WEBVTT - Reid Hoffman 0:00:03.760 --> 0:00:06.360 Reen Hoffman is one of the most successful entrepreneurs and 0:00:06.400 --> 0:00:09.520 investors in Silicon Valley. As an entrepreneur, he helped to 0:00:09.560 --> 0:00:12.760 build PayPal and he started linked In. As an investor, 0:00:12.800 --> 0:00:15.000 he was an early investor in Facebook and an early 0:00:15.040 --> 0:00:18.400 investor in Airbnb. On this episode Appear to Appear, I 0:00:18.440 --> 0:00:20.840 sat down with Reid Hoffman to talk about those different 0:00:20.880 --> 0:00:24.560 skills of being an entrepreneur and an investor. The venture 0:00:24.600 --> 0:00:28.000 capital world today seems like it can never get any better. 0:00:28.120 --> 0:00:31.320 Everybody seems to be making money. The values are high, 0:00:31.400 --> 0:00:33.760 but returns are very high. Can he get any better 0:00:33.760 --> 0:00:35.440 than this? And are you worried about this being a 0:00:35.520 --> 0:00:38.160 bubble not unlike we had in the tech bubble burst 0:00:38.200 --> 0:00:42.240 in two thousand. Well, you always worried about the market's 0:00:42.240 --> 0:00:44.920 getting over inflated. Amount of stimulus. Everything else is part 0:00:44.920 --> 0:00:46.519 of making this happen. And so I do think that 0:00:46.520 --> 0:00:49.640 there is some risk within the general market of this. 0:00:50.240 --> 0:00:54.320 Now that being said, technology is accelerating the transformation of 0:00:54.360 --> 0:00:57.600 all industries. Uh, there's what artificial intelligence gonna do to 0:00:57.640 --> 0:01:00.200 all industries. There's obviously, you know, that's a leading edge 0:01:00.240 --> 0:01:03.440 of software. There's things happening with a R and VR, 0:01:03.680 --> 0:01:07.080 there's things happening with crypto and fintech, and so all 0:01:07.120 --> 0:01:09.360 of this area, I think is is very much accelerating 0:01:09.360 --> 0:01:11.280 in the future, and so I think that's part of 0:01:11.280 --> 0:01:14.200 the reason why the venture industry has been so good, 0:01:14.680 --> 0:01:18.880 is because technology is important in redefining many key industries. 0:01:19.080 --> 0:01:22.039 Right now, Silicon Valley is not the only place in 0:01:22.040 --> 0:01:24.800 the United States where their technology investments, but it seems 0:01:24.840 --> 0:01:27.960 like the Silicon Valley companies seem to be the most 0:01:28.080 --> 0:01:31.399 valuable and that's where the most activity is occurring. Is 0:01:31.400 --> 0:01:34.080 there something about Silicon Valley that makes it unique and 0:01:34.120 --> 0:01:37.000 better than other areas of interested in technology United States? 0:01:38.959 --> 0:01:42.680 Silicon Valley itself has a number of overlapping network effects. 0:01:42.959 --> 0:01:46.640 It has a network effect of essentially being the hub 0:01:46.680 --> 0:01:50.040 by which a lot of English speaking entrepreneurs from around 0:01:50.040 --> 0:01:52.920 the world come to start their software businesses or key 0:01:52.960 --> 0:01:57.480 technology businesses. There's the hub for capital and the knowledge 0:01:57.520 --> 0:02:00.640 and investing that goes into it. There's a u of 0:02:00.720 --> 0:02:03.480 talent for people growing these companies. As part of the 0:02:03.480 --> 0:02:06.040 reason I wrote this book blitz Scaling for how how 0:02:06.040 --> 0:02:09.079 do you how do you build technology companies at a 0:02:09.120 --> 0:02:13.240 global scale? Lightning Fast and the tech, the talent, there's uh, 0:02:13.280 --> 0:02:16.840 there's network effects of learning and of sharing of information, 0:02:17.160 --> 0:02:19.119 and it's part of the reason why Silicon Valley, which 0:02:19.120 --> 0:02:21.560 you know has the whole Bay Area has like three 0:02:21.639 --> 0:02:24.600 and a half million people tops, that's not the tech industry. 