Young and Profiting with Hala Taha (Entrepreneurship, Sales, Marketing)
Reid Hoffman: LinkedIn Co-Founder on Building and Scaling Massively Valuable Companies Fast | Entrepreneurship | E332
Mon, 27 Jan 2025
Despite having a strong product idea, Reid Hoffman’s first startup collapsed, forcing him to return investors’ capital. This tough experience reshaped his approach to entrepreneurship. By embracing failure, iterating quickly, and adapting relentlessly, he went on to become a leader at PayPal and later, the co-founder of LinkedIn. In this episode, Reid shares the concept of blitzscaling, which prioritizes speed over perfection, smart strategies for taking risks, and insights on achieving rapid market dominance. In this episode, Hala and Reid will discuss: (00:00) Introduction (01:32) Building Impact-Driven Businesses (02:56) Why We Need More Entrepreneurs (04:31) The Vision Behind LinkedIn’s Success (06:43) Lessons from a Failed Startup (09:26) Making Quick, Intense Decisions at PayPal (12:39) Blitzscaling: Prioritizing Speed Over Efficiency (18:10) Maintaining Company Culture While Scaling (21:20) The Power of Early Market Dominance (25:01) The Five Stages of Company Growth (28:54) Strategies for Taking Intelligent Risks (31:44) Why Product Perfection Delays Success (33:25) Pivoting Early to Seize New Opportunities (36:18) Entrepreneurship as a Team Sport Reid Hoffman is an entrepreneur, investor, partner at Greylock, and co-founder of LinkedIn and Inflection AI. He was an executive at PayPal and a founding investor in several companies, including OpenAI. Reid actively supports various non-profits and has received numerous accolades, including an honorary CBE from the Queen of England and the Salute to Greatness Award from the Martin Luther King Jr. Center for his philanthropic efforts. Resources Mentioned: Reid’s Book, Blitzscaling: The Lightning-Fast Path to Building Massively Valuable Companies: amzn.to/4jnQkfQ Sponsored By: OpenPhone - Get 20% off 6 months at openphone.com/PROFITING Shopify - Sign up for a one-dollar-per-month trial period at youngandprofiting.co/shopify Airbnb - Your home might be worth more than you think. Find out how much at airbnb.com/host Rocket Money - Cancel your unwanted subscriptions and reach your financial goals faster with Rocket Money. Go to rocketmoney.com/profiting Indeed - Get a $75 job credit at indeed.com/profiting RobinHood - Receive your 3% boost on annual IRA contributions, sign up at robinhood.com/gold Active Deals - youngandprofiting.com/deals Key YAP Links Reviews - ratethispodcast.com/yap Youtube - youtube.com/c/YoungandProfiting LinkedIn - linkedin.com/in/htaha/ Instagram - instagram.com/yapwithhala/ Social + Podcast Services: yapmedia.com Transcripts - youngandprofiting.com/episodes-new All Show Keywords: Entrepreneurship, entrepreneurship podcast, Business, Business podcast, Self Improvement, Self-Improvement, Personal development, Starting a business, Strategy, Investing, Sales, Selling, Psychology, Productivity, Entrepreneurs, AI, Artificial Intelligence, Technology, Marketing, Negotiation, Money, Finance, Side hustle, Startup, mental health, Career, Leadership, Mindset, Health, Growth mindset. Career, Success, Entrepreneurship, Productivity, Careers, Startup, Entrepreneurs, Business Ideas, Growth Hacks, Career Development, Money Management, Opportunities, Professionals, Workplace, Career podcast, Entrepreneurship podcast
Chapter 1: What lessons did Reid Hoffman learn from his failed startup?
When you're scaling really fast, hiring really fast, how can you maintain a healthy company culture?
You have to intentionally...
Welcome back to the show. Today, we have a true legend on the podcast. Reid Hoffman, who is the co-founder of LinkedIn and Inflection AI is joining us. He's also a renowned venture capitalist. He's been behind companies like Airbnb, PayPal, so many great, huge companies that have moved the world forward. He is also a partner at Greylock.
