#159: No Rules Rules — 7 Culture Principles That Made Netflix Unstoppable

Most founders add layers to gain control. Reed Hastings built an empire by removing them. 

This episode unpacks No Rules Rules—the leadership playbook behind Netflix’s rise from a DVD mail service to a global entertainment powerhouse. Co-authored by founder Reed Hastings and INSEAD professor Erin Meyer, the book reveals how to scale not through policy, but through trust, talent density, and extreme transparency. 

But this isn’t just about Netflix. 

It’s about you—if you’re building or investing in companies between Series A and IPO, where culture either compounds performance or quietly kills it. 

I walk you through 7 operational principles that deep-tech teams can apply now—lessons forged in crisis, growth, and reinvention. You’ll learn how to sunshine mistakes, pay like a pirate, and lead without becoming a bottleneck. 

Each principle is translated into coaching prompts, ready to implement this week. 

Key Takeaways: 

• Culture Outruns Capital: Don’t optimize the engine—reinvent the vehicle.
• Pro Team > Family: Loyalty is earned through excellence, not tenure.
• Candor Drives Speed: Build feedback loops that fuel progress.
• Pay Top of Market: Buy peace of mind. Unlock creative flow.
• Bet Boldly: Seek dissent. Test. Learn. Repeat.
• Context Beats Control: Share the why. Let them own the how.
• Transparency = Trust: Open up, even when it’s uncomfortable.

Timestamps:

(00:00) Intro – Why Netflix Scaled Faster by Removing Rules, Not Adding Them
(04:30) Who Is Reed Hastings? – From Math Teacher to Global Disruptor
(09:13) Book Snapshot – What Makes No Rules Rules a Real Operating System
(11:35) Lesson 1: Culture Outruns Capital – How Netflix Survived 4 Disruptions, Blockbuster Didn’t Survive One
(17:25) Lesson 2: Build a Pro Team, Not a Family – Talent Density Over Loyalty
(22:48) Lesson 3: Radical Candor = Speed – The Feedback Model That Fuels Innovation
(27:34) Lesson 4: Pay Like a Pirate – Why Netflix Pays Top of Market—No Games, Just Outcomes
(32:20) Lesson 5: Bet Bold, Fail Proudly – The 4-Step Innovation Cycle That Keeps Netflix Ahead
(39:12) Lesson 6: Lead with Context, Not Control – Scaling Leadership Without Becoming a Bottleneck
(43:28) Lesson 7: Transparency Builds Velocity – How Truth-Telling Became Netflix’s Superpower
(48:15) 7 Key Takeaways – The Culture Playbook Every Growth-Stage Founder Needs
(50:15) Personal Reflection – What I Questioned, What I’ll Steal, What Gave Me Pause
(52:00) Call to Action + What’s Next – Support the Show + Tease of the Next Episode

Why Listen:
 

• Learn how Netflix scaled without micromanagement
• Get 7 principles that push your org design, talent strategy, and leadership edge
• Discover where you're still playing defense—when your culture should be your offense
• Upgrade your leadership thinking with real examples and immediate applications

Found this useful? Like, share, and follow.
Every signal grows the show—and brings in more elite guests ready to share the truths behind high-growth success.
 

Transcript

00:00:00:00 - 00:00:10:05

Christian Soschner

Most founders still copy. Correct. They hire for IQ build companies full of perks like the famous Defoe spy, Poe link.

00:00:10:07 - 00:00:11:03

Christian Soschner

Or.

00:00:11:05 - 00:00:25:12

Christian Soschner

Other gaming entertainment features. They add layers of product managers, and they assume a fun and entertaining gaming culture is what makes people actually happy at their workplace.

00:00:25:12 - 00:00:27:00

Christian Soschner

Retail stinks.

00:00:27:00 - 00:00:46:01

Christian Soschner

He did exactly the opposite. He hired for judgment. He stripped away perks. He removed permission. Gates and criticized the culture not to make people feel good, but to move fast, speak hard truths and win on adaptability.

00:00:46:03 - 00:01:22:10

Christian Soschner

While Google built a world class innovation lab that struggled to commercialize outside its core business. Netflix rebuilt its business model four times without breaking its culture once. And that's why it outlasted them in entertainment. Retail stinks. He removed controls. He scrapped vacation policies. He paid engineers like Hollywood stars and then he escaped Netflix into 190 countries without a single approval chain.

00:01:22:10 - 00:01:23:09

Christian Soschner

The book is.

00:01:23:09 - 00:01:25:11

Christian Soschner

Called No Rules.

00:01:25:16 - 00:01:52:14

Christian Soschner

Rules written by Netflix found the retail stinks, and inside, Professor Karen Mayer. It's not a hype story. It's a playbook. And what makes it different is this. It's not about how to manage people. It's about how to design a culture where you don't have to. Netflix faced four existential transitions in 15 years.

00:01:52:14 - 00:01:56:23

Christian Soschner

DVD to streaming. Licensing to originals.

00:01:57:00 - 00:01:59:12

Christian Soschner

Hollywood took it over.

00:01:59:14 - 00:02:21:24

Christian Soschner

The secret to surviving all of them wasn't luck. It was a set of radical practices. Almost no startups. They had to try, like firing nice people, sanctioning $100,000 mistakes, and running life, 360 degree feedback dinners.

00:02:21:24 - 00:02:40:12

Christian Soschner

This episode gives you everything a behind the scenes look at how Hastings rewired the culture for speed. The seven leadership lessons that deep tech founders must steal and why transparency, candor, and trust are more than slogans.

00:02:40:14 - 00:02:48:09

Christian Soschner

They are operational levers, and I will walk you through each one with concrete examples you can apply right away.

00:02:48:09 - 00:03:00:24

Christian Soschner

So if you are still scaling your company like a family, waiting for consensus or hiding bad news from your team, you are already behind and losing. You just don't know it yet.

00:03:01:03 - 00:03:18:04

Christian Soschner

But here's the good news. In the next 60 minutes, you will learn exactly how Netflix built the culture that outliers outliers and outperforms the competition. And whether you are leading five people or 500. This model will change how you think about leadership.

00:03:18:04 - 00:03:26:14

Christian Soschner

Now here is why this episode matters to you, especially if you are building or investing in companies between series A and IPO.

