LinkedIn cofounder Reid Hoffman “Success! How I Did It”





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Reid Hoffman
Reid Hoffman is a prolific entrepreneur and investor in
Silicon Valley.

Kevin Moloney/Fortune
Brainstorm Tech


  • Reid Hoffman is the billionaire cofounder of
    LinkedIn and served as its CEO for four years.
  • He’s also an investing partner at Greylock
    Partners.
  • Hoffman was on the early executive team at PayPal and
    created web-based social networks in the 1990s.


People talk about Reid
Hoffman
as a philosopher of Silicon Valley. That’s by
design.

Before he was the billionaire cofounder of LinkedIn and a partner
at Greylock, he planned to be a “public intellectual.” Hoffman
says his philosophical training guides his business and
investment strategies every day.

“Formulating what your investment thesis is, what the strategy
is, what the risks with the approach are, what kinds of things
you would be doing with it, are all greatly aided by the
crispness of thinking that comes with philosophical training,”
Hoffman said on Business Insider’s podcast, “Success!
How I Did It
.”

He’s now one of the foremost experts on entrepreneurship and
careers, sharing his theories through his podcast “Masters
of Scale
,” presentations, essays, and books. He’s built one
of the most robust networks in Silicon Valley — Tesla/SpaceX’s
Elon Musk and
Facebook’s Mark Zuckerberg and Sheryl Sandberg
are among his
many friends — and he’s always gathering insights from them.

On this episode of “Success! How I Did It,” Hoffman talks about
how he sees his place in the world,
his 30-year friendship with his political opposite Peter
Thiel
, and his love of playing board games.

You can listen to the podcast below:

Subscribe to “Success!
How I Did It
” on
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, RadioPublic,
or your favorite app. Check out previous episodes with:

Following is a transcript of the podcast; it has been lightly
edited for clarity and length.


reid hoffman archive
Hoffman attended the
Putney School, where he had a unique high-school
experience.

Courtesy of Reid
Hoffman


Rich Feloni: Let’s start at the beginning — a
young Reid Hoffman playing board games.

Reid Hoffman: Probably my younger self would be
embarrassed about how less good my older self would be. But,
like, in Settlers of Catan, I think it’s one of the most
entrepreneurial of the kind of social board games because it
involves trading — you trade resources and so forth — and that
kind of dynamic actually makes it much more entrepreneurial than
your typical kind of board game slash war game.

There’s nothing obsessive like a kid. I spent literally days and
days and days and days just doing that, and that led me to a
sense of strategy, which was then, of course, very helpful when I
later got to my entrepreneurial and business life.

Feloni: So we have that experience from your
childhood carrying over into adulthood. You grew up in
California, but you persuaded your parents to send you to a
boarding school, Putney School in Vermont. That’s far from your
typical school, right?

Hoffman: It is. I got bitten by the
independence, to be out of the house a little earlier than your
average kid. And part of what appealed to me about Putney was
that, in addition to having academics, it was doing blacksmithing
and woodworking and working on the farm and art and a bunch of
things that I wouldn’t otherwise had experience to do.

I think it really led me to the view that you could, in fact,
construct your own path because there were lots of paths
available, and then the second was almost like a very pragmatic
kind of “work on solving the problem” versus “being an expert
within a discipline.” This kind of entrepreneurial focus on a
personal life — not necessarily on building companies — but on
the how you take risks and how you cut your own path and how you
think about just solving the problem versus identifying yourself
as, “Oh, I’m a member of this discipline” — like, “I’m a product
manager,” or “I’m an artist,” or “I’m a lawyer,” but rather,
“These are the problems I’m working on. This is how I’m making a
serious difference in the world.”

Meeting Peter Thiel


reid hoffman archive peter thiel
Hoffman with Peter Thiel.
The two have known each other since they were students at
Stanford.

Greylock
Partners


Feloni: Your next stop was Stanford, and that’s
where you met Peter Thiel.

So Thiel, the billionaire investor — he’s quite controversial.
He’s as much known today as being the first investor of Facebook
as he is for being President Donald Trump’s connection to Silicon
Valley. On the surface, you guys can seem to be total opposites,
but you’ve had a long running friendship. How did the two of you
even end up becoming friends?

Hoffman: Peter had heard about me as this really
lefty person, and I’d heard about him as this really right-wing
person, and we ended up being in the same philosophy class. And
we heard about each other — “Oh, we need to talk” — and then we
started talking and arguing, and the first umpteen conversations
were all literally discovering all of the areas where we
disagreed. Part of the reason that our friendship formed was that
in those discussions we both realized that we had a real strong
belief in truth; we had a real strong belief in discourse as the
way of getting there; we had a strong belief in kind of listening
to alternative perspectives. And I know that he certainly made my
thinking a lot sharper, and I hope I did the same for him.

