Lessons from Reid Hoffman, EO Conversation on Zoom

Reid Hoffman, founder of Linkedin and first COO of Paypal

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.

Investing Guidance

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.

Stand in the Traffic

The title of this blog comes from a session in a course that Professor Paris de l’Etraz teaches about Life. I met Paris at a dinner in Madrid 4 years ago hosted by another inspiring teacher.

Stand in the Traffic: I love the simplicity of this life strategy.

Whatever you want in life, there are places where opportunities are flowing… and there are places where opportunities are not flowing. Abundant places… and stagnant places.

Stagnant: There are very few opportunities passing the person sitting on their sofa watching Netflix.

Abundant: There are many more opportunities passing the person out there in the world engaged in conversation… on a university campus, in industry conferences, in associations, online via youtube and blogs and writing articles.

If you have any idea what you are looking for…

If you have any idea about the types of things that you want to come into your life, the next step is to ask yourself “Where is the traffic?” Where are relevant people, resources, ideas, activity flowing?

Go stand there.

Put yourself where opportunity will pass you by.

If you are at an industry event and it is coffee break time, where do you stand?

If you stand by the wall with your mobile phone in front of you… you are not “in the traffic”.

If you stand by the coffee machines or the food service area, all the traffic will pass by you.

If you know how to smile and ask a few questions “hey, how are you doing? what brings you here? what has impressed you so far?”… now you can engage with the traffic.

Where should you be putting yourself more often?

PS the traffic is not just a physical location… my blog, my linkedin newsletter and my youtube channel are all ways of “standing in the traffic”

More Lessons from Paris about Life

Check out Paris’ TEDx talk on how Uncertainty affects the Professional Mind.

5 Ways Successful People Increase their Impact

How do those who are successful go on and make a truly lasting impact?

  1. Focus (no athlete wins 100m and marathon)
  2. Time horizon (Jeff bezos handstand)
  3. Habits (little habits every day > big decisions once a decade)
  4. Love the Process/Plateau (bamboo – it doesn’t always look like progress)
  5. Connected Relationships (communications, trust)

Check out the longer discussion of these 5 elements in the video below…

If you liked this post, you will also like Success Lessons from Kung Fu Panda and The Simplest Definition of Success.

How to Double your Sales to your Best Clients?

The title sounds a bit “salesy”… but that is what the video is about.

My friend and colleague at Vistage, Harry Marsland, shared with me one of his secrets to build a successful marketing agency in the UK. He has 5 questions that he would ask to his favourite clients each year:

Harry’s 5 Sales Questions to Double your Business:

  1. What do we do that you Like?
  2. What do we do that Not like?
  3. What could we Do more?
  4. What should we Do less?
  5. What will it take for you to double the business you give us?

Uncommon sense

Charlie Munger on uncommon sense…

Competence – you can only be trusted as competent if you clearly understand the limits of your competence. The great danger of experts is they forget the limits of their expertise – “it is better to trust a man of 130 IQ who thinks he is 125 IQ, than to trust a man of 180 IQ who thinks he is 200 IQ” Warren Buffett

Inverting – if you want to make life better, think of what you would do to make life worse. Charlie was an aviation meteorologist during WWII. His task was to give weather briefings to pilots. His role was unclear until he thought of the inverted perspective “if I wanted to kill pilots as a meteorologist, what could I do? Flying with iced wings, flying in conditions they will be unable to land.” This really clarified for him the important aspects of his role in keeping pilots alive. In our own lives, asking “how would I really make my life worse?” can be a valuable perspective on what really matters.

Collector – be a collector. How many collectors do you know who are unhappy? Identify things or experiences that you enjoy collecting and become a curator of your collections.

Integrate ideas between domains – most people focus on details within the idea (especially academics), few people look at the interaction between big ideas. That’s where there’s not much incentive in academics, but it’s very interesting for investing money.

Occam’s razor- go for simple… with a proviso that was initially shared by Einstein “Everything should be made as simple as possible but not more so” Einstein. Anywhere there is a “lollapalooza result” (Charlie’s term for a hugely positive and rapid outcome)… look for a confluence of causes. Academic experts find one cause. To a man with a hammer, everything looks like a nail. There are rarely just single causes for high impact outcomes.

The problems of Social science– all chemists can answer “where do the rules of chemistry not apply?” In the high temperature plasma state. how many social scientists can answer “if you want to sell more should you raise or lower the price?” Where does this rule not apply? 1 in 50 will say “luxury goods!” Many social scientists forget to think of the exceptional cases.

Update… a summary of this post in a #shorts video

More on Charlie Munger’s thinking process

Charlie Munger’s Inverse Thinking Process

Short term Happy vs Long term Fulfilled

Leaders Must Develop 2 Skills in the People around Them

If you are a leader, you need to work on developing 2 skills in the people around you:

  • Influence and
  • Decision Making.

The Importance of Influence Skills

Without the people around you learning how to influence others, they will always need your involvement to get anything done.

