Reed Hastings, the co-founder of Netflix Inc NFLX, recently revealed that he has been following a business philosophy inspired by Jeff Bezos, the former CEO of Amazon.com Inc AMZN.
What Happened: Hastings, who co-founded Netflix in 1997 and now chairs the $260 billion streaming giant, shared his approach to taking risks in a recent conversation on entrepreneur Tim Ferriss‘ podcast.
He emphasized the importance of taking “recoverable risks” to boost productivity and creativity. This approach, according to Hastings, is borrowed from Bezos’ leadership style at Amazon, where risks are categorized as “one-way doors” or “two-way doors.”
“A two-way door risk is easy to take because it’s reversible, so you can come back in and pick another door,” Bezos explained in a ‘Lex Fridman Podcast‘ last year. “But a one-way door risk probably can’t be undone. You go in that door, you’re not coming back.”
Hastings agreed: "I think that's a great business philosophy. I share it."
At Netflix, greenlighting new shows that aren’t guaranteed hits is considered a recoverable risk. If a show proves unpopular, the streaming giant can cancel it, using revenue from safer, lower-risk programming to cover the financial losses.
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In 2017, Hastings told CNBC he was pushing his content team to “take more risk.” This strategy can lead to surprise hits or valuable lessons from failures.
Why It Matters: Hastings’ business philosophy is in line with Bezos’ unconventional approach to productivity. Bezos, who stepped down as Amazon’s CEO, revealed that he believes in allowing his mind to wander during meetings to foster creativity and problem-solving.
However, Bezos has also been embroiled in controversy, with the Federal Trade Commission or FTC accusing him and Amazon CEO Andy Jassy of deleting text messages that could have been used as evidence in an ongoing antitrust investigation.
Despite this, Bezos has continued to make headlines, with his fiancée, Lauren Sánchez, recently sparking a debate over a bold fashion statement at a White House state dinner.
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