Reed Hastings: From Building Netflix to What Comes Next

This is a conversation about technology as a civilizational lever, about whether the people building AI and the people governing it are asking the right questions, about what entertainment can teach us about human nature and what human nature can teach us about AI and about what it means to have spent 35 years watching technology reshape the world and to still believe the best is ahead. And now to our conversation with Reed Hastings. Reed, awesome. As usual, to talk with you, I thought we'd start with something a little light for both of us. So I'll answer this too, but we'll start with you. In various weird ways, we get mistaken for each other.

What was one of the funny ways that comes to mind for you about being mistaken for me? And then I will also answer that question. I'll read Opman, read Hastings, both in deck. So I get introduced sometimes to conferences and someone's done the quick chat GPT and they, you know, do it on read or read H or something. And they call me the founder of LinkedIn. And I'm very excited because that's a hell of a business. Yes. Well, and similarly, because Netflix is a hell of a business. I think the last one that I got in this out of, you know, many, many was, oh, my God, that Wednesday show is awesome. You guys have done such a great job, which I'm now passing along to you. It's an awesome show. But, you know, like that kind of thing. And, you know, we've been doing this for a while. So when we get the emails, we just kind of forward them to each other.

Exactly. All right. Well, people confuse you guys, but let's see if you guys confuse yourselves with each other. So I'm going to say a quote, and you guys are going to tell me who said it. Shout it out. Most entrepreneurial ideas will sound crazy, stupid, and uneconomic, and then they'll turn out to be right. I think that's me. I would totally disagree. Let's read. Those turn out to be wrong. That's the whole point of the contrarian thesis. And then occasionally they're right. Yes, but they sound stupid. No, Reed Hastings, you said it. No, I did not. I'm sure that's a misquote. Oh my God, we're going to fact check this.

Okay, let's hit it from the top. But the quote is, you've got to have a contrarian thesis that everyone else thinks you're stupid, basically. And then it turns out to be right, which is rare. The whole point is that most of the time, the entrepreneurs fail because the idea doesn't work. Oh, God. They're so similar that they're confusing each other's quotes. All right. The future isn't something that experts and regulators can meticulously design. It's something that society explores and discovers collectively. Boring. So that means me, and it's accurate. That was Reid Hoffman. Thank you. Thank you.

All right. We have a few more. Boring is frequently how Reed talks to me, but, you know, it's the details. The entertainment part of Netflix, the key to that was always, not that I am, but always trying to be thrilling, and boring is the only sin in entertainment. There you go. All right. Stone Age, Bronze Age, Iron Age. entire epics of humanity by the technology that they use. Reed Hastings. All right, we got that. All right, two more. We are homo techne. When we cross the river, we are deepening our understanding of technology and ourselves. That was Reed Hoffman. And last one. Companies rarely die from moving too fast, and they frequently die from moving too slowly.

That was Reed Hastings, but I feel like you've said such similar stuff. Such similar stuff. It's brick and brack. Thank you for humoring me. Who's the better investor? Who's more entertaining? All right. There you go. Well, it turns out that operating personality is really different from allocating capital personality. So operating personality, you're like a dog with a bone. You never give up on a problem. You just work it. You work it. And investing personality is staying very broad, not falling in love with an idea, cutting your losses and moving on. And when I tried investing, I just fell in love with all the entrepreneurs and kept giving them money, and none of it worked out.

And when Reed tried operating, we quickly found the right guy in Jeff to operate for him, who was an amazing operator. Fair enough. Reed, I'll turn it over to you. So you were CEO of Netflix for 25 years. and then when you handed over the role January 2023 what happened the next day what did you what did you then go do my schedule evaporated so you know I had first of all it was a secret and second you know I had a whole bunch of work meetings and a pretty full schedule that I then wasn't going to do a bunch of internal and external things you know first couple days it was just like be at home and shock and and you know a lot of calls and just people saying congratulations kind of nice uh sweet things um and then you know I said well I've always wanted to ski a lot and I've only been able to ski five or ten days a year uh because of work so I'm going to take February and March and you know ski my brains out so mostly that's what I did uh and And that was a super fun release and fulfillment, but it wasn't really planned.

