Reid Hoffman (@reidhoffman) is a co-founder of LinkedIn, investor at Greylock Partners, host of the podcast Masters of Scale, and co-author of Masters of Scale: Surprising Truths from the World’s Most Successful Entrepreneurs.
What We Discuss with Reid Hoffman:
- What Reid means when he calls himself a “six-person-or-less extrovert.”
- Why fostering diversity is important for any company that wants to be relevant tomorrow.
- How to identify the five kinds of “no” and what they can each teach you.
- Why unanimous consent in a pitch meeting is a concerning sign.
- The best and worst ways to pitch ideas to venture capitalists.
- And much more…
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If you want to get a front-row seat to understanding the mind of a venture capitalist, Reid Hoffman is your guy. He’s a co-founder of LinkedIn, investor at Greylock Partners, and co-author of several books, including Blitzscaling: The Lightning-Fast Path to Building Massively Valuable Companies, The Start-Up of You: Adapt to the Future, Invest in Yourself, and Transform Your Career, and his latest, Masters of Scale: Surprising Truths from the World’s Most Successful Entrepreneurs. Appropriately enough, he’s also the host of the Masters of Scale podcast, which explores how the world’s most successful entrepreneurs take their companies from startup level to becoming household names.
On this episode, Reid rejoins us to discuss the five kinds of “no” and what they can teach you, why diversity is crucial to the health of any business that wants to be here for years to come, why everyone agreeing with your idea at the pitch meeting isn’t necessarily a good thing, the best and worst ways to pitch ideas to venture capitalists, and much more. Even if you’re not an entrepreneur and have no intention of ever pitching to a room full of venture capitalists, there’s a lot to take away from this one. Listen, learn, and enjoy!
Please Scroll Down for Featured Resources and Transcript!
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Miss our conversation with comedian, actor, and director Bob Saget? Catch up with episode 372: Bob Saget | How Comedy Continually Changes His Life here.
Dr. Caroline Leaf is a cognitive neuroscientist, bestselling author, and mental health expert. Whether you’re struggling in your personal life or simply want to learn how to understand and use your mind to live your best life, her Cleaning up the Mental Mess podcast will provide you with practical tips and tools to help you take back control over your mental, emotional, and physical health. Listen here or wherever you listen to fine podcasts!
Thanks, Reid Hoffman!
If you enjoyed this session with Reid Hoffman, let him know by clicking on the link below and sending him a quick shout out at Twitter:
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Resources from This Episode:
- Masters of Scale: Surprising Truths from the World’s Most Successful Entrepreneurs by Reid Hoffman, June Cohen, and Deron Triff | Amazon
- Reid Hoffman | Mastering Your Scale for the Unexpected Part One | Jordan Harbinger
- Reid Hoffman | Mastering Your Scale for the Unexpected Part Two | Jordan Harbinger
- The Masters of Scale Podcast
- Reid Hoffman | LinkedIn
- Reid Hoffman | Twitter
- From Idea to Iconic | Greylock
- Blitzscaling: The Lightning-Fast Path to Building Massively Valuable Companies by Reid Hoffman and Chris Yeh | Amazon
- Quiet: The Power of Introverts in a World That Can’t Stop Talking by Susan Cain | Amazon
- Venture Capitalist (VC) | Investopedia
- UX Design & Predictive Anthropology by Coburn Hawk | Medium
- Why We Need Diversity | Psychology Today
- Gwyneth Paltrow: Entrepreneurship as a Second Act | Masters of Scale with Reid Hoffman
- Jessica Alba: Make Your Customer the Star | Masters of Scale with Reid Hoffman
- The Five Kinds of “No” — And What They Can Teach You by Reid Hoffman | LinkedIn
- Brian Chesky | Lessons Airbnb Learned to Survive the Pandemic | Jordan Harbinger
- David Sze | Greylock
- Stay with Locals and Meet Travelers | Couchsurfing
- Workouts Streamed Live & On-Demand | Peloton
- Elle Woods Video Essay | Legally Blonde
- The Start-Up of You: Adapt to the Future, Invest in Yourself, and Transform Your Career by Reid Hoffman and Ben Casnocha | Amazon
- Why Networking Is the Best Insurance Policy | Jordan Harbinger
- The Big Mistake People Make About Networking | Jordan Harbinger
- David Burkus | How to Become a Networking Superconnector | Jordan Harbinger
- Six-Minute Networking
- My Story | Kara Goldin
- Adam Grant | The Power of Knowing What You Don’t Know | Jordan Harbinger
- We’ve Got Your Eyes Covered | Warby Parker
- Shoes, Sneakers, Boots, & Clothing | Zappos
- The Inspiring Stories of 10 Famous Co-Founders by HubSpot | Medium
- Daniel Ek: Build Trust Fast | Masters of Scale with Reid Hoffman
- China: Sunset of Localized Version of LinkedIn and Launch of New Injobs App Later This Year | Official LinkedIn Blog
- How China is Crushing the Uyghurs | The Economist
- The Prince by Niccolò Machiavelli | Amazon
- Ryan Holiday | Stillness Is the Key | Jordan Harbinger
611: Reid Hoffman | Surprising Entrepreneurial Truths
[00:00:00] Jordan Harbinger: Coming up next on The Jordan Harbinger Show.
[00:00:02] Reid Hoffman: Presuming that everything's going to be the same year after year after year, you just have to look around to know that that's a mistake. And networks are not just, you know, resilience making, but they're also amplifying. You can learn things. Like there's this great other opportunity that I would just know about if I had some allies out there. Now, a lot of the reason why people frequently say don't network is because it sounds like you're trying to use people. Like, "Hi, my name is Reid. Can I have your business card?" And you're like, no, no, no. Treat it as a partnership, treat it as a dance, treat it as something where we help each other. We're human beings. We're doing this journey together. It doesn't have that icky feel that people who described themselves as networkers frequently have.
[00:00:43] Jordan Harbinger: Welcome to the show. I'm Jordan Harbinger. On The Jordan Harbinger Show, we decode the stories, secrets, and skills of the world's most fascinating people. We have in-depth conversations with people at the top of their game, astronauts and entrepreneurs, spies and psychologists, even the occasional war correspondent, arms dealer, or tech mogul. Each episode turns our guests' wisdom into practical advice that you can use to build a deeper understanding of how the world works and become a better critical thinker.
[00:01:08] If you're new to the show, or you want to tell your friends about the show — and of course I love it when you do that — our episode starter packs are the best way to go about it. These are collections of top episodes organized by topic. We even have them in Spotify playlist. It'll help new listeners get a taste of everything we do here on the show. Like I said, you can find them in Spotify or just go to jordanharbinger.com/start to get started or to help somebody else get started.
[00:01:32] Today, Reid Hoffman, founder of LinkedIn, and kind of a big deal of venture capitalists here in Silicon Valley. He's back on the show. We'll discuss how to find and vet ideas that are actually good and learn some mental models to parse good and useful feedback from unhelpful feedback on those same ideas. Also the different types of noes when it comes to business ideas, raising funds and other types of rejection and what those noes mean. Lots here, even if you're not an entrepreneur or a business owner, Reid is always just such a clear and practical thinker. And I think you'll enjoy this conversation as much as I did.
[00:02:04] By the way, all of these guests that you hear on the show are booked because my network game is quite strong. And I'm teaching you how to build your network for free, because that is probably the most useful life skill I have in my whole repertoire, by the way. I want to teach it to everybody who will listen. Our free course is at jordanharbinger.com/course. It's for business, it's for personal reasons. The course is really about improving your network and connection skills and inspiring others to develop a personal and professional relationship with you. It'll make you a better networker, a better connector, and a better thinker. That's at jordanharbinger.com/course. And most of the guests you hear on the show subscribe and contribute to that same course. So come join us, you'll be in smart company where you belong.
[00:02:43] Now, here's Reid Hoffman.
[00:02:47] I've heard you call yourself a six-person-or-less extrovert. What is that all about?
[00:02:51] Reid Hoffman: So introvert/extrovert is what gives you energy, right? So an introvert is you get some energy about being by yourself, recharging, reading a book. Extrovert is you get on from other people. I get energy from small group discussions. One-on-one like we're doing now or up to six people.. Once it becomes a cocktail party, I lose energy. It's just like the battery's draining at a super fast rate. And so the six-person-or-less extrovert is where you can have one serious threaded conversation, and around six people is when that starts getting hard.
[00:03:21] Jordan Harbinger: You grow up kind of that way, or is this sort of, "Hey, I realize that nothing good happens when there's a big group of people that I'm just supposed to perform, and I'm sick of that crap."