Feloni: Yeah, and didn’t you guys have a
public-access show together where you debated politics?

Hoffman: We did that very briefly — I think it
was 1996. This was actually a Peter idea. He said, “You know what
we should do is we should do a public-access TV show with this,”
and so we would invite on guests, and through a set of topics
around the guest, we would argue with each other, and I think the
guest was, like, “Huh, I guess I’m here to be kind of dodging
between the two of you.”

Becoming a public intellectual


reid hoffman archive
Hoffman
received his master’s in philosophy from Oxford on a Marshall
Scholarship in 1993.

Courtesy of Reid
Hoffman


Feloni: As you continued your education, you got
your master’s in philosophy at Oxford. I think a lot of people
would probably joke that someone who is getting their master’s in
philosophy would be setting themselves up for a life of poverty,
but clearly things didn’t go that way. How do you think that
studying philosophy — studying abstract thought — helped get you
to where you are today?

Hoffman: So a couple of ways. A simple one is
that philosophy is a study of how to think very clearly and, for
example, when I’m being an investor, which includes being an
entrepreneur, because as an entrepreneur you’re kind of an all-in
investor: formulating what your investment thesis is, what the
strategy is, what the risks with the approach are, what kinds of
things you would be doing with it — are all greatly aided by the
crispness of thinking that comes with philosophical training.

One thing every entrepreneur in consumer internet is doing is
essentially embodying a theory of human nature as individuals and
as a group for how they’ll react to the service, especially if
it’s community or network properties, how they’ll interact with
each other, how this will fit in their landscape of how they
identify themselves and how they communicate or transact with
other people. That’s particularly of course part of the reason
why, at Greylock, I tend to look at networks and marketplaces
centrally in my investment thesis, and these kinds of things are
the concepts that actually come out of philosophy. There’s almost
a sense in which part of being an entrepreneur or being an
investor is being an applied philosopher or an applied
anthropologist.

Feloni: Before you went the business route, you
were thinking that you were going to be a public intellectual,
but then you ended up going into tech. Could you kind of give me
the moment when you realized that you needed to really have this
shift in the plan that you had set out for yourself?

Hoffman: Well, my goal was, how do I help
humanity evolve? And what that means is, how are we better as
individuals and as a society — as a group?

And my original thought was, I could become an academic and then
be a public intellectual as an academic, writing essays and books
that would cause people to reflect and grow in this direction and
I myself grow and discover through those books. And then what I
realized from my experience with academia is that academia is,
kind of default, fairly hostile to academics being public
intellectuals. They want them to be scholars, they want them to
be in the narrow focus of that discipline, and I realized very
quickly that that wasn’t me. I didn’t have the interest — perhaps
I didn’t have the talent — and it was just something that I
didn’t really want to do.

And so that was what started me thinking about, like, well, if
what a public intellectual is doing is writing essays and books
in order to help humanity scale, what are other ways to possibly
do that? And I realized that software was another form of media,
and so if you actually work on the software as the media object,
that’s something that could then in fact have a similar kind of
impact, which is kind of helping humanity at scale, and helping
humanity both the individuals and the group think about, like,
who are we and who should we be and how do we get there?

Stanford is such a central part of Silicon Valley that helped me
encounter those thoughts and think about them as an option,
where, if I hadn’t gone to Stanford, it’s unclear I would have
thought of that.

Feloni: That’s a tremendously big goal, trying
to impact humanity as a whole. Was that ambition something that
drove you throughout your career and still is driving you?

Hoffman: Yeah, and very much so.

I tend to think that you should always have a fairly big goal,
and I, of course, know that the likelihood that I’m going to make
big changes for the billions of people on the earth is very
difficult. Luck will play a huge component of it, but as you
think about it, you go, OK, well, maybe I won’t get the billions.
Maybe I’ll only get to hundreds of millions or tens of millions,
as the impact that comes out from the kind of work that I’m doing
and I help improve how a very large number of people live. How,
in the case of LinkedIn, their economic career transforms, and
what kind of economic opportunities they have.

Feloni: How much do you think success is a
matter of effort and hard work, and how much do you think would
be luck in terms of where you were born, who your parents are,
gender, race, et cetera?

Hoffman: So this is one of those false-dichotomy
questions because the answer is massively both, right?

Some people who are successful like to say, “It’s all skill! It
was my capabilities!” And it’s, like, “No, no.”