Read more on Influence

The Importance of Good Decision Making

Without the people around you taking good decisions, you will always need to step in to stop disaster from happening.  In the IESE MBA program we have a course called “Analysis of Business Problems”.  We teach a 6 step process for business decision making:

  1. What is the Problem?
  2. What are the Criteria?
  3. What are the Options?
  4. Compare Options to Criteria
  5. Select Option
  6. Create a Plan

Read more on Decision Making

What is the fundamental characteristic of a leader?

What makes a person into a leader?

Charisma? No.

Communication? No.

Experience? No.

They deserve a promotion because of past efforts? No.

What ideas do you have?

There is one characteristic without which you cannot be called a leader.

Followers? Yes…  but what do you need to have as a leader so that others actually follow?

The Fundamental Characteristic of a Leader

A Destination.

You know where you are going.

…and then the power to Communicate

…and then you need to develop the ability to engage with people so that the destination becomes a shared destination.  

If you can begin to paint the destination in the minds of others with stories you begin to engage not just their hands, not just their skills, but their whole self in the committed pursuit.

A Shared Vision of a Worthwhile Destination

How do you engage those around you to commit to the journey?

Don’t “motivate” people.  

Figure out something that is worth doing.  Figure out how it will make your life better, how it will make their lives better and how it will make society better. 

Help others understand that being part of it will be better for them and their life.

How do you share this destination with others?  How’s this as a script:

  • Let us move forward: This is a good use of our time…
  • Here is what is in it for me…
  • Here is what is in it for you…

Business as an Infinite game

Simon Sinek shares a powerful concept in his book “The Infinite Game”.  He has popularised the distinction between Finite games and Infinite games. 

Chess is a finite game.  Soccer is a finite game.  Tennis is a finite game.  They each have a set of agreed rules, and a clear victory condition at which time the game ends.  The objective in a finite game is to end the game as victor.

Business is not a finite game.  Life is not a finite game.  Leading human beings is not a finite game.  

Success in life is keeping it engaging to play for all those involved (including yourself!). 

A game everyone plays voluntarily is more successful than a game where some must be compelled to play.

If you are going to set up an organisation, you can compel people to perform with threats and fear.  It is much more effective to engage them to play a game that is meaningful for them, and for you… and for society as a whole.

How to lead the whole Person

Imagine these two requests from a leader:

  1. “Go home and take 4 hours to think about how you will contribute to this organisation over the next year” or
  2. “Go home and take 4 hours to think about your life and formulate a plan for your life with this business being a part of the plan”

Which is the question of the bigger leader?

Jordan Peterson reports a 10% increase in contribution where leaders ask the 2nd question to their teams. 

You want yourself and your team to see that working for you serves their higher order purpose.  

If not, this is not the job for them.  Help them find a place where they can serve their higher purpose.

If you liked this post, you will also like Finding Purpose and Defining a Vision for your Life and What is Leadership?

This post was inspired by Jordan Peterson in this Bigthink video: 

 

Breaking The Downward Spiral

In golf, one poor shot can trigger a state of mind that leads to a run of poor shots. I hit my drive into the bunker. In frustration, I try a more difficult shot than I should, and put it in another bunker. I then try and hit it extra hard to reach the green in 3… and leave it in the bunker.

Chess international master Josh Waitzkin says that the moment when a chess player really loses the game is when they think they are ahead, and after a move they realise that maybe their position is not so strong.  The next move will be too aggressive because they are anchored on the emotional sense of being ahead.

A professional learns to forget the past and play the shot or the move that they have in front of them.   An amateur compounds the error.

One poor shot does not ruin a golf round… unless you let it.  

The same occurs in life.

Do you let one mistake lead to three more?  

On a diet… one biscuit leads to 3 more? …that’s how to screw it up.

Do you tend to let one mistake lead to 3 more?

 

How to Make People Feel Good about themselves

I’ve had some tough days this year.

I am not alone.

Covid is a physical disease, but the wider impact will be on the mental health of the billions who have been hit by the economic shutdown.

Who do you feel is struggling to keep things together?

Every single one of us has incredible power to lift up the spirits of the people that are around us. It requires a choice. It is harder when you are struggling yourself. It is important. The people around you need your leadership.

How can we help those around us feel good about themselves?

In the video, I share 3 ideas.

  1. Ask Questions
  2. Let them help you
  3. Shine a light on their strengths

Who needs your attention today? Who around you would benefit from a few minutes of facetime or skype or a phone call?

Living in Fear or Living in Confidence

There are two modes of dealing with our life:

  • Living in Fear – the mode of seeking “Freedom from” and seeking validation for our past decisions
  • Living in Confidence – the mode of clarifying “Freedom to” and making choices as a responsible being.

Over the last 7 months, I have noticed that I have slipped into the living in fear mode. I knew what I didn’t want, but not what I did. I was waiting to see how the world would work out rather than committing to creating my own clear path.

I share these two modes in the video.

Stay safe.

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