[00:03:29] Reid Hoffman: I think I mostly grew up that way, but it's partially because I so much like really discovering interesting things from other people that, that focus conversation, as opposed to, you know, "What were you doing yesterday? Where did you go out to dinner last night or something?"
[00:03:44] Jordan Harbinger: Yeah. There is something that happens when you have to — and this is going to sound super snobby. And I don't mean it that way — but like conversation almost has to be almost at the lowest common denominator. So if you're in a room full of brilliant people, you can have a really big, brilliant discussion up until people can't track what's going on at the other end of the 12-person table. If there's a couple of duds in the room, you know, now it's just, you can't really, unless they're nice and quiet and they know when to listen, which I never do. I'm the dud in the room in case anyone's wondering. Then it just ruins the conversation for everyone. That's been my job for 14 years and counting.
[00:04:18] Reid Hoffman: Which is the reason why, of course, professional conversation is your job. So that's the little A2.
[00:04:23] Jordan Harbinger: Yeah, I had to learn it all manually. I read the book and I really enjoyed it. I love it. It's kind of like masters of scale, except it's, well, a lot more focused on specific entrepreneurs or concepts that these people bring up. And some of these concepts I want to take out and then we'll just dissect them. Many investors miss opportunities that are right in front of them, you mentioned. And while some venture capitalists — can we define venture capitalist actually for people that are like, "Wait, I've heard of this, but I don't know what it is"?
[00:04:50] Reid Hoffman: Venture capitalist is someone who invests generally speaking of the very early stages of a company, frequently tech, but not only, where there's enough risk, the company may not work at all.
[00:04:58] Jordan Harbinger: Okay. So it's like the moonshot guys and gals for that matter.
[00:05:02] Reid Hoffman: Yes.
[00:05:03] Jordan Harbinger: So while some venture capitalists might learn and investigate, many people cannot or will not understand a product or need that stands from an unfamiliar life experience. And this is very insightful because Silicon Valley has a lot of diversity, but it really does show in what gets invested in where you go, "Okay. This was like a group of guys who are probably from the same background as me, same ethnicity as me," or very similar, certainly, same socioeconomic status for most of their lives until they struck whatever kind of riches they did with their startups. And then it's like a lot of these products kind of look the same, feel the same, but the opportunity lies elsewhere or at least some of the opportunity lies elsewhere.
[00:05:42] Reid Hoffman: Yeah. I think one of the things that's important is entrepreneurs call it predictive anthropologists, which is how could the world be? Where is the world moving to? Where is the market moving to? Where are consumers willing to? And then try to get there first because the current products and services are around the current world. And you know, sometimes it's easy, cheaper, faster, et cetera, et cetera, but frequently it's a, "No, no, we're re-imagining the world."
[00:06:04] And to do that, actually having a breadth of perspective is extremely helpful. Now, one of the mistakes frequently people say is, "Oh, well, women entrepreneurs and women products should be invested by women VCs and men, blah, blah, blah." And actually, in fact, the case is if you want a team, you want a diversity effort, and so it's actually, in fact, not siloed that way. There is ways where you have a more natural inclination. If you grew up playing video games that you know more about video games, but also that if you bring the team together, you get a much stronger thing. And that's part of the reason why the diversity of perspectives and building teams and investing.
[00:06:36] Jordan Harbinger: Why do people think that female founders need to be invested in by female VCs? That almost seems like the opposite of diversity in some ways. I mean, yes, we get diverse perspectives, but diversity means, well, diverse, right? So what's going on there?
[00:06:49] Reid Hoffman: It's not coherent as that, oh, this is a product for women. So a woman should be making a decision to invest. Like you hear that from, not all, but a bunch of foolish VCs.
[00:06:59] Jordan Harbinger: Yeah.
[00:07:00] Reid Hoffman: And actually in fact, no, partnering on these things is the thing that really works in all directions. That's the reason why I bring that up as a point, because for example, when I interviewed Gwyneth Paltrow and Jessica Alba on Masters of Scale, they were like, "Yeah, the male VCs we were talking to were saying, 'Oh, there's no market, or we don't get it. And you should talk to someone.'" Well, actually in fact the whole point about being a good investor is do your homework. Figure out these massive markets and engage in them in partnership.
[00:07:28] Jordan Harbinger: It sort of baffles me as — look, I only invest in index funds primarily, but I'm on some boards and things like that or advisor positions, I don't need to know what skin cream is going to feel like necessarily if Gwyneth Paltrow or Jessica Alba like, "This is good."
[00:07:43] Reid Hoffman: Yes.
[00:07:43] Jordan Harbinger: You know, like they've got an audience and their audience, their following is going to tell them, "Hey, you know what? This smells bad," and they'll iterate on it. These are smart people.
[00:07:51] Reid Hoffman: Yes.
[00:07:52] Jordan Harbinger: That have a really good fan base. It seems so obvious. But then again, maybe when you're like here's a hundred million dollars, you think about it more and maybe you talk yourself out of some of these investments.
[00:08:01] Reid Hoffman: Yeah. And foolishly, because there's this broad range. You know, it isn't all video games or enterprise software, very valuable areas, but there's this whole wide range. And I think it's an important thing that we're doing both with the podcast and obviously with the book.
[00:08:17] Jordan Harbinger: You mentioned that there are different types of noes that in entrepreneurs, founders, people who are looking for investment or even advice come to, the substantial no versus the skeptical no versus the lazy no. Can we go through these? Because I'd never heard this and I thought, "Wow, I've gotten all of these, and a lot of them, a lot of different ones."
[00:08:34] Reid Hoffman: The book, obviously, part of the reason we opened the chapter that way is because the key thing is to learn from those. Now the broad principle is, can you learn from this no or not? So it's like a lazy no, I'm not really paying attention. I'm just kind of going down, no, then disengage as fast as possible. Go elsewhere. You're not going to learn anything. You're not going to get anywhere. But like, for example, when you get a squirmy no with like, "Well, no," but then they're actually engaging. You can possibly get a discussion and learn some about it. Part of investing is to be contrarian, but right. Part of that, like, for example, when we look at it as a partnership at Greylock, we actually prefer investments where half the partnership goes, "Ooh, that's a great idea." And half the partnerships says, "Ooh, that's a bad idea," because that's where you get the amazing breakthrough ideas. And the squirmy no could also be a reflection of that. The, "Well, God, I'm not sure. I don't see it," because if it's the case and you do have a good idea that you can execute there, the likelihood is you'll have much less competition.
[00:09:28] And so that's what you're essentially doing and engaging in the noes to learn and to iterate. And part of it also goes with the advice entrepreneurs have, don't say, "Hey, what do you think of my product? I got this great new thing. It's a hat you wear to parties," and you go, "What do you think?" People say, "Oh, you know—" You need reassurance. I'm going to tell you it's great. And actually in fact what you want to say, "What's wrong with it? What can I improve? What would get break?" Because then you may learn something just as you may learn something from the no that helps you be better.
[00:09:57] Jordan Harbinger: Right. Yeah. I mean, this is probably not something that comes up a lot when you're talking with professional investors. But if you're just starting with your idea and you say, "It's a video service, but it's only for people that speak Hindi and live in the United States." Your friends might say, "I don't really understand this." Or they might say, "Yeah, that's great. Who doesn't love Hindi movies, except I don't speak Hindi." But then if you're talking to an investor, they might say, "Well, how many Hindi people live in this particular area? Okay, a ton of good markets, or your movies are only in Tamil. Maybe you should focus on a different region or something along these lines." This makes sense. I think a lot of us, even when we are asking for advice, we're not really asking for advice. We're asking for somebody to pat us on the back and tell us it's going to be okay.
[00:10:38] Reid Hoffman: Yeah. Which is completely useless to you as an entrepreneur.
[00:10:41] Jordan Harbinger: Right.
[00:10:41] Reid Hoffman: That's why seek noes, learn from the noes, seek challenges, learn from the challenges.
[00:10:47] Jordan Harbinger: So lazy no, disregard, move on. Skeptical no or — is skeptical and squirmy no the same thing?
[00:10:52] Reid Hoffman: They are versions of the same thing. It's the question of how you engage. Like I prefer the squirmy no, because it's kind of like I'm maybe yes, maybe no. And I'm trying to figure it out. Whereas the skeptical no depends on how much the person's engaging, right? Because the skeptical no is kind of also can be on the lazy no, you know, which is, "Ah, no," paying attention. You know, you got this idea for a new search engine, "Search engines don't make any money. I'm not interested." Because that — by the way, it was back when Google was founded. People without search engines, the business model for online was advertising and keeping people on your site. And search engines send people off your site. It was not a very good business. Engaging with it is far more important.
