Real Alpha
Try Pro free

The Knowledge Project · 3 min · Jun 10, 2025

Hastings says his weak sales judgment held Pure Software back

Reed Hastings recalls cycling through five sales leaders at Pure Software because he didn't know how to hire for enterprise sales. He twice offered to step aside as CEO, but the board kept him in place.

Reed Hastings

Reed Hastings is cofounder and former co-CEO of Netflix.

Co-founded Netflix and led it as CEO, then became majority owner and chair of Powder Mountain.

  • Shane Parrish, Host · Founder, Farnam Street

    Former intelligence agency employee; wrote the bestseller Clear Thinking.

About this segment

Reed Hastings recalls cycling through five sales leaders at Pure Software because he didn't know how to hire for enterprise sales. He twice offered to step aside as CEO, but the board kept him in place.

From “Reed Hastings: How Netflix Built a Culture That Fires Good People”, Jun 10, 2025. Watch the full episode

“I didn't really understand how to run enterprise sales. And so, I kept picking the wrong person.”
Reed Hastingsat 1:02:08 · The Knowledge Project1:02:08

Takeaways Pro pick

  1. Pure Software doubled sales despite frequent sales-team turnover.
  2. Hastings says his own hiring and firing decisions were mistakes.
  3. He offered the board a CEO change twice, putting the company first.

In this episode

Full episode

  1. 1:01:36Hastings says his weak sales judgment held Pure Software backPro pick 3:24

  2. 2 more moments in the full episode
Up next · All-InNASA’s bureaucracy pushes ownership away from the people doing the workPro pick 6:46

Transcript

Transcribed by machine (Whisper) from the episode’s audio, so a word may be off here and there.

  1. 1:01:49

    i want to win the championship yep at pure you ipo'd i think you went through five head of sales in five years what was that like and what did you learn from that experience sure um pure software where it was like 91 to 97. And we went public in 1995, strangely, the week before Netscape. So, for one week, we were the hot tech IPO. But it was challenging. You know, I didn't really understand how to run enterprise sales.

  2. 1:02:24

    And so, I kept picking the wrong person. That held us back, for sure. We could have grown faster, better, and be a more successful company if I had more of an adept hand at enterprise sales. So, we had incredible products because we doubled our sales every year despite the fact of turning over the sales team every year. But again, if I had done a better job of sales, we could have been even much more successful.

  3. 1:02:54

    So, I don't know, take like Atlassian in the modern era here that's been a, you know, phenomenal software tools company. How did you know you had the wrong head of sales when you're doubling sales every year? Like that seems like a pretty good outcome, but you're like it's not fast enough, not enough velocity or just the wrong fit? Yeah. I mean, each case was a little bit unique. But, and, you know, it's possible that I made the wrong calls and I should have just kept the first one the whole time.

  4. 1:03:22

    So, you know, again, but it was my bad decisions, you know, either on the hiring or the firing in when this one area sales, whereas in this other area developing the product, we were very shorthanded and we had, you know, the hottest products of that time. Was there a moment at Pure Software where you wanted to give up or you found yourself sort of like feeling sorry for yourself or what was that like and how did you get out of it?

  5. 1:03:50

    Yeah, I don't think I felt sorry for myself, but I did feel like I was hurting the company back to these sales turnovers and back to caring more about the company than myself. So I wanted the company to succeed more than I cared about myself. And so I twice I went to the board of and said, look, you should hire, you know, a CEO who's got a shorthand in sales and I'll do product and it's fine. And, you know, and both times they rejected that idea.

  6. 1:04:23

    And it's like, yeah, you are making mistakes. They were clear about that. But overall, we'd rather be investors in this company that you're doing than make that change. And for me, it was a little bit, it's like confession, you know, because I felt so guilty about those sales mistakes. that then, you know, offering my role and sacrifice was sort of cleanse that wound and then I'd get up and live to fight another day.

  7. 1:04:51

    Do you think that there's a difference