet really clarified um our priorities but through that

exercise uh of the various protests um we solidified that we need to build employees who are proud that we entertain very effectively uh and not to make them think that every show was a reflection of our values um and uh so you know that was tumultuous at the time but we got to a Good place uh where we can really focus on incredible entertainment um as the uh main aspect of what we do and not about does this reflect our values so for example in a show there might be a lot of Gunplay or a

lot of n-word or a lot of other things that doesn't mean that those things cuz on the show are okay in the office okay shows um and and films are often explorations of fantasies both positive and negative in all kinds of ways and People are able to separate them you know I remember when you know my kids were growing up and they were playing the firstperson shooter video games and I thought oh my God this is like you know ninth grade they're going to turn into killers and they're not and it's kind of amazing how

we humans are able to separate that intense fiction or fantasy uh from reality so when you all were in this tumultuous place it sounds like you got To this you recognize your values you recognize you know you as Netflix what your stance is how did you get to that a lot of long painful tearful uh we had um made a real point of recruiting trans employees and being trans friendly this is like 2015 to 2019 roughly um and we're proud of it and and we're amazing employees and they felt as a whole that we had

promised shangar LA and now we were U betraying them so There was an intense sense of betrayal uh amongst this group of employees and their allies um and and the other thing I think is that we had really built up allyship uh and that's an important aspect of being being a good Ally uh but what it can lead to is not thinking for yourself you know either it's a litmus test you're an ally with today it would be your Palestinian or Jewish friends um you know and if Again if you're required to be an ally

to one or the other of them uh it can force a lot of Divisions so I think we should have always set it up as people thinking fors and being able to tolerate dissent internally um but again we and the culture were going through a lot at that time uh and you know again I think we came out in a good place which is really focused on the entertainment value and you asked about the process of it each situation Is different and so I think you know it's a lot of discussion and dialogue um and

that was an important tool in it uh and really uh my successor uh I've got two successors Greg and Ted but Ted really LED in that discussion and he was really grounded in the artistic values and was so literate in places that artists had been suppressed uh and later uh you know to everyone's regret so another force that is shaping The stories we tell is ai ai you studied it it's very big now um maybe always has been some would say maybe not um but years ago when you were asked who is Netflix biggest competition

you famously joked that it was sleep now it's been a little bit different most notably other streaming services but just last week open AI launched their very first video model Sora is AI generated content and existential threat to your Business well AI will help us be more creative okay and so we'll be able to produce more shows uh using those tools so uh again it's authoring essentially accelerant if it means that Disney does a better job at us because they do better at AI than we do um then sure there would be a shift in

competitive strength um so we're super focused in the company about using AI in all these aggressive scenarios as as you would expect um to tell better stories um so Uh that's the kind of big evolution of it now in the long term to the degree that AI replaces humanity and then we're entertaining AIS instead of you you know there are some big changes sure okay but they're sort of beyond the scope of our corporate planning um and so we tend to use AI as just like a better Photoshop you know and um trying to create

uh movies especially prototyping we haven't used it really in final production at this point but it's pretty incredible at The prototyping level to be able to imagine the scenes do you see your yourself using it in the final production stage yeah absolutely and so it will uh all the low-level tasks will get transformed and in general whether this is the legal field or in the legal field first it's the par first it's search like Lexus Nexus and then it's the paral leals and then it's the firste attorneys and then the junior partners and eventually AI

coming for the senior Partners right so you know think of it as moving up the stack as it gets more sophisticated um and it's the same thing you know we we've had a lot of people who draw you know uh animation and you know that's one of the first areas that gets hit and then it moves up the stack in more and more creative areas uh as we and others can use those tools for better entertainment another Trend in media and entertainment right now is gaming gaming Is a $200 billion doll industry and is getting

more and more of consumer time other production companies have tried to enter the space and have failed so what bet is Netflix making on gaming and how do you think you'll win yeah um we started in film uh expanded to television now we're uh big in television big in film and uh we've got about three years in on our uh gaming efforts and we have to be the most creative gaming studio that produces Games that everyone is you know dying to play and interact with uh and we're getting little pockets of success in that um