[00:11:29] Jordan Harbinger: Yeah, it makes sense. It's funny to think because I remember using Google in, I don't know, 1999 or whenever it started to become sort of more popular for dorks like me who had Internet in 1999. And I thought this is the most useful thing in the world that I can think of right now. And I didn't understand how they made money, but maybe they also didn't understand how they were going to make money. And then someone was like, "What if we put ads on the site," and...everyone there has billions of dollars and doesn't know — like everyone who was there in '99 is like flying around in their own jets. So that worked.
[00:12:01] Reid Hoffman: But by the way, this is the classic entrepreneur thing. They thought they were going to sell search to enterprises that actually didn't work. Their backup plan was to double click and put double click. And then the double click banner market fell out.
[00:12:12] Jordan Harbinger: Oh yeah.
[00:12:12] Reid Hoffman: So they looked around and they saw an overture and they said, "Oh, well, this ad word thing, maybe that would work." And then of course a rocket ship going out of the galaxy would be an understatement. That's how they discovered it.
[00:12:23] Jordan Harbinger: Gosh, I forgot about the banner ad era, where that was a thing.
[00:12:26] Reid Hoffman: Yes.
[00:12:27] Jordan Harbinger: That was a hot minute where you couldn't get away from those. And they were like the most effective thing ever. And now I've literally — maybe I see one every day and I ignore it and I don't even know it's there or they're just not anywhere anymore.
[00:12:38] Reid Hoffman: I think they're gone now. They're not very effective.
[00:12:40] Jordan Harbinger: And the substantial no is what? No, because here are so many problems with your idea that it's impossible or infeasible.
[00:12:46] Reid Hoffman: Yep. And that's a good thing to listen very closely to. Like, usually from a viewpoint of expertise, it could be expertise on your business. It could be a go-to market. It could be a product. And you want to think through that and think, "What do I know that this expert doesn't know? And maybe I need to change. Maybe I need to pivot. Maybe I need to pivot a lot," depending. And it isn't that you absolutely need to pivot, but you should have a very active theory about how you're integrating the style and why you have a belief in the world that's different than the expert engagement that you're getting.
[00:13:15] Jordan Harbinger: You mentioned unanimous consent. I don't think he phrased it this way, but you said when somebody brings an idea to Greylock and everyone in the room was like, "That's amazing." Then you take a pause and go, "This isn't good." Why? There should be obvious flaws in every idea. Is that what you mean?
[00:13:29] Reid Hoffman: We invest sometimes only if it's unanimous, always nervous about it, because we're worried either A, we're missing what the challenges are, or B, everyone thinks this is obvious and so they're just going to be like a thousand companies funded in the same way. The mix is good because we tend to think that there will be fewer competitors. And that if it actually does establish as a new category, say like Airbnb, then you actually have something huge, right? We pay a lot of attention when we have some people going, "Oh, this is incredible. This is really important." And other people go on, "This is not such a good idea."
[00:14:00] Jordan Harbinger: Like who's going to rent out their basement or their futon and eat cereal, and then somebody else goes, "No, you don't understand." Now, we have as many hotel rooms as we have houses on planet earth. That's what this means. Yeah.
[00:14:12] Reid Hoffman: Yeah. For example, on this specific one, the reason I'm at Greylock is David Sze, who's my most valued board member at LinkedIn brought me there. And when we were talking at the partnership table about Airbnb, David looked at me, turned to me, "Look, every VC needs to have a deal they can fail on. Airbnb can be yours, right? So that's okay." Now to David's credit, he then later, like six months, data hadn't changed. He came back to me, "You were totally right. I was wrong. What did you see that I didn't see?" And I was like, "Well, you were right about all the risks. You were right about the regulatory risks. You're right about the adoption risks, all that. But if we got through those risks, it's going to be huge."
[00:14:45] Jordan Harbinger: Yeah.
[00:14:45] Reid Hoffman: And as it turned out.
[00:14:46] Jordan Harbinger: Yeah. The Airbnb is something that I saw when I was younger and I thought I'm 100 percent going to use this for everything, because I was doing a lot of couch surfing from couchsurfing.org, that original website. And I was like, "Eh, it's kind of unreliable because there's no money exchanged," but I will gladly go to Minsk Belarus and be like, "Yeah, here's 50 bucks." Now, I don't have to stay at some crazy like roach infested sort of Cami hotel. And I've got somebody who's going to maybe show me around or at least be mildly interested that I'm there and I'll feel safer. So that for me as a twenty-something was like, this is the greatest invention that anybody has ever had.
[00:15:20] And I still prefer to stay in hotels now that I'm 40 and have kids, but not because I don't like staying in someone's house, but mostly because I don't want my kids screaming and crying in somebody else's house. It's a completely different game now.
[00:15:32] Reid Hoffman: Yep.
[00:15:33] Jordan Harbinger: The biggest ideas are often contrarian. You mentioned Peloton in the book. Peloton, to me, it seems like, hey, we've had exercise bikes since 1968 or something like that. Why is this a contrarian idea? This was probably why a lot of people missed out on it as well, right?
[00:15:47] Reid Hoffman: Well, yeah, it was contrarian because people thought, "Ah, look, we've had exercise bikes. Okay. So you have an exercise bike with some content or something else. And why is that significant?" And the actual answer is various ways of connecting the world of bits and atoms becomes very useful. And that part of what Peloton did was create a loop that made it more likely to use, more likely to engage. You know having group competitions causes a lot more engagement or usage, change it to a subscription model, because you're subscribing to the online services. It should model better than sell a piece of good service. So all of those things, but you know, you had to go through a thousand nos before he got through the one yes that allowed him to begin to develop business.
[00:16:29] Jordan Harbinger: It's just amazing to see. You know, I like working out in my garage. I'm not a Peloton guy. My wife couldn't wait to get hers. It was back ordered and then pandemic hit. It made it a million times worse. She gets this thing and I'm like, "It's an exercise bike with an iPad strapped to it. What's the big deal?" And then I start using it, and I go, "I'm going to beat that guy tomorrow." Oh, this is the thing. Now, I'm gamified. My competitive side comes out. The trainers are funny. Now, it all makes sense. It's not just a VR headset, jumping up and down in my living room. Like this is a real trainer, real spin class.
[00:17:00] Reid Hoffman: Exactly right.
[00:17:01] Jordan Harbinger: Except it doesn't smell. Well, it does, but it's just me. It's not everybody else.
[00:17:04] Reid Hoffman: It doesn't smell of other people.
[00:17:06] Jordan Harbinger: Right. Yeah. I'm fine. I can live with that part.
[00:17:09] So these ideas that you find — we mentioned this a couple of years ago when I was in your office, when we were allowed to do those things. And I said, "What are some good ways to bring ideas that you have that you think are good to venture capitalists?" And we probably came through one or two and I'd love to hear more of those. And then I'm going to ask you what the worst ways are. Because I remember some of them being kind of scary and I assume that those are still happening.
[00:17:32] Reid Hoffman: Yes.
[00:17:32] Jordan Harbinger: Let's talk about the good ways to bring an idea to Reid Hoffman.
[00:17:35] Reid Hoffman: So the great ways are, get an introduction from a trusted connection who doesn't have to necessarily say your idea is the best thing since chocolate, but it's to say, "Hey, this person's really good. They're committed. It's interesting, you know, et cetera." That's among the best. You know, others can be clearly playing in a kind of an area that I'm involved in. It could be artificial intelligence, cryptocurrency with a very clearly kind of like what's the hook of the idea in short communication. Most of the cold call stuff I get is, "Would you like to invest in the best new business that's going to grow at a thousand percent per year? Reply to me." And I was like, it kind of sounds a lot like a Nigerian funding email. It doesn't really give any information and isn't very confidence inspiring.
[00:18:18] Now, the terrible ones, people cold email all the time, usually with long and they're describing what they think are the great attributes of their business, or they'll say, "You know, I've heard that you like investing in dog food. So here's my dog food business." And I'm like, "I don't invest in dog food businesses. I'm a technology investor." And again, that's again uncompelling. Now, probably the worst that it's been is like, this is before I moved away to a house that's more anonymous and discrete—
[00:18:46] Jordan Harbinger: A secure location.
[00:18:47] Reid Hoffman: A secure location, you know, witness protection program.
[00:18:49] Jordan Harbinger: Yeah.
[00:18:49] Reid Hoffman: Some would use to come by and like leave business plans on the window of my car, right? Or knock on my neighbor's doors and say, "What's it like to pitch?" And you're like, "Well, certainly not creep ville. That doesn't really help." And I get, you know, the entrepreneurs tell themselves that a hustle is very important and a hustle is very important. But it's got to be a hustle as partnership, not hustle as target.