0:02:24.720 --> 0:02:27.880 And you know why half of the NASDAC emerges out 0:02:27.919 --> 0:02:31.600 of Silicon Valley is for those kinds of reasons, and 0:02:31.639 --> 0:02:34.440 those network effects are what makes Silicon Valley great. What 0:02:34.560 --> 0:02:37.520 about around the world, is China likely to catch up 0:02:37.560 --> 0:02:41.440 and pass Silicon Valley as a leader of technology? UM? 0:02:41.480 --> 0:02:44.520 I think that one it's one of the greatest concerns 0:02:44.600 --> 0:02:49.160 that Silicon Valley knowledgeable people have because China is amazing. 0:02:49.160 --> 0:02:52.320 It has huge amounts of tech talent. Everyone's acting like 0:02:52.360 --> 0:02:56.079 an immigrant, UM, you know, with with with hunger. Uh, 0:02:56.120 --> 0:03:00.200 they're like large companies have this policy nine nine a m. 0:03:00.280 --> 0:03:02.520 To nine pm, six days a week. You're discoverable at 0:03:02.520 --> 0:03:05.040 your desk, and that's kind of like you know, you 0:03:05.080 --> 0:03:08.480 know tens of thousands of techno people in technology companies 0:03:08.960 --> 0:03:11.600 and um, they're doing a lot of innovation. Uh. There 0:03:11.720 --> 0:03:14.560 is there's things that we learned from from China, and 0:03:14.600 --> 0:03:16.600 so I think that that China is going to have 0:03:16.680 --> 0:03:22.120 one um kind of very strong creation of the technological future. 0:03:22.600 --> 0:03:24.280 It's one of the reasons why in blitz scaling we 0:03:24.360 --> 0:03:27.000 call it the land of blitz Scaling. I think Silicon 0:03:27.040 --> 0:03:29.520 Valley has some edges too, but I think it's very 0:03:29.600 --> 0:03:33.120 much of a game on circumstance. Now, some people would 0:03:33.160 --> 0:03:36.120 say that the technology world the United States is dominated 0:03:36.120 --> 0:03:41.960 by just a limited number of companies Google, Facebook, Apple, Netflix, Microsoft. Um, 0:03:42.000 --> 0:03:45.560 you're sure you're familiar with all this. Do you think that, uh, 0:03:45.680 --> 0:03:48.440 the United States is dominated by too many, too few 0:03:48.480 --> 0:03:51.800 technology companies and there's ship should be done, something should 0:03:51.800 --> 0:03:53.920 be done to kind of weaken their power, or do 0:03:53.920 --> 0:03:56.840 you think it's okay as it is? Well, what I 0:03:56.920 --> 0:04:00.320 think that we're heading to is we're going from five 0:04:01.040 --> 0:04:04.280 massive tech companies to ten. I think we're already naturally 0:04:04.320 --> 0:04:06.840 heading in that direction. You can see it with things 0:04:06.880 --> 0:04:11.000 like uh, Netflix and Salesforce, and you know, all of 0:04:11.040 --> 0:04:13.480 these other companies which are continuing to also grow in 0:04:13.560 --> 0:04:19.839 strength and create a breadth of additional global, very strong 0:04:19.880 --> 0:04:23.080 technology companies. And as respective as an investor, when you 0:04:23.120 --> 0:04:25.919 go around and you ask kind of what all the 0:04:26.480 --> 0:04:28.520 you know, kind of the venture capitalists, They're like, no, no, 0:04:28.600 --> 0:04:31.440 we're We're having more and more startups, more and more 0:04:31.560 --> 0:04:36.160 ability to create amazing new tech companies. So like, if anything, 0:04:36.200 --> 0:04:38.840 I think we're already naturally on that transit of that trajectory. 0:04:39.400 --> 0:04:42.880 Do you think that large Chinese technology companies Ali Baba, 0:04:43.040 --> 0:04:46.040 ten Cent, By, Do By Dance and stuff forth can 0:04:46.120 --> 0:04:49.240 have their technology become very dominant or important in the 0:04:49.279 --> 0:04:51.200 United States and around the world. And are we in 0:04:51.279 --> 0:04:54.040 a world now we're competing with Chinese technology companies for 0:04:54.200 --> 0:04:57.000 market share outside of the United States and China. So 0:04:57.040 --> 0:04:59.200 I think we're already in that world. I think that 0:04:59.360 --> 0:05:01.680 if you look a kind of things that Ali Baba 0:05:01.760 --> 0:05:05.279 is doing in terms of um spreading the the Ali 0:05:05.360 --> 0:05:10.359 pay and everything else into South America into Africa, you know, 0:05:10.400 --> 0:05:14.280 I think that the notion of the technological platforms of 0:05:14.320 --> 0:05:17.880 the future are in deep like the there's a fast 0:05:17.960 --> 0:05:22.040 moving