7 Game-changing Tactics For Growth And Success From Netflix, Airbnb, Facebook, And Others

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7 GAME-CHANGING TACTICS
FOR GROWTH AND SUCCESS
FROMNETFLIX,AIRBNB,FACEBOOK,ANDOTHERS

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A big part of being a successful entrepreneur is knowing how to listen and adapt.
This takes maturity, discipline, and control of your ego because—while you have to
make decisions, you won’t always have the answers. When you lead, you always start
with your best few ideas. If they work, great. If not, you move on to the next-best
ideas. But sometimes, you’ll find your next few ideas are substantially worse than
your earlier ideas. That’s when you should recognize the need to change course or
seek outside help.
Part of being an experienced entrepreneur is recognizing that moment when
“I have to do something different.” It’s a lesson shared by almost everyone who has
appeared on Masters of Scale. The following tactics come from some of the world’s
most successful entrepreneurs. It’s important to recognize that every decision
didn’t lead to success for them. But every decision—whether a success or failure—
provided clues on how to grow and become better. Here are 7 proven principles that
can help guide and improve your business and decision-making.
7 GAME-CHANGING TACTICS
FOR GROWTH AND SUCCESS
FROMNETFLIX,AIRBNB,FACEBOOK,ANDOTHERS

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“The mistake in Pure Software [Reed’s first company] was that every time we had a
significant error—sales call didn’t go well, bug in the code—we tried to think about
it in terms of what process could we put in place to ensure that this doesn’t happen
again, and thereby improving the company?
And what we failed to understand is by dummy-proofing all the systems, that we would
have a system where only dummies wanted to work there, which was exactly what
happened. And so the average intellectual level fell, and then the market changed, as
it inevitably does. In that case, it was C++ to Java, but it could be anything. And we
were unable to adapt to it, because we had a bunch of people who valued following
the process rather than the first-principle thinking. (A first-principle thinker will
constantly ask, ‘What’s best for the company?’ And ‘couldn’t we do it this other way
instead?’)
And so the reverse of that, which we do at Netflix, is you have to be a first-principle
thinker. There’s an overhead to that, about what’s best for the company. So this is
true on the broad scale, like what kind of content we do. It’s also true in the micro,
which is, ‘How should I travel, business, or coach, or by bus’ And we asked people to
do what you would think is best for the company. We don’t give them any more guide-
lines than that.
”
LESSON 1
BE VERY INTENTIONAL ABOUT CREATING A CULTURE
THAT REWARDS THE RIGHT BEHAVIOR.
Reed Hastings, CEO & Founder of Netflix

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“When our team was growing, I interviewed everyone who joined globally. And when
we were at 100 people I noticed that the queue for my interview was holding up our
hiring process.
So I said in a meeting with my direct reports, ‘I think maybe I should stop interviewing,’
fullyexpectingthattheywouldjumprightinandsay,‘Absolutelynot.You’reagreatinter-
viewer. We need your personal recommendation on anyone on your team.’ You know
what they did? They applauded.
And I thought to myself, ‘I’ve become a bottleneck, and you didn’t tell me—and that’s
on me.’
I thought my interview was that important, no one else did. I was their boss, I was their
manager. If they didn’t tell me, that was on me. I realized I had to make it safe to speak
up when I’m messing up.
”
LESSON 2
EMBRACE TRUTH-TELLING.
Sheryl Sandberg, COO of Facebook

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“We put up these flyers anonymously saying, ‘Seeking a traveler. We’ll photograph
your trip to San Francisco if you let us follow you.’ This guy Ricardo replied. He was
from London. We sent a photographer around him while he was just travelling in San
Francisco. What we learned was his trip was awful. He’d show up, he’d go to Alcatraz
by himself, put on the headset, and then he’d go to Bubba Gump Shrimp. He’d stay in a
budget hotel. He’d go to a hotel bar by himself, sitting with a bunch of dudes at the bar
but he doesn’t talk to anyone because he was introverted.
We call him back. We said, ‘Ricardo, we want to create the perfect trip to San Francisco
foryou.’Weflyhimback.WehadtheteamstoryboardtheperfectexperienceforAirbnb.
We had a driver pick him up at the airport. We took him to the perfect Airbnb, there are
all the services. He went on these dinner parties, we got him the best seats at restau-
rants. We took him on this midnight mystery bike tour.
I see him at the end of the trip. I say, ‘How was your trip?’ He says, ‘It was amazing.’ And
then I walk away. He yells at me. ‘Brian, one more thing.’ He starts crying. He breaks
down, he says, ‘Thank you. This is the best trip I’ve ever had.’ I was like, ‘Oh my God. I
guess it worked. It really moved him.’
I don’t think anyone ever tried to design an end-to-end experience for somebody
like they’re in a movie before and we did it. That became a blueprint. We said we are
LESSON 3
CREATE A MAGICAL EXPERIENCE… AND THEN FIGURE OUT
WHAT PART OF THAT MAGICAL THING CAN SCALE.
Brian Chesky, Co-founder & CEO of Airbnb

