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Reed Hastings

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Reed Hastings
Born
Wilmot Reed Hastings Jr.

October 8, 1960 (1960-10-08) (age 64)
Boston, Massachusetts, U.S.
Alma materBowdoin College
Stanford University
Occupation(s)Co-founder, CEO and Chairman of Netflix
Board member ofFacebook, KIPP, DreamBox, Netflix
SpousePatricia Ann Quillin[1]
Children2

Wilmot Reed Hastings Jr. (born October 8, 1960) is an American entrepreneur and philanthropist. He is the co-founder, Chairman and CEO of Netflix and serves on the boards of Facebook and a number of non-profit organizations. A former member of the California State Board of Education, Hastings is an advocate for education reform through charter schools.[3]

Early life and education

Hastings was born in Boston, Massachusetts, the son of Joan Amory (Loomis) and Wilmot Reed Hastings.[4] His maternal great-grandfather was attorney, financier, scientist, inventor and philanthropist Alfred Lee Loomis.[5] He attended Buckingham Browne & Nichols School in Cambridge, Massachusetts. He entered Marine Corps officer training through their Platoon Leader Class and spent the summer of 1981 in Officer Candidate School at Quantico, Virginia.[6]

After graduating from Bowdoin College, Hastings joined the Peace Corps "out of a combination of service and adventure",[7] and went to teach high school math in Swaziland from 1983 to 1985. He credits part of his entrepreneurial spirit to his time in the Peace Corps.[7] "Once you have hitchhiked across Africa with ten bucks in your pocket, starting a business doesn't seem too intimidating."[8]

After returning from the Peace Corps, Hastings went on to attend Stanford University. He graduated in 1988 with a master's degree in computer science.[9]

Founding of Pure Software

Hastings' first job was at Adaptive Technology, where he invented a tool for debugging software.[9] He met Audrey MacLean in 1990 when she was CEO at Adaptive Corp.[8] "From her, I learned the value of focus. I learned it is better to do one product well than two products in a mediocre way," says Hastings.[8]

Hastings left Adaptive Technology in 1991 to found his first company, Pure Software, which produced products to troubleshoot software.[7] The rapidly growing company soon proved challenging for Hastings as he lacked managerial experience. He stated he had trouble managing with a rapid headcount growth.[6] His engineering background didn't prepare him for the challenges of being a CEO and he asked his board to replace him, stating he was losing confidence.[10] The board refused, and Hastings says he learned to be a businessman.[7]

In 1996, Pure Software announced a merger with Atria Software.[7] The merger integrated Pure Software's programs for detecting bugs in software with Atria's tools to manage development of complex software.[11] Hastings' goal in the merger was the unify the two companies' sales forces.[11] The Wall Street Journal reported that there were problems integrating the sales forces of Pure Software and Atria after the head salesmen for both Pure and Atria left following the merger.[12]

In 1997, the combined company, Pure Atria, was acquired by Rational Software, which triggered a 42% drop in both companies' stocks after the deal was announced.[12] Hastings was appointed Chief Technical Officer of the combined companies[12] and left soon after the acquisition.[13] After Pure Software, Hastings spent two years thinking about how to avoid similar problems at his next startup.[13]

Founding of Netflix

In 1998 Reed Hastings co-founded Netflix, offering flat rate movie rental-by-mail to customers in the United States.

In 1997 Hastings and Marc Randolph co-founded Netflix, offering flat rate movie rental-by-mail to customers in the United States.[14] Headquartered in Los Gatos, California, Netflix has amassed a collection of 100,000 titles and over 100 million subscribers.[15][16] Hastings had the idea for Netflix after his company was acquired.[6] "I had a big late fee for 'Apollo 13.' It was six weeks late and I owed the video store $40. I had misplaced the cassette. It was all my fault. I didn’t want to tell my wife about it. And I said to myself, 'I’m going to compromise the integrity of my marriage over a late fee?' Later, on my way to the gym, I realized they had a much better business model. You could pay $30 or $40 a month and work out as little or as much as you wanted."[6]

Hastings said that when he founded Netflix, he had no idea whether customers would use the service.[7]

Netflix culture

As Netflix grew, the company began being noticed for its innovative management practices—the results of the culture Hastings was exploring—called "Freedom and Responsibility."[13] Netflix is known to pay salaries that are typically much higher than customary to attract the best talent, and is one of the few companies where employees can choose annually how much of their compensation they want in cash versus stock.[13] Other innovations include their treatment of employees who don't meet expectations.[13] "At most companies, average performers get an average raise," says Hastings.[13] "At Netflix, they get a generous severance package," because that way managers don't feel too guilty to let average performers go.[13] The company also gained notoriety for eliminating sick and vacation time for employees, and instead allowing them to manage this time off individually.