Like, I was lucky to have been born in the Stanford Hospital, to
have gone to Stanford, to know about the network, to participate
in it, to make some great friends and connections that kind of
helped me along with it. All of that stuff is hugely
serendipitous. On the other hand, you also try to think and act
as strategic as you could, you try to learn constantly, you work
hundred-hour weeks, are constantly kind of trading lessons and
information with each other in order to make it happen.

So the short answer is, it’s both massively luck and massively
hard work. Sometimes it’s more luck than hard work, and sometimes
it’s more hard work than luck. But every success requires both.

Starting a social network: part one



reid hoffman archive
Hoffman
was an early social networker by working on a few early sites and
founding the dating site SocialNet in 1997.

Courtesy of Reid Hoffman


Feloni: So back to this notion of your aspiring
to be a public intellectual. You essentially became one for
entrepreneurs. You founded your first company in 1997,
SocialNet.com, which was an early social network. Do you consider
being an entrepreneur foundational to your identity, and, if so,
was it always there? Or when did you realize that?

Hoffman: I actually never really thought about
myself as an entrepreneur until years into LinkedIn, which is
after I had founded my second company. What I had been focused
on, almost from those early days at Putney, was just building
stuff, being a public intellectual, making something happen, and
then what’s the way you do that?

Oh, well, you raise some money, you hire some people, you launch
your product. It’s what an entrepreneur does, but it wasn’t like
my identity was: “I aspire to be an entrepreneur. I think of
myself as an entrepreneur.” I was more thinking of myself as,
“I’m a person who is helping create ecosystems, and what’s the
way that I can do that?” And I realized that one of the pieces of
progress that we’re making as a society and as a world is
realizing that entrepreneurship isn’t just the odd kid at school
or the occasional or random thing, but, at least in some areas of
the world like Silicon Valley and China — but also a number of
others; entrepreneurship is spreading — to almost be a pattern
that’s a choice, not for everybody, but for a number of people.
And the creation of these companies and these products and
services is part of how we’re going to create more products and
services. We’re going to create more jobs.

And so then I became an advocate for entrepreneurship, and,
exactly, as you mentioned, in some sense, a substantial part of
my kind of current expressions as a public intellectual is about
why entrepreneurship is key, how to do it well, what are the key
lessons for it, how to think about it from everything from as a
government or as a corporation, but also entrepreneurs building
new, interesting companies.

Feloni: You essentially saw the rise of social
networks before that even became a thing. Maybe you were a bit
too early there. But when you had a chance a few years later to
be the first investor in Facebook, you turned it down. How do you
figure that?

Hoffman: Oh, actually, I didn’t turn down that
investment. Because I was worried about the appearance of
conflict with LinkedIn, I sourced it to Peter and then I
co-invested a small amount of dollars along with Peter. So it was
financially very expensive, but it’s always good to act first and
foremost with a sense of ethics and integrity, and what I had
been worried about was that people would say, “Oh, well, you’re
both invested in Facebook as a lead investor and you’re doing
LinkedIn,” and I said, “OK, well, Peter has no conflict, so he
can lead and then I can essentially co-invest.”

So I would say that as part of the social revolution on the web,
in addition to my very first company being SocialNet — which kind
of lacked some key components — starting LinkedIn, investing in
Friendster, investing in Facebook, investing in Flickr, right?
There was a wide variety of these social movements.

Feloni: What do you think that SocialNet was
missing?

Hoffman: I had had this notion of having a
network be a platform, and what a platform is, is a number of
applications are built on top of it. But a network is a platform
primarily when it has your real identity and real relationships.
When it is, in fact, Reid Hoffman and Reid Hoffman’s colleagues
and friends and so forth.

SocialNet still used what was very prevalent in the first stage
of the internet: pseudonyms. Right? So you would choose a fake
name so that you could hide behind it because quote, unquote
cyberspace was dangerous. And there were good things in
SocialNet: It had a really good “how do you match two people
together who might share interests, how do you make a platform of
that in terms of profiles and micro profiles for matching
together, how do you allow two people to be anonymous to each
other and start communicating and then reveal identity?” All of
that was you know useful and interesting early work, but it
lacked this identity and relationships as a network platform,
which I think is key to part of the reason why we’ve had the
entire social web revolution, or web 2.0.

Joining the PayPal Mafia


peter thiel elon musk early paypal
Thiel
and Elon Musk were on the PayPal founding team in
1998.

AP

Feloni: You ended up at PayPal. Thiel was one of
the founders. And you started off on the board and then ended up
working full-time as an executive there from 2000 to 2002. This
was the age when — and I know you hate the term — what a lot of
people like to refer to as the “PayPal Mafia,” which was just an
intense collection of very talented people, including Thiel,
yourself, Elon Musk, the founders of YouTube, the founders of
Yelp. What was the energy like at its peak, and how do you manage
so many alpha personalities all at once?

