Marc Randolph is a veteran Silicon Valley tech entrepreneur, advisor, and angel business investor. He co-founded streaming channel Netflix, becoming its first CEO, and laying much of the groundwork for a service that’s grown to over 150 million subscribers; fundamentally altering how the world experiences media.
As an authority on business, strategy and innovation, he’s enjoyed an entrepreneurial career spanning four decades. By fostering creativity and turning ideas into realities, Marc has created several successful business ventures.
He’s founded or co-founded six other successful start-ups, mentored hundreds of early stage entrepreneurs, and as an investor has helped seed dozens of successful tech ventures (and just as many unsuccessful ones). More recently, he co-founded analytics software company Looker Data Sciences, which was subsequently sold to Google for $2.6B.
His first job in 1981 was for a music company in New York. Entrusted with the company's small mail-order operation, Marc taught himself direct mail and marketing techniques while toying with different ways to sell their catalogue of sheet music directly to consumers.
His fascination with computer software to track customer buying behaviour informed his decision to create a user interface at Netflix that doubled as a market research platform. He further developed theories about using direct mail to influence and retain customers while helping found the US version of MacUser magazine in 1984. While co-founding computer mail-order firms MacWarehouse and MicroWarehouse a year later, he made the connection between overnight delivery and improved customer retention.
The discovery later proved crucial to Netflix's growth and survival: the company's subscriber base blossomed and cut into Blockbuster’s revenues in cities where Netflix offered overnight delivery.
From 1998, Marc spent the dawn of the Internet age building direct-to-consumer marketing operations at software giant Borland International. He left in 1995 for a series of short stints at Silicon Valley start-ups where, in late 1996, a software debugging company acquired the small start-up where he was working.
The founder and CEO, Reed Hastings, retained Marc Randolph as vice president of corporate marketing. It was then acquired in an $850m stock swap in what was then the richest merger in Silicon Valley history. Hastings and Randolph commuted together for four months while the merger was finalised, and on these journeys, the idea for Netflix was born.
Marc wanted to replicate the e-commerce model pioneered by online bookseller Amazon.com. He'd heard that digital-versatile-discs (DVD) were being tested in several US markets, and wanted to explore the concept of selling the compact new digital format online.
He and Hastings couldn't find a DVD, so they tested the idea with a compact disc. Wondering if a CD could be mailed, they purchased a music CD and a greeting card then stuck the CD in the envelope and posted it to Reed's house. The next day it arrived, intact.
If ever there was an 'a-ha' moment, that was it.
Randolph named the company, designed the user interface and branding and acted as chief executive for the first year while Hastings completed Stanford University graduate school.
Netflix launched on April 14, 1998. Randolph had designed the user interface to act as an online catalogue of movies and a market research platform so that he could constantly test different versions to perfect the user experience.
The data generated by these market tests led the team to three concepts that they combined in 1999 to create Netflix's successful business model:
1. A subscription-based service with no due dates or late fees and unlimited access to content;
2. A 'queue' that allowed subscribers to specify the order in which DVDs should be mailed to them, and
3. A serialised delivery system that automatically mailed out a DVD as soon as the previous rental was returned.
The subscriber data collected by the user interface fed a recommendation engine known as Cinematch, that helped manage the company's limited DVD inventory by guiding subscribers to movies and TV shows that were in stock and generally away from new releases.
Randolph ceded the CEO post to Hastings in 1999 and turned to product development. He left Netflix in 2002 after helping guide the company through its IPO two years earlier. He credited Hastings with successfully scaling the company to 93 million subscribers worldwide.
His book, That Will Never Work: The Birth of Netflix and the Amazing Life of an Idea was published in September 2019.
Since his departure from Netflix, Randolph has served as a mentor to numerous start-ups. In addition to his mentorships, he is a keynote speaker, focusing on entrepreneurship, leadership, and innovation. He travels the world speaking about his experience with Netflix and the lessons he has learned from his other start-up investments.