>> he's been called the startup whisperer. reid hoffman is the executive chairman of linkedin and an investor in some of the most successful companies of all time, including facebook. he wasn't always on track to be an entrepreneur. a student of philosophy, hoffman at one point pursued a career in academia. but he took his first job out of school at apple, and then joined the paypal mafia. now a partner at greylock, hoffman sits on seven boards. he is the author a new book, "the alliance." thank you for joining us.

>> thank you. >> you have no shortage of jobs. why did you write this book? >> in many circumstances, employers and employees are lying to each other. the notion is the modern career is changing. there are career tracks that are changing. how do you get that investment in the future, between the employer and the employees. the answer is an alliance. that transforms your career, it makes you employable, and transforms the company. >> you say people should be honest from the start, how honest should they be? >> something i learned from one of our executives -- when he's interviewing people, before they joined the company, he asked them what job they want after linkedin. that's part of his interview.

that's a level of transparency. we are committed to your career. we wanted to be transformative for your career is. >> what if he hears something you do not like? >> you ask why? that's a very good thing to learn. >> the comparison to the military -- do people really feel that way about their companies? that patriotic? >> we want people to understand it's not daily employment. it is an investment. it should be transformative. a bold terms should be the right way to think about it. >> what other companies are doing this well? >> google, for example. we normally think about these as three to five year stints, or

the person actually learns a job, chief something significant, proves himself, and then goes to do something else. ebay focuses a lot on how to we bring the relationship of folks who have graduated together. they have the external network tied in. places like ge, in terms of what they do in executive rotation. how do you then groom all kinds of stars to be an executive at this huge industrial conglomerate? >> what is silicon valley get that other industry's don't get? >> silicon valley gets that r&d is not just holing up in a lab and inventing something, and then there it is. it's actually being present an interactive in the network around innovation. people hold up steve jobs and say he was sit in the back room.

but he was talking to people constantly. what can be done here, i mentioned learning about this, i wanted learn about this. it's a combination of intense, competition and intense cooperation. >> linkedin is a paradox. it makes it easy for people to find opportunities, and makes it easy for companies to lose good people. >> when you have a transparent ecosystem, the quality opportunities, the high culture companies will benefit. the talent will flow to those. but overall, it creates massive benefits for individuals and for the companies that have interesting opportunities. that is a good thing. >> you have a statement of alliance at the end of a book that people can use as a guide. isn't it just a promise, and a promise can be broken? >> promises can be broken, just like any relationships. sometimes a friendship ends, it happens.

but if you lived your whole life like friendships may end, so i won't have any friends, that would be terrible. [laughter] >> companies sometimes have a founding myth that boils down into legend. >> my myth is a manifest destiny march towards talent. but how do we come towards people, how to we help that? software. entrepreneurship. as ways of discovering that path. that is the myth and reality. >> let's take a break. we'll be right back. ♪

>> let's talk about how you got there. you grew up in berkeley. >> yup. >> what did your parents do? >> both lawyers. that led to the legal profession is the one that people most often leave. when people asked me when i was 12 when i wanted to be, the answer was not a lawyer. [laughter] i didn't actually know what i wanted to be. i kind of got the independent bug a little early. i was going to a school that was called a college preparatory school. a friend said they were going to a school in vermont. and i said, wait, i could go and be independent. i could be exploring my own life. so i applied to that school, and got in. without either of my parents knowing. >> you applied to a boarding school without your parents knowing? >> yes. >> what kid were you in high school? >> i was a pretty strange individual. [laughter]

for example, i usually would have one or two friends in most of the different cliques. i had a friend or two in the jocks, a friend or two in the artists. it was all very individual. >> i did have much younger -- i was part of a fantasy role-playing group. >> what is that? >> dungeons & dragons. the way i got into dungeons & dragons was my dad, when i was nine, hired a babysitter that introduced me to dungeons & dragons. creating a new world, thinking how stories come together. like an interactive novel. >> you went to stanford. you majored in symbolic systems. what is that? >> it's a unique major. the simple explanation is -- cognitive science and artificial intelligence.

