Current Project: Reading books about entrepreneurs and sharing what I learned from them

Mission: Create a library of wisdom from notable entrepreneurs that current entrepreneurs can leverage to increase their chances of success

Cumulative metrics (since 4/1/24):

• Total books read: 56
• Total blog posts published: 357

This week’s metrics:

• Books read: 1
• Blog posts published: 7

What I completed this week (link to last week’s commitments):

• Read An Honorable Titan, a biography of entrepreneur and publisher Adolph Ochs, who bought The New York Times
• Caught up (mostly) and rekindled conversations with prospective developers

What I’ll do next week:

• Read a biography, autobiography, or framework book
• Reach out to two more developers about this project
• Explore using Gumloop, Lindi, and Manus to see if they can help with this project
• Adjust layouts for a list of entrepreneurs on my blog
• Crystallize and write down idea for a biography-related website

Asks:

• If you can get me an invitation code to Manus, please let me know!
• If you know any full-stack developers interested in working on the software for my current project, please introduce us!

Week two hundred sixty-one was another week of learning. Looking forward to next week!

Current Project: Reading books about entrepreneurs and sharing what I learned from them

Mission: Create a library of wisdom from notable entrepreneurs that current entrepreneurs can leverage to increase their chances of success

What I struggled with:

• No material struggles this week related to this project. Just playing catch-up after being out for a few weeks.

What I learned:

• I’ve been seeing “vibe coding” references lately. A friend explained it to me as “using natural language to create actual code by prompting to focus on features and capabilities but not line-by-line code. It’s different from no code, which is building blocks. Vibe coding is what people are doing in cursor. They prompt something that writes an entire application for them.” This definition was useful to me.
• This same friend shared with me a free DeepLearning.AI course about vibe coding taught by Replit. I signed up for it. Enroll here.
• I had more conversations this week with developers, but when I was asked about the details of the technical stack, I could answer only some of the questions. My gut tells me this signaled negatively to one senior developer I chatted with this week. My developer friend is available and will help transition things, but I need to understand the stack better and be able to communicate how it all works together.
• I looked at data about the posts I’ve written about biographies. The long-form posts about part of an entrepreneur’s journey get more visits than the shorter posts about one takeaway. A few shorter posts have done well, but they’re the exception. I suspect that the longer posts are also shared more.
• I learned about Manus and Gumloop. Manus is an AI agent tool, and Gumloop is an AI workflow tool. They may be able to help me with certain aspects of this project. I plan to experiment with both.

Those are my struggles and learnings from the week.

This week there was lots of discussion in financial media around the CoreWeave IPO. CoreWeave provides cloud-based GPUs to AI developers. The IPO was completed today after the number of shares being sold in the IPO was reduced from 49 million to 37.5 million and the share price was lowered to $40 from the planned $47 to $55. (see here)I haven’t kept close tabs on the IPO market since my last update in October 2024 (see here), so I took a look today. Here are the updated IPO stats through March 28, 2025:

• 2025: 73

For comparison, here are prior years’ IPO stats:

• 2024: 225
• 2023: 154
• 2022: 181
• 2021: 1,035
• 2020: 480
• 2019: 232

IPO activity picked up in 2024. We were pretty much back to the 2019 level. COVID and ZIRP contributed to the 2021 IPO explosion (see here). When interest rates began rising sharply in 2022, we saw an implosion of IPO activity in 2022 and 2023.

Time will tell how receptive the market is to CoreWeave. It took almost a year before public-market investors were interested in buying technology companies that IPOed in 2023 and 2024, such as Reddit, Instacart, and Klaviyo.

CoreWeave has seen explosive growth in the last year or so because of soaring AI demand (OpenAI is one of its biggest customers). I’m sure venture capitalists and technology entrepreneurs are watching to see how receptive public-market investors are to buying the company’s shares.

I’m curious to see how CoreWeave performs and whether we’ll see more technology companies going public via IPOs in 2025.

