This Multi-billion Dollar Company Started Because Of A Math Problem

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Netflix is worth more than $60 billion today and has millions of subscribers. It’s hard to imagine that the idea for the company all started because of a textbook engineering problem.

According to the company’s co-founder and CEO, Reed Hastings, the idea of Netflix came about because of a math problem.
During a session at Mobile World Congress (MWC) in Barcelona on Monday, Hastings talked about Andrew Tanenbaum.

Tanenbaum is a computer scientist who wrote a math problem asking students to work out the bandwidth of a station wagon carrying tapes.

Hastings said the problem required someone to work out how many tapes could fit in the station wagon, how much data the tapes could hold, and then how quickly the station wagon could get to the destination.

“It turns out that’s a very high speed network,” Hastings said.

“When a friend told me about DVDs and I realized, well that’s 5 gigabytes of data and you know you can mail that very inexpensively, I realized that is a digital distribution network. And from that original exercise, it made me think we can build Netflix first on DVD and then eventually the internet would catch up with the postal system and pass it,” Hastings said.

Disclaimer: We have no position in Netflix Inc. (NASDAQ: NFLX) and have not been compensated for this article.