Reed Hastings: How Netflix Built a Culture That Fires Good People

Let's start with Powder Mountain. You first visited in 2016, I believe? Yeah, that's right. We had a house in Park City for 20 years, loved skiing there, and then got very, very crowded, as the whole industry has. And Powder Mountain is not in the epic icon ecosystem, and so it was uncrowded and blissful. So it's become a great place for me to both enjoy. So we went there in 2016 and then built a house that completed in 21. And then I retired in 23 and then crazily bought the mountain. How do we make that leap? It's really hard for independent mountains to compete, I would imagine, especially in the era of Epic Pass. And how do you go from casually skiing to buying a mountain?

You know, I wasn't looking to do another capitalist thing. It was definitely a save the mountain because I live there expression. And we haven't done it yet. So you're right that Epic and Icon are fascinating because they're great businesses. And they've made skiing, you know, for $1,100, you get a range of options. So it's really popular with skiers. They sell, you know, two million passes a piece. They generate, you know, a lot of the visitation. And they're becoming bigger and bigger. So from a commercial standpoint, it's what people want. So think of it as the Costco of skiing. You know, you pay a fee and then you get great value.

And it's been very successful. So I don't really have any critique of it. But there's a sector of the market, maybe more like Whole Foods is to Costco, that's a little more specialty, so people willing to pay for uncrowded skiing. And then that's super fun, and you get wide open slopes and low lift lines, but it costs a little more. Do you think that that's the future for independent ski hills? Like you're either going to be one or the other, you're going to be like the mass market supermarket almost, or you're going to be niche high end? Yeah, I think Powder and the other independents need to strongly counterposition or just become part of Epic Icon.

But you're not going to live as you were because you lose a third of your revenue and all of your profit to the Epic Icon family. And it partially depends where you are geographically. But as a general rule, you've got to counterposition quite strongly. Do you think that that sort of eventually becomes self-defeating? You know, if we walk through maybe a decade from now and you go to the mountain and the lines are too long, the food stations are crowded, like you don't have a good experience anymore. Not even to mention the skiing. There's no fresh tracks. There's no sort of and so people will opt out of skiing in general or will do you think?

No, I mean, again, if you're a historic skier and a purist, you might say, oh, Park City is really crowded now. But it's also a great value and you've got this great icon or epic pass. And so far, the money does the talking and people are showing up and visitation is continuing to grow. So it's been a very successful model of broadening the skier base. You've always set culture as a founder. So at first with Pure and then with Netflix, what's it like coming into an existing organization and either changing or enhancing culture? So in Powder Mountain and running that, it's small enough, 150 full-time employees when I took over, that it's pretty intimate.

It's not like taking over a substantial business. So I suppose it's a little different, but not materially. And what changes have you sort of made with culture with respect to taking your learnings from Pure and Netflix? And we'll get into this a little more later. Sure. I mean, for the Powder story, we've done many changes on kind of the positioning, you know, created a private skiing option. We've upgraded the employee compensation, sense of mission, sense of winning, many aspects of it. And have you brought the almost meritocratic focus of Netflix into like the culture that you were famous for there into Powder Mountain?

Yeah, substantially. So, Powder, I would say we've done, in my opinion, a slightly better job of it from the lessons that we've learned. So, in Netflix, there was the meritocracy and outsiders thought it was cutthroat, thought it was hunger games. But inside, it really wasn't. People looked out for each other, helped each other quite a lot. But in the words we use to describe it, we're not warm and loving enough. And so it came across as brutal from the outside. Okay. And so we were never really able to shake that kind of perception. And in powder, we started with big hearted champions who pick up the trash.

And so big hearted, of course, loving and generous as the lead word in our kind of employee motivation. Champions, like, no, we really do care about performance. That's that meritocracy aspect. Very driven, keeper test, all the things that we had at Netflix. And then who pick up the trash is a symbol of self-responsibility. And everything is my job. And people really do pick up the trash in both metaphor and actual ways. I always find that interesting. I used to watch people when I worked in the government. And they would like push down into the trash instead, like they would do anything possible instead of literally just like taking the bag out of the trash.

