This is why I always liked Netflix's outlook (both stated and practiced):
We are a sports team, not a family. Perform well and you will be paid well, perform poorly and you will get a nice check to go elsewhere. And sometimes you might perform really well but we just don't need someone with your skills anymore, so we'll still give you nice check to go elsewhere, and that isn't a reflection on your abilities.
I worked for someone who liked that, too, and after leaving Netflix, he carried it over into a new startup. It was not as great of an experience for any of us (including that founder) as it may sound. Years later, and we still talk amongst ourselves about how weird of an environment it created.
Basically, that outlook sounds great on paper, but is not so great to actually live.
I lived it for four years and loved every second of it, but I will be the first to tell you that it's not for everyone.
I can also see how it would be hard to carry over into a startup, because the entire culture rests on the idea that you can pay people top of market to be there, that they don't have to worry a lot about budgets, and that you can afford to give people big checks when they leave.
> What's so off-putting about: "Do well and you stick around, do poorly and you go away"?
Because I don't want to have that kind of instability if I don't get a lot of money to make up for it. It works because people know that if they get "cut" they'll be doing fine.
Also, the best people have lots of options. If there are multiple interesting options, all else being equal the extra cash will help a lot.
There's a certain risk any time you take a new job of "how well will my view of poor performance align with my manager's view?"
In a "regular" company there's usually a longer leash if you don't get that right on day 1, or if circumstances change and the specific skills you were brought in for aren't as relevant anymore.
In the Netflix model there's a by-design higher chance of it instead resulting in you losing your job.
So if you aren't compensating with $$$ for that increased risk, it's going to leave you with more of the folks without other good options and fewer of the folks who say "I can get the same money with less pressure if I take this other role instead."
For a lot of people, psychological safety is paramount over even money, especially in the United States where your employment is tightly tied to healthcare, insurance, etc.
Secondly, more often than not, doing "well" or doing "poorly" can be highly subjective and politically motivated. Also, underneath it all we're human. A great performer for years may fall off the wagon for a few quarters due to various life circumstances like death of a loved one, divorce, health, etc.
Is the solution to this is to just throw them to the curb the minute they aren't performing to their previous level?
If so, then I expect to be paid until the Benjamin's are pouring out of my eyeballs. You get what you pay for.
Because the philosophy revolves around the competitiveness of the position. Sports teams have limited roster, and make bales of cash (or are planning on doing so, with massive funding). The goal is for the position to have some cachet.
Why put up with "do well and stay or poorly and you go away" when other places pay the same for better culture and less drama?
One note: high turnover causes lots of workplace challenges - so you have to have a carrot along with your stick or you'll create a doom loop. Just "do well and stick around" is way to glengary glen ross for me.
Danger pay is a thing for a reason. Contracting pay vs salaried pay is a thing for a reason.
Or mathematically, the long term expected return from a volatile employment situation should be equal to the long term expected return from a stable employment situation.
A great culture is really hard to reproduce because it depends on the ability of the CEO. The CEO needs to properly evaluate the performance of his team, and reward or punish them fairly to demonstrate the culture. In the meantime, the CEO needs to find the likeminded people to uphold the culture. In the end, culture is not a plaque on the wall but how the company rewards and punishes employees at every level.
A simple example. Netflix promotes Freedom and Responsibility. Their engineers seemingly had freedom to choose their own systems to build with their own designs at their own pace. The company's guideline to their managers used to be "All that a manager does is to set context". But really? How can the leaders avoid catastrophic failures? How can the leaders keep their orgs' schedules and promises? How can the leaders draw the line between empowering and micro-management in such environment? It's not there is a runbook. And things do fail and sometimes someone do take the fall. Then who? How much? How do the leaders do it to avoid sink the culture?
Netflix can do that because they pay as well as sports teams do.
If you offer me a typical tech job at 1/20th of what a netflix engineer makes, don't expect me to perform like Michael Jordan.
Sports team dedicate their entire life to performance. 80 hour weeks are nothing to them. Their diet, sleep, and personal lives are part of their jobs. I don't want a typical tech shop to have that sort of control over me unless they are paying me serious money.
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All that aside, modern Netflix is not what Reed Hastings describes. There are tons of tenured benchwarmers lounging around.
It reminds me of Amazon's "bar raiser" requirement. That a new hire has to be better than 50% of the interviewers. The idea that Amazon engineers are the top is laughable to anyone in the space these days. Only the desperate work for Amazon.
Wow if these numbers are correct it has declined a lot. Then again the stock is not meteoric like it used to be. Netflix was minting multimillionaires all day long back their younger years.
> That a new hire has to be better than 50% of the interviewers
Not sure if a typo, but if this is what you actually meant, this is a _gross_ misunderstanding of the situation. The benchmark is that a new hire should _have capability to_ outperform 50% of folks in the current role, not a) _currently_ be able to outperform b) 50% of _interviewers_ (who are potentially of higher level than the interviewee).
