The secrets of Reed Hastings and Netflix culture

Recent share price swings aside, Netflix is among the most innovative companies of the last 2 decades.

They’re also incredibly transparent, to our benefit.

I first read this presentation 4 years ago. I remember thinking, “holy shit”, and immediately forwarding to the shopkick team.

I’ve re-read it 3 or 4 times. Still not enough.

It’s now part of 1-Read-A-Day.

Here are my takeaways

I bias towards the unusual (since we all know the old yarns of “A players attract other A players”, “employees are your #1 asset”, blah yada etc)

1. A company’s REAL values are shown by who’s rewarded, who’s promoted, and who’s fired (slide 6)

2. “Adequate performance gets a generous severance package” (slide 22, reminds me a little of Zappos’ $1K to quit) [http://blogs.hbr.org/taylor/2008/05/why_zappos_pays_new_employees.html]

3. The Keeper Test: “Which of my people, if they told me they were leaving, for a similar job at a peer company, would I fight hard to keep at Netflix?” (slide 25)

4. “Brilliant jerks” are avoided – hurts effective teamwork (slide 35)

5. Growth –> More complexity –> More processes –> Less talent –> Long-term irrelevance (slide 52)

6. Netflix’s solution to above? Increase talent density to offset rising complexity. Do this by hiring only “high performance people” and giving them more freedom (slide 54)

7. Example: no vacation policy; take what you want (now a startup-world standard) (slide 69)

8. Departments are “highly aligned” (agree on goals), and “loosely coupled” (freedom in implementation) (slide 93)

9. Pay top of market, because Netflix only wants top people – top of market is re-defined with each hire, each performance review (slide 96)

10. Comp is salary-focused. Employees can choose to trade salary for stock options (109)

11. Everyone gets $10K in benefits, from receptionist to CEO (slide 109) – this was published in 2009

12. All options are fully vested – employees stay for the right reasons

13. For promotion, new job must be “big enough”, and you must be a superstar in your current role

That’s it, folks!

Publishing 3.0: James Altucher and what we can learn from his self-publishing success

James AltucherI read How to Self-Publish a Bestseller: Publishing 3.0 and LOVED it. So much so, that I took notes, and am sharing with y’all.

I admire James for letting it all hang out. He does this day after day. It’s what made him a successful blogger, author, and entrepreneur.

Here are my notes in note-form (that is to say, disorganized and unedited)

The distinction today is not between traditional and self-publishing, it’s between professional and unprofessional publishing

Benefits of professional self-publishing (ie, do it yourself, and do it well):
1. More money – you own rights, can do special packages, higher royalty
2. Control over design
3. Faster process – up to a year
4. Control over content (say what you want)
5. Avoid “bad things in life”

Here’s how you do it

1. BUILD A PLATFORM
MUSTS: significant Twitter, Facebook, and blog following

2. HOW TO BUILD IT
“if it doesn’t bleed, it doesn’t lead”
“sincere voices will always rise to the top”

3. WRITE
Write 500-2000 words every day
High quality foreword – Dick Costolo (Twitter) wrote his

4. KNOW WHAT YOU WANT
you can do it the easy way – Amazon Createspace
OR, you can put out best possible product, follow “Publishing 3.0”. this is more expensive and requires more effort

Publishing 1.0 – traditional publishers like Random House, Simon & Schuster
Publishing 2.0 – self-publishing like Amazon CreateSpace (15mm books published last year, vs 300K 10 years ago…not a typo)
Publishing 3.0 – “self-publish better, more successfully, better edited, better designed, better marketed, and make more money than if you go any other route”; much of the best publishing talent (editors, designers, marketers) do lots of freelance

5. EDITING
hired 2 copy editors
hired Command Z Editing for content/structure editing. worked with Nils Parker who previously edited Tucker Max, Naval Ravikant, Ryan Holliday; together they did 15 rewrites

6. DESIGN
Erin Tyler Design – found a great cover designer, managed interior design process

7. AUDIOBOOK
a. helps credibility for your print and ebook
b. for his topic (self-help-ish), people love listening while driving to work
Tucker Max recommended John Marshall Media – James improvised quite a bit, made a fresh product
reading highlights writing that isn’t working, rewrote 20% of the book after the experience

