Reid Hoffman (LinkedIn)

Masters of Scale - Reid's podcast

2016.10.14 - YouTube - Reid Hoffman at Startup School SV 2016
- 0:19 - Q: Tell me something you believe to be true that very few people agree with you on.
  - A:
- 12:06 - Q: If I want to raise money from Greylock, what can I do to be successful?
  - A: 1) You're much stronger off with a referral saying "Here's why you should pay attention to this." "I probably get somewhere between 30 and 50 unsolicited decks every single day." "How many of those have you funded?" "None that I'm aware of."
    - 13:00 - Q: Who counts as a good intro?
      - A: Someone I know, trust, and respect.
  - 13:20 - Anyway, secondly: VCs are looking for something that's seriously unique. It doesn't have to be the only thing in its field, although if you're in a crowded field you'll have the VC wondering why you're going to be the one that's successful. "What's the thing that has either suddenly opened up or the thing that is going to make your thing very big, when you realize there are thousands of start-ups now."
- 14:40 - Q: What did the 'Convoy' founder do to convince you that that was the company to fund, out of all of its competitors?
  - A: First, it came through a referral, where the investor had done a whole bunch of work and chosen this. Second, in the very first conversation I got a very good sense that the founders understood the game in front of them. I asked them a bunch of questions and it was clear they had thought about each of them; that doesn't mean they had perfect answers, but they had thought about it and the way they had developed their product was in-line with that thinking.
  - If someone comes into me as a seed and says "I'm guaranteed to be successful", that says to me that either they're crazy or they're lying to me, and both of those are bad signs. I much prefer it if someone comes to me and says "Here's the situation, here are the risks, here's how I'm monitoring the risks, here are my contingency plans, etc."
  - 16:17 - I think it's very important to have an ability to have structured conversations early. It doesn't necessarily have to be a deck. Some of the conversations are just "Here's the list of beliefs that convince me that this is a good idea."
- 16:50 - Q: Do you recommend a deck?
  - A: Generally I think it's good to at least have a lightweight one (10-15 slides).
- 17:15 - Q: What do you recommend being in those slides?
  - A: Open with "here are the hypotheses that back this investment thesis", and that should be roughly between three and seven bullets.
  - Your slides are then explaining why you'll win at that.
  - - Ex: "There is actually a space for a professional network separate from a social one; it'll solve this thing in people's lives; it can be distributed virally; etc."
  - Then there's a view / sketch of what the mature business looks like. That doesn't mean revenue projections; it's like "we're charging people like this, this is why the product will be good, this is why we'll have good margins, this is why we'll have a defensible position, this is why we'll be at a big size, and this is why we'll be growing."
  - Airbnb was one of the pitches where, two minutes in, you're like, "OK, I understand." And you also understood the risks: "People aren't used to this, etc."
  - To claim zero competition is usually not credible. Usually it's "this is why the competition has a very different angle of attack than I do and this is why my angle of attack would work."
  - And in early-stage consumer companies, you'll want to touch on why you think distribution is going to work (not sure I understand that).
- 19:40 - Q: Can you talk about terms?
  - A: So, there's a difference between angels and VCs. Angels touch a wide variety of deals and don't commit as deeply to any particular deal. VCs usually commit to companies for the long haul, and are typically prevented from doing more than one company in the space
  - Terms typically have one or two leads, someone who is really going to role up their sleeves and work with you. Most VCs target 20% or greater ownership, and that's so they can make their fund multiples work.
- 21:20 - Q: For a $500 mill fund, what return are they targeting?
  - A: $2.5 bill gross is a "reasonable" fund; "oh, that was a credible fund".
- 21:55 - Q: What does 'scale up' mean and how do you know when it's time to do it?
  - A: We've done a class called 'blitzscaling' that people should check out.
  - 'The key thing is, first-mover means first-to-scale.' There are a bunch of advantages that come from that. And it isn't necessarily the first person out of the gate.
  - More often than not in Silicon Valley, you face such intense competition that you need to make a decision to scale sooner than you'd otherwise choose to.
  - Uber is an example of this.
