Strategic advice from Reed Hastings, co-founder of Netflix

Reed Hastings, co-founder of Netflix, recently sat down for a conversation with Marc Andreessen, co-founder of venture capital firm Andreessen Horowitz. Full podcast is here. My notes are below:

— Don’t dabble. If you’re going to go after a new area you think has potential for high returns, invest one-third of your resources. He’s citing this for business, but the same can be said for investing your personal time. This goes back to the advice of Warren Buffett and Bill Gates that the most important factor in their success was ‘focus.’

— We constantly underestimate the magnitude of change that can occur 10+ years into the future. This goes back to Bill Gates’s line that we overestimate what can be accomplished in one year but underestimate what can be accomplished in ten years. For any of us, just look back at who you were ten years ago to see how much can change in that timeframe. Now look ahead ten years and consider what you want to be, what capabilities you want to have.

— Andy Grove’s (founder/CEO of Intel) line ‘Only the paranoid survive’ is too simplistic. In chess, once you get 7-8 moves into a match, the number of possible directions the match can go reach the limits of human understanding. Similarly, when running a business, trying to stay aware of every possible threat can lead to delusional worry about some scenarios that are very unlikely to occur. It’s better to prune the small branches to focus primarily on the big ones.