Reed Hastings: Build Elite Teams to Scale Faster & Avoid Burnout

You know the feeling.

Your startup’s growing, investors are watching and every hire feels like a make-or-break decision.

You’re wearing multiple hats, solving high-stakes problems daily, and managing people.

All while trying to keep the vision alive.

Meanwhile, your calendar’s packed with meetings, your best people show signs of burnout, and you’re wondering if your team can really scale with your vision.

If that’s you, let me tell you a story.

It was late 2000.

Reed Hastings gathered his Netflix team.

The dot-com bubble had burst, and the company was bleeding money.

Investors weren’t convinced that an online DVD rental business had a future.

Reed Hastings had a tough choice to make—either keep a bloated team and sink or make painful cuts and build a company that could survive.

So he made the hard call.

He laid off a third of the company.

Here’s the interesting part.

The smaller team didn’t just survive, they got better. Work that used to get stuck in endless discussions now moved quickly. The office felt different.

More focused. More energetic.

This moment taught Reed something he never forgot:

“Having the right people matters more than having lots of people.”

 Talent Density Matters More Than Headcount.

As a CEO or founder, you’ve probably felt this struggle too.

• You hire fast to keep up with growth, but then you end up with a mix of A-players and average performers.
• You feel like you have to manage everything because people aren’t stepping up.
• Your team is growing, but execution is slowing down.

Hastings’ solution?

A radical approach to building high-performing teams.

Here’s how he did it and how you can too.

1. The “Keeper Test”: Only Retain The Best

“If this person told me they were leaving, would I fight to keep them?

If the answer isn’t a strong yes, they let the person go, generously.

This is what Reed Hastings calls the “Keeper Test”, and it’s one of the most powerful principles behind Netflix’s elite team culture.

It ensures that only the top performers, the ones who drive real results, stay and grow with the company.

Netflix Way:

• Managers give candid feedback in real time, not just during reviews
• They offer months of severance to make tough decisions easier
• Every employee can interview elsewhere regularly to know their market value

Start Today:

• Make a list of your direct reports
• Answer the keeper test question for each
• Schedule honest conversations with anyone who’s just “good enough”
• Build a pipeline of exceptional talent before you need them

2. Freedom, But With Extreme Responsibility

Netflix doesn’t have approval processes for expenses or vacation policies.

Employees have full autonomy but they’re expected to make decisions like a business owner would.

Give your top people more freedom, but expect them to own their outcomes.

 Netflix Way:

• No travel & expense policies
• No vacation tracking
• No set work hours
• But clear expectations about results

Implement Now:

• Identify one policy you can remove this month
• Replace it with a simple guideline: “Act in the company’s best interest”
• Trust first, deal with abuse if (rarely) needed

3. Lead with Context, Not Control

Hastings doesn’t micromanage.

Instead of telling people what to do, he gives them the why. The full business context, so they can make better decisions on their own.

Netflix Way:

• Leaders prioritize sharing broad context about decisions and strategy
• They use detailed memos to explain important decisions
• They focus on explaining the “why” behind choices rather than just giving directive

Start Today:

• Write down your company’s current context: market position, challenges, opportunities
• Share it with your entire team
• Ask them: “Given this context, what would you do?”
• Listen more than you speak

How to Start Small

You don’t need to be Netflix to use these ideas. Start here:

1. On Your Next Hire: Pay more for someone great instead of hiring two average people
2. This Week: Ask yourself the keeper test about your current team
3. This Month: Remove one unnecessary rule or process

Pick one thing from above. Try it this week. See what happens.

Remember what Reed always says: You’re building a sports team, not a family. Every player needs to be great at what they do.

Getting A team players in your team is difficult but you know what would make it easier?

Putting out content about your company’s work culture.

The best talent wants to work with the best people.

What’s a better way to tell them than posting your thoughts on hiring and building a good team?