When Marc Randolph and the team behind Netflix walked into the headquarters of Blockbuster in Dallas in the US state of Texas, more than 20 years ago, they were a tiny start-up pleading with the A$6 billion video company to buy them. As the Blockbuster executives smiled and nodded, they asked one question - how much did these young entrepreneurs want for their struggling company?
Randolph's co-founder Reed Hastings "screwed up his courage" and informed the Blockbuster suits that the two-and-a-half-year-old start-up was about A$50 million (NZ$52m) in the red.
"The meeting went downhill pretty quickly after that," Randolph told an audience of mayors, innovators, business people and academics at the 2019 Asia Pacific Cities Summit in Brisbane, Australia on Monday morning.
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Disheartened, the Netflix team walked out of their meeting and flew back to Santa Barbara.
"I remember sitting there on the plane, with my head down, thinking, 'Oh ... now we're going to have to kick their ass'," Randolph said.
"And we did.
"It took about 10 years, but eventually we did drive Blockbuster into bankruptcy."
Netflix is now the home-media top dog, a powerhouse streaming company that redefined television and entertainment.
Randolph told his audience he didn't recount that story to gloat - not entirely - but to drive home the lesson that innovation wasn't just important for entrepreneurs.
"There is an encouraging story, that a handful of people, with no experience in the video business, could take down a A$6b corporation with 60,000 employees," he said.
"But there's also a different story if you are the market leader, if you're the one in front, if you're resting your laurels.
"Because what it says then is that the people who are going to come after you may look nothing like you. They may not even be in business today.
"And it says that if you can't figure out how to disrupt yourself, you are leaving it wide open for someone to disrupt it for you."
But, Randolph said, Netflix's success wasn't simply a case of a "eureka moment", with a fully-formed, viable idea appearing from the sky that caused the upheaval of years of technology.
He and his co-founders went through hundreds of ideas, testing each one-by-one - many of them bad, he said.
And on the road from a start-up with just 150 orders for DVDs on its first day, to a streaming giant with 150 million subscribers, he said he tested many bad ideas to find the gold inside them.
The biggest jump, he said, was closing down Netflix's DVD-selling business - 99 per cent of its revenue - and focusing solely on renting.
And then, the idea that removing late fees, due dates, and introducing a subscription - it sounded like a bad idea but "people loved it".
The result was a company that leads the field in streamin
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