Communication lessons from Netflix CEO
Create and tell your story, be humble but confident, compliment people absent in the room and have fun
Tell me in a sentence
Create and tell your story, be humble but confident, compliment people absent in the room and have fun.
Tell me in an image
Tell me more
Netflix CEO, Reed Hastings, was interviewed by The New York Times on 30th November. The interview was very well done1. The interviewer had some very tough questions, but Reed did a phenomenal job at answering and deflecting them. Since communication is the key to a successful career, let us take a look at what we can learn from this 34-minute interview.
All the links below are to the original interview to the specific timestamps. You may be better off listening to the entire interview than snippets.
Tell your story
Reed focuses on what Netflix is trying to do when answering a whole range of questions. Netflix wants to produce the most exciting series, movies, and games that the world has ever seen.
Questions about competitors or about Netflix's correction
Question about another investor’s comment about Netflix’s spending spree
Asked to comment on Dave Chappelle
Asked to comment about the high-budget deals with Obamas, Harry and Meghan, and others
Reed’s answers to all the above questions revolve around Netflix’s strategy and goals, and not on the specifics of each of the scenarios.
Understand your company’s values and goals. This will help you communicate effectively with your internal team and customers.
Develop your career story. This will help you in your job-hunting conversations.
Own the narrative
Reed demonstrates the knack to respond to ‘questions with only bad answers’ by taking control of the narrative.
When questioned about subscriber growth and unit economics, Reed brings up his 2 religions - customer satisfaction and operating income. He then goes on to make a strong case for how Netflix’s strategy to focus on series, movies and games makes the most sense
When questioned about the crackdown on password sharing, Reed goes into the complexity involved - how Netflix is both a TV service and a personal service. And goes on to make the distinction of sharing the service with someone living with you vs a relative across the country. Additionally, he highlights the fact that a customer can choose a $7 to $20 plan, depending on discretionary income.
When asked about leaving money on the table with the theatrical release of Glass Onion(~600 theaters as opposed to typical 3000 theatres) is about building buzz, and not a revenue generation program.
Give relevant context and details to your audience. Tell your teammates why a particular task is important. Give your boss a status update on ongoing product development.
Have fun
Reed cracks a joke or two keeping the mood light, even when tackling very serious business questions - asking Andrew for his Netflix password.
Taking about changes in tactics on binging, Reed talks about how 20 years back selling yesterday’s news was great business - a jab at NY’s own business model evolution.
You spend a lot of your time at work. Have fun with your team. Join your Zoom a minute early and make small talk. Talk about the soccer world cup.
Celebrate wins
Reed demonstrates the confidence to celebrate his wins.
He commented about how Netflix spends billions and has 8% of the market share in terms of screen time, compared to Amazon’s billion-dollar spending to win 3%.
He talked about how Netflix is now better than HBO
Celebrate project deliveries, customer compliments, promotions, and everything in between.
Own your mistakes
Reed has no qualms about admitting he was wrong - when talking about ad-supported model
Reed talks about how he missed the gap in what Google/Facebook offered to advertisers in terms of the target demographic - when talking about the ad-supported model.
Apologize when you make a mistake and move on. You can only learn by trying new things and mistakes happen.
Pay attention to the details
Reed has an eye for details.
Andrew, the interviewer, made a comment about Netflix's market cap being $700B. Reed caught it and graciously corrected it to ~$700 share price(Netflix’s peak market cap was around $300B in Nov 2021, when the share price hit ~$700)
Andrew mentioned how Reed said never to advertisements, to which Reed responds(again with finesse)- “I dare you to find that quote when I said never”
Reed is familiar with the release date of a Netflix release - Glass Onion on Dec 23rd.
Do not gloss over details. Most details do not matter, but some do. For example, what you call your product internally matters.
Give credit where credit is due
Reed gave Hulu team credit for figuring out the ad-supported model.
He gave credit to his CFO for convincing Netflix to offer an ad-supported model
He talked about Netflix’s great relationship with Apple and Google from the play store perspective.
Shine a light on your collaborators. Just like happiness, giving credit doubles the quantity of credit.
Compliment others -companies or individuals
Reed says great things about Disney - about their IP, creativity, and leadership.
Talks about how Andrew Jassy is a fantastic guy and a long-term thinker.
Reed says how we would not bet against Mark Zuckerberg on his VR efforts.
Reed talks about how Elon is the bravest creative person on earth. “I am trying to be a steady respectable leader, but Elon does not care”
During the Q&A session, Reed was handed a veiled compliment about how founders are longer-term thinkers than hired CEOs, Reid comments that he does not believe that and sees no such distinction.
GrubHub’s founder, in his book Hangry2, noted how retail investors are the worst kind of investors because they are opportunistic. As a very small retail investor, I was hurt. Reed talks about how long-term thinking companies attract investors that appreciate long-term thinking. I thank him for that perspective.
The only criticism that is useful is the constructive kind. Constructive criticism is best done 1:1. Compliment in public.
Okay then. Put these into practice and communicate with flair.
Also, I am a fan of another Reid(Hoffman). Are they pronounced differently? I do not want to know.
A decent read, especially the company-building parts of the book.