but not yet you know something equivalent of uh the ground or something like that um so we're continuing to work on it um gaming like series and films you have to put 50 to 500 million in upfront to do an incredible production job and then you release it to a lot of people and then there's a community around it um so it's got very similar Attributes uh to film and television so you know it'll take us a couple years to build up that DNA of what type of creative choices how do we make those and

how do we win against uh pure gaming companies sure um but again in the same way in the old world there was film studios and Television Studios and they were distinct and for us you know it's all creativity I'm confident we'll be able to do that okay um the challenge that we do worry about is user generated Content so YouTube and Tik Tok so to the degree that you all and your kids eventually all are happy with YouTube and Tik Tok there's less time to watch Netflix um so uh it is entertainment it's incredibly addictive

you know our storytelling is more measured built up uh and it's a different Rhythm and again you know your taste and the next generation's taste if they shift towards uh user generated content you know that's a threat uh and what we have to Do is really uh lead on the professional content and continue to raise the bar on that so that part of your entertainment every month is Netflix whether it's films series or gaming uh and so that's why we're investing so much there yeah hearing you talk about this it's just so fascinating seeing how

much has changed since you first served as CEO of Netflix um you've served as CEO for over two decades and toward the end of that Journey Ted sendos joined you as your Co-ceo now it's Ted and Greg Peters in those roles fewer than 10 companies in the Fortune 500 have a co-ceo model so how did it work for you and what should we think about as we build our own models of leadership yeah I would say it's not a general technique that I'm out pitching um I would say if you've got two people that have

worked together for 18 years now uh it's a high performance technique um and then you know they work so well together and they Can leverage each other's strengths and um so uh but if I think of the next 100 Years of Netflix there may be only twice when it's a co- CEO model versus so it's not like we've discovered something magical and this is the way to go um it's a optimization for two very unique uh people who trust each other deeply and have complimentary skill sets so it's fantastic for us um but it's uh

like one recipe in the recipe book it's not the general uh model sure how do you I I will say that it's probably selection bi us but if you look in S&P over the last 50 years those companies with uh co-ceos uh considerably outperform all other companies but I think that's because only healthy companies dare do it yeah okay so again it's it's a selection bios more than it is a driver or there's no way to separate those sure how do you cultivate that trust relationship I'd imagine it's something similar with a co-founder Relationship like

how do you actually build that trust you know you have to earn it um you have to set a culture where people are very candid but also caring you know you don't want to be caned and cruel because it shuts down human interactions you want to be caned and caring um and so we spend a lot of time on um going through issues and uh you know may not be quite as intensive in learning some about your touchy fely Course um and the uh rate of Affairs that it generated um so it does seem to

have some uh tricky aspects uh so what we do is uh maybe similar but damp down a little bit or maybe we're older compared to when you guys when you take those things but uh it's um you you really do want to create a lot of intimacy at work you want people to really care for each other in some cases to love each other uh but not to have that accelerate learning and Trust uh Rather than have it uh become obsessive where you know your whole life is there sure so really really valuing that relationship

showing up with intimacy showing up with care it sounds like is is one way to build that trust y so something you care a lot about in addition to cultivating those relationships and culture is your philanthropic work um and one of the areas you've invested a lot in is um diversity equity and inclusion Recently we've sort of seen this big blowback on Dei so specifically big tech companies are cutting funding for Dei teams we've seen less investment in underrepresented Founders um it feels like just as underrepresented minorities and women were sort of starting to have

Headway we're now facing a blocker from your perspective what's going on and what do we do about it you know I think if if you look over the last 100 years of civil rights um There was a lot of people saying to Black Americans yeah we agree with your goals but wait you know you're going too fast this kind of thing and it's awfully irritating uh when you feel the the burden of discrimination and be told wait we're moving too fast that kind of thing um I do think that companies uh rushed into a post