[00:19:12] Jordan Harbinger: I will never leave you alone. Yeah.
[00:19:14] Reid Hoffman: Yes.
[00:19:15] Jordan Harbinger: Yeah.
[00:19:15] Reid Hoffman: Those are in the category of the, please no.
[00:19:17] Jordan Harbinger: Yeah.
[00:19:20] This episode is sponsored in part by My First Million podcast. My First Million is a top 25 business podcast on apple and every week Sam Parr and Shaan Puri, brainstorm business ideas you can start tomorrow. Not only do they bring ideas, but they break down how to pull off these businesses. And these guys are fun. They're successful. They're not just talking about news articles or whatever. They can be side hustles that make you a few grands a month, big billion dollar ideas or anything in between. There's a recent episode about companies with only one employee that are making millions and what we can learn from them. I talked about a previous episode before about vending machines and how shockingly lucrative these things can be. They also bring on founders, celebrities, billionaires. Get them to open up about business ideas they've never shared before. And the way they talk and explain things, it's like you're sitting at a poker table with a couple of guys who really get it. I really liked these guys. Check out My First Million podcast if you want to be inspired by great business stories, hear potential ways to make money, and get energized to start writing the story of your first million. Search My First Million on Apple Podcasts, Spotify, or wherever you're listening now.
[00:20:20] This episode is also sponsored by Masterworks. You know, I spent a lot of time with really fascinating people and topics, but sometimes the most interesting things are right under our noses. Like how one of the oldest asset classes in history isn't on the radar of most investors. I'm talking about blue-chip artwork, actual, tangible art, like you see in a gallery or a museum. The ultra wealthy have used artwork to store and grow wealth for generations. And now, it seems like only Bezos and Beyonce can afford Picasso for obvious reasons, but that's no longer the case with Masterworks. They're a start-up democratizing the art market, giving everyday investors a piece of the art pie or a palette. I guess if we're going to keep the metaphor consistent. Their solution, make blue chip art investible because contemporary artwork has low correlation to public equities. The prices actually outpaced the S&P 500 from 1995 to 2021. And now anyone can add paintings by artists like Monet, Basquiat, and Banksy, their portfolio without paying millions. So you could own like one of those dots in Van Gogh's Starry Night, maybe even one of the dots, that's a star, not bad eh.
[00:21:19] Jen Harbinger: Masterworks has already signed up almost 300,000 investors and you can join them by going to masterworks.art/jordan. Again, that's masterworks.A-R-T/jordan. See important disclaimers at masterworks.io/disclaimer.
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[00:21:59] Now, back to Reid Hoffman.
[00:22:01] That's interesting that people do that, but I kind of understand it because people get really passionate about ideas. A lot of technology-focused people maybe had their heads in books and don't realize how weird that is. And then there's a lot of like people who watched movies a lot growing up and thought — I mean, when I went to law school, I remember talking to the admissions officers and I said, "So how many videotapes are you getting now that Legally Blonde came out." Reese Witherspoon had submitted like a VHS tape and a scented resume or something like that. And she made this crazy video and they're like, "We get so many tapes that we wrote on the website, 'Do not send a videotape. We will not watch it.'" And people think they're being unique, but really all they're doing is littering in your driveway.
[00:22:42] Reid Hoffman: Yes, exactly. Actually it reminded me of the essay application, when I went to Stanford for my undergraduate, I had, "What's one word that describes you?" and I had thought about putting terse, because I thought it was funny. And then I went, "Oh, wait a minute. A lot of other people are going to do this." And my freshman advisor ended up being the assistant dean of admissions. So I said, "How many people put terse?" He's like, "1200." Think a little bit about the environment you're in. It's not unique.
[00:23:05] Jordan Harbinger: I mean, verbose would have worked too, but that's probably like a thousand wrote that instead.
[00:23:09] Reid Hoffman: Yes, exactly.
[00:23:11] Jordan Harbinger: I know you mentioned sort of coming through a warm connection or somebody who knows you already or knows somebody at Greylock that can be really difficult. And I always recommend people network and dig the well before they get thirsty, so to speak. And you recommend people, build their network early, which makes sense because you founded LinkedIn. But I hear people tell me all the time, things like, "Look, I don't really need to worry about my network at all, because I work at a school," or, "I don't plan on leaving my job. I like it here." I know that that's wrong. But what do you think about that? I want to hear your take.
[00:23:42] Reid Hoffman: So the world changes and you change. This has all things, my first book, The Start-Up of You, which is presuming that everything's going to be the same year after year after year, you just have to look around and know that that's a mistake. And networks are not just, you know, resilience making, but they're also amplifying. You can learn things. Like what if, for example, there was this, like I'm working at the school but this is this great other opportunity that I would just know about if I had some allies out there. Now, a lot of the reason why people frequently say don't network is because it sounds like you're trying to use people. Like, "Hi, my name is Reid. Can I have your business card?" And you're like, no, no, no. Treat it as a partnership, treat it as a dance, treat it as something where we help each other. We're human beings. We're doing this journey together. And if you do it that way, then it's great and you're helping each other. And it doesn't have that icky feel that people who described themselves as networkers frequently have.
[00:24:32] Jordan Harbinger: Yeah. There's a couple of people that have described themselves as like, speaking of people, leaving things on your hood or your windshield. This guy ambushed me with a video camera and a microphone, and like an assistant film crew type person. And he goes, "Hey, my name is—" I almost said his name, "My name is so-and-so and I'm the world's best networker. And I just wanted to connect with you and dah, dah, dah." And I'm like, I stopped and I go, "This is not connecting with me. You ambushed me outside of a room that I was giving a talk in. I don't know who you are. You did yell your name and my face. What is this guy doing with the video camera? Are you going to post this online? This is so weird. You're not going to remember this later if you're doing this to all 40 speakers. This whole thing is just bizarre as hell." It was like the most awkward moment because he'd probably never heard of that before. And he apologized and sort of left. And I was like, "Wait, wait, you don't have to leave. Like we can talk like people, but put the camera down, put the microphone down, sit on the couch, you know, introduce yourself. I'll do the same thing." But you're right. There's a nice in-between there that people neglect because it's unfortunate, good people don't want to network, because they think, "I don't want to be a gross sort of salesy smarmy "business card in your face" person. So they are willfully ignorant of the secret game that's being played around them. But in the extreme one percent or in-your-face annoying, they sort of ruin it for everybody else who could use this skill to great advantage.
[00:25:46] Reid Hoffman: A key tip is when you walk up, offer something. Don't ask for something, offer something. Like, "Hey, I know that you've been thinking about the new world of media and actually in fact, I think AI is going to do some interesting things in it. I think there's going to be some, like invent your own adventure stories and other kinds of things," and you go, "Oh, let's talk about that," right? That's interesting. Like you're offering something versus saying, you know, "Jordan, you've got this awesome podcast. Can I be on it?" You're like, "Oh, okay."
[00:26:09] Jordan Harbinger: Everyday.
[00:26:10] Reid Hoffman: Talk to so-and-so.
[00:26:11] Jordan Harbinger: Yeah, every day of my — "Hey, are you looking for guests?" "Well, yes, but since you phrased it like that, almost certainly not from you. Yeah."
[00:26:19] Reid Hoffman: Yes.
[00:26:20] Jordan Harbinger: Not to be a snob, but when you phrase it like that, for sure the rest of the conversation is going to be terrible.
[00:26:24] Reid Hoffman: Yes.
[00:26:24] Jordan Harbinger: I also hear people, especially in Silicon Valley or in tech, generally say things like, "Look, man, my work is so good. It speaks for itself." Or, "My idea is so good. It speaks for itself. What do you think about that?
[00:26:39] Reid Hoffman: The short answer is everything is a work of becoming. And the reason that you talk about it, you articulate the strategy. You say why it is, it might work what the game plan looks like, and you don't just pretend everyone's going to go, "Oh my god. That's the most amazing thing ever," is because it requires that work. And we were referred to Google earlier. Like new search was not considered to be particularly smart, even though the people doing it were super smart. The idea could always use a little bit of help in its explication and the vision that you see and why you see it could possibly work. And so try to help in the communication that way.
[00:27:16] Jordan Harbinger: I think a lot of people say things like, "My work or my ideas speaks for itself," especially when they're talking about their work, because they're afraid to market themselves. And they think, "You know, that sounds cringe and terrible and I don't want to do that. So what I'm going to do is keep my head down and work" and then complain when somebody that I hired four years ago is now my boss or on the same level as me and says, "They don't appreciate me," right? And then get all angry about it instead.