And it gave space, you know, really to the company. And you kind of, in many cases, it's good to have the ex-CEO. Not be itching to, like, call in to make decisions. How about lunch, Ted? Greg, let's talk about strategy. That episode of Love is Blind was terrible! So I was able to just enjoy myself and, yeah, focus on, well, snowboarding. Was there anything that you found surprising that you missed? No, the huge surprise is how much I was okay with moving on. I thought I would, like, miss everything. You know, because it was my whole entire life. I loved every second of it. And what I was just realized, I had done everything I wanted.

I had done this huge global rollout. I had lived on an airplane around the world and every week in, you know, Seoul or Mumbai or Berlin. And it was incredibly fun and exciting. But I didn't need any more of it. And so I was super surprised that I didn't, like, yearn to get back in the saddle. And, of course, there's aspects you miss and the people I missed. But, you know, I've stayed in touch with them on sort of a personal basis. So it's surprisingly easy because I certainly have heard of people who have a very hard time with it. We've certainly seen some CEOs who stepped away and then had to go right back because they missed it so much.

Even in your former industry. But beyond Netflix, you've been on the boards of Meta, Bloomberg, so many influential companies. And these companies were some tech, some less, different business models, different industries. What did you learn from being on the board of such diverse companies, obviously in addition to Netflix, about the AI and media ecosystem? Well, the lucky break of my professional life in that way was that in 2005, Microsoft was looking to get someone from tech on the board, but they have conflict rules, so they couldn't have the head of Cisco on the board. And so they started going down the list of tech people, and after a year, they had gotten down to the head of a domestic DVD rental service, Reed Hastings, for an interview.

um and so i was like you want to interview me um and then i went up and met with steve balmer and bill gates and we really hit it off and a little while after that they put me on the board of directors of the microsoft corporation which you know was a million times larger than netflix at that time uh and super again. global and super long-term in their thinking. So the stuff I got out of it was amazing because they were willing to work on projects for things 10 years ahead. And like I had never been able to do that because we, the company didn't have enough profit stream to do that kind of thing. And so it was such incredible learning for me. Then later as social became really important, I thought, oh, you know, I'm kind of old. I should really get much closer to this is going to transform Netflix like it to transform photos and things so I got on the board of Facebook and Mark Zuckerberg was very open in the company and I tried to do what I could to help and I certainly learned a ton about social but then it turned out that social really had very little to do with movies and TV shows so it wasn't like this huge transformation of the rest of the universe like in the way that say AI is so those were two long-term born assignments I did and I

a lot on. And I certainly encourage all the CEOs I know to do one or two other companies, hopefully big companies where they can learn from. And then I got on the Bloomberg board really as a favorite of my friend, Mike Bloomberg, who's an incredible philanthropist. He's been number one the last two years of most giving in the US and just a great human being and a great philanthropist. So that's been a favor and fun. And then I'm on the board right now of Anthropic as well as Netflix. And on Netflix, it's pretty passive because the CEOs trust me and I trust them. And so it's just kind of easy. But Anthropic is really exciting and intense.

And I've really come to appreciate the team, the mission. And it's neat to have a seat kind of on the front edge of what they're doing. Absolutely. Well, one of the things some people know, but very early days in LinkedIn, I wrote to you asking you to join the board because you're one of the top board picks for Silicon Valley intelligent people.

took a huge product that did deliver. So talking about AI, everyone is talking about AI, and you have also joined the public conversation. Where do you think people are asking the wrong questions, maybe having the wrong answers, or what is part of the discourse of AI that you think is totally missing that people should be talking about more? Well, I'm not sure if whether AGI comes in 18 months or six years, it really is going to make much difference. So I think we should just sort of say, you know, it's coming fast.

