Reid Hoffman Greylock

What Reid Hoffman, Greylock says about topics vital to entrepreneurs

Reid Hoffman Posts – Titles

Reid Hoffman Posts  – Titles  (10 posts)

 

What Great Silicon Valley Companies Have in Common

Smart Adapting & Pivoting

Pivot to Real Market Need

Better To Be in Front of a Big Change than Behind It  

Focus on Learning over Profitability

Success is Fragile - Be Paranoid

Curiosity

Entrepreneurial Hustle: Get Resourceful or Die

Achieve Big Success:  Be Contrarian and Right

What Sets Great Entrepreneurs Apart

 

 

What Sets Great Entrepreneurs Apart

Reid Hoffman angel investor, Co-Founder & Executive Chairman LinkedIn and Partner Greylock & Ben Casnocha entrepreneur

“[] what sets the great entrepreneurs apart from the pack is not a high tolerance for risk per se, but their ability to judiciously assess and manage it.  They strategically pursue only those opportunities with enough upside to justify the possible downside.  It’s one of the key skills that makes entrepreneurs successful.

 [] “[I]f you are not genuinely pained by the risk involved in your strategic choices, it’s not much of a strategy,” says Reed Hastings [CEO] of Netflix.”  Reid Hoffman and Ben Casnocha, The Start-up of You book, pg 176 

Achieve Big Success: Be Contrarian and Right

Reid Hoffman angel investor, Co-Founder & Executive Chairman LinkedIn and Partner Greylock & Ben Casnocha entrepreneur

 “Warren Buffett [the acclaimed investor] has a mantra:  “Be fearful when others are greedy and greedy when others are fearful.”  It’s a competitive edge for him. [] In public market investing, as in many things, you achieve big success when you’re both contrarian and right.”  Reid Hoffman and Ben Casnocha; The Start-up of You book,  pg 183

Entrepreneurial Hustle: Get Resourceful or Die

Reid Hoffman angel investor, Co-Founder & Executive Chairman LinkedIn and Partner Greylock & Ben Casnocha entrepreneur

“[Entrepreneurs’] ability to [hustle] well can comprise a competitive advantage.  Entrepreneurs, forever operating with constraints, are the kings and queens of hustle []”. You can’t study in a textbook the “[] entrepreneurial opportunity-generating strategy of [] hustle.”

The founders of Airbnb a short-term property rental marketplace hustled to raise cash by selling cereal, while determining how to scale the business.  “[Investors were impressed with their resourcefulness, enabling them] to raise outside financing, including a Series A investment [Hoffman led at Greylock].”

When Internet radio service Pandora’s business model was threatened with federally-mandated unsustainable cost increases, it organized a lobbying campaign in Congress to buy time to renegotiate royalty payments.  Despite almost 10 years of “lawsuits, unfavorable legislation and [bankruptcy threat], [] resilience [] kept them [alive].” Pandora eventually raised additional Greylock-led financing and completed an IPO in 2011. 

“Both [Airbnb and Pandora] were [] at one point operating with severe resource constraints, [lacking] money,[] know-how, [] connections, [] employees, advisors [and] partners.[] When you have no resources, you create them. [] Caterina Fake the co- founder of Flickr says that the “less money you have, the fewer people and resources you have, the more creative you have to become”.  Get resourceful or die.”  Reid Hoffman and Ben Casnocha; The Start-up of You book (pg 162-167)

Curiosity

Reid Hoffman angel investor, Co-Founder & Executive Chairman LinkedIn and Partner Greylock & Ben Casnocha entrepreneur

“There’s one [] mind-set that must be “on” [] to power all the other opportunity-seeking behaviors: curiosity.  Entrepreneurs brim with curiosity: they see opportunity where others see problems, because while others simply complain, entrepreneurs ask Why?  Why the heck doesn’t this annoying product/service work as well as it should?  Is there a better way? And can I make money off it? [] For entrepreneurs this mix translates into supreme alertness for new business opportunities”.   Reid Hoffman & Ben Casnocha, The Start-up of You (book), pg 147  

Success is Fragile - Be Paranoid

Reid Hoffman angel investor, Co-Founder & Executive Chairman LinkedIn and Partner Greylock & Ben Casnocha entrepreneur

 “[] the overriding problem [for the U.S. auto industry’s decline] was [that it] got too comfortable.  As Intel cofounder Andy Grove once famously proclaimed, “Only the paranoid survive”. Success, he meant, is fragile- and perfection, fleeting.  The moment you begin to take success for granted is the moment a competitor lunges for your jugular.  Auto industry executives, to say the least, were not paranoid.”  Reid Hoffman & Ben Casnocha, The Start-up of You (book), pg 15