George Floyd um into doing something because they genuinely cared um and there is some blowback on Dei for sure but I think the general Idea of inclusion and giving everybody a fair shot has been the aspirational side of America uh and frankly of capitalism and of Freedom uh and so it gets us all excited to work on achieving that dream which you know we know for most groups is not fully there um but there's a lot of commitment to making the meritocracy work um as opposed to abandoning the meritocracy which would be the the the

hard Edge um but I do think that not many Americans really understand Anti-blackness which is separate distinct and worse than most of the other uh exclusion classes and you guys are all capitalists so you would understand that morality often follows prophets um and so if you think of manifest destiny and this idea that European Americans should take over all of the Continental us because it was our destiny right this this whole philosophy grew because it empowered people to you know take over land um and what happened Is a Portuguese figured out sailing in the 1400s

and could get to Africa and to us and Brazil and they discovered a very rich source of profits which is trading in black bodies and capturing them and selling them and to do that you had to Brand them and you had to buy them and sell them and this was like morally difficult because they were clearly human beings so they invented this idea that black people were subhuman and because of that it was morally Acceptable to do slavery uh and so the shorthand is slavery was 400 years the reigning ethos because it was so profitable

to do and then yeah the Civil War and that's great but it doesn't like unwind the psychology um and so this idea of black inferiority is sadly deeply amhed in ways that are hard to tease apart of course in white people but sometimes in black people too um and this taxes everything that we do and for me the Cure is black excellence and really focusing on Amazing achievement and um you know those kinds of programs uh and so Kenya Baris a great Creator in La often says it's all about slavery and I used to get

kind of tired of constantly saying this and then I was oh it's true um so you know companies are I think leaning into this and trying to figure out what can we do uh to be more inclusive you know on every Dimension not just black white um but I do think That as a society if we can focus more on black Excellence we can rise out of this kind of crippling disease that that comes out of basically the for-profit aspect uh created a morality sure so what does it look like for us then as Future

Leaders to kind of cultivate that black Excellence um you know there's people are naturally want to be excellent black white Indian whatever so I don't think there's uh that much to do on that front It's being able to have more honest conversations about you know again race gender sexual orientation all those things which again you guys compared to you know when I was around here 25 years ago it's so much better okay it's not better as much as we want uh so it's like we got to continue to lean in to achieve the dream of

uh equal opportunity U but I think in general things are going well and in in that Dimension I would say it's appears that On climate we may have overcorrected so Al Gore and others were worried about climate and so they told us the world's going to end you know unless we change and it seems like a lot of people think the world's going to end and and um we have many problems in society there's no question uh but of all of them climate is one of the most amenable science like we can science our way

out of climate you know we've pumped a trillion tons of carbon into the Atmosphere uh now we got to go capture it and put it back in um there's a lot of science technique that we're all learning I mean there's EVS on one dimension there's others so I think the chance that um climate ends Society is extremely small and that there are other threats that are again politics countries going to war this kind of thing that are not amenable to science Solutions okay whereas getting again amazing solar panels nuclear fusion Whatever you guys invent uh

there there is there are science approaches to climate which I think will bail us out not easily and not free but again science will work whereas the science on human psychology like the idea of countries or religions or Wars I don't have the solution for that because we humans are evolving very slowly and we see in the current time a lot of War so coming wraping it up I think on climate people are too negative sure um and it And it makes them think the world's going to end so as long as to answer your

question of like how do we make progress hope is the Big Driver of human behavior um and the fact that we all have hope and have had hope and continue to into hope is incredibly important inspiring and powerful and so I hope you guys are able to of course have hope not just for your startup um but hope for our society to achieve a lot of its dreams sure and it's really inspiring Reed to hear you um so passionate about this so thank you so much for for sharing um I have two more quick questions

for you the first is you were now in this neish role of chairman as of late last year um what's life like for you now what are you up to um well the good news is that Netflix things are going super well with Greg and Ted and so uh as long as the company continues to grow the role of a board is pretty minimal um and so uh they're They're off and running and you know I know a lot what's going on but I give hardly any advice so you want to be I think as

a board member highly informed about the opportunity and the execution um but you're not doing it day-to-day and you you know like the uh WWE deal you know they did have like hardly anything to do with that and or nothing to do with it to be honest and I didn't even approve it I just read about it so it's like that's the way it should Be um so anyway that's a small part of the time uh mostly philanthropy you know I'd love to be baby Bill Gates by which I mean sort of a a technocratic

