After 18 years of being at Netflix and growing from a team of 1 to more than 650, David Hyman - General Counsel for Netflix - discusses what risk and innovation on the legal team looks like, what qualities they look for when hiring, and just what happened with that Stranger Things cease and desist letter.
Lyle: This year, David Hyman, our general counsel, will mark 18 years of helping to make Netflix successful. David is responsible for all legal affairs and government regulations of Netflix. David and his team handle a wide variety of issues, including content acquisition, marketing, partner licensing, intellectual property, finance, securities, corporate governance, litigation, consumer protection, privacy, and real estate, and employment, actually. David, welcome to We Are Netflix.
David: Thank you. That's an impressive list.
Lyle: It does sound impressive, doesn't it?
David: Wow.
Lyle: Do you actually do all those things?
David: I just supervise all the people that do that.
Lyle: Other people do all the work, huh?
David: That's right. That's right.
Lyle: So, you're coming up on 18 years at Netflix, and I want to rewind to prior to that. You actually had a focus on real estate.
David: Exactly. When I first started, as they say, as a dirt lawyer—
Lyle: That's legal.
David: So, yeah. Physical real estate assets. I came out of law school in 1993, and it was an interesting time because there had been a financial crisis in the real estate market and had hit pretty hard. And so, there was a lot of opportunity for people in the real estate world. I'd come out of law school, and I thought there were, kind of, two ways of becoming a lawyer. One is you become a litigator. The other one is you become a transactional attorney, and I chose the transactional side.
Lyle: Why?
David: It was really there. You know, it's funny because there's a little history there. So, the history is, when I was a summer associate, I had to do research for a partner.
Lyle: Like look up case law?
David: Yeah, look up case law and everything. And, this is before the internet, so you had to go, actually, to the library. And, I went to the library. I did all this research for this litigation partner. I came into his office, and I probably had a stack of—Literally, I had a stack of, like, 10 books, and I walked through all the cases with him. And, I just remember sitting there. It was, like, Friday night at, like, 9:00 at night, and he slammed the book shut each time I had gotten a case and said, "No, not on point. Not on point. Go find another thing." So, I ran back to the library and spent the rest of the night trying to find more cases and, you know, finally got a, you know, an acceptable answer from him. But, it really colored my viewpoint of litigation.It was much more adversarial, and I really liked—
Lyle: Even in your collegial aspect, your, college—
David: Oh, yeah. It was the guy I worked for. Yeah.I worked for. I was going to go work for him at the, as a full-time person, but I ended up finding that the transactional nature of the law is a much more fit to my personality. You, kind of, have to find solutions. The rules aren't written for you. You have to figure out how it becomes mutually beneficial to both sides, whereas, you know, litigation is more adversarial by its nature.
Lyle: Well, so, why did you say yes to Webvan and do Webvan?
David: Oh. So, I moved out here in 1995, somewhat on a whim because my then girlfriend, now wife, wanted to move out to be in a big advertising market. So, I just followed along for fun. And, when we got out here, it was, you know, lo and behold, the dot.com bubble, but it was all dot.com. There wasn't very much going on for real estate lawyers because it was all, you know—
Lyle: Virtual.
David: …bits and bytes and it was all virtual. But, there was this one company that was out there that was, you know, kind of, mixing physical assets with the technology. It was Webvan. They were creating, you know, a bunch of distribution centers around the country. So, they actually had need for a real estate lawyer. So, it was, like, the only opportunity in the tech space that really needed somebody who was coming from the old world and the dirt lawyer, and so, I jumped on it.I would say it was transformational.It was a pretty big risk at the time.Actually, Webvan didn't work out.I still consider Webvan to be well ahead of its time because, now, what Webvan was doing is what Amazon is doing, and it was, you know, an opportunity to take what I had, which was skills around real estate, and use them for this company. But at the same time, that company had an opportunity to do a whole bunch of other things.
Lyle: It was going too fast, right?
David: Yeah. And, I was able to pick up marketing agreements. I was able to pick up some securities law. I was able to pick up all types of transactions and manage some litigation, a whole host of things. So, it really transformed my career.
Lyle: And so, from there, you came to Netflix, right? Reed asked you to join in 2002 or so?
David: Webvan went bankrupt at the end of 2001. So, 2002, I'm looking for a job. There is this headhunter that I had working with me, and he said there's a job in Los Gatos. So, for those of you who don't know about the geography of the Bay Area, is I live about 40 miles from where Los Gatos is, and it almost felt like, "Hmm. I don't really want to go down to Los Gatos." But, he said there's this company that delivers DVDs through the mail.I said, you know, it's kind of similar.It was, what they used to call, the B to C play, and I enjoyed dealing with the consumer side of things. So, I said, you know, maybe I'll go. I said, you know, I need interview experience anyway, and it's worth it. I'm not sure I would go down and commute to that job, but yeah.
