Netflix

Reed Hastings often told the story of his inspiration for Netflix: a $40 late fee from Blockbuster. He said, “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?’” Still chagrinned over the late fee, Hastings, a dot-com multimillionaire, formed Netflix, a company that would rent DVDs through the mail for a monthly subscription price, with no postage charges or late fees. Hastings’s model for Netflix seemed simple enough. Netflix subscribers would create a wish list of DVDs on the company’s website, and Netflix would send a new title from the list when the previous rental was returned. Behind the simple model however, Netflix’s success had been built on attending to every detail of its operations and adapting to the company’s various constituencies. For subscribers, Netflix designed a recommendations engine that customers liked and that allowed Netflix to shift subscriber interest from