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. ♪ emily: he's been called the startup whisperer of silicon valley. reid hoffman is the co-founder and executive chairman of linkedin and an investor in some of the most successful companies of all time, including facebook. yet, the man with one of the most impressive resumes in silicon valley 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 later joined the now legendary paypal mafia. now a partner at greylock, hoffman sits on seven boards. he is the author of "the startup of you" and now a new book, "the alliance." our guest today on "studio 1.0" is reid hoffman.

reid, thank you so much for joining us. reid: my pleasure. emily: you have no shortage of jobs. why did you write this book? reid: the key thing is, in many circumstances, employers and employees are lying to each other. the notion is the modern career is in fact changing. there are options for shifting companies and how you evolve and even career tracks that are changing. the question is how do you get that investment in the future and entrepreneurial relationship between the employer and the employees? and the short answer is an alliance. an alliance based on tours of duty that are three or five years long. that transforms your career, it makes you employable, and transforms the company. emily: you said people should be honest from the start. how honest should they be? reid: something i learned from one of our executives at linkdin -- when he's interviewing people, before they start the company, he asked them what job they want after linkedin. that's actually part of his interview.

emily: what do you want to do next after you do this? reid: that's a level of transparency. we are committed to your career. we want your stint here to be transformative to what your career is. emily: what if you hear something you do not like? reid: well, then you ask why. that's a very good thing to learn. if you learn something and i like, wait a minute, that may mean they are lying. over this three to five years, it may not work. emily: the comparison to the military -- do people really feel that way about their companies? that patriotic? as a soldier is to his country? reid: we want people to understand -- look, it's not daily employment. and it is an investment in something real and something real and it should be transformative. a bold term would be a right way for people to think about it. emily: what other companies are doing this well? you have your hand in so many of them. reid: google, for example. when i talk to eric schmidt. we normally think about these as three to five year stints, or --

where the person actually learns a job, achieves something significant, proves himself, and then goes to do something else. ebay focuses a lot on how do we bring the relationship of all the folks who have graduated from ebay and paypal together. and then have an external network tied in. even places like ge in terms of what they used to do and still do for executive rotation. how do you then groom all kinds of stars to be an executive at this huge industrial conglomerate? emily: what does silicon valley get that other industries don't yet? reid: silicon valley understands that r&d is not just holing up in a lab and we inventing something, and then, tada, there it is. it's actually being present and active in what is going on and the entire network is around innovation. people hold up steve jobs and and say he was sitting 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. i want to learn with these google folks are doing. let me talk to them. silicon valley is a combination of intense competition and intense cooperation. emily: linkedin is an interesting paradox. on one hand, it makes it easy for people to find opportunities, and makes it easy for companies to lose good people. reid: when you have a more open and transparent ecosystem, that means that the quality opportunities, the high culture companies will benefit, because essentially, the talent will flow to them. but overall, it creates massive benefits both for individuals and for the companies that have interesting opportunities. and that is a good thing. emily: you have a statement of alliance at the end of a book that people can use as a guide. in the end, though, isn't it just a promise, and a promise can be broken? reid: promises can be broken, just like any other relationships. you know, sometimes a friendship ends, it happens.

but if you lived your whole life like friendships may end, so i am not going to have any friends, that would be terrible. [laughter] emily: so many companies have a founding myth that is sort of boiled down into legend. what is the myth of reid hoffman, and what is the reality? reid: myth, reality -- who can tell the difference? the myth is kind of a manifest destiny march towards entrepreneurship and talent. a march towards technology. the reality is how do we come towards people, how to we help that? oh look, software. oh look, entrepreneurship. right? as ways of discovering that path. that is the myth and reality. emily: let's take a break. we'll be right back. ♪

emily: let's talk about how you

got there. you grew up in berkeley. reid: yup. emily: what did your parents do? reid: both parents are lawyers. and that led to -- because the legal profession is the one that people most often leave. when you look at the actuarial charts of people transitioning. when people asked me when i was 12 when i wanted to be, the answer was not a lawyer. [laughter] emily: what was the answer? reid: i didn't actually know. what happened is i kind of got the independence bug a little early. i was going to a school that was on the berkeley/oakland border called a college preparatory school. a friend of mine said i'm going to the putney school in vermont. and i said, wait, i could go and be independent. i could be exploring my own life. i applied for and got into the putney school without either of my parents knowing. emily: you applied to a boarding school without your parents knowing? reid: yes. it was part of the independent streak that i got early. emily: what kid were you in high school? reid: no, actually, i was a pretty strange individualist. [laughter] reid: for example, i usually

