CEO, founder, and now chairman and president of products of social network website LinkedIn, Reid Hoffman tells Steve Coomber about the challenges of entrepreneurship, the role of a CEO and the best board game ever created.
1. Steve Coomber: You studied symbolic systems at Stanford University, and analytic philosophy at Oxford University, has any of this been useful in your career?
Reid Hoffman: With entrepreneurship you’re always doing something new, because you’re innovating and venturing into new ground. The ability to learn quickly is one ingredient of successful entrepreneurship. My studies have been useful in training me to think and learn.
2. Did you have any idea what you were going to do when you left Oxford University?
I knew I wanted to do software start-ups and online stuff, so I networked my way to a couple of venture capitalists who told me: "Go get a job, learn to ship a product, then come back and talk to us." When I joined Apple Computer in 1994 I had a kind of a checklist, an agenda, to get experience in certain areas in order to begin doing start-ups.
3. What drove you to start LinkedIn?
It was thinking about what of kind of new applications are possible on the internet. The initial idea was that every professional should have a profile on the web, so other people can find them. As I elaborated on the idea, one aspect of that was, how did that affect your career? Another was, how does that make you more effective as a professional day-by-day?
4. Are you a gregarious person by nature? Are you a networker?
I’m not intrinsically what you would call a networker, but the kind of networking that LinkedIn supports is the kind of thing that every professional does. We all have a set of people that we have a good working relationship with. Although LinkedIn allows you to approach people you don’t know, it is more about working with the people you already know, but getting more information, getting more done, being able to find the right people.
5. When people ask you what LinkedIn is for, what do you tell them?
Staying in touch with professional, current and former colleagues and classmates; finding the right kind of professional information to help solve problems and perform tasks. The right people that can help you succeed in business.
6. Is it really a useful tool for finding out information?
Yes, absolutely. My favourite recent example is about a guy who needed to know the best way to move 12 million tons of cement from China to Dubai. He posted the question on LinkedIn, and within 24 hours got an answer pointing him to an expert who could solve the problem. On average, when people post questions, they get about seven answers, the majority of which are helpful.
7. How will you make sure that LinkedIn stays relevant?
Whereas entertainment has to be about the new and interesting, hopefully, for the kinds of things we are building, the kind of tools for providing good filtered information for what you need to know as a professional today, then the value propositions are much longer term.
8. I hear a lot of aspiring Web 2.0 entrepreneurs saying that a trade sale is their principal motivation for wanting to found a business. Do you think that is the right motivation for creating a business?
People can be motivated by economics, by the love of a particular area such as technology, by wanting to change the world; there are all kinds of motivations. Ultimately, it’s about succeeding in creating things that are valuable for people. I generally advise people to only do entrepreneurship when you are working on a big idea, because it’s the same amount of work for the small idea as the big idea, but the big idea can potentially have a much greater effect.
9. Do you have a particular management or leadership style that you prefer?
I fear most people would probably say that I manage by inspiration, vision and collaterally solving problems. And they generally would complain about the fact that I tend to jump on a problem. But I’m not one of those people who makes trains run on time, so I hire people to manage processes effectively for me.
10. Should a CEO or chairman have a wider social role, or is it just about a duty to shareholders?
I think that life is about having a positive effect on the world, within your company and more generally. Those are the kind of companies that I want to build. But you can’t neglect or forget that you have a strong duty to shareholders.
11. As CEO of LinkedIn, how did you view your role, what were the key things you did as CEO?
I made sure I had really good staff, including executives. Having a clearly articulated vision, keeping good communications and responding to changing market conditions, choosing a strategy that works. Those sorts of things. We’ve always tried to maintain as much internal transparency as possible, so when we go through a fundraising process, for example, we actually share what we are telling our investors with the entire company.
12. Making the transition from CEO to chairman, and president of products, how do you stop yourself from getting involved in those areas that were your remit?
That takes a certain amount of skill and judgement which hopefully I have. When you are CEO, you run the company. You set the strategy, you make the final calls; and when you are not CEO, you are either a lieutenant executing stuff or you’re an advisor. But when I move to not having a full-time operational role in the company, there’s no doubt it will feel a little weird.
13. You are invested in a lot of businesses. How do you manage your time?
Well you have to have good time management prioritisation, and you have to work all the time. That’s basically what it comes down to.
14. Do you Twitter?
I don’t, although I like Twitter as a product.
15. Would you consider starting a blog?
I’m an investor on the board of Six Apart, which is blogging, but I don’t blog. The founders, who are friends of mine, keep suggesting that I should start blogging. I’ve done a bit of time analysis and the challenge is that, if I were to start blogging effectively, it would require the same amount of time as being on two different boards of directors. So I decided to do the boards.
16. Do you still feel the need to develop long-term skills, and if so how do you go about doing that?
The best way to keep up knowledge and skills is to stay in the flow. Part of that is about posing questions and talking to other professionals solving similar problems. You trade insights, tips and tricks. It is not like you take classes, it is all done as you work.
17. Do you have time to read books?
Not as many as I’d like. Reading is done, and I don’t mean to compare these two experiences, in the bathroom or flying in a plane.
18. What do you like to do when you’re not trawling through PowerPoint business pitches, sitting on a board or running your company?
Sleep. When I have time, I think about what I can do to help social entrepreneurs. That’s part of the flow of my life.
19. Surely you must have some kind of hobby?
I don’t really have hobbies, although there is a German board game called Settlers of Catan. Occasionally friends come over and we play that. It's the best board game ever created, as far as I can tell.
20. You have been doing this for a little while now. Do you still have the same levels of enthusiasm and motivation?
If anything, I would say my enthusiasm and excitement is growing over how things are improving online and changing our lives. We’re just beginning to be able to show people how they can be more effective professionals by using LinkedIn. For example, I think there’s going to be a variety of interesting ways of getting entertainment and sharing and generating news. I think we’re just at the beginning of what’s possible.