So, I came down here, and I met with Reed and a bunch of other folks and just was really impressed by both the vision of what the company was wanting to achieve. And, just, it was fun to be in the entertainment space, and so, I ended up jumping on. And, you know, at that point, I would say we thought about the digital delivery of content as coming one day, but that was pretty far off. And, the idea that we would actually be, you know, a producer of content on our own was, you know, not really within the realm of possibility at the time, and we were, you know, we were a small, domestic company. You know, the biggest challenge we had was Blockbuster Video at the time.
Lyle: Now, Ted was there at that time, right?
David: Yeah.
Lyle: Okay. Was he thinking about making movies at that point?
David: I think, if you even ask Ted, no.
Lyle: Interesting.
David: At that point in time, we were mostly about distribution.I mean, Ted loves movies, and he's, you know, I'm free. You know, if you asked him, Ted would say, you know, his ultimate dream was to be an owner of a small movie theatre somewhere and run, you know, old Indie films.So, he's, you know, passionate about it.So, and part of the reason we're in it now is because of that passion, but, right at that point in time, I'm not sure he thought about it as that's the possibility.
Lyle: Let me catch people up that don't work here. Ted Sarandos is, of course, our head of content creation, and Reed Hastings is the CEO and founder, one of the founders.Okay. All right. So, that's your, kind of, transition to her, and I thought one of the things that I find really interesting is that, when you did start working for Netflix, you were the first lawyer. And, for quite a while, you were the only lawyer on staff.
David: Yeah.
Lyle: So, now, I look at your org chart, and you've got, like—I don't know—650 people working for your in the organization. So, it's a little different.
David: Yes. It's very different.
Lyle: So, what has it been like to do that transition?
David: Well, it's funny because it's been such a journey in going, you know, over that past 18 years to developing it, and, really, the growth, since probably around 2014, has been, you know, almost exponential.And so, it's really, you know, it's mind-blowing in some ways, but it's also, you know, we've seen it happening across the company at that time. So, in that sense, it's not such a surprise, and a lot of it, you know, the majority of the growth has been around the creation of the content space. I often talk about, you know, when we first started, it was like selling cars. We were just a dealership selling cars. Now, we've moved to actually manufacturing cars. So, if you think of all the infrastructure and all the complexity associated with actually building a car and then delivering it, that's what we're doing now. And so, we need, you know, a lot more lawyers to help deal with all the issues that arise in the production of movies.
Lyle: Globally.
David: Yeah, globally. I mean, you know, it's not merely just in the U.S. It's across the globe. I mean, one of the great things about Netflix is this ability to have a global platform and take stories from, you know, around the globe, find them, enable those storytellers to make their own stories, and then distribute them globally.
Lyle: So, in this growth from yourself to 650 people working on these problems in your org, what's been the biggest challenge of that growth?
David: I think the biggest challenge for us as we've grown the org from, you know, one to over 650 is really about planning. Netflix is such a dynamic environment, that to be able to predict and plan what your resources' needs are is challenging. And so, you're constantly having both to look around the corner to see what's out there, but also, kind of, restrain yourself from meeting that right away because it may shift again. People ask me what it's like to work at Netflix and how are, you know, do you be successful, and I'll say I think the biggest characteristic for success at Netflix is being flexible because the business is always changing, the resources to support that business are always changing, and therefore, you, as an individual, have to be flexible in how you approach that. And, in some instances, that's not the right place for people because they like to have structure. They like to know what is around that corner. For us, if you like to address new and, often times, situations of first impression, then Netflix is a great place because you've got to be, you know, curious and willing to try new things, and that's been, I think, a challenge both for me, you know, kind of, personally and professional, to be able to manage a team in that regard and then also build out a team.
Lyle: Does that sound like you have enough staff to do the things you're doing and then things get more complex? You grow in a certain area. You haven't necessarily beefed up staff prior to that happening. It's just happening, and everybody's plate is just really, really full. And you go, "Oh, we need to get new people or more people." Is that, kind of, what the lack of ability to plan really well or the need to move on a dime is that just the workload becomes extremely high?
David: It's not so much that the workload becomes high.It's more how do you service the business? What's the best way to service the business, and how do you think about building that out in a way that's both scalable and provides the business with the resources that it needs? There's always, sort of, some interim period in which maybe somebody is a little bit busier than different, but it's also trying to figure out and see some of those problems before they become problems.
Lyle: And what to focus on before they become problems.
David: Yeah.
Lyle: Yeah. That makes sense. Okay.Last year, you delivered an orientation address to the class of 2021 at your alma mater, University of Virginia School of Law, and, in this talk, you brought up something I think a lot about with regards to lawyers. As an engineer and stuff, normally, when I'm chatting with lawyers, we talk about risk.Risk seems to me the thing that is, kind of, driving the thought process, and it's almost, like, synonymous to me about what lawyers do. So, to me, that talk was, and what you talked about in that talk is, like, not getting hypervigilant in risk or not really looking at risk in, kind of, a different way.Can you tell me a little bit about that?Talk about that.
