The serial entrepreneur was hit with a $40 late charge and the idea for NetFlix, a new company that would combine the Web and mail order to give consumers a better way to rent movies while avoiding punishing late fees. Bringing convenience to the masses through the Web wasn't exactly novel by the late 1990s. Kozmo, the 7-Eleven of cyberspace, quickly hit cult status in major cities such as New York and San Francisco for delivering anything from doughnuts to toilet paper right to your door. Online grocer Webvan was busy spending nearly a billion dollars to expand its door-to-door business in cities nationwide.

Now Webvan and Kozmo are long-gone. But, thanks to a low-key approach, the sudden popularity of DVDs in the holiday rush and old-fashioned business principles such as customer loyalty and word-of-mouth marketing, NetFlix is emerging as a star amid the dot-com shakeout. "We were passe during the bubble because we weren't cutting-edge," said Hastings, NetFlix's CEO and co-founder. "But like AOL, we've focused on the ease of use, flat fees and unlimited usage."