Netflix CEO’s $100M Ski Resort Gamble: Bringing Silicon Valley Culture to the Slopes

Reed Hastings Brings Netflix Management Style to Utah Ski Resort

Reed Hastings, the co-founder and former CEO of Netflix, is applying his renowned management techniques to a new venture: Powder Mountain, a ski resort in Utah. After acquiring a controlling stake in the resort last year, Hastings is implementing significant changes to its business model, including the introduction of his controversial “Keeper Test” management strategy.

The “Keeper Test,” a hallmark of Netflix’s corporate culture, is a method used to evaluate employee performance. It asks managers to consider whether they would fight to keep an employee if that person were to resign. This approach focuses on retention rather than traditional performance metrics and has been used as a criterion for termination at Netflix.

While the “Keeper Test” has been praised for fostering a high-performance culture, it has also faced criticism for potentially creating an environment of job insecurity. A Wall Street Journal investigation highlighted employee concerns about the pressure to perform and the fear of being fired. Netflix has defended the practice, stating that it promotes accountability and reduces the need for excessive controls.

Hastings’ $100 million investment in Powder Mountain comes with a 10-year development deal aimed at revitalizing the struggling resort. Established in the 1970s, Powder Mountain had faced financial difficulties and had partially closed to the public. The new plans include selling lots of raw land starting at $2 million each, signaling a shift towards a more upscale clientele.

As part of the overhaul, Powder Mountain is now offering jobs starting at $20 an hour with benefits, according to its website. This move, coupled with the implementation of the “Keeper Test,” suggests that Hastings is committed to creating a high-performance work environment similar to that of Netflix.

The application of Netflix’s management philosophies to a ski resort represents a unique experiment in cross-industry leadership. As Hastings works to transform Powder Mountain into a thriving destination, the success or failure of this venture may provide valuable insights into the adaptability of Silicon Valley management techniques in traditional hospitality sectors.