Netflix’s CEO explaine Why culture matters.

The horse was the dominant form of human transportation for about 5,000 years, domesticated in Kazakhstan, 3000 BC. That’s Reed Hastings, the founder and CEO of Netflix. You might think he’s giving an elevator pitch for a Netflix Original, like Marco Polo, but without the blind Taoist monk. He’s actually revealing the foundational strategy that drove the company’s success. He starts the story on the plains of Kazakhstan and moves pretty quickly from there. HASTINGS: The horse was the dominant form of human transportation for about 5,000 years, domesticated in Kazakhstan, 3000 BC. So for 5,000 years, if you wanted to make a contribution to personal transportation, it was a better saddle, better breeding, better hooves. And then in one generation, from 1900 to 1930, everything changed with the internal combustion engine. What Reed Hastings understands, with such clarity, is that technological shifts don’t always happen incrementally. Sometimes, they burst over your head like a thunderclap and wipe away habits that have lasted thousands of years. HASTINGS: And the trick is to realize, those are pretty rare. So sometimes innovation happens fast. And that’s the kind of change we typically aim for in Silicon Valley. But more often, innovation happens slowly. And Reed Hastings knew early on that Netflix needed both kinds of innovation. They started by sending DVDs in the mail, and evolved into a streaming video service with original content. HASTINGS: Much of the time, the right strategy is to improve what you’ve got, and then some of the time, everything changes – and correctly recognizing the differences there is really important. Humans are inventing faster and faster, and that does mean that the typical business model is shorter lived than it would have been before. So I’m not expecting internet streaming to be 5,000 years, like the horse. But it may be like the automobile, where it’s 100 years or more.