Before it became the streaming giant and the household name it is today, Netflix was a DVD rental business that Amazon was interested in acquiring. In 1998, in fact, Amazon top boss Jeff Bezos offered $15 million for Netflix, which was then a one-year-old company. Netflix co-founders Marc Randolph and Reed Hastings turned down his offer – and the rest, as they say, is history.
Today, 25 years to the date of that fateful meeting, Marc Randolph has once again spoken about their reasons for turning down Amazon’s offer.
“25 years ago, in 1998, Reed and I flew to Seattle to talk about selling Netflix to Amazon. The meeting went well, and Jeff Bezos floated a price of $15 million,” tweeted Randolph, who in 1998 was the CEO of Netflix.
He explained that even though talks with Amazon went well, the meeting made him and his business partner Reed Hastings realise that they were not yet ready to put their startup in the hands of somebody else.
“It turns out that there’s nothing like having the option to get out that reinforces your desire to stay in,” wrote Randolph, admitting that taking up the offer would not have been a bad deal for less than 12 months of work. At that time, Hastings owned 70% of Netflix, while Randolph owned 30%, and both would have earned millions if they had taken up Bezos on his offer.
“For Reed and I, this wasn’t a sales trip. This was a commitment ceremony,” the first-ever CEO of Netflix concluded. He also spoke about the incident in greater detail in a LinkedIn post shared today
Randolph has spoken about Amazon’s offer in the past as well, both in interviews and in his memoir ‘That Will Never Work,’ according to CNBC.
He said that he and Hastings discussed the pros and cons of selling their DVD rental startup to Amazon and agreed it made sense because Netflix, at that time, was not making money and had no scalable business model.
Despite that, both the co-founders knew they were “on the brink of something.”
Turns out their hunch was right – Netflix is today a production and streaming company with a market capitalization of over $150 billion.
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