Reid Hoffman, LinkedIn Co-Founder | The Brave Ones

my aspiration my hope has been to try to help humanity of all what that's led me to do is to think in terms of networks think in terms of how people are connected how we find each other how we trust each other how we communicate how we navigate life together and that has been in a sense my life's mission Reid Hoffman is an icon of Silicon Valley he's always thinking about things and very large-scale we live in an age that overwhelms us in choices from the minuscule to the monumental how much of the world is touch how am I gonna change things just like being trapped in a carnival attraction that combines a bounce house and a Hall of Mirrors he's the one example of a nice guy winning he created LinkedIn which has really changed the way people find jobs and network this uncertainty poses challenges that can leave the most experienced of managers scratching their head he was an early employee at PayPal which changed the way people pay for things he's also one of the most thoughtful people I've ever met in terms of just thinking about the world as a switched-on listener of this podcast you likely look on general labels such as millennial with a large dose of skepticism though he is someone who always thinks how do I create incentives for other people to be brave to step out to say the unpopular thing to do the harder thing [Applause] was born August 5th 1967 I was born in the Stanford Hospital when my father was a law student at Stanford this was course during the kind of turbulence around Vietnam the issue here became the right to protest and it all seemed quite removed from the war in Vietnam dad likes the joke I was participating in demonstrations and running from tear gas even before I could walk because I was of course a kid in my parents arms Reid has a very strong sense of social justice which I think also sets him apart in Silicon Valley one of the things in business that I tend to be known for his strategy and they say well how did you learn your strategy and the answer was board games and fantasy role-playing games my first paycheck was actually in fact a check for doing at a toy work at a fantasy role-playing game called rune quest that was produced by a game company called the Kaos iam I just basically walked in the door with my friend to start talking to the people working there and I still remember their slightly like oh god here's this young kid what do we do with them you can just picture how much twelve-year-old really eager slightly obsessed super smart kid who just loves this game and then what I done is I they'd publish something in so I went through it with a red pen about how I would change it and all the kinds of things I would do and I brought it in I handed it to Steve Perrin would you like to work on something else he is always gonna seek out perspective or an experience that will round him out as a human being when he talks about Putney he talks about learning to be a good person and learning to be a good citizen not just you know being good at calculus the Putney school was fascinated me it was drivin through the woods and you know kind of do blacksmithing and woodworking and all these things that I'd never had experience with before so I applied and got in without my parents knowing and then what I did is after I got in I went to my dad and I said okay I'd like to go to the Putney school he's like that's fine wait a minute where is that I was like Vermont he's like alright let's talk about this a little bit and so we had a conversation and one of the things with both my parents being lawyers is from a very early age whenever I wanted something I'd have to make a case you can definitely see in Reed that he grew up in an environment that cultivated some aspect of debate of course I was a kid and I go to the school nights they go boarding school that sounds fun I get to be independent and boarding schools are a lot like Lord of the Flies he had to stand up for himself and learn how to understand his ground against police much tougher people as challenging environments go that also those crucibles also help shape you they help you go okay how do you actually in fact overcome challenges overcoming difficulty the first year boarding school was probably one of the hardest years of my life but also I think it was one of the most instructive I don't know this is true for everyone for me my real personal identity really blossomed when I got to Stanford a lot of my really close friends are people that I met at Stanford we were both in a then brand-new program at Stanford called symbolic systems which combined philosophy programming logic computer science psychology into one new major and so it was the the reinvention of AI if you like if you look at breeds sort of educational paths what he chose to study and how he chose to study it you really see someone who is coming at the complexity of the world that we live in today with a really deep foundation of philosophy Stanford had such an impact on the subject my trajectory that I literally don't know what the alternative would look like what that alternative world would look like cuz I wouldn't have understood entrepreneurship I wouldn't have understood software I might not even become a technologist if I hadn't gone to Stanford he started building a really like this amazing network of people who were thinking about how humans and technology work and how they interact with each other he also met Peter Thiel who ended up being a very important connection for him you've agreed more than disagreed what is something you strongly disagree about Peter teal and Reid Hoffman are very different in terms of their political approach their world but from what I understand Reid always like to interact with people who were different than him I think he's doesn't have a myopic view I mean he really likes to see the forest for the trees and he likes she's got friends from different parts of the world I met me at Oxford he was at Oxford 22 years ago many people don't actually know this he was telling philosophy early on he wanted to be a philosophy professor he