would have one or two friends in most of the different cliques. i had a friend or two out of the jocks, a friend or two in the artists. a friend or two -- it was all very individual. i did have much younger -- i was part of a fantasy role-playing group. emily: what is that? reid: dungeons & dragons. right? and actually, the way i got into dungeons & dragons was my dad, when i was nine, hired a babysitter for me who introduced me to dungeons & dragons. and i was like, oh, creating new worlds, and thinking how stories come together. it's kind of like an interactive novel. emily: you went to stanford. you majored in symbolic systems. marissa mayer also majored in symbolic systems. what is that? reid: symbolic systems -- it is a unique major to stanford. the simple explanation is science and artificial intelligence. most people do not think it is that simple. it is a step deeper. part of what is transforming the world is this notion of system

assemblage. whether they are computer programs, mathematics and logic, models of how we think, technology. i think i was the eighth or ninth person to have that major. emily: so while you are at stanford, you met peter thiel. reid: yes. emily: tell me how you met. reid: so peter and i had both been told about each other by people we knew. i was told there was really right wing person, he was told i was this really left-wing. we both said, i've heard about you. we grabbed coffee, and i think we argued for eight hours. we were like, you can't believe that. we said that was fun, let's do that again. emily: you went to oxford. you studied philosophy. why? reid: i said, i think i will be an academic. because if i'm an academic, i can write about both of these interesting questions. i'm always fascinated about people, how we think, and how we reason. how we communicate. what i realized was that the course of becoming an academic

professor was to be a very narrow scholar. you essentially wanted to be an expert on the thing that only 10 to 20 people in the world probably knew about. and actually what i wanted to do was how do you help millions of people? within six months at oxford, i knew that in fact i wasn't going to be an academic. i was going to come back here. emily: that is when you decided to be an entrepreneur, essentially? reid: that is when i started to work on software. i started thinking of myself as an entrepreneur -- that kind of came later. emily: you took your first job at apple. reid: yes. emily: 1994, in the middle of the near death spiral. did you meet steve jobs? reid: no. steve jobs was not there at the time. i was literally at apple at the -- we have 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. i bought one of the earliest ones, i learned to program on the apple iie. emily: then you went on to start your own company. you started a social network

before social networks, right? it was called social net. 1997? reid: 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 some kind of 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. emily: you then went on to the paypal mafia. who called who? how did that happen? reid: i called peter, and peter said, we are going to actually probably going to sell paypal. we don't have a business model at the time. but it would be really useful for us, because you know all of this stuff, could you come help us organize the company and sell it? if i could be helpful, i would be happy to step in and do that. we did not sell it, we took it public and sold it to ebay after we took it public. and so what was supposed to be a six-month tour of duty turned into a three-year tour of duty. and -- well, the paypal story is long and fun.

emily: and legend. when did it start being called the mafia? reid: you know, i don't really know. it might have been with the "fortune" article. i am always hesitant about the term. the mafia implies dark rooms, you know, extortionate practices -- these kinds of things. it's clever, it gets repeated. it implies a dense, tight network, you know, where people are tight with each other. what i would call it is much less evocative. the paypal network is what i would call it. it probably started six to 12 months after the ebay acquisition. emily: 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 -- what did you have in common? reid: paypal collected a whole bunch of people that were young and intense, and entrepreneurial themselves. and then all of a sudden, it was bought by ebay. so all of these folks were like, okay, what do i do next?

and so chad and steve do youtube. elon goes to do tesla and spacex, jeremy and russ do yelp, i do linkedin. and yet, because we had this intense experience together, we all have still a really tight network. we are calling each other going, i'm thinking about doing this, what do you think? emily: who do you call for what? reid: for example, for macroeconomic, financial, bold models, i will call peter. the intersection of kind of interesting business models or business technology, big data, i will call max levchin. for a willingness to just think super big, with risk as not a variable, elon. [laughter] reid: right? emily: what do they call you for? reid: laughs. no. [laughter] emily: i have heard you are quite funny. reid: occasionally. but i don't know. other people are funnier. a view of the valley.

like, okay, i'm thinking about x, who are the right people to talk to about x? emily: you were instrumental in the sale of ebay for $1.5 million, 2002. looking back, was it the right decision? i mean, ebay, paypal have had an interesting year. some other members of the paypal mafia think they are better apart. reid: it was absolutely the right decision at the time. and we made it collaboratively. part of the reason was to really get to the right kind of 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 inside or outside? and one could make good arguments both ways. the argument with is for example, actually, in fact, there is still a lot of density of value between ebay and paypal. on the other hand, the argument against it, maybe paypal should be like a bank. ebay is not a bank holding company. the natural evolution is to head there in some direction. that's also possible with the right management team. emily: it's time for a quick break, we will be right back. ♪

emily: after you sold paypal, you could've retired a few times over, probably. some other members of the paypal mafia bought ferraris. you bought an acura, which is still a nice car. but you did not say, i an going to lean back. reid: a funny story on the car. i was taking about buying an audi s8. it's a really nice car. what happened is i got pitched by a friend of mine. i thought would i rather buy the s8 or would i rather invest in the startup? what is the cheapest nice car i could buy? because i would rather spend my money investing in these companies that are transforming the world. that is how i ended up buying an acura. emily: then you decided to buy something new. reid: i was thinking about traveling the world for year. in 2002, silicon valley concluded the internet was over. i said, no, it's just beginning.