orientation to improving human welfare um and you know he's incredible because he knows and has learned so much uh I'm more narrow and so I'm trying to do a lot around uh African economy and uh various technological interventions there mobile network solar these kinds of things uh and then in the US I work a Lot on nonprofit Public Schools uh generally called Charter Schools uh to help them grow because organizationally when they're successful they're really excellent and they stay excellent which is not what we see in the kind of unevenness of school district districts sure

um so those are the two big areas very exciting I'm I'm excited to see how how that goes it sounds like you're very passionate about all of those which is really cool you know uh I think we all Are passionate about making a difference you guys have worked super hard to get to where you are here um and you're developing tools and uh you know near term you're going either go into great firms or create great firms uh but as you do that you also want to make a difference in the world and you're all

you know I think going to be very talented at that thank you Reed this has been a fantastic conversation before I open it up to the audience for questions I have one final question for you our view from the top theme this year is redefining tomorrow so Reed as chairman of the board at Netflix if there's one change you could make to redefine tomorrow what would it be you know I think if you guys think about the age of abundance um and what's going to be possible with technology there's sort of again if you look

over 10,000 years there's two big drivers of positive change that have Happened uh one has been technology and you guys are well aware of like all the things that are different whether it's antibiotics driving a car Etc then 5,000 years ago but the other one is the moral ethical systems the notion of identity um that we need a continued amount of progress on I call that story what's the story that gets us to trust each other what's the story that makes us who we identify with um and a simple example is the New Testament versus

the Old in the New Testament it was turn the other cheek Love Thy Neighbor these were radically different things than the Old Testament with eye for an eye okay so that's an example of moral progress about identity uh another one is consent to the Govern you know that the original idea was the people don't matter it's the Kings and it's hereditary and you're close to God and then over a couple hundred years we developed this idea underlining democracy that the consent Of the Govern was the way to to rule but these kind of Big Ideas

come along you know infrequently and have tremendous impact in human society and so again when you look back over 500 or 5,000 years uh a bunch of us will work on technology um and that drives a lot of human progress and the other aspect ECT as we all contribute to the human ideas and what are the big ideas that connect us that make us uh a better society and a better world and Those things can have huge improvement too it's just they're multigenerational because our psychology evolves very slowly thank you so much Reed well with

that I will now open it up to the audience for Q&A hi my name is Andrew and I'm a first year MBA student um it was great that Katie touched on culture and responsibility and my question is about a little bit of um how they relate so specifically honing in on employee giving so this is A really interesting aspect of Netflix benefits um at a time you even increased employee giving to two for one and that would seem temporary and maybe it will become permanent in the future and I'm curious um how do you think

about that benefit and how it can help solve some of the issues that business itself cannot purely solve the obvious answer is um oh because it gets employees to give and feel good and the company matches and it's a better Society uh the Less obvious answer is without that all the employees say the company should donate to Gaza the company should donate to the flood the company it's people love giving away other people's money so the more that you make it an employee match um and focus on that is what the company does does the

more it's realistic because then people give you know $300 here $500 there to important causes okay so you can think of it as when an organization whether that's a Company or a university has to take positions it's divisive because even if 90% of the people agree 10% don't and it's partially their money okay and that's certainly to with customers right and some of our customers like this cause versus that cause so as a company we'd like to stay away from that so by uh really putting the focus on employee giving we're like yes if you're

passionate about this topic give a lot of your money and we will match it and The relative costs in uh the benefits to us in Harmony are very high because the employee match is a less coercive mechanism than the than the company deciding what to give to and what not not to give to thank you really so much for coming back I really appreciate your time I'm Lexing NBA 1 at gsbm I'm doing also the Drone degree with education school and I'm especially interested in the interdisciplinary area between entertainment and education and given Your strong

exposure in education like from Peace Court math teacher to California State Board of Education I'm really curious about your view on the educational social impact of Entertainment also I'm curious about uh do you have any strategies or inhouse initiative that Netflix have to ensure its content actually deliver good values educational influence and good social impact in the world to all the age groups you cover thank you so much yeah It's a fascinating irony that here I do all this work in education uh and then in Netflix we focus on entertainment uh and I'm a super