If you want to see the latest or historical IPO stats, try here (where I get my IPO data).

Two weeks ago, I read a second biography about Albert Lasker, The Man Who Sold America. It mentioned how Lasker worked with Adolph Ochs, who owned The New York Times, to free Leo Frank, who had been charged with the murder of Mary Phagan in Atlanta in 1913. Lasker and Ochs, both Jewish, felt Frank was being wrongly accused because he was Jewish. Learning how Lasker and Ochs created a sophisticated media campaign to draw attention to this case nationally was fascinating.

I’d never heard of Ochs, but I was curious about his journey and how he became the owner of The New York Times. This week, I began reading a biography about him, An Honorable Titan, by Gerald Johnson.

I’m early in the book, but I’ve already been surprised by Ochs’s history: The publisher of a nationally recognized and New York–based newspaper dropped out of school at 14. He wasn’t from an elite family or background. He had to start working full-time at 14.

Adolph began his career as an information entrepreneur in Chattanooga, Tennessee, where he sold a directory at age 19. In 1878, he and a partner created a directory of all the businesses in Chattanooga. This was a manual effort requiring them to canvass the entire city house-by-house to collect the information before they compiled it in a book.

The benefit of this grunt work was that Adolph developed a detailed understanding of the town, its businesses, and the entrepreneurs who owned them. His directory became a valuable resource that allowed him to establish relationships with all the entrepreneurs in town and add value to them by providing aggregated information about where to buy goods and services.

Adolph was selling information that, for the most part, was readily available to everyone in Chattanooga. But by compiling it and making it easy to use, he created something of value that others were happy to pay for. It’s not exactly the same, but it reminds me of how Michael Bloomberg took publicly available bond market data, centralized it, and made it easy for people to make buy-and-sell decisions around bonds (more here). The information product is still, as of this writing, the anchor of his empire and over $100 billion fortune.

It’s interesting how these two information entrepreneurs took a similar approach when they started out though there’s a 100-year gap between them.

I’m curious to learn more about Ochs and how all this led him to The New York Times.

Yesterday, I shared what I learned about how much of the company each Netflix cofounder owned (see here). I also learned from reading Netflix’s S-1 document that VC firm Technology Crossover Ventures (TCV) owned roughly 43% before the IPO and roughly 34% after it. I learned that TCV partner and cofounder Jay C. Hoag has been a Netflix board member since 1999 (see here). Jay and TCV invested before the IPO, so they’ve seen the company go from a promising start-up worth tens of millions to a global, publicly traded company worth over $400 billion.

I view investors who found investment firms as entrepreneurs, so I was curious to learn more about Jay and TCV. I’m early in my research, but I found Jay’s interview (listen here) from 2021 on the Invest Like the Best podcast. A few things I found interesting:

• Netflix stock traded down 15–20% after the 2002 IPO and stayed down for about six months.
• TCV was founded as a private and public (i.e., “crossover”) investor. This means that it invests in private technology companies (i.e., start-ups) and technology companies traded publicly on the stock exchanges.
• In 2011, TCV made a PIPE investment in Netflix after the stock had declined 70%. The stock traded down further after the PIPE investment, which was for $400 million, with T. Rowe Price participating, too. More details are here and here.  
• “By being a private investor, it made us better public market investors” and “By being a public market investor, it made us better private investors.”
• “The capital allocation exercise is to look across the technology landscape, take advantage of all the research and knowledge that we have, and look for the best investment . . . and not be bucketed by either private or public.”

Jay and TCV also invested in Zillow, Peloton, Facebook, Airbnb, Tripadvisor, Spotify, and many more wildly successful technology companies. I’m excited to learn more about Hoad and what led to his outsize success.

Last week I read a biography about Netflix’s early years, That Will Never Work. In one of my posts, I shared how the Netflix cofounders initially divided ownership between the two of them: about 68% for Reed Hastings and about 30% for Marc Randolph. I also shared in a separate post that Marc gave Reed some of his shares in the company when Reed took over as CEO about a year after the company was founded. Both posts were based on what Marc wrote in the biography.

