Reed Hastings

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Reed Hastings
Re publica 2015 - Tag 1 (17195424118).jpg
Hastings in 2015
Born
Wilmot Reed Hastings Jr.

October 8, 1960 (1960-10-08) (age 59)
EducationBowdoin College (BA)
Stanford University (MS)
OccupationBusinessman
Known forCo-founding Netflix
Net worthUS$4.7 billion (April 2020)[1]
TitleCEO and Chairman of Netflix
Board member ofKIPP, DreamBox, Netflix
Spouse(s)Patricia Ann Quillin
Children2

Wilmot Reed Hastings Jr. (born October 8, 1960) is an American billionaire businessman. He is the co-founder, chairman, and chief executive officer (CEO) of Netflix, and serves on a number of boards and non-profit organizations. A former member of the California State Board of Education, Hastings is an advocate for education reform through charter schools.[2]

Early life and education[edit]

Hastings was born in Boston, Massachusetts, the son of Joan Amory (Loomis) and Wilmot Reed Hastings. [3] His maternal great-grandfather was attorney, financier, scientist, inventor, and executive producer Alfred Lee Loomis.[4] He attended Buckingham Browne & Nichols School in Cambridge, Massachusetts. He entered Marine Corps officer training through their Platoon Leader Class, and spent the summer of 1981 in Officer Candidate School at Marine Corps Base Quantico. He did not complete the training and never commissioned into the Marine Corps—choosing instead to pursue service in the Peace Corps.[5]

After earning a Bachelor of Arts degree in Mathematics from Bowdoin College, Hastings joined the Peace Corps “out of a combination of service and adventure”,[6] and went to teach high school math in Swaziland from 1983 to 1985. He credits part of his entrepreneurial spirit to his time in the Peace Corps.[6] He made a remark that, “Once you have hitchhiked across Africa with ten bucks in your pocket, starting a business doesn't seem too intimidating”.[7][8]

After returning from the Peace Corps, Hastings went on to attend Stanford University, graduating in 1988 with a master's degree in computer science.[9]

Founding of Pure Software[edit]

Hastings' first job was at Adaptive Technology, where he created a tool for debugging software.[10] He met Audrey MacLean in 1990 when she was CEO at Adaptive Corp.[7] In 2007, Hastings told CNN, "From her, I learned the value of focus. I learned it is better to do one product well than two products in a mediocre way."[7]

Hastings left Adaptive Technology in 1991 to found his first company, Pure Software, which produced products to troubleshoot software.[6] The company's growth proved challenging for Hastings, as he lacked managerial experience.[6] He stated he had trouble managing with a rapid headcount growth.[5] His engineering background didn't prepare him for the challenges of being a CEO and he asked his board to replace him, stating he was losing confidence.[11] The board refused, and Hastings says he learned to be a businessman.[6] Pure Software was taken public by Morgan Stanley in 1995.[6]

In 1996, Pure Software announced a merger with Atria Software. The merger integrated Pure Software's programs for detecting bugs in software with Atria's tools to manage development of complex software.[12] The Wall Street Journal reported that there were problems integrating the sales forces of Pure Software and Atria after the head salesmen for both Pure and Atria left following the merger.[13]

In 1997, the combined company, Pure Atria, was acquired by Rational Software, which triggered a 42% drop in both companies' stocks after the deal was announced.[13] Hastings was appointed Chief Technical Officer of the combined companies[13] and left soon after the acquisition.[14] After Pure Software, Hastings spent two years thinking about how to avoid similar problems at his next startup.[14]

Founding of Netflix[edit]

In 1997, Reed Hastings co-founded Netflix, offering flat rate movie rental-by-mail to customers in the US

In 1997, Hastings and former Pure Software employee Marc Randolph co-founded Netflix, offering flat rate movie rental-by-mail to customers in the US by combining two emerging technologies; DVDs, which were much easier to send as mail than VHS-cassettes, and an online website to order them from, instead of a paper catalogue.[15] Headquartered in Los Gatos, California, Netflix has amassed a collection of 100,000 titles and more than 100 million subscribers.[16] Hastings had the idea for Netflix after he left Pure Software.[5] "I had a big late fee for Apollo 13. It was six weeks late and I owed the video store $40. I had misplaced the cassette. It was all my fault. I didn’t want to tell my wife about it. And I said to myself, ‘I’m going to compromise the integrity of my marriage over a late fee?’ Later, on my way to the gym, I realized they had a much better business model. You could pay $30 or $40 a month and work out as little or as much as you wanted."[5]

Hastings said that when he founded Netflix, he had no idea whether customers would use the service.[6]

Netflix culture[edit]

As Netflix grew, the company was noticed for its innovative management practices—the results of the culture Hastings was exploring—called “Freedom and Responsibility.”[14] Netflix reportedly offers mediocre employees large severance packages to ensure that employees are consistently working to further the company’s innovative environment. Netflix has eliminated sick and vacation time for employees, and instead allows them to manage their time off individually.[17]

