Some folks have criticized Netflix for being anti-innovation. According to Netflix’s Adrian Cockcroft, they’re only half right.
Cockcroft, who works as a cloud architect for the streaming giant, outlined the unique business practices (not forcing innovation just for the sake of it), corporate structure (no bonuses or IT Ops groups) and even the mistakes (Qwikster) that make Netflix unlike other companies.
Before I joined Netflix I worked at eBay for a few years, and helped found eBay Research Labs. This was setup because eBay felt it wasn’t innovating fast enough, and they were looking for the one missing ingredient that would drive more innovation into the company. This is a fairly common approach. “You guys go and be innovative, then hopefully we will find ways to spread it around a bit.” Unfortunately the end result of setting up a separate group to add innovation to a big company is more comical than useful.
As it turned out, forcing innovation at the online auction house wasn’t easy.
“The most interesting projects got tied in knots, they trod on too many toes or were scary,” opined Cockcroft. “We went to an Innovation Forum in New York. That was weird, some of the primary examples they were talking about emulating were eBay and Paypal!”
Cockcroft said whispers of the “Netflix culture” enticed him, and in 2007 he was hired to oversee the company’s cloud-based operations.
The architect also revealed some interesting tidbits about life at Netflix, answering several questions with a single response: “We don’t.”
“Who has teams spread over multiple sites and countries,” asked Cockcroft. “Who has junior engineers, graduate hires and interns writing code? Who has an architecture review board and centralized coding standards? Who has to ask permission before deploying 100s or 1000s of servers? Who has a centralized push cycle and has to wait for the next ‘train’ before they can ship their code? Who has project managers tracking deliverables? Who has a single standard for development tools?”
The same answer applies to traditional bonuses, he added.
“Once a year we revise everyone’s salary to their peers and current market rate – based on what we are paying now to hire the best people we can find,” said Cockcroft. “We also have what sounds like a crazy stock option plan that grants options every month, vests the same day, and they last 10 years even if you leave Netflix.”
Netflix CEO Reed Hastings, however, had his 2012 stock options cut in half to $1.5 million following a tumultuous year full of fleeing subscribers and unpopular website tweaks. The executive also won’t be receiving a raise; he’ll have to settle for what he made in 2011: $500,000.
Cockcroft closed with some blunt advice to both low-level workers and managers: “Stop doing all the things that are slowing you down, and get rid of the unproductive BS that clogs up your management and engineers.” (via Hacking Netflix)