The last part of the book is about going public in 2002 and the day of the IPO. According to my research, the company’s market capitalization (valuation) when it went public was around $300 million (now, it’s more than 1,300 times more: over $410 billion). I was curious how much of the company each cofounder owned when Netflix went public, so I did some digging. I found the company’s 2002 S-1 Registration Statement it filed so it could go public; what I was looking for is on page 66. Here are the details:

• Reed Hastings owned 20% of the company before the IPO and roughly 15% after it. His 15% stake was worth roughly $45 million.
• Marc Randolph owned roughly 5.5% of the company before the IPO and roughly 4% after it. His 4% stake was worth roughly $12 million.

An interesting data point in the S-1 is that VC firm Technology Crossover Ventures (TCV) owned roughly 43% before the IPO and roughly 34% after it. TCV’s ownership stake can be seen on page 66 of the S-1. It’s under the name of TCV founding partner Jay C. Hoag, who is also on the Netflix board. In the biography, Marc says TCV led the company’s series C in early 1999 with a $6 million check and, in April 2000, ten days before the dot-com bubble burst, invested $40 million. IPO documents (page 61) show that TCV invested another $8.3 million in July 2001 via a promissory note and warrants. After the company went public, TCV’s 34% stake was worth roughly $102 million.

The above isn’t a complete picture of everything that happened between the company’s founding and its IPO. Other financial transactions (such as stock options being issued, founders selling shares via secondary transactions, etc.) likely impacted each founder’s ownership at the time of IPO.

I enjoyed Marc’s description of the early days of Netflix. It was helpful for me to see the data around company ownership at IPO.

I finished reading That Will Never Work, the biography about Netflix’s early years. Cofounder and first CEO Marc Randolph’s perspective on taking the company from idea to IPO in seven years is full of wisdom that entrepreneurs will find helpful.

One of his principles I enjoyed was what Marc and Reed Hastings call the “Canada Principle.” For the first twelve years, Netflix served only the United States. But several times during that period, they thought about expanding into Canada. It was close, so shipping costs would be low (it was shipping DVDs then), and the regulatory environment was friendly. Canada looked like low-hanging fruit.

But first appearances were deceiving.

When they dug into it, they learned it would be complicated:

• French is the main language spoken in some parts of Canada, so they’d have translation issues.
• Canadian dollars differ from U.S. dollars, so they’d have to deal with currency issues.
• The postal system in Canada was different, so special envelopes would be necessary.

When they ran the numbers, they learned they’d get a roughly 10% revenue boost by expanding into Canada.

They then considered the “effort, manpower, and mind-power” required to expand into Canada. It would be a big lift for their team. Then they analyzed how much they could increase revenue if they applied the same amount of effort to other aspects of the business.

Using that framework to evaluate the decision made things crystal clear. If they applied that effort in other areas, they could get a far greater return by increasing revenue considerably more than 10%. Expanding into Canada wasn’t the best way to allocate their resources. The return was too low relative to other options requiring similar effort.

They realized that Canada was a short-term, obvious move that would provide short-term benefits. “It would have diluted our focus,” wrote Marc.

After this experience, Netflix adopted what Marc calls the “Canada Principle.” When faced with options, evaluate the potential return of each of them and the effort and resources required to generate it. Pick the highest-return activity and focus on it. Don’t spread yourself thin and lose focus by doing low-return activities.

Marc and Reed realized, through trial and error, that focus is a superpower and that if they could focus on the right high-return activities, they’d have a competitive advantage. The Canada Principle became key to deciding what initiatives to pursue or kill.

The Canada Principle led the company to stop selling physical DVDs and focus entirely on subscription rentals, even though DVD sales were 90% of their revenue. It also helped them decide against pursuing automated DVD rental kiosks, despite promising results from months of testing. (Side note: a team member on the kiosk project helped found Redbox.) All of these were the right decisions. They kept the company focused. They leapfrogged competitors and built a behemoth that’s now publicly traded and has a market capitalization (valuation) of over $410 billion as of this writing.

