A Profile in Citizenship
by Jeremiah Norris (Colombia 1963–65)
In Reed Hastings gap year before college he sold vacuum cleaners door to door, then went on to graduate from Bowdoin College with a degree in Mathematics. He spent his college summers in a Marine Corps training program, including a stint at the Officers Candidate School in the summer of 1981. He was never commissioned, choosing instead to become a Peace Corps Volunteer. He went to teach math at a high school of 800 in rural Swaziland, Africa, from 1983-85. Reed credits part of his entrepreneurial spirit to his time in Peace Corps, remarking that “Once you have hitch-hiked across Africa with ten bucks in your pocket, starting a business doesn’t seem too intimidating”.
After returning from Peace Corps, Reed went on to attend Stanford University, earning a Master’s in Computer Science. His first job was at Adaptive Technology where he created a tool for debugging software. He left in 1991 to lay the foundation for his first Company, Pure Software, which produced products to troubleshoot software. It was taken over by Morgan Stanley in 1995.
In 1997, Reed and one of his colleagues from Pure Software co-founded Netflix, offering flat rate movie rental-by-mail to customers in the U. S. by combining two emerging technologies: DVDs which were much easier to send as mail than VHS-cassettes; and a website to order them from instead of a paper catalogue. Reed’s idea for Netflix originated with his having forgotten to return Apollo 13 and he had to pay a $40 late fee. He had misplaced the cassette and didn’t want to tell his wife about it. He said to himself: “I’m going to compromise the integrity of my marriage over a late fee!”
Running late on his way to a gym, he realized that he had a much better business model. A person could pay $30 or $40 a month, and do physical work-outs as little or as much as one wanted.
That experience led Reed to conceive the idea of a subscription-based movie-rental service. He felt that DVDs could travel well through the mail. In 1997, he incorporated Netflix in California and started mail-order DVD operations in 1998. At first, customers were allowed to rent each DVD for a seven-day period, but by December 1999 subscribers could pay a set monthly fee to rent an unlimited number of DVDs. Although customers selected the DVDs and controlled their accounts via the Netflix Web site, DVDs (up to three at a time) were sent and returned by mail. Once a DVD was returned, the next movie on the customer’s account was automatically mailed.
Reed expanded Netflix through movie studio partnerships and aggressive marketing campaigns, emphasizing Netflix’s catalog of indie films, documentaries, and other movies not easily available through other services. In February 2007 Netflix shipped its billionth DVD. Meanwhile, the company launched applications that permitted customers to access movies and TV shows through streaming downloads.
He oversaw Netflix’s foray into content produced specifically for its streaming service. Its first such offering was the episodic drama series House of Cards, which debuted in 2013. The streaming service became hugely successful and a major focus of the company.
As Netflix grew, the company became known for its innovative management practices, the results of which Reed was exploring called: “Freedom and Responsibility.” Netflix eliminated sick and vacation time for employees and instead allowed them to manage their time-off individually. He created an internal culture for employees, meeting with them to discuss the company’s culture and their theories about it.
In 2020, Reed co-authored a book on Netflix’s culture and management principles with interviews from current and former employees. No Rules Rules: Netflix and the Culture of Reinvention, was a New York Times bestseller, featured on year-end lists for publication, such as: NPR, The Economist. It was shortlisted for the Financial Times and McKinsey Business Book of the Year Award.
Reed is a proponent of Internet television and sees it as the future. He credits YouTube for his shift in strategy for developing a video streaming service. Netflix launched a service in 2007 to stream movies and television shows to personal computers.
He became interested in educational reform in California and enrolled in the Stanford Graduate School of Education. In 2000, the then-governor of California appointed him to the State Board of Education, and in 2001 he became its President. Reed is active in educational philanthropy and politics. One of the issues he most strongly advocates is Charter Schools, publicly funded elementary or secondary schools that have been freed from some of the rules, regulations, and statutes that apply to other public schools, in exchange for some type of accountability for producing certain results, which are set forth in each schools charter. In 2006, Reed put money behind his beliefs by donating $1 million to Beacon Education Network to open up new Charter Schools in Santa Cruz county where he lives.
Since 2012, Reed has been a Giving Pledge Member (a program to encourage extremely wealthy people to contribute a majority of their wealth to philanthropic causes) via the Hastings Fund where he pledged $100 million to children’s education. The Fund gave its first two gifts to the United Negro College Fund and the Hispanic Foundation of Silicon Valley for college scholarships. Then, in 2020, he donated $120 million to be equally split between among the United Negro College Fund, Morehouse College and Spelman College. It represented the largest individual donation ever to support scholarships at HBCUs. In 2020, Reed and his wife, Patricia, donated $30 million to the Global Alliance for Vaccines and Immunizations, in this case, Covid-19.
Reed has matched his phenomenal success in an emergent technological global environment to his extensive philanthropic and educational initiatives, paying full tribute to Peace Corps 3rd Goal, earning him a well-deserved Profile in Citizenship.