8. TITLE
chose a bunch that he liked, ran FB ad campaigns, “Choose Yourself!” was clearly #1 based on click-thrus

9. MARKETING
used Ryan Holliday’s Brasscheck
scheduled 60 podcasts, radio interviews, speaking engagements, guest blog posts
Reddit AMA – 3K comments, 1mm views
Ryan’s co created slideshare preso – 300K views
First ever bitcoin-only pre-release
Video trailer scripted and edited by Simplifilm
“the offer” – if you proved that you bought and read it, James would refund your money

10. FOREIGN RIGHTS
2 Seas Agency – In June, the first month the book was out, Marleen Seegers from 2 Seas sold rights to: Brazil (USD 2500), China (USD 4300), Korea (USD 5000)

11. OTHER MERCHANDISE
I also made a poster that is designed like the cover of the book when you look from afar but when you get close to it you see clearly all 67,000 words of the book

12. THE NUMBERS
Here are my advances on my first mainstream-published five books in order: $5,000, $7500, $30,000, $100,000, and $30,000

In the first week “Choose Yourself!” was out I got onto the WSJ Bestsellers List with about 10,000 copies sold

Altogether in the first month I sold 44,294 copies between my paperback, audio, ebook, and even hardcover versions

at $4.99 per copy, with ~60% royalties (averaged), he cleared 6-figures in the first month, not including foreign rights and special offers. not bad! :)

Don’t watch the ball, watch the seams

Thanks to http://www.odt.co.nz/sport/tennis/138357/tennis-federer-beats-nadal-atp-finalsIn tennis, we’re told to watch the ball.

My coach used to say, “follow the ball from their racquet to yours,” pointing out that “Sampras, Agassi…they’re always looking at the ball, even after it makes contact.”

We’re supposed to focus on that green dot like a cat on a laser pointer.

On a recent drive to LA, I was listening to The Inner Game of Tennis. Think Zen and the Art of Motorcycle Maintenance, but replace “Zen” with “Inner Game”, and “Art of Motorcycle Maintenance” with “Tennis.”

Really, both could be called “Life wisdom revealed in the pursuit of a hobby”.

In The Inner Game, author W. Timothy Galloway makes a point that I paraphrase thusly:

“Don’t watch the ball…watch the seams.“

Bam!

It’s the Inception of life advice.

On Level 1 (the reality level), Galloway is instructing us to watch the ball so closely that we see its seams.

On Level 2 (the rainy-city/van-chase level), Galloway is really telling us to pay attention to detail. If you’re truly watching the ball, you’ll notice it’s not just a fuzzy green object. It has a logo. It turns a disheveled, patchy yellow with use. And it has seams.

On Level 3 (the hotel level) – and that’s as far as this extended metaphor goes – it’s all about pushing our limits. Don’t watch the ball, watch the seams. Don’t make a 3, hit a swish. Don’t aim for a million dollars, go for a billion. Now THAT’S cool.

It brings to mind a Bruce Lee quote, one of my favorites.

There are no limits. There are plateaus, but you must not stay there, you must go beyond them. If it kills you, it kills you. A man must constantly exceed his level.

Are you watching the seams in your life?

5 articles you should read, or at least, browse

A high school friend once confessed that he spent 4 hours a day reading the news. Ridiculous, I thought.

Here’s a running list of my readings. It’s not 4 hours – yet – and I avoid the news, but look who’s ridiculous now…

From that list, here are 5 July favorites:

1. David Brooks’ The Service Patch [link]

Young people – particularly the accomplished ones – have a “blinkered view of their options” and don’t think about the kind of person they want to be.

It’s worth noting that you can devote your life to community service and be a total schmuck. You can spend your life on Wall Street and be a hero. Understanding heroism and schmuckdom requires fewer Excel spreadsheets, more Dostoyevsky and the Book of Job.

2. Emily Nussbaum’s Difficult Women: How Sex and the City lost its good name [link]

I enjoyed SATC (see, I even used the acronym). Clever, fast, and at times provocative. The show’s weakness is that – while Carrie and friends began energetically against-type – they had a whiff of cardboard-cutout by the end.

