SPEAKING OF PORN, A week before the Netflix launch, Steve Kahn invited Reed, Lorraine, and me for dinner.
Wait. It’s not what you think.
“You’re probably running on fumes at this point,” Steve said when he called me. “I just got some new buttkickers I’ve been dying to test out. We’ll have a nice dinner, drink some wine. You can tell me what you’re worried about and I’ll be reassuring.”
“Huge subwoofers,” Steve said. “I put ’em under the floor and attached them to the joists. Makes the whole room vibrate.”
It was a Tuesday night, so our usual babysitter could cover for us, and even though the point of date night was to get away from work—to get away from members of the Netflix board like Reed and Steve—by that time, a week pre-launch, it was almost impossible for me to ever fully leave the Netflix offices behind. Even when I wasn’t there physically, my mind returned to the offices, looking for solutions to all the little problems we needed to fix before going live.
Steve knew that. He’d known me a long time. He knew I wouldn’t be able to truly take a break, so he decided to help any way he could—by at least giving Lorraine a night off.
“Only thing you have to bring is a DVD,” he said.
Easy enough. Before I left the office for the day, I swung by the vault, and, without looking, grabbed the top DVD case on the pile of new releases that had just arrived that morning.
I really needed a break. So did Lorraine. “Morgan’s been driving me nuts,” she said in the car, on the way to Los Altos. “She spent all afternoon stealing lipstick out of my purse and trying to eat it.”
This sounded almost unbearably cute to me, but I understood.
Steve lived on the east side of Los Altos, on a street crowded with gigantic new houses. His house wasn’t that big, but it was nice. I mean really nice. Architecture Digest nice. And it displayed (tastefully, of course) all the trappings of wealth that a long, successful career in business afforded.
“I don’t think you need to lock the doors,” Lorraine said sarcastically as I parked the car. “Not in this neighborhood.”
Steve greeted us at the door with glasses of wine, healthy pours of Cabernet (for me) and Chardonnay (for Lorraine). He gave us a tour through impeccably decorated rooms. Two things stand out in my memory: a wall in the study that was covered entirely with bird’s-eye maple cabinetry, and a living room filled with modernist furniture that looked straight out of Beetlejuice. It was the first time I’d seen more than one Eames chair in the same room.
“The furniture museum is Karen’s territory,” Steve said when his wife was out of earshot. “I don’t know what any of this crap is.”
Throughout this tour, I smelled cooking. But Steve and Karen were with us—who was watching the stove? It wasn’t until we repaired to the bar for finger food that I saw the white coat of a caterer, disappearing through the swinging doors to the kitchen. This was a first for me: I’d never been to a dinner party with a hired chef.
When Reed and his wife arrived, Steve lifted his empty wineglass. “Cocktails in the garage!” he said, laughing. Within thirty seconds a tray of gin and tonics appeared, carried by a smiling waiter, and Steve took us out to the garage to show off his new Porsche. I’m not really a car guy, but I know when to make appreciative noises. And it wasn’t just the Porsche—there was also a full home gym: gleaming, brand-new exercise machines, a treadmill, a stationary bike, all of it atop racquet-club-quality rubber mats. Though he was a decade older than I was, Steve was probably in better shape. Back at Borland, Steve’s fortieth birthday resolution had been to run every day on his lunch break, for forty days in a row. And to take me, wheezing, along with him.
Drink in hand, I wondered if all of this—the car, the furniture museum, the caterers in the kitchen—was in my future, too. I thought of my beat-up Volvo, dog toys in the backseat; the house with a leaky roof I couldn’t at that moment afford to repair; the stained green carpet of the Netflix offices, which had begun to exude a peculiar stench the closer we got to launch day.
It seemed unlikely. Or at least far, far in the future.
There was still about a half hour before the cooks would be done with dinner. So while Lorraine and Karen poured more glasses of Chardonnay and discussed our kitchen renovations, Steve, Reed, and I repaired to the back deck.
“Bring a suit?” Steve asked.
And that’s how I ended up in borrowed Hawaiian swim trunks, bobbing in a saltwater pool, in an impromptu board meeting with two of Netflix’s earliest investors.
“There are a ton of things I’d do if we had more time,” I said. “For instance, we want to do a thing called The List, which would let you save a list of titles that you want to watch. Mitch has this idea to have a digital clerk who helps you find movies he knows you’ll like.”
“Makes sense,” Steve said, resting his wineglass on the side of the pool. “Every time I go to Hollywood Video I just ask the kid with the nose ring what to rent. The other guy always gives me French New Wave crap.”
