Netflix: Recruiting and Retaining the Best Talent

Surrounded by fierce rivals, founder Reed Hastings keeps the troops motivated with hefty compensation and luxe perks, including lots of time off

I had the great fortune of doing a mediocre job at my first company," says Netflix Inc. (NFLX ) founder Reed Hastings. He's talking about his 1990s startup Pure Software, a wildly successful maker of debugging programs that, through a series of mergers, became part of IBM (IBM ). Hastings says Pure, like many other outfits, went from being a heat-filled, everybody-wants-to-be-here place to a dronish, when-does-the-day-end sausage factory. "We got more bureaucratic as we grew," says Hastings.

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