Chapter 2: How did PayPal shape Reid Hoffman's entrepreneurial journey?
He hosts a podcast, Masters of Scale, and he's a prolific author. He's got a brand new book out on AI called Super Agency, which we're going to dig into in this conversation. Me and Reid talked for well over an hour and 20 minutes, which you guys know I love to do when somebody is just absolutely amazing. I want to keep them on for as long as possible. And Reid was one of those guests.
In part one of this conversation, we really focus on entrepreneurship. So I talked to him about his early entrepreneurship endeavors. We learn about his failures and big learning lessons. And then we go into scaling, all of his strategy for scaling businesses. And guys, he scaled huge. huge companies. Like I mentioned, LinkedIn, Airbnb, PayPal.
He's behind some of the biggest companies in the world. So he's got a lot of great content when it comes to scaling businesses, specifically his Blitz scaling methodology. And then in part two, we really focus on AI. He wrote a new book called Super Agency. It's all about how humans are going to have agents moving forward, AI agents.
Chapter 3: What is blitzscaling and why is it important?
And I really pick his brain on his optimism towards AI and how he imagines the future to be with AI in the picture. And everything's going to be changing. So in part one, like I mentioned, we're talking about entrepreneurship. So stay tuned for that and enjoy my conversation with the amazingly talented Reid Hoffman. Reid, welcome to Young and Profiting Podcasts.
It's great to be here. I've been looking forward to this.
Me too. And first of all, I want to say I feel very honored to have you on the show. You were a truly prolific entrepreneur. You've literally helped push the world forward for decades. You've been a leader at companies like PayPal, LinkedIn, Airbnb, now Inflection AI. You also were a part of OpenAI. So you've just been behind so many huge companies that have pushed the world forward, like I said.
So I wanted to ask you, when you think of all your contributions to the world and all the companies that you work with, because you don't have to work right now, you choose to work. And so you must be thinking about like, okay, what makes me want to work with a company? What is your mission? And what is the red thread with everything that you're doing in the world right now?
I guess probably it's like I'm, to put it philosophically, a humanist, which is how do we make ourselves better individually and as a group? So it's empowering a bunch of different individuals' lives, but also leaving the world much better than we found it. And how do we do that? And that's the red line through everything I do, including companies, because you want to do companies that...
of course, have all the normal company things of running great product services and jobs and all the rest, but you also want it to be the impact that you have on the world leaves the world in a much better place. You transform industries, you transform societies.
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Chapter 4: How can companies maintain culture while growing rapidly?
And like all the companies you mentioned that I've been involved with from the earliest stages, whether it's personally LinkedIn and PayPal, or as an investor and board member, Airbnb, OpenAI, All of it has a theory of how does this improve human life, human work, quality of experience? How do we elevate ourselves, become more the people we aspire to be?
And in a similar way, in a similar token, I'd say you've said in the past, society flourishes when people think entrepreneurially. So talk to us about why you believe that the more entrepreneurs that we have in the world, the more that mankind is better off.
It's part of how you create the future. Everything that we have in our lives, I mean, this podcasting stuff, these computers, these phones, all come about through entrepreneurial innovation. And it's part of how the new future is created. And it's part of how prosperity is created. It's part of how life is improved.
And basically, we wouldn't get to, you know, even when you say, well, wait, there's also science, which invents vaccines and other kinds of things, although a lot of vaccines are commercial these days and have an entrepreneurial bent like Moderna. And so it's this invention of new things, and it's envisioning the way the world could possibly be.
How could you create something that would be of service to—this is one of the things I think people always forget about the process of Adam Smith and capitalism is this theory of moral sentiments. How are you being of service to other people? And that entrepreneurial creation of business and products and services is a really key part of it. And
You know, when you look around our lives and all the things in it, it was earlier entrepreneurs that we were building upon their work.