Reed wasn’t really saying anything, but I could tell that he was thinking. About what, who knew. By spring of ’98 he’d gotten tired of his classmates at Stanford and had been focusing most of his energy running a different venture: Technology Network. TechNet was a lobbying group that combined Reed’s two overriding passions: the tech world and educational reform. It pushed for better protections for tech companies against lawsuits from shareholders, easier visa requirements for foreign tech workers, and improvements to math and science education. Reed was a big believer in charter schools and was using the group to advocate for them, donating money to a growing number of politicians.
Frankly, he had enough to worry about. But I was still relieved when he dunked his head underwater and swam to the other end of the pool. I didn’t want his laser focus on any of Netflix’s problems. Due to Michael Erlewine, we’d already missed one launch date—it was now April 14 rather than March 10—and I didn’t want Reed to think that we’d have any problem meeting the second one.
As Reed began swimming laps, his six-foot frame gliding through the water like a seal, I told Steve about the version of The List we’d actually been able to construct, under our deadline. Like a lot of our quick fixes, it wasn’t built to last. Christina had come up with it: a button a user could push that would flag a movie you were interested in, so that next time you saw it, an icon would appear. The icon? A finger with a red thread wrapped around it.
“The engineers hate it,” I told Steve. “They call it the Bloody Finger.”
We laughed. And for a moment, the stress of the previous weeks melted away. We had a deadline, sure. We had people counting on us: investors to satisfy, employees to pay, and customers to reach. But when it was all said and done, we were a website that gave people access to DVDs. We weren’t changing the world like Reed was. We’d fix the Bloody Finger. But for the moment, it was okay.
After drying off and having dinner—mussels in some kind of sauce, a fish that Steve assured me wasn’t really endangered, all washed down by a wine I couldn’t pronounce the name of—we headed to Steve’s home theater, adjoining the living room. It had been a while since I’d seen it, and he’d made a number of modifications. There were huge leather chairs with massive arms (and cupholders), each separate from each other. Each of them was nicer than anything in my house—and he had twelve of them! He’d installed track lighting in the aisle, just like a real movie theater. The screen was easily eight feet across and took up a full wall, and the projection system hung down from the ceiling. Steve pointed out speakers: tall ones on stands at the front of the room, two massive ones at the back, and a center speaker in the middle of the room that Steve said was just for dialogue. Steve then gestured at one of the seats, second row, slightly left of center. “That seat? That’s the money seat,” he explained. “Everything is balanced, faded, and toned so that it sounds perfect in that one spot.”
Karen started up the popcorn machine just outside the screening room, and I took a look inside the replica candy case that stood by a refrigerator stocked with sodas.
Mounds bars. My favorites.
“So, Marc, you got a movie for us?” Steve asked, once we all had our concessions.
“Sure,” I said, fumbling in my backpack until I found it. “I don’t know anything about it, but it just came in today. One of this week’s featured releases.”
Steve saw the cover. “Oh, right, Boogie Nights! I remember hearing that was good.”
“Worth a shot,” I said. I felt good: relaxed, full of wine and seafood and the reassurances of a friend. I sat down in one of the front-row recliners, next to Lorraine. Steve took the money seat, next to Karen. Reed took the row behind them.
The lights went down, the curtain went up, and we watched Dirk Diggler let it all hang out in crystalline, DVD-quality resolution, across an eight-foot screen.
At first I was horrified. Then I laughed until I cried.
“Let’s hope your content team knows more about your inventory than you do,” Lorraine said.
I had to agree.
That night with Steve Kahn taught me a thing or two about the virtues of preparation. But I’ve learned most of my lessons on that subject outdoors—particularly, in the mountains.
It’s definitely not a place that you can take lightly.
There are river crossings, where a single missed step can plunge you into water that was snowmelt only hours before. If the cold doesn’t get you, then it will rush you downstream and stuff you permanently beneath a submerged outcropping or felled tree or, failing that, trap your leg in the rocks and bend you backward, buffeting you up and down until you finally lose the strength to hold your head above water.
There are snowfields. To cross them, you have to step with enough force to forge a solid platform. But it’s entirely possible that once you’ve committed your weight to a step, your platform will give out without warning, leaving you sliding downhill at increasing speed, hoping that you will be able to arrest your slide with your ice ax before you plunge at high speed into the rock-filled moat that forms the boundary between snow and earth.
