Reed Hastings offered to sell Netflix to Blockbuster for $50 million in 2000, when Blockbuster had 9,000 stores and 60 million customers. The CEO turned him down. A decade later Blockbuster went bankrupt while Netflix hit a $366 billion valuation. The difference came down to team and culture, not technology.
In the year 2000, Reed Hastings, the founder of Netflix, walked into a conference room on the 27th floor in Dallas, Texas. Across the table sat John Antioco. John is the CEO of Blockbuster. At the time, Blockbuster had 9,000 stores, 60 million customers, $6 billion in annual revenue. Netflix had 300,000 subscribers and they were losing money. So, Hasting made a pitch to him. He said, "Buy us for $50 million and we're gonna run your online business." Antioco laughed them out of the boardroom. 10 years later, Blockbuster filed for bankruptcy. Today, Netflix is worth $366 billion. That meeting is one of the most instructive moments in business history. Not because Blockbuster was stupid and dropped the bag, but because Netflix had something Blockbuster just didn't. It had nothing to do with technology, had nothing to do with their business knowledge. It had everything to do with their team and their culture.