Hoffman: Well, fortunately, this is a little bit
more Peter’s problem than mine, but PayPal did hire very
entrepreneurial, very high analytic, clock-speed-IQ folks who
were very focused on succeeding, and part of what allowed us to
kind of naturally pull together and be and work pretty intensely
was that PayPal got started kind of in late ’99 — it got
started a little earlier than that, but it got launched
in late ’99 — and then as we kind of went to market, the internet
crash, the bust, started to happen, and so pretty quickly PayPal
was one of the very few companies that had really interesting
prospects that it could still create something that was big and
valuable. It wasn’t the only one — Google was there, et cetera —
but it was one of the companies that had that kind of unique
characteristic and so everyone had a tendency to put aside their
own tendency to say, “Well, it’s my idea — I want to be in
command” to “Boy, this is a really valuable company, and I want
to make it work. OK, let’s work together to make this work.” But
there was a tremendous amount of, like, very strong
personalities. I think it was partially circumstances, partially
love of the mission, and partially the difficulties of the time
that kept the ship together.

Starting a social network: part two


Reid Hoffman, LinkedIn IPO
Hoffman founded PayPal and served as its CEO for four
years.

REUTERS/Mike
Segar


Feloni: You began a new chapter in your career
when you cofounded LinkedIn, in 2002, and that was after PayPal
sold to eBay and everyone in that executive group — that
high-powered group — kind of went off, started their own
companies, became really influential in Silicon Valley. You’ve
said that when you cofounded LinkedIn, you weren’t exactly
passionate about professional networks themselves the same way
that you weren’t really passionate about online banking at
PayPal. So do you recommend that people prioritize market
opportunity over passion? Or is there a way to find balance?

Hoffman: Well, the good news is it wasn’t that I
didn’t care about them; they just weren’t the top thing in the
world for me. So actually, in fact, the answer to your question
is, you do a cross product, an intersection of market opportunity
for building something new, entrepreneurial, et cetera, the teams
and resources and assets available to you, and the things that
you’re passionate about.

And so the notion of getting everybody better enabled through
their network, to maximize your economic opportunity, is part of
how you really advance society. And so that form of it really
interested me. Now, some people approach it as professional
networking. For example, I walk up to people at cocktail parties
and hand people my business card and try to explain — kind of
cold-calling them — why it’s great to do business with me, and
that’s not something that I’m passionate about, and we enable
that, too.

But the thing that I was kind of looking at was, “How do you
essentially enable everybody to share information and
connectivity to other people in order to best realize their
economic opportunity?” And that’s something that’s important to
me — maybe not the top thing in the world, but definitely
important to me.

And then, similarly, with PayPal, part of PayPal was saying,
“We’ll actually in fact enable a swath of entrepreneurship
because participating in electronic payments is extremely
important for the acceleration of your business.” And if you’re
an individual person, or you’re a small business, being able to
participate in electronic payments is really important and that
actually unlocks a lot of entrepreneurship. And that is also
something that is super important. So it isn’t that I didn’t care
about them — it was that they were like, “Oh, they’re important
things, just maybe not the most important things.” But they were
important things that had the right product market fit and the
right opportunity at the right time.

Feloni: So at LinkedIn you served as CEO for
four years and then eventually you found your perfect CEO with
Jeff Weiner in 2009. When did you know that it was time to step
back, and when did you know that Jeff was going to be the person
you were going to stick with?

Hoffman: So I knew that my best capabilities are
around being a strategist, a product-strategy person, a
business-strategy person, a collaborator, and not, per se, in the
CEO job. Because the CEO job as you scale becomes very much a
“How do you build a high-performance organization?” — which I
appreciate, which I have learned a great deal of things about,
but which is not the kind of core thing that I focus on.

And so I knew from a fairly early day that I would want to hand
over the CEO reins. I wouldn’t want to go through my whole
professional career being a CEO at all, let alone, like, by the
way, a CEO of LinkedIn, but I just didn’t want to be a CEO. And
so I was looking for: When do you have the right kind of raw
acceleration and value in the network that bringing somebody in
so that they would then be essentially a later-stage cofounder?
Because they so much valued the mission, valued the progress that
you’re making, your inertia, your kind of default momentum? Part
of what made it very clear very early that Jeff was the right CEO
is that he had actually really started embodying, acting as a
founder. For example: “I have a vision for what the company is
doing,” but it’s like, “I have a vision for how I’m transforming
the world, I have a different way of thinking about this product
and thinking about their transformation.” And then that together,
with recruiting some great executives, you know, being a very
sharp product person, which is important in the consumer
internet, all those things led me to go, “Oh, yes, Jeff is the
right guy.”

