Netflix co-founder Reed Hastings recently opened up about a valuable lesson he learned from Jeff Bezos, the CEO of Amazon.
Hastings, who launched Netflix in 1997 and now holds the position of chairman at the $260 billion streaming giant, revealed in a podcast that he has adopted a "great business philosophy" inspired by Bezos's leadership style.
Speaking on entrepreneur Tim Ferriss' podcast, Hastings said, “I try to take a lot of risks on things that are recoverable.”
He said that trying out reversible risks can actually “help you get more done.” He also said that if you constantly worry about all the things that could go wrong, you might end up feeling overwhelmed by anxiety. "This anxiety could then stop you from taking any risks when you really need to."
It just gets in the way of creativity, he said, adding that in most fields, "you want to move fast, and some things don't work, and you fix them fast.”
Hastings' strategy, inspired by Bezos' leadership at Amazon, involves categorising risks into "one-way doors" and "two-way doors."
Bezos explained on a podcast last year that two-way door risks are like doors you can open and close easily.
This means, that if things don't work out, you can go back and try another option. However, one-way door risks are more permanent, meaning, once you have made the decision, there is no turning back, he said
“You go in that door, you're not coming back,” Bezos had said.
Bezos had highlighted the need to carefully consider one-way door decisions because they are irreversible. “Those decisions have to be made very deliberately, very carefully,” he said.
Hastings agreed with this perspective, saying “That's a great business philosophy,” adding, “I share it.”
He mentioned that at Netflix, they take risks on new shows that might not become big hits.
"If one of these shows doesn't do well with viewers, the company has the option to cancel it. Then, they use the money they make from other, safer programs to cover any losses. This way, Netflix can try out different types of shows without risking too much financially," he said.