Like the Simpsons and Friends, you were watching a magician perform the same card trick for the 37th time.

In contrast, Carrie and her friends—Miranda, Samantha, and Charlotte—were odder birds by far, jagged, aggressive, and sometimes frightening figures, like a makeup mirror lit up in neon.

3. Paul Krugman’s Hitting China’s Wall [link]

Krugman takes big public stances that have substance. His ire is usually focused on our economy, but here it turns to China.

China is in big trouble. We’re not talking about some minor setback along the way, but something more fundamental. The country’s whole way of doing business, the economic system that has driven three decades of incredible growth, has reached its limits.

4. Anahad O’Connor’s How the Hum of a Coffee Shop Can Boost Creativity [link]

I prefer working alone, but it can be hard to maintain focus; I’m always looking for hacks and tools to provide a boost. If that sounds familiar, try Coffitivity.

Their results, published in The Journal of Consumer Research, found that a level of ambient noise typical of a bustling coffee shop or a television playing in a living room, about 70 decibels, enhanced performance compared with the relative quiet of 50 decibels.

5. Paul Graham’s Do Things that Don’t Scale [link]

Another PG gem that challenges startup orthodoxy. When you’re early, it’s ok to do things that don’t scale, like Pebble assembling its own watches. You learn, you show grit, and you move your baby forward.

The need to do something unscalably laborious to get started is so nearly universal that it might be a good idea to stop thinking of startup ideas as scalars. Instead we should try thinking of them as pairs of what you’re going to build, plus the unscalable thing(s) you’re going to do initially to get the company going.

Did they kill him, too?

A favorite podcast moment, from a favorite podcast.

Listen to it here (Episode 88, Kid Logic, Act One).

Kids are amazing. Substitute teaching is another goal on my miles-long list of life goals.

Story transcript below. Thanks to This American Life.

It all began at Christmas two years ago, when my daughter was four-years-old. And it was the first time that she’d ever asked about what did this holiday mean? And so I explained to her that this was celebrating the birth of Jesus. And she wanted to know more about that. We went out and bought a kids’ bible and had these readings at night. She loved him. Wanted to know everything about Jesus.

So we read a lot about his birth and his teaching. And she would ask constantly what that phrase was. And I would explain to her that it was, “Do onto others as you would have them do unto you.” And we would talk about those old words and what that all meant.

And then one day we were driving past a big church and out front was an enormous crucifix.

She said, who’s that?

And I guess I’d never really told that part of the story. So I had to sort of, yeah, oh, that’s Jesus. I forgot to tell you the ending. Well, you know, he ran afoul of the Roman government. This message that he had was so radical and unnerving to the prevailing authorities of the time that they had to kill him. They came to the conclusion that he would have to die. That message was too troublesome.

It was about a month later, after that Christmas, we’d gone through the whole story of what Christmas meant. And it was mid-January, and her preschool celebrates the same holidays as the local schools. So Martin Luther King Day was off. I knocked off work that day and I decided we’d play and I’d take her out to lunch.

We were sitting in there, and right on the table where we happened to plop down, was the art section of the local newspaper. And there, big as life, was a huge drawing by a ten-year-old kid from the local schools of Martin Luther King.

She said, who’s that?

I said, well, as it happens that’s Martin Luther King. And he’s why you’re not in school today. So we’re celebrating his birthday, this is the day we celebrate his life.

She said, so who was he?

I said, he was a preacher.

And she looks up at me and goes, for Jesus?

And I said, yeah, actually he was. But there was another thing that he was really famous for. Which is that he had a message.

And you’re trying to say this to a four-year-old. This is the first time they ever hear anything. So you’re just very careful about how you phrase everything.

So I said, well, yeah, he was a preacher and he had a message.

She said, what was his message?

I said, well, he said that you should treat everybody the same no matter what they look like.

She thought about that for a minute. And she said, well that’s what Jesus said.

And I said, yeah, I guess it is. You know, I never thought of it that way, but yeah. And it is sort of like “Do onto others as you would have them do unto you.”

And she thought for a minute and looked up at me and said, did they kill him, too?