And they would spend like five minutes doing this, right? And things would fall out and they'd pick it up. And I'm just like, what is wrong? Like just like wrap the bag up and put a new bag in. Yeah, everybody takes care of the trash at home. And only some people do that at work. Let's dive into a little bit of culture. But I mean, it starts with hiring and this applies to Powder Mountain. Netflix and all the companies and even the schools that you're involved in, how do you go about finding the right people? I would say pretty imperfectly. You spend five or 10 hours of interviews with someone and it's just hard to tell sometimes. So I'm pretty open-minded. We'll take a chance on people. And then again, if it doesn't work out, we give them a package and move on. So some people say all the focus should be on the hiring process. And maybe they're able to do that incredibly well. I've found it's hard to differentiate. And so I'm willing to give people chances and let it be a little more instinctual. And then, you know, then you're with them for months. And then you can really tell their performance as opposed to from the five or 10 hours of interviews. How long is it before you really form that first intuition? Is it

with somebody working directly with you? Is it like a week, two weeks into the job, three months, six months? Like at what point are you like, okay, this isn't going to work? Well, it's rarely initially. So you almost always were in honeymoon, you know, for three months. And then you might see some of the cracks start to appear of things. And, you know, some of it is coachable and some of it is not. So you first lean in on that aspect and are communicative and clear. And so that's tended to work very well. What was the highest value aspect of interviewing people or doing reference checks? Like what was the one thing that you would say is like the 80-20 of that?

I would say almost always I'll have a meal with them, and it's sort of how they interact with the service staff, the food, aspects of humanity and character might be one of the most telling. That's a really good way to do it. A friend of mine also travels with them. He'll go on a trip and see how they deal with the airport and the security line. Are they thinking in advance? Are they frustrated by delays? I always think that that's interesting. How do you go about evaluating persistence or character? Mostly by track record. If they've moved jobs every 18 months, that's one pattern. and if they've been, you know, six years, and then three years, and then seven years, you know, with someone, you can sort of see that's their orientation. They dig in and try to make it work. So, the past, again, for a more senior employee where there's a long enough run to be able to see those makes a real difference.

I remember listening to an interview, I think it was even last night, right before I was going to bed, and you had mentioned reference checks. How do you go with doing a reference check? Yeah, I mean, we rarely ask people for references because those are so anodyne um so then it's climbing through linkedin histories finding cross uh things going to quite some lengths um to get references um that are more loyal to me um than they are to the candidate because again you know if you ultimately do all that and you end up with the candidate's brother they're just going to say nice things so you you got to find you know intermediates when you can sometimes you can't are there any tips or tricks for for doing that that you've learned over the years like do you go on linkedin and like who do we have in common and well for sure um but i'll go to like their all their prior you know generally they're currently employed and that's not a safe place to go for them so then i'll look at the prior employer and then try to comb through and try to find um people who work there uh who are probably knew the candidate And then I'll reach out, you know, and try to get a conversation going.

And then only after there's a little conversation going, reveal that I'm calling as a reference. Is there any particular question you find yourself asking over and over again? Mostly it's the, would they hire them again? If they wanted to come back. And then once you hire somebody, what's the onboarding process like? Not differentiated. I mean, we don't try to really specialize in making that great. And, you know, hopefully they get a laptop and an account and that all works. But it's sort of, I don't think there's much to do right or wrong in that first week. You know, it's sort of just a full-on immersion.

And you sort of take or don't, I guess, right? Almost like a transplant. Well, we're very invested once we've hired someone that they do take and their manager is invested in it. But I haven't seen anything really go wrong in the first week. So it doesn't feel very error prone. I don't know what year you put out your first deck that got released. I don't know if it was released or somebody. 2009. I was like, man, I want to work there. I was like, this is the exact type of call. So it almost has a selection bias too, because I imagine people see that and then they opt in. They want to be a part of this meritocracy.

They want to be part of this culture of no rules and high trust and high agency. Sure. Sure. Well, we had an internal slide deck, and I would meet once a month with all the new employees as a group and then go through it. So this is 2006, 2007, et cetera. And most of the time, their managers had well briefed them before they hired them on what we thought was important. But once in a while, we'd get people who were in total shock. And I realized, oh, it's kind of unfair to this person that they got into something they didn't particularly want. And that it would be better to give all the candidates the slide deck sort of going through the culture.

And then we realized, of course, once we're giving it to all the candidates, it's going to get public at some point. So let's go ahead and just make it easy for the candidates by making it public. And that's what led to that release. But the reason it looked so unofficial is because it was just an internal comms deck to the new employee welcome. But it made sense to sort of put it out there so people knew what to expect. That's right. And then it had exactly the effect you referred. to, which is the people who fundamentally wanted job security over growth were repelled. And the people who wanted growth and willing to trade off job security loved it.

And so then we selected a very creative type of person who, again, was into performance and taking risk. One of the key ideas was talent density. Talk to me about what that means and how you thought about it throughout the organization. Yeah, I mean, I think the big struggle we had in the early days was the contrast of loyalty and what that meant versus performance. And, you know, everybody wants loyalty and they want performance and their attention. And so, as we sorted through that, we realized, okay, professional sports teams have a clear bargain of you're sort of playing for your position each season, and it is a performance culture, but the team can be quite close and can be very supportive of each other.

and so that wrestling uh with we came to think of loyalty as a stabilizer so loyalty gives you you know if you have a bad day you don't get instantly fired or if your boss has a bad day you don't quit instantly you sort of think things through solidly over you know a couple months um but that ultimately it was about performance and um that helped us clarify our own values that we were more valuing growth and achievement than we were, say, lifetime loyalty, which is different than a family company or other relationships that we have, where we value loyalty in our friendships, in our marriage, and other things.