thought I have ideas on the world and I want to be a public intellectual I want to share those ideas perhaps academia is the right way to do it the thing that I realized with him 3 to 6 months of being at Oxford was it wasn't it was a scholarly pursuit not a public intellectual pursuit that's always like oh no no I actually want to have a much broader canvas he wanted to take the ideas that were so appealing to him as a student of philosophy and he wanted to bring them to the masses it was thinking back to my time at Stanford where I was like oh wait software is this new medium by which we interact with each other by which we kind of parsed the universe I could go work in that and so I called Stefan Eck and he said maybe you should go work at Apple today Apple is hemorrhaging money and its stock price has plummeted this is the dark era when Apple was down and out shrinking market share they're making products that were frankly not great during those years you know he was at Apple early he were to thing called ie world which as everyone knows is Apple's big social network but nobody knows that because nobody used it one of the things that I learned from Apple also was that I really wanted to build a new product from the ground up to really see if I could do something that would really make a huge difference in people's lives by Rican sexualizing what you're doing so my very first company was called social net social net his first pre LinkedIn startup was about how do you form connections how do you bring people together around common in he was certainly ahead of his time in terms of understanding the power and the value of connecting people within a digital context he understood network effects before it had a name and social net was a dating service it was a professional networking service it was roommates it was sports partners like golf or tennis for the time there was a very radical idea kind of like he was an entrepreneur before people could spell entrepreneur there was probably 1996 or 97 so you know as a social network that was on the early edge of the internet part of what I learned from social net was actually in fact we're all trying to navigate our real world lives we're not trying to go to cyberspace we're trying to have a really rich and interesting life where we live where we work and so your real identity your real relationships and improving that and navigating the world around you that was the key thing if you think about that era what was very hot at that time was a Palm Pilot PDAs and having a rolodex and address book of friends on your device and read was the first to realize it's not the names the places the addresses it's the relationships that matter starting a company is jumping off a cliff and assembling the airplane on the way down and what you're realizing after you've jumped off this cliff after you said hey we're gonna go start this new thing is oh I don't have a lot of the parts I need new people to help me with this and I don't know what order to assemble this plane in a good friend of mine from Stanford Peter Thiel calls but it says hey we have this great idea it's encryption on mobile phones I say well that's a terrible idea but you're a very good friend of mine so I'll come help you with this this is the company that later became known as PayPal [Music] there's a way of thinking about startups which is I've never learned so much except for maybe between the ages of two and three it's cuz it at the end of every week there were things that I wish I knew at the beginning of the week so PayPal launches we think oh we have this mobile payment solution we do this whole financing around by transferring money on the Palm Pilot it's a mobile company very early mobile first and all of a sudden these eBay sellers start using the product and for the first week everyone's like who are these people we should get them off our service they're not our customers then I was like wait a minute these are the people using our product these are our exact customers and we pivoted entirely away from focusing on Palm Pilots to email payments through eBay using PayPal he was the wolf I mean he was the fixer I very quickly became Peter Till's firefighter in chief everything that went wrong he he went to try and fix which was make sure I Bey doesn't drive us off the service make sure visa doesn't shut us down persuade the federal government but it's okay that we're not a back it was a true disruption of a very established very regulated industry payments banking and they were doing things that didn't fit an existing category I remember we had breakfast one time he said I'd leave 8:30 second I get on a plane in New York to go talk to eliot spitzer the Attorney General of New York who's suing PayPal for basically anti-money laundering type things and he's like I just gotta go fix this and here's how I'm gonna fix it because New York was convinced that PayPal was being used for gambling all sorts of other things he's confident he doesn't back down from a fight and he's very strategic I mean the man plays German board games for fun he learned so much in terms of risk-taking how to build teens how to make the right decisions especially when faced with existential crises as a company which every startup goes through it was fun because part of what ends up happening you say alright well what's a bank like what defines a bank how do I persuade them I've never talked to a regulator before all right let me go figure out how this looks it's really gonna be quite thrilling to talk to me because his mind works so quickly and he connected dots so quickly and in such an unexpected way he's really able to focus on the things that matter and let other things like burn there was a whole set of fires at PayPal where if he didn't solve them value of the company zero out of business their customer numbers and loans are exponentially that they could not keep up with customer service and they actually just made the decision that that was a fire they weren't gonna fight at that moment so he's able to say here's the one two three top priorities everything else I'm not gonna