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Netflix founder Reed Hastings on the tension between performance and loyalty at a startup
“The big struggle we had in the early days was the contrast between loyalty and performance,” Reed explains. “Everybody wants loyalty and performance, but they’re at tension.”
This is why he chose to model Netflix after a professional sports team:
“Professional sports teams have a clear bargain where you’re playing for your position each season and it is a performance culture, but the team can be quite close and very supportive of each other.”
Reed continues:
“We came to think of loyalty as a stabilizer — if you have a bad day, you don’t get instantly fired. Or if your boss has a bad day, you don’t quit instantly. You sort of think things through, solidly over a couple of months. But ultimately it was about performance.”
This helped Netflix clarify their own values:
“We valued growth and achievement more than lifetime loyalty. That’s different than a family company or other relationships that we have — in our friendships or marriage we value loyalty over performance.”