Mitch Lowe - Watch and Learn: How I Turned Hollywood Upside Down with Netflix, Redbox, and MoviePass—Lessons in Disruption

I n the spring of 1997, out of a job and looking for something interesting to do, I pitched my friend Reed Hastings some ideas for a new company. I pitched personalized shampoo, custom dog food, subscription vitamins dozens of ideas in all. But the craziest one was DVD rental by mailan idea that everyone said would never work. Theres a Blockbuster on every corner, they would helpfully point out. Why would anyone want to rent a movie that is going to take three or four days to arrive?

But hope and optimism prevailed, and in April 1998 we launched the company you now know as Netflix. From there, the path we took as the company grew from its humble DVD-by-mail origins into a global entertainment company is filled with surprising storiesmany of which you will hear in the following pages. But perhaps the most surprising story of all is that when we started, none of us had the slightest idea how the video industry operated.

Well, almost none of us.

Enter Mitch Lowe, who I encountered in the summer of 1997 running a tiny booth at the Video Software Dealers Association convention in Las Vegas. It wasnt a long conversation, but he seemed to know what he was talking about, and I decided I wanted him on the team. It wasnt easy, but eventually I convinced Mitch to join us, and it ended up being one of the best decisions I ever made, as well as marking the beginning of a lifelong friendship with one of the smartest, kindest, and most interesting men I have ever met.

Initially I was drawn to him because Mitch knew video. He knew the customers, who they were, what they watched, what they liked. He knew the industry: what had been tried, what worked, what didnt. And he collected people the way some people collect Pokmon cards: he wanted a full set. Walking through a trade show with Mitch was an exercise in frustration, since almost every third person was yet another old friend that Mitch needed just a few more minutes to catch up with.

But as I got to know Mitch, I realized that his video industry experience was just scratching the surface. He would tell me unbelievable stories about being a club DJ in Italy, smuggling gypsy clothing out of Romania, hanging out with Andy Warhol in Monaco, dodging the military police in Egypt, and running an art gallery in San Francisco.

In the pages that follow, Mitch will share these stories with you, as well as equally surprising stories from starting Redbox and his valiant attempt to disrupt the movie ticket business with MoviePass. But they are more than stories, they are lessons. Just as he was eager to teach me everything he knew about video rental, hes eager to share with you everything hes learned about businessand life.

If theres a common denominator to all his experiences, its curiosity and experimentation, and they are traits of his that I first encountered one afternoon in the summer of 1998, not long after Netflix had launched. Ive got an idea, Mitch blurted out, sticking his head into my office. I just read that Bill Clintons testimony in the Monica Lewinsky affair is going to be publicly released. I wonder if we can make our own DVD of the footage?

Mitch, I countered, do you know anything about how youre going to get that content? Or about mastering DVDs? In fact, is that even a thing?

Then he gave me a look that I would see hundreds of times over the next several years. No, he somewhat sheepishly answered. But Ill bet I can figure it out.

And off he went to do just that. None of usleast of all Mitchcould have anticipated the events that followed, as a project he thought would take a day or two stretched into several sleepless weeks, with dozens of dead ends, false trails, and forced errors (including mistakenly shipping a porn DVD to a few hundred surprised customers). But Mitch delivered, and not only was it the public relations event that put Netflix on the map, but it laid the groundwork for the coming decades of trial and error.

Over the coming years, Mitch and I worked together on dozens of crazy projects, all of which were best described as the ones that everybody said would never work. And after our last Netflix project together, when I spent the summer of 2002 with Mitch in Las Vegas trying to help him launch a Netflix kiosk, I thought I had seen the last of Mitchs Ill figure it out ideas.

I should have known better.

Ten years later, in the fall of 2013 when he reached me by phone, I knew immediately that Mitch had found another one. Youve got to meet these guys, he blurted out excitedly. Theyve got a company called MoviePass thats doing a subscription service for movie theaters. And with that, I once again found myself alongside Mitch working on another idea that everyone said would never work. I didnt last long there, and I wont spoil the ending here, but the eight-year adventure in category disruption that followed is one of the most fascinating and colorful business stories ever, and as usual, Mitch was right in the center of it.

Whether youre just starting out in business or already have a long track record of success, youll find plenty to learn from a man who has seen it all, done most of it, and met everyone. Youll see theres nobody else like Mitch.

Marc Randolph

Cofounder and first CEO of Netflix and best-selling author of That Will Never Work: The Birth of Netflix and the Amazing Life of an Idea