I didn’t have a name for it when I was building my company, but I applied the Canada Principle several times when making strategic decisions. It was sometimes painful in the short run, but it usually led to the best long-term decision.

Current Project: Reading books about entrepreneurs and sharing what I learned from them

Mission: Create a library of wisdom from notable entrepreneurs that current entrepreneurs can leverage to increase their chances of success

Cumulative metrics (since 4/1/24):

• Total books read: 55
• Total book digests created: 15
• Total blog posts published: 350
• Total audio recordings published: 103

This week’s metrics:

• Books read: 1
• Book digests created: 0
• Blog posts published: 7
• Audio recordings published: 0

What I completed this week (link to last week’s commitments):

• Read That Will Never Work, a biography about Netflix’s early years
• Helped one of my parents resolve their medical situation

What I’ll do next week:

• Read a biography, autobiography, or framework book
• Catch up on everything from the last two weeks

Asks:

• If you know any full-stack developers interested in working on the software for my current project, please introduce us!

Week two hundred sixty was another week of learning. Looking forward to next week!

Current Project: Reading books about entrepreneurs and sharing what I learned from them

Mission: Create a library of wisdom from notable entrepreneurs that current entrepreneurs can leverage to increase their chances of success

What I struggled with:

• No material struggles this week related to this project

What I learned:

• This week, I continued helping one of my parents with a medical situation. I learned about neurological rehabilitation, but not much related to this project. 

Those are my struggles and learnings from the week.

Yesterday, I shared what I read in the Netflix biography That Will Never Work about how cofounders Marc Randolph and Reed Hastings divided equity and how the first financing round led to Reed owning 68% of the company to Marc’s 30%. I shared all the math in this post.

The interesting outcome of that scenario was the ownership, voting control, and control of the board. Marc was CEO, but he owned a minority 30% stake in the company and didn’t have voting control. He also didn’t control the board because he wasn’t the board's chairman. Reed wasn’t an employee of the company but owned a majority 68% stake in it, which meant he had voting control. He was also chairman of the board, so he effectively controlled the board, too.

Marc and Reed were friends and had worked together at another company. They spitballed ideas until they landed on the idea that became Netflix. So they were used to working together and being brutally honest with each other.

In the fall of 1998, about a year into the company’s life, Reed sat Marc down and told him that he’d done some good things. Then he added, “I don’t think you’re a complete CEO” and “A complete CEO wouldn’t have to rely on the guidance of the board as much as you do.” Reed proposed that he join the company full-time and become the CEO. He suggested Marc become the president and that they run the company together as a team.

Reed had voting and board control, so technically he could have forced this decision on Marc. Instead, he left it up to Marc. Marc thought about it and in the end decided that Reed was better suited to be CEO and that he himself was better suited to work alongside someone disciplined like Reed. They divvied up duties. Reed focused on what they called “back-end” functions such as finances, operations, and engineering. Marc handled customer-facing things like PR, web design, movie content, partnership relations, and customer service.

With the changes agreed to, there was one last issue: compensation. Reed surprised Marc by requesting that the two cofounders redivide their ownership. Reed wanted 2 million more shares—and he thought they should come from Marc.

Marc doesn’t share exact numbers in the book, but he does say, “In the end, I’d agreed that a third of the shares Reed wanted, if he was to come on as CEO, would come from me. The other two-thirds he was going to have to ask the board for. Which he did – and which he got.”

In the end, roughly one year after the birth of the company, Marc relinquished the CEO title to Reed and Reed received additional shares. By this point, they’d raised an additional $6 million from Institutional Venture Partners, a prominent VC firm in Silicon Valley at the time. I’m not sure what the exact ownership split between the cofounders was, but I’d assume Reed had a significant, majority ownership stake in the company.

That’s the story of how Reed Hastings became the CEO of Netflix, as told from Marc Randolph’s perspective.