David: Sure. It's interesting because I think, you know, both from a personality standpoint and from a training standpoint, you know, I think lawyers and people that end up in the legal profession are often more anxious and, you know, kind of, cautious, and therefore, when they go to schools and the school teaches them to identify risks and to address risks, that's just right up their alley. And then, they go out into the working world, and what they're doing is seeing all the risks that are out there. And, they, one, don't have the ability to see the opportunities necessarily as clearly, and also, they don't have a real good framework for assessing the actual values of the risks. Right? Because, not all risks are created the same. Some are going to be catastrophic, and some are just going to be little bumps in the road.And, I think, for us at Netflix, one of the key attributes for a successful member of the legal team is really to be able to assess risk and to be able to help guide the business and be a partner to the business on assessing that risk.
Lyle: So, assessing, not avoiding?
David: Correct.
Lyle: Okay. Interesting.
David: And, in fact, you know, a lot of what we talk about with the team is about reality-based decision-making. There's as little catchphrase that I use for talking about risk because it's easy for a lawyer to read a statute. It's easy for a lawyer to read a contract. It's harder for a lawyer to know how that contract or that statute are actually interpreted or implemented or likely to be interpreted and implemented, and I think it's that latter part that we get paid to do for the company. Often times, you know, if you've been trained at a law firm or if you're coming out of law school, you know, you give the "on the one hand" and "on the other hand," which is, if you go down that path, here's all the risks I see.If you go down this path, here's the, you know, the outcomes that I see, and then—
Lyle: You, kind of, let the client decide.
David: Yeah. And, you say, "What do you want to do?" And, I feel like, for us at Netflix, what makes us valuable and, sort of, an integral part of the business is that we make those decisions for the business.So, it's not that we would present the one hand or the other. It is we will tell them what we think is the way to go.
Lyle: Interesting. That means you have to have a lot of context around the purposes of those things you're diving into, right?
David: Correct.
Lyle: Yeah. So, you're really, the staff you've got are fully embedded throughout the company as much as possible to be partners to the decision-making process.
David: Yeah. I think it's a combination of really understanding the business and then also understanding the real world. The lawyers and the legal professionals that form the legal team really have to be familiar with what's going on in the business because they've got to understand the context in which people are operating, and then, they have to take that and apply it to what they see in the real world. And, both of those require a high level of curiosity and an extremely, I would say, developed sense of EQ to be able to both elicit information from people and engage with people and be part of a team. EQ, of course, is emotional quotient. It's the emotional quotient.
Lyle: Emotional intelligence is what we'll call it. Yeah.
David: To be able to really both be a trusted partner, to be an active listener, and to be a problem solver. I think the team does an outstanding job of that. I think that's, at least for me, one of the accomplishments, I would say, when you listed off all those things that the people are doing. And, I'm not doing a lot of that stuff. One of the things that I do, as the general counsel, is try to make everybody work better together, and I try to make everybody think about risk in a pragmatic, practical way and to help the business achieve the goals that it wants to achieve.
Lyle: I want to talk a little bit about our core values at Netflix because it feels to me—
Maybe it's not one of the core values, but the cultural perspective that I'm, kind of, embedded with as an engineer is that feel free to take smart risks. You know, have some courage on things. Move quickly.You know, resolve issues fast. That's the, kind of, methodology we, kind of, have about the work we do, which is not about being careful. Right? Careful is not necessarily in there. I mean, of course, we have to have good judgment. That's one of our core values, really good judgment of course. If you make a really bad mistake, it turns on being careful, but it's also that you made a bad judgment.So, for you on these core values, which one of these is challenging from the eye of the lawyer, if you will? And, that's, like, judgment, communication, curiosity, courage, passion, selflessness, innovation, inclusion, integrity, and impact. And yes, I am reading those.
David: Remembers them all. You know, it's funny. I would say that the hardest one really is going back to that courage. For those of you who want to look at the culture memo, you'll see that within each of those core values are a bunch of smaller bullet points, and, if I recall correctly because I am not reading it, that courage, one of the real values is about taking smart risks. And, that's the one. I mean, going back to what we were just talking about—and this is probably the value between this and curiosity are the two core values that I think are most important, at least for our team—is being able to take on those smart risks and to be innovative around that. I mean, that's the curiosity part about it, which is it might not be about taking a risk.It might be about mitigating a risk, mitigating a risk in a way that is helping the business achieve what it wants to achieve.Right?
