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How Reid Hoffman Grew to become a Silicon Valley Icon

Foundr Journal publishes in-depth interviews with the world’s best entrepreneurs. Our articles spotlight key takeaways from every month’s cowl characteristic. We talked with Reid Hoffman about confounding LinkedIn and a founding board member of PayPal, two firms which have helped mildew the world as we all know it as we speak and mixed to promote for greater than $27 billion. Learn excerpts from that in-depth dialog under. To learn extra, subscribe to the journal.


Had Twitch been round when Reid Hoffman was 12, you might have been in a position to watch a future billionaire hone his enterprise abilities in real-time.

An avid gamer, Hoffman was obsessive about fantasy role-playing video games, equivalent to RuneQuest.

He beloved the thought of making a world, and, in some methods, collaborating within the earliest model of a metaverse the place you needed to learn to collaborate with others, go on missions, and resolve issues.

Then there was his ardour for Avalon Hill board video games that taught him the basics of technique. Fundamentals he nonetheless makes use of when speaking to entrepreneurs as we speak.

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“Continuously once I’m speaking to entrepreneurs, the metaphor that I take advantage of to attempt to unpack a technique is, what’s your principle of the sport? Proper? So what sport are you enjoying? What’s your principle of the sport? How do you win?” Hoffman says. “There’s clearly OKRs and different kinds of issues. However that form of factor I feel got here from my 12-year-old self, who was so obsessive about video games.”

Unbeknown to Hoffman on the time, his obsession with gaming would give him a basis of abilities that will assist him create behemoths of firms equivalent to LinkedIn and PayPal and put money into numerous others, together with Airbnb and The acclaimed creator and investor can be the creator of the favored podcast Masters of Scale.

So how does a person put together to construct two firms that offered for greater than $27 billion mixed?


By learning philosophy, in fact.

To Be or To not Be

Hoffman by no means supposed to get into tech.

Initially, he thought he could be an instructional, and after he had accomplished his research at Stanford, the place he graduated with a bachelor’s in Symbolic Techniques, he crossed the pond and enrolled at Oxford.

As a Marshall Scholar, he acquired his grasp’s diploma in Philosophy in 1993. Nevertheless, throughout his research at Oxford, he realized he could be spending most of his time writing papers for the educational neighborhood if he continued with a profession in academia versus pursuing an ambition near his coronary heart, which was discovering methods to assist humanity evolve.

Witnessing what his classmates at Stanford had been doing with expertise and the way they had been bettering the world, he needed to be part of that.

Reid hoffman foundr magazine cover
Reid Hoffman on the duvet of Foundr Journal concern 107

With extra of a transparent give attention to what he needed to do along with his life and how much firms he needed to be concerned with, Hoffman was on the job hunt when he returned to California. And naturally, he ended up on the good tech firm that shared the identical passions.

“After I got here again from Oxford and I used to be wanting round for a job, once I had that prospect at Apple, I jumped at it due to these outdated senses,” Hoffman says.

“Plus, a part of what we do with expertise is we attempt to make a greater world for individuals.”

Though this was in the course of the darkish ages of Apple earlier than Steve Jobs had returned, the corporate nonetheless had a dedication to its outdated senses and dedication to person interface design. Hoffman beloved that, and whereas engaged on person expertise for practically two years, he gained buckets of data from the easiest.

After Apple, he spent a while with Fujitsu as their director of product administration and improvement earlier than shifting on to his first entrepreneurial enterprise, SocialNet.

Based in 1997, the social community hoped to assist customers discover relationship alternatives and join with buddies.

With this being his first startup, Hoffman was studying on the fly. From being an inexperienced supervisor to not having a transparent plan on buyer acquisition, the younger firm had too many hurdles to beat, and after two and a half years, SocialNet ran its course.

However Hoffman wouldn’t stay idle very lengthy.

The PayPal Mafia

Whereas at SocialNet, Hoffman was additionally on the founding board of a cutting-edge expertise firm: PayPal.

PayPal, an digital cash transmission service, was co-founded by his longtime pal Peter Thiel, a relationship that began once they had been sophomores at Stanford.

With SocialNet now dissolved, Hoffman joined the so-called “PayPal Mafia,” the place he labored alongside future tech icons equivalent to Elon Musk. Nevertheless, on the time, Hoffman had no clue how influential his colleagues had been. He had no concept they might be the longer term leaders of tech.

“No,” Hoffman says. “What I did know was it was a bunch of individuals with a really intense studying curve, who’re operating at creating the longer term actually quick and type of throwing your entire candle within the hearth.”

One would assume that with an organization stuffed with future leaders, PayPal ran with no hitch and confronted only a few challenges. It was truly the exact opposite. In truth, it was maybe probably the most intense interval of Hoffman’s life.

“I feel quite a lot of it’s we’re a bunch of younger of us who didn’t perceive administration very nicely,” Hoffman says. “And [we] tended to make quite a few unforced errors that you just’d should appropriate from quick. PayPal had a lot of near-death experiences.”

When considering again to a kind of near-death experiences, Hoffman recollects a dialog with Thiel in August of 2000 about how briskly they had been spending cash. “I stated, ‘Look, we’re spending cash so quick that if we had been … throwing wads of $100 payments over the roof of the constructing, we’d spend cash much less quick doing that than the best way we are actually,’” he says.

With out a actual enterprise mannequin in place on the time and no income coming in, the corporate was operating on fumes.

Nevertheless, it’s intense experiences like this that folks hardly ever see. Positive, everybody sees the good product and the acquisition, however they don’t see the stress behind the scenes that their crew was shouldering.

“I do assume it’s one of many issues that folks ought to perceive about entrepreneurship,” Hoffman says. “It does contain these strains; it does contain that type of tear within the stuff that you just’re doing. However in fact, that’s one of many the explanation why it’s onerous. And whenever you succeed, it will also be heroic since you’ve gotten by way of that.”

Hoffman and the crew would ultimately create one thing heroic, as eBay would purchase PayPal for $1.5 billion in 2002.

Along with his newfound wealth, Hoffman had each intention of taking a yr off and recalibrating. However there was one factor on his thoughts that he couldn’t shake, and he couldn’t wait a yr to revisit it.

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