We value loyalty over performance. I remember an interview, I think it was Jamie Dimon who gave it, and he said, I want loyalty, but loyalty to the company first and loyalty to people second. Yeah. I mean, what he's getting at there is not a personal loyalty like political factions where you look after your boss or something like that, but you care about the organization. and I do believe he's right that that creates a very powerful force and it only works if they see the leader in that case Jamie or was myself at Netflix are clearly willing to sacrifice their self for the benefit of the company and then when you get that and everybody's working towards the company's success it's very powerful force.

How do you think about the notion Bill Belichick said you know I'm not collecting talent I'm building a team I'm building the best team not the most talent what's your initial reaction to that it's two zero some and so i would say it's a little more of both um but what he's trying to get the point across is uh building the team is a distinct operation um but if you build the team from a bunch of high school football players you know that's not gonna win so um you know but again he's he's saying it uh dramatically to make and at a point, you know, it's like saying only the paranoids arrive. And when Andy Grove said that for two decades, that was like the phrase.

But it's not literally true because the paranoid are delusional, okay? And they see everything as a crazy threat and they can't differentiate what's an important threat and what's not and what's reality, okay? But, you know, it was a provocative and memorable statement to try to get people to be business leaders, to be more worried about what could happen to them. Talent density isn't just about bringing in talent. It's also about... removing people who maybe the role has changed, they're no longer suitable or they were never suitable to begin with. How did you go about identifying and then removing? I mean, one of the things that I think you did was severance packages, but you said, and correct me if I'm wrong here, that the severance packages were for managers. They weren't for the employees because it gave the managers almost permission to remove people.

Sure, the money goes to the employee. Okay, it doesn't go to the manager. But managers are generally selected because they have good human skills and they like people. And so it's very hard for them to let people go. And so if you are giving the terminated employee a big severance package, it makes it easier on everyone. And so that's one of the hidden benefits of it. the other is getting a release. So, you know, Netflix has let go many people. And I mean, maybe there's a few employee lawsuits, but hardly any, again, because the severance package is bigger. And then we generally don't do performance improvement plans, which are sort of a way to document the employee's poor performance so that you can win a suit. Instead, why not just give them a check? And, you know, there's so few people who get put on a PIP that then, you know, turn around, that it's a, I think it's a false system of legal protections that doesn't work. And again, it's better to give them a generous severance package, have them sign a release and help them onto their next challenge. Is there anyone that was either on a PIP that you know of that turned around or anybody that you had formed an impression of after three months that was like, this isn't

going to work out. And then it turned out to work out spectacularly. Well, again, we didn't use PIPs, But I would say, are there people who got into a rough spot and got out of it? Absolutely. And the more someone was a longer term employee, the more the rough spot was sort of taken in context. And we would try to say, okay, let's see if we can shift them into some other role and see if they can get back to being miraculous in that role.

how did you go about preventing that from creeping in well once you have a let's take a expense policies okay so you know most companies have policies you can spend 250 dollars in certain cities and you know more in tokyo and you know less in omaha and they're trying to save money right and they're like trying to be careful with expenses and then you've got to have a whole bureaucracy to administer that, to make sure people comply with that, to educate them and whatever. And we got rid of all of that. And then we just had a travel as you would on your own nickel. And, you know, I'm sure there's, you know, occasionally some expense that gets done that shouldn't be, but compared to the cost of enforcement, it's tiny. So, you know, again, that's more of our freedom and responsibility approach. I like that approach better because

it treats people like adults. Yes. And you, in treating people like adults, you want to set some context of, you know, kind of what we mean by that and give some principles and examples. But yes, you're, again, it's getting away, it's moving from the industrial model to the knowledge worker model. And yet many of our corporate forms haven't adjusted fast enough to the basic work. How did you go about recognizing good judgment? I mean, I think people take bets about what's going to work. And if they do end up working, then we say they had good judgment. So I think we recognize it by them making unusual choices and having those be quite successful.

I think of it like advantageous divergence. You go against the crowd and you're correct. That's right. And in those moments, do you think judgment can be taught? I think so. I mean, I, you know, to varying degrees, I mean, it's kind of like music or something, which is everybody can learn some music, probably only some people become fantastic at it. But you need some teaching in it, for sure. It's not just like, it's not like spoken language where it's so wired into our biology, everybody learns to speak. Let's talk about Netflix for a second. You left the co-CEO role, you're now on the board.

