How Netflix's Reed Hastings overcame failure while leading his first company

'I just felt like a failure because I was clearly making these big, wrong decisions,' CEO says

Netflix CEO Reed Hastings is a successful business leader worth billions of dollars.

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He is estimated to be worth $4.8 billion, according to Forbes, and Netflix made over $20 billion in sales last year.

At the end of March, Netflix had 183 million subscribers around the world and is considered the leader in the streaming industry.

However, before he co-founded Netflix in 1997, Hastings founded and led another company called Pure Software.

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Though the company was successful in the six years Hastings served as the CEO -- from 1991 to 1997 -- he has said he felt like a “failure” for some of the decisions he made.

In a 2015 interview, with venture capitalist John Doerr, from Kleiner Perkins Caufield & Byers, reviewed by FOX Business, Hastings said his time as CEO was “an amazing adventure.”

“I never set out to be CEO,” Hastings told Doerr. “I just wanted to do the product. I was very product-driven and this particular product was for other software developers, so you know, it was a match. But it was very frustrating because I was and felt underwater a lot of the time.”

He said that even though the company was doubling in sales every year, he kept changing vice presidents of sales for five of Pure’s six years.

“I just couldn’t pick,” he explained. “I kept picking the wrong type of person because I just didn’t know that much.”

“And the real thing is, I just felt like a failure because I was clearly making these big, wrong decisions,” he added. “It was the feeling of the company deserves better.”

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He said he asked the board twice to find a new CEO for Pure Software, but both times they said they would rather have him “do those mistakes than take the other set of risks,” Hastings told Doerr.

Netflix Founder and CEO Reed Hastings is pictured during a 2017 interview in Barcelona, Spain. (AP Photo/Manu Fernandez, File)

“It gave me absolution or resolution because I could kind of -- they were my confessor,” Hastings said. “And then I could forgive myself. And one of the hardest things is when you make big mistakes as a leader, is being able to forgive yourself because you just, you know, for the sake of the enterprise, you just feel terrible.”

“And yet, you have to realize that hey, if you gave it your cleanest, most ethical, best hardest thinking shot, that’s all you can hold yourself accountable for, not the outcome,” Hastings added. “But that’s hard.”

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By 1997, Pure was bought out by its largest competitor, Rational Software, because the company missed its numbers, Hastings explained to Doerr.

“It was a soft landing to what would have been very bad news,” he said.

After the sale, Hastings said he took some time to figure out what his next step would be and eventually landed on Netflix, which he co-founded with Marc Randolph.

He said that leading Netflix has been redeeming for him.

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“I got to start over as a CEO,” he said. “In the first company, I was a very good product person, but I was not a good CEO. Or I was not a great CEO. I was sincere but naive. And then in the second company, because you get to start over, you’re much more thoughtful.”

“It was just a chance to do it over and do it better and I’ve definitely enjoyed Netflix much more than Pure,” he added. “Pure, you know, it was the feeling of near-drowning constantly by the growth and by my lack of preparation.”

He’s certainly learned how to be better at hiring, though he said it was really just a matter of practice.

Netflix declined to comment further on this story.

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