Reed Hastings has on multiple occasions been described as the man who revolutionized entertainment and the reason is not hard to spot. Thanks to his foresight with regard to the future of movie rental, he founded Netflix and grew it into one of the largest movie rental companies in the U.S. From renting DVDs by mail, Netflix has now extended its business to streaming movies online and has gone global. They now produce their own original movies and series, several of which have gone on to win prestigious accolades such as the Primetime Emmys, the Golden Globes, and the Academy Awards.
Achievements such as this have made Hastings one of the most respected and talked about CEOs in the USA. He is also one of the wealthiest with a net worth of about $5.4 billion, a figure that is guaranteed to grow in the nearest future.
Reed Hastings Sold His First Company, Pure Software, For $750 Million in 1997
Reed Hastings may have achieved unprecedented success with Netflix but it must be noted that this is not his first rodeo. Before delving into the movie rental and entertainment business, the Massachusetts native had initially deployed his maths and computer science degree to work as a software developer for some companies. One of them was Adaptive Core and Hastings spent a few years there, a time during which he developed a debugging software for the organization. While developing software for other people, Reed Hastings figured that he could as well go into business for himself. He, therefore, quit Adaptive Core in 1991 and soon started his own company known as Pure Software.
Pure Software dealt in debugging software for engineers and was quite successful. They doubled their revenue each preceding year and by 1995, went public. The next year, they merged with another software company known Atria Software. All these mergers and IPOs should have been a blessing for Reed Hastings but it only created another set of problems for him. The increased workforce, as well as the diversification into a broad portfolio of products, proved too much to manage for the man who was only a trained engineer. The company ran into several troubles and it became inevitable that it would be sold. Thankfully, it was sold for an impressive price, $750 million, and Hastings got a healthy cut. It was that healthy cut that would fund his next big idea, Netflix.
At 200m, Rich, it was Denny's on Demand at home. pic.twitter.com/VKgr3qJ0So
— Reed Hastings (@reedhastings) January 20, 2021
He Co-Founded Netflix in 1998
Netflix specializes in bringing us fantastic stories and this is just as well seeing as there is a wonderful tale about how the company came into existence. The year was 1997 and VHS cassettes were the in thing while DVDs were still creeping into the mainstream. It was also the norm to rent movies from video stores and Reed Hastings found himself owing as much as $40 on demurrage for the late return of a particular tape. While fretting over how to get himself out of the dire situation, Hastings found himself analyzing the monthly membership subscription offered by gyms.
He figured that this was a better way of doing things and so came up with the idea of doing something similar for movies. Customers could pay a monthly subscription fee for renting DVDs by mail and list their choices on the company’s website. Once they returned the first movie they were sent, the next one would be automatically mailed to them. This was the humble beginnings of Netflix in 1998 and the service immediately took with members of the public. They had more than 200,000 customers by 1999 and reached the one million mark in 2003.
2021 = a new movie EVERY WEEK on Netflix. Here's a sneak peek at 27 of the biggest, brightest, fastest, funniest, feel-good, feel-everything films and stars coming to Netflix this year pic.twitter.com/iCr1ZPrc7W
— NetflixFilm (@NetflixFilm) January 12, 2021
Such performance generated much revenue for the company but Reed Hastings did not rest on his oars. He stayed on the lookout for better opportunities and so when streaming services became a big deal, he equally took his company in that direction in 2007. Netflix is now one of the most popular streaming platforms in the world and has more than 200 million subscribers globally. It generates revenue as much as $20 billion each year and has a valuation of about $39 billion. Hastings meanwhile owns 1% of the company and this accounts for the greater percentage of his net worth.
Reed Hastings Also Owns Shares in Companies such as Facebook
Another avenue through which Reed Hastings has made much money is his investment in Facebook. The Netflix co-founder purchased 47,826 shares in the company for $1 million in 2012. Several years down the line, those shares are now worth more than $10 million. Asides from that shareholding, Hastings also served as a director of Facebook from 2011 to 2019. His Departure was believed to have been informed by the fact that the social media company could become potential rivals giving their delving into web streaming.
Reed Hastings also served as an independent director of Microsoft from 2007 to 2012. His departure was ostensibly due to the fact that he wanted to dedicate more time to his then-fledgling company, Netflix, as well as his philanthropic efforts in education.
Reed Hastings, Co-CEO of Netflix, shares his top 5 Lessons Learned over the years. Get a deeper dive into these insights in the book "No Rules Rules," written by @reedhastings and @erinmeyerINSEAD, available for order at https://t.co/Y5rI0IT5XR pic.twitter.com/S1DSOEl4U3
— We Are Netflix (@WeAreNetflix) September 10, 2020
Highlights of the Sources of Reed Hastings’ Net Worth
- Earnings and Sale of Pure Software
- Founding of Netflix
- Shares of Facebook owned and role as director
- Role as director at Microsoft
The Netflix CEO Once Served in the Peace Corps and Spent Two Years Teaching High School Math in Swaziland
Prior to becoming the billionaire co-founder and co-CEO of Netflix, Reed Hastings was just a little boy born in Boston, Massachusetts. He hailed from a well-to-do family and could have grown up without breaking one sweat. His parents, notably his mother, instilled in him the need for hard work and so for a year after high school, he occupied himself with selling vacuum cleaners from door to door. Hastings would later enter college and obtain a degree in mathematics. He then had a stint with the Marine Corps in 1981.
From the Marine Corps, Reed Hastings joined the Peace Corp for the purpose of rendering service to humanity. He was sent to Swaziland where he spent two years teaching math at a rural high school. It was an extremely satisfying experience for the young man and he learned to become quite creative along the way. He picked up several skills and these skills would later come in handy in helping him build up Netflix to the level that it is now.
— KIPP Schools (@KIPP) January 13, 2016
Hastings days of teaching high school math are over but he remains passionate about education. He served on the California education board in the past. He has also made generous donations to education efforts. For instance, in 2016, he created a $100 million education fund aimed at ensuring that a greater number of kids have access to rich and holistic educational experiences. It has thus far supported the United Negro College Fund as well as the Hispanic Foundation of Silicon Valley.
- Reed Hastings is one of America’s foremost business executives with a net worth of $5.6 billion.
- He founded the software company, Pure Software in 1991 and sold it off for $750 million in 1997.
- He co-founded Netflix as a DVD rental-by-mail company in 1998. The company has now grown into a global movie rental and streaming service with a valuation of about $39 billion.
- Beyond Netflix, Reed Hastings also owns shares in Facebook and has served on the board of both Facebook and Microsoft.
- The Netflix CEO is passionate about education and has doled out more than $200 million to support various education initiatives to date.