And how do we want society to be, what do we imagine, in 10 or 20 years? You know, sort of get over the idea of, like, the intensity of how fast it's happening to it's here. And what will we do and how does it work? And, you know, how will the legal profession work? Like, as an example, in education, people say, oh, it doesn't change at all. And, you know, look at how medicine has changed from 50 years ago. educators are, you know, recalcitrant because they don't want to change. But if you look at the practice of law, like, you know, pleading before the Supreme Court, it's identical to 100 years ago. And we're so proud of that, right? So I imagine things like that, you know, a briefing before a Supreme Court will actually work identical in 20 years when AI is fully ubiquitous, right? Now, the briefs will get AI edited and improved, and the research will be a little faster, but it's kind of like in the noise in the way that today LexisNexis is, or word for legal briefs. So some areas of the economy has a huge change, some areas not so much. So I think, again, there's so much focus on, is the current version of quad code this or that, as opposed to, okay, it's going to happen, and the robot side, the humanoid robot's going to happen. So then what

will society be in 10 to 20 years? Well, you're saying if so, education, medicine, law, those are either sort of highly regulated industries or industries with big unions. Do you think that's why they might be affected less and others will be affected more? Or to actually throw your question back at you, do you think there's a profession that will be the most affected by AI,

other kinds of things versus versus the transactional cost which is legitimately there on a number of things but they increase in transactional cost that's in legal well i think where we both are is no one quite knows exactly right which fields uh will be but what i think we both see is an era of great promise um that the next 20 years will be super exciting and i think it will usher in this era of abundance through both scenarios, which is, again, you've got the white-collar symbolic processing stuff that's getting pioneered now, like lawyering, writing software. And then we've got the Android humanoid robots coming at some pace. So that'll be pretty exciting.

So one of the things that, you know, obviously a lot of discussion of AI is on,

But no one of them is going to, like, destroy all humanity at once like massive nuclear war might. All right. We're going to go from nuclear war to AI writing. Which some people think is nuclear war, but it's fair. So the New York Times recently ran a blind test, and 86,000 people took it. and I don't know if you saw the results, but they were showing folks snippets of AI writing versus human writing. And 54% of people preferred the AI writing. And so some people argued like, ah, that was short form. That wasn't novels. Like that's what AI is particularly good at.

Other people were so devastated that more people preferred the AI writing. Like, what do you think that, like, what does this mean? Does this mean that most writing is going to become AI in the future? Or like, what are the implications of a test like this where regular people preferred the AI writing? You know, I think short form writing on a specific topic is a very different writing a story and developing character and a character arc and a conflict and a resolution. Just look at how Shakespeare still has a huge impact, you know, and it was 400 years ago and no one's been quite as good as him at a certain broad range of things. So I think it's an extremely rare talent of the very high-end AI.

But average writing is, I don't think, the way to analyze it. And I'm not surprised that the AI is better than the average writer today. Right. Fair enough. And so thinking about all these creative revolutions, it's like you were there for DVD to streaming, and now obviously lots of people, they're concerned about AI is the entertainment industry. So forget the tools that people use, whether we'll use AI for editing or scripting or whatever, but the actual stories that are being told. Do you think the AI era

So it's what do you watch Robots doing is the interesting question. Now, what do you think are some of the interesting more side effects? Like, obviously, you know, if you came to me today and said, hey, AI will help us improve identification of potential hits early, that's like seems unlikely unless there's some like analysis of major data streams that, you know, the humans don't do yet.

but what are some of the more like side cases of how ai comes into this you know it could be you know also like you know an ai discuss the content with i mean like what are some of the things that kind of not just reinventing the process but thinking about ai at the corner cases or at a corner case that may become big is there any of that that you've had musings on yet we haven't found say the equivalent of sports betting so sports betting is a whole kind of value emotional engagement layer on top of sports. It's not really AI enabled and kind of nothing to do with AI, but we're always with entertainment looking for things that, what's a layer of conversation, what's a layer of engagement, you know, that enriches the experience. So, you know, maybe AI will improve that, but it's not obvious what that will be. And to some part, the beauty of a show or a movie is that it is you know kind of self-contained and you know that it's it's this you know it's been more than a hundred years we've had films and so it's like a novel where the novel as an art form has really stayed constant and so there's something about you know the size and the capability that people are used to it sure there's short stories and