And how hard has that been to walk away from something that you created and not be hands-on and not be in the weeds and sort of like to be sitting on the board? It hasn't been hard at all, partially because Greg and Ted, you know, were with me for 20 years and they were very ready. And so, it was exciting for them to get the opportunity that I had, you know, to have the responsibility and to manage so much global complexity. So, I was excited for them and, you know, they've done a great job these last two years, so that helps. And then in terms of my own time, it was nice just decompressing and then spreading my focus, you know, around these different philanthropic and then Powder Mountain efforts.

Can you maybe riff a little bit on the competitive landscape of online streaming? Well, it's, you know, very broad, you know, everything from YouTube, you know, to HBO. and then in every nation it's a little bit different there's a lot of national networks And so Netflix earns, you know, depending on the country, like 5% to 10% of television viewing. And so we got a long way to go. And as we say inside, we lose most of the time. You know, we don't win the majority of television screen time. So then it's like, okay, what are the types of entertainment that we can do and how well can we do them to earn more time?

And is that part of the move into gaming? It's moving in gaming, unscripted content. I mean, initially we were just film and not even in TV. So, yes, we've expanded category by category to see where can we earn more time or, you know, do a better job than anyone else in entertaining our members. Do you think it's inevitable that live sports becomes part of that? Well, on Christmas, we had two NFL games. So I would say it is part of that. It's one of the things that Greg and Ted have done because I was always very skeptical, not of course of the viewing, but that there could be a good long-term proposition there.

And they've proven me wrong and have found good models where it makes sense for Netflix, the company, and of course for all the members. One of the interesting shows that you guys did about F1 Drive to Survive, is that what it was called? Correct. Yeah. You turned a whole country really onto an industry. And it's so interesting to me because you single-handedly changed the trajectory of F1 across the world. Not that it was bad before, but you definitely increased the slope of adoption and interest. And you captured so little value of that on a value basis like billions of dollars accrued to f1 and i'm i'm positive you guys didn't make billions of dollars out of that show how do you think about that and and your role in um driving eyeballs and attention well look f1's been working hard for 50 maybe 100 years you know building up so they they deserve you know that lion's share about it it is certainly true that when we set a show in a context and then the show works, as Drive to Survive did, then it popularizes that thing. But it doesn't bother us that they profit from it any more than if we did a show that was set in farming and then all these people are growing apples. It's like, okay. In other words, we're looking to have incredible entertainment and F1's

an incredible context, uh, for that. Um, so, um, doesn't bother us that they, uh, um, bet on us and then we delivered. I guess where I was thinking about that is like, do you envision any future in the next, you know, 20 or 50 years where maybe you actually buy a sports team or a franchise, or you could have bought F1 before this and then made the show and then, uh, captured that advantage to you, also had exclusive broadcasting rights and all of these other things that sort of tie together. Well, you'd have to ask Greg and Ted about that. They will be the ones trying to figure out, does that make sense in our continued growth and

Maybe just riff on how you see the inclusiveness, DEI playing out in the workplace and how it could be better incorporated or, because there seems to almost be an anti-DEI movement at the same time now that's going on politically or within companies where people are questioning whether people deserve their roles just because they might be a minority or underrepresented.

How do you think about all of this? Yeah, I mean, there's certainly the U.S. federal government is leading this anti-DEI push. I don't know how much it's affected Netflix. Again, you'd have to ask Greg and Ted about that. But I would say in general for us, we always focused on inclusion. We never called it DEI. for us is we want everyone who's a Netflix employee to be able to contribute at their highest ability because that's in our commercial interest. So perhaps we can go as far out on a limb as, you know, some companies did. But our inclusion efforts have remained strong. And again, we want people to feel comfortable so that they can contribute at their highest level.

I love this quote from you. I have two religions, customer satisfaction and operating income. Everything else is a tactic. Talk to me about that. Yeah, I mean, there's another way to say customer satisfaction there is revenue, right? That's the top line. And the operating income is the bottom line. So you want to be, I think Bezos is the one who said this best, to sort of be very firm about certain principles, and then very flexible on the tactics. And then this is a specific application of that, which is let's try to think through things that grow customer happiness and also grow operating income.

And, you know, it's quite hard to do both of those. It's easy to do one or the other at the cost of each other. But the art of business is doing both of those better than your competitors do. You put a $100 million bet on House of Cards, having never watched the pilot. What gave you the confidence that that was going to work out? And I think you beat out HBO for the show. What data did you use? How did you make that decision? That was a big bet at the time. Well, that's 100% credit to Ted Sarandos. So, Ted had been working with David Fincher and trying to develop some of these ideas. The show was up for bid.