competition between companies and Silicon Valley and companies in China, 0:05:22.360 --> 0:05:24.279 and I think that's part of like, you know, which 0:05:24.360 --> 0:05:27.600 systems will be the systems that the world operates in 0:05:28.040 --> 0:05:30.880 is I think in deep competition. And that being said, 0:05:30.920 --> 0:05:35.320 I think we're already seeing uh, Chinese uh, platform companies 0:05:35.680 --> 0:05:38.920 beginning to make strong head roads into the US. Byte 0:05:39.000 --> 0:05:42.000 Dance and TikTok as an obvious one, but I you know, 0:05:42.040 --> 0:05:45.000 I think you already see it in also like drone 0:05:45.000 --> 0:05:48.479 manufacturing d G I. There's a whole bunch that are 0:05:48.560 --> 0:05:53.440 already UM, that are already getting massive global relevance, and 0:05:53.480 --> 0:05:55.680 you can see it already. Let's talk about the future. 0:05:55.880 --> 0:05:57.920 Some things that people are interested in the right now. 0:05:58.080 --> 0:06:03.200 One of them is cryptocurrents. Are you a cryptocurrency officianado 0:06:03.360 --> 0:06:06.840 or not? I am I. Actually, if if you go 0:06:06.960 --> 0:06:11.039 to YouTube and search for bitcoin wrap battle. This is 0:06:11.120 --> 0:06:15.440 inspired by Alexander Hamilton's the musical ideated and then funded 0:06:15.480 --> 0:06:21.000 and produced a rap battle between Alexander Hamilton's and Satoshi Nakamoto. 0:06:21.040 --> 0:06:23.520 And that's because I think there is a real role 0:06:23.640 --> 0:06:27.320 for cryptocurrencies in helping US evolve. So do you invest 0:06:27.400 --> 0:06:32.400 in cryptocurrencies yourself? I do? Okay? What about transportation? Are 0:06:32.480 --> 0:06:36.600 you're a big believer in autonomous vehicles? I am, um. 0:06:36.640 --> 0:06:41.080 I've invested in Aurora and neuro um because actually, in fact, 0:06:41.160 --> 0:06:44.840 it's literally a question of when, not if, and how soon? 0:06:45.360 --> 0:06:47.880 For when we have autonomous vehicles, it will make all 0:06:47.920 --> 0:06:50.800 of our societies better. It will save you know, tens 0:06:50.800 --> 0:06:54.440 to hundreds of thousands of lives, It will enable huge 0:06:54.480 --> 0:06:57.560 amounts of increase and productivity. And so I think it's 0:06:57.640 --> 0:06:59.960 it's it's a great thing that we should be accelerating 0:07:00.000 --> 0:07:02.480 to as societies. Have you been in one of these 0:07:02.520 --> 0:07:04.719 cars where you were not the driver and you feel safe? 0:07:05.600 --> 0:07:08.039 I do, and I do. Um. Look, I think part 0:07:08.040 --> 0:07:10.800 of the thing that all of them, uh, not just aura, 0:07:10.960 --> 0:07:13.560 not just neural, but all of them have safety. Safety. 0:07:13.600 --> 0:07:16.280 Safety is the very first thing. So when I've been 0:07:16.320 --> 0:07:18.760 in these cars where there is nobody in the in 0:07:18.800 --> 0:07:22.840 the driver's seat, um, it's it's it's been good and 0:07:22.920 --> 0:07:25.400 fine you wear a crash helmet when you're in those 0:07:25.400 --> 0:07:28.920 cars or no, you know, okay, what about flying taxis 0:07:29.000 --> 0:07:32.200 is that something in our future? It is? Uh? As 0:07:32.240 --> 0:07:35.960 you know. I also helped bring a JOBEI Public buys back, 0:07:36.480 --> 0:07:39.480 and it's move the transport grid from two D to 0:07:39.600 --> 0:07:46.160 three D, redefine space in cities, make commutes much less onerous, 0:07:46.440 --> 0:07:49.400 be reliable and getting to the airport on time, or 0:07:49.480 --> 0:07:52.480 be able to live you know, kind of more distantly 0:07:52.480 --> 0:07:54.240 remote and then be able to come into the cities, 0:07:54.240 --> 0:07:57.280 and so I think The Jetsons is now no longer 0:07:57.320 --> 0:08:00.960 science fiction but on route to science fact. What about space? 