So, that's again going back to what you were talking about, which is you've got to be close to the business. You've got to be embedded because you've got to understand what the business wants to achieve or your partner or whoever it is. It's not necessarily the overall business, but, you know, the client that you're supporting. So, you really have to understand that deeply because then you can come to them and say, "Well, wait a second. You know, you want to go down Avenue A. Avenue A is filled with a bunch of risks. I don't think we should take those risks, but I've got Avenue B, which I think, if you thought about it doing this way." Which I think is, like, one of the best things about being in-house and where I, often times, think about the legal department versus other departments.
I try not to think about us as a legal team, as opposed to part of the Netflix team. And so, what I want the people who are part of our team is to be able to engage with the business and actually, you know, kind of, think like the engineer, if you're supporting the engineering team. Think like a marketer if you're supporting the marketing team. Think like a creative if you're supporting the content team. And, you know, come to them with their ideas, and, in some ways, I mean, Netflix, there's this interconnectedness because, if the teams that we're supporting don't look at us as merely lawyers, then we have lots more freedom to engage with them across a broader spectrum of things.
Like, you know, you can see people who work on the IP team and are reviewing scripts. You know, they can actually have ideas for making the show better.
Lyle: Seriously, yeah.
David: I mean, you know, you can think about that.
Lyle: IP, of course, stands for intellectual property, and, of course, this is a very important thing when we're creating new content that we actually own the content right off the bat. So, you have to, kind of, be involved in that the entire time. So, you're writing a script, and the lawyer on the team is actually helping?
David: Yeah. He can be—Think about it. Or, he or she can be engaged in what, you know, like, a script review. Right? So, in essence, that is, okay, like, an exercise in risk identification. And again, going back to this reality-based decision-making is, as they go through these things, they've got to figure out, okay, well, what kind of risks can I take and what can't I take. And, in that process, you know, they're reading the script.Okay. If they see something that's funky, they can actually, you know, understand the script and try to make suggestions about mitigating certain risks that might arise from reading the script. But, at the same time, if they've got a good relationship and good rapport with the creatives that they're dealing with and the productions that they're dealing with, ideas can flow beyond just the legal team, and I think people at Netflix respect that. And, it's a cross-collaborative arrangement.
Lyle: We try not to say, well, that's not my job. That's not one of the things we do. Like, everybody can participate at what level they're engaged in.
David: Oh, yeah. That's, like, the worst if you say it's not my job, especially if it's something that you—Okay. When you don't want to do something, you say, "Yeah. That's not my job." If that's the kind of place, no. Don't come to Netflix.
Lyle: It also represents, like, "Hey, but out of this, that's not your job." That's also not said, right? There's this idea that we're all trying to do good work together.
David: Yeah. I think, if you find people—That's one of the other things about Netflix I think is great is, you know, the transparency and the ability to, sort of, understand the business more broadly, but that also leads into this whole notion around curiosity and cross-collaboration. And, you don't have identified swim lanes in which you necessarily—If you go out of that, the person in the other swim lane is going to be mad at you. You know, you may need something, some demarcation so you know where your responsibility ends and someone else's begins, but we're all very collaborative across that.
Lyle: As we've talking, one of the things you mentioned is innovation. What is your legal team innovating on? What are they doing that's different than maybe other places that's new?
David: You know, there's some great examples of innovation around process and, sort of, elimination of process and making things simpler, just trying to address some of the policies that we have at Netflix and coming at them from, what I will say is, a Netflix perspective.
Lyle: Let's talk about one of the examples.
David: So, let's take our employment letter, for example. If you go to some companies about our employment letter, it's, like, you know, five to 15 pages long.
Lyle: This is the offer letter?
David: This is the offer letter, and we try to make—You know, it's interesting because we've talked about this, again, thinking about the way in which you interact with the different teams is, you know, the legal team works with the talent and the talent acquisition team. And, we're like, "Look. This offer letter is, like, the first impression of a new employee's view of Netflix." And, if the first thing they get is going to be something fully of legalese—
Lyle: That's hard to parse.
David: …and 15 pages, that says something. Right? That says something. And, that was basically, like, the legal team's presentation to the talent team because they don't really care about it. They're like, "Ah, what do I have to do? I've got to get something." And, I think we were very collaborative about that. So, if you look at our offer letter, you'll see it's, like, a page and a half long, and that's it. And, it's pretty much written in very plain English text. In my mind, that's innovating.
Lyle: So, let's talk about plain language text, or even fun text. Quite a while ago, I think a couple years ago, there was a pop-up bar in Chicago's Logan Square area, and they were using Stranger Things theme. And, would you read this letter that your team sent to these two people that were running this pop-up?
David: Sure. So, for those of you who don't know, cease and desist letters are typically really legalistic, and you send them off to people to tell them to stop doing something.Half the times, they're ignored.You sometimes feel like you have to send them because you've got to either preserve a right, or sometimes you send them because talent wants something to be done about it or you're doing, you know, somebody else wants you to take an action. And so, in this instance, there was this pop-up bar, and they were using Stranger Things and it wasn't authorized. So, we chose to send them this letter.