And then Ted put in this two-season bid, which was unheard of at the time. You know, HBO had a precedent where they don't do that. So, they didn't match. And then that team, Media Rights Capital, went with us. And it turned out fantastic. But that really, all of that bravery is due to Ted Sarandos. But what data goes into those decisions? I mean, like how did Ted make that decision? You know, there's some data, but I would say that's raw. It's instinct that the thing you've got a partial script, you've got some casting, and you have to guess how good is that show going to be. to figure out what it's going to comp against in terms of your data.

So there's no real data that tells you. That was an instinct call. Is it harder to create content that hits or buy content that hits? Well, if you buy content that hits, you're implying that it's never been shown. So the later it is in the pipeline, the more it's just a sketch, boy, it's hard to tell. The more it's a complete script, you can tell a little bit more. The more it's a script and a cast, you can see a little bit more. The more it's a script and a cast and some dailies, you can see a little bit more. The more it's an edited, completed thing, then you can really take a guess, okay? But you still don't have that much public reaction.

The more you've done test screenings, you can tell. So at each stage, you get more information and you're more likely to be right. But in all of the stages, it's a lot of judgment. So a simple case would be Squid Game. So we knew Squid Game would be big in Korea, or we highly suspected it would be. But the fact that it took off globally was a surprise to us. And we'd been doing it for 20 years. So, again, there are some surprises in there. But you're increasing the odds each time you do these things of learning. And the team's gotten better and better at learning which things are going to get really popular.

How do you go about using data, obviously, to inform what you're creating, but also allowing for serendipity and unexpectedness and variation, as you would tell, if you're only using, we know people like this based on their viewing habits, how much they watch, where they stop, all of this stuff. We can create more of this pretty easily. How do you think of that in terms of variation and surprise and new innovative shows or ideas? um we you know we stimulate uh a lot of judgment of people trying new things and um sometimes we celebrate the failures that don't quite work um because they you know again you got to be willing to have people try things um and it doesn't really work in entertainment to say let's do a show just like that that that rarely ends up successful um so there's not much risk of going for that because it's not a good commercial path.

How much data do you collect on what I watch? You know, we have some basics, but it doesn't help us with the next show. So the thing that's helpful is at the end of a Netflix show, you give a double thumbs up, single thumbs or thumbs down. We know you finished it, but maybe you thought it sucked. And so we... You really want to know what you thought of it. So that's probably the piece of data that helps the most. I just want to let you know my kids go in and they often mess up these little thumbs up, thumbs down things. Sometimes I see these recommendations when they were younger and I'm like, I don't watch Transformers.

Like what? Yeah, well, as kids evolve, us adults don't evolve that fast in our taste, but kids do. Well, they do it on purpose, right? Yeah, yeah. And they totally hijack my YouTube too. all these recommended videos, I'm like, what is going on here? Talk to me a little bit about AI and maybe riff on how you're seeing it used today and how you see it being applicable. And yeah, just walk me through a little bit of your thoughts on that. Well, let's see. In a Netflix context, Ted and Greg really lead that work. Ted's important quote about a year ago was, you're not going to lose your job to AI. You're going to lose your job to a producer who uses AI. And it's a tool for people to use. And hopefully everybody will use it and raise the level of performance just as they did with, say, digital filmmaking.

At Powder Mountain, we haven't found very many uses for AI yet. So we use AI a little bit in marketing copy, but it's pretty minimal. So I think there'll be, you know, a number of businesses that are impacted a lot and other ones that are impacted much less. How are you using it personally? As a search replacement. So I tend to use Claude, you know, or Gemini or OpenAI where I would have used search. So in the ski industry, I've been learning a lot of things about lifts and lift, you know, cable strengths and other things like that and water systems. And I'll be educating myself essentially through AI, through posing a bunch of AI questions.

Has it changed how you go about learning about these things? Because skiing is an entirely new industry when it comes to like lifts and cable strengths and sort of... Yeah, I mean, I think 20 or 40 years ago, you'd probably have to go to some engineering textbooks or it was very opaque about how to do that. The rate of learning is much higher now because of AI. First search, and that made a big difference for 20 years, and then AI is really improving that. You do a lot of work with charter schools. I want to come a little bit higher level in a second, but how do you see AI playing out in the classroom and learning?

Hugely. I mean, I think AI for teaching kids is an awesome application. You know, generally, you're in a classroom with 20 or 30 kids, and it's very hard for the teacher. The kids are all at different levels. And it's a very industrialized model. All third graders are going to learn the same thing today. And that really, again, that's for the convenience of the operator of the school and for being able to handle mass education. And AI offers the potential of every kid gets their own tutor and goes at their own pace. So there's a lot of efforts going on now on the board of Khan Academy, a nonprofit that's really pioneering a lot of stuff with Khan Migo, helping other for-profits like L-O-E-L-L-O that does a reading app that's amazing.