0:08:01.440 --> 0:08:05.640 Do you invest in outer space related investments? Um? Not 0:08:05.880 --> 0:08:08.560 as as as intensely as some of my friends like 0:08:08.680 --> 0:08:12.160 Ellen um, who obviously are in it. I've I put 0:08:12.200 --> 0:08:14.880 some money into SpaceX. That's more because you know Elon 0:08:14.960 --> 0:08:18.960 and this amazing transformation of the world. Uh. But it's 0:08:19.040 --> 0:08:22.400 it's um, It's it's obviously an important area. UM. I've 0:08:22.480 --> 0:08:25.000 kind of ended up in it sometimes just by who 0:08:25.000 --> 0:08:27.720 I know. So let's talk about how you became an 0:08:27.760 --> 0:08:30.000 investor and an entrepreneur. But you were going to be 0:08:30.000 --> 0:08:32.040 an academic and then I guess on a road to 0:08:32.120 --> 0:08:35.120 Damascus kind of epiphany, you said, I'm not going to 0:08:35.200 --> 0:08:38.360 be an academic. I'm gonna be something more important in academic. 0:08:38.440 --> 0:08:41.960 I'm going to be an investor. Well, actually didn't start 0:08:41.960 --> 0:08:45.320 with investor. It started with a product creator. I wasn't 0:08:45.360 --> 0:08:49.319 even necessarily starting with entrepreneur. It was how do we 0:08:49.720 --> 0:08:52.360 think and speak better? How do we make ourselves better 0:08:52.440 --> 0:08:55.640 as individuals and as a group. Well, actually, this medium 0:08:55.679 --> 0:08:59.400 of software, this medium of constructing new products. UM, it 0:08:59.480 --> 0:09:01.079 was kind of like I was just beginning to get 0:09:01.120 --> 0:09:03.719 that lens of what does the internet mean? And how 0:09:03.720 --> 0:09:06.559 do we all work together and play together and live 0:09:06.679 --> 0:09:10.280 together using the internet to redefine our space and redefine 0:09:10.280 --> 0:09:13.079 our networks and already be better and and I should 0:09:13.080 --> 0:09:15.920 go create that. Well, as you were starting this career, 0:09:16.360 --> 0:09:19.440 you were invited to join a company that was called PayPal, 0:09:20.240 --> 0:09:22.960 and PayPal turned out to be a gigantic success later 0:09:23.040 --> 0:09:27.240 sold to eBay. What was your job at PayPal? Well, 0:09:27.280 --> 0:09:30.240 so when Peter Tiel and Max lefton started PayPal, they 0:09:30.240 --> 0:09:34.240 each invited their friend who most understood and had entrepreneural 0:09:34.240 --> 0:09:36.439 experience to be on the board. So that was me 0:09:36.559 --> 0:09:39.400 for Peter and then Um, after about a year of 0:09:39.440 --> 0:09:41.640 being on the board, I was thinking about going and 0:09:41.640 --> 0:09:45.280 starting another company, and Peter said, no, come join um 0:09:45.720 --> 0:09:48.680 PayPal full time. Uh and help us because you know 0:09:48.679 --> 0:09:50.160 you've been helping us so much on the board and 0:09:50.200 --> 0:09:53.160 you understand this stuff and and we have so much 0:09:53.200 --> 0:09:57.000 to do because PayPal was an early blitzcaler. It was 0:09:57.400 --> 0:09:59.040 its theory was it was going to be a bank, 0:09:59.360 --> 0:10:02.319 and that was that that was not a workable theory. Um, 0:10:02.400 --> 0:10:05.400 so we had a great customer acquisition engine, But how 0:10:05.440 --> 0:10:08.760 do you redefine the payments OS was something that was 0:10:08.800 --> 0:10:10.959 all in front of it even as it was exponentiating 0:10:11.000 --> 0:10:14.200 its burn rate. So so I joined PayPal full time, 0:10:14.200 --> 0:10:17.439 stepping off the board. All right. So PayPal was ultimately sold, 0:10:17.440 --> 0:10:20.000 as I mentioned the eBay for about a billion and 0:10:20.000 --> 0:10:22.280 a half dollars or so. You got your share of 0:10:22.280 --> 0:10:25.960 the profits. You then became an angel investor. For those 0:10:26.000 --> 0:10:28.440 who don't know what an angel investor is as opposed 0:10:28.480 --> 0:10:32.880 to a devil investor, what is an angel investor? Well, uh, 0:10:33.880 --> 0:10:37.560 sometimes there may be investors that entrepreneurs think our devil investors, 0:10:37.600 --> 0:10:41.480 although it's usually more opposed. Fact, angel investors are individuals, 0:10:41.679 --> 0:10:44.360 usually with some expertise in this area or some knowledge 0:10:44.360 --> 0:10:48.760 of the entrepreneur, that tend to invest the earliest stages 0:10:48.840 --> 0:10:52.000 of a of a company. Frequently, well, it's an idea 