"Danny and Doug, my walkie-talkie is busted, so I had to write this note instead. I heard you launched a Stranger Things pop-up bar at your Logan Square location. Look, I don't want you to think I'm a total wastoid, and I love how much you guys love the show. Just wait until you see Season 2. But unless I'm living in the upside down, I don't think we did a deal with you for this pop-up. You're obviously creative types. So, I'm sure you can appreciate that it's important to us to have a say in how our fans encounter the world we build. We're not going to go full Dr. Brenner on you, but we ask that you please, one, not extend the pop-up bar beyond it's six-week run ending in September, and, two, reach out to us for permission if you plan to do something like this again.Let me know as soon as possible that you agree to these requests. We love our fans more than anything, but you should know that Demogorgon is not always as forgiving. So, please don't make us call your mom."
Lyle: So, it's great, right? I mean, that, of course, hit the news, and it was very popular.Kind of, look how cool Netflix is at even doing this kind of thing. Right?It's a tactical document that says stop using our IP. Right?It's—I wouldn't say it's a threat, but they can definitely perceive it as a threat. Right? If you don't do this, we're going to do something else. But, this is very much friendly. You know, hey. And, we didn't terminate their thing right away. We said keep during the pop-up for the duration. Why did you make those decisions? Who made those decisions?
David: It's a great example of both innovation and the value that we have around here called "context, not control". You know, the idea at Netflix is really to empower people across the company to make decisions. You know, we had this concept of freedom and responsibility, and freedom and responsibility is really you push down the responsibility to folks in the business and you give them the freedom to exercise and make the right choices. And, they don't have to go up and get things approved, and you just give them context in which to operate.
And so, here, this was brought up by the IP team.They decided. It was actually one individual, and he decided to take this approach to it because he knew that the classic way of dealing with it was, you know, ineffective. And, if anything, it makes companies look really bad. Right? They look like the big company coming to squash somebody. Why do that, right? And, you can get the message across in such a better way. So, Bryce, who was putting this together, took it upon himself to send this out.
Lyle: One of your staff?
David: Yeah.
Lyle: He's responsibility is to, kind of—
David: A lawyer on the team.
Lyle: Really?
David: Yeah.
Lyle: Did he work with somebody else on the creative team to, kind of, go through it, or did he know the show well enough to just write it?
David: Bryce is a brilliant lawyer and also a very creative type.And so, this is, you know, a great example of how we can unleash, within people on the legal team, creative juices that they have.
Lyle: Yeah. And innovative too, right?
David: Yeah, and being innovative. I mean, the creativity and innovation, same thing.
Lyle: So, this staff member decided to send this out as a way to address the issue, and that wasn't approved by anybody else. Like, he just did it?
David: Yeah. He just did it.
Lyle: Okay. Did you—When did you find out about it? Did he show you that he was doing it, or did you find out about it in the news like I did?
David: I think I found out about it in the news.
Lyle: That's crazy.
David: Yeah, and the cease and desist letters don't run by me.But, I think it was great. It was. I mean, it was truly—And, it's been used as a great example of how we can enable the team to be more innovative. Right?
Lyle: Yeah. I just, I find—
David: At his former employer, he would never have been able to do this.
Lyle: Right, in most companies, not so much.
David: Yeah.
Lyle: That might be changing. We might have an impact in that regard. I think that that—Yeah. It's very different giving that kind of autonomy to individuals, in most spaces we see across the company. But, it seems like the one place we wouldn't see it would be your org, but I guess, you know, all of the judgment calls that you have to make are still just judgment calls.Right? They're, you know, there's no right answer with regard to law.Right? There's interpretation and judgment. It's all—That's what it's about.
David: I would say, look, there are certain black and white, you know, things that you've got to abide by, and most of those, at the end of the day, are, make sense, that people don't want to do that. Right? You know, in many instances, the law makes sense. It's areas where we're innovating where it's unclear. There's ambiguity, and that's where the judgment comes in and it's judgment calls—
Lyle: Yeah. That makes sense.
David: …and figuring out ways to manage that risk.
Lyle: How do you feel about—I mean, you've been here a long time. So, obviously, you've, kind of, embraced it. But how do you feel about this avoidance of rules, kind of, methodology we have for our staff? Do we, have we, has it backfired on us?
David: We haven't had any issues with the fact that the processes and rules at Netflix are limited. This notion of transparency and openness for all, you ask anyone and they think you're crazy to have such a level of transparency. And, you know, for me, it's like, again, going back to risk.It's like you can say there's going to be a whole host of bad things that come out, and that's the easy way to get around it. The harder way is to say, "Hey. Let's trust the people that we're working with, and let's see if anything happens. Let's go down that path." Today, nothing's happened. You know, we've not had, we've had—You know, we've had some minor, I'll call it, leaks, but, relative to the stuff that matters, like the sensitive information around quarterly performance or other issues—
Lyle: Which is public to all the staff.
