- After racking up late fees at a traditional video rental store, Reed Hastings co-founded Netflix and made R83 billion in the process.
- Before founding Netflix, Hastings spent one year teaching in Swaziland with the Peace Corps and another as a door-to-door vacuum salesman.
- Hastings' philanthropic efforts are focused on education, including a $120 million donation to fund scholarships for black college students and building a luxury training camp for teachers in Colorado.
- Visit Business Insider's homepage for more stories.
The $40 (R660) late fee Reed Hastings paid after temporarily losing a rented video in 1997 may have been the best money he ever spent.
That fee gave him the idea for Netflix, the entertainment giant he cofounded and leads as chief executive. Hastings has since built a $5 billion (R83 billion) fortune that he has spent to support educational reform and bolster the campaigns of Democrats running for office.
A representative of Hastings at Netflix did not respond to Business Insider's request for comment on Hastings' career trajectory, net worth, philanthropy, and political donations.
Keep reading to learn more about Netflix co-CEO Reed Hastings.
Reed Hastings, 59, is the son of a Nixon administration attorney.
Hastings was born in Boston in 1960, according to the Bloomberg Billionaires Index. His father, Wilmot Reed Hastings, worked in the Department of Health, Education, and Welfare under President Richard Nixon. The elder Hastings' work earned the family an invitation to Camp David, the president's country residence, when the future Netflix CEO was a child, per The New York Times.
"We rode around in golf carts, had a tour, and I saw that President Nixon had a gold-coloured toilet seat," Hastings told The Times in 2006.
After Hastings graduated from high school, he did a year-long stint as a door-to-door vacuum cleaner salesman before enrolling in Bowdoin College. "I majored in math because I found the abstractions beautiful and engaging," Hastings told The Times.
Hastings joined the Marine Corps while still in school, but later petitioned to join the Peace Corps instead because "[I] found myself questioning how we packed our backpacks and how we made our beds" and "questioning wasn't particularly encouraged," per The Times.
Hastings later earned a graduate degree from Stanford. "I didn't get into my first choice, which was M.I.T.," he told The Times.
Hastings and cofounders Raymond Peck and Mark Box launched Pure Software in 1991 when Hastings was 31 years old, per The New York Times. Hastings described its flagship product to Inc. Magazine as a "debugging tool for engineers."
"I was doing white-water kayaking at the time, and in kayaking if you stare and focus on the problem you are much more likely to hit danger," Hastings told The Times of his experience running Pure Software. "I focused on the safe water and what I wanted to happen. I didn't listen to the skeptics."
The company was very successful, and doubled its revenue every year before going public in 1995, Hastings told Inc. Now-defunct Rational Software acquired the company in 1997 for $750 million. The sale "gave me the means to start Netflix," Hastings told Inc.
"I had a big late fee for 'Apollo 13,'" he told The New York Times in 2006. "It was six weeks late and I owed the video store $40. I had misplaced the cassette. 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?' Later, on my way to the gym, I realized they had a much better business model. You could pay $30 or $40 a month and work out as little or as much as you wanted."
The idea laid the groundwork for Netflix, which Hastings cofounded with serial entrepreneur Marc Randolph in 1997, per Bloomberg. Hastings hasn't always been the company's CEO, however. Randolph held the top spot before leaving the company in 2002, Business Insider previously reported.
The company received 239,000 subscribers in its first year alone, Inc. reported. Users maintained a queue of DVDs they'd like to see on Netflix.com, and the company mailed them out one at a time in then-iconic red envelopes. Subscribers could keep the films for as long as they wanted with no late fees.
Netflix went public in 2002, and shares of the company reached a new high in 2011, before Hastings made what former Forbes reporter Brian Solomon called "a series of questionable decisions." The CEO divided Netflix's traditional DVD subscription and its then-fledgling streaming business into separate services with separate fees, sending the company into a crisis.
"We want to be ready when video-on-demand happens," Hastings had previously told Inc. in 2005. "That's why the company is called Netflix, not DVD-by-Mail."
However, Hastings may have been ready for that change long before Netflix's subscribers were. Customers were outraged by the new subscription options and Netflix's stock price fell 75% by the end of 2011, per Forbes.
Hastings shares the daily responsibilities of running the company with fellow Netflix executive Ted Sarandos, who was promoted to co-CEO in July.
"Incredible people don't want to be micromanaged," Hastings once said, per Forbes. "We manage through setting context and letting people run."
As a part of his strategy, Hastings says he often takes six weeks of vacation time annually. "I take a lot of vacation, and I'm open about it internally," Hastings said during a 2015 appearance at The New York Times' DealBook Conference. "Just as you would expect, you often do your best thinking [when] you're off hiking on some mountain or something and you get a different perspective … or you're reading something that's not connected to work."
Hastings and his wife Patty Quillin have two children, per the Bloomberg Billionaires Index.
Despite valuing time off work, Hastings says he doesn't have any hobbies to fill his downtime. "Unfortunately, and weirdly, I have almost no hobbies," Hastings told The New Yorker. "I don't sail, I don't fish. I'm a pitiful failure as a Renaissance man." Hastings does enjoy swimming and snowboarding, however, he told The New York Times in 2006.
The CEO spent a total of $8.1 million on political donations in California between 2001 and 2011, according to the Silicon Valley Business Journal.
More recently, Hastings donated $2,800 to former Vice President Joe Biden's 2020 presidential campaign, Business Insider previously reported. Hastings is one of 137 billionaires to donate to Biden.
Before backing Biden, Hastings gave thousands of dollars to former Mayor Pete Buttigieg's failed presidential bid, according to records obtained by the Center for Responsive Politics. Records also show that Hastings gave half a million dollars to Senate Majority PAC earlier this year, a group that aims to achieve a Democratic Majority in the Senate.
He also donated $5,000 to former President Barack Obama's 2012 reelection campaign, according to the Silicon Valley Business Journal.
In 2012, Hastings and Quillin signed The Giving Pledge, the philanthropy pact founded by Bill Gates and Warren Buffett mandating that billionaire signatories give away the majority of their fortunes.
"It's an honor to be able to try to help our community, our country and our planet through our philanthropy," Hastings and Quillin said in a statement at the time. "We are thrilled to join with other fortunate people to pledge a majority of our assets to be invested in others. We hope through this community that we can learn as we go, and do our best to make a positive difference for many."
In 2020 alone, Hastings and Quillin gave $120 million to fund scholarships for Black students through a partnership with two historically Black colleges and the United Negro College Fund and bankrolled a luxury training camp for teachers in Colorado.
His pursuits in the field aren't limited to just providing funding, however. Hastings joined the California State Board of Education in 2000 and spent three years as its president, according to the Silicon Valley Business Journal.
"Being an entrepreneur is about patience and persistence, not the quick buck, and everything great is hard and takes a long time," Hastings told Inc. in 2005. "If we can transform the movie biz by making it easier for people to discover movies they will love and for producers and directors to find the right audience through Netflix, and can transform public education through charter schools, that's enough for me."
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