0:10:52.000 --> 0:10:54.680 on the back of a napkin or an entrepreneur just 0:10:54.679 --> 0:10:57.600 thinking about doing something. Although that has all, like all 0:10:57.640 --> 0:11:02.120 investment has professionally scaled and does so kind of individually. Um, 0:11:02.160 --> 0:11:06.400 not with a firm, the resources and assets of a firm, uh, 0:11:06.480 --> 0:11:09.240 the platform, the network that the firm brings and so 0:11:09.320 --> 0:11:11.520 that was what I started doing, mostly just because I 0:11:11.559 --> 0:11:15.439 was interested in other folks who were building these great 0:11:15.480 --> 0:11:18.440 projects that I wanted to help out with and participate in. 0:11:18.920 --> 0:11:22.000 Right when you started doing that, you did it relatively prolifically, 0:11:22.320 --> 0:11:24.920 and you became known as maybe the most active and 0:11:24.960 --> 0:11:28.040 maybe the most successful angel in the western in Silicon Valley. 0:11:28.440 --> 0:11:30.320 One of the companies I think you invested in was 0:11:30.400 --> 0:11:33.720 that Facebook. Yes, so what did you see in the 0:11:33.760 --> 0:11:35.599 young Mark Zuckerberg? Did you say this is gonna be 0:11:35.640 --> 0:11:37.080 one of the great companies in the world. Are you 0:11:37.120 --> 0:11:42.040 just said I'll take a chance. So Facebook had already 0:11:42.080 --> 0:11:46.280 successfully launched a product that when it opened up a campus, 0:11:46.280 --> 0:11:49.240 because when when I did the investment, it was strictly 0:11:49.280 --> 0:11:53.600 only a kind of a university campus, you know, network, 0:11:53.679 --> 0:11:57.040 not even not not the whole world. And but when 0:11:57.080 --> 0:11:59.920 it opened up a campus in six weeks, eight percent 0:12:00.120 --> 0:12:02.800 of the campus was using it six days, six times 0:12:02.880 --> 0:12:04.880 or more per day. And so you could just look 0:12:04.880 --> 0:12:08.600 at the usage curve and go, this is interesting. The 0:12:08.600 --> 0:12:11.040 person who's created this is a really interesting And even 0:12:11.040 --> 0:12:13.760 though back then Mark was very quiet, so I had 0:12:13.760 --> 0:12:17.280 a tendency to to not talk very much. Um long 0:12:17.360 --> 0:12:20.520 pauses minutes long pauses in the conversation where you're like, 0:12:20.640 --> 0:12:23.840 is this conversation over um? You could see that he 0:12:23.920 --> 0:12:26.120 was very smart and you could see what was the 0:12:26.160 --> 0:12:29.880 trajectory that Facebook was on was really interesting. So let's 0:12:29.920 --> 0:12:33.120 talk about this, your angel investor. You're doing pretty well. 0:12:33.160 --> 0:12:35.120 People are coming to you all the time with deals, 0:12:35.200 --> 0:12:37.920 and while you might miss one or two, basically you're 0:12:37.960 --> 0:12:41.600 doing quite well. Why did you join a firm called Graylock? 0:12:41.679 --> 0:12:45.440 An excellent venture capital firm? But why did you need 0:12:45.480 --> 0:12:47.640 to be joining a venture capital firm. You're already your 0:12:47.640 --> 0:12:49.560 own venture capital if you have enough money to start 0:12:49.559 --> 0:12:53.120 your own firm, why would you join Graylock? So um, 0:12:53.160 --> 0:12:55.920 not again not surprising for the guy go down to LinkedIn. 0:12:55.960 --> 0:12:58.520 I think in networks, and I think in networks as platforms. 0:12:58.880 --> 0:13:00.920 And one of the things that I think those small 0:13:01.040 --> 0:13:05.560 number of very elite venture capital firms within Silicon Valley 0:13:05.600 --> 0:13:08.000 and other places do is create a network. And I 0:13:08.200 --> 0:13:11.079 was originally thinking about building my own. And then David 0:13:11.120 --> 0:13:15.000 z and Neil Bustrie, who are then both general partners 0:13:15.000 --> 0:13:17.560 at Greylow, came in and said, hey, we're um, we're 0:13:17.600 --> 0:13:19.920 in the process of moving the firm from Boston to 0:13:20.559 --> 0:13:24.200 Silicon Valley where where it's kind of a kind of 0:13:24.200 --> 0:13:26.760 a rebirth of the firm, which has this great set 0:13:26.800 --> 0:13:29.719 