David: …yeah, which is public to the staff, has not leaked it.And, we really impress upon people it's such a privilege, and I think it's that because, the people who come here, they do. They understand that it's such a privilege to do that, and the community respects it.
Lyle: Are you assessing the valuability (sic) of it though?It's very hard to put a picture on how valuable it is that I can go and find out what the numbers are for all the shows this week or whatever. Right?Things that aren't exactly a part of my job, but I might be curious about, and therefore, I care about the business more. There's some value in that, but, since there is so much risk, as we have—I don't know—6,000, 8,000, 9,000 employees or something like that, it seems to me that there's a point where the risk just gets larger and larger and maybe it won't make sense. Are you always assessing that as an exec team?
David: Yeah. We're constantly assessing that, but I would say, to date, when people say there's all that risk associated with it, there hasn't, you know, that's like okay.It's, again, the parade of horribles, but, as a practical matter, we have not seen that. Now, the first time something happens, that may change us dramatically.
Lyle: Yeah. And, we've had things that were close to, like—We had to talk about it and stuff, but I'm not talking about the risk specifically because there's a little bit of risk, obviously. I could go and make a blog entry and do something stupid and talk about our numbers publicly, which we're not to do.
David: Yeah. People can always—That's always—You know, the biggest issue is people doing stuff that's stupid. Right?
Lyle: Right. And, of course, the consequence would be the company at risk. The question is, that little bit of risk that does exist, is that much smaller? I mean, is there a lot of benefit happening to all the individual employees in having that transparency? Like, how do we assess what benefit it is to be so transparent?
David: So, you know, it's again, because you're the engineer, you're looking for the equation that shows. I feel like this one of those where we have a real deep belief that transparency across the business is the way to go.
Lyle: Important.
David: Yeah. It's important to empowering people, and we see that in, I think we see that in our continued innovation. We see that in the continued engagement of our employees, and, you know, when you ask employees about it, I think that's where you hear it's such a different culture.And, the other thing that I think it does create, which, you know, you hear from people who join—I've been here for so long I don't know what life was like before it—is the lack of, like, politics that gets involved. You know, because in many places, information is power. If you're on the distribution list, then that's somehow powerful. And then, you can withhold information. You can don that upon other people, and it creates a dynamic that, I think, is extremely unhealthy. And, that is something that we don't have here, and I think a lot of that is driven by the fact that we have a transparent orientation.And, it creates, you know, all sorts of extra benefits, at least I think we perceive as a company and as a management team.
Lyle: So, it's more of a core value of our company, not an assessment balance. It really is, like—
David: Yeah. It's a fundamental belief.
Lyle: …so much benefit that it's hard to think of. The company would be a very different thing if we didn't have it. Therefore, that's not the company we are. That's, kind of, the way we think, right?
David: And look, as we change—So, the other thing to just think about is, look, the access to information—And, as we grow, we do change and we do adjust things. We're not dogmatic about it. We're pragmatic about it. So, you know, people don't have access to personal data. People don't have access to financial information. People don't have access to the bank account. You know, there are levels in which transparency is always limited. It's not an unlimited value.
Lyle: We also do things like when we're doing the, when the quarterly reviews, the public statements come out. We get them the moment as well, not, like, the day before.
David: Yeah.
Lyle: Because, it's, like, there's not a lot of benefit to us to see the actual, what the report is going to say. The data is there. We can see it, but I think that's one of those examples. It also is very beneficial to me as, kind of, a public speaker in talking with people. I'm always looking for how we are speaking publicly from the company, and that's what I can say to people that work here because it's hard to remember that space when you know so much about the company internally. I want to talk about the cultural competence issue of we have people all over the world now.I had a wonderful episode of this show a while ago talking about public policy and business development in Europe with one of your staff, and, in that, I realized how important it is for people to actually understand the culture they're working in. And now that we have a global company, how is your org making sure that that's happening?
David: The growth of Netflix is, you know, over the next five to 10 years, is largely outside the United States, and we are still largely a U.S.-oriented company. And, I think that's one of our big challenges ahead of us is to become a much more globally-sensitive company. I think the way in which we do that is a combination of things. One is which we need more international employees, and we are expanding in our international markets. And then, we need more cultural competence, and, you know, we have one of these core values of inclusion. And, I think that part of that inclusion is really taking into account diverse, global perspectives, and we've got to learn about those diverse, global perspectives.
