reid hoffman starting greatness mike maples

The Network Philosopher King | Reid Hoffman on Starting Greatness with Mike Maples, Jr.

Check out the Starting Greatness Podcast Page

Key Takeaways

  • Most of the time, you don’t need people with on-the-job experience; you need fast learners and team players
  • Every entrepreneur needs an investment thesis—a clear set of articulated beliefs about the way the world is becoming, the role of your product or service in that world, and what you’re going to do to enable that role successfully
  • “The rule for consumer internet—and the general rule for most businesses—is: while the entrepreneurial instinct is to build the product and then figure out distribution, you should figure out product and distribution together.” Reid Hoffman
  • Great distribution & mediocre product > great product & mediocre distribution
  • Every weakness has a corresponding strength

Intro

Let’s Set the Scene

  • “If I had to pick someone who knows consumer internet and network effects businesses the very best, I’d choose Reid Hoffman” – Mike Maples

The SocialNet Days

  • Reid started his first company, SocialNet, in the 1990s, almost a decade before the concept of social networking was on the public radar
    • What was SocialNet? A platform for dating, roommates, activities, sports partners, and professional networking 
      • Reid notes that the platform worked great for everything besides professional networking (hence, his desire to start LinkedIn)
  • The people-first mindset Reid applied to SocialNet
    • “The classic engineering design mindset when it comes to software is people, places, and things … How do we do a simulacrum of the real world and things that matter to us—our work, our entertainment, people, places, and things—and put them all in the digital world? The thing I started telling people in 1996 is that it’s not people, places, and things; it’s people, people, people. What most matters to other people: people. Sure they like places, and sure they like things, but we’re social animals … Focus on people. How do you make people better with each other? THAT’s the thing to do.” – Reid Hoffman
  • Other lessons from Reid’s SocialNet experience
    • Focus on distribution
    • If you’re not embarrassed by your first product release, you launched too late
    • Don’t presume you know what your product-market fit is—get there and start adjusting
    • You don’t need people with on-the-job experience; you need fast learners and team players

Every Entrepreneur Needs an Investment Thesis

  • “Part of the thing you should have—and this gives you a sense of whether or not you should double-down, stay on target, or pivot, etc.—is a clear set of articulated beliefs about the way the world is becoming, the role of your product or service in that world, and what you’re going to do to enable that role successfully.”Reid Hoffman
    • LinkedIn’s investment thesis, for instance: every professional should have a public identity that identifies which business they’re willing to engage in (and the whole world is better off when this occurs)
    • To hone in on your investment thesis, ask yourself: “What would make everything in the world better—better for people, companies, and industries?”
  • Then, as fast as you can, find out if one part of your investment thesis isn’t working (and adjust as needed)

The ‘ABZ Planning Framework’ for Startups

  • (This is a concept from Reid’s book – The Start-up of You)
  • Have a Plan A
  • Have “Plans B”: These are slightly different paths/plans than Plan A (AKA The micro-pivots made when adjusting your investment thesis)
  • Have a Plan Z: This is something totally different than Plan A

Distribution, Distribution, Distribution (Then Product)

  • With SocialNet, Reid did the opposite—he focused on building a great product, and paid for marketing, advertising, partnerships, etc. to grow the company
  • “The rule for consumer internet—and the general rule for most businesses—is: while the entrepreneurial instinct is to build the product and then figure out distribution, you should figure out product and distribution together”Reid Hoffman
    • Great distribution & mediocre product > great product & mediocre distribution
      • Why? With great distribution, you can fix the product after receiving user feedback. If no one’s using your product, it doesn’t matter!
    • In fact: Find a distribution advantage, then find a product you can deliver with it (not the other way around)

How to Hone Your Distribution

  • Build a distribution mechanism on an already established platform:
    • For instance, look at how PayPal piggy-backed eBay or how Skype piggy-backed the phone system (people were already conditioned to call each other; Skype took that same behavior and made it free over long distances)
    • Or, consider the general strategy: sending invites via email; LinkedIn, for instance:
      • Encouraged new users, when signing up, to invite friends to the platform
      • Encouraged users to sync their email contact list, so they could be notified if one if their contacts joined LinkedIn in the future
    • In general, always ask: “How are we operating within a platform to spread within that platform?”
  • Also, make sure your distribution mechanism is cost-effective & plays against competition & antibodies
    • In 2003, email wasn’t very competitive, but nowadays, the “antibodies” are very high—people are much more resistant
    • Your mechanism MUST be distinct & unique

‘Reidisms’

  • “People are complicated and flawed. Root for their better angels.”Reid Hoffman
    • Reid’s advice: Engage with others in a way that brings out the best versions of you & yourself (your better angels)
    • Also related: Magnify your strengths; let others accommodate for your weaknesses
  • “The best way to get a powerful person’s attention: offer to help them”Reid Hoffman
    • But, don’t ask, “How can I offer help?” Offer to do something specific.
  • “Every weakness has a corresponding strength”Reid Hoffman
    • Reid expands: “The vast majority of things we think of as really unique strengths actually have corresponding weaknesses”

Reid’s Advice to Every Founder

  • Have a clear investment thesis
  • Know specifically, within your investment thesis, what things you understand that others don’t (i.e., how is it unique?)
  • Also, know the specific risks you’re taking if your investment thesis is wrong

Additional Notes

  • Reid studied philosophy at Oxford
    • Here’s why: “I was curious about what makes us human—how we think, speak, and communicate with each other, as well as how we find truth and connection” – Reid Hoffman
  • Raising money doesn’t equate to success; it just means you jumped off the entrepreneurship cliff and you’re well on your way
  • Reid was an angel investor in Facebook
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