of investors and pedigree and culture and learnings and all 0:13:29.760 --> 0:13:32.719 these things that will be very helpful. But also this 0:13:32.800 --> 0:13:38.040 idea of network uh amplifier for venture capital. Um, we 0:13:38.160 --> 0:13:39.640 love it. We'd love to do it with you. And 0:13:39.640 --> 0:13:41.439 I was like, why these are these are people. I 0:13:41.440 --> 0:13:44.240 would be delighted to be partners with these folks. So 0:13:44.400 --> 0:13:46.719 let's let's build the firm here now. When you were 0:13:46.760 --> 0:13:49.640 starting at at Graylock, even though you have already had 0:13:49.679 --> 0:13:52.480 a good career as a venture investor and angel investor, 0:13:52.840 --> 0:13:55.320 I think one of the legends of Silicon Valley is 0:13:55.320 --> 0:13:59.599 the deal you wanted to do was Airbnb and the 0:14:00.040 --> 0:14:02.480 and your partner at your firm said, look, that's a 0:14:02.559 --> 0:14:06.240 terrible deal. It's going nowhere. Um. So were you intimidated 0:14:06.280 --> 0:14:07.959 by that because he had a lot of experience, and 0:14:08.440 --> 0:14:11.960 how did you push that through? There's even more drama 0:14:12.000 --> 0:14:15.280 than your question suggests because the partner, the senior partner 0:14:15.320 --> 0:14:19.400 is David z who was uh who's an amazing general partner, 0:14:19.480 --> 0:14:23.920 was my board member from Greylock at LinkedIn uh reason, 0:14:23.920 --> 0:14:27.400 I'm Matt Greylock Um and so I bring in Airbnb. 0:14:27.480 --> 0:14:30.840 It's my first deal that I'm bringing into the partnership. 0:14:31.360 --> 0:14:34.200 And David, you know who I'm super close to I 0:14:34.280 --> 0:14:37.560 have deepest respect for, has has returned billions of dollars 0:14:37.640 --> 0:14:39.720 the fun looks at me and says, well, every VC 0:14:40.000 --> 0:14:42.360 has a has a deal that they can learn from 0:14:42.400 --> 0:14:45.120 and fail from. An Airbnb can be yours. And so 0:14:45.160 --> 0:14:48.960 I was like, David's super smart, and so ultimately I 0:14:49.000 --> 0:14:50.840 kind of said, well, look, I have to have the conviction. 0:14:50.920 --> 0:14:54.960 This is a portfolio. I'm gonna He gave me the 0:14:55.040 --> 0:14:57.360 hunting license, the permission to go do the deal. So 0:14:57.400 --> 0:15:00.040 I went and did the deal. Now to David's it 0:15:00.160 --> 0:15:01.840 six months later, the numbers hadn't changed it all. He 0:15:01.880 --> 0:15:03.640 came back to me and said, I thought about it 0:15:03.680 --> 0:15:05.360 a lot. I think you were right. I was wrong. 0:15:05.600 --> 0:15:07.560 What did you see that I didn't see? And I said, well, 0:15:07.880 --> 0:15:10.320 all of the risk factors that you saw were correct. 0:15:10.760 --> 0:15:14.080 I just realized that if you if you navigated through 0:15:14.080 --> 0:15:16.600 the risk factors which I could see as able to do, 0:15:17.160 --> 0:15:19.600 then you would end up with a redefining company of 0:15:19.600 --> 0:15:21.880 an industry. It would be you know, the like the 0:15:22.000 --> 0:15:25.840 literally like you just it transforms the entire industry. And 0:15:25.840 --> 0:15:27.840 that's the thing I saw. You had some time I 0:15:27.880 --> 0:15:29.680 don't know where you got the time from to start 0:15:29.680 --> 0:15:33.480 a little company called linked In. The goal was building 0:15:34.120 --> 0:15:37.800 something that enabled every individual professional to most to transform 0:15:37.880 --> 0:15:42.080 their career by collaborating within a network. So in addition 0:15:42.160 --> 0:15:45.360 to venture investing, you had some time I don't know 0:15:45.360 --> 0:15:47.280 where you got the time from to start a little 0:15:47.280 --> 0:15:51.320 company called linked In. Um, how did you have time 0:15:51.360 --> 0:15:53.920 to start a company called LinkedIn when you're a partner 0:15:53.960 --> 0:15:57.560 in a venture firm? Well, actually I started it much earlier, 0:15:58.120 --> 0:16:01.160 and then Graylock. Um, that's actually how I met Greylock 0:16:01.240 --> 0:16:04.320 because David z lad my series b UM. So