big Focus guy you can only do things great if you focus and so Netflix is very focused on entertaining and giving you those guilty experiences and it may not make you a better person you know it may not teach you how to do this or that um we don't even have cooking videos um so uh I would say I've always kept those Worlds separate now within education people are figuring out du lingo is probably the most sophisticated at it how to use gamification to have fun at learnings to give off those uh psychic uh rewards

as you continue um so all the things that these social networking companies learned you know are are applied in duo lingo um so that's a a great example of using essentially human behavioral observations and learning uh in an education game but again that's Really different from trying to be entertaining how do we create characters that you care about more than you care about those people at Disney or HBO or others um and so we keep the Netflix one very focused on uh how much do do you connect with those characters and want to see the

next episode of the the rest of the film hi Reed I'm Anna I'm an NBA to I loved your thoughts on AI and how it will help enhance our creativity would you talk a bit about your thoughts And predictions on immersive Technologies such as VR and AR um entertainment is often pretty connecting that you watch with someone that's important to you a spouse a date a parent a child um and you know the joy of it is somewhat uh the experience of the moment and somewhat it's about talking about it uh either the people that

watched it and so all of that connection oriented aspect of entertainment uh means that these Isolating devices uh probably won't play a big role now if these devices actually because you've got other people in your view that might not be physically in your presence find ways to connect you then they'll have broad impact not just in entertainment but across many areas um but so far uh they've all been relatively isolating um once you immerse into them so people are working on it but I would say I'm somewhat skeptical in its change of entertainment because So

much of what we do uh as humans is the reason we're watching the show is because it's with someone else um and so it's a joint experience so if I had to guess I would say not a huge impact on um storytelling um potentially a pretty big impact in gaming uh where you know you you put on your gear and then you're immersed in some you know interaction work world as opposed to the Storyteller to you hi I'm Jack Stone I'm a first Year MBA here um I'm interested to hear how you balance things like

encouraging people to to your point take out the trash you know when people aren't looking versus something like a yearly performance review where you are focused on Optics and looking you know well to your managers and higher ups and how those two things could come into conflict you know the annual performance review um is rarely done well um I think we have it in place in most companies Because otherwise the person might not get any feedback so uh you know it might be a necessary uh device um but it's so much better to help coach

people throughout the year uh around you know after this meeting those kinds of things and so what we try to do is really lift up the gift of feedback back and to make feedback so continuous and expected people walk around Netflix and say do you have some feedback for me you know And they're just all the time asking for feedback and I think if you can set up a culture where that's expected in valued that's kind of like brushing and flossing every day and that's the stuff that really helps on Dental or emotional hygiene and

then when you do the once a year to the dentist you know there's like I didn't find anything okay so you might say there's a once a year review but it's basically all these interactions so think of it you want to Have feedback be like brushing and flossing so that it's an everyday activity it's a little more interactive between people so I suppose that's a little bit of a difference um but think of it as that's the maintenance and try to get everyone in your organization to always be asking for feedback and of course as

a leader then you're constantly talking about the feedback that you've gotten you know you find a set of devices to make sure that uh Feedback you know either in the moment or like say shortly after an interaction is much more useful and constructive uh than the annual performance review uh aspect wonderful okay Reed Before I Let You Go it's view from the top tradition to finish every interview with a series of Rapid Fire questions so I'm going to make some statements and then you'll fill in the blank with the first thing that comes to mind

so good favorite Netflix series uh beef hardest Mountain you've ever skied or snowboarded uh Palisades kt22 okay biggest lesson from your time in the Peace Corp yeah uh it's fun to be independent favorite way to spend time with your family cooking and what are the odds that Stamford game gets added to Netflix's 2024 original series list I wish I had come in my green squid Game that would have been that would have been a perfect if I had known um you guys have so much potential maybe not so much in acting but like in in

business you crush it thank you so much Reed this has been so fun Reed Hastings thank you [Music]