[00:27:40] Reid Hoffman: Doing great work and having great ideas, super important, baseline, but then also helping those ideas work and helping people see what you're doing is also useful. You can do it in a very human way. It doesn't have to be the, I am Reid. I co-founded LinkedIn." It could be the, "Hey, I'm trying to make these Internet things work really well. And I learned some interesting things with LinkedIn and how to help people establish their identity," and that works.
[00:28:05] Jordan Harbinger: You mentioned that you invest in cryptocurrency. I think probably a lot of people have heard of things like Coinbase, for example. What do you think are some of the new frontiers in cryptocurrency that are not being addressed right now? I'm not going to ask you to speak about stuff you're working on. I know how that goes, but what would you love to see walk in your door and solve or an idea that you think, "Well, how has nobody attacked this yet?"
[00:28:26] Reid Hoffman: Well, there's a lot going on, which is great. The sorts of inventions that are happening, there's a lot of developers thinking about how do we reorganize the financial side of the Internet, just like the Internet as an open platform. That's revolutionized communications and collaboration and information discovery and information publishing. How do we add the financial side of that? And then crypto systems are doing that, including for the unbanked, including global, including assets and all the rest of this.
[00:28:52] And so I think that the areas that I continue to, and we've made some investments at Greylock in these, you know, is all right, so what are the combination of the distributed platform that has the resilience in the software developers, but also fits within the needs of society. You know, for example, no, one's really solved the payment side of it yet.
[00:29:10] Jordan Harbinger: Tell me about it.
[00:29:11] Reid Hoffman: Yeah.
[00:29:11] Jordan Harbinger: I try to freaking pay someone in Bitcoin. And I was like, so I paid $60 to move it in $100 to move it out. He got it two hours later after I had to email support to get it like on frozen. This is not money at all.
[00:29:24] Reid Hoffman: Exactly. So I think there's that. There's also, you know, interesting areas as it develops into even portfolio management. So like for example, on the asset side, people use it for balancing a portfolio, but I think there's a bunch of things in that that are still as yet interesting to create.
[00:29:39] Jordan Harbinger: Yeah, I love the crypto space and cryptocurrency and people pitch me ideas for the show all the time. We don't need another Bitcoin or crypto podcast, people. That's why.
[00:29:48] Back to networking. You mentioned, I'm stealing this by the way, you say, "Networking is like flossing. You know you need to do it, but you hate it. So you never really bother." That's perfect.
[00:29:57] Reid Hoffman: Yeah. And well, there's the classic thing where people, ah, and you really should do it. And then the question is just like flossing, look, put on an audio book, put on some interesting music, do something like that, and then it makes the flossing better. Well, similar in networking, yes, it's difficult for me to come out of my shell. Maybe I feel like I'm an introvert. Maybe I feel like I have nothing to say. We'll think a little bit about fun things that you might say to people when you're at the conference and so forth. Questions you might ask that would engage a good dialogue and then try those and learn.
[00:30:25] Jordan Harbinger: I like this. There's one more type of no, actually that I forgot to ask about, which is the affirmative no. And I love the example you give in the book with Kara Goldin and Hint water. Can you take us through this?
[00:30:35] Reid Hoffman: Kara Goldin is a great example of affirmative no, which is — remember you want to be contrarian and right, and so sometimes when people tell you that you're wrong, it's bad, it's for the reason that it's validating what it is you think there is an open market. So for example, on the Hint water, it's like everyone only wants sweet beverages and so, a terrible idea to invest in. Well, actually, in fact, people, for example, want low-calorie beverages, hence sugar-free Coke—
[00:30:58] Jordan Harbinger: Sure.
[00:30:58] Reid Hoffman: Diet Coke, and what's more, do you think the people only want like sweetened beverages? Like what about the variation in palate? I am one of many people who have a whole bunch of Hint water in my refrigerator because I would like healthy water, but with some flavor and not without sugar and not with whatever your artificial sweetener is. And so that affirmative no where someone who says, "There's absolutely no market here." And you go, "No, I actually in fact, I understand this better than you. And that actually means there's a significant market. That's very open because people like you don't see it.
[00:31:29] Jordan Harbinger: How do you know if we're getting an affirmative no? Or if it's substantial, where it's like, "This is actually a bad idea," or, "Oh, you just think it's a bad idea, but you don't get it." Because it's really tempting as the person with the idea to think that you're a genius and everyone else doesn't get.
[00:31:42] Reid Hoffman: It's a great question. The short answer is you have to be listening carefully and have your active theory. So you go, "Okay. It's affirmative no, because actually in fact, the way that you said that no leads me to think there's no market here. Yet, I have this other data analysis that we think it is a good market." Whereas sometimes someone might say, "Well, you know, like for example, I'm not sure where to sure. You'd know how to do your distribution and how to get your water and other people's hands," and that I may be, "Well, that might be right. That might be a challenge. That may be something I need to fix." These things are always acts of judgement.
[00:32:13] Jordan Harbinger: What was an investment where you gave a no, actually? Whether it was the lazy one or not, probably it wasn't because of course, you know, you would never do that, but it turned out to be a big winner. And then you weren't riding the train. Do you have anything where you're like, that's my white whale?
[00:32:25] Reid Hoffman: Oh, I have a whole list. We could spend the whole podcast with mistake number one, mistake number two, mistake number three. If you're not making both type one and type two errors in investing, you're not investing well. And perhaps the canonical one was Pinterest because Ben and Paul, great guys, came to me for the seed, came to me with series A, you know, it's working well. And I just didn't understand that Pinterest, that the pinboards was a new medium. I'd gotten other new mediums. I just hadn't gotten that medium. And I was like, "Well, it seems like a feature, not a medium. And you know, you guys are great, but good luck. Keep in touch. I'll help, but good luck." And I was like, yep, that was one of the end mistakes, by yours truly.
[00:33:02] Jordan Harbinger: Pinterest is something that I also don't totally understand, but I think the market is largely women too. So of course, I just didn't understand. I'm not that visual. I don't even use Instagram that much. I don't want to collect things at all digitally or otherwise, so it's not for me. So I probably would've missed out on that as well. I remember Adam Grant who I'm sure, you know, telling me about Warby Parker and he's like, "Glasses?" These are two students of his, they founded this. That he's like, "I don't think anybody would buy glasses by mail." And it's like, "But Zappos." And he was like, "Eeh," and then it's, you know...he's got to sell books instead of—
[00:33:35] Reid Hoffman: Exactly.
[00:33:35] Jordan Harbinger: Instead of retiring.
[00:33:37] A lot of VCs will only invest in companies with a co-founder, I heard you say. Why is that?
[00:33:42] Reid Hoffman: I think very few VCs will only do a co-founder, but I like a number of, I hope other smart investors prefer co-founders, and the reason is when you have co-founding teams of two or three people, you have a diversity of skills and ability to trade off work. You know, you handle this fire, I'll handle this fire. You have an ability to kind of cross sink and not going to drink too much of your own Kool-Aid and talk to each other about what needs to happen. And you have a kind of the resilience that comes through, you know, startups have many valley of the shadow moments where you're, "Why did I ever think this is a good idea? Why didn't we ever think this was a good idea?" You can help each other through that. So, generally speaking, co-founding teams are super strong and people frequently forget because they think, okay, well, Bill Gates. Well, Bill Gates actually had Paul Allen. That was super helpful. You know, as Larry and Sergey, a lot of these companies' actions by co-founders are key to both resilience and the arc of takeoff.
[00:34:39] Jordan Harbinger: This makes sense. I definitely think it's probably easier to have somebody else, even if they're just sharing your pain and you go, "Okay, we're out of money. Can you find some, I'm going to make sure that the damn thing works." Like that would be nice from time to time.
[00:34:52] Reid Hoffman: Yes.
[00:34:53] Jordan Harbinger: Especially in the early stages.
[00:34:54] Reid Hoffman: Yes.
[00:34:54] Jordan Harbinger: What do you look for in a co-founder? What should people be looking for in a co-founder? Because I think a lot of folks just look for somebody who shares their passion for an idea, or maybe they have technical skills, but it doesn't always make the best recipe.
[00:35:08] Reid Hoffman: Yeah. So again, acts of judgment, generally speaking, I tend to think your co-founders should be, I wouldn't start this business unless I was starting it with them, not per se contingent because there's things they bring to our journey that are going to be completely fundamental. And obviously they should think the same thing. And so sometimes it's, you know, one person gets the sales, the other person is a technical person, one person is great with finance and other person is great with marketing. You know, it could be a whole set of things, although everyone should be somewhat more generalists and somewhat learners and learning how to manage and hire. And all the rest, I think is part of what's key in the stuff. And then with it, you want to have people who will learn with you, who will go the distance with you, who will stand up under the pressure that is startups, because frequently you get to the, "Why did I ever think this was a good idea," right? Kind of moments.