00:03:26:16 - 00:03:54:08

Christian Soschner

The truth is, there aren't many people out there who have done this successfully, and culture is one of the biggest levers and blind spots between early traction and sustained scale. Ready for an IPO? So if you're a founder or a venture capitalist, your job is to decode the few playbooks that actually work. This podcast is part of the treasure hunt.

00:03:54:08 - 00:04:20:10

Christian Soschner

We dissect what high performing companies do differently and how to apply it inside your own team. Fast. If that sounds like a mission worth supporting, here is how you can help. Like, share and comment and follow the show on your podcast platform of choice. Every single signal makes the show stronger and brings in more world class guests to share their real world lessons.

00:04:20:12 - 00:04:28:19

Christian Soschner

So let's dive in. And the first part is who is Reed Hastings and why should founders listen to him?

00:04:29:00 - 00:04:57:09

Christian Soschner

Why is Reed Hastings the only founder who could build Netflix the way he did? Reed Hastings isn't a media mogul. He didn't grow up in Hollywood. He didn't come out of Stanford school or in an MBA program either. He was a math teacher, then a software engineer. And that outsider mindset, it's exactly why he built the company no one saw coming.

00:04:57:11 - 00:05:08:03

Christian Soschner

Most founders scale by layering on roles, by hiring real managers. By standardizing everything that once made them special.

00:05:08:03 - 00:05:31:22

Christian Soschner

Hastings, he did the opposite. Why? Because he already lived through the dark side of scaling. In the early 90s, when the internet was young. He founded pure Software and Debugging Tools company. It was successful. They went public. He was on magazine covers.

00:05:31:24 - 00:05:35:07

Christian Soschner

One of the early days of the internet, shiny stars.

00:05:35:07 - 00:05:50:04

Christian Soschner

But behind the scenes, pure was imploding. Every time someone made a mistake, they added a new role, a policy, a form to fill out, a sign of.

00:05:50:04 - 00:05:53:10

Christian Soschner

They tried to make excellence safe.

00:05:53:10 - 00:05:59:10

Christian Soschner

But in doing so, they made innovation. Kim possible.

00:05:59:12 - 00:06:34:03

Christian Soschner

The smartest people started to leave. The company lost speed and got slower, and eventually they sold it off. Reed walked away with money and a deep scar tissue. He swore, if I ever build another company, I will do it differently. And that company? Yes, you guessed it right. Became Netflix from day one. Hastings focused not just on product, but on culture as an infrastructure.

00:06:34:05 - 00:06:50:13

Christian Soschner

He made a vow. No roads, only responsibility. He didn't want managers who managed. He wanted leaders who built trust. He didn't want feedback to be a luxury. He made it a requirement.

00:06:50:13 - 00:07:04:09

Christian Soschner

And when you already read principles operate earlier, you will see that they have a lot in common to shape this vision. He brought in Patty McCord, one of the most radical thinkers in the Reddit.

00:07:04:11 - 00:07:12:00

Christian Soschner

Together, they built the now famous Netflix character deck. The deck has been viewed over 20 million times.

00:07:12:00 - 00:07:19:03

Christian Soschner

Facebook CEO Sheryl Sandberg called it the most important document to come out of Silicon Valley.

00:07:19:03 - 00:07:30:13

Christian Soschner

But this wasn't theory. It was a living operating system designed for speed, clarity and reinvention. And it worked.

00:07:30:15 - 00:08:03:17

Christian Soschner

Netflix survived and thrived through four disruptive industry shifts DVD to streaming, streaming licensed content to producing originals us only to global scale tech platform to full Stack Studio. Each of those transitions could have killed a traditional company easily. But Netflix moved fast, stayed flat, and kept reinventing.

00:08:03:17 - 00:08:09:10

Christian Soschner

Here is what Hastings learned across two decades. You don't scale with control.

00:08:09:12 - 00:08:10:23

Christian Soschner

You scale with clarity.

00:08:11:00 - 00:08:19:23

Christian Soschner

You don't build loyalty with perks. You build it with purpose. And you don't fix mistakes with roads. You fix them by hiring better people.

00:08:20:00 - 00:08:34:07

Christian Soschner

Netflix bet on culture as its core product. And the result? It didn't just attract light talent. It unleashed them. Today, Netflix operates in 190 countries. It rebuilt Hollywood.

00:08:34:07 - 00:08:52:17

Christian Soschner

And at its peak, it won more Emmys than HBO. So when Hastings talks about sanctioning $100,000 sales are running 360 degree feedback dinners or paying top of market with no bonuses.

00:08:52:19 - 00:09:07:14

Christian Soschner

He's not being provocative. He's being practical because he knows what doesn't work. What does work? And he has built it. And then he built something much better.

00:09:07:20 - 00:09:10:10

Christian Soschner

So the big question is what makes no.

00:09:10:10 - 00:09:13:13

Christian Soschner

Roads, roads more.

00:09:13:15 - 00:09:14:05

Christian Soschner

Than a business.

00:09:14:05 - 00:09:14:14

Christian Soschner

Book?

00:09:14:14 - 00:09:47:17

Christian Soschner

Most leadership books give you slogans, not more. This one gives you a tested system that actually has built one of the most valuable companies on the planet. In 2025. And if you stop here with listening to this episode, you will miss the full operating manual. No roads. Roads. It's not just about Netflix. It's about what every fast scaling company faces.

00:09:47:19 - 00:09:56:19

Christian Soschner

How do you grow without losing your soul? How do you stay innovative when the world changes faster than your road map?

00:09:56:19 - 00:10:01:00

Christian Soschner

And how do you build a team that doesn't need permission to be great?

00:10:01:00 - 00:10:36:05

Christian Soschner

The book is structured like a flywheel. Every chapter feeds into the next. It starts with talent density. We move average players, raise the bar. It adds then candor. How do you build feedback loops that never stop? It removes controls, expenses, vacation approvals. You don't need that. And it reinforces it all with transparency and trust. But let's be honest, it's not all sunshine or the day.

00:10:36:07 - 00:10:41:08

Christian Soschner

Hastings admits this system is not for everyone.

