>> he's been called the startup whisperer of silicon valley. the chairman of linkedin and an investor in some of the successful companies of all time, including facebook. the man was not always an entrepreneur. pursued a career at academia.

out of the first job school at apple, now he sits on seven boards. the author the author of the s

review and a new book "the alliance." our guest today on studio. >> what your career is. >> what if you hear something you don't like? >> then you ask, why? by the way, that's a very good thing to learn. o if you -- if you learn something there's an alliance. may not work. >> the comparison to the military, the term, "tour of duty," do people feel about their company, that patriotic. >> we want to get people to look, it's not daily employment. it is an investment in something real and it should be transformative that a kind of a bold term would be the right way for people to think about it. other companies out there are doing this well? so many ofur hand in them? >> google, for example. normally think of these as a three-to-five years.

they weren't using the words tour of duty, be uh three to ive year stints where the person learns a job, achieves significant, proves themselves, goes on to something else. how we bring the relationships of all of the folks who graduated from ebay paypal and have the external network tied in. do and what they used to still do for executive rotation, but then also how do you then stars to be as of executive at this huge strim conglomerate. silicon valley get that other industries don't get. is not just we hole up in our lab, we invent something, tada, there it is. that being present and active in what is going on in the entire network around silicon valley is innovation. people hold up steve jobs like he's the guy sitting in the back

room. e was talking to people exon standly. he was like what can be done here, here, i'm interested in learning what's this. want to learn what the google folks are doing. talk to them. is a icon valley combination of intense cooperation. nd >> linkedin sits in an interesting paradox. people to find good opportunities and makes it asier for companies to lose good people. >> if you have an open and ecosystem the quality opportunity, the high culture companies will benefit. flow to that.l but overall, it creates massive benefit for the individuals and are -- companies that that have interesting opportunities. that's a good thing. have a statement of alliance at the end of the book that people can use as a guide. end, is it just a promise? a promise can be broken? >> promises can be broken just relationships. sometimes you -- like a

happens.p ends, it but if you lived your whole life like, oh, friendships may end so i won't have any friends, that would be terrible. >> companies have a founding that sort of boil down to legends. what is the myth of reed hofman the reality? >> you can tell the difference. a manifest destiny march to entrepreneurship and technology. the ways to help that? software, entrepreneurship. as ways to cover that path. reality.yth and >> take a break, we'll be right back.

>> let's talk about how you got there. you grew up in berkeley? >> yep. do?hat did your parents >> both parents are lawyers. that led to -- because the legal one that is the people most often leave when you charts on actuary people transitioning. when people asked me at 12 what grew up, o do when i the answer was not a lawyer. >> what was the answer? know.didn't i kind of got the independence bug a little early. the to school called college school and my friend said i'm going to a school in vermont. like, hey, i could go and be independent and exploring my life. i applied for and got in the school without -- without parents.of my >> you applied to boarding chool without my parents knowing. >> yes. independence streak i early. ered

>> what kid were you in the high school? anywhere?it in a box >> no, i was a strange individualist. friends ave one or two in most of the different clooeks. a friend or two out of the jocks thethe friend or two out of artists and a friend or two -- it was all very individual. i did have much younger i was the fantasy role playing group. >> what's that? >> dungeons and dragons. dungeons and dragons because my dad who was 9 babysitter for me and like oh, creating new rules and thinking of how stories come and an interactive novel. stanford and majored in symbolic systems? what is that? measure to stanford. it's the simplest going to some artificial intelligence. deeper which step

is part of what's transforming are these notions of ymbols, computer programs, mathematics and logic, models in thinkology.k and i was the eighth or ninth person. >> while you were at stanford, you met. yes. >> tell me how you met? peter and i had both somebody we knew. it was a right wing person, a left wing person. i heard about you. we grabbed a coffee and we argued for eight hour us. you can't oh, believe that. and then i was like, oh, that was fun. do that again. oxford, studied philosophy. >> why? >> i think i'm an academic. if i'm an academic, i can write about these interesting questions. people, howed about we think, reason, communicate. what i realized was that the

course of becoming an academic very, veryhould be a narrow scholar. so you wanted to be an expert on the thing that, for example, 10 to 20 people in the world knew about. do is how do to you help millions of people, basically within about six oxford, i knew that i wasn't going to be an academic, here. oing to come back >> that's when you decided to be an entrepreneur essentially. started to work on software thinking to myself, as an entrepreneur, that kind of came later. so you took your first job at apple. >> yes. middle sort of in the of the near death spiral. did you meet steve jobs? >> no, he feelsn't there at the time. i was literally at apple at the -- we don't know what we're have no really good plan to adapt to what's going on in the future. went there because i loved apple products, i lovedmac intosh. on the d the program

apple ii e. >> you started your own company you. networks before social networks. social net, 1997. it had some of the right ideas. the right idea of having the discoverability. it had the idea of having some sort of social controls on how strangers.eet but it didn't have the or the tal network idea real identity idea. > you went on to the paypal mafia. who called who? how did that happen? >> i called peter. we're going sell paypal because we don't have a business model at the time. be useful for us because you know all of this stuff. and help organize the company and sell it. i'd d i know all you guys, be happy to step in. we took it to public, selling it to ebay after it was public. o what was supposed to be a

