Mark sent Hacking Netflix this great article by Jim Cook, one of the co-founders of Netflix, about Five Lessons From the Netflix Startup Story. If you're curious about how Netflix got started, and what sort of problems they faced, it's a fascinating read.
I joined Netflix as a subscriber and began blogging about them in 2004, after Netflix had already solved all of their problems, so I saw none of the trial-and-error aspects of the early business. They tried 150 envelope designs before they settled on the one we have now! They originally rented movies one at a time and had due dates and late fees. They were trying to replace the video store concept. It wasn't until they invented the queue and the subscription model that they really took off.