‘15 minutes between exultation and terror’: The fascinating journey of Reid Hoffman

“A lot of the big enduring businesses tend to be started in market downcycles. There are a couple of different reasons. One is that you have less competition.

“Another, by necessity, is being very disciplined and very focused. It’s figuring out ‘what is the thing you’re actually trying to do?’. That gives you a higher chance of success.

“Right now, in various ways, the growth capital markets are much more challenging. There are mid-stage companies that have more difficulty with financing. But the Series A financings are fairly close to open capital markets, so the notion of having an idea, being able to assemble a team - seeds and Series As are essentially as open as they were two or three years ago.”

challenge when you start a company is you don’t have any default customers and you have to establish product market fit. These are challenges where if you succeed, you have this really great opportunity. 

“When it comes to series B, you need to be much more disciplined on capital. But, it does give you a real chance to have competitive differentiation. If you’re in a place where you have a really good product market fit, you can hit the accelerator faster than your competition.”

“Silicon Valley rounds up to 3.5 million people, it’s fewer people than are in Ireland, yet half of the Nasdaq market capitalisation comes from companies started here. Why is that? What are the lessons learned?

“One thing Silicon Valley has learned, pretty intensely, is this notion that speed-to-scale is the way of establishing new tech platforms. The precise definition of Blitzscaling is prioritising speed over efficiency in an environment of uncertainty.

“For example, is your new mobile app serving this market? Is yours the one that gets to 10 million DAUs first and enjoys the benefits that come with it? That’s what Blitzscaling is, a set of techniques built around how to do that.”

“When I started my first company, SocialNet, a friend of mine who had joined, who had left Apple, wrote me a one-line email saying ‘welcome to where there are 15 minutes between exultation and terror’.

“When we were starting PayPal we had multiple things that could kill us. We could die by Visa and Mastercard rules, by eBay and similar platforms, by chargebacks and fraud, by not getting our business model set up on time.

“Part of what you’re really looking for, as an entrepreneur, is the resilience to keep…not calm, but focussed and effective in how you navigate these challenges. The vast majority of startups don’t succeed, a lot of entrepreneurs blind themselves. There’s always serendipity in these things, you need to condition yourself with flexible planning and pivoting.”

“When you’re in a leadership role, people take their cues from you. If you’re going ‘I think we’re going to die’ then everyone else follows. You have to work through that, the challenges, the fear and uncertainty. 

“The best thing is to have a good set of counsellors and advisors. People you’re able to talk with bluntly, to recognise what your points of failure and risk are, people you can ask ‘what do we think we can do about this? Is this a brick wall I can go through or do I need to go around it?”

“I think the answer is both. Having that money meant we had a much broader set of companies, including a much broader set of foolish companies, companies that probably in any capital-disciplined way wouldn’t have gotten financed.”

“If you’re not paying attention to changing market conditions and changing capital conditions, you’re not navigating intelligently. 

“At Greylock, we always try to be fairly disciplined and professional, so the seeds and Series As, we’re still investing in at the same rate. On the other hand, because of changing circumstances, the questions are: what do future financings look like? What will we need to do in order to prove it? What capital do we need to make the next financing? What's the speed at which the competition is running? 

“One of the things about Blitzscaling, if you’re competitor is Blitzscaling and you’re not, they’ll win or lose, but if they lose, you’ll probably lose too.”

“The focus has to be ‘what industry transformations are five to ten years out?’.

“We’ve been doing a bunch of stuff in AI, and we’ve also been doing a lot with Web3 as there are fundamental platform changes that will alter the way the internet works, those shifts in platform really matter, you’re looking at this as a ten-year journey.”

“One of the phrases I use to describe what we are is the ‘network age’, and the world is getting more and more networked. That is continuing through communication, through transport and logistics, across markets, across commerce, all of these things, the network age means you get more largescale opportunities.

“I think there are many PayPal-size opportunities. That discerning question is figuring out which are the ones that the current market and tech trends will enable.

“As an investor, I always look at networks. Part of what I’ve been doing for the last five years is transport networks, and how networks can be redefined by autonomy. I’m always interested in new network definitions, that’s part of the reason I’ve been looking at Web3.”

“When we started LinkedIn we got a bunch of our theories right, which was that individuals own their own network, whereas a lot of our competitors thought companies owned the network for individuals.

“One of the mistakes we made, one thing our competitors pushed was a focus on groups - professional associations or conferences versus individuals. We hedged our convictions and built some group products.

“What we should have done was bet on one or bet on the other. We ended up with a decade-long anaemic groups product that we never really invested in, which distracted us from other things we could have done on our individual product. The principle that I would apply, is to focus on your bet, even when it makes you nervous, have the conviction and continue. 

“One of the things entrepreneurship requires is an ability to take risky gambles with hiring people, refactoring and being able to close your shop down if it’s not working. I frequently give advice to European governments to try and enable this more. 

“Often what a lot of tech entrepreneurs do is hire tech teams in places like Berlin where it’s cheap enough to allow experimentation.

“The things to look at when you’re European is to say ‘where do I have a really good competitive edge for a global fight?’. I think there’s a lot of really interesting opportunities. When you have these regulation challenges, ask are there any ways to turn those into advantages?”