Feloni: Then last year, Microsoft acquired
LinkedIn for $26.2 billion and you joined the board of Microsoft.
How did you decide to make that decision?

Hoffman: Well, any of these kinds of decisions
are, in fact, very difficult. I mean, one of the things that Jeff
and I and the exec team at LinkedIn share is, we’re in service to
the mission. So the mission is: How do you enable as many people
to have as many transformative economic opportunities as
possible? How do you allow them to take control over their own
career progress, their own economic progress? And what the
decision, fundamentally, came down to is, is that better in
combination with another company or is it better solo? And we
basically said, “OK, let’s take a look at that.” And with
Microsoft, and that fact that it’s already focused on, as a
mission, how do you make organizations more productive, how do
you make individuals more productive? There was a natural
alignment of those missions, and we realized that we could better
reach our mission combined.

Making a difference through investments


reid hoffman
Hoffman has made a name for himself as a prolific
investor after making bets on Facebook and Airbnb, and now he’s
becoming active politically.

Max
Morse/Getty


Feloni: Parallel to LinkedIn, you’ve had a
career as an investor, and today you’re a partner at the
venture-capital firm Greylock. Can you use the example of your
decision to invest in Airbnb in 2009 as an example of what you
look for in an investment — and what that meeting was like?

Hoffman: At Greylock we tend to have a depth of
expertise in both consumer internet software and enterprise
software, and, in both cases, we tend to say, “Look, we ourselves
have been company builders, we’ve built products like this, we’ve
built companies like this.” And so we have a very good pattern
for both recognizing what’s interesting, and also we aim to be
the best possible help to entrepreneurs within these two areas.

And for me, as I had mentioned a little earlier, that tends to be
networks and marketplaces, and obviously Airbnb is a marketplace
for space. Brian and Nate and Joe sat down with me on a weekend
and started running me through their pitch, and I think it was
only a couple minutes in that I said, “Hold on. I personally
would like to invest, and I’d like to bring you into the
partnership. This could be rapidly huge. It could be
industry-transforming.” And that’s almost always what I look for
in investments. We went from that meeting to a partner meeting —
I think a few days hence — to an offer for investment the next
day.

Feloni: Do you typically work that quickly when
investing?

Hoffman: Sometimes you do. Sometimes you might
meet with an entrepreneur on the weekend, bring them in
partnership on Monday, and give them an offer that afternoon.
Sometimes it may take a few weeks, doing due diligence, thinking
about it, trying to understand the entrepreneur and the business.
It all depends both on the idea, and how much information you
have on the company and the entrepreneurs going into the first
meeting.

Feloni: And as you’ve grown your network, you’ve
gotten connections in politics, you’ve backed Hillary Clinton and
were an initial investor in the entrepreneur Mark Pincus’ “Win
the Future” movement, which is a grassroots movement for
progressive politicians. How do you think you can effectively
wield influence in a public way as someone who’s coming from a
position of power and with a lot of money to invest if Americans
are increasingly wary of money’s influence on politics?

Hoffman: Well, just because it’s money doesn’t
necessarily mean it’s corrupting or challenging. I think with
power comes responsibility; it’s essentially “Spider-Man” ethics.
And money is, essentially, reification of assets, of essentially
power, and so for me, what I try to do is I try to do a set of
investments and things that really enhance human potential,
including within political or other arenas. Overall, I would say
that I kind of take a Silicon Valley investing approach to the
whole thing, which is, I look for where I can invest money, time,
support, and a project could make a really big difference in the
world, including potentially a really big difference in providing
the right sort of governance for the society that we all live in.

Feloni: What would you advise to some of the
listeners who are wondering how they can improve their
professional network and kind of want to avoid that whole
just-passing-along-business-cards sort of deal?

Hoffman: I mean, this is part of the LinkedIn
design, which is: It’s much better to get an introduction, a warm
connection, than it is to cold call. Sometimes a cold call is all
that’s available to you, but when I’m introduced through
somebody, it’s like, “Oh, this person’s known this person for a
while, they’re trustworthy, they’re good to do business with,
they’re really committed to the long game, and playing it out,”
and all that stuff is really helpful in knowing, “Well, should I
really dig into and really understand this business?” And so the
general advice to entrepreneurs is figure out how to get a good,
warm introduction. And of course you don’t have to use LinkedIn,
but LinkedIn is a good way to figuring out what that possible
mutual connection might be.

Feloni: Thank you so much, Reid. I really
appreciate the time.

Hoffman: Likewise.

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