Hastings created an internal culture guide for Netflix by meeting with employees to discuss the company’s culture and employees' theories about it. In August 2009, Hastings posted this internal culture guide publicly online, and it eventually became a pre-employment screening tool that dissuaded incompatible people from applying.[18]

Internet television[edit]

Hastings is a proponent of Internet television and sees it as the future.[19] He credits YouTube for his shift in strategy for developing a video streaming service.[20] Netflix launched a service in 2007 to stream movies and television to computers.[19]

Other business interests[edit]

Hastings has been a director of Facebook since June 2011.[21] As of September 2016, he is reported to own over US$10 million worth of Facebook shares.[22] In April 2019, Facebook announced that Hastings would leave the board as of May 2019.[23]

Hastings was on the board of Microsoft from 2007 to 2012.[24]

Educational and political activism[edit]

California State Board of Education[edit]

After selling Pure Software, Hastings found himself without a goal.[9] He became interested in educational reform in California and enrolled in the Stanford Graduate School of Education.[9] In 2000, Governor Gray Davis appointed Hastings to the State Board of Education, and in 2001, Hastings became its president.[9] He spent $1 million of his own money together with $6 million from Silicon Valley venture capitalist John Doerr to promote the passage of Proposition 39 in November 2000,[25] a measure that lowered the level of voter approval for local schools to pass construction bond issues from 66 to 55 percent.[9][19]

In 2009, Hastings ran into trouble on the State Board of Education when Democratic legislators challenged his advocacy of more English instruction and language testing for non-English speaking students.[26] The California Senate Rules Committee refused to confirm him as the board's president.[26] The California State Legislature rejected him in January 2005.[26] Governor Arnold Schwarzenegger, who had reappointed Hastings to the board after Hastings' first term, issued a statement saying he was “disappointed” in the committee's action.[9] Hastings resigned.[when?][9]

In April 2008, Steven Maviglio reported that Hastings had made a $100,000 contribution to California Governor Schwarzenegger's “Voters First” redistricting campaign.[27]

Charter schools[edit]

Hastings is active in educational philanthropy and politics.[2] 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 school's charter.[2]

In July 2006, the Santa Cruz Sentinel reported that Hastings had donated $1 million to Beacon Education Network to open up new charter schools in Santa Cruz County, where he lives.[28]

Hastings, as a Giving Pledge member since 2012, founded Hastings Fund and pledged $100 million to children's education.[29] In his post on Facebook, he said that the Hastings Fund "will donate these funds in the best way possible for kids' education."[30] Hastings Fund gave its first two gifts, totaling $1.5 million, to the United Negro College Fund and the Hispanic Foundation of Silicon Valley for college scholarships for black and Latino youth.[31]

In March 2014, he argued for the elimination of elected school boards.[32]

Technology[edit]

In April 2004, Hastings authored a Wall Street Journal op-ed advocating the expensing of stock options.[33]

Politics[edit]

In August 2007, the Los Angeles Times reported that Hastings had donated $1 million to a committee formed to support California State Superintendent of Schools Jack O'Connell's candidacy for Governor of California in 2010.[34]

In April 2009, Hastings donated $251,491.03 to Budget Reform Now, a coalition supporting California Propositions 1A to 1F.[35]

Hastings supported Hillary Clinton in the 2016 US presidential election.[36]

Historically Black Colleges and Universities (HBCUs)[edit]

In June 2020, Hastings donated $120 million to be equally split among the United Negro College Fund, Morehouse College and Spelman College.[37] It was the largest individual donation ever to support scholarships at HBCUs.

Personal life[edit]

Hastings lives in Santa Cruz, California.[1] He is married to Patricia Ann Quillin, and has two children.[9]

He appeared in a front-page article in USA Today in 1995, posing on his Porsche.[38] He has said that if he ever appears on the front page of USA Today again it will “not [be] on the hood of a Porsche, but I would [pose] with a bunch of movies”.[38][relevant? ]

In 2018, Hastings appeared in a podcast series by Linkedin co-founder Reid Hoffman, Masters of Scale, and discussed the strategy adopted by Netflix to scale.[39]

References[edit]

