Shalom Life | November 23, 2014

For LinkedIn Founder Reid Hoffman, Relationships Rule the World

Founder of PayPal, Linkedin, and a substantial shareholder of Facebook and Zynga, Hoffman is the most successful angel investor in Silicon Valley

By: David Rowan

Published: March 26th, 2012 in Business » World

For LinkedIn Founder Reid Hoffman, Relationships Rule the World

Reid Hoffman dreamed of becoming a philosopher. After Stanford, he took a Marshall scholarship so he could ponder the great ideas at Oxford. “What I most wanted to do was strengthen public intellectual culture,” the 44-year-old LinkedIn cofounder reflects over lunch during one of his regular trips back to the UK. “I’d write books and essays to help us figure out who we all should be.” Within months of starting his term, though, Hoffman concluded that spending decades answering a single philosophical question might not have sufficient impact on the world. “Academia wasn’t the right platform,” he says. “It didn’t have enough scale. So I decided I would be a software entrepreneur instead.”

On this November afternoon, Hoffman is here to cochair a four-day conference called “Silicon Valley Comes to the UK.” At the podium, the would-be philosopher proves that he still has some very big ideas to discuss. He elaborates at length on why he sees data as “Web 3.0″ and why every business needs a “big data strategy.” In the session after that, he explains why the potential of mobile computing would likely take three more years to be realized and why “biology as code” would soon spur extraordinary innovations. “The future,” he says, “is sooner and stranger than you think.”

In February Hoffman published his first book, The Start-Up of You, which does in fact try to help us figure out who we all should be. Cowritten with fellow entrepreneur Ben Casnocha, the book argues that “every individual is a small business.” It urges readers to “craft iterative, flexible plans,” to be in “permanent beta.” It cites as case studies the rise of Netflix and the fall of Detroit, the pivots of Flickr and PayPal, the arc of George Clooney’s acting career. But at its heart, The Start-Up of You is the gospel of LinkedIn, down to the familiar blue and white logo that graces the cover. “All of the attributes of a business now apply to an individual,” says Hoffman, who cofounded LinkedIn in 2003 and served as its CEO until 2007, when he stepped aside to serve as executive chair. “And if you want to get better at your job, you should be an active member of LinkedIn. Because we can connect you not just to new people but to new insights.”

LinkedIn went public last May, at a $4.3 billion valuation; within hours the share price had more than doubled from $45 to $94.25. This windfall prompted a belated recognition among tech observers that LinkedIn, of all the social networks, had been unfairly ignored in favor of its bigger, more freewheeling cousins. LinkedIn now has more than 150 million accounts and is growing, Hoffman says, by roughly two new members per second. But more important than the sheer number of members is the remarkably valuable information they entrust to the site. While Facebook and other sites vie to own the minutiae of our private lives, LinkedIn stands largely unchallenged as the trusted repository of our professional selves. That fact has already opened huge revenue streams for LinkedIn—in particular from recruiters, who now pay the company more than $260 million per year for advanced tools to find employees—and promises to pay even better dividends when the economy eventually rebounds.

Hoffman’s fortunes as an investor have been even more impressive. In 2004 he did decline Sean Parker’s offer to lead Facebook’s first funding round—”the most expensive decision of my life,” Hoffman says today. Still, after he suggested that PayPal cofounder Peter Thiel lead the $500,000 round, he made a five-figure investment of his own (though he declines to comment on his percentage of ownership). Since stepping aside as CEO of LinkedIn, Hoffman has joined Greylock Partners, where he has emerged as one of Silicon Valley’s most perceptive moneymen. He participated in the first round of investments in Zynga, Digg, Friendster, Six Apart, shopkick, and Kongregate. He put the first Silicon Valley money into Flickr and Last.fm, and he also bought into Groupon and Airbnb. All in all, Hoffman boasts an unusually consistent track record in a sector littered with failures.

With all eyes now on Facebook and its IPO riches, we ought not to forget about the more straitlaced LinkedIn and the man whose vision brought it into being. If Mark Zuckerberg represents Silicon Valley’s world-conquering hubris, Hoffman embodies its more modest, searching soul. No one expresses this perspective more articulately than Thiel, who, despite having an aggressive, hyper-libertarian worldview that’s diametrically opposed to Hoffman’s, has been close friends with him since their undergraduate days at Stanford. “One of the conversations I remember our having back then was about the meaning of life,” Thiel says. “Reid’s answer was that it’s the people you spend your life with—the connections you make. It’s no surprise that Reid thought through social networking earlier and more methodically than anyone else did.”

Israel Antiquities Authority Launches New Game For Children Israel Antiquities Authority Launches New Game For Children TrendingYou Can Now Buy an 'Indiana Jones' Melting Nazi Candle You Can Now Buy an 'Indiana Jones' Melting Nazi Candle TrendingHey UCLA Students! Boycotting Israel Means No More Google, Apple, Microsoft, or Intel Hey UCLA Students! Boycotting Israel Means No More Google, Apple, Microsoft, or Intel Trending
 

Netanyahu's Government Approves Controversial Jewish Nation-State Bill

November 23, 2014 | By Moran Azulay
Netanyahu's Government Approves Controversial Jewish Nation-State Bill

Bibi's administration approved the legislation that would officially deem Israel as the home of the Jewish people on Sunday

Read More

The Ten Best Kosher Restaurants In Toronto

November 21, 2014 | By Caitlin Marceau
The Ten Best Kosher Restaurants In Toronto

We look at the best kosher eateries the city of Toronto has to offer

Read More

Israelis Grapple with Synagogue Safety in Aftermath of Jerusalem Attack

November 21, 2014 | By Deborah Fineblum Schabb, JNS.org
Israelis Grapple with Synagogue Safety in Aftermath of Jerusalem Attack

Rabbis agree that we have to be more "vigilant" at shul

Read More

Israel Antiquities Authority Launches New Game For Children

November 21, 2014 | By Caitlin Marceau
Israel Antiquities Authority Launches New Game For Children

With "Dig Quest: Israel," kids will learn about history and archaeology without having to get off their iPads

Read More

Life Expectancy On The Rise In Israel

November 21, 2014 | By Caitlin Marceau
Life Expectancy On The Rise In Israel

Expectancy for both men and women is up compared to 2012

Read More

Lena Dunham, Gwyneth Paltrow, and Adam Sandler Read "Mean Tweets" on Jimmy Kimmel

November 21, 2014 | By Sara Torvik
Lena Dunham, Gwyneth Paltrow, and Adam Sandler Read "Mean Tweets" on Jimmy Kimmel

Dunham doesn't seem amused by one Twitter comment reading: "Unpopular opinion: lena dunham's boobs are dog noses."

Read More

Sarah Silverman Admits to Crossing the Line With Bill Cosby Rape Joke

November 21, 2014 | By Sara Torvik
Sarah Silverman Admits to Crossing the Line With Bill Cosby Rape Joke

The comedian offended many of her Twitter followers on Wednesday.

Read More

Amy Schumer Pays Tribute to Joan Rivers at Glamour's Women Of The Year Awards [VIDEO]

November 21, 2014 | By Sara Torvik
Amy Schumer Pays Tribute to Joan Rivers at Glamour's Women Of The Year Awards [VIDEO]

Schumer gave a hilarious and heartwarming tribute to the late comedian.

Read More

More Headlines