There are cliffs. To climb them, you must make a pact with the rock, promising to linger on each hold only as long as it takes to move to the next one, the cliff warranting that the tiny edge of rock you have grasped and staked your life on will support your weight. Until it doesn’t, and with sudden and unexpected consequences, you’re hurtling down, your fall unobstructed until it’s broken by the jagged piles at the base of the cliff.
There are dangerous animals like bison, cougars, and grizzlies; poisonous plants, berries, and mushrooms; you risk infections, lacerations, contusions, concussions, and dislocations. There are avalanches, rockslides, mudflows, and icefalls. There are blizzards, downpours, hailstorms, and sudden freezes.
There are countless ways nature can tell you that you are unwanted, alone, and far from medical attention.
But probably the scariest risk in nature’s repertoire is lightning. When you’re in the mountains, weather moves fast. One moment, the sky is clear and cloudless, and the next it’s dark, filled with angry clouds. Is there anything more biblical than a bolt of energy that comes crashing down from the clouds without warning? In an instant, lightning can turn a towering Douglas fir into a blazing birthday candle. And when you’re up high, it’s certainly no consolation to know that lightning aims for the highest point around—whether that be a tree, rock pile, sailboat mast, ice ax, or head. Lightning doesn’t discriminate based on your religion, your educational background, your sexual orientation, how much money you have, or how many pounds you can bench-press. All it knows is that you are out in the open, unaware, and, for at least that particular moment, the fastest and easiest way to move 10 billion watts of potential energy in a single release from turbulent cloud to the ground. If it has to go through your head, down through your organs, and out through the soles of your feet in order to do so…well, then that’s just your bad luck.
To maintain your sanity in the mountains, you can’t dwell on these things. But the best mountaineers aren’t quite sane. I’m no climbing legend or anything, but when I’m at elevation, I’m always asking myself, “What is going to go wrong?” If I have to cross a stream, it’s only after I’ve hiked a few hundred yards downstream to see if there is anything there that might trap me should I lose my footing and be swept down that way. I’m looking for tree limbs on the bank I can grab, areas where the current eddies out into a gentle swirl, so I know what to swim toward. And as I start wading across the stream—or start my way across the log that spans the creek—I’ll have loosened the waist belt on my pack. It makes it harder to carry, but infinitely easier to shed should I need to swim.
That’s what it’s like being in a startup. You spend a lot of time thinking about what might happen. And preparing for it. Sometimes you actually put a backup plan in place, but most of the time you just think through how you will respond—you scout out the rivers for rocks, check out the cliffs for things to grab onto if you fall. Most of the time, the worst doesn’t come to pass. But when it does…when the shit really hits the fan? Well, you’re going to be the guy with the pail and the mop. And wearing a raincoat. And that’s the kind of thing that makes the difference between being a success and being the guy who is covered with shit.
Sometimes, as we learned on Netflix launch day, there is no difference. You’re both.
On the morning of the Netflix launch, I woke up early—around five. Lorraine mumbled in her sleep as I quietly slid on my slippers and shut the door behind me. The kids would be up in two hours or so, but until then I had the house to myself. In the predawn darkness, I dodged hammers and granite samples in the still unfinished kitchen. It was the last room in the house to be remodeled, and we hadn’t gotten very far yet. The décor was straight out of 1971: fluorescent lights, avocado-green cabinets, peeling linoleum over the wood floors.
There was still some coffee in the pot from the previous day, and after heating it up in the microwave, I drank it standing in the kitchen, feeling my mind boot up. I made a new pot, scooping ground coffee into a filter and pouring water into the reservoir of our coffeemaker. It was ostensibly for Lorraine, but I’d probably drink half of it before she got up. I’d need every bit of the caffeine.
In the six months since Reed had written that check, we’d done so much—we’d assembled an inventory, put together a website, built a company with a culture. We’d worked tirelessly to make our dream of an e-commerce site for DVDs a reality.
But up until now, it still had the feeling of an unresolved dream. The site existed for us—but not for anyone else. The problems we anticipated—and we’d racked our brains anticipating them—were still in the future. We weren’t even sure if we’d identified the right problems. The successes, too, were in the unrealized days and months ahead.
There are a great many stages in the life cycle of a startup. But a tectonic shift happens on launch day. Before you go live, you’re in the dreamy zone of planning and forecasts: your efforts are provisional. You’re making predictions about what can go wrong and what can go right. It’s a very creative, heady sort of work. It is essentially optimistic.
The day your site launches, something shifts. Your work now is no longer predictive and anticipatory: it’s fundamentally reactive. Those problems you anticipated? You didn’t know the half of it. Your planned solutions? They’re a drop in the bucket. And there are hundreds—thousands—of issues that you could have never even imagined, and now have to deal with.
