How Reid Hoffman Turned a Silicon Valley Icon

Foundr Journal publishes in-depth interviews with the world’s biggest business owners. Our content articles highlight crucial takeaways from every single month’s address feature. We talked with Reid Hoffman about confounding LinkedIn and a founding board member of PayPal, two companies that have helped mould the world as we know it nowadays and blended to provide for more than $27 billion. Read through excerpts from that in-depth discussion down below. To study a lot more, subscribe to the magazine.


Had Twitch been all over when Reid Hoffman was 12, you might have been able to watch a future billionaire hone his business enterprise techniques in true-time.

An avid gamer, Hoffman was obsessed with fantasy job-enjoying games, these kinds of as RuneQuest.

He liked the thought of making a globe, and, in some ways, taking part in the earliest variation of a metaverse where by you experienced to learn how to collaborate with others, go on missions, and clear up complications.

Then there was his passion for Avalon Hill board online games that taught him the fundamentals of system. Fundamentals he even now makes use of when talking to business owners nowadays.

“Frequently when I’m talking to business owners, the metaphor that I use to test to unpack a technique is, what is your theory of the activity? Correct? So what video game are you participating in? What’s your concept of the activity? How do you gain?” Hoffman claims. “There’s definitely OKRs and other forms of items. But that type of matter I feel came from my 12-calendar year-aged self, who was so obsessive about video games.”

Unbeknown to Hoffman at the time, his obsession with gaming would give him a basis of competencies that would assist him make behemoths of corporations this sort of as LinkedIn and PayPal and spend in plenty of many others, which include Airbnb and Discount The acclaimed author and investor is also the creator of the well known podcast Masters of Scale.

So how does a guy get ready to construct two organizations that marketed for additional than $27 billion mixed?


By finding out philosophy, of program.

To Be or Not to Be

Hoffman under no circumstances meant to get into tech.

Initially, he imagined he would be an academic, and soon after he had done his scientific studies at Stanford, where by he graduated with a bachelor’s in Symbolic Systems, he crossed the pond and enrolled at Oxford.

As a Marshall Scholar, he gained his master’s diploma in Philosophy in 1993. On the other hand, during his scientific tests at Oxford, he recognized he would be paying most of his time producing papers for the academic group if he continued with a career in academia compared to pursuing an ambition near to his coronary heart, which was locating means to help humanity evolve.

Witnessing what his classmates at Stanford had been undertaking with engineering and how they were being increasing the earth, he wanted to be a aspect of that.

Reid hoffman foundr magazine cover
Reid Hoffman on the address of Foundr Magazine issue 107

With more of a distinct concentration on what he required to do with his daily life and what type of organizations he preferred to be included with, Hoffman was on the work hunt when he returned to California. And normally, he finished up at the excellent tech corporation that shared the identical passions.

“When I arrived back from Oxford and I was on the lookout all around for a career, when I had that prospect at Apple, I jumped at it due to the fact of those people outdated senses,” Hoffman suggests.

“Plus, part of what we do with technological know-how is we consider to make a far better globe for people today.”

Despite the fact that this was throughout the dark ages of Apple ahead of Steve Employment had returned, the organization even now experienced a motivation to its aged senses and perseverance to consumer interface structure. Hoffman loved that, and whilst operating on consumer practical experience for approximately two decades, he attained buckets of know-how from the pretty ideal.

Immediately after Apple, he used some time with Fujitsu as their director of item administration and growth ahead of relocating on to his first entrepreneurial venture, SocialNet.

Founded in 1997, the social network hoped to assist people obtain relationship opportunities and hook up with good friends.

With this currently being his very first startup, Hoffman was learning on the fly. From becoming an inexperienced manager to not possessing a very clear plan on shopper acquisition, the young firm experienced as well numerous hurdles to overcome, and immediately after two and a 50 percent yrs, SocialNet ran its system.

But Hoffman wouldn’t stay idle pretty lengthy.

The PayPal Mafia

Though at SocialNet, Hoffman was also on the founding board of a cutting-edge technological know-how firm: PayPal.

PayPal, an electronic revenue transmission service, was co-established by his longtime mate Peter Thiel, a romance that started off when they have been sophomores at Stanford.

With SocialNet now dissolved, Hoffman joined the so-referred to as “PayPal Mafia,” wherever he worked together with upcoming tech icons these as Elon Musk. Nevertheless, at the time, Hoffman had no clue how influential his colleagues have been. He experienced no plan they would be the foreseeable future leaders of tech.

“No,” Hoffman states. “What I did know was it was a bunch of persons with a incredibly extreme understanding curve, who are functioning at building the long term truly speedy and form of throwing the entire candle in the hearth.”

A single would think that with a corporation full of long run leaders, PayPal ran with no a hitch and faced very few worries. It was essentially the entire reverse. In point, it was perhaps the most powerful time period of Hoffman’s daily life.

“I consider a great deal of it is we’re a bunch of younger individuals who didn’t fully grasp management quite well,” Hoffman says. “And [we] tended to make a variety of unforced mistakes that you’d have to appropriate from quick. PayPal experienced a big range of close to-loss of life activities.”

When imagining back to one of those near-death ordeals, Hoffman recollects a discussion with Thiel in August of 2000 about how quickly they ended up spending dollars. “I mentioned, ‘Look, we’re spending money so rapidly that if we ended up … throwing wads of $100 payments above the roof of the constructing, we’d commit money a lot less quick accomplishing that than the way we are now,’” he claims.

With no a real small business product in place at the time and no profits coming in, the company was functioning on fumes.

On the other hand, it’s powerful ordeals like this that individuals hardly ever see. Guaranteed, every person sees the excellent product or service and the acquisition, but they never see the stress powering the scenes that their crew was shouldering.

“I do imagine it is one of the items that men and women really should understand about entrepreneurship,” Hoffman says. “It does include these strains it does involve that kind of tear in the things that you are accomplishing. But of class, which is one particular of the factors why it’s challenging. And when you succeed, it can also be heroic simply because you’ve gotten by means of that.”

Hoffman and the crew would eventually develop some thing heroic, as eBay would obtain PayPal for $1.5 billion in 2002.

With his newfound prosperity, Hoffman experienced each and every intention of getting a yr off and recalibrating. But there was a person issue on his thoughts that he could not shake, and he couldn’t hold out a 12 months to revisit it.

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