00:10:41:21 - 00:11:07:18

Christian Soschner

Some people break under radical freedom, some cultures reject public feedback. And if your team is not ready, implementing these ideas can actually backfire. But that's genius. No roads. Roads isn't a dogma. It's a conversation. It pushes you to ask, where am I slowing my company down and why? If you stop here, you will walk away with the chest.

00:11:07:20 - 00:11:33:20

Christian Soschner

But if you keep listening, you will get seven strategic moves, each one battle tested, sharp and ready to play. We will break down each one with real world quotes, examples and coaching prompts so you can apply the Netflix system to your own company starting tomorrow. Stay with me, because what comes next might just save you years of trial and error.

00:11:34:14 - 00:11:36:08

Christian Soschner

Let's start with the first lesson that.

00:11:36:08 - 00:11:38:07

Christian Soschner

Blockbuster trap.

00:11:38:09 - 00:11:40:23

Christian Soschner

Culture always outruns capital.

00:11:40:23 - 00:11:46:05

Christian Soschner

Here is why deep tech startups die when they optimize for efficiency over reinvention.

00:11:46:05 - 00:12:16:05

Christian Soschner

Many startup founders reach this brutal realization. The idea is good. Customers love it, but it will never become a standalone business. So what's the advice from venture capitalists? Go find a strategic partner. Get acquired. Integrate into an incumbent and off to go pitching to corporate giants, presenting the case with hope.

00:12:16:07 - 00:12:28:24

Christian Soschner

But what do they get? Polite rejections, blank stares, and sometimes even amused laughter. That's when the self-doubt creeps in. If nobody wants.

00:12:28:24 - 00:12:29:22

Christian Soschner

Us.

00:12:29:24 - 00:12:56:23

Christian Soschner

Maybe we are not worth much. And actually, many founders just walk away and end the company. But not Reed Hastings. Not his partner, Mark Randolph. They lived this exact script. And here is what happened next. In 2000, Reed Hastings and Mark Randolph walked into blockbuster status headquarters with a bold offer.

00:12:57:00 - 00:12:59:21

Christian Soschner

By Netflix for $50 million.

00:12:59:21 - 00:13:01:03

Christian Soschner

And in a book to read.

00:13:01:03 - 00:13:08:06

Christian Soschner

How much would blockbuster need to pay for Netflix? When he heard our response, $50 million,

00:13:08:06 - 00:13:12:22

Christian Soschner

he flatly declined. Mark and I left crestfallen.

00:13:12:24 - 00:13:25:13

Christian Soschner

That night when I got into bed and closed my eyes. I had this image of our 60,000 blockbuster employees erupting in laughter at the ridiculousness of our proposal.

00:13:25:13 - 00:13:38:22

Christian Soschner

At the time, it made perfect sense. Blockbuster was to try at 9000 stores. Billions in revenue. Netflix just described it. Deep mail service hemorrhaging cash.

00:13:38:22 - 00:13:45:02

Christian Soschner

But here is what blockbuster didn't understand and missed in the years after 2000.

00:13:45:04 - 00:13:56:11

Christian Soschner

Netflix wasn't a DVD business. Activities are going to die anyways. It was a culture business designed to adapt, pivot and rebuild itself from the inside out.

00:13:56:11 - 00:14:19:09

Christian Soschner

Over 15 years, Netflix pulled off four major reinventions, from DVDs to streaming, from licensed content to originals, from outsourcing to building an in-house studio from the United States only to 190 countries. Blockbuster.

00:14:19:11 - 00:14:37:24

Christian Soschner

It never changed. By 2010, it was bankrupt. By 2019. Only one lonely store remained, and I'm pretty sure that in 2025, the remaining 12 employees actually won't laugh about Netflix anymore.

00:14:37:24 - 00:14:46:14

Christian Soschner

Netflix did not win because of better tech. It won for one simple reason it had the better culture,

00:14:46:14 - 00:14:55:13

Christian Soschner

and in the book to read, it was not obvious at the time, even to me. But we had one thing that blockbuster did not

00:14:55:13 - 00:15:03:10

Christian Soschner

a culture that valued people over process, emphasized innovation over efficiency, and had very few controls.

00:15:03:10 - 00:15:17:06

Christian Soschner

The culture people have process freedom. Mobile control became their real mode. So if you're scaling from Crusade to IPO, here is the trap to watch you hire layers of management.

00:15:17:06 - 00:15:27:17

Christian Soschner

You optimize for efficiency. You've built systems to protect what already works. But in doing that, you quietly kill what built your company in the first place.

00:15:27:17 - 00:15:43:12

Christian Soschner

Curiosity, courage. Reinvention and Netflix did exactly the opposite. They stripped out approvals. They trusted their people and hired the right ones. They bet on culture as their innovation engine.

00:15:43:12 - 00:15:46:05

Christian Soschner

Efficiency feels smart. It feels safe.

00:15:46:10 - 00:15:55:00

Christian Soschner

Controls. It's safe. Squared. But in deep tech, safety is the risk. And that's the net.

00:15:55:00 - 00:16:02:06

Christian Soschner

So if you only optimize what's already working, you lose your edge and eventually your future.

00:16:02:06 - 00:16:12:21

Christian Soschner

What's the real lesson here? Culture isn't posters or perks. It's how your people behave when the stakes are high and nobody's watching

00:16:12:21 - 00:16:16:12

Christian Soschner

at Netflix. Bold moves weren't just allowed.

00:16:16:13 - 00:16:21:09

Christian Soschner

They were expected and encouraged, and that made all the difference.

00:16:21:09 - 00:16:26:09

Christian Soschner

They survived four waves of disruption. Blockbuster didn't even survive one.

00:16:26:09 - 00:16:51:06

Christian Soschner

Now let's pause and turn this insight into action with questions to test the resilience of your own culture. The first one what part of your company still runs like blockbuster? Efficient. Profitable but already resistant to change.

00:16:51:08 - 00:17:01:02

Christian Soschner

Which controls are you installing today that might strangle innovation tomorrow?

00:17:01:04 - 00:17:12:24

Christian Soschner

Are you building a culture that reinvents or one that protects what's already working?

00:17:13:01 - 00:17:24:03

Christian Soschner

And finally, what trends are you widely ignoring because it threatens your current model?