6-month tour of duty turned into a 3-year tour of duty. long and fun. >> a legend. when did it start being called the mafia? i don't know, it might have been with the "fortune" article. of the term. afia implies dark room, extortionist practices, these kinds of things. clever, gets impeded. requires a tight network where people are tight with each other. evocative, the paypal network? i don't know how we'd call it. months probably after the acquisition. youtube, n, tesla, yammer, and space-x all founded by the members of the paypal mafia. special. what do you have in common? paypal collected people who were young, intense, and well.reneurs as

then all of a sudden, ebay and he folks were like, okay, what do i do next? chad and steve go and do youtube. goes and does tesla and space-x. jeremy and russ do yelp. do linkedin. because we've had this intense experience together, we have a network. so we're all calling each other saying i think about doing this, what do you think? >> what do you call for what? financial boldc, models, i call peter. of intersection of kind interesting business models, technologies, big data, max. willingness to just think super big with risk without a elan. le, >> what do they call you for? >> laughs. >> i've heard you're quite funny. >> occasionally. but i don't know. funnier.ople are

the view of the valley. are hinking about "x", who the right people to talk about "x" ooshgs. in the e instrumental sale to ebay for $1.5 billion, 2002. ebay and paypal have had interesting year. some members of the mafia thinks they're better apart. > the right decision at the time. we made it collaboratively. to really get to the right level payments transaction system, it required a much closer connection with ebay. ow that it's gotten to a certain level, they say, look, is it better inside or outside. you could make good arguments ways. the argument with, for example, density till a lot of of value between ebay and paypal. paypal should ct natural bank, but the evolution is to head there in some direction. that's also possible with team. r management

>> time for a quick break.

>> i think for paypal, you could over, tired a few times probably, some of the members or the paypal bought ferraris, you bought an acura, it's a nice kafr. going to lean i'm back. >> i was thinking of buying an audi sa. it's a nice car and so forth. a friend pitched by acura.e on the i would rather invest in the sa or the startup. what's the cheapest nice car i buy.d i would rather spend my money investing in the companies that are transforming the world. bought acura. >> then you started something new. >> i was going to take the year off. going to travel around the world for a year. and what i realized was in 2002,

silicon valley concluded the internet was over. and i was like, oh, no. it's just beginning. the companies are great. google, yahoo! ebay, amazon. only some of the great companies are created as opposed to a year. took two weeks in australia, what's the best idea. linkedin is still a very valid idea. the market opportunity is ripe it. i should start that. started to invest in companies a e facebook, flikr and number of others and i was like, let's go all in on the next generation of the internet. early years were hard. tell me about that. i don't know how many of our friendsor.ll remember >> i come back and i say this is linkedin is. they would say it's like friendsure but for business. be like, no, and i can't tell you how many times i had people who s with are smart and they say i don't think it will work. closest to you come

giving up? >> never. >> took five years to turn a profit. you made really hard decisions along the way, including stepping down adds ceo and becoming executive chairman? the question wasn't like oh, a difficult thing for ego, for ceo as much as s hat gives us the best possible chance to realize something. to part of what i've come realize with that is i'm passionate about solving business problems. i'm passionate about innovation ship and but not running an organization. i don't wake up and say how do i executive staff better and how do i when i'm onboarding he next 100 people, how do we do that? i though know it's important. and i came together with jeff. help you running thatxecutives of the stuff

you feel confident about. >> tell me about your jeff. ship with >> jeff and i get along well. things like to building organizational cultures executive you make an staff work really well together and how do you identify a-plus talent through the whole organization. so we partner on these things together and solve these problems. now between time linkedin and -- is it like 50-50, do you break it down? 70. 70- >> or -- days a week.en i have an office by jeff. the short answer is all. seven days a week. >> you have so many wins already. how do you do all of this? i think about it is how do you have a life that you're proud of having lived it. you think that what you did in the world was worth it.

steve jobs. at facebook erburg and google, is there a founder lost if you weren't here? >> i think so. founder is useful. the vision, the commitment. he willingness to take bold risks. >> you have a unique investing philosophy in that the best invest in are ctually the betweens you don't agree on. >> most everyone thinks everyone votes their deal. yes, that's a good deal. deal that happens. however, the best deals are not saying i would do the deal too. the bold deals that transform ndustry are the ones that seem a little crazy. a little out there. not quite right. early days n in the and yet end up growing something that's big. facebook disagree on and air b&b. >> yep. partner not to be named said be the death of graylock. and air b&b, a variety of

including david, david c said, you know, people are going to rent out their rooms a littleat going to be weird? he and i had an argument. do the, fine, i wouldn't deal but you can. >> you're the startup whisperer silicon valley. what's whispering to startup involve? >> not quite sure. people who use that term -- i identify myself that way by being an entrepreneur myself. a lot g a participant in of the early stage xaenls. and it's not that i know everything. are useful. gs >> we live in the age of four increasingly powerful platforms, apple, google, facebook, and amazon. do you worry at all any one of too powerful?ome necessarilyough not specifically each one of them, but more as a general system. if you have aggregation of platforms, you talk about leaving room for entrepreneurs ap innovation.

on a general that basis. not on the specific for company basis. to the ceos of those companies and they're all like, buildwe're just trying to great products and do great things. >> and richard has a private island. balmer, buying a sports team. mark gives a lot away. what do you do with all of the money you've made? >> most of it is still in linkedin stock. on a number of nonprofit boards like kiva and endeavor do something. i try to finance projects that i think are interesting. going to see you start something else? another company? not.robably you know, with series action&c ounders, i work closely with them. there's a long way to go with linkedin, still. unlikely. it's you will see me partnering with a bunch of great young help try to and

figure out how to build something big. >> reed hofman, thank you so much. pleasure to have you on the show.

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>> abuncommon breed in the world of intermriez technology. levy is known for his colorful sneakers, magic tricks, tweets.ic but there's no underestimating his ambition in dominating the cloud.s to the he started building websites when he was 13 and met the kids co-foundersecome the as far back as middle school. but unlike places like facebook tales of early in fighting are legend, all four co-founders still work there together a decade later.