Reid Hoffman on best strategies, valuable lessons, the PayPal mafia & creating early social networks | Summary and Q&A

November 14, 2014
This Week in Startups
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Reid Hoffman on best strategies, valuable lessons, the PayPal mafia & creating early social networks

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In this video, Jason Calacanis interviews Reid Hoffman, the founder of LinkedIn. They discuss the origins of LinkedIn, the challenges they faced, and the strategies they used to achieve success. Reid also shares his insights on entrepreneurship and the importance of taking risks.

Questions & Answers

Q: What is LinkedIn's current scale?

LinkedIn has over 330 million users globally, ranging from high school students to CEOs. It is available in every country.

Q: How did Reid come up with the idea for LinkedIn?

The idea for LinkedIn originated during a meeting with Peter Thiel, Max Levchin, Luke Nosek, and Reid Hoffman. They were trying to fix PayPal's financial issues and also discussed other potential ideas. Reid pitched the idea of an internet platform that would provide individuals with a public professional identity and help them find jobs and professional connections.

Q: How was LinkedIn's idea received at the time?

People at the time were skeptical about the idea of a professional social network, as there were only message boards and online forums for social networking. However, Reid and his team saw the potential for a platform that would connect professionals and provide value in various ways.

Q: How did Reid and his team address the challenge of building a valuable product from scratch?

They focused on building critical mass by encouraging users to invite their contacts to join LinkedIn. They developed tactics like uploading address books to show users who else was on the platform, which increased engagement and facilitated network growth.

Q: When did Reid figure out LinkedIn's monetization strategy?

The monetization strategy was clear from the beginning. They knew that recruiting and job-seeking were high-stakes problems with significant revenue potential. They focused on improving these aspects of the platform and monetized them successfully.

Q: What were some of the challenges and lessons learned from building LinkedIn and SocialNet?

Reid highlighted several valuable lessons for entrepreneurs. One lesson was to think long-term and short-term simultaneously, focusing on both product development and financing strategies. He also emphasized the importance of product distribution and making the product distinct and appealing. Additionally, he discussed the role of surprise and delight in capturing users' attention and differentiating a product.

Q: How did Reid feel after the failure of SocialNet?

Reid viewed SocialNet as a learning experience and saw it as one step in his entrepreneurial journey. He understood that failure was a possibility and was prepared to learn from it and move on to the next venture.

Q: Did Reid have any specific lessons or mistakes from SocialNet that stuck with him?

Reid highlighted the importance of product differentiation and thinking about how the product can be paradigm-shifting and capture users' attention. He also mentioned the need to focus on product distribution, as it often presents greater challenges than product development.

Q: When did LinkedIn start monetizing and what strategies did they use?

LinkedIn started monetizing from the beginning by focusing on recruiting and job-seeking as revenue streams. They understood the value of these services and worked on improving them to attract users and generate revenue.

Q: What was the creative process behind LinkedIn's success and monetization strategies?

Reid and his team had a clear vision from the beginning, and they understood the problems they wanted to solve. They focused on the unique value proposition of providing a public professional identity and facilitating connections. They also analyzed the market and identified recruiting and job-seeking as the initial revenue streams.

Q: How did Reid view the concept of luck in LinkedIn's success?

Reid acknowledged that luck played a role in their success. While they had a solid plan and executed well, they also recognized that they had competitors in the market. They were fortunate that their competitors didn't come up with better ideas or execute faster, allowing LinkedIn to become a leader in the industry.


Building a successful company requires a combination of vision, execution, and a bit of luck. Reid Hoffman's experience with LinkedIn showcases the importance of understanding market needs, focusing on valuable product features, and developing effective distribution strategies. It also highlights the necessity of learning from failures and being adaptable in the entrepreneurial journey.

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