In 2006, Russ Reeder took a set-top box home for the weekend.
He was running NXTV at the time, a company that sold movies to guests in luxury hotel rooms at places like the Four Seasons, St. Regis and The Peninsula. The business was in trouble. Netflix was mailing DVDs to everyone, laptops could play movies, and nobody wanted to pay for an in-room film anymore. Revenue was dropping fast.
But NXTV had things nobody else had. It had proprietary encryption, licensing deals with every major studio, relationships with every TV manufacturer, and servers sitting in hotel basements around the world, pushing digital movies up to the rooms.
Russ had just gotten FiOS installed at home and was thrilled with his 12-megabit connection. Then he realized that was roughly the bandwidth running from a hotel basement up to the 50th floor.
So over that weekend, his team figured out how to send a movie from the hotel basement to his house instead of to a hotel room.
It worked. They worked out a promotion with the Four Seasons: buy a movie in your room, get one free at home. Warner Brothers was ecstatic, because they knew Netflix was working on streaming and they wanted a competitor. NXTV had a working prototype, the infrastructure and the relationships, years before most people had heard the word “streaming.”
Then the controlling shareholder, a billionaire real estate investor who owned a lot of hotels, said no. He wanted more hotel rooms, not a home business. He couldn’t get the idea out of his head that this was the wrong move.
You know who built that business instead.
Russ joined me on Unscripted to talk about a career that most executives would need three lifetimes to collect.
He started out writing code at Mobil Oil in the early ’90s, building software for lube plant operations. He went on to run application sales at Oracle for companies with more than a billion dollars in revenue. When a meeting with Warner Brothers revealed that the studio didn’t even know which rights it owned to its own content, he joined a Sequoia-backed startup to solve that problem.
After that company sold, he called Jeff Berg, who ran the ICM talent agency and sat on Oracle’s board, and asked him to lunch. Russ explained what he wanted to build. Berg wrote a check right there at the table.
That company became Rightsline, which now manages rights and licensing behind Netflix, Hulu, Sony and Universal.
Since then, Russ has led nine private equity-backed companies across six continents. He helped sell Media Temple to GoDaddy and ran OVHcloud’s US business. Today he runs KeyDelta, helping leadership teams fix the operating model before they layer AI on top of it.
The lesson Russ remembers most from Mobil had nothing to do with code.
He was a co-op student, and his manager would look over Russ’s shoulder while they talked, waving at anyone who walked by. Russ felt like the least important person in the room.
He decided right then that he’d never manage that way. When you talk to someone, give them your full attention and be curious about them. It’s a small thing, and almost everyone gets it wrong.
His other hard-won lesson took longer. Russ is a natural optimist. For years he trusted the people across the table to act with the same energy and integrity he would. They didn’t always, and the clues were usually there in what they had done before. Learning to be a realist cost him some expensive mistakes.
That realism shaped the book Russ is writing now: Heroes Don’t Scale.
You know these people. One is the brilliant engineer who is the only person who understands how the code works. They’ll stay up all night to fix an outage, everyone cheers, and they never take the time to make sure it doesn’t break again. Another is the salesperson with incredible client relationships who is a jerk to everyone internally and never shares those relationships with anyone. The third is the manager who makes sure every piece of information flows through them and treats it like currency.
Every company reveres its heroes, and every company slows down because of them. Each one has built a moat around themselves, and the business can only move as fast as they allow.
Russ has replaced five CEOs in his career. Three of them were heroes who wouldn’t let any important decision or information move without going through them first.
I had my own confession to make. We had an account manager at TPG who was extremely successful financially and was disliked by nearly everyone. We also had a consultant who was innovative and great with clients, but she created a toxic undercurrent across the team. It took me far too long to see how much damage they were doing.
You can hang your values on every wall in the office. But if you keep employing people who break them, your team hears a very different message.
Russ’s book asks a simple test question: if your key person quit tomorrow, would the business still work?
Most leaders say no. Russ says nearly every company would survive. People rise to the occasion and the work gets done. The fear of losing the hero is usually the real problem, and it keeps leaders from acting.
Letting people go is never easy, and Russ remembers his first hard one clearly. In 1998, he had to let go of an account rep at Oracle who wasn’t hitting her number. She cried, and it hurt. She then went to Siebel Systems, which everyone was buying at the time, and did great. She earned big commissions and equity using the same skills that hadn’t fit at Oracle.
“No one wants to quit,” Russ said. “They’re just going to hate waking up in the morning.” Part of a manager’s job is to set clear expectations, give people what they need, and remove the ones who hate their jobs before that spreads.
After nine PE-backed companies, Russ has seen investors at their best and worst.
The best firms, and he named teams at KKR, Silver Lake and TowerBrook, set clear expectations, track the right KPIs, make useful introductions and hold leaders accountable without micromanaging them. The worst assume that owning the company means they know how to run it. They turn executives into puppets or try to cut their way to a bigger exit.
Russ is a growth executive, and he’s blunt about that last mistake: “Companies are bought, they’re not sold.” You can’t cut your way to $5 million more in EBITDA and expect buyers not to notice.
When I told Russ that some of my own people now seem unable to do jobs they handled for 20 years without AI, he took the idea further.
Picture an employee who vibe-codes a new sales automation system that runs on their personal account, with them as the only person who knows how it works. You’ve just created a brand-new hero, and AI is about to create thousands of them.
The same technology can also break those dependencies. AI can document processes, build systems anyone can run, and remove the single points of failure that slow companies down. Which way it goes depends on whether leaders are paying attention.
So what about the 25-year-old who’s scared AI will take their job?
Russ didn’t sugarcoat it. Anyone afraid for their job probably should be, and he thinks everyone should be. But he believes curiosity is the cure. Ask how AI can help you do your work better, faster and cheaper. Become the expert. Build the systems.
Fear makes you tense and pushes you to fight or run. Curiosity makes you ask, “Tell me more. How does this work?” You can’t do both at once.
“If you want to ride the wave, you’ve got to lean in,” Russ said. “If you want to get run over by the wave, just slow down and be disinterested.”
Look at that 2006 story again. NXTV had the technology, the studio deals and a working product. What it also had was a single person at the top whose approval every decision depended on, and who couldn’t see past the business he already knew.
That’s a hero problem too. Whether the bottleneck is an engineer, a salesperson, a CEO or a shareholder, the cost is the same: everything moves only as fast as one person allows.
Heroes don’t scale. Systems do.
Listen to the full conversation with Russ Reeder on Unscripted with Jeff Pedowitz.