So speaking of building on entrepreneurs of the past, my career has totally skyrocketed from LinkedIn. I was able to become a full-time entrepreneur with my social agency and my podcast network. And so my question to you is LinkedIn has blown up into this huge platform. It's one of the biggest social media networks in the world, 135 million daily active users.
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Chapter 5: What are the five stages of company growth?
Was your vision for LinkedIn what it is today? What was your initial vision? And did you ever imagine it would scale to what it is today?
So when you start a business, you should think about this as a kind of probabilities of outcomes. So I did think that LinkedIn could become what it is today. I actually even think things that were could be bigger and could be on path. And you could be asking me this question in five years when I achieved a bunch of new things. And I would also say, hey, yes, this is possible.
Now, are we in a low probability but a high result situation? Future from when I started LinkedIn? Absolutely. You have to be rational as an entrepreneur. And part of what sometimes entrepreneurs are told, oh, ignore risk. No, no, no. Take smart risk. Manage it smartly. And so when I started, it was like, well, we could be this big.
Chapter 6: What intelligent risk strategies can entrepreneurs use?
And, you know, there's all of these outcomes between here and there, which include not succeeding at all. that you manage your way towards, even as you have the moonshot, if you shoot for the stars, maybe sometimes you only get to the hills, right? But you have to be shooting for the earth. You have that, but you're wise about it.
And so, yes, you know, there's learnings and we can go to the depths of which things I made mistakes on or which things turned out to be new surprises with LinkedIn. But I would say that we're within the probability set that I thought was possible.
I love that. And I'm definitely going to be asking you about scaling a business and all of your guidance around that.
Chapter 7: Why does Reid Hoffman prioritize speed over product perfection?
But first, before we do that, I do want to talk about your early entrepreneurship days, because a lot of the listeners tuning in, they're young entrepreneurs, they're failing every day, which is a big part of eventually becoming a great entrepreneur is failure at first so you can learn and get better.
So you started a company called SocialNet, which actually was a failed startup when I read about it. You can tell me what you think, if it was a failure or not, but it was a social app for dating way before we had the dating apps of today, like Bumble and things like that. So it was like a really innovative concept.
Chapter 8: How can entrepreneurs pivot to seize new opportunities?
Tell us about what happened with that company, why you ended pivoting to something else and some of the failures and learnings that you had from that.
So a lot of the writings I've done are all the learnings from mistakes. There was almost never anything like I just got it right the first time. It was that you iterated at speed and you kept adapting and you kept learning. And that's one of the rules of entrepreneurship is always be learning.
So SocialNet, you know, I started with kind of this theory of, oh, I've learned how to create software products. I know what a really good thing would be. I've got a great product idea. Let me go raise some venture capital. Let me release the product.
Well, a huge number of things, everything from, you know, if you're not embarrassed by your product release, you've released too late relative to software and consumer internet, because I thought I would polish it and get it just so right and beautiful before getting out. And when we released, we quickly discovered half the things we'd spent months on were completely useless.
We thought that the game was entirely about, well, did we have a vision for product quality? And we didn't spend that much time thinking about like our go-to-market strategy, which is fundamental to entrepreneurship. And so it was just failure after failure and recovery.
But the two ways that I kind of came to learn to summarize this was one is I perhaps never learned so much in my life, except for between the ages of two and three, because when You're falling over and learning it and standing back up. And then the other one is every Friday, there were things I wish I had known on Monday.
And those things I wish I'd known weren't person X is going to return your phone call or this partnership pitch won't work out. It's literally how to play the game, what to do. And so it was a tremendous learning experience, which of course means lots of scars, tissue, and a lot of blood on the floor. And I'd say that it was, you know, in Silicon Valley terms, a failure.
We returned the investor's capital, but that was all we were able to do fundamentally.
And so I love that you started as an entrepreneur and you learned a lot with SocialNet and then you went to PayPal, right? And you learned as an executive there before you went and co-founded LinkedIn. So talk to us about that. What were some of the learnings that you learned at PayPal that helped you become a great entrepreneur?
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