Reid Hoffman

It isn't that we could guarantee the risk, but the fact that everyone else saw those risks meant that we had years of no competition, that we could establish the network, we could establish the marketplace. And then once we're there, we are the marketplace for how that works. And that's the kind of investment I like doing. That's the same thing with LinkedIn, as I founded it.

Same thing with Airbnb as an investment. And so that category of investment, you cannot validate with the customers.

Yes.

Yes. And I'm looking for both in my creation of ideas and in my funding of ideas. It's not dumb people who think it's a bad idea. It's smart people who think it's a bad idea. You want smart people. Yes. Because then you have something that's contrarian. Because that's what contrarian is. Contrarian is that I don't understand technology at all, and I think it's a terrible idea.

It's like, well, who cares? You don't understand anything. It's smart people who think it's a bad idea. And then you have a theory of the game that's a good one, not perfect, can be very risky, about why they're wrong. So I'll give you the LinkedIn example. Literally, John Lilly, partner of mine at Greylock. I recruited him into Greylock later. He was the CEO of Mozilla that I was on the board of.

Super smart guy, friend of mine. I sat down with him about LinkedIn because this is how I go when I'm starting a company. I go to all my smartest friends and I go, here's what I'm doing. What's wrong with it? I don't want to have the conversation of them going, oh, it's great. Useless. Doesn't help me. Right? What's wrong with it? Why will this go – why will this fail? And so I sat down with John.

We had breakfast at a breakfast place in Silicon Valley. I said, da-da-da-da. And he said, okay, you know, look, I'm your friend. It's never going to work. Right? And I said, okay, well, why do you think it's never going to work? He said, well, look, you'll never grow the network. Like the first person who comes in, no one else in the network. Not valuable for me. Why should I invite someone in?

Until you have like, I don't know, 500,000 people, a million people, there's no value in the network. So there's zero value. So it's never going to grow. You're never going to get anywhere, right? And it was a very smart, perspicacious thought that was probably the key thing for starting LinkedIn was, how do you get to millions of people in the network?

Because that's the only place where the value proposition kicks in, right? I knew that if you had 1,000 people come in, 900 of those people would be exactly like John. They'd go, eh, I don't see anyone else here in this network, et cetera. But I knew that some of them, somewhere between 10 and 100 of them, would go, oh, I see what this could be, and I kind of want to play with it.

So I'll invite Stephen. I'll invite some people in. And then as it very slowly starts going, then all of a sudden there's enough people in. It's interesting. It's curious. And you could grow to being valuable.

So I knew that by persistence through those initial exploratory people, people who are curious, people who want to experiment with it, people who got the vision of it, et cetera, et cetera, that all of that, I could grow to your initial critical mass. And then-

Really?

Public CV. It was a public CV with a search capability and ability to communicate with people.

talk about themselves or to share their life etc and we knew that we would get to growing network effects like for example again part of the you know marines army police is your network effects may very much evolve you may start with no network effects that's fine yeah but you have a plan yes yeah yeah so am i right in thinking because around then there were social networks emerging that were very focused on people conversating with each other whereas linkedin but by design

And that's a virtue, not a bug, because it was part of how we solved the critical mass problem.

Yeah. Well, I'm kind of a specialist. Yeah. Right? You know, one of the first investors in Facebook, one of the first investors in Friendster.

Yes. You...

Network. It has less pizzazz, but we weren't really a criminal group.

Well, it certainly was a component. And so it's a couple of things. So one, that high density talent of folks who are willing to take intensive risks, want to do contrarian things, believe in what their contrarian thing is against common sense wisdom. That's one part. Another part is when PayPal went public, it was a technology winter.

It was one of two technology companies that went public that year.