Here's why we love the culture at Netflix

From a company perspective, there's a lot of reasons to admire Netflix. For one, they disrupted a major industry (remember when you actually had to leave the house to rent a video -- not to mention the stress of late fees?). They've also thrived for nearly decade, and their success evolution has led them to become a household name, an everyday verb, an expense 75 million people in 190+ countries happily pay each month, and, of course, become subject to one of today's most popular memes

What most people don't know is that Netflix has also built an extraordinary culture. In fact, back in 2009, Netflix developed what is still one of the most famous company culture manifestos out there, with over 10 million views. 

“It may well be the most important document ever to come out of the Valley.” - Sheryl Sandberg, COO of Facebook

The slideshow is 124 pages, and well worth looking over, but in case you don't have that kind of time right now, we'll pull out a few highlights for you: 

Netflix values: good judgment, communication, impact, curiosity, innovation, courage, passion, honesty, selflessness. 

A great workplace isn't about perks. "Great workplace is not espresso, lush benefits, sushi lunches, grand parties, or nice offices. We do some of these things, but only if they are efficient at attracting and retaining stunning colleagues." 

They hire stars. "Adequate performance gets a generous severance package."

No brilliant jerks. At Netflix, it doesn't matter how smart or talented you are if your personality sucks. 

They use the Keeper Test. "Which of my people, if they told me they were leaving, for a similar job at a peer company, would I fight hard to keep at Netflix?" Anyone else should get their generous severance now.  

They're loyal. If people who were previously star employees hit a rough patch, Netflix keeps faith they'll be stars again. Similarly, if Netflix hits a temporary bad patch, they want their people to stick with them. 

They value high performance. They don't care how many hours their employees work or are in the office, as long as they deliver excellent results. "Sustained A-level performance, despite minimal effort, is rewarded with more responsibility and great pay."

They hire the best, and reward them with freedom. "Responsible people thrive on freedom, and are worthy of freedom." As opposed to most companies, their goal is to increase employee freedom as the company grows. 

"Avoid chaos are you grow with ever more high performance people -- not with rules." 

They have a Culture of Creativity and Discipline, Freedom and Responsibility. This means: 

  • Unlimited vacation time (since 2004) 
  • Work when you want -- just get the job done
  • They policy on expenses is simple: "Act in Netflix's best interest"

They use a Highly Aligned, Loosely Coupled model of teamwork. Strategy and goals are clear and specific, but there are minimal meetings except to gain alignment. Trust is high, so teams can move fast.

They pay top of market. "Whether Netflix is prospering or floundering," they ensure they offer the best salaries for the best talent because "one outstanding employee gets more done and costs less than two adequate employees." 

"Employees can decide how much Netflix stock they want, versus cash." All comp is full vested. 

They celebrate their alumni. When people move on, Netflix doesn't hold it against them. "We should celebrate someone leaving Netflix for a bigger job that we didn't have available to offer them."

A quick backgrounder on Netflix's history

Photo of Reed Hastings via Wired Magazine

Photo of Reed Hastings via Wired Magazine

Netflix was co-founded by Reed Hastings and Marc Randolph in 1997 as a mail-order DVD service, that essentially took on the local video store business. 

Hastings bootsrapped the company himself, investing $2.5 million in startup capital (he'd previously built Pure Software, which he sold for $700 million), and by April 14, 1999, the co-founders and their team of 30 launched the website with 925 pay-per-rent movie titles, that went for 50¢ each. (And yes, late fees applied.) They moved into monthly subscriptions in 1999, and since 2000, has offered unlimited rentals without due dates and late fees or shopping charges. 

A decade after launching, in 2007, Netflix delivered its billionth DVD and began offering the streaming video service we know it as today. 

Photo of Reed Hastings via Wired Magazine

Photo of Reed Hastings via Wired Magazine

While the company has had its fair shares of highs and lows, 55-year-old Hastings has led it valiantly as CEO. Abiding by his strong values and opinions, and a relentless commitment to culture, he has not only led the company to a $42 billion valuation, but also created a culture roadmap for countless businesses to learn from. 

“You have to fight the idea that as you get bigger, the culture gets worse," Hastings said in a Stanford Business interview. "At Netflix, we’re significantly better [than we were] because we have more brains thinking about the problem. If you have 1,000 really thoughtful people thinking about how to improve, you’ll make a lot more progress than if you have 100,” Hastings says.

What's your company crush?

We're doing a big series on the coolest company culture out there, and would love to know which companies you look up to. Let us know in the comments below, via Twitter, or via our contact form.