[00:36:03] Jordan Harbinger: Yeah.
[00:36:03] Reid Hoffman: And then kind of work your way through it, pivot or persist or reinvent. And so those are the kinds of folks you're looking for as co-founders.
[00:36:12] Jordan Harbinger: In the book, you talk about entrepreneurs and building trust and how you need to build trust fast, which actually seems kind of like an oxymoron, if you're not really versed on this. Trust, you say, is consistency over time. Tell me about that.
[00:36:27] Reid Hoffman: So the first one, the thing is, you know, what's the mechanics of how people actually build trust. And it's because they realize that they can rely on somebody or something. That's part of how brand gets created because they go, "Okay, well, this was a really good experience. And so I trust the person's really invested in it and we'll continue to do that." And that's the same thing as true in human relationships, which is, oh, we've been interacting for a while. You've been reliable. Consistency over time. The question is the world doesn't slow down and wait for you. And frequently you have circumstances where you need to build trust much more quickly. You need to build trust with each other and the team, you need to build trust with new team members, you need to build trust with customers, you need to build trust with investors, all of this, decided.
[00:37:09] So the question about how to build trust faster, and also frankly, do it in a way that's genuine, not manipulative is one of the things that you go, "Okay. So what are the ways that you can possibly do that?" Now in personal interactions, a frequent one is, you know, be vulnerable, say something that is kind of like revealing something of yourself to the person. They go, "Oh, okay. So this person's being vulnerable with me." By the way, there's a whole set of kind of similar techniques in business.
[00:37:37] So for example, one of the things I recommend entrepreneurs pitching investors is to be clear about which risks you think there are in the business. Because if you say, "Hey, look, I think there are these risks in the business. This is how we're going to overcome them. This is what we're going to do." Then you're building trust because it's like, "Oh, I'm not trying to snow you. I'm not trying to hide that there's no risk in the business. I'm showing you this risk and I'm also inviting you to show you that I have given some thought to how to navigate them. And I want to work with you on it." That's an example of building trust.
[00:38:08] Jordan Harbinger: This is The Jordan Harbinger Show with our guests Reid Hoffman. We'll be right back.
[00:38:13] This episode is sponsored in part by QuickVue. After returning from the Amazon Jungle, for the peace of mind and my pregnant wife and family, I made sure to get tested for COVID-19. Did you know that with QuickVue at-home OTC COVID-19 tests, you can get rapid results in just 10 minutes in the privacy of your own home. You can pick one up over the counter at your local retailer or online. And testing is really easy. Instructions are clear and simple. Essentially, you swab each nostril, put the swab in a tube of solution, put the test strip in the solution, and then wait and check for the results. Whether you're feeling under the weather, seeing a loved one, returning from a trip, or you just want to check your COVID-19 status, it's always a good idea to test with QuickVue at-home OTC COVID-19 tests. Take 10 minutes. Take charge. Visit email@example.com for FDA emergency use authorization. Only pick up a QuickVue at home OTC COVID-19 tests at your local retailer.
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[00:40:03] Jen Harbinger: Shop now at adoreme.com.
[00:40:05] Jordan Harbinger: This episode is sponsored in part by Audible. I am a heavy consumer of audiobooks. I mean like two-plus per week. I highly recommend Audible. The podcast that you're listening to right now, how I prepared for this episode, I used Audible. I read Reid Hoffman's Masters of Scale audiobook using Audible, of course, so I can walk. I can get my steps in. I can be working out in the garage while absorbing that sweet, sweet knowledge through my ears. Masters of Scale as you can hear from the show, it's an inspiring book showing up behind-the-scenes look at how iconic companies like Netflix, Spotify, Etsy, Airbnb, all those folks you hear about every single day, dealt with surprise challenges, bad luck, unexpected competition, before they were iconic, of course, and possibly not even going to survive. I read entire books on airplanes at freaking gates waiting for flights that are delayed. The app's got a great UI. It saves me a frigging ton of time. And new members can always try Audible for 30 days on us.
[00:40:58] Jen Harbinger: Visit audible.com/J-H-S or text J-H-S to 500500.
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[00:41:19] Now for the rest of my conversation with Reid Hoffman.
[00:41:23] Right, so is that sort of, maybe not radical transparency, but transparency and saying, "Hey, well, the problem we're going to have is that we're definitely going to get sued by the record companies at some point, because we're going to be dipping into their pockets and the RIAA is going to come after us." Because if you don't say that, then everyone goes, "This dude knows he's going to get sued into oblivion, right? Or not. Because if he doesn't see that we got to run the other way, because he's just not thinking clearly at all." What else? What about the idea of putting the company's interests ahead of your own? Speaking of getting sued by the RIAA, the Spotify example, Daniel acted a really good job of sort of saying, "Hey, you're probably going to be mad that I want to license all your music and play it for free on people's devices, but hear me out here," and he kind of, he massaged it.
[00:42:06] Reid Hoffman: Yes. And by the way, he figured out ways to start it. Spotify is one of the businesses I think could have only really started in Europe because what it is, is that okay, "What's the amount of money that you would expect if I were buying it?" "Okay, that's the minimum guarantee. I'm going to pay you that. So now allow me to experiment." They said, "Okay." Of course, you couldn't do that for the whole world because there's not enough money to do it for the whole world, "But I could do it for the Scandinavian market." And then once the Scandinavian market is like, "Oh, okay. Actually in fact, this does work." "All right, we'll do the larger markets now." And by the way, having proven the data, you can go and negotiate with other players and make it happen. And you've worked out your business model. And that was a way of saying, "Look, I take the risk off your shoulders to mine. And that's the way that you can engage in the risk of innovating here." And that kind of shared risk is also a way to potentially navigate it.
[00:42:55] Jordan Harbinger: That is interesting. I think also Sweden has weird IP laws where basically you can't have any sort of ownership over something. And he was like, "Well, this will buy us a little bit of time while they try and aim torpedoes at us and whatnot."
[00:43:07] One of your catchphrases in the book in any case is, "Never let a crisis go to waste, crisis creating a sense of urgency in some ways." That sounds kind of horrible though because you know, running a business, kind of the last thing you want is a crisis. I'm guessing you're not running headlong into these things or advising other people to do it. But what should we do when that inevitably arises?
[00:43:28] Reid Hoffman: Obviously seeking crisis or seeking, you know, kind of a fender bender, a train wreck, et cetera, is bad idea or mostly a bad idea, sometimes—
[00:43:36] Jordan Harbinger: Mostly.
[00:43:36] Reid Hoffman: —there are occasions. Now the thing is though you end up in the crisis. And so then the question is: how should you approach the question? How should you navigate it? Obviously, if you said, "Oh my god, it's all over. I'm just going to sit here and cry." Well, that's not going to work very well. And you have a team that's responsible for possibly customers, company, et cetera. And so the general thing is to say, "All right, we're in the crisis. We didn't select it. But how can we leverage it? How can we use it? How can we use it to discover a new, better, a possible alternative?" You know, like when we talked to Tyra Banks, it was like, "Okay, I was going to create this whole new mall." "Oh, that's not going to work during the pandemic. Okay, I'm going to pull a small team together. I'm going to innovate on ice cream right now for something really different." And so you want to take that crisis and use it as a leverage point to gain energy, to do something bold you haven't done before, gather the team, get everyone rowing in the same direction, you know, playing good teamwork together. And that's the kind of thing, so now let's say, "Okay, how do we use it?" That shift of adversity into forward momentum is one of the things that distinguishes great entrepreneurs from not so-great entrepreneurs.
[00:44:45] Jordan Harbinger: Ah, interesting. I hadn't really thought of that before. I heard that you never hire or advise others to never hire someone when you're tired. What's going on there? I feel like most of the time we're hiring when we're tired, honestly.
[00:44:58] Reid Hoffman: Well, this is a part of a general thing of all through life, especially through entrepreneurship, especially when you're jumping off a cliff and assembling an airplane on the way down, which is the kind of entrepreneurship metaphor, you're going to make a lot of decisions under time pressure, under information poverty, and a bunch of other things, making decisions well and fast, and then of course, sometimes you have to re-correct them and everything else because you're making them fast is really important. And so part of that, some of the key decisions are who you're partnering with, who you're hiring. And so if you're making that decision while you're tired, you're probably making some pretty critical errors. And you might say, "Wow, this person doesn't seem very good," and that's because you're tired. Or you might be saying, "Oh, okay, that's fine. Good enough. I'm not going to really try to ask the extra question or go the extra mile or get those three references because I'm just tired and so on." And you're like, no, no, your company is the people who work there and this is the most critical thing to do. And so approach it with a clear head, strong energy, a willingness to go the extra mile, and good decision.