So if you have a five to seven-year-old, it really helps the kid develop a confident reader. The AI is very patient and will listen to the kid and then correct them and then help them get stronger and stronger in their reading. So, you know, and we're scratching the surface. So in the next 10 years, you'll be able to have a complete K-12 and probably university education with AI on a phone or tablet that will be really. change learning. So think of it as AI is getting more impactful in society. The standards of what people need to know and can know is much higher. So we've really got to do this pivot to individualized education from mass classroom lecture style communication. How do you see the role of the teacher changing in that? Well, the teacher will evolve to be a little more like a social worker and a motivator. So they're not actually giving the instruction in that long-term case. All the AI is doing that. And they're doing the social emotional learning. Okay. So how do you interact with other students? How do you do the project? How do you sit still? So think of them as becoming social emotional experts and that they're pretty good at that already and less subject matter.

What happened in 12th century England and, you know, and they do it regurgitating the facts, which is a lot of what they have to know now. So it's them becoming, again, specialized in the social emotional side. And then you've got this huge numbers of companies now are trying to do AI for education. So it's a big scramble, a lot of competition, very exciting. Yeah, I think it's going to be really interesting to watch how it plays out. like Synthesis Tutor just got a state on board, signed on to teach math, and a whole country, I think El Salvador, starting in September, their whole country in past September, and the results are staggering.

Kids are learning faster, better, they understand more. Yeah, and again, the classroom model has so many inefficiencies in how it's organized, how little learning happens, that it's a great AI application to take on. And then also, young people are very adept at new technologies. So, it's got a double win. So, I think education will be one of the big areas transformed and everyone will be able to get a better education. Just as an aside, I tell my 14-year-old, I think he could be a mid-level employee in most companies if they never saw him just based on his output alone. Yeah. Because for him, AI is like his arm, you know?

Like he's been using it since he was young and it's just second nature. And he knows how to how to work that. And I think and the danger for a 14 year old like that is then they sit in a classroom and they can get pretty bored and then they can act out and then they can get labeled in various ways. Totally. So, you know, it's why the again, the industrial education system, you know, is slowly adapting and good ways is to avoid that outcome. And then charter schools are a U.S. form of school governance where a public school is a nonprofit, and they get to be independent and operate under their own rules, but they operate as a nonprofit focused on the kids.

And they're a little more flexible than the government-run schools because they don't have the civil service orientation. And there's quite a range of them. There's no one learning style for charter schools. So it's more like a governance change, again, where they're run by a nonprofit. Why is education so important to you? I mean, it's important to everybody, you know, so I don't think that's unique. Yeah, but not everybody dedicates their time to it. Sure. I could be working on environment or aquaculture, lots of things. Right out of university, I became a math teacher. I was a Peace Corps math teacher in Swaziland, which is between South Africa and Mozambique, and spent two and a half years teaching.

And so later in life, when I became a philanthropist, it was the thing I knew a little bit about. So I would have to say it's a bit random in that way. But then, you know, what I counsel people is all the problems that we have in society today are the ones our parents and grandparents couldn't solve. They're selected to be quite challenging. So if you dig yourself into one... major societal problem and spend your life on that, that's a great outcome to try to make a difference in one of these hard problems. And why charter schools? Why not tackle it through the Department of Education or a different way? Why did you pick that vector?

Well, I came to believe that the government running the schools was sort of the essence of the problem and that it would be better and more effective to have nonprofits. Like if you look at the university sector, you know, and all of our top universities, they're all nonprofits. And so it's modeling on that. Um, so it's a, it's a shift from, uh, kind of more government bureaucratic control to nonprofit control. One thing I think we both agree on is a quality of opportunity. And it's not always that way in the education system, your zip code or your postal code or wherever you live can dictate the quality of education you get. How do we go about increasing a quality of opportunity? Well, I think tech is probably the biggest driver of that, you know, which is if we can have AI tutors that are like in Khan Academy's case, free or low cost in other cases, you know, on tablets that are widely available. I think that's an incredibly great way to expand the franchise of learning. Well, if you were to take over education in charge of the country almost from a specific vector? What policies would you change? What would you change in the classroom? What would you include? What would you take away?

Mostly I'd focus on school choice and giving teachers the tools to create a school because you get that flourishing of, you know, there's lots of teachers who have very good ideas about what would be the perfect public school, at least for some sector of kids, But they have no way to do that in the current system. So it's then allowing them and supporting them to create a nonprofit, to create a school, and then to give the parents the choice to join that school or not. So the whole model of teachers getting to create lots of new schools and then parents choosing which of those schools they want to go to is something I think would be transformative in a positive way for kids' outcomes.

