Netflix co-founder Marc Randolph may be among the few people who credit a demotion to their company’s success.
Stepping down as the company’s first CEO helped the company prosper and go public, Randolph said during a podcast episode of “The Diary of a CEO with Steven Bartlett” earlier this month: “To put my ego aside for a bit was probably the smartest decision I ever made the entire time at Netflix.”
In 1999, roughly a year and a half after the company first launched its website, Randolph’s co-founder Reed Hastings knocked on his door, laptop in hand, and asked to talk, Randolph recounted. Randolph was shocked, and a little offended, when Hastings walked him through a PowerPoint presentation of his strengths and weaknesses as a CEO, he said.
“We closed the computer, then proceeded to lay out that he was concerned, that he had seen minor errors in my judgment, that he questioned some of the hires I had made,” said Randolph. Hastings suggested that he take the reins as CEO, with Randolph stepping down into a COO role.
In the moment, Randolph said, he was crushed: Netflix started as his idea, and stepping down felt like giving up on a dream. He went home, “sat on the porch with my wife and we finished a bottle of wine,” he said.
Then, Randolph started evaluating his own strengths and weaknesses. When he and Hastings started the company, they were a “left-brain, right-brain” duo, Randolph said. Randolph was people-oriented, but had trouble holding difficult conversations. Hastings also had more business experience: He was previously the CEO of Pure Software, a debugging tool-turned-company that went public in 1995.
The analysis helped him decide that Hastings was right, said Randolph. “I began to realize … Maybe this was two different dreams … [creating] a big, successful company might be a different dream than the one of me being CEO,” he said.
“Those years after that, when Reed and I [ran the company] together, that was the renaissance at Netflix,” Randolph added.
The company went public in May 2002, roughly a year before Randolph left Netflix entirely. At the time of Netflix’s IPO, Randolph held $12.6 million worth of beneficially owned shares, according to an SEC filing. Randolph now sits on a variety of company boards, including Solo Brands, and Netflix has a market capitalization of $298.58 billion, as of Wednesday morning.
Giving up to get ahead
Randolph certainly isn’t the only CEO — or ex-CEO — who’s had to forfeit something meaningful to get ahead. For example, Virgin Group founder Richard Branson cried the day he had to sell Virgin Records, one of his first business ventures, for $1 billion in 1992, he told CNBC Make It in April.
“I remember running down the street with tears streaming down my face, past a sign that said, ‘Richard sells for a billion,'” Branson said.
The label, which Branson started in 1972, was deeply meaningful to him — and established enough that it’d survive without him. He needed the money to support his upstart airline Virgin Atlantic, amid a legal battle with British Airways that could’ve bankrupted his newer company, Branson detailed in his audiobook memoir, “Losing and Finding My Virginity.”
Being aware of your own strengths and weaknesses can make you a better job candidate, employee or leader, recruiters and CEOs say — largely because it can help you connect with other people and build trust more effectively.
Try asking your friends, family and colleagues for feedback. They don’t have to present you with a slideshow of your failures: It can be helpful to know when other people see you at your best, Wharton organizational psychologist Adam Grant told bestselling author Simon Sinek’s “A Bit of Optimism” podcast last month.
“In my experience doing it, people can’t anticipate what their strengths are in other people’s eyes. And so, it turns out we have positive blind spots, not just negative ones,” Grant said.
Want to be more successful and confident with your money? Take CNBC Make It’s new online course. Our expert instructors will help you master your money and discover practical strategies to boost your savings, reduce debt and grow your wealth — in a way that works best for you. Enroll in “Achieve Financial Wellness: Be Happier, Wealthier & More Financially Secure” to start your journey to financial freedom today! Get a 30% discount with the coupon code EARLYBIRD until September 2, 2024.
Plus, sign up for CNBC Make It’s newsletter to get tips and tricks for success at work, with money and in life.