Hastings would meet each new employee and discuss the culture and his theories about it. Over the years his personal presentation codified into a Powerpoint slide deck that was widely shared internally, reviewed and tweaked by upper management, and refined actively. In August 2009, Hastings posted this internal culture guide publicly online. It laid out his strongly held beliefs about workers and management. The guide became a pre-employment screening tool that dissuaded incompatible people from applying.[17] As of January 2015, the deck had been viewed more than 10.5 million times.[17]

Internet television

Hastings is a proponent of Internet television and sees it as the future.[18] He credits YouTube for his shift in strategy for developing a video streaming service.[19] Netflix launched a service in 2007 to stream movies and television to computers.[18]

Controversy

In July 2011, Netflix announced that subscription prices were changing: DVD rental prices would drop by 20%, but the initially free streaming service would now be charged for. For many customers this represented a savings, but for the group that both received discs and enjoyed streaming, it would result in a cost increase of up to 60%. The move led to customer backlash, cancellations, lower than projected subscriber growth, and a decline in stock price.[20] Netflix admitted to making poor public relations decisions in announcing the change,[21] but kept its policy in place.

Two months later, in September 2011, Netflix announced that it would spin off its popular DVD business under a new brand name, Qwikster, leading to customer and market confusion.[22] Netflix reversed the decision less than a month later.[23][24][25] During this time, the company's stock value plummeted and Hastings was asked about resigning, but he flatly rejected the idea.

Other business interests

Hastings has been a director of the board of Facebook since June 2011.[26] As of September 2016, he is reported to own over US$ 10 million worth of Facebook shares.[27]

Hastings also served on the board of Microsoft from 2007[28] until 2012.[29]

Educational and political activism

California State Board of Education

After selling Pure Software, Hastings found himself without a goal.[9] He became interested in educational reform in California and enrolled in the Stanford Graduate School of Education.[9] In 2000, Governor Gray Davis appointed Hastings to the State Board of Education, and in 2001, Hastings became its president.[9] He spent $1 million of his own money together with $6 million from Silicon Valley venture capitalist John Doerr to promote the passage of Proposition 39 in November 2000,[30] a measure that lowered the level of voter approval for local schools to pass construction bond issues from 66 to 55 percent.[9][18]

In 2005, Hastings ran into trouble on the State Board of Education when Democratic legislators challenged his advocacy of more English instruction and language testing for non-English-speaking students.[31] The California Senate Rules Committee refused to confirm him as the board's president.[31] The California State Legislature rejected him in January 2005.[31] Governor Arnold Schwarzenegger, who had reappointed Hastings to the board after Hastings' first term, issued a statement saying he was "disappointed" in the committee’s action.[9] Hastings resigned.[9]

On April 3, 2008, Steven Maviglio reported that Hastings had made a $100,000 contribution to California Governor Schwarzenegger's "Voters First" redistricting campaign.[32]

Charter schools

Hastings is active in educational philanthropy and politics.[3] One of the issues he most strongly advocates is charter schools, publicly funded elementary or secondary schools that have been freed from some of the rules, regulations, and statutes that apply to other public schools, in exchange for some type of accountability for producing certain results, which are set forth in each school's charter.[3]

On July 11, 2006, the Santa Cruz Sentinel reported that Hastings had donated $1 million to Beacon Education Network to open up new charter schools in Santa Cruz County, where he lives.[33]

On March 4, 2014, he argued for the elimination of elected school boards.[34]

Technology

Hastings is a member of Technology Network, a political network of business executives that promotes technology growth and innovation.[35] TechNet brings its members together with national policy makers to advance America's global leadership in innovation.[35] Hastings served as CEO of Technology Network for a year.[36]

In April 2004, Hastings published a Wall Street Journal op-ed advocating the expensing of stock options.[37]

Politics

On August 1, 2007, the Los Angeles Times reported that Hastings had donated $1 million to a committee formed to support California State Superintendent of Schools Jack O'Connell's candidacy for Governor of California in 2010.[38]

On April 12, 2009, Hastings donated $251,491.03 to Budget Reform Now, a coalition supporting California Propositions 1A to 1F.[39]

Hastings supported Hillary Clinton in the 2016 US presidential election.[40]

Personal life

Hastings lives in the San Francisco Bay Area. He is married and has two children.[9]

He was featured in a front-page article in USA Today in 1995, posing on his Porsche.[41] He has said that if he ever appears on the front page of USA Today again it will "not [be] on the hood of a Porsche, but I would [pose] with a bunch of movies."[41]

One of Hastings' favorite movies is Gloomy Sunday.[8]