What do you think goes into the decisions to transfer? I'm thinking as a parent, what would cause me to transfer charter schools? Maybe it offers the hope of better education and better teachers, and maybe it also deviates to the negative. Not all of them are going to be successful. So there's a risk involved in that. How do you think about that from the parent's perspective? Yeah. I mean, it's a little like for parents who send their kids to university, they have the same thing. Some universities seem good but aren't really, or it can be a good university and you have a bad experience. So there's no perfect outcome in that.

And then in general, for charter schools, in wealthy areas where the schools are pretty good, the existing government schools, there's not much incentive to change. And basically, so for example, in Palo Alto, California, there's no charter schools. But in East Palo Alto, which is quite poor right next door, there's a bunch of charter schools because the parents are desperate for change and options. So the charters have really focused on the lowest income kids because they don't have great government schools and they're willing to take a chance and try the new charter school. And some of them have, of those charter schools have worked out fantastically.

That's awesome. If you could shadow one CEO for a month, who would it be? In the old days, for me, it was Jeff Bezos, you know, but now he's retired. so you know probably would be Jamie Dimon at this point since he's still active and such a broad intellectual and it'd be fascinating to sort of, you know, be on his shoulder for a week. I think he's one of the, he's well known, but also underappreciated for all the things he's done and all the crises he's managed through in banking. And he's becoming a lot more vocal too, which I think is a good thing. Whether you agree with his vocalness or not, I do love the fact that CEOs are becoming more vocal about things that they're passionate in. They feel like they can share their opinions now. Yeah. What's the biggest misconception that you think other people have about you? I really don't know that they have any misconception or I'm not confident of what their perception is. I would say for now, I'm focusing on turning around this cool ski area as a passion project to making it, you know, this fantastic and unique place, continuing the charter school work that helps, you know, get kids more opportunity.

So I would say if people have opportunity, it's that I'm trying to do things that are a balance of fun and good. And, you know, powder is 90% fun and 10% good, you know, and the charter school work is 30% fun and 70% good. So, it's a range of different projects that way. You said one of the philanthropists you admire is Bill Gates? For sure. Why is that? His basic approach is a technocratic approach to human welfare, to sort of sit down and try to think, okay, what are the causes of human misery? And how do I knock them down one by one? and takes bold, ambitious bets, you know, curing disease, many other things, energy.

So very long-term oriented. He'll work on, give you an example, there's a terrible virus that affects cassava in Africa. And cassava is like potato, but it's the main crop, main calorie crop of many countries and people. And this virus is continuing to spread, maybe naturally, maybe through climate change. and he's been working for more than a decade to find genetically modified variants that don't suffer from this virus. And they're now in field trials, okay? And I was at one of the field trials recently and it's stunning. I mean, you know, basically the plants with this genetic modification don't get the virus and instead of getting a 10 or 20% yield that a farmer gets because the virus has taken 80 or 90 percent, they get, you know, a 95 percent yield. So it's like a five or 10 times more food produced. Okay. But like the foresight, you know, that Bill's team had to have to figure out what to back, you know, early is amazing. So that kind of deep science for, again, improved human welfare is very inspiring. When you were running Netflix and pure software, how did you think about, I don't want to use the word balance, but it's probably the one most people understand between running a business, being ambitious, being all in on that,

also family, friends, health, all these other competing things for your time and attention. Yeah, I think of it as work-life integration. When you have a bad example of work-life integration is pulling up your phone in the middle of dinner with your family, okay? And a good example is, you know, you might come home at 5.30 and cook dinner and hang out with your kids, and then at 8, you know, maybe they're watching TV and you go do an hour or two at work. So the flexibility of what modern technology offers provides you an opportunity to do great integration. Another would be, you know, while you're running, listening to a podcast, okay?

So there's a bunch of clever life hacks to improve integration because most of us want a great family life and a great professional life. And when you're into the balance metaphor, it's sort of more of one, less of another. It's zero sum in the metaphor. And I think that's unsatisfying. There's a degree of truth to it, but it's unsatisfying. And so it's better to think of it as how do you improve work-life integration where you have, again, a great professional life and a strong family life? The ones that get pushed to the side are sort of how much friendships do you develop between, again, depending on your family situation, between family and work, that could be pretty all-consuming. So that tends to get less. And sometimes health and diet and exercise do. But of course, as everyone knows, if you put some time into that, you'll be better at the other things. Are there things that you gave up that you regret in the pursuit of your goals?