That morning, watching the sun rise over the mountains, I was positioning the various teams in my mind, imagining what the day would bring for Jim Cook’s crew, for Eric’s programmers, for Te and the marketing squad. I ran through the day’s plan: the 9:00 a.m. launch, the morning full of press calls, the process of order to shipment.
In other words, I was doing what I’d been doing since the summer of 1997: strategizing. Before you launch, you’re making a beautiful battle plan, coordinating the future movements of your troops.
The second you launch, you’re in the fog of war.
I got to the office at seven or so in the morning and called our standard daily meeting. Christina, Te, Jim, Eric, and I filed into the conference room to go over the day’s schedule.
“We’ve got press calls starting at nine,” Te told me.
For months, Te had been lining up reporters and news outlets who would be interested in writing a story about our startup, hitting her Rolodex hard so that when our launch day came, people would read about it. All morning I’d be on the phone with these reporters, giving them a pretty canned speech that I’d spent hours trying to make sound natural.
Here’s an excerpt:
With this morning’s launch of the nation’s first internet DVD rental store, every DVD owner—no matter where he lives, no matter how far he lives from a video rental store—is now guaranteed access to every DVD title available—to buy or to rent.
“Who’s first?” I asked.
“Steve Perez at the Santa Cruz Sentinel,” Te said.
Starting with the hometown paper wasn’t coincidental. My strategy is always to start with a softball. For your first call, there’s nothing like having a friendly voice on the other end of the line.
(And in this case it paid off. Unlike the San Francisco Chronicle or Yahoo!, two of the other outlets that covered us, the Sentinel gave us prominent coverage, with a photo. Somewhere in my files there’s a faded full-page newspaper clip from the day after our launch, featuring a photo of a very late-nineties iteration of me, complete with a pager clipped to my belt, standing next to a Gateway and a mess of cables and wires. The lede?
Still trying to figure out how to program your VCR? Trash it then. Videotapes are as passé as Grandpa’s Polaroids.)
“Great,” I said, running over my lines in my head. I knew that whatever happened, I’d have to project cheerful calm through the mouthpiece of my telephone. Bombs could go off, the servers could catch on fire, and the site could crash—but I’d just have to close my eyes and keep going.
Netflix makes it incredibly easy to rent a DVD. There’s no driving. No searching for parking. No standing in line. We even make it easy to return it. And we’re open 7 days a week, 24 hours a day.
We went over, one last time, the process for Jim’s team.
“Order comes in,” Jim said, “and once we’ve got credit card authorization, it goes to the printer in the safe. My team finds the disc, slips it into the sleeve, and scans it once to pull it from inventory. Then it’s off to Dan. Dan inserts the promo sheet, seals things up, slaps the labels on, and scans it again to show it’s shipping. Then into the bin and ready to mail.”
Jim was still smiling that stupid grin, but I could tell he was nervous. He’d spent weeks streamlining his process, checking it for flaws and inefficiencies. But there was only so much he could do without the pressure of real orders coming from the site. And one of the big problems was that we had no clue how many orders we’d get on launch day. Five or ten? Twenty or thirty? A hundred?
Corey had been working overdrive on the message boards, pumping Netflix up to tech nerds and cinephiles, and he’d continue to do so throughout the day. But how many orders was that? I wasn’t holding my breath for big numbers.
Eric and his team—Boris, Vita, Suresh, and Kho—looked inscrutable. Whether they were nervous or not, I couldn’t tell. Most of the stress of the day fell on their shoulders, of course. They’d anticipated all sorts of problems with the site, and they’d formulated any number of solutions to those problems. But they knew that things would go wrong that they hadn’t expected, and so the day, for them, was going to unroll in a flurry of Mountain Dew and pizza slices. Eric barked out a few largely incomprehensible reminders to his team, and I took that as an opportunity to look them over. Boris and Vita appeared the same as ever, unflappable and calm. Kho looked like he’d dressed up for the launch: clean black T-shirt, somewhat clean-looking black jeans. His hair looked combed.
Christina was nervous. She’d planned for this day for months. She had hundreds of pages, in dozens of notebooks, detailing the site’s operation—how a user would interact with it, what would happen if they made a mistake. Her team had spent many hundreds of hours integrating our own movie content with Michael Erlewine’s back-of-the-box data, building informative, interesting entries for all 925 films in our archive. I could see her team through the conference room window, still manually scanning the cover images of the last few DVD boxes to be uploaded onto the site. To them, it was just another day of their usual work. But to Christina, whose understanding of the website’s logistics far surpassed anyone else’s, it was a stressful day.
