Netflix and the Best Failed Exit Strategy Ever

I’m big on exit strategies. I found an excellent example of one in the Reed Hastings and Erin Meyer book, No Rules Rules: Netflix and the Culture of Reinvention.

Except this time, it was a failed exit strategy that made Netflix successful.

In the year 2000, Netflix was a tiny two-year-old startup that delivered movie DVDs to subscribers via the mail. That year, they had 100 employees, 300,000 subscribers and lost $57 million dollars.

They were desperate to sell.

The Netflix founders approached the CEO of Blockbuster, a $6 billion dollar movie-rental chain with 9,000 locations, about a possible acquisition…