I was talking to Brian Halligan about this on the podcast. And he said, look, I was focused on HubSpot. That was my baby that got all, you know, 90% of my attention. And I was like, well, that's interesting right now looking back to your regret. And he's like, not at all. I don't regret that at all. If anything, I probably spent too much time, you know, with friends and family and I should have spent more time in the business. Like, how do you think looking back now about how you integrated all of these different things and if anything, you would change? Yeah. I mean, I don't have any big regrets. I'm glad that I retired at 62. And I think, oh, should I have done it at 55 and had, you know, more of life in this new kind of multifaceted state versus the obsessive state. But I loved my 25 years on Netflix. It was fantastic. And I'm so happy now that Greg and Ted are doing such a good job on it and enjoying it. So, it's all coming together.

So, I can't think of any significant lessons or regret. You do have to feel your way along. And there are a few people who work, oh, Warren Buffett, you know, he does like one thing until he's 95, but I'm not really critical of that. It's not what I would want for my life, but I, you know, it's up to him how he wanted to live his life. You mentioned the word obsessive. Go deeper on that. Well, I think to be world class at anything, whether that's sports, cooking, business, you have to be pretty maniacal and obsessive and intense and, you know, it's not easy. So, I don't want to kid anyone that it's an easy life. You have to definitely, you know, push hard and give a tremendous amount of energy, you know, as I did to Netflix, which is part of why it's great at 62 to hand it over to people who are a decade younger and they're super obsessive now.

I want to come back to culture for a sec. There's one question I didn't ask. What was the keeper test and how did it apply? So the Keeper test is a Netflix shorthand for asking yourself, if one of your employees were quitting, how hard would you work to keep them to stay? Would you try to change their mind? And if you wouldn't, then you should proactively give them a generous severance package and try to recruit someone who you would feel that you would really try to keep them. And so the typical employee test that people use is, did they screw up enough that they deserve firing? So they have to really fail to deserve firing.

And we want to change that presumption to be, no, it's the people that you – fight to keep. Those are the ones that you stay in. If someone is not in that, then you should give them a package and move on. And of course, the more nuanced one is to have a conversation with them. Like I wouldn't fight that hard and let's try to change that and try to not surprise them and be honest with them. But it's shifting at the standard industrial model is like you nearly have to commit a crime to get fired okay as opposed to the athletic team case which is i think i can upgrade i wouldn't fight to keep you um because you're fighting for a roster spot because

for the role of the board on a founder-led company versus maybe a professional manager or non-large founder, I guess, involved in the company? You know, there's a lot of talk about that, founder-led companies and not, and I'm not sure that I buy anything. to that very much. There are some very bad founder-led companies. There's some very good professional-led companies. And there might be some correlation that founder-led ones, you know, are extraordinary. But, you know, Microsoft under Sajan Adela has done incredibly well. The most value out of any company ever, right? Sundar Pichai. I mean, you know, it's like, I'm not sure that it's like such a strict correlation. So I'm thrilled that Mark Zuckerberg is doing so well. But again, you know, there's lots of other companies that have other managers or leaders and everyone's going to eventually that do well. So do you think the role of the board is different when there's a founder as the CEO versus a non-founder CEO? You know, I did a

little venture capital in the mid nineties after Pure and I sucked at it. And so I would say I I would defer to my venture capital colleagues who would comment to you professionally and thoughtfully. I only know my one or two little board experiences, and I would say I'm not that deep in this area. Who's the best venture capitalist you know from an investing point of view and identifying talent? I'm not that broad in the area, so I don't have a comprehensive view, But Ben Horowitz has always seemed to me just phenomenal and he's never been on one of my boards, but just from watching and talking with him.

Is there a moment that stands out as a defining moment in your life? No, I don't remember like any kind of Damascus Road experience where I suddenly change. You know, I would say I've always been open to new experience and trying new things. And I'm quite surprised that then I succeeded a business. I never really thought that much about business. And so I was content to try many things. And I did accompany Pure Software only because I got excited about a certain product and I needed to accompany to get that product out. So I was always led by my passions and it worked out super well. The first product you got excited about was a foot mouse, was it not?

Well, that's true. I mean, let's see, if we go way back in middle school, I was, you know, selling cinnamon sticks and things like that. But when I was a grad student at Stanford in the mid 80s, I thought that the big idea was to have a mouse that was controlled by your foot. So you keep your hands on the keyboard and you could type and point at the same time. And I almost dropped out of school to do it. I got so excited about it and, you know, did a bunch of research on the original mouse and how it came to be and this kind of thing. But once we started using the prototypes, two problems really became glaring.

One is it's very dirty on the floor. So after like three or four days, it was very gross cleaning it out. and then two your leg cramped and it just did not have the uh fine muscle control that your hands have um and so if you tried to do any fine movement with a mouse um it was a big problem and so luckily uh i did not go forward with that idea i want to wrap up we always ask the same question what is success for you i would say success is having a positive impact on other people. And that could be, you know, through religion, that could be through a nonprofit, that could be through government service, that could be through business. But, you know, doing good for others would be my fundamental core definition of success.