  - It is important to start to think about how you'd scale the various parts of your business, because the really big businesses are the ones that can scale.
- 25:34 - Q: Are entrepreneurs nowadays taking too long to scale? Or they trying to scale too soon?
  - A: It's both.
- 26:25 - Q: Have you ever seen a way to correct your situation if you need to make a course correction?
  - A: Nothing comes to mind, but this is a good example of why fundraising is a partnership.
- 27:30 - Q: One of the problems I've seen YC companies deal with when they scale quickly is how to hire good people and maintain the culture. What's your advice?
  - Culture-wise: Codifying it is useful. For example, Netflix. Because then you have everyone holding each other accountable. For example, one of Netflix's is, "We're not a family; we're a sports team." So if you're evaluating someone and you wouldn't fight to keep them, you give them a severance package and you move on.
  - Other examples: Do we really care about design? At Netflix, one cultural thing is that they optimize for the individual watcher and not just for the person paying the bill.
  - Hiring-wise: Obviously using your network is super-important. That can sometimes get to all-of-the-same. The next thing is reference-checking; even before I decide to reach out, I'll do a light reference check. Most people are very good at seeming reasonable over a few interactions. What you really want to know what they're like over weeks or years.
  - So I'll ask someone: "Sam, rate him 1 to 10." The weak answers are 7, 7.5, those are the people who want to say bad things but don't feel comfortable doing it. What you're looking for is a combination of 8s and 9s. If I get a 10, I reply and say 'Oh really, Sam is one of the best people you've ever worked with?' And so when you have a blend of them, that gives you a sense of whether you should dig into this person.
  - So: Networks, referencing, pre-referencing, and then definitely doing deep referencing.
  - Another thing: actually spend a bunch of time with the person. Depending on the importance of the person, don't just think two or three interviews and you're done. When I hired Jeff (the CEO), I probably spent about 40 hours with Jeff in discussion before I got to, "Ok, this is going to work.", and that's in addition to all the referencing. It's super-important. In executives, it can easily be 20 hours. Do our values match up, are the things we want to accomplish sufficiently aligned, etc.
2009.09.15 - Sarah Lacy interviews LinkedIn founder Reid Hoffman backstage at TechCrunch50
2011.11.02 - YouTube - Reid Hoffman and Brian Chesky
2012.06.01 - YouTube - Stanford eCorner - Reid Hoffman: Live Life in Permanent Beta [Entire Talk]
2012.08.11 - YouTube - PandoMonthly: Fireside Chat With Reid Hoffman
2014.02.24 - YouTube - LinkedIn Speaker Series: Reid Hoffman and Matt Mullenweg
2013.07.15 - YouTube - Reid Hoffman & Ben Casnocha: The Startup of You
2014.11.04 - YouTube - Lecture 13 - How to be a Great Founder (Reid Hoffman)
2014.11.14 - YouTube - Reid Hoffman on best strategies, valuable lessons, the PayPal mafia & creating early social networks
2015.06.02 - YouTube - PAYPAL MAFIA: Reid Hoffman & Peter Thiel's Master Class at CEIBS
2015.10.26 - YouTube - Blitzscaling 09: Reid Hoffman and Allen Blue on Why and How They Scaled LinkedIn
2016.03.01 - YouTube - Reid Hoffman Interview - Founder & Chairman of LinkedIn
2016.03.29 - YouTube - Reid Hoffman discusses the company of the future
2016.06.13 - YouTube - Distinguished Speaker Seminar - Reid Hoffman
2016.06.26 - YouTube - Greyscale: Reid Hoffman and John Lilly on Blitzscaling
2016.08.13 - YouTube - Netflix CEO Reed Hastings Talks About Scaling A Business (ft Reid Hoffman)
2016.09.13 - YouTube - Opportunities Everywhere: Reid Hoffman and Josh Elman of Greylock Partners
2016.10.27 - YouTube - Reid Hoffman in conversation with Nicholas Dirks
2016.11.07 - YouTube - Building and Scaling Marketplaces with Reid Hoffman
2016.11.10 - YouTube - Reid Hoffman Fireside with Josh Elman