[00:45:59] Jordan Harbinger: Yeah. The first few hires, especially right in your organization. You're not just hiring your coworkers. You're hiring. I think you called it like culture co-creators where, if there's one a-hole in a room of a hundred people, fine, okay. But if there's one a-hole in a room of five people, you have a-hole culture now, right?
[00:46:17] Reid Hoffman: Exactly.
[00:46:17] Jordan Harbinger: That's the way it is. What's that metaphor? It's like how much motor oil is acceptable in a jar of honey.
[00:46:23] Reid Hoffman: Yes, exactly.
[00:46:23] Jordan Harbinger: Something like that, yeah.
[00:46:24] Reid Hoffman: Yes.
[00:46:25] Jordan Harbinger: Was it Zuckerberg who said, never hire somebody that you would not work for in an alternate universe? That seems like a pretty good idea. Because I've definitely hired people I would never work for and they're not here anymore.
[00:46:37] Reid Hoffman: Exactly. No, it's a very good test because they will also themselves be hiring people. They will be defining the culture. And so if you wouldn't work for them, why should you have them in your organization?
[00:46:49] Jordan Harbinger: Yeah, it's brilliant because it is easy. A founder or a middle manager, wherever you are to go, "Well, this they're not really my problem because they're going to be nice to me. I'm their boss."
[00:46:59] Reid Hoffman: Yes.
[00:46:59] Jordan Harbinger: And then it's like, yes, but everyone underneath is like, this place is more toxic now because they hired this person. And then you start to see your lower rank start to empty out. And of course, it's because you hired the person who's nice to you and crappy to everybody else.
[00:47:12] Reid Hoffman: Yeah, exactly.
[00:47:13] Jordan Harbinger: I'm wondering if you are able to/willing to speak a little bit about China and LinkedIn because it's banned there now. Is that accurate?
[00:47:21] Reid Hoffman: It's not banned.
[00:47:22] Jordan Harbinger: Censored?
[00:47:24] Reid Hoffman: Well, there is a censorship of content and social media sites. LinkedIn's mission is to empower every individual in the world for their best economic opportunity. And so that's the mission that we're trying to provide. And we think that the world is better when that's the case and, you know, creates better broad-based societies when the bulk of people get great economic opportunity. And so, you know, obviously, China is a huge part of the population of the world and is important for delivering the mission. What isn't as critical is issues around political speech trust. I mean, obviously as an American political speech is close to my heart, but you know, LinkedIn is being a global service.
[00:48:02] And so they were trying to figure out how to navigate the tensions. And ultimately part of the decision was, look, let's just go back to our very close knitting about jobs and recruiting people and talent, and let's stay out of the general discourse arena. So that we're not running afoul of the rules in China or pressure from groups outside of China and are staying close to our mission, which is help people find the best outcome opportunities.
[00:48:32] Jordan Harbinger: Yeah, of course. I mean, one of the things that is horrible about general social media companies and no one specifically, but is the erosion of civic trust and disinformation and toxic threads. And honestly, I see plenty of that on every social network. So I won't single anyone out, but I mean, even logging into LinkedIn, sometimes you see someone be like, "These are unAmerican values and look at this schmo and this person's terrible. And anyone who disagrees with me is terrible." And I was like, I remember when LinkedIn didn't have this and it was nicer. And I didn't have to look at somebody that I respected and think, "Well, you're officially an idiot now. You should not have posted that publicly. What are you doing?" Even if I agree with them, sometimes I'm like, "What are you doing?" Right? You're running a company. This is not the place. How do you not know that? But LinkedIn kind of got, it's getting a little bit of the stick instead of the carrot in China. And I know that it is nice to go back to the original mission, but there is also some activists and things like that that have just sort of vanished from LinkedIn. And I'm wondering if that makes sense to you as somebody who founded sort of an open Internet.
[00:49:34] Reid Hoffman: Well, we try to do, as we say, look for the activist, your professional career, your ability to get a job, your ability to hire people, your ability to create partnerships and alliances. We want to enable that, right? So the weirdness, as you might be saying, "As an activist, we're trying to help you recruit the people into your activist organization and do stuff." And that's great. And LinkedIn is a perfectly good use for that. Well, we're not trying to be the platform for the activism itself. Just as, for example, another kind of service that I put a bunch of money into and helped us change that org, which is petitioning to try to petition institutions to be more human. LinkedIn is not a petitioning site. So you go, "Well, I'm an activist and I want to write about, you know, kind of situation X in depth. And I want to be able to do my activism on the LinkedIn platform." And I'm like, "Well, look, if the country says, it's the right thing to do, we're perfectly fine with it." Although we're trying to be within business and making a business better, making a career better, making your skills better, but if it's not go do the activism elsewhere, you can do your recruiting for your organization, just fine here.
[00:50:39] Jordan Harbinger: So do you think that LinkedIn should limit political discussion in the United States or other countries as well China?
[00:50:46] Reid Hoffman: Generally, we don't in countries that say that political discussion is fair and we try to do as little limiting as possible because we have that kind of individual enablement genetics. We do when it's kind of the well-organized government and says, "Okay," like, you know, you're France and you say, "Well, you can't put things about Nazis in your newsfeed or your profile because that's forbidden here." We'd say, okay, that's fine with us because we're not trying to argue for the Nazis. We generally think that Nazis are proven to be historically bad people and people shouldn't be doing that right now. We don't like hate speech. We don't like racist speech, you know, all of that kind of stuff we're adamantly against because that effectively disables lots of important groups' ability to realize their full value for themselves and for society.
[00:51:32] So broadly, we're there. Now that being said, the question is, when you say that — and by the way, there's a bunch of people on LinkedIn who say no political speech here, because we want it to be only business. My usual reply to that is to say generally speaking, that's the case, because we want to have a broad tolerance. On the other hand, when the speech is about rule of law or the speeches about the appropriate treatment of women or minorities within work, I actually think that is what's good and healthy for business. And so therefore, that is LinkedIn is a very good space to be talking about that because it's kind of like what raises all of our abilities to be great economic contributors to our communities and to the society as a whole. And that, you know, we need to be enabling. So that's the kind of set of considerations that go into it. And sometimes that leads you to like in China issues around censorship.
[00:52:22] Jordan Harbinger: Yeah. It seems very tricky because of course, somebody might say, "Well, what about the Uyghur minority group in China? Why are they getting censored?" And it's like, "Well, are we going to exist here at all and help people with business and get jobs and things like that? Or we're going to not exist at all in this market period, because we're going to get the plug pulled if we start allowing that stuff." I don't envy the position that people find themselves in having to control a social network like LinkedIn in China.
[00:52:47] Reid Hoffman: Yeah. We don't allow censorship that says that's outside of, you know, kind of that says disabling people's ability to take control of their economic destinies. So if you came to us and said, minority X is not allowed to get jobs, and so can't be on LinkedIn, we wouldn't cooperate with that. Because with that economic opportunity is what's really fundamental to us. And, you know, look, we like the rest of the opportunities too. But if you say, "Well, look, people can use this in order to get really good jobs, but they can't use it to complain about the oppression of Uyghurs in China." It's like, okay, right? We think they should be. But our fundamental commitment to the Uyghurs is best possible economic opportunities as we can provide through our platform.
[00:53:28] Jordan Harbinger: Yeah. Yeah. It's very tricky. So last time I asked you, this was about two or three years ago, you said I would like to, in theory, rewrite Machiavelli's The Prince for modern day Silicon Valley. So one, how's that coming along?
[00:53:43] Reid Hoffman: Well, I remember that conversation. I do think that it's interesting to take some of these classics and rewrite them for modern times, modern markets, modern technology. Machiavelli, The Prince was one of the ones that kind of occurred to me because you've got these builders of these new companies. And how do you build these new social systems? As part of what the Machiavelli was doing was giving advice to rulers within competitive circumstances, competitive city states within the rest of competitive companies within Silicon Valley. And the short answer is I still need to get to that project.
[00:54:13] Jordan Harbinger: Yeah.
[00:54:14] Reid Hoffman: There's other things I've been doing, like writing the Masters of Scale book or doing the Masters of Scale podcast. But I think that project would still be interesting.
[00:54:20] Jordan Harbinger: What about having someone like Ryan Holiday do some of the heavy lifting on something like that. I bet it would sell like crazy.