I 0:16:04.360 --> 0:16:07.880 was doing angel investing while I was a while I 0:16:07.960 --> 0:16:11.840 was the c the founding CEO, and and co founder 0:16:11.840 --> 0:16:14.640 of LinkedIn. But I didn't start venture investing until after 0:16:14.680 --> 0:16:17.000 I'd hired Jeff Weener to be the CEO of LinkedIn, 0:16:17.560 --> 0:16:22.440 and LinkedIn ultimately was sold to Microsoft or roughly billion 0:16:22.480 --> 0:16:25.680 dollars or something like that. Did you ever anticipate something 0:16:25.720 --> 0:16:27.440 like that when you started the company or helped to 0:16:27.440 --> 0:16:30.640 start the company. So, Um, one of the things to 0:16:31.040 --> 0:16:33.600 think about when you're strategizing. And it's like my first book, 0:16:33.640 --> 0:16:35.920 The Startup of You, has this framework called a b 0:16:36.040 --> 0:16:37.520 Z planning, which is part of it is the thing 0:16:37.560 --> 0:16:40.760 about the spread of outcomes, like what's the what's the 0:16:40.800 --> 0:16:43.880 great possible outcome, what's the worst outcome, what are the 0:16:43.920 --> 0:16:46.920 intermediate outcomes? What are the things that change the landscape 0:16:46.920 --> 0:16:49.480 of it? So I always knew that LinkedIn could be 0:16:49.520 --> 0:16:52.840 a network as a platform that would be transformative, and 0:16:52.840 --> 0:16:54.560 I also knew that it was the kind of thing 0:16:54.640 --> 0:16:58.480 that most aligned with Microsoft's mission. So did that mean 0:16:58.720 --> 0:17:00.920 that I knew that Microsoft is gonna end up buying 0:17:00.920 --> 0:17:03.480 it for a you know, for it's it's it's it's 0:17:03.520 --> 0:17:06.040 you know, kind of the largest acquisition, uh in its 0:17:06.080 --> 0:17:09.560 history or um in as answers, No, I thought it 0:17:09.560 --> 0:17:11.919 was a possibility. Uh, it was. It was an outcome, 0:17:11.960 --> 0:17:15.240 It wasn't the goal. The goal was building something that 0:17:15.359 --> 0:17:19.159 enabled every individual professional to most to transform their career 0:17:19.720 --> 0:17:22.760 by collaborating within a network. Right when you sold the 0:17:22.760 --> 0:17:25.399 company to Microsoft, you went on the board of Microsoft, 0:17:26.040 --> 0:17:28.600 And let me ask you about that. Microsoft was a 0:17:28.600 --> 0:17:31.960 technology company that came out of nowhere, became a dominant 0:17:31.960 --> 0:17:35.320 software company. Many people thought it would go south as 0:17:35.359 --> 0:17:38.480 it was, you know, getting older and older and transformed itself. 0:17:38.480 --> 0:17:42.199 When Sancho Odela became the CEO, were you shocked and 0:17:42.280 --> 0:17:44.840 surprised at how the company has become one of the 0:17:44.840 --> 0:17:47.960 most valuable companies in the world again, Uh No, Um, 0:17:47.960 --> 0:17:51.119 for a number of reasons. One is Microsoft has always 0:17:51.160 --> 0:17:53.560 had an enormous amount of talent throughout the whole company. 0:17:53.600 --> 0:17:58.320 The technology depth Microsoft you know has actually created a 0:17:58.359 --> 0:18:01.960 whole range of products within not just commercial sidebels on 0:18:02.040 --> 0:18:05.600 Microsoft research, um. And so there's always this raw amount 0:18:05.640 --> 0:18:09.600 of talent. And then obviously having some key franchises like 0:18:09.720 --> 0:18:12.679 Office and Windows and other kinds of things, and being 0:18:12.720 --> 0:18:16.040 willing to be bold and creation of Xbox and the 0:18:16.080 --> 0:18:20.440 gaming franchise. Now that being said, you know that I'd 0:18:20.480 --> 0:18:24.000 say that the thing that Satya brought back with vigor 0:18:24.480 --> 0:18:28.879 to the company was a focus on earning the ability 0:18:28.960 --> 0:18:32.600 to to to build the next generation of products, you know, 0:18:32.640 --> 0:18:35.760 starting with his own background and Azure, but also kind 0:18:35.760 --> 0:18:40.639 of transforming across the the company. A we are only 0:18:40.680 --> 0:18:44.239 one company in this universe, and we are um uh 0:18:44.760 --> 0:18:47.640 doing our absolute best to surprise and delight our customers. 