You might have heard a myth about how an excessive late fee for a video rental triggered a lightbulb moment for a young entrepreneur, who then went out to build a movie rental business centered around no abusive late fees.
Yeah, that’s a load of crap, but don’t blame yourself for believing it. Netflix co-founder Reed Hastings peddled the myth as late as 2009, like when he told Fortune Magazine:
“The genesis of Netflix came in 1997 when I got this late fee, about $40, for Apollo 13. I remember the fee because I was embarrassed about it. That was back in the VHS days, and it got me thinking that there's a big market out there.”
In reality, Netflix’s other co-founder Marc Randolf called the tale “‘a convenient fiction.’” The story actually was just a marketing method to describe how Netflix didn’t have late fees when it rolled out its subscription model, not the “aha” moment of greatness that led to you binge watching “Scandal” in your underwear.