“You know,” she told me, “this is our fifth launch together?”
It was true. We’d launched a whole series of PaperPort scanners at Visioneer together. And each of us, individually, had dozens of other launches under our belt. But that was then. After all, in software and packaged goods, when the actual launch day arrives, you’re already past the point of no return. The product has been finished for weeks—it’s come out of the factory, it’s made its way into boxes, it’s on trucks going out across the country. Launch day is just a press day.
“I feel like this is going to go somewhat differently,” I said as we filed toward the bank of computers in the middle of the office workspace.
“I think you’re right,” Christina said.
We had no idea.
It started well. At 8:45, everyone in the office gathered in front of Eric’s computer. The site was going live at 9:00, and we’d already made the rounds of preparations. Was there paper in the printers? Were all the DVDs tucked in their sleeves in the safe? Were all the i’s dotted, all the t’s crossed?
There were actually two versions of our website. One resided on a server that wasn’t online. It was a duplicate version that Eric could use to test out new pages and features. Anything new was posted first to what was called a staging server. Then we would bang on it for a while to make sure that it worked the way we expected it to, and, more importantly, that the new additions played nicely with the rest of the site. Then, once we had some satisfaction that we weren’t going to have a disaster on our hands, we would push the new version over to what was called a production server, which was hosting the live site.
Up until this morning, the distinction between the two sites was entirely academic. Although one was supposedly final and connected to the internet, it wasn’t visible to the actual public. Although we had practiced pushing things live, and pretended we had real customers using it, there weren’t any real consequences. This was all about to change.
For the hundredth time, Eric idly scrolled through on the staging site, pretending to be a customer. “It looks good, it looks good,” he said, clicking on the links and filling in fields on our forms. Boris and Vita were acting nervous, too. They knew—as we all did—that things would break, and that they’d have to be on their toes to fix the site when it invariably malfunctioned. They’d planned for things to go wrong. What happened if a user entered his state abbreviation as NF rather than NC, ND, NE, NM, NV, or NY on the checkout page? What would happen if the credit card number didn’t start with a 4 (for Visa) or 5 (for Mastercard), or didn’t go through at all? Would we fail gracefully, or crash and burn?
One final thread that I knew was still sticking out of the seams of our startup was the confirmation email. We hadn’t yet created an automated confirmation email function for users, one that would contact a customer after she placed an order and reiterate information about payment and shipping. We’d have to compose confirmation emails by hand for each individual customer. That wasn’t ideal, obviously, but I figured it would be workable.
“Five minutes,” Christina said at 8:55. She was drinking coffee out of a huge mug and munching on a scone. That’s how I knew she was nervous—a gym rat like her usually stayed far away from buttery pastries.
“How are the nerds?” I asked Corey. He’d been on the forums all morning, reminding some of the heavier users about the Netflix launch.
He shrugged. “Hard to tell. I think they’ll show up, but who knows how many.”
Jim had his hands on his hips. I could see his mind going through the logistics of shipping, replaying over and over how to fill an order, pack it, and store it until 3:00 p.m. That’s when the orders had to hit the post office in Scotts Valley, to ensure that they’d ship that day.
At 8:57, Te tapped my shoulder and said, “Remember, you’ve got a call in five. So you can watch the ball drop, but then you gotta be by the phone.”
I nodded, and out of the corner of my eye saw the door open and then close. It was Reed, slipping in just before launch. I hadn’t expected him to come, but I was glad to see him—and somewhat relieved that we were on schedule. He gave me a brief nod when he walked in, but he didn’t say anything, just stood somewhat awkwardly behind the huddle of employees in front of the computer.
By 8:59 the office was so quiet that I could hear my watch’s second hand. At 9:00 on the dot, Eric leaned over, punched a few keys, and we were live. We held our breath. Eric had hooked up a bell to his computer—not unlike the kind that businesses leave on the counter to alert employees that a customer needs help—and rigged it up so that it would ring each time an order came in. I filled out the day’s first order as a test: I, Marc Randolph, requested a copy of Casino, to be delivered to my address outside Scotts Valley. I hit Enter to place the order, and moments later the bell rang. Almost immediately, we had three others in the queue, each sounding the bell as credit cards were authorized, inventory decremented, and packing slips printed. I patted Eric’s computer for good luck and walked back to my office for press calls.
Within minutes, the bell sounded like a machine gun. Even with the door closed, even as I carried on a conversation with Steve Perez at the Santa Cruz Sentinel, I could hear it, pinging in the next room.