Anecdataly, I am ~6 months into my first post-Amazon role (after 10 years there) and have only met a single peer who would have been passable in my previous team.
I like the sports team concept in terms of being a sieve for performance. Similar to HS->College->NFL athletes, elite military SOF groups, etc. You get binned and sometimes that's hard to accept, but that's the point of the filter.
It's interesting that despite the high-performance culture though, Netflix is still slowly degrading. This past year I finally realized I could cancel Netflix and not feel like I lost anything, and I was an early subscriber to the DVD plan.
Any thoughts on Netflix's degradation over time? My take is that its transitioned from peak phase into cash-cow mode once everyone wanted a piece of the streaming pie.
It depends on what metrics you are basing the degradation. Financially they are doing very well. After they cracked down on account sharing, they gained six million new subs, so they seem to be doing well on product as well.
They don't seem to have as much breakout content as before, but I think they have a lot of minor hits, especially in other countries. And honestly that is better for their business than huge breakout hits.
From what I've heard from friends who are still there, the nexus of the company shifted from the Bay Area to Hollywood a few years ago. At that point they became more of an entertainment company than a tech company. Some have said all the "hard" problems are solved, now they are just making small adjustments. Although I disagree with this: they quietly added live streaming which was a huge tech leap for Netflix, although it was so quiet no one seems to have noticed.
Also, with the economy the way it is and being an entertainment company now, they are starting to worry more about budgets. When I was there the only real budget guidance we got was "don't grow your headcount faster than our subscriber count" and "keep IT costs flat on a per stream basis". I hear now directors get budgets they have to stick to.
Also they added leveling which allowed them to hire more junior engineers. When I was there, there were no levels. We didn't really hire junior engineers. We hired senior engineers to solve problems that usually juniors would be given, and they would solve it with automation and robustness that maybe took a bit longer and would be considered "over-engineered" but that lasted for years and scaled with minimal effort.
But the freedom is still there for the most part. Managers still mostly just provide context and the leaf nodes come up with the implementations.
> Any thoughts on Netflix's degradation over time?
Netflix both got better and worse at the same time.
With wider audiences and more content, there is both more content for you in absolute terms, and less in proportion to the total amount. So while there's more stuff you will like to see, it gets drowned out.
Netflix was unlikely to ever be able to forever remain an aggregator of content from other distribution shops. They would've gotten squeezed to death from all sides.
So now they have tons of content and tons of viewership (and tons of profits the last several years) but they've changed from being "the biggest streaming hub for all your favorites" to "one of many producers and distributors." They might on the whole have more good stuff you'd like - but they have a lot less mindshare for that stuff than when it was stuff that had already done theater and TV rounds.
(What's really interesting to me is that the music industry evolved differently, with almost no exclusives, so you have many competing streaming services (but all that seem to be VERY squeezed profit-wise) all with the same content. My best guess is it's because people want to be able to flow music together in custom playlists, spanning a bunch of artists, vs binging a single series or such?)
The music industry set up a way for anyone who wanted their content to get it without their permission, as long as they paid for it, and they did that back in the 50s when radio was their main method of distribution. It was too hard to make deals with every radio station, especially since they were mostly independent.
So the music streamers were able to leverage that and extend the deal.
If movies had a similar licensing model, you'd see a ton of "Netflix"'s who were all licensing the same content and competing on user experience. Like the music streamers.
Although it should be noted that the music streamers are now moving towards the exclusivity model, where the big ones are making exclusive deals to keep that music off of any other platform.
THe low cost of a single song vs. an entire episode I suspect also plays a factor. A lot of artists are one or two song wonders, so once you take out a Taylor Swift, there's no incentive for artists to limit their songs to a single platform, no platform will pay enough for the exclusivity to make the artist think it is worth it.
> Any thoughts on Netflix's degradation over time?
I still have plenty of use for Netflix, but here are my thoughts:
From a creativity/artistic perspective: creativity is one of the things where simply throwing more money at it and/or "optimizing" it is not the solution. I mean, it can be the solution from a purely business perspective, but I'm assuming this isn't satisfying to you (or me), hence the "degradation" you speak of. Creativity, as in "good quality things you can enjoy but are not necessarily mass-produced for everyone to like" is not a "problem" to be "optimized" by whatever algorithms Netflix is using.
From a business perspective I've no idea how they are doing. Given their crackdown on account sharing, I'd say things are not as rosy as they used to be. Also, quite obviously, the competition became harder; Netflix is no longer the only player in town.
We are a sports team, not a family. Perform well and you will be paid well, perform poorly and you will get a nice check to go elsewhere. And sometimes you might perform really well but we just don't need someone with your skills anymore, so we'll still give you nice check to go elsewhere, and that isn't a reflection on your abilities.