sure there's epics but like almost all the business is novels and what people read and And I think there's a lot of that with film and TV series that they're not artifacts. They're really reflections of human attention span and stories. I feel like people have been complaining forever about, you know, you have one superhero movie hit and then you have 20. I'm more superhero or like Barbie hits. And then all of a sudden you have toys, like toy stories. Like you're not, we're not getting sort of the diversity of hits because people are looking at an algorithm or they're, well, you know, you got to put this star with this story and then, and so you don't maybe get a K-pop Demon Hunters, which like you said, was the 28th and no one could predict it.

Obviously we're in sort of the time of heated rivalry when no one could have predicted that. Do you think AI will, will flatten things? Like, will AI lead to people just, you know, betting on past success because the algorithm told it to, and so they'll take less chances, or that's already happening? Like, how does AI affect it from a data perspective? You know, very, very little. We're really predicting for kind of that human conflict and something. You know, you want something that's both familiar but also fresh. Yeah. So those are tensions. In terms of, like, over-sequelization, if you look at the amount of new content that Netflix is producing, that's really gone away.

In other words, sure, we'll have some sequels and think of season two of Wednesday, season three, et cetera. So that's always been a part of the business. It's very enjoyable for people because it's a story they already know and you see more of it, but you don't want it to be the only thing. And that's certainly not true today. Today we have an incredible set of new films coming out all the time. Yeah, and how well do you think Netflix can predict a hit? Like sometimes things come by surprise, but you're like, no, no, no, we got it. We know, or you're like, eh, sometimes we don't. Yeah, it's a mix of both.

Okay. So season twos, we have much more. Sure. Sure. You have more data there. All right, fair enough. One of the many smart things that Ted Sarandos has said is that there's a much better business in increasing the upside, the quality, the volume of the reception of content by 10% than cutting costs by 50%. And it was a way of kind of lensing to why is AI potentially really amazing? What are the kinds of things in terms of thinking about how AI can be additive that you think that the entertainment industry should be thinking about broadly, given obviously there's a lot of concerns and uncertainty around it?

You know, in entertainment, there will be a lot of work on special effects and sort of things that didn't fit in a budget before can now be done. you know, using AI. So that's a good example. But more or less, I think anything that lives in the emotional realm will be impacted not as much by AI because we humans react to these things emotionally. And so again, I think we'll not watch robots playing basketball. And so it's the easiest example for people to get that things that are emotionally stiff pleasure, emotional stimulation will still do. So, you know, you like to give and get real flowers, not fake flowers. So it's like, I don't think that's changing just because of AI.

So where AI is very good is at thinking and logic, like coding. Wow, it's breaking too. So I think of it as tremendous excitement in medicine, in biology, in things that are very factual, logical, hard, and complex. And things that are emotional, it's not that it won't eventually be able to add value, but that's certainly not the big thrust of the AI world. All right, this is something I'm very excited to talk about. You and I share a deep passion for education.

And I feel like some people are like, the criticism is like, they're not even using the cutting edge AI.

Other people say, look at their test scores. They're doing, you know, twice as well as anyone else. Some people complain about equity, $40,000 a year. $60,000. It's fantastic. If you can afford it, go. So why do you, like the thing I like. love about it is actually less about the AI, but more just about the like giving agency to kids, focusing on other things. Like what do you, why do you think Alpha School is so great? Well, it starts with McKenzie and Joe's philosophy that the kids have to love school and they love vacation. So the number one goal is the kids don't want to go on vacation. They want to stay in school because they'd love it so much. Then they start from, okay, if we want them to love it and we need them to know the basics up to do well on tests, what are we going to do? And so they do two hours on software a day where you know it's relatively practice and drilling and these kinds of things but they have a coach really motivating and helping um and then they get the reward for that is they get to spend the rest of the day doing stuff they want either a set of the schools are for athletes and people for sports or they spend the rest of the afternoon doing like watching

ted talks and talking about them or a range of things um but i would say they're kind of like the tesla roadster that was the first tesla over a hundred thousand dollars sports car yep specialist thing but it set electric cars as the aspiration and they were cool because the first electric car was this you know extremely fast accelerating thing so that's alpha school is our tesla roadster for ai schools and you think it can be done we can go down the cost chain and we can do it at a lower amount. A hundred percent. Model three will be coming. I love it. So yeah, there'll be more and more innovation at that end. Cool. So Reed, we talked about education and how there's enormous opportunity for change. Alpha school, which is operating within the United States. How is