  1. ^ a b "Forbes profile: Reed Hastings". Forbes. Retrieved 18 April 2020.
  2. ^ a b c "Charter schools advocate Reed Hastings to speak April 12: 4/00". news-service.stanford.edu.
  3. ^ "Family tree" (PDF). humphrysfamilytree.com. Retrieved 2020-02-05.
  4. ^ John Reeves (November 12, 2012). "9 Fascinating Things About Reed Hastings and Netflix". The Motley Fool.
  5. ^ a b c d "Out of Africa, Onto the Web". December 17, 2006 – via NYTimes.com.
  6. ^ a b c d e f g "How I Did It: Reed Hastings, Netflix".
  7. ^ a b c writer, Interview by Matthew Boyle, Fortune. "Questions for... Reed Hastings - May 28, 2007". money.cnn.com.
  8. ^ "Netflix CEO Reed Hastings '83 Funds New Program for Student Success at Bowdoin | Bowdoin News Archive". Retrieved 2020-05-15.
  9. ^ a b c d e f g h "Stanford Magazine - Article". www.stanfordalumni.org.
  10. ^ Mookherji, Kalyani (2017). Digital Revolutionaries: Who Have Change the World. Prabhat Prakashan. ISBN 978-81-8430-523-4.
  11. ^ "'Charismatic' founder keeps Netflix adapting - USATODAY.com". www.usatoday.com.
  12. ^ Journal, Don ClarkStaff Reporter of The Wall Street (1996-06-07). "Software Firms Pure and Atria Agree to Merge in Stock Deal". Wall Street Journal. ISSN 0099-9660. Retrieved 2020-03-19.
  13. ^ a b c Journal, Don ClarkStaff Reporter of The Wall Street (1997-04-08). "Investors Pan Rational's Plan To Buy Pure Atria for Stock". Wall Street Journal. ISSN 0099-9660. Retrieved 2020-03-19.
  14. ^ a b c "Netflix: Flex To The Max". September 24, 2007 – via www.bloomberg.com.
  15. ^ Auletta, Ken. "The Red-Envelope Revolution". The New Yorker.
  16. ^ "Global video streaming market is largely controlled by the usual suspects". VentureBeat. 2019-03-31. Retrieved 2020-03-19.
  17. ^ Wang, Angela. "Is unlimited vacation a trap? It just might be". Insider. Retrieved 2020-03-19.
  18. ^ Zangs, Emma. "Is Netflix's 2009 Culture Deck Still Relevant Today To Shape Company Culture?". Forbes. Retrieved 2020-03-19.
  19. ^ a b c Riley, Jason (February 10, 2008). "Movie Man" – via www.wsj.com.
  20. ^ Stanford Graduate School of Business (October 15, 2014). "Reed Hastings, Netflix: Stanford GSB 2014 Entrepreneurial Company of the Year" – via YouTube.
  21. ^ Facebook. "Facebook Names Reed Hastings to Its Board of Directors". www.prnewswire.com.
  22. ^ "REED HASTINGS Insider Trading Overview". www.insidermole.com. Retrieved 2016-09-27.
  23. ^ Rodriguez, Salvador (April 12, 2019). "Netflix CEO Reed Hastings to depart Facebook board of directors". CNBC.
  24. ^ "Microsoft Announces Reed Hastings Will Not Seek Re-Election". October 9, 2012. Retrieved December 28, 2012.
  25. ^ Wall Street Journal. "Silicon Valley Moguls Spend On Education Ballot Battles" by Ann Grimes. October 31, 2000.
  26. ^ a b c "California Department of Education. "O'Connell on Reed Hastings - Year 2005." January 12, 2005".
  27. ^ the California Majority Report. "Is Reed Hastings Six Figure Contribution to Schwarzenegger's Redistricting Effort Simple Revenge?" by Steven Maviglio. April 3, 2008.
  28. ^ "Santa Cruz Sentinel. "Netflix CEO gives $1 million to open charter schools" by Matt King. July 11, 2006".
  29. ^ "Reed Hastings". Forbes. Retrieved 2020-04-24.
  30. ^ Candid. "Reed Hastings Creates $100 Million Education Fund". Philanthropy News Digest (PND). Retrieved 2020-04-24.
  31. ^ Eng, James (2016-01-13). "Netflix CEO Reed Hastings Starts $100M Fund for Education". CNBC. Retrieved 2020-04-24.
  32. ^ Strauss, Valerie (March 14, 2014). "Netflix's Reed Hastings has a big idea: Kill elected school boards (update)".
  33. ^ Hastings, Reed (April 5, 2004). "Expense It!" – via www.wsj.com.
  34. ^ Halper, Evan (August 1, 2007). "State Republican Party floating in a tide of budgetary red ink" – via LA Times.
  35. ^ "California Secretary of State - CalAccess - Campaign Finance". Cal-access.sos.ca.gov. Retrieved June 26, 2012.
  36. ^ "Hillary Clinton racks up business endorsements". Politico. July 23, 2016.
  37. ^ Togoh, Isabel. "Netflix CEO Reed Hastings Donates $120 Million To HBCUs: 'We Hope This Will Help More Black Students Follow Their Dreams'". Forbes. Retrieved 2020-06-17.
  38. ^ a b Wall Street Journal. "Netflix's CEO Is Mobilizing For Battle With Amazon" by Carl Bialik. October 20, 2004.
  39. ^ "Masters of Scale - Reed Hastings".

External links[edit]