I was on a zoom call today with Reid Hoffman, founder of LinkedIn. Here’s my lessons from the call…
How do we learn Entrepreneurship?
The best way of learning entrepreneurship: play boardgames… Settlers of Catan is good – there is trading, there is ambiguity, there are multiple strategies. Chess is good but no ambiguity… we all know all the information all the time. Monopoly is too simple… roll dice, buy everything… not really learning to make strategic decisions. Poker has the aspects of taking decisions under ambiguity that are so important as an entrepreneur.
Sun Tzu on entrepreneurship: no business plan survives contact with the market. Entrepreneur needs a plan, but needs to know what is truly important in order to rapidly and flexibly change the plan based on market response.
Entrepreneur is open minded that if I can’t make it work today, it doesn’t mean it doesn’t work… maybe in a year or two things have evolved and you now have an important business.
How do you do so much?
“I choose great CEOs.”
Why can Elon Musk do so much?
Poor competition. Electric cars and Space exploration… very difficult… and there was no serious competition. That allowed Elon to do hard things in parallel.
If there is strong competition… you’ll need to focus.
The Role of Entrepreneurship
Society needs entrepreneurship – creative ideas getting tested, and what works growing. If nothing new can start, society is stagnant. Ask for permission in Europe vs Ask for forgiveness in US and China. Experimenting on the edges of banking is illegal in EU, but allowed Paypal to begin in US.
What was Hard in starting LinkedIn?
On founding Linkedin – “professional” social networking was resisted strongly at the beginning. Initial tagline: “We are friendster, but for business”. Journalists “oh yeah, you are the job seeking application.” It was a real struggle and lots of people thought I was mad.
As a CEO in an early stage company, you are focussed on building the product, extending the product.
As a CEO in a late stage company, your entire focus is on scaling up the business. What will accelerate our growth?
Why has half of the NASDAQ come out of Silicon Valley?
Region of 3 million people… why so much impact?
“There is a learning network. There is an intense local learning of how to build these tech business and scale them up. “
Today Silicon Valley, there is so much money going into the area that so many ideas can be tried and tested… and the entrepreneurs share their experiences. It is like a “Cambian explosion” of tech business.
Reid wrote Blitzscaling to share the best ideas from Silicon Valley out with the rest of the entrepreneurial world. These are the techniques by which the technology companies of the future are being built.
Early Investor in Facebook and AirBnB. Lessons?
Being contrarian and right is a wonderful place to be as an investor and as an entrepreneur.
Facebook – “its for college kids with too much time on their hands…” well, I think there is something important here. Contrarian… and right.
Yahoo offers $1B… should we sell? what is upside, what is the downside? we didn’t have a business at the time… but I believed there was something big and we would be able to find a business. Contrarian… and right.
AirBnB – we are the market for space. Liked the founders. First meeting: lets get down. to business… I know I am going to make an offer to invest, lets work together on the big questions. Contrarian… and right.
Big thing at AirBnB – taking control of the full experience… not just the web design. Dirty windows = bad. Clean windows made such a positive impact on airbnb rental locations. The founders really worked on designing the whole experience.
“Every challenge is a design challenge” AirBnB
The future of work?
“Crisis always begets opportunity.”
Phone calls will become video calls
Remote is a real option. Some companies have gone completely virtual and will never go back.
Co-working will be important.
Travel… for 1 meeting? we can zoom.
Look at Entrepreneur, Market, Product
The most important: look at the entrepreneur. A good entrepreneur will find a market and will find a product. A great market and a great product… but doubts about the entrepreneur… we won’t invest.