Is Reed Hastings a Highly Unusual Business Leader?

Former Netflix co-founder says Reed Hastings is an extraordinarily bold leader, willing to risk the ire of millions of his customers to position the company for its future business, not its current business, says Marc Randolph, co-founder of Netflix. Essentially, the argument is that Hastings will once again sacrifice most of the company's current business to set the foundation for the next business.

What is unusual is the willingness to risk damage to the great bulk of its current revenue.

Randolph says the company had to make a similar decision earlier in the company's history, shutting down the DVD sale business at a time when it provided 95 percent of total revenue, to focus on the longer-term opportunity, which was rental, not sale.

"I would guess that 95 percent of our revenues were coming from the sales of DVDs," Randolph says. "Although this did pay some bills, it was obvious to us that this was not a sustainable business."

"It was inevitable that at some point in the near future we would have Amazon entering the DVD business," he said. "And then Walmart, all of which would have crushed our margins and slowly but surely driven us out of business."

Did Netflix screw up? I don’t think so.