So, we do a number of things along that line, one of which, for example, I spent two years living in Amsterdam when we first opened up our EMEA operations. And, that was extremely enlightening for me in the sense of being able to understand better what it's like to operate in an international office and as well as getting more sensitive around the cultural differences of both operating in the market as a business, but also with the employee base. And, we've done that with a number of our executives and others in the company to send them out overseas to get more experience.
And, the other thing that we're doing is—because not everybody can go live overseas—is be more thoughtful about the international perspective. We've done things just like bringing in speakers to talk about what it's like to work as an ex-pat or as to work for an international company, to talk about different cultures. There's a book by Erin Meyer out there called The Culture Map, which has been very influential for me, and as I think also for my team, in understanding what it's like to work with people from different cultures. And so, really spending time thinking about what it's like to do business in those countries, what it's like to be an employee there, and what it's like to be more culturally aware and culturally sensitive.
Lyle: Well, so, the two years you spent in—Do you have family?
David: I did.
Lyle: Did they move with you?
David: Yeah. We took everybody over there, including the dog.
Lyle: That's great. And, you did that really just to understand the business from that perspective, right? That was the purpose?
David: There were two purposes. One is, because we were opening up an office and we have a, sort of, a unique culture, is to bring—I was the Netflix cultural ambassador to the new employees over there.
Lyle: You set the tone in the space and all that?
David: Yeah. And then, I was also, you know, kind of, the guinea pig for understanding and being a more global executive.
Lyle: When you say global, of course, we don't always talk about all the different offices we have, but we have a Sao Paulo office in Brazil.We have, of course, an Amsterdam office.I think, London and a few other places.
David: Singapore.
Lyle: Singapore, of course, yeah. Right.
David: Seoul, Tokyo.
Lyle: But, this represents our ability to hire people in those areas to work with us—
David: Yeah.
Lyle: …so that we represent the people that are enjoying our service, right? I get that.I feel like one of the things you touched upon there, that we're an American-focused country, if you will.How, besides focusing on our skills on that, how, what other tactics are we going to use to try to break that from our, the way we operate? I mean, isn't some of our culture deck actually, kind of, an American feel to it?
David: It's interesting to say that because one of the things we always talked about about the culture deck is a lot of people ask, "Well, how, as you grow, as you grow internationally, are you going to preserve the culture?"And typically, the response to that is we don't seek to preserve the culture. We seek to grow and to change the culture so that it meets the needs that we have going forward, and that's one of the things about being a more global company is that some of the values that we have may strike them as very, I would say, you know, Western, very U.S.-focused. And, we're constantly thinking about how to manage those in those environments.
We fundamentally think that a lot of the values are universal, but, maybe in their application, they're slightly different.So, you wouldn't say anything behind somebody's back that you wouldn't say to them in their face. We want candor. Candor is a value for us. Well, the way in which, you know, candor may appear in the Netherlands may be very different than the way it appears in Japan, and that same value of candor is important. We just need to be able to figure out how that that shows up in that marketplace and to make sure that, when we talk to people about candor in Japan, we're talking about it in a way that's culturally relevant for them. And, that's the, to your point, that's when we need to bring in people that we're hiring in Tokyo to help us understand, "Okay. We agree with the value at its core, but it's application may be slightly different."
Lyle: And, you could see that shifting such that we take on things that come from other areas, if you will, outside the U.S. and start changing the culture. Have you already seen that happen as well?
David: I would say one of the expansions, you know, inclusion was not in our culture deck, say, four years ago, but that's been something that we've seen as we've grown as a company and as we've seen, kind of, the need to have that as a core value in order to both grow as a company and to be, you know, kind of, a better company overall. That became a core value for us, and that includes everything from, you know, kind of, diversity and inclusion initiatives in the U.S. to also what I was talking about about bringing people's perspectives from outside. And, I think fundamentally being able to have that mindset of openness to other people's perspectives is what's going to be helpful for us to be a global company and take on that challenge, really, of growing outside of the United States.
Lyle: Can you tell me some of the challenges that we do face that you're thinking about right now? Like, what keeps you up at night, or what do you, kind of, know that is going to be something that you have to focus a lot of time one?
David: I think there are really two issues that I spend a bunch of time on. One is on the, kind of, in my wheelhouse, which is regulatory and public policy.As we're growing as a global company, as the internet delivery of video becomes more the paradigm for the delivery of entertainment, you're seeing a whole shift in the way the regulatory landscape views media entertainment. You know, historically, media entertainment has been heavily regulated. They're usually, like, terrestrial broadcasters or cable operators, but now, with it coming over the internet, there's a whole host of rules and regulations that are shifting to address that. And now, it's incumbent upon us to make sure that regulators understand more deeply the business they're thinking of regulating, and it's not that we're trying to stave off regulation. It's that we really are spending time to educate legislators and regulators around the globe about what Netflix, what internet delivery of video means because, many times, they don't have as deep a perspective as we do. And, we can also give them a better idea of what's coming down the pipe and the future, and so, that's a big challenge for us.