most do not think it is simple. it is a step deeper. part of what is performing the world's this notion of system assemblage. whether it's computer programs, models of how we think -- i think i was the eighth or ninth person to have that major. >> so while you are at stanford, you met peter thiel. >> yes. peter and i had both been told about each other by people we knew. i was told he was really right wing, he was told i was really left-wing. we grabbed coffee, i think we argued for eight hours. we said that was fun, let's do that again. >> you went to oxford and studied philosophy, why? >> if i'm an academic, i can write about both of these interesting questions. i'm fascinated about how people think and reason. how we communicate. what i realized was that the course of becoming an academic professor was to be a very

narrow scholar. you wanted to be an expert on the thing that only 10 to 20 people in the world knew about. what i wanted to do was how to help millions of people? within six months at oxford, i knew that i wasn't going to be an academic. i was going to come back here. >> that is when you decided to be an entrepreneur. >> that is when i started to work on software. i started thinking of myself as an entrepreneur later. >> you dabbled in the near death spiral at apple. did you meet steve jobs? >> no. he was not there at the time. we had no idea what we were doing. no good plan to adapt during the future. i went there because i loved apple products. i love the macintosh.

>> then he went on to start your own company. you started a social network before social networks. it was called social net. 1997. >> social net had some of the right ideas. it had the idea of having a profile, the idea of discoverability. it had the idea of having social controls on how you would meet strangers. but it didn't have the fundamental network idea. it didn't have the fundamental real identity idea. >> you went on to the paypal mafia. how did that happen? >> i called peter, and he said, we are going to sell paypal. we don't have a business model. but it would be really useful for us, because you know all of this stuff. could you come help us organize and sell it? if i could be helpful, i would be happy to help. we did it, we sold to ebay after we took it public. it turned into a three-year tour of duty. the paypal story is long.

>> and legend. what did it start being called the mafia? >> i don't really know. it might have been with the fortune article. i am always hesitant about the term. mafia implies dark rooms. extortion. these kinds of things. it's clever, gets repeated. it implies a dense network. it's much less evocative. the paypal network is what i would call it. it probably started six to 12 months after the ebay acquisition. >> linkedin, tesla, youtube, yelp, yammer, and spacex. all founded by members of the paypal mafia. what was special about all of you? what did you have in common? >> paypal selected a lot of people who were young, and intense, and were entrepreneurial themselves. then they were bought by ebay. so all of these folks were like, what do i do next?

some of them go to youtube, some go to spacex, some of them do yelp, i do linkedin. and yet, because we had this intense experience together, we all still have really tight networks. we are calling each other going, i'm thinking about doing this, what do you think? >> who do you call for what? >> macroeconomic bold models, i will call peter. the intersection of interesting business models or business technology, i call max. for a willingness to just think super big, with risk as not a variable, elon. >> what do they call you for? >> laughs. [laughter] >> i have heard you are funny.

>> occasionally. i don't know. other people are funnier. a view of the valley. i'm thinking about x, who were the right people to talk to about x? >> you were instrumental in the sale of ebay. looking back, was it the right decision? ebay and paypal have had an interesting year. some other members of the paypal mafia think they are better apart. >> it was the best decision at the time it. we made a collaboratively. to really get to the right level of mass of the payments transaction system, it required a much closer connection with ebay. now that it has gotten to a certain level, is it better or inside or outside? one could make good arguments both ways. the argument with is for example, there is still a lot of density of value between ebay and paypal. on the other hand, maybe paypal should be like a bank. ebay is not a bank holding company. the natural evolution is ahead there. that's also possible with the right management team. >> it's time for a quick break, we will be right back. ♪

>> after paypal, you could've retired a few times over. other members of the paypal mafia bought fancy cars. you bought an acura. you didn't say you were just going to lean back. >> a funny story on the car. i was taking about buying an audi. it's a really nice car. i got pitched by a friend. would i rather buy this car or invest in the startup? was the cheapest nice car i could buy, because i would rather spend my money investing in these companies. so i bought an acura. >> then you decided to buy something new. >> i was planning to travel. in 2002, silicon valley concluded the unit was over.