00:17:24:05 - 00:17:37:19

Christian Soschner

And here is lesson to build a pro team, not a family. Why talent density, not loyalty, drives performance in high growth companies. Startups

00:17:37:19 - 00:17:44:15

Christian Soschner

they love calling themselves a family. It sounds cozy, supportive and absolutely safe.

00:17:44:15 - 00:17:55:15

Christian Soschner

But in high stakes scaling. Remember your goal is 100 x minimum a10x. Now another 2 or 3 x in this situation.

00:17:55:15 - 00:17:55:24

Christian Soschner

Is.

00:17:55:24 - 00:18:11:12

Christian Soschner

Loyalty without performance, it kills momentum. Families prioritize belonging. Pro teams prioritize performance. And if you're building a deep tech company, here is the truth.

00:18:11:12 - 00:18:15:23

Christian Soschner

Excellence is not a wipe. It's a system.

00:18:15:23 - 00:18:18:23

Christian Soschner

And Netflix learned the hard way in 2001.

00:18:18:23 - 00:18:26:11

Christian Soschner

Reed Hastings had to lay off a third of the team he praised for backlash. In the book on page five, he writes.

00:18:26:13 - 00:18:46:05

Christian Soschner

In the days before the layoffs, my wife remarked how on edge I was, and she was right. I worried that motivation in the office would plummet. I was convinced that after I'd let go of their friends and colleagues, those who stayed would think that the company wasn't loyal to employees.

00:18:46:07 - 00:19:02:16

Christian Soschner

But the reality is, what happened next surprised him. And to read somewhere in the book on page five. By noon, it was finished. Then within a few weeks, for a reason I couldn't initially understand. The atmosphere improved dramatically.

00:19:02:16 - 00:19:07:08

Christian Soschner

The office was suddenly passing with passion and energy and ideas.

00:19:07:08 - 00:19:13:18

Christian Soschner

Cutting low performance actually lifted the entire team to a higher level.

00:19:13:20 - 00:19:21:09

Christian Soschner

Remember this? Less people, better performance. Isn't that a contradiction?

00:19:21:09 - 00:19:29:13

Christian Soschner

Morale went up. Creativity surged. Because the real drag wasn't headcount, it was mediocrity.

00:19:29:13 - 00:19:46:20

Christian Soschner

Netflix calls this principle talent density. Only the best stay and everyone else gets coached out. On page four, retesting writes, those who were exceptionally creative, did great work and collaborated well with others, went immediately into the keeper's pile.

00:19:46:22 - 00:19:57:06

Christian Soschner

Better make a court edit. We learned that a company with really dense talent is a company everyone wants to work for. It's on page seven.

00:19:57:14 - 00:20:32:05

Christian Soschner

This might sound cruel, but it's actually not. It's clarity. High performance thrive when surrounded by peers who raise the bar every single day. So here is the mindset shift you need as a leader in a deep tech company a family. It means unconditional acceptance. A pro team in a company means high performance, high trust, high expectations, and a championship team.

00:20:32:08 - 00:20:58:21

Christian Soschner

That plays to win. It trains hard and it upgrades fast. And at Netflix, this philosophy became a system on page 271. Reed Hastings, right. If a person on your team were to quit tomorrow, would you try to change their mind? Or would you accept their resignation? Perhaps with a little relief.

00:20:58:21 - 00:21:02:21

Christian Soschner

and that question, that's to keep a test.

00:21:02:23 - 00:21:07:09

Christian Soschner

If you wouldn't fight to keep them. Let them go. No.

00:21:07:09 - 00:21:21:12

Christian Soschner

Because the truth is, mediocre hires don't trust underperform. They do something worse. They drain managers energy. The lower the team's IQ and drive away your top talent.

00:21:21:12 - 00:21:34:14

Christian Soschner

That's why retesting says on page seven, a team with 1 or 2 merrily adequate performance brings down the performance of everyone and drives staff who seek excellence to quit.

00:21:34:16 - 00:21:43:14

Christian Soschner

And here is the kicker. Everyone already knows who shouldn't be there. They're just waiting for you as the leader to act.

00:21:43:14 - 00:21:59:12

Christian Soschner

Netflix did not build a family. They built a walled garden of excellence. No politics, no stack ranking. Just one simple question. Would you fight to keep them?

00:21:59:12 - 00:22:05:22

Christian Soschner

And if not, to help them leave with dignity and hire someone who fits the bar.

00:22:05:24 - 00:22:11:21

Christian Soschner

Because that's what real teams do. They care deeply and upgrade constantly.

00:22:11:21 - 00:22:36:02

Christian Soschner

Let's take a moment and turn this principle into practice with questions. Challenge your own team. Design the first one. Who on your team trains more energy than the ad. If they quit today, would you fight to keep them or feel relief?

00:22:36:04 - 00:22:48:11

Christian Soschner

And the third one. How can you apply the keeper test this week to raise your team's talent density?

00:22:48:20 - 00:23:02:17

Christian Soschner

And here we are at lesson number three. Radical candor equals speed. Here is how to unlock peak performance with Netflix for ace feedback model.

00:23:02:17 - 00:23:12:18

Christian Soschner

Most teams, they avoid tough conversations because it can hurt feelings. People hold back. Afraid to offend. Afraid to.

00:23:12:18 - 00:23:13:09

Christian Soschner

Look.

00:23:13:11 - 00:23:20:12

Christian Soschner

Difficult. But here is the truth. Silence isn't kindness.

00:23:20:14 - 00:23:22:06

Christian Soschner

It's betrayal.

00:23:22:10 - 00:23:39:24

Christian Soschner

At Netflix, not speaking up is a problem. On page 18. Reed Hastings writes at Netflix. It is tantamount to being disloyal to the company. If you fail to speak up when you disagree with a colleague or have feedback, that could be helpful

00:23:39:24 - 00:23:42:20

Christian Soschner

without feedback. Even the smartest team starts.

00:23:42:22 - 00:24:06:05

Christian Soschner

Here is why. Because your brain treats criticism like a threat. Fight or flight kicks in. Creativity shuts down. But the data is clear. A feedback loop is one of the most effective tools for improving performance. We learn faster and accomplish more when we make giving and receiving feedback a continuous part of how we collaborate.