Lyle: And, we don't want legislators to creates policy that doesn't actually match really well what's happening because, then, you get in that ambiguity space where you're like I don't even know how this law would be applied because it's not clear. It doesn't understand the business model really well, or it just doesn't how the technology works. That kind of thing is what you're trying to—
David: Yeah. There's that, but there's also, I mean, just trying to fundamentally understand the problem that the regulator is trying to address and making sure that the solutions that they think to fit that problem really match the reality and are going to achieve that. Because, the worst-case scenario, I mean, you've got one where there's an ambiguous regulation. Then, there's the other one, which is it may not be as ambiguous, but it actually isn't going to address the issue that they're trying to solve.
Lyle: The side effect isn't the one they were looking for?
David: Exactly. There's all these unintended consequences is that, you know, is the buzzword around, "Hey. If you go down this path, you're actually going to not achieve what you want. You may actually achieve something wrong."
And then, I was just going to say, the really second thing is we were just talking about growing and global. I mean, that's probably where I spend—
Lyle: The second thing you spend—
David: …yeah, a lot of my time thinking about is how does my team scale? How does my team grow to become more thoughtful about international? You know, as we bring on new people how do we bring them on in a way that validates the culture, but also lets enough room for us to grow that culture at the same time.
Lyle: So, one of those growth aspects is just getting more people in the different areas that we're landing, if you will. What are, who are you looking for? What kind of—I'm assuming you're looking for lawyers, mostly. I mean, you at least need people that have a deep understanding of the law. What are you looking for in these people?
David: I'd say we're looking across the board. So, it's not just lawyers. You know, the team is 650 people. I would say probably a half of them are lawyers, but the other half, and actually a big, growing part of that, are just legal professionals. I would say that the big area of growth for us continues to be in the content development space, so production, all things related to that. So, we've got lots of opportunities for people, both in the U.S. and as well as in our international markets, people who are coming in to do everything from, you know, the music side of the house to the physical production side of the house to the transactional side of dealing with content. And then, you know, we've got a host of other issues around policy.So, the policy team is also building out. The policy team has basically doubled in the last year and probably will continue a pretty hefty growth rate as we expand into these additional countries.
Lyle: Remind us what policy is.
David: So, policy would be both the folks who are keeping track of what each of the governments around the globe are doing in areas of regulation and media entertainment, tax. Those are the people who are on the, kind of, the front line of dealing with the new regulations that are coming down.
Lyle: And, there is another podcast episode about that if you're curious more on what we're doing there in the EMEA area or U.K. I can't recall now. And, you earlier mentioned, I asked you about who are you looking for, what kind of person you're looking for. And, you did mention earlier that you really want people that are, kind of, okay with ambiguity or okay with a lot of change and not necessarily having a planning perspective, but an ability to handle things that change under them quite a bit. That's the, kind of, quality you're looking for?
David: Well, I would say not—It's not that it's not an ability to plan. I think that's important, but I think it's also being flexible in how you're—If your plans don't work out, you're okay going to Plan B. I think, really, the characteristics that make a successful member of the legal team, one, is the flexibility that we talked about. I think, two, in going back to the values that we were discussing, is this notion of curiosity. I mean, really, if you come to Netflix, you're here to do some particular job function for us, but, if all you want to do is do that job function, I think that's probably going to be somewhat limiting. And, we what we really are looking for is for people who are very curious about the business in general and can, you know, reconceptualize perhaps the way in which they've done things. And so, it's really that curiosity coupled with the flexibility that can make someone very successful here. And, I think the last one is really about courage, and that goes back to being comfortable in an area of ambiguity, comfortable in assessing risk and making decisions around risk.
Lyle: David, what do you personally want to be better at?
David: I think, for me, it's really about being a better leader, trying to figure out how to balance between inspiring people, helping guide them through some of the issues we've talked about around managing risk and thinking smartly about risk and being both curious and innovative. How do I do that in an effective way? The other area that I'm always constantly working on is less micromanaging, jumping into the weeds too deep, and then, I think the last one that I'm always trying to be mindful of is seek first to understand.You know, make sure you're listening actively before you either jump to conclusions or jump in.
Lyle: Yeah. That's a hard one for me too. You make a conclusion first, and, of course, you hurt someone. That's not a good conclusion. Yeah.
David: Listen. Listen more, right?
Lyle: One last question for you. What are you currently watching, David?
David: Six Underground. I am an escapist by heart in my entertainment value. I've been craving a big, just lose yourself in an action adventure, and—
Lyle: And that does it?
David: …you can lose yourself.
Lyle: That's great.
David: Yes, so.
Lyle: Well, David Hyman, thank you so much for joining me on We Are Netflix.
David: Hey. Thanks for having me.