I learned these three business cases from Netflix founder Marc Randolph during my PowerMBA studies.

Netflix’s Rise: From Underdog to Streaming King in 3 scenes.

Netflix, today’s $262 billion streaming giant, started its tiny business in 1997 as a DVD-by-mail service. Blockbuster, a brick-and-mortar giant, dominated the DVD rental scene with its 3,500 stores across the US.
It was a David and Goliath battle.

SCENE 1: The Failed Sale of Netflix
Netflix was low on cash in 2000, so they came to Blockbuster and offered to sell themselves for a $50 million. Blockbuster, blinded by their own brick-and-mortar empire, saw Netflix as a minor threat. The offer was rejected… Big mistake.

SCENE 2: Blockbuster Almost Killed Netflix
A few years later, Blockbuster finally woke up and started their own DVD-by-mail service. Now Netflix was really in trouble. Blockbuster offered to customers unlimited access to DVDs ONLINE and OFFLINE, which was a strong competitive advantage that was slowly killing Netflix… But then, something amazing (for Netflix) happened. The Blockbuster board rejected the bonus of its CEO John Antioco, which led to his quiting. Even greater luck for Netflix was that the newly appointed CEO had no experience in digital. He decided that Blockbuster’s subscription access was a waste of money and canceled the project basically giving Netflix a lifeline.

SCENE 3: Netflix’s Crystal Ball Vision
In the mid-2000s, even though internet back then was super slow (dial-up, anyone?), Netflix saw the future of streaming. They used their money from renting DVDs to build a secret weapon: a magic website where you could watch movies instantly, without waiting for the mail! By the time the internet got faster and everyone had smartphones, Netflix was ready for winning move.
Streaming killed the DVD business. The giant Blockbuster fell and by 2010 went bankrupt.

So yeah, the next time you’re scrolling through endless options on Netflix, remember the little company that dared to be different. They outsmarted a rental giant, got a lucky break (or two), and became the king of movie nights.