References

  1. ^ "Patty Quillin - Netflix' CEO Reed Hastings' Wife (bio, Wiki)". April 22, 2014.
  2. ^ "Reed Hastings".
  3. ^ a b c "Charter schools advocate Reed Hastings to speak April 12: 4/00". news-service.stanford.edu.
  4. ^ http://humphrysfamilytree.com/Royal/Larson/Edw3-ReedHastings.pdf
  5. ^ John Reeves (November 12, 2012). "9 Fascinating Things About Reed Hastings and Netflix". The Motley Fool.
  6. ^ a b c d "Out of Africa, Onto the Web". December 17, 2006 – via NYTimes.com.
  7. ^ a b c d e f "How I Did It: Reed Hastings, Netflix".
  8. ^ a b c d writer, Interview by Matthew Boyle, Fortune. "Questions for... Reed Hastings - May 28, 2007". money.cnn.com.{{cite web}}: CS1 maint: multiple names: authors list (link)
  9. ^ a b c d e f g h i "Stanford Magazine - Article". www.stanfordalumni.org.
  10. ^ "'Charismatic' founder keeps Netflix adapting - USATODAY.com". www.usatoday.com.
  11. ^ a b Wall Street Journal. "Software Firms Pure and Atria Agree to Merge in Stock Deal" by Don Clark. June 7, 1996.
  12. ^ a b c Wall Street Journal. "Investors Pan Rational's Plan To Buy Pure Atria for Stock" by Don Clark. April 8, 1997.
  13. ^ a b c d e f g "Netflix: Flex To The Max". September 24, 2007 – via www.bloomberg.com.
  14. ^ "Netflix Facts". Netflix. Retrieved March 2, 2007.
  15. ^ "Press Release". Sec.gov. Retrieved June 26, 2012.
  16. ^ "Netflix Releases First-Quarter 2017 Financial Results" (PDF). {{cite web}}: Cite has empty unknown parameter: |dead-url= (help)
  17. ^ a b Netflix Culture of "Freedom and Responsibility".
  18. ^ a b c Riley, Jason (February 10, 2008). "Movie Man" – via www.wsj.com.
  19. ^ Stanford Graduate School of Business (October 15, 2014). "Reed Hastings, Netflix: Stanford GSB 2014 Entrepreneurial Company of the Year" – via YouTube. {{cite web}}: |last= has generic name (help)
  20. ^ "Company Town". Los Angeles Times. September 15, 2011.
  21. ^ Loftus, Tom (September 19, 2011). "Netflix Customers: Sorry Doesn't Cut It, Pal". The Wall Street Journal.
  22. ^ "Can Netflix fix its mistakes?". Forbes.
  23. ^ "DVDs will be staying at Netflix". blog.netflix.com.
  24. ^ PCWorld Video, PCWorld   September 20, 2011 4:13 PM (September 20, 2011). "Netflix Says Sorry, Then Irks Customers Again with Qwikster". PCWorld. Retrieved June 26, 2012.{{cite web}}: CS1 maint: multiple names: authors list (link) CS1 maint: numeric names: authors list (link)
  25. ^ "Qwikster Goes Qwikly: A Look Back On A Netflix Mistake". Huffington Post.
  26. ^ Facebook. "Facebook Names Reed Hastings to Its Board of Directors". www.prnewswire.com. {{cite web}}: |last= has generic name (help)
  27. ^ "REED HASTINGS Insider Trading Overview". www.insidermole.com. Retrieved September 27, 2016.
  28. ^ "All News Releases Distributed by PR Newswire". www.prnewswire.com.
  29. ^ "Microsoft Announces Reed Hastings Will Not Seek Re-Election". October 9, 2012. Retrieved December 28, 2012.
  30. ^ Wall Street Journal. "Silicon Valley Moguls Spend On Education Ballot Battles" by Ann Grimes. October 31, 2000.
  31. ^ a b c "California Department of Education. "O'Connell on Reed Hastings - Year 2005." January 12, 2005".
  32. ^ the California Majority Report. "Is Reed Hastings Six Figure Contribution to Schwarzenegger's Redistricting Effort Simple Revenge?" by Steven Maviglio. April 3, 2008.
  33. ^ "Santa Cruz Sentinel. "Netflix CEO gives $1 million to open charter schools" by Matt King. July 11, 2006".
  34. ^ Strauss, Valerie (March 14, 2014). "Netflix's Reed Hastings has a big idea: Kill elected school boards (update)".
  35. ^ a b "TechNet - The Voice of The Innovation Economy". www.technet.org.
  36. ^ New York Times. "One Man's 2 Challenges" by Laurie J. Flynn. June 3, 2002.
  37. ^ Hastings, Reed (April 5, 2004). "Expense It!" – via www.wsj.com.
  38. ^ Halper, Evan (August 1, 2007). "State Republican Party floating in a tide of budgetary red ink" – via LA Times.
  39. ^ "California Secretary of State - CalAccess - Campaign Finance". Cal-access.sos.ca.gov. Retrieved June 26, 2012.
  40. ^ "Hillary Clinton racks up business endorsements". Politico. July 23, 2016.
  41. ^ a b Wall Street Journal. "Netflix's CEO Is Mobilizing For Battle With Amazon" by Carl Bialik. October 20, 2004.
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