-- the internet was over. i said, no, it's just beginning. the current companies are great. but they are only going to be some of the great companies created. i took two weeks in australia, said what is my best idea, and said linkedin is still a valid idea. i should start that. i started investing in companies like facebook and flickr tom and a number of others. i said let's go all in. >> the early years were hard. tell me about that. >> i don't know how many viewers will remember this, but friendster was all the rage. i would say, this is what linkedin is. >> did you come close to giving up? >> never. >> it took five years to turn a

profit, and you took some hard steps, including stepping down. >> it was hard for his ego, but what gives is the best possible chance to realize something? i have come to realize that i'm passionate about scale, impact in the world, solving problems, entrepreneurship. i'm not passionate about running a business. i know it's important, but it's not the problem that i wake up thinking about. as it came together with jeff, jeff said i can help you interim, running the stuff that

you feel challenged about. jeff is enough of a product guy, he could do this job. >> tell me about your partnership with jeff. >> we get along very well. he knows that when it comes down to things like building organizational cultures, or thinking about how do you really make up an executive staff work really well together, or how you identify a plus talent. we partner on these things together. we solve these problems together. >> you spent your time between greylock and linkedin? is it like 50/50? can you break it down? >> it's 70-70. i work seven days a week. >> seven days a week? >> yes. >> you have had so many wins already. why do you do all of this? >> how do you have a life that you are proud about having lived? that you think that what you did in the world was worth it? >> you think about steve jobs,

mark zuckerberg. is there a magic than the founder brings that would be lost if you weren't here? >> i think so. every founder is useful. that commitment, that willingness to take bold risks. >> you joined greylock is a partner in 2009. you have a unique investment philosophy. the best companies to invest in are the ones you don't agree with. >> most people thanks best think that in investment partnership, when everyone says yes, this is a good deal, then that is a deal that happens. the best deals are when everyone votes for the deal. the really bold deals that transform industries are the ones that initially seem a little crazy. a little out there. they end up growing to something that is great. >> and you guys disagree on facebook and airbnb? >> a partner said this is going to be the death of greylock. with airbnb, a variety of the partners said -- people are

really going to rent out the rooms? isn't that going to be weird? we had an argument. he said, fine. it turned out ok. >> you have been called the startup whisperer. what does that involve? [laughter] >> i'm not quite sure. people who use that term -- by being an entrepreneur myself, by being able to spent in a lot of their early stage companies -- it's not that i know everything. i know some things that are useful. >> we live in an age of four increasingly powerful platforms. apple, google, facebook, and amazon. do you worry at all that anyone of them could become too powerful? >> yes. more as a general system. when you have a navigation of -- an aggregation of platforms, you have to worry about leaving room for innovation.

i worry about that on a general basis. not on those specific four companies. i talked to all of the ceos of those companies. they are all trying to build great products and do great things. >> richard branson has a private island. steve ballmer is buying a sports team. what do you do? with all of the money you have made? >> most of it is still in linkedin stock. i am building the world with linkedin. i serve on a number of different nonprofit boards. i try to finance projects that i think are interesting. >> are we going to see you start something else? another company? >> probably not. i work pretty closely with them, but there is a long way to go with linkedin. i would say that is unlikely. you will see me partnering with a bunch of great young entrepreneurs, and trying to figure out how to build new things.

>> reid hoffman, thank you for joining us. it has been a pleasure. >> thank you. ♪ the only way to get better is to challenge yourself,

and that's what we're doing at xfinity. we are challenging ourselves to improve every aspect of your experience. and this includes our commitment to being on time. every time. that's why if we're ever late for an appointment, we'll credit your account $20. it's our promise to you. we're doing everything we can to give you the best experience possible. because we should fit into your life. not the other way around.

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