00:24:06:05 - 00:24:13:08

Christian Soschner

No feedback means slow growth, blind spots, compounds, misalignment, festers.

00:24:13:08 - 00:24:29:01

Christian Soschner

So what did Netflix do? They built the four A's feedback model a simple set of rules that changed everything. The first rule is aim to assist. Your goal is to help, not hurt.

00:24:29:02 - 00:25:07:01

Christian Soschner

So don't weaponize feedback. The second one feedback must be actionable. Be specific. Change behaviors, not personalities. The third one appreciate. Receive feedback with gratitude, even if it stinks and especially if it stinks. And the fourth one. Acceptance or discarding. It's always on the receiver set. You don't have to agree. Just listen. Reflect and choose where you can learn something, whether it's useful or not.

00:25:07:03 - 00:25:10:24

Christian Soschner

This model turns feedback into a tool, not a threat.

00:25:10:24 - 00:25:19:01

Christian Soschner

And then they took it a notch further. Netflix introduced life 360 degrees. Feedback Venus.

00:25:19:01 - 00:25:36:12

Christian Soschner

the reason they sent three tastings. Describes it on page 26. We hire for your opinions. Every person in that room is responsible for telling me frankly what they think. And he talks about himself as the leader and the CEO.

00:25:36:22 - 00:25:55:22

Christian Soschner

And here is how the dinners work. 75%. That's the requirement for developmental feedback. 25% should be praise. The dinner has a strong moderator and zero anonymity. No gossip, no ambush is just honest growth.

00:25:55:22 - 00:26:12:01

Christian Soschner

And outputs. Imagine your next board meeting with that level of candor. Now picture the reality. Polite. Not sad. Spoken doubts. Safe conversations. Nobody should get hurt.

00:26:12:03 - 00:26:36:01

Christian Soschner

And yet read Hastings notes in the book. The higher you get in an organization, the less feedback you receive, and the more likely you are to come to work naked or make another error that's obvious to everyone but you. And those blind spots. They kill startups faster than external threats ever could.

00:26:36:01 - 00:26:43:22

Christian Soschner

Feedback is not optional. It's oxygen. And at Netflix, they made that oxygen part of daily life.

00:26:44:00 - 00:26:51:07

Christian Soschner

Structured, candid and kind. And that's how you learn faster. That's how you scale smarter.

00:26:51:07 - 00:26:58:08

Christian Soschner

Now let's turn that principle into action. Here are three questions to upgrade your team's feedback culture.

00:26:58:10 - 00:27:00:10

Christian Soschner

The first one.

00:27:00:12 - 00:27:09:01

Christian Soschner

How can you make feedback as routine as your daily stand ups?

00:27:09:03 - 00:27:19:23

Christian Soschner

Are your conversations grounded in the four days, or slipping into gossip and generalities, or what you did on the weekend?

00:27:20:00 - 00:27:33:10

Christian Soschner

What steps can you take this week to run a life 360 session, formal or informal, to surface blindspots and build trust?

00:27:33:15 - 00:28:07:00

Christian Soschner

Here is the lesson number four. Pay like a parrot. Talent is the multiplier, not a cost center. Why is it necessary to pay top of market to attract and retain your rock stars? And why is this the most neglected principle in European startups and venture capital? Here is a mistake. Most founders centerpieces still make. They treat compensation like a cost center instead of a competitive weapon.

00:28:07:02 - 00:28:35:12

Christian Soschner

But in deep tech. Velocity beats fairness, and velocity comes from creative rockstars who build in weeks. But ten average hires need months to deliver. Netflix learned this the hard way until today. As Reed Hastings explains, a 1968 study from Santa Monica changed how they hired forever in the book. On page 73, he writes,

00:28:35:12 - 00:28:49:02

Christian Soschner

the best guy was 20 times faster at coding, 25 times faster at debugging, and ten times faster at program execution than the programmer with the lowest marks.

00:28:49:02 - 00:29:11:18

Christian Soschner

That insight sparked Netflixs rock star principle hire one world class talent. Pay them what they are worth. Never settle for ten average people at a discount. And here is the move Netflix made. They ditched the bonus games and paid high base salaries from day one.

00:29:11:18 - 00:29:20:13

Christian Soschner

On page 77, he says people are most creative when they have a big enough salary to remove some of the stress from home.

00:29:20:15 - 00:29:24:22

Christian Soschner

Big salaries, not married bonuses are good for innovation

00:29:24:22 - 00:29:49:01

Christian Soschner

And they pay conversations honest and open on page 86. Netflix wants to pay what will attract and keep talent. They estimate what that person could make elsewhere and offer just above it. No negotiations, no lowballing. Just clear, confident, trust based offers.

00:29:49:01 - 00:30:06:00

Christian Soschner

So if you are scaling a deep tech company, this is your mindset shift. Stop chasing cheap deals on talent. Pay calm minds to create big ideas. Treat compensation as a signal of trust, not a variable.

00:30:06:00 - 00:30:06:18

Christian Soschner

Cost.

00:30:06:20 - 00:30:15:13

Christian Soschner

Because when you pay 10% above market for a true rockstar, you unlock ten x the outcome and ten x the loyalty.

00:30:15:13 - 00:30:20:19

Christian Soschner

So are you still using performance bonuses to drive creativity?

00:30:20:21 - 00:30:22:20

Christian Soschner

That's a trap.

00:30:22:22 - 00:30:37:07

Christian Soschner

Big payouts raise anxiety. They push people to play it safe. And if your best engineer is underpaid by 15%. They are not planning to stay there waiting to be poached.

00:30:37:07 - 00:30:50:07

Christian Soschner

this might sound counterintuitive, but the thing with the bonuses, it's not clear for a whole year whether you'll get it or not. That's uncertainty. And uncertainty kills creativity.

00:30:50:09 - 00:31:22:02

Christian Soschner

I myself experience that at the end of the year. You might experience a surprise. Your manager doesn't have time for the bonus discussion for months. He avoids it and when he has it, he finds some super delicious ideas. Why not get it? That's uncertainty at its best. So instead of doing that, Reed Hastings just ditched bonuses and said, we pay a high base salary and give people one think certainty and peace of mind.