and the current companies are great. google, yahoo!, amazon. but they are only going to be some of the great companies created. as opposed to a year, i took two weeks in australia, came back, said what is my best idea, and said linkedin is still a valid idea. the market opportunity is still right for it. i should start that. i started investing in companies like facebook and flickr and a number of others. i was like, let's just go all in on this next generation of internet. emily: i know that the early years were hard. tell me about that. reid: i don't know how many of our viewers will remember this, but friendster was all the rage. emily: i remember friendster. reid: i would say, this is what linkedin is. they said you are like friendster, but for business. i was like, well, that's not the way i would describe it. i cannot tell you the number of times that i've had conversations with people who are smart and close to me say it will not work and i said, i think it will. so. emily: when did you come closest to giving up? reid: oh, never. emily: never? reid: nope. emily: it took five years to

turn a profit and you made hard some really decisions along the way, including stepping down as ceo and becoming executive chairman. reid: the question really wasn't like, oh, was it a difficult thing for ego, stepping down as ceo, but what gives us the best possible chance to realize something? and part of what i had come to realize is that i'm passionate about scale impact in the world. i am passionate about solving product and business problems. i am passionate about entrepreneurship and innovation. but i'm not passionate about running an organization. i don't wake up going, how do i run my exec staff better? and how do i -- when we are onboarding the next 100 people, how do we do that? 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. we were like, oh, jeff is enough of a product guy, he can actually do this job. emily: tell me a little bit

about your partnership with jeff. reid: jeff and i get along well. for example 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 through the whole organization. so we partner on these things together. and we solve these problems together. emily: you split your time between linkedin and greylock. how do you split your time? is it like 50/50? can you break it down? reid: it's 70-70. [laughter] reid: generally speaking, i work seven days a week. i have an office next to jeff's. the short answer is all. emily: seven days a week? reid: yes. emily: you have had so many wins already. why do you do all of this? reid: the way i think about it is, how do you have a life that you are proud about having lived it? you think that what you did in

the world was worth it. emily: you think about steve jobs at apple and mark zuckerberg at facebook and larry and sergei at google. is there a magic that the founder brings that would be lost if you weren't here? reid: i think so. every founder is useful, because of that vision, commitment, that willingness to take bold risks. emily: you joined greylock as a partner in 2009, and you have a unique investment philosophy. the best companies to invest in are actually the companies you do not agree on. reid: most people think the way that a venture partnership works is everyone votes on a deal and when everyone says yes, this is a good deal, then that is a deal that happens. the best deals are when everyone votes, yes, i would do the deal, too. the really bold deals that transform industries are the ones that initially seem a little crazy, a little out there, like linkdin and it's early days, and yet end up growing to something that is great. emily: didn't you disagree on facebook and airbnb? reid: yes. a partner said this is going to be the death of greylock. with airbnb, a variety of the partners, including david, said, you know, people are really

going to rent out the rooms? isn't that going to be weird? we had an argument. he said, fine. i wouldn't do the deal, but you can. obviously, everything turned out ok. emily: you have been called the startup whisperer of silicon valley. what does whispering to start ups involve? [laughter] reid: well, i'm not quite sure. i guess what people who use that term -- i don't identify that way myself -- by being an entrepreneur myself, by being able to be a participant in a lot of their early stage companies -- it's not that i know everything. i know some things that are useful. emily: we live in an age of four increasingly powerful platforms. apple, google, facebook, and amazon. do you worry at all that any one of them could become too powerful? reid: yes, although not necessarily specifically each one of them, but more as a general system. but naturally when you have aggregation of platforms, you have to worry about leaving room for entrepreneurs, 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 like, look, we are trying to build great products and do great things. emily: richard branson has a private island. steve ballmer is buying a sports team. mark benioff gives a lot away. what do you do? with all of the money you have made? reid: most of it is still in linkedin stock. i am building the world with linkedin. i serve on a number of different nonprofit boards. like endeavor and do something. i try to finance projects that i think are interesting. emily: are we ever going to see you start something else? another company? reid: probably not. you know, with the founders, i work pretty closely with them, but there is a long way to go with linkedin. i would say that is unlikely. although you will see me partnering with a bunch of great young entrepreneurs, and trying to help figure out how to build something big.

emily: reid hoffman, thank you for joining us. it has been a pleasure to have you on the show. reid: thank you. ♪

♪ emily chang: he has built some of the world's biggest pop stars. justin bieber, ariana grande, korean viral sensation psy, and "call me maybe" hit maker carly rae jepsen. it all started when scooter braun stumbled across a youtube video of a kid in a canadian talent show. that kid was justin bieber, and braun is the manager who catapulted him to superstardom. but as the music industry goes through traumatic transformation, braun is reinventing his own empire, producing movies and tv shows, investing in tech companies like uber and pinterest, and looking for more