Hastings and Randolph considered and rejected selling and renting VHS as too expensive to stock and too delicate to ship. Randolph admired Amazon and wanted to find a large category of portable items to sell over the Internet using a similar model. Patty McCord, later head of human resources at Netflix, was also in the carpool group. Hastings and Randolph came up with the idea for Netflix while carpooling between their homes in Santa Cruz, California, and Pure Atria's headquarters in Sunnyvale. He was previously a co-founder of MicroWarehouse, a computer mail-order company, as well as vice president of marketing for Borland. ![]() Randolph had worked as a marketing director for Pure Software after Pure Atria acquired a company where Randolph worked. Hastings, a computer scientist and mathematician, was a co-founder of Pure Software, which was acquired by Rational Software that year for $750 million, the then biggest acquisition in Silicon Valley history. Netflix was founded by Marc Randolph and Reed Hastings on August 29, 1997, in Scotts Valley, California. Even though Neflix eventually abandoned the Qwikster idea, the Twitter handle mistake was further evidence of management not having things in order.Fourth and current logo, used since 2014 Launch as a mail-based rental business (1997–2006) Marc Randolph, co-founder of Netflix and the first CEO of the company Reed Hastings, co-founder and Executive Chairman ![]() What a way to introduce your customers to your brand. ![]() It was therefore surprising to find out that Netflix had not secured the Twitter handle for Qwikster – which was actually being used by someone posting obscene tweets. Similarly, you should make sure the social media identify for your brand is available, especially the Twitter handle and Facebook page address. It should go without saying that you cannot launch a company today without making sure the domain name for your company is available. Secure Social Media Identity for Your Brand.It was clear the customers were not happy with the price change. Netflix used its blog to do this, and the company received overwhelming response from its customers. Before you deliver bad news or make huge changes that will impact a large section of your customers, make sure you have a social media strategy in place to both communicate the change, address customer questions and concerns, and allow them to provide feedback. They can also use social media to amplify their anger when things go wrong. They can use this for good - telling their followers and friends how wonderful your company is. Your customers are more connected today, through social media. Netflix could have delayed the price increase and announced it after it signed new movie deals, thereby showing its expanded movie collection and justification for the price increase. It did not help that the quality of their content was going to be further diminished with the failed attempt to renew its steaming deal with Starz Entertainment, which was their most valuable source for new movies. When Netflix announced the price increase, rather than communicating the value the price increase will bring, the company focused the attention on its own pain, like the rising cost of acquiring content from the studios. Whatever you do, don’t make it harder for your customers to do business with you. Focus on the issue your customers are unhappy about and find a better way to explain the change you are making or offer other solutions. As a business, you only get one chance to correct a mistake. This generated more customer complaints and public ridicule, as shown in this scathing SNL parody (which in itself became a self fulfilling prophesy). ![]() Rather than addressing the pricing issue with customers or finding a way to appease their angry customers, Netflix made matters worse by splitting the DVD and Streaming businesses into two separate entities, requiring customers who wanted both services to maintain two accounts, one for the DVD service (the short-lived Qwikster) and the other for the streaming service. The company lost 1 million more customers than anticipated and Wall Street was not happy - sending the stock price down almost 50 percent, from $300 to $155. Netflix quickly realized it had botched the price increase.
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