We got fifteen minutes.
For fifteen minutes, customers chose movies, inputted their personal information, gave us their credit card numbers, and hit the red button that said confirm. For fifteen minutes, the bell rang, orders were printed out on the pair of laser printers at the back of the office, and Jim’s team took them to the vault. For fifteen minutes, each order was matched to its movie, the disc was slid into the mailer, and an address label slapped on. For fifteen minutes, the completed orders grew into a small stack in a box by the door.
Several months ago we recognized an opportunity to create a major commerce brand in a billion dollar market, as well as to be a critical catalyst in the growth of one of the fastest-growing consumer electronics categories. This morning, Netflix opened the world’s first Internet DVD rental store: NetFlix.com. The NetFlix store carries every DVD movie—all of which are fully available for rental.
I watched it all through the glass of my office window, giddy with excitement. I’d asked Te to stay in the room with me, and to write down any questions from the press on the whiteboard I kept in my office—the same board we’d used to decide on a name. I liked to use journalists’ questions as a jumping-off point for longer, more in-depth stories—even though the beginning of each call was canned, I wanted my answers to be improvisatory riffs that really got at the heart of what we were trying to do. I’d weave in American history, pop culture, and even stories from the outdoors. But I needed an anchor, a handhold to grab—hence the questions on the board, and Te standing next to it, marker in hand, like a Silicon Valley Vanna White.
Despite phenomenal growth in the DVD market, most of the nation’s video outlets don’t yet carry DVD—and those that do, carry only a limited selection of titles, often a single copy of each. Netflix, on the other hand, carries virtually every DVD. While we don’t carry X-rated titles, we do—as of this morning—list 926 titles for rent, the largest selection available anywhere. And our warehouse contains hundreds of copies of the most popular movies, virtually guaranteeing that our customers can rent the movie they want, when they want it.
It wasn’t hard to get excited, riffing about our business, that day. I could see it through the window, right there in front of me—the dream I’d been working on, in full color.
At the NetFlix web site, we make it fast and easy to find the right movies, and we deliver them in two or three days. Customers keep them seven days and get to watch them as often as they like. When they are finished, they simply replace the discs in the envelope we provide and drop it in the nearest mailbox. We even pre-pay the return postage.
Slowly, however, I started to realize that something was wrong. Eric was frowning at his computer. Boris and Vita were typing furiously. Suresh was down on his hands and knees, grasping at something underneath the servers. Kho was unplugging and replugging cords into the wall, and tracing their looping trajectories up to the ceiling.
Eventually, Christina edged into the office, biting one of the few fingernails she had left. I’d just finished chatting with Jon Swartz at the San Francisco Chronicle.
This is a tremendously exciting prospect for us, for our customers, and most importantly, for the entire DVD community.
I set the receiver down in the cradle. That’s when I noticed it—the bell wasn’t ringing.
Christina rolled her eyes. “Servers crashed.”
This is another problem that current startups don’t really have to deal with. Now, almost every web company runs their business in the cloud. Rather than the long, laborious, and capital-intensive setup that Eric and Kho had to deal with, now companies simply write a check, buying access to somebody else’s computers, stored in air-conditioned warehouses with backup power and plenty of storage. But back in 1998, cloud services didn’t exist. If you wanted to run an e-commerce site—or any website with high traffic, for that matter—you had to own the means of serving up web pages, storing data, and keeping track of customer information. That meant racks of computers in your own office dedicated to hosting your website.
We’d gone into launch day with a grand total of two of them. Corey, who had spent two years at Netscape, had tried to tell me to stock up on extras. “You’re going to need them,” he’d said. “If not for the launch, then soon after. Why not buy in bulk, ahead of time? Don’t you want to anticipate the best-case scenario?”
I did. But I think a part of me was still superstitious, worried that I would jinx the whole thing. Christina had said it best—launching the company was like throwing a party, one that you weren’t sure anyone else would attend. You didn’t want to buy extra kegs if no one was going to come.
But Corey had been right, of course. Two servers was like trying to cross the old West with a single mule. Wasn’t going to cut it.
When I walked out of my office, Eric and Boris were gearing up to make a trip to Fry’s, the electronics store over the hill in Campbell, where they’d buy eight new desktops with a whopping 64 megs of RAM each.
“That should do it,” Eric said, looking unconvinced.
“What do we do in the meantime?” Christina asked. “We could be losing dozens of people.”
“What a nightmare,” Te said. “All these press guys are gonna go to the site and there’s gonna be nothing there!”