worry about right now because if I get these three things right everything else will be okay if even had turned us off if we're no longer to operate on eBay no initial users no traction no network effect no ability to grow because eBay had its own payment system that was competing with PayPal PayPal was winning and so I think those got very complicated and eBay very much didn't want to have to buy PayPal and eventually they thought they had to we know these guys very well obviously because so much of their business is in fact on eBay the synergies of putting these two companies together were incredibly outstanding and it just seemed like the right time to get this deal done it was able to marshal the support of PayPal users to help make the case to eBay of PayPal's importance to them and that really is actually a quite magnificent jiu-jitsu that was the inflection point in my career that was the thing that made me learn all these key lessons about how you do consumer Internet companies how you not only how do you learn how not to fail but how do you learn to succeed and the network the so-called PayPal mafia which I refer to as the PayPal Network was instrumental in figuring out what the next day is a web 200 was everyone looks at is like oh the PayPal mafia they were so amazing that must have been so fun that was a really hard company I mean he doesn't start easy things you were part of the PayPal mafia is what we call people like you Elon Musk the YouTube guys all of those people went on to do amazing other things YouTube and Tesla and LinkedIn and I mean so many major other things PayPal created fortunes for a handful of very important men in Silicon Valley you're not just creating a company you're creating a generation of entrepreneurs now initially I was going to take a year off but then I suddenly looked around and I realized Silicon Valley had gone crazy that everyone had thought the consumer and it was over this was 2002 I know what they're wrong oh I can't take it you're off I'll take six weeks off and I'll come back and I'll start the company that I've been thinking about LinkedIn some people need to rest to be reenergized I think it read fuels himself through ideas and LinkedIn was an idea that Reid had been turning over in his mind for a long you know his sense was you know these resumes you these connections that are hard to see if I can go use the web and connect people virtually that unlocks the power and kind of makes it makes real these things that are in advice heads right now like how did you use this to navigate your work in your career and when I first started telling a bunch of my network about this idea I basically got the oh that will never work I remember thinking I had this high quality network why would I make it available to everybody else and I just and he's like well can you just do it and I said fine I'll sign it to LinkedIn and I was like you know frightening number seven or nine or twelve or something on the service I think some of the biggest challenges that read in the initial founders of the company faced were how to reach critical mass and how to scale it took a long time to get going you know the first four or five years were quite dicey of everything it's kind of messy but it's a really good but I still think it's kind of messy and I still think it's a good idea once we begin to get to network density once we begin to see the kind of use cases where people could transform what their economic opportunities are or how entrepreneurs could use it to pull businesses together or how venture capitalists would look at it in order do reference checking of entrepreneurs we knew we had something and at that point it was something they just question of how big LinkedIn co-founder Reed Hoffman tells me that in this competitive global environment there's more demand than ever for social and business networks when your design is met and you're still slang you're onto something the big story right now is that IPO from LinkedIn the shares are of 87 percent the press that was generating we sustained from much longer than we anticipated and really helped take the brand to the next level Reid felt that the idea of the network could now live on in a large company and we decided that it was worth taking up time to talk to other companies to see whether or not combination would make sense Microsoft acquiring LinkedIn this morning Microsoft will acquire LinkedIn for one hundred and ninety six dollars per share it's an all-cash transaction and we ended up combining with Microsoft cuz Microsoft had this how do we make all the world's organizations productive and we had a how do you transform individuals career paths and how do you make individuals productive I am looking forward to this new inflection and what I can be doing because now past just having four hundred and thirty million members this is a path to the billions of active members that was one of those investment decisions were you wet oh yes this is you should we should definitely do this [Music] in a world of Silicon Valley where everyone's always on a million devices Reid Hoffman is very interested in making sure he's focused he's very much present no matter who he's in a meeting with what I'm getting ready to go to lunch go to breakfast go to a dinner have a meeting I actually put a little bit of thought into oh this would be good to talk about this would be good to talk about this would be good to talk about and I have a list of that yeah he juggles so much I think it's probably the only way that he can operate is by having all these lists this is always way longer than mine by the way because he's got a lot of things that he's working on I'll get together and whom he like okay so I have these you know eight things I want to talk to you about and it looks to me like it's a list he's been holding on to for six weeks I'd hate to imagine what his actual master list looks like the bar is so high I mean here's somebody who's done so much and is committing himself to doing more like he's not chilling on the beach somewhere he's committing himself to spreading ideas our next guest is