Focus on Learning over Profitability

Reid Hoffman angel investor, Co-Founder & Executive Chairman LinkedIn and Partner Greylock & Ben Casnocha entrepreneur

Start-ups believe that “[] technology companies focus on learning over profitability in the early years to maximize revenue in the later years.”  Reid Hoffman & Ben Casnocha, The Start-up of You (book) pg 60   

Better To Be in Front of a Big Change than Behind It

Reid Hoffman angel investor, Co-Founder & Executive Chairman LinkedIn and Partner Greylock & Ben Casnocha entrepreneur

“Plan A is what you’re doing right now. [] Within a Plan A you make minor adjustments as you learn; you iterate regularly.”

“[] [Should] you decide you need to make a bigger change, that’s when you pivot to Plan B. [] It’s changing direction or changing your path to get somewhere based on what you’ve learned along the way.”

“How do you know when to pivot from Plan A [] to a Plan B? [] You’ll rarely know for sure when to pivot or when to persist in what you’re doing.  In general, a lesson from the technology industry is that it’s better to be in front of a big change than to be behind it.  But the question of when to shift exactly is a question of both art and science, intuitive judgment combined with the best feedback or data you can collect []. [Expect] both good luck and bad luck along the way that will open and close unexpected windows of opportunity.

The common presumption is that you shift to Plan B when something isn’t working.  That’s frequently the case but not always. What you’re doing now doesn’t have to be failing for it to make sense to shift. [] If you find that the grass really is greener somewhere else, go there!”  Reid Hoffman & Ben Casnocha, book The Start-up of You, pg 58, 68, 70-71

Pivot to Real Market Need

Reid Hoffman angel investor, Co-Founder & Executive Chairman LinkedIn and Partner Greylock & Ben Casnocha entrepreneur

PayPal a leading online payments company was acquired by eBay for $1.5 billion in 2002.  Yet PayPal initially was very different than today.

In 1998 Max Levchin and Peter Thiel “[create[d] a “digital wallet”- an encryption platform [] that [] evolved to software [] [for securely moving digital cash via a Palm Pilot] [one] of several iterations []”. The company grappled with finding a mass-market use case as the public wasn’t used to wirelessly and electronically sending cash.  Meanwhile eBay was growing significantly despite its inability to efficiently handle payments, even though “growing numbers of eBay users [tried] us[ing] PayPal to handle payments”[].  As a result “[] PayPal ditched the Palm Pilot app [] and focused on eBay]. [] It stayed true to [its] initial encryption roots while shifting to capitalize on what appeared to be the real market need.”  PayPal became a huge success, overcoming many challenges, including new management and losses from fraud.   Reid Hoffman & Ben Casnocha, The Start-up of You (book), pg 64-66, 68-70

Smart Adapting & Pivoting

Reid Hoffman angel investor, Co-Founder & Executive Chairman LinkedIn and Partner Greylock & Ben Casnocha entrepreneur

Flickr is a popular photo-sharing website. Yet its founders Caterina Fake and Stewart Butterfield didn’t plan to start a photo-sharing site.

Begun in 2002 their original product was an online game played simultaneously by hundreds of players.  “[] the plan was to build [] less [of] a game and more [of] a “social space designed to facilitate and enable play”” with features to attract users, including photo-sharing.  When photo-sharing surpassed the game itself in popularity they had to decide whether to continue game development while expanding photo-sharing, or dedicate most of their resources to photo-sharing.  They pivoted from the original plan to focus solely on photo-sharing.  Its tremendous popularity resulted in Yahoo! acquiring it in 2005.  

“[] [its] evolution [] “is a case study in smart adapting: its founders [] tried many things to see what would work, and nimbly shifted their plans based on what they learned.”   Reid Hoffman & Ben Casnocha, The Start-up of You (book), pg 52-53  

What Great Silicon Valley Companies Have in Common

Reid Hoffman angel investor, Co-Founder & Executive Chairman LinkedIn and Partner Greylock & Ben Casnocha entrepreneur

 What great Silicon Valley companies like Intel, Apple, Google, YouTube, Twitter and LinkedIn  among others have in common: “[] Take intelligent and bold risks to accomplish something great.  Build a network of alliances to help [] with intelligence, resources and collective action.  Pivot to a breakout opportunity.”  Reid Hoffman & Ben Casnocha, The Start-up of You (book) pg 18-19