00:31:22:02 - 00:31:38:24

Christian Soschner

And here is the deeper truth. Compensation is one of the most important factors of a good, innovative culture. At Netflix, big salaries, big base salaries communicate. We trust you. We want your best thinking. We don't play games.

00:31:39:05 - 00:31:39:12

Christian Soschner

With.

00:31:39:12 - 00:31:45:14

Christian Soschner

Talent. That clarity builds loyalty, focus and innovation at scale.

00:31:45:14 - 00:31:54:23

Christian Soschner

So if your product roadmap is bold, your pay strategy better be just as sharp. Let's test your thinking.

00:31:55:01 - 00:32:05:06

Christian Soschner

The first coaching question. Are your salaries high enough to attract true rockstars?

00:32:05:08 - 00:32:12:09

Christian Soschner

What would happen if your top engineer got a recruiter call this week?

00:32:12:11 - 00:32:19:20

Christian Soschner

How can you make your compensation policy more transparent? Fair and magnetic.

00:32:19:22 - 00:32:32:19

Christian Soschner

Lesson number five pet bold and fail. Proudly. The Netflix innovation cycle. Drive breakthroughs by farming for dissent, testing bets and censuring failures.

00:32:32:19 - 00:32:54:10

Christian Soschner

Innovation dies in silence. Where ideas stay stuck at the top and teams wait for approval. Instead of taking a leap. Momentum disappears. And in deep tech and tech, momentum is everything. Netflix attacked this bottleneck head on by teaching every employee to think like an entrepreneur.

00:32:54:12 - 00:32:57:10

Christian Soschner

No more waiting. Just place your bet.

00:32:57:14 - 00:33:31:06

Christian Soschner

Reed Hastings puts it in the book. On page 138, we use the image of placing bets. This motivates employees to think of themselves as entrepreneurs who typically don't succeed without some fierce take carry story. She wanted to launch an influencer campaign. It wasn't her boss's idea. It wasn't consensus approved. But she farmed for dissent, socialized it early, and went to bed anyway.

00:33:31:08 - 00:33:48:20

Christian Soschner

The result? A hit campaign that reached millions. It became a hit campaign. Everybody was against it. But she did it. Now imagine this whole process with approval. No hit campaign.

00:33:48:20 - 00:34:04:00

Christian Soschner

To scale this mindset. Netflix builds the innovation cycle. And here it is. The first step is farm for dissent a socialist idea. The second one for a big idea.

00:34:04:02 - 00:34:05:02

Christian Soschner

Test it out.

00:34:05:02 - 00:34:06:14

Christian Soschner

First.

00:34:06:16 - 00:34:11:05

Christian Soschner

The third one is the informed captain. Make your bet.

00:34:11:05 - 00:34:25:03

Christian Soschner

And if it succeeds. Celebrate with dance company. And if it fails, sanction the failure so people can learn from it. Four simple steps. Repeat them and your company becomes a learning machine.

00:34:25:03 - 00:34:36:14

Christian Soschner

Let's break this down with the voice of Netflix behind every move. Step one farm for dissent. Before you commit, go hand down objections.

00:34:36:19 - 00:34:43:22

Christian Soschner

It will broaden your picture about your idea. You don't have to agree, but you have to know where the loopholes are.

00:34:43:22 - 00:35:00:23

Christian Soschner

Find unspoken risks. Light up dark corners. At Netflix. This isn't optional. On page 241, Reed Hastings says it is disloyal to the company. When you disagree with an idea and do not express that disagreement.

00:35:00:23 - 00:35:30:00

Christian Soschner

The second step is socialized and tested out. Don't build in a vacuum. Share early drafts with everyone who will be impacted in one Netflix quarterly business review. 400 leaders broke into 60 days each debating on page 245 for testing describes. Should we spend more, less or no money on kid's content? 400 brains digging into.

00:35:30:00 - 00:35:30:17

Christian Soschner

This problem.

00:35:30:19 - 00:35:38:21

Christian Soschner

That won't cut prompt surfaced insights. No executive could have spotted a alone on their own.

00:35:38:21 - 00:35:50:09

Christian Soschner

And when you have that move to step three, make your bet. If you are convinced it will work. After the preparation, you decide and you own it. No passing the.

00:35:50:09 - 00:35:51:05

Christian Soschner

Buck.

00:35:51:07 - 00:36:09:01

Christian Soschner

Netflix trusts the person closest to the decision, and by 249, retesting says the person living and breathing the contract needs to be the one who signs it. I'm not going to take ownership away by putting my name on the deal.

00:36:09:01 - 00:36:38:21

Christian Soschner

And this is something very common in success for companies. There's a similar quote in the book, The Innovators, written by Walter Isaacson about Intel and their famous founder, Noyce, who said, look, here are your guidelines. You've got to consider a you've got to consider and you've got to consider. See, it's similar to Netflix, farm for decent and socialize the idea and get some ideas where problems might be.

00:36:38:21 - 00:36:54:16

Christian Soschner

But also. No, I said, but if you think I'm going to make your decision for you, you're mistaken. Hey, it's yours. So at the end of the day that people decide they know what's best for the company.

00:36:54:16 - 00:37:15:18

Christian Soschner

And then you get to step four. Sunshine fails when a bad flops. Don't hide it. I it. Everybody wants to celebrate successes of course, but let's be honest. Nine out of ten ideas won't succeed, but people need to understand what went wrong to avoid it in the future.

00:37:15:20 - 00:37:50:00

Christian Soschner

And that's why Netflix teaches a three step response. What did we learn? Don't dramatize it. Third one sanction it. Say I was wrong and then move on. Because transparency transform mistakes into wisdom and terrorists won't forget you by distributing decision making to the team instead of diluting it. Netflix unlocks speed, accountability, and innovation at every single level of the company.

00:37:50:00 - 00:38:16:13

Christian Soschner

Founders often fear failure, but hiring mistakes guarantees you will repeat them. As Hastings says, we just fix the problems as quickly as possible and discuss what we have learned. Rapid recovery is the best model. You can read it in the book on page 238 without rapid recovery, bold bets disappear and so does your edge. Just think about the startup community here in Europe.

00:38:16:15 - 00:38:21:19

Christian Soschner

How often when people fail, they are punished and punished all over again.