Then Reed spoke up. It was the first time he’d said anything all morning. “Can’t you just put a STORE CLOSED, COME BACK TOMORROW sign up?”
We’d grown accustomed to calling Netflix “The Store.” It made sense—what we were trying to offer was an e-commerce version of what Mitch Lowe and his family were doing at Video Droid. But unlike a storefront, a website can’t hang an OUT TO LUNCH sign on the door. The internet doesn’t have business hours.
“Did we build an error page?” I asked.
Christina’s face fell. “No,” she whispered.
“Well, let’s do it,” I said. For the next forty-five minutes, while Eric and Boris were buying new servers, we built a cheeky “We’re down but not out” page that would reassure customers that they were in the right place—and that we’d be right back.
That page got a lot of views that day.
An hour later, Kho hooked up the eight new servers, essentially quintupling our capacity for new orders. Everything worked fine—the site was up and running, the orders were flying in—for about forty-five minutes. Then the servers crashed. Again.
And again, Eric and Boris took off for Fry’s. I didn’t go with them, but I can imagine it even now—the two of them riding sternly to the store in the rusty pickup truck that belonged to Greg Julien, Netflix’s company controller. Pushing a shopping cart directly to the computer department, then dealing with the same checkout person as they discussed among themselves whose credit card to use. That clerk had probably seen this exact thing happen dozens of times, with dozens of startups. We were in Silicon Valley, after all.
The site crashed all day. And because we had no way to measure site traffic yet, we didn’t know how many potential customers we were missing.
It was a disaster. But at the same time, these were good problems—we had visitors to the site, we had orders coming in.
“People are coming!” I found myself saying in amazement. “They’re coming to the site, and they’re giving us their credit card information!”
When we’d moved into the offices, I’d bought a bottle of 1995 Ridge Estate Cabernet Sauvignon—a California wine that was about a hundred dollars more expensive than the bottles Lorraine and I usually bought. (Translation: It was $120.) I’d told everyone that we’d open it once the website had gotten a hundred orders, and took a straw poll about when the rest of the office thought that would happen. The shortest guess was from Suresh, who was working on inventory and order entry. He guessed less than a day.
I guessed a month or two.
Guess who was right?
“Good call, Suresh,” I said sometime after 2:00 p.m., when the hundredth order came in. I flipped him a silver dollar, which he caught without even taking his eyes off the screen.
It’s what we’d all hoped for, of course. But it still was astonishing, in the moment, to see it. As I watched the orders come in, and listened to the printer printing them out, I had an enormous sense of relief. Our big reveal hadn’t been greeted by an orchestra of crickets.
It was popular. In fact, it was a bit too popular.
We ran out of boxes. We ran out of tape. We ran out of paper. We ran out of ink.
After the fortieth printer jam of the day, I walked to Corey’s desk and asked him if he could slow things down a little. The servers were down, the printers were jammed, and we had Christina’s entire content team typing individual confirmation emails for the orders we’d already received. (Turns out an automated email should have been higher on the to-do list.)
“Think you can hold off the nerds for a little while?” I asked.
Corey laughed. “I’ll try.”
“But they’re really into it,” he said.
Increasingly, as the day went on, one deadline began to loom large: 3:00 p.m. That’s when the Scotts Valley post office packed all their mail into their trucks and headed over to San Jose. If we wanted our DVDs to go with them, we had to have all of our shipments there—processed, packaged, and addressed—by 3:00, or the same-day shipping we’d promised our users would turn into next-day shipping.
That was unacceptable to Jim. But as the day went on and the orders rolled in—as the servers crashed, and the printers jammed, and Christina’s team gave themselves blisters writing confirmation emails to everyone who ordered a DVD—he was getting nervous.
“If we get jammed, we can drive everything down to Santa Cruz,” Jim said. “Their last pickup is at four.”
Jim had done research for weeks on pickup times, post office hours, and routes. He knew that the DVDs we dropped off, presorted by destination, would travel first to San Jose, then to all of the destinations we’d seen on orders that morning—San Diego, Seattle, San Antonio. But first they had to get out of our hands.
“If I leave at two fifty-two,” he said, “I can get to the Scotts Valley PO with a minute to spare. If we’re not ready by then, I can go to the Santa Cruz post office—but it’ll take me twenty minutes to get there, and who knows if there will be parking. So I’d have to leave at three thirty to be safe.”