0:18:47.880 --> 0:18:51.119 So let's talk about the different skill sets it. To 0:18:51.160 --> 0:18:53.240 be an investor, you need a certain skill set. What 0:18:53.400 --> 0:18:55.280 is that skill set and what is the skill set 0:18:55.280 --> 0:18:59.119 and how is it different to be an entrepreneur. So, well, 0:18:59.160 --> 0:19:00.720 I'll start with an entrepren because I think it's a 0:19:00.720 --> 0:19:04.480 little easier, which, well, the game is hard, but the 0:19:04.520 --> 0:19:08.640 definition is easier, which is, you have a vision for 0:19:08.760 --> 0:19:11.960 where the world is moving towards, where you can help 0:19:12.000 --> 0:19:15.639 build it towards. Um frequently, in the case of a 0:19:15.640 --> 0:19:19.600 new technology or a market shift or something that gives 0:19:19.640 --> 0:19:22.960 you that kind of market opportunity, you can assemble through 0:19:22.960 --> 0:19:26.560 your network the assets not just capital, but talent, uh, 0:19:26.720 --> 0:19:30.160 the ability to build the new product or service. And 0:19:30.280 --> 0:19:33.080 you're driven by kind of the cadence of a complete 0:19:33.080 --> 0:19:36.240 focus on how do you and you know, how do 0:19:36.280 --> 0:19:41.000 you navigate that path, which can include pivoting, includes risk management, 0:19:41.280 --> 0:19:43.520 and a bunch of other things. But it's that build 0:19:43.600 --> 0:19:47.520 of of building something from nothing and then in you know, 0:19:47.600 --> 0:19:50.560 kind of blit scaling getting it really large very fast. 0:19:51.359 --> 0:19:54.840 As an investor, what you're looking at is judging entrepreneurial 0:19:54.920 --> 0:19:59.200 talent and that same kind of circumstance of can this 0:19:59.640 --> 0:20:03.439 set of people, can she or he or you know, 0:20:03.520 --> 0:20:06.840 sometimes better to have two or three founders do that 0:20:07.200 --> 0:20:10.320 run this? Uh this kind of this this race. And 0:20:10.359 --> 0:20:14.040 the key thing that's a difference between being the entrepreneur 0:20:14.160 --> 0:20:16.000 where it's kind of the all in focus is the 0:20:16.040 --> 0:20:19.200 only thing I'm doing and a an investor is that 0:20:19.720 --> 0:20:21.560 you're making the judge. You're not running the race as 0:20:21.600 --> 0:20:26.360 the investor. The founders, the entrepreneurs, they are running the race. 0:20:26.560 --> 0:20:28.800 You're helping as much as you can, but you have 0:20:28.840 --> 0:20:31.239 to judge can they do that? And then can you 0:20:31.440 --> 0:20:34.800 help them as best you can get there? But it's 0:20:34.880 --> 0:20:38.160 it's the key difference in skill. So to make people 0:20:38.200 --> 0:20:41.360 feel good who aren't as successful as investors as you are, 0:20:41.920 --> 0:20:43.920 do you have some failures you can tell us about 0:20:43.960 --> 0:20:46.120 where you made a terrible mistake, you lost all your money? 0:20:46.200 --> 0:20:49.120 Just to make unrest of us feel good? Uh, well, 0:20:50.000 --> 0:20:51.800 it depends on you know, do we have days I 0:20:51.800 --> 0:20:54.520 can go through the list um And actually, by the way, 0:20:54.800 --> 0:20:57.240 the interesting question about the analysis of here is not 0:20:57.359 --> 0:21:03.520 as much of the companies that you that you invested 0:21:03.560 --> 0:21:05.760 and went to zero. There's a large list of those 0:21:05.760 --> 0:21:09.879 companies that that did that. The real thing is the 0:21:09.920 --> 0:21:17.080 companies that uh you missed, so like missing Twitter, missing Snapchat, 0:21:17.400 --> 0:21:21.240 missing Pinterest, those are in Those are much worse outcomes 0:21:21.400 --> 0:21:23.960 then you put in, you know, a hundred thousand dollars 0:21:24.040 --> 0:21:25.680 or a million dollars or ten million dollars in this 0:21:25.800 --> 0:21:28.760 other company that went to zero. So final question, if 0:21:28.760 --> 0:21:30.960 somebody said I want to be the next Reid Hoffman 0:21:31.720 --> 0:21:34.920 person who's starting companies, investing in companies, doing good things 0:21:35.000 --> 0:21:37.320