00:38:21:19 - 00:38:30:12

Christian Soschner

Success isn't about avoiding failure. It's about learning faster than your competitors and adapt the entire organization.

00:38:30:12 - 00:38:45:13

Christian Soschner

success. It's all about adaptability. The innovation cycle ensures every misstep becomes a stepping stone, and every bold move gets the recognition it deserves. Let's turn this principle into practice.

00:38:45:13 - 00:39:03:24

Christian Soschner

Ask yourself and your team. How can you build regular farming for descent into your planning cycle? What small bets can your team run this week? Just to test something bold.

00:39:04:01 - 00:39:12:08

Christian Soschner

How will your sunshine a recent failure to build safety and speed into your culture.

00:39:12:14 - 00:39:36:08

Christian Soschner

Here is lesson number six. Lead with context and not control. Empower your teams with clarity, not rules to unlock speed and innovation. Here is the trap. You install more rules to scale, but end up slowing down the people you hired to move fast. In deep tech, every delay is costly.

00:39:36:08 - 00:39:41:18

Christian Soschner

And now centralized teams like micromanagement. You have felt it.

00:39:41:18 - 00:39:45:21

Christian Soschner

Endless approvals, expense reports, sign offs.

00:39:46:04 - 00:40:11:24

Christian Soschner

Meanwhile, your smartest people are waiting for permission. Instead of solving problems. That's not discipline. That's friction disguised as process. Netflix flips the script with one core idea. Lead with context, not control. Instead of issuing orders, they teach principles instead of managing decisions. They manage clarity.

00:40:11:24 - 00:40:18:16

Christian Soschner

Here is how Netflix makes it real with four context setting tools you can adopt today.

00:40:18:16 - 00:40:49:00

Christian Soschner

The first rule is act in Netflix best interest. A five word policy replaces an entire rule book, and it's written in the book on page 66. Act the Netflix best interest. The story is when a shot artist's 4K TV was mistakenly discarded. Junior engineer Nick sprinted to best Buy at 2 a.m. in the morning, and he bought a replacement without asking anybody.

00:40:49:02 - 00:40:51:19

Christian Soschner

He didn't break a rule. He followed the principle.

00:40:51:21 - 00:40:52:14

Christian Soschner

And

00:40:52:14 - 00:40:54:15

Christian Soschner

following a principle means.

00:40:54:17 - 00:40:54:19

Christian Soschner

It's.

00:40:54:20 - 00:41:28:10

Christian Soschner

The second point that you set context upfront and monitor out back. New hires attend Netflix employee college where they are taught. It's on page 59. In the book. If you can explain comfortably why that purchase is in the company's best interest, then no need to ask. Go ahead and buy it. No permission is needed, just clear intent. The third one highly aligned, loosely coupled.

00:41:28:12 - 00:41:54:03

Christian Soschner

This means Reed Hastings brings top leaders together at QPR and ECF meetings to align strategy, and then steps back. On page 226. Aligning a North star happens to our East staff and QPR meetings. Once everyone knows to why, decisions happen at the edge, fast and focused.

00:41:54:03 - 00:41:54:07

Christian Soschner

And.

00:41:54:07 - 00:42:27:16

Christian Soschner

Finally choose innovation over our role prevention. When speed matters, don't over design controls design desire. It's Antoine to so expertly set. If you want to build a ship, don't drum up the people together, but don't give orders. Instead, teach them to yearn for the vast and endless sea. Lead with vision, not micromanagement. Give your people purpose and they will self steer.

00:42:27:18 - 00:42:29:21

Christian Soschner

So ask yourself.

00:42:29:23 - 00:42:30:13

Christian Soschner

What's.

00:42:30:13 - 00:42:42:04

Christian Soschner

Slowing your team down more? Lack of information or lack of trust? Would you rather have a team that waits for sign off? Or a team that acts with context?

00:42:42:04 - 00:43:02:04

Christian Soschner

True leadership isn't about making every decision. It's about making sure everyone else can. When you lead with context, you stop being a bottleneck and start being a multiplier. Now let's put this into practice and ask yourself and your leadership team.

00:43:02:06 - 00:43:09:14

Christian Soschner

The first one, what critical context is your team missing right now?

00:43:09:16 - 00:43:28:15

Christian Soschner

Which control mechanisms can you replace with? Use your best judgment principle. And at your next offset. How will you align your team on assumptions and direction and then step back to let them run?

00:43:28:15 - 00:43:47:07

Christian Soschner

And here it is the final lesson. Number seven transparency builds velocity, drive, trust, agility and informed risk taking through extreme transparency. In most companies, mistakes are whispered.

00:43:47:09 - 00:44:02:05

Christian Soschner

Bad news is buried and truth arrives last when it's already too late. This is how companies run into bankruptcy. That silence. It doesn't protect trust or the company. It destroys.

00:44:02:05 - 00:44:02:14

Christian Soschner

It.

00:44:02:14 - 00:44:24:03

Christian Soschner

Secrets are heavy. They don't just stay hidden. They live in your team's minds, quietly distracting them. As the book puts it on page 203. Secrets take up a lot of space in our brains. One study showed people spent twice as much time thinking about their secrets as they do, actively concealing them.

00:44:24:03 - 00:44:30:17

Christian Soschner

If you ever sensed a strange tension in a team meeting, odds are something was being withheld.

00:44:30:17 - 00:44:32:19

Christian Soschner

Netflix. It has a radical.

00:44:32:19 - 00:44:33:20

Christian Soschner

Cure.

00:44:33:22 - 00:44:45:15

Christian Soschner

Wins, losses, doubts and fears. Put it all on the table and don't keep it under it. Because when people see the truth early, they can act early.

00:44:45:15 - 00:44:51:24

Christian Soschner

Here is how Netflix puts transparency to work. For habits that build velocity through trust.

00:44:52:08 - 00:45:04:16

Christian Soschner

The first one. Sunshine. Secrets to build loyalty. Retesting says on page 204. There is no better way to build trust quickly than to shine a light directly on. Able to be secret.

00:45:04:16 - 00:45:16:24

Christian Soschner

Reed Hastings avoids closed door offices. He takes walking meetings and every layer of secrecy gets stripped away. Second one open the books.