known as the startup whisper of Silicon Valley want to welcome him to the table Reid Hoffman is here kovita is one of those people who came to investing I think naturally he's so curious so he makes lots of little bets as part of my days at LinkedIn one of the people I'd helped was this entrepreneur named Sean Parker and Sean calls me and he says oh this is really awesome startup that you really need to invest in called Facebook kind of like I'm aware of it it's great it's in Boston he's like no no they've rented a house out here you need to meet them Reid has invested in nearly every company that's gone from zero to a gazillion what was clear was that Facebook had an awesome product market fit that when they turned on a college campus within six weeks 80% of the students in the campus were using it more than six times a day Harvard didn't have a Facebook so that's the gap that we were trying to fill and now we're at a hundred thousand people so who knows where we're going next now that was one of those investment decisions where you went oh yes this is you should we should definitely do this read loves being an investor because it allows him to touch so many different sectors so many different companies walking down a hall with him now it's hard I have been in those venues with him just everybody's walking up to him to pitch him something and fair enough for a long time he was like the man with the golden touch in Silicon Valley so I would invest in the kind of networks and the kinds of companies that as people got into them the value was out of their life by the other people also in the network so this range anything from Flickr and photo sharing to last out FM for music sharing to Zynga for game playing he's able to see around corners and he's able to see things before they actually happen and that kind of vision whether you're an investor or founder can be extraordinarily valuable and Grail I gave him an opportunity to broaden that to bring his expertise to other great ideas other great companies the interesting thing about Greylock it is really a venture capital firm that is set up in the to the benefit of entrepreneurs one of things I was very lucky about in my first investment in Crais lock is these three guys this then tiny company called Airbnb come in to meet with me and I knew within two minutes of their pitch this is one of the things I want to invest in he's a good spot of trends early as to things before they become you know the thing that everybody else is talking about we're here in an Airbnb and it's part of how you hope to see the world transform which has more local and cultural connections as people travel around the world Hoffman's Greylock partners was actually one of the early investors in Airbnb they are now growing past a 10 billion dollar valuation I didn't know for sure but I knew if it worked out it'd be amazing Reid Hoffman doesn't think of his investments as passive he knows if he's gonna put money into a company he's also gonna put in his own human capital the goal is to actually shine a light that's actually useful to everyone I approached my impact investments very similar to how I do my commercial investments which is I look at a great scale mission a interesting application of a technology or product or service and a world-class entrepreneur Reid is one of the only funders that I have learned through real experience you absolutely have to be a hundred percent honest with and when you say this didn't work and here's why he spends a few minutes making sure you really understood it and asking some deep questions and then goes great you learned he's been incredibly influential in Silicon Valley as an entrepreneur as an investor so with Code for America they said hey we have this idea for how do we build fundamental products they can help all of the governments but we need a big chunk of cash in order to do this I was like great I'll do it that's not how a lot of the world works it's certainly not a traditional fundraising work one of the funny things that happened is I started doing some of the public intellectual stuff but I had is that original idea I said actually in fact I'm learning all these things about how to start companies how to scale companies how to navigate the world of work what we should write about them we should write these books start up with you Alliance blitzscaling we should do a podcast masters of scale and the idea of it being any different didn't even occur to most people this idea sounds hellish to the modern mind but it had its advantages and the reason I do this is to try to get these ideas out to other people this information that helped their lives it isn't actually it's a hobby really it's a it's a philanthropic activity from the outside it looks like Reid's doing a bajillion things all like different domains different spheres different influences but edie core we'd believes in entrepreneurship and agency of people to change the world he's so smart about many different things he founded the world's most valuable and largest professional network and that's really to a large extent of manifestation of who he is I don't actually look at it as breaking the rules I look at it as trying to redefine the rules I believe that Reed's entire life has been an exercise in impact and I don't know what's next what I hope for and what I work for is a society and set up networks by which we make each other better and he's really had this desire I think this whole life to make the world a better place we learn how to improve ourselves and each other through connection through dialogue through collaboration through working together and it may be that he has just a massive influence on the future of AI or a massive influence on I don't know something else that maybe we haven't even thought of yet the set of technologies services that I want to build are those things that allow us to become our better selves as we help each other do so [Music] you you

Channel: CNBC International TV

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Id: Zuw2zRGD58E

Length: 26min 20sec (1580 seconds)

Published: Mon Nov 05 2018