Hastings rented a movie and forgot to return it. When he finally did, he owed $40. He began pondering how a movie rental system could operate without relying on fees for tardy returns. Hastings says his company taps into an audience that wants some of the most recent movies, but also sometimes just wants to watch that movie from their childhood that's hard to find. "We try to figure out where we can efficiently serve some sector of customers who are a little bit tolerant on new releases and love the catalog of a hundred thousand titles with overnight delivery," he said. "If there is a secret sauce, it is that we think very carefully and strategically about which set of customers to serve well."