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confident on an unscalable basis that we know how to create a trip that deeply moved
somebody that’s better than anything they’ve ever experienced. The question is: Can we
develop a technology that scales and do it 100 million times?
This is the narrative of every movie you’ve ever seen: A main character starts in an
ordinary world. They leave their ordinary world. They cross the threshold to a new,
magical world where all these obstacles happen and they overcome something. They
call it the hero’s journey. We applied this to trips, built a small team, and we spent the
last couple of years figuring out how to scale this, and this has led to what we have today
which we call ‘Airbnb Trips.’
”

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“So the single most important thing is to get the best people you can around you. When I
lookatmyfriendswhowererunningothergoodcompanies,thesinglebiggestdifference
that I see in whether the companies end up becoming really great and reaching their
potential, or just pretty good, is whether they’re comfortable and really self-confident
enough to have people who are stronger than them around them.
I’ve adopted this hiring rule, which is that you should never hire someone to work for
you, unless you would work for them in an alternate universe. Which doesn’t mean that
you should give them your job, but just if the tables were turned and you were looking
for a job, would you be comfortable working for this person? I basically think that if the
answer to that is “no,” then you’re doing something expedient by hiring them, but you’re
not doing as well as you can on that.
There are all these things that Sheryl [Sandberg, COO of Facebook], for example, is just
much stronger than me at, and that makes me better and makes Facebook better. And I
am not afraid or threatened by that—I value that. That’s what makes Facebook good.
”
LESSON 4
NEVER HIRE SOMEONE TO WORK FOR YOU UNLESS YOU WOULD
WORK FOR THEM IN AN ALTERNATE UNIVERSE
Mark Zuckerberg, Founder & CEO of Facebook

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“Things are always more expensive than you think they are, and they’re always going
take more time to prove out, and you’re gonna need more optimizations, and more
loops to correct things than you think you will.
That’s why we just say roughly speaking at Minted, ‘Act like you’ve got half, because
you’ve got to factor in all the failures and all the optimizations that really kill great entre-
preneurs and businesses all the time.’ We know so many people who had good ideas,
were on the right track. They just ran out of runway.
”
LESSON 5
RAISE TWICE AS MUCH MONEY AS YOU THINK YOU’LL NEED.
Mariam Naficy, Founder & CEO of Minted

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“If you look at the companies that have gone to become super important and valuable,
and shaped the world in a big way, they tend to have fairly fanatical early users. If you
think about how you first came across Facebook or Google, it’s very likely because a
friend told you how great it was.
Scaling falls into two categories—the easy kind and the hard kind. And you may not
know you’re doing the hard kind of scaling until it’s too late.
The hard kind of blitz scaling is where you try to start scaling up before the product is
really great. And then most of your effort in scaling is to generate demand. So I think the
number one most important insight about how to blitz scale is that the good kind of blitz
scale is when you are not having to generate demand as you go but that you first got the
product right.
People don’t stick with products that they don’t love. And so it is easy to get a lot of
people to try something with a clever growth hack.
The value of those users is often very low. They use it for a little while, you engage
them with some trick, and they don’t stick around. And that is not how you build these
enduring, valuable companies. You need things that people want to come back to and
use a lot, and I think it’s much easier to figure that out early, when you can still make a
lot of changes to the product.
Everyone’s like, ‘Well, I’m just going to get a lot of people to like me, and then I’ll figure
out how to make them love it later.’ In practice, that’s really rare.
”
LESSON 6
FOCUS ON LOVE, NOT LIKES.
Sam Altman, President of Y Combinator

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“I had a slide in my Powerpoint—I think it was like slide 14—where I talked about
Proactiv—the acne system—as a good analogy to what we’re trying to do. It’s the
difference between Gillette and Bevel, as Neutrogena and ProActiv—it’s a system that
solves a very important issue. And this VC looked at me—and I’ll never forget this—he
said, ‘Tristan, I’m not sure issues related to razor bumps, shaving or irritation are as
profound and big an issue for people as acne.’
At which point, I said, ‘I kind of understand what you’re saying, but all you had to do
was get on the phone with 10 black men, and eight of them would have said, ‘This is
a permanent thing I have to deal with.’ All you had to do is get on the phone with 10
white men, four of them would have said the same thing. Could have done it for women
too, and you would get the same ratios.’ So it wasn’t that it was a bad idea, or not as
important—it’s just that that person was unwilling to acquire the context necessary to
understand what we’re working on. That’s just laziness—and at that point, I can’t fix
that. So I just gotta move on until I find somebody who understood it.
Whenthequalityofthequestionsdrops,Tristanknows,mid-pitch,thattheconversation
is over—the rest is noise.
”
LESSON 7
PAY ATTENTION TO THE QUALITY, NOT THE
QUANTITY OF REJECTIONS.
Tristan Walker, Founder & CEO of Walker and Co.

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