[00:54:26] Reid Hoffman: He might be able to do a much better job than I would.
[00:54:29] Jordan Harbinger: Yeah, we can make it happen. Just say the word.
[00:54:30] Reid Hoffman: Yes.
[00:54:31] Jordan Harbinger: I know you're big on connection and friendship. I'm happy to make that connection for you if you don't already have it, which I'm sure you do.
[00:54:35] Reid Hoffman: I have met Ryan.
[00:54:36] Jordan Harbinger: Reid, thank you very much. I'm very happy to be connected with you. Thank you for coming back on the show. This is always fun.
[00:54:42] Reid Hoffman: Jordan, always fun. You're a great conversationalist.
[00:54:46] Jordan Harbinger: Thank you very much. Sometimes I get a little bit in my head, like everybody else, especially in a format like this. So I appreciate the kind words. Are you doing like back to back of this stuff and then, you know, run to the bathroom, come back, sit down, click on a link again kind of thing?
[00:54:59] Reid Hoffman: No, it fits in with other meetings. I was only doing the ones I really liked. I loved our other conversations. I was like, yes, I'll do this one.
[00:55:06] Jordan Harbinger: Great. Yeah, I'll take it. I'll take it.
[00:55:10] I've got some thoughts on this episode before we get into that. Bob Saget shares how humor can be used as a coping mechanism for pain and the necessity of reinvention for career longevity and fulfillment. Here's a preview.
[00:55:22] When did you know that you were funny? Like, were you a class clown the whole time? Or was it—?
[00:55:27] Bob Saget: Last year.
[00:55:27] Jordan Harbinger: Last year, yeah.
[00:55:29] Bob Saget: Fame is bullsh*t. To let it go to your head, the moment you're cocky is the moment you've lost me as an audience. And a lot of people are attracted to it. You know, if I didn't know that secret as a teenager, I would have had a lot of girlfriends or just been quite the stud because the key was not to care. I'm calm in my skin now. I don't know if it's evident, Jordan, this thing, if I'm so calm, why the hell was I clicking this chopstick? I'm demonstrating—
[00:55:55] Jordan Harbinger: Yeah, man.
[00:55:55] Bob Saget: This is what you're hearing, but you were hearing in a much slower clicking.
[00:56:02] Jordan Harbinger: It's like a hypnotic pattern for the listener.
[00:56:05] Bob Saget: So I put your listeners to bed. For me to walk around scared or thinking about people that are trying to hold me back, nobody's holding me back. If anybody's holding you back, it's you. You know, not you, not you, Jordan.
[00:56:16] Jordan Harbinger: No.
[00:56:16] Bob Saget: If anyone's holding me back, it's you, Jordan.
[00:56:19] Jordan Harbinger: This podcast is going — you're going to see a massive onslaught of listeners for your show.
[00:56:24] Bob Saget: Bob Saget's Here for You is going to get eight more people.
[00:56:27] Jordan Harbinger: Provided we don't blow it in that last quarter here, in the last 10 minutes here or whatever.
[00:56:31] Bob Saget: No. That's impossible. Well, we got more than that. We're in an hour and 12 and two of those minutes have to be cut.
[00:56:37] Jordan Harbinger: You're standing there with John Stamos, Dave Coulier and you think no one can see you. And I heard that there was a life-size doll.
[00:56:44] Bob Saget: Yeah. Let's forget this one. This was painful. Ah, you know too much. I'm going to have to kill you.
[00:56:49] Jordan Harbinger: I know. I read your book.
[00:56:50] Bob Saget: When I get near you, I have to kill you.
[00:56:51] Jordan Harbinger: Yeah, we can hang out when the plague lifts.
[00:56:53] Bob Saget: Oh, I can't wait. Maybe I'm on here, but I don't like Coronavirus. We don't have wet markets in Downtown LA, right?
[00:57:00] Jordan Harbinger: No, we don't. At least not with like bats and pangolins and other stuff that you haven't heard of. No.
[00:57:06] Bob Saget: What the hell happened?
[00:57:12] Jordan Harbinger: For more with Bob Saget on how the big breaks can come from one of life's worst discipline and Bob's proven remedy for dealing with the haters — and we all have haters — check out episode 372 on The Jordan Harbinger Show with Bob Saget.
[00:57:26] Something we didn't get to that I did read in the book is that a lot of these businesses, even things like Airbnb, they interacted early on with their super fans to build referral currency and also it helps you get inside the mind of your users. I do this with you guys as well. I mean, anybody who DMs me, hits me up on LinkedIn, a lot of the emails, I reply to pretty much every single email or DM that I get. It does help inform me where the show needs to go, what people are interested in hearing. And frankly, I like to get a good feel for who's listening and you have not disappointed. You are not all totally crazy weirdos that I would never want to meet in person. In fact, quite the opposite. I've been very delighted with who I've met as far as listeners of the show. So thank you all for being awesome.
[00:58:08] Some of us, by the way, come up with the best ideas that we have in the shower or around certain people, maybe at a certain museum. I like to walk everywhere, my shower game is not that great. I do listen to podcasts in the shower. Yes, I bring my phone in with me and yes, I know that's weird. Sara Blakely of Spanx, she calls it the invisible commute. She used to just drive around the city because she would get such good ideas while driving. And I know a lot of you have that same sort of feeling. Brian Chesky of Airbnb, who you've heard on the show, he would go to the Walt Disney Museum and just sort of roam around and come up with great ideas and solve problems.
[00:58:40] I want to know what works for you. I'm so curious, tweet it at me, or shoot it to me on Instagram. A lot of you — look, if it's driving or walking around, great. But if you have something weird where you come up with ideas and you're like, "Yeah, I have to be jumping rope." I'm so curious about this because everybody kind of has their little quirky thingamajig and I might make a list and sort of share that, of some of the weird ones. Definitely tweet it at me at @JordanHarbinger, DM me, or email me. Y'all know how to reach me. I really appreciate that.
[00:59:05] And thank you again for listening to the show and thanks to Reid Hoffman for taking part. Links to the book and everything Reid Hoffman will be at jordanharbinger.com. Please use our website links if you buy the book, it does help support the show, all those book links always do. Transcripts in the show notes. There's a video of the interview on our YouTube channel at jordanharbinger.com/youtube. I'm at @JordanHarbinger on both Twitter and Instagram, or just hit me on LinkedIn.
[00:59:30] I'm teaching you how to connect with great people or at least, you know, passively good people that you should have in your life. I can't guarantee everybody's going to be amazing, but you can manage relationships using the same software, systems, and tiny habits that I do. That's our Six-Minute Networking course where I'm teaching you how to dig the well before you get thirsty. It's free. It takes a few minutes a day, no whining. Most of the guests on the show, they subscribe to the course. So come join us, you'll be in smart company where you belong.
[00:59:55] This show is created in association with PodcastOne. My team is Jen Harbinger, Jase Sanderson, Robert Fogarty, Millie Ocampo, Ian Baird, Josh Ballard, and Gabriel Mizrahi. Remember, we rise by lifting others. The fee for the show is that you share it with friends when you find something useful or interesting. If you know some startup founders or somebody who could use the advice we talked about here with Reid today, please share this episode with them. I hope you find something great in every episode of the show. The greatest compliment you can give us is to share the show with those you care about. In the meantime, do your best to apply what you hear on the show, so you can live what you listen, and we'll see you next time.
[01:00:31] This episode is brought to you by Cleaning Up the Mental Mess with Dr. Caroline Leaf. Whether you're struggling in your personal life, or you simply want to learn how to understand and use your mind, this podcast will give you practical, scientific, and simple tips and tools to help you take back control over your mental, emotional, and physical health. Each week, Dr. Leaf shares scientifically backed ways to help you manage anxiety, depression, relationship issues, and more. And she does interviews with top experts in her field on topics, such as how to deal with a narcissist, break free of codependency, help a child struggling with depression, even some psychedelic stuff in there. I've been on the show in the past. But Dr. Leaf has a way of breaking down complex neuroscience and psychology concepts that even I can understand. Episodes I downloaded recently, episode 328 Signals of Depression and episode 330 Toxic Versus Unhealthy Boundaries, which might sound familiar. We did a little bit of that on Feedback Friday. Actually, we do that a lot on feedback Friday.
[01:01:20] Jen Harbinger: Take back control of your mental health and life today by listening to Cleaning Up the Mental Mess with Dr. Caroline Leaf. Each episode is packed with life-changing information and strategies and maybe what you need in your life right now. Search for Cleaning Up the Mental Mess with Dr. Caroline Leaf, that's L-E-A-F, on Apple Podcasts, Spotify, YouTube, or wherever you listen to podcasts.
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