Back in 1998, Amazon‘s founder was looking to expand the e-commerce site beyond books. That is when Jeff Bezos decided to meet “movies-by-mail subscription service”, Netflix‘s co-founders – Reed Hastings and Marc Randolph.
Netflix had just recently launched and the founders were pretty excited to meet Amazon‘s CEO. Whereas Amazon had just made $100 million in revenue by selling books. And when they got to know that Bezos wanted to meet them they knew they had to take the meeting and flew to Seattle to meet with Bezos and his team.
When Hastings & Randolph arrived at the Amazon office they were shocked to see the office space.
Randolph, Netflix‘s CEO, said,
“People were squeezed in there. The desks were all doors — like old wooden doors … on wooden posts. And Jeff was in an office with four other people.”
They soon realized what the meeting was about. They knew Bezos wanted to buy Netflix. That is how Bezos planned to enter the video market.
And after the meeting wrapped, Bezos’ team offered Netflix somewhere in the low eight figures to acquire the company. Randolph revealed that by low eight figures they meant somewhere between $14 million and $16 million.
Even though Netflix was only two months old and was not making any considerable money at the moment, why did the duo decide not to take up Bezos offer?
As per Randolph, they knew Netflix would be the next big thing soon. had a working website, a smart team and deals in place with a handful of DVD manufacturers. They had also figured out how to source virtually every DVD on the market and Netflix was unquestionably the best source on the internet for DVDs.
So on the plane ride back home, they both decided to turn the offer down and take the leap of faith instead.
Their decision paid off. Today, Netflix is the world’s sixth-largest internet company by revenue, which exceeded $15.7 billion in 2018.