So one of the things you said earlier, which I completely agree with, and one of the things I think I would partially reframe, and it's kind of a question leading into education, I think our human skills, how we collaborate, getting into humanity, understanding these things, I do think will amplify up. and the skill of learning coding obviously goes away because it's like oh this does the code but i think the various two things that i think will still be pretty deep in what we're doing is one is a good systematic understanding of what truth in the world is around so like biology physics chemistry etc because that kind of iteration of understanding the nature of the world we're in i think is pretty familiar scientific thinking is it like the patterns of thinking I think are important the patterns of strategy are important and I think actually even coding will go that way because part of the thing is is while people say well should I study should I stop studying computer science like well no you should It's not a computer science, not coding, right?

Like more of the kind of the thinking about the system or the pattern of it in terms of how we operate. And I think that will become more general. I'm curious what you think of my modest reframing of your earlier statement. I think I'd just study math. You know, if you want to get to like patterns. Well, IOMs are terrible accounting, so yes. So, you know, whether it's algebra, I mean, there's so many interesting things in math. If you want to help people like kind of learn abstraction or search for truth. You know, look, there's going to be some role for science and a few people will be drawn to it.

But think of the last 20 years. We've been as a society, STEM, STEM, STEM, learn to code, STEM, STEM, STEM. So I just think that as everyone sees that coding is overdone, my guess is we'll see that STEM is overdone. Um, and the kinds of things that you do with a biology background will be done so much better and faster by AI that it'll be hard to compete for jobs in that space. So shifting to another thread, one of the things I think AI will do is it will break us a little bit of the industrial model, which is the industrial model tends to be the, you know, go to high school, go to college, learn, now go work and learning then now work.

And I think ongoing learning will be one of the key things. Do you think that will also be part of, not just like, I have this one learning period, but it's like, I'm constantly interweaving learning with what I'm doing? Absolutely. So, you know, trying to think through the ongoing skill acquisition, you know, by learning things has probably, you know, been important for a long time because the stuff you learned in high school changes so much. And the knowledge in the field changes so much. And that's only going to continue. So certainly learning will need to be for people who want to make a living intellectually constant.

But I don't think that's like a more of the past because that's been true for a while. It's just going to be even more true, you know, in this new world.

What are the things that need to happen for that to be true? Are there conditions that need to be met now for that to happen? And did you mean just in the U.S. in terms of the abundance, or could it be global abundance too? It depends kind of how the IP is shared or the rewards of it, but I think it'll be pretty global. So just like you saw in the industrialization, it really did lift all boats. You know, it's at a different level than in the host country.

But so let's take nuclear fusion, you know. And if we can actually make it work, you know, which will be assisted by AI, you know, then we've got a tremendous energy source. If through it we're able to bring down the cost of solar, you know, or invent new types of batteries and storage, you know, it could really revolutionize energy usage and production, which then brings us to, you know, age of abundance. So in early nuclear, we were a little bit naive, and we thought electricity would be too cheap to meter, okay? So, you know, we're probably not going to get to that. But, you know, that's the kinds of thinking for abundance that we want to do.

So if you think about housing and, you know, it's very expensive to build. What if it was robots building it, you know, 24 hours a day? So then you've got, okay, you've got carpenters not working, so that's a negative. but you've got, you know, low cost, very custom, beautiful housing. So that would be, you know, another example. So, you know, I think in each industry, we're going to see much lower costs for doing things and then incredible amounts of inventive energy because maybe we don't need to build a house that way. Maybe you just print it, you know, in some giant 3D printer. So there'll be both tech revolution in that way, which, again, would be like nuclear fusion.