I knew that Jim was just thinking out loud. He’d driven to the post offices a half-dozen times in the weeks before the launch, trying to find the quickest route. Once he was there, he’d familiarized himself with the parking lot and the drop-off location. In an extreme gesture of optimism, he had even put a handcart in the back of his pickup that he could use to wheel up boxes if the orders were too heavy to carry. He’d already scouted out where the handicap ramps were, in case he needed to use them.
“You do whatever you think is best,” I said. “But it would be kind of nice to use the hometown PO for the first run, wouldn’t it?”
Jim nodded. We’d stepped into the vault by then, and two of Jim’s team were busy flipping through the hanging discs, searching for movies to fulfill recently placed orders. I picked up an order slip from the table near the door and joined them, searching the alphabetized wall for a DVD copy of Heat. I walked past it several times before I saw it. I bumped into Jim’s workers at least twice.
“You’re hopeless, Marc,” Jim said, grabbing the DVD from me and expertly shoving it into a mailer. He affixed an address label with finesse and expertly sealed the flap. “Now get out of here. We’ve got forty-five orders more to fill before the post office closes.”
The clock on the wall of the safe read 2:24.
It was stressful until 2:52, when Jim left for the post office. Then the whole office relaxed. The day’s deadline had passed. Now it was just time to figure out how to make things work better the next day.
We’d expected 15 or 20 people to use the site to order a DVD. We’d gotten 137—and potentially we’d gotten more than that, since we didn’t know how many people had tried to access the site when it was down.
It was an enormously promising start. But that’s all it was: a start. There were hundreds—no, thousands—of changes we still needed to make.
Did we open the bottle of wine? We didn’t have a corkscrew, so I had to push the cork into the bottle using a ballpoint pen, then decant into an empty liter bottle that used to hold Diet Coke. And we had to use red Solo cups instead of wineglasses. But we opened that bottle, and all shared a brief toast in the conference room. I looked for Reed but didn’t see him—he’d slipped out sometime in the afternoon.
“To beginnings,” I said. “To the work ahead.”
And there was a lot of it. We needed to automate confirmation emails. There were dozens of problems with the online ordering form, which, it turned out, was fine at catching bad state codes. Not so good at validating zip codes. And clueless for international orders. (Who knew people would try to order from other countries!) We still needed an algorithm that would ensure that high-demand titles were always in stock—and figure out how to steer customers to lower-demand titles in a way that made them actually want to rent them.
There were thousands of puzzles to solve, and we all knew that we’d spend months solving them. So after the toast, we all crumpled our Solo cups into the recycling bin and got back to work.
Around six or so, someone ordered pizza. I left around ten. The engineers would probably be in the offices all night, working to ensure that the next day’s traffic wouldn’t crash the site. And of course the site didn’t shut down overnight—you couldn’t just turn the neon sign off and get back to work in the morning. All of us realized, then, that our work with Netflix was entering an entirely new stage.
That night, I sat again at the table in my unfinished kitchen. The kids were asleep, and so was Lorraine. I was still antsy, high on the adrenaline of the day. When I’m like that, there’s no point in trying to sleep. So I pulled out my notebook and started writing down a list of all the things we needed to work on:
- Site Redundancy—how do we gracefully recover from crashes when a server goes down?
- Get better Packing slips—peel off labels keep coming off in the printer.
- More inventory? How many is too enough? How many is too many?
- Need Metrics! Get Suresh to report on today’s orders by source and title. What else?
As I thought of possible solutions, I idly lined up a few slats of wood we’d left on the table. They were 120-year-old pieces of redwood that we had reclaimed from some of the house’s original flooring, and Lorraine had been thinking of using them as shelving. I lifted one, felt its heft, the lines of the wood grain. I tried to imagine it on the wall behind me, which was covered in paint samples for the eventual renovation. I could almost see it.
We were still building our kitchen, even as we lived around it. Just like Netflix, I thought—we’d built it, but it wasn’t finished yet. It would probably never be finished, truthfully. Every day, we’d have to work to keep it upright—to keep the water flowing, to keep the cabinets filled. To keep the burners clean and the gas bill paid.
But it was there, now. It was out in the world.
Years ago, on a climbing trip, I was hiking across a snow plain just below the summit of a mountain when I felt a peculiar static buzzing around my head. My hair stood on end, and around my helmet there was an ultraviolet glow. It was Saint Elmo’s fire—a positively charged electromagnetic field that was about to discharge itself to earth. It was lightning, just before the strike.
That’s how Netflix had felt, all that spring—a blue haze buzzing around all of our heads. But starting on April 14, Netflix wasn’t just potential energy anymore. It was a live current, positive meeting negative. It was a lightning strike.
And now we had to figure out how to manage it.