Reid Hoffman ON: The Entrepreneur’s Mindset & Why What Got You Here Won’t Get You There

Transcript

you don't really say well I just want to get a yes and it's like well you're not going to just get a yes especially if you have something that's Bold And original different cuz a bunch of people are going to say well I don't get it right like you know like I don't get that people will want to buy flavored water without sugar I don't get that you kn... Read More

Summary

In this video, Reid Hoffman, co-founder of LinkedIn and host of the podcast "Masters of Scale," discusses entrepreneurship, scaling businesses, and the importance of embracing rejection and doing things that don't scale. He offers insights and advice based on his experiences as an entrepreneur and investor.

Questions & Answers

Q: When did the idea of entrepreneurship first spark your intriguing curiosity?

Reid explains that he always thinks in terms of projects and didn't think of himself as an entrepreneur early on. It wasn't until years into LinkedIn that he realized the word "entrepreneur" described what he was doing. He was motivated by the impact he wanted to have in the world and the insights he wanted to operationalize in the early days of the internet.

Q: What mistakes did you make with your first company, SocialNet?

Reid answers that a mistake he made was jumping off the cliff without knowing everything he needed to know about starting a company. He didn't have the knowledge about financing, scoping a project, or making initial hires. However, he believes that a bias to action is essential in entrepreneurship and that mistakes are a natural part of the learning process.

Q: How do you approach hearing "no" in entrepreneurship?

Reid explains that getting a "no" can be a learning opportunity. Sometimes, when a lot of people say they don't get an idea, that's when it becomes something promising. It's important to approach rejection as a chance to gather feedback and improve. Reid suggests categorizing different types of "no's" and determining whether there is something valuable to learn from them or if it's a stereotype or unengaged response.

Q: What is the difference between scaling and growing a business?

Reid states that scaling involves achieving something bold and different of significant scale. It often requires choosing a contrarian idea or vision. Growing a business, on the other hand, focuses on incremental growth and may not involve the same level of boldness or originality. Scaling typically requires a mastery of navigating various challenges along the way.

Q: Can you share an example of a surprising "yes" you've given in investing?

Reid mentions Airbnb as a surprising "yes" he gave as an investor. Initially, many people thought the idea was foolish, but he saw potential in the founders' vision and the transformative impact it could have. Despite others' doubts, Reid trusted his intuition and made the investment, which turned out to be successful.

Q: What mistake do most startups make in the early stages of their business?

Reid emphasizes that there are many ways to fail in entrepreneurship. One common mistake is disregarding the importance of doing things that don't scale. Startups often focus too much on scaling from the beginning without experimenting or innovating. It's important to understand that not everything can or should scale immediately.

Q: What advice do you have for someone who is hesitant to pursue their big idea?

Reid suggests considering factors such as risk tolerance, long-term commitment, and personal goals. Every entrepreneurial journey involves risks and unknowns, but experimentation is a valuable tool for gathering feedback and making informed decisions. He also highlights the importance of experimenting with oneself and how an idea or venture makes one feel.

Q: How do you define the big idea in entrepreneurship?

Reid explains that the big idea is usually something bold, original, and different. It often involves solving a problem in a way that others may not understand or appreciate initially. Successful entrepreneurial ventures have a big idea at their core, and pursuing it requires taking smart risks and being open to experimentation.

Q: What are some of the common fears or concerns people have when starting their own venture?

Reid mentions concerns about fundraising, skills, competition, originality, and fear of failure or disappointment from family and friends. He underscores the importance of understanding one's own risk tolerance and taking smart risks. By experimenting and seeking feedback, individuals can gain clarity and confidence in pursuing their ideas.

Q: How can experiments help in entrepreneurship?

Reid explains that experiments are valuable in testing assumptions, gathering feedback, and making informed decisions. They can be done on a small scale, quickly, and at a low cost. Experimenting allows entrepreneurs to validate ideas, understand customer behavior, and pivot if necessary. It's a proactive and learning-oriented approach to entrepreneurship.

Takeaways

Reid Hoffman encourages entrepreneurs to embrace rejection and view it as an opportunity for learning and improvement. He emphasizes the importance of experimentation, even in the early stages of a business, and doing things that don't scale. Scaling requires a mastery of navigating challenges and taking smart risks. Entrepreneurs should consider factors such as risk tolerance and long-term commitment when pursuing a big idea. Experiments can provide valuable feedback and insights, both externally and internally. By approaching entrepreneurship with a growth mindset and a willingness to learn, entrepreneurs can increase their chances of success.