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Silicon Valley Memes, Talent Identification, Science Fiction, Board Games, and More – Reid Hoffman on Conversations with Tyler, Hosted By Tyler Cowen

Check Out the Conversations with Tyler Episode Page & Show Notes

Key Takeaways

  • The creation of new technologies and tech companies is the most effective Archimedean lever by which to improve the world, but as those levers become more critical to society–and this isn’t a standard belief—there needs to be more discourse with society
  • One reason productivity and GDP growth have decreased since the late 1990s: Technology provides you with goods you otherwise would have had to pay for, but now get for free
  • 99% of the time, reference checks > interviews
  • Reid’s favorite question to ask a reference:
    • “What’s this person’s greatest weakness and challenge?”
    • “Is this person among the top-five people that you would choose to do a new venture with?”
  • Crypto is here to stay

Books Mentioned


Reid Drove Oxen in High School

  • Reid attended Putney High School, a John Dewey-inspired school in Vermont that focuses on the importance of diversifying yourself as a human being
    • The school, in addition to academics, also teaches art, blacksmithing, and farm work (shoveling cow manure, maple syrup farming, and driving oxen!)
    • One thing Reid learned while attending: “The diversity of human experience—[the importance of] thinking of human beings as complicated entities that have lots of different kinds of expression and motives.”

Reid’s Thought Process

  • First, he thinks in terms of systems
  • Then, he thinks in terms of Archimedean levers, by which you change the systems
    • There are several types of Archimedean levers, ranging from ideas, to incentives and cultures, all the way to leaders building and reforming organizations/institutions

Reid’s Early-Life Science Fiction Favorites

If Reid Were to Invent Three Board Games…

  • One would be a political economy game involving the creation of companies
    • Why? – Teaching the skills of entrepreneurship is essential for how we make progress in society and how we solve the future of middle-class jobs
  • The second would be Life 2.0 as a game
  • The third would be: “Think of it as the future of humanity. As human beings are evolving, who would we choose to be?”
    • (Similar to World of Warcraft, but more realistic) 

Lessons from Philosophy Applied to Entrepreneurship

  • Reid has a master’s degree in philosophy from Oxford 
  • Reid’s favorite philosopher: Aristotle
    • One of his favorite learnings: “Philosophy isn’t the thing that you sit in a cave doing, but something you do as you participate in society”Reid Hoffman
  • Philosophy stresses the importance of articulating your theses with clarity, which ties in well to the advice Reid frequently gives to entrepreneurs: 
    • Write out a clear investment thesis. What is it you believe the world is and is becoming? What is your strategy for making it happen? And why do you have a rare or unique position in so doing?

Why has the labor market been so slow to recover following the 2008 financial crisis?

  • One reason: “Unfortunately, while entrepreneurship is doing quite well in Silicon Valley and a few other places, it’s been on the decrease across the US. We need to get back to the formulation of new firms—entrepreneurship across the entire country—because that gives you adaptive places where people can go.”Reid Hoffman
  • The second reason: A lack of continuous learning, which inhibits adaption for new jobs

Mr. Peter Thiel

  • Reid first met Peter at a philosophy class called “Mind, Matter, and Meeting,” taught at Stanford University
    • “Peter’s super smart … I learned some of the crispness of my thinking through arguing and debating with him.” – Reid Hoffman
  • How would Peter and Reid’s reading of Shakespeare’s The Tempest differ?
    • Peter would probably conclude something along the lines of the individual being the primary focus of what matters
    • Reid, on the other hand, would undoubtedly be led to believe that an individual’s potential and capability are significant, but would probably conclude that the rejoining of society with the things you learn is more crucial 

Why did PayPal succeed?

  • “If eBay hadn’t existed, PayPal would have never succeeded” Reid Hoffman
    • (PayPal’s payment system took off on eBay)
  • Other reasons:
    • Their high density of talent
    • Their willingness to be fast-moving and learning machines
    • Their recognition of a market need
  • Reid’s comparative strength on the PayPal team:
    • “I was willing to interface with these various massive platforms and institutions—eBay, Visa, Mastercard, government regulation, other companies—and to figure out how to win PayPal a place within those platforms, how to navigate their concerns, how to not make PayPal be organ rejection to those entities.” – Reid Hoffman

Silicon Valley Memes

  • 🎧 Reid agrees with the standard belief that the creation of new technologies and tech companies is the most effective Archimedean lever by which to improve the world
    • But, as those levers become more critical to society–and this isn’t a standard belief—there needs to be more discourse with society, including but not limited to:
      • Accountability on design principles
      • Integration of societal feedback mechanisms
      • Philosophical discussions of the technology
    • Expanded: “As you have more successful tech companies that have an impact on society as a whole, part of what you should start doing is deliberately engaging in discourse with the various institutions of society in a public way.” – Reid Hoffman

🎧 Why has productivity and GDP growth decreased since the late 1990s?

  • GDP only measures dollars flowing in the system, not value flowing in the system
    • Some tech is monetized, but much of it provides you with goods and services you would have otherwise had to pay for, but now get for free (i.e., Wikipedia, entertainment, etc.)
      • These types of things take dollars out of the system, leading to a net GDP that doesn’t look like it’s growing, even though there’s more value flowing within the system

Reid’s An Expert at Talent Search and Identification

  • 99% of the time, reference checks > interviews
  • Reid’s favorite question to ask a reference:
    • “What’s this person’s greatest weakness and challenge?”
      • He’ll add: “If you don’t give me one that’s believable, I’ll believe that the thing is so bad you can’t tell me about it.”
    • “Is this person among the top-5 people that you would choose to do a new venture with?”
  • (40:26) As an investor at Greylock, Reid seldom meets with an entrepreneur that isn’t referred to him by someone he trusts

Long Bitcoin

  • Reid helped make a YouTube video titled: Bitcoin Rap Battle Debate: Hamilton vs. Satoshi
  • In a 2015 Wired article, Reid argued that the world would need one or more cryptocurrencies
  • What significant cryptocurrency will we end up with in the future—Bitcoin, the Chinese e-currency, or something that doesn’t exist yet?
    • Probably Bitcoin, but the Chinese e-currency may take off because of the large market within China
    • But wait there’s more: “My guess is that there will be one more additional” – Reid Hoffman

🎧 What do people most commonly misunderstand about friendship?

  • “I would say that people most commonly misunderstand about friendship is that they think it’s strict loyalty to the other person … Actually, in fact, I think what you’re loyal to is the person’s aspirational better self … It’s who they are in the world and what they’re doing. That’s where the loyalty should lie.”Reid Hoffman
    • For instance, if you discover your “friend” is a serial murderer, you’d probably end the friendship

Additional Notes

  • Reid has never lost at an Avalon Hill board game
  • Playing Dungeons & Dragons as a kid made Reid start thinking about “life as a heroic quest in which you have a number of different players, all of whom are coming together in order to accomplish something”
  • Reid identifies as a “mystical atheist”: Neither entirely religious or entirely atheist, but somewhere in the middle
  • Check out Reid’s first appearance on TV, in which he argued that governments could and should regulate speech on the internet side-by-side with Ariana Huffington and William F. Buckley
  • The “topple rate” of the S&P 500 is increasing (the number of companies that were in the S&P 500 in the previous decade but have since dropped out of it altogether)
  • Reid hopes to one day write a book on friendship
Conversations with Tyler : , , , , , , , , , , ,
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