00:45:17:01 - 00:45:54:09

Christian Soschner

Netflix shares, financials, forecasts, even tensions before they are finalized. On page 226, he states, when making decisions that will impact your employees well-being. Open up to the workforce early, before things are solidified. It may cause discomfort temporary, but it builds long term alignment. And the third one. Publish digital story, he said. When an employee in Taiwan racked up hundred thousand dollars in an offer to travel, Netflix didn't buried

00:45:54:09 - 00:46:20:05

Christian Soschner

Reed Hastings said, page 62, at the next Quarterly Business Review. Our chief talent officer told Michelle Story to 350 attendees. There was no cover up, just clarity, consequence and a renewed standard of trust and also an improved context. And the fourth one admits and model mistakes.

00:46:20:05 - 00:46:30:24

Christian Soschner

Reed sets the tone himself. On page 123. He says, every time I feel I've made a mistake, I talk about it fully, publicly and frequently.

00:46:31:01 - 00:47:05:06

Christian Soschner

Broadcasting failures encourages your people to act courageously. When leaders sanction failure, others stop hiding. This. The fear is always the same. If I'm too transparent, people will panic. But the opposite is true. When you share openly, especially what could go wrong, people trust you more. As the authors write, when you share information that could sabotage your success. People think if she'd tell me that, she'd tell me anything.

00:47:05:08 - 00:47:27:02

Christian Soschner

Your trust in me skyrockets. Extreme transparency is a speed lever. When teams have the whole picture, they move faster and with more precision because they are not second guessing. Leadership in deep tech where risk is the norm. Trust is your operating system. Sunshine builds that.

00:47:27:03 - 00:47:27:18

Christian Soschner

Trust.

00:47:27:24 - 00:47:31:14

Christian Soschner

Quickly, cleanly, and permanently.

00:47:31:14 - 00:47:55:20

Christian Soschner

Let's translate that into action. Because the truth is, your team already knows better silences. The question is, will you name it? Here are three coaching questions at the end. What information are you currently withholding? Intentionally or by default, that would actually empower your team.

00:47:55:22 - 00:48:04:04

Christian Soschner

How could you sanction a recent failure in your next meeting to normalize learning from mistakes? And the third.

00:48:04:04 - 00:48:05:09

Christian Soschner

One.

00:48:05:11 - 00:48:33:01

Christian Soschner

Which area of your business is operating in shadows, and what would it take to open the books, even partially? And here we are at the end of this recording. Let's sum it up with my key takeaways. The seven moves you can use today. Let's bring it all together. If you remember nothing else from this review, remember this. Netflix didn't scale back, adding more rules.

00:48:33:03 - 00:48:35:12

Christian Soschner

They scaled by removing friction.

00:48:35:12 - 00:48:52:03

Christian Soschner

Here are the seven plays you can steal. The first one, culture outruns capital. If you don't reinvent your company faster than the market, changes, you are blockbuster with a better branding.

00:48:52:05 - 00:49:14:24

Christian Soschner

Second one talent density is a growth strategy. Keep only those you fight to keep interest. Help them find the next chapter. The third one. Radical candor and looks sweet. Silence feels safe, but feedback saves companies. Build it into your weekly rhythm.

00:49:15:06 - 00:49:50:08

Christian Soschner

The fourth one. Pay like a pirate. One calm rock star outperforms ten anxious. Pardon. House. Pay top of market. Transparently for the fifth one. Bet boldly and fail proudly. Don't seek consensus. Seek instead runs more tests and sunshine to failures. Number six lead with context, not control. Give people to Y and trust them with the how. That's how you skate yourself.

00:49:50:10 - 00:50:15:18

Christian Soschner

And the seventh transparency builds velocity. Tell the truth. Early open books sanctioned losses and make trust your operating system. Each one is simple. None are easy. But together they form a leadership model designed for speed, scale, and reinvention. And maximum value for customers and your shareholders and your employees.

00:50:15:18 - 00:50:21:18

Christian Soschner

Here is what the loved in the book. Rules. Rules doesn't breach its challenges. It made me ask,

00:50:21:18 - 00:50:41:23

Christian Soschner

where am I still optimizing for control instead of trust? Which rules am I hiding behind? What would it take to let go without losing grip? The parts that struck me the most compensation Netflix philosophy that you should pay. Top of personal market from day one.

00:50:42:03 - 00:50:51:03

Christian Soschner

It reframed how I think about loyalty, performance and trust, and also gave me an interesting perspective on the European ecosystem.

00:50:51:05 - 00:50:53:00

Christian Soschner

Where.

00:50:53:02 - 00:51:20:01

Christian Soschner

HR expenses, especially in the startup and club world, are just treated like cost centers and unnecessary expenses. But remember, one thing at the end of the day, the only thing that stands between your investment in a company and a successful exit is actually the team building. It. Think about it now. What gave me a pause? This culture isn't for everyone.

00:51:20:02 - 00:51:37:12

Christian Soschner

It demands emotional maturity, self-motivation and resilience. If your team isn't already rolling this out too fast, could backfire. Still, if you're building for scale and want to run lean without losing speed. This book is a blueprint.

00:51:37:12 - 00:51:51:16

Christian Soschner

If you found this episode bad, you wouldn't want to full system with all the context, anecdotes, and leadership tools that the book used to link in the show notes to support the podcast.

00:51:51:18 - 00:52:02:05

Christian Soschner

And if you are serious about applying this inside your company, let's talk. I help founders in teams put this into action one lesson at a time.

00:52:02:05 - 00:52:11:10

Christian Soschner

And that's a prop on no rules roads. One of the sharpest operating manuals for modern leadership I have ever read.

00:52:11:12 - 00:52:33:15

Christian Soschner

In the next episode, we will dive into a 20 minute recap of one of the best episodes of the last year. It's another powerful lens for building high performance teams in deep tech and beyond. Thanks for listening, reflecting, and growing with me. If this helped you share it with one founder, one investor, I wonder who needs to hear it.

00:52:33:15 - 00:52:52:02

Christian Soschner

And don't forget on the platform you're listening to the show. Follow it. It helps attracting more great speakers and bringing more book reviews to you to help you scale faster and scale better. Until next time, stay bold, step count and keep building.