Yeah. I'm going to shift to one other zone of subject because I think this is something that people frequently misunderstand. What do you think are why is so much of this innovation happen in Silicon Valley? What are the things that make Silicon Valley kind of a unique creator of these kinds of technologies? Why is it half of the NASDAQ is within 30 miles of where we're currently sitting? Well, I think if you look at the financial city of London or you look at New York or you look at Detroit for cars, this is not something specific about tech. You get very positive reinforcement when you've got a whole lot of talented people that can switch jobs and not have to move.

And then they move the ideas. So in the U.S., we don't have very high protection against the ideas walking out the door. so it makes it can be very hard for a given company because they feel like oh my secret spread but it makes it very productive for the economy and for the ecosystem that those ideas do spread so i think of it as liquidity and employees changing is probably the key ingredient which is a combination information. of things like LinkedIn of, I wish we had non-employer-based healthcare. So if you had it, you know, in some other ways that employer-based it, you'd have more liquidity. The less we do non-competes, the better. It's one of the things I think that the Biden FTC had right of making it easier to compete with existing companies by eliminating non-competes. So those are the, But that liquidity of movement, I think, is the most important thing.

So one of the questions, maybe a last question before we get to rapid fire on jobs is obviously the general discourse is loss of jobs, you know, and kind of other sorts of issues. But there's way insufficient discussion on wages, because even though, in fact, you know, actually, in fact, I think there will be a lot of creation of jobs, a lot of transformation of jobs. But what will happen, a little bit like the earlier comment in radiology, is there will be a, okay, which of these jobs are super valuable, compensation goes up. Which of these jobs become less valuable, compensation goes down.

fire unless there's another question let's do it all right is there a movie song or book that fills you with optimism for the future there's a cool movie i watched recently the queen of chess and And it's about an Eastern European 1980s guy family who raises his three daughters to get out of poverty via chess.

And they all three become grandmasters and get to a middle class or better living through this dedication. And so it's a situation where there's no reason they should have had hope being in 1980s Romania. And yet they did. And they worked towards a future that has been great. So I love a documentary like that. All right, I got to check that out. What is the question that you wish people would ask you more often? I think people focus a lot on business success, which I've been, you know, super fortunate on, and less on joy. And so I think the question would be, what gives you joy? How do you increase joy in your life? All right. How do you increase joy in your life? Let's hear it. I would say that I'm trying to do more on the mindfulness and on the appreciation, noticing much of my work life was relatively frantic, kind of lots of email short burst stuff. And I think I could have integrated more mindfulness into that busy time. But certainly now that I'm retired.

they can. Love it. So where do you see progress or momentum outside of your industry, let's call that tech entertainment, that inspires you? Definitely medical work. I mean, the amount of improvement in cancer therapies, health, understanding, insulin resistance. I mean, it goes on and on. What we're slowly learning of the brain, of the body, and then the brain's, even slower, but making some progress on that. All right. Our final question. Can you leave us with a final thought on what is possible to achieve in the next 15 years if everything breaks humanity's way and what's the first step to get there? Well, if everything breaks humanity's way, it's because AI has unleashed human flourishing and we find the political mechanisms to share that across within our country, across different income groups, and then between countries.

The world as a whole is enhanced. And a first step for that would be to realize how interconnected we are between people in our country and then between countries and trying to get away from win-lose to win-win. Totally. Amen. Thanks so much. Reid, always a pleasure. Indeed. Possible is produced by Pallet Media. It's hosted by Ari Finger and me, Reid Hoffman. Our showrunner is Sean Young. Possible is produced by Tanasi Delos, Katie Sanders, Spencer Strassmore, Imozu, Trent Barboza, and Tafadzwa Nimarundwe. Special thanks to Surya Yalamanchili, Sayida Sapieva, Ian Alice, Greg Beato, Parth Patil, and Ben Rallis.