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LinkedIn founder Reid Hoffman chats to Edge

Peter Crush

Reid Hoffman LinkedIn

Reid Hoffman says social networking allows managers to take greater control of their careers. But, he tells Peter Crush, that doesn’t mean organisations need to be afraid of their staff jumping ship

Influential start-up blog TechCrunch once famously described LinkedIn as “the boring social network that won’t find you a date but may land you a job”.

It’s where ordinary business leaders can rub virtual shoulders with executives from every Fortune 500 company (they’re all there), and for the last few years the site has been the place to go for those seeking their next career move – 25% of its members make at least one job search a week.
Founded in May 2003, LinkedIn is now a NYSE-listed company. On the first day of its float, in May 2011, its share price doubled.

Investors were no doubt buoyed by the site’s startling statistics: between 2010 and 2011 its membership grew by 100% (to 100 million users globally), and it is still growing by an average of two members a second, now boasting over 150 million members.
So it’s a surprise when Reid Hoffman, LinkedIn’s co-founder, tells me that in the early days the plug was very close to being pulled.

“It was November 2003, six or seven months on from launch. I didn’t have the numbers we needed; my target was one million users by the end of year one. I’d decided that if I didn’t get these by the following March, that would be it – I’d have to do something else.”

Companies full of people looking after themselves will, by default, make their companies better too. In this sense, leaders don’t need to lose hope; they just need to play the game better.

Put this admission in the context of a previous venture  – in 1999 he walked away from SocialNet, a website for matching people with similar interests (now cited as the first real attempt at social networking) – and his pessimism is entirely understandable. 

Hoffman, talking to me on a crackling mobile phone line from California, is in reflective mood.

With social networking now an integral part of modern life, he’s beginning to ruminate on the contribution LinkedIn has made to the world of business and leadership.

It has created and continues to shape notions of a global, linked talent pool, and allows connections to be made with apparent ease.
“The career escalator – where we rose up the ranks, and could depend on our business leaders – simply does not exist anymore,” he says.

To prove it, he has co-written The Start-up of You, a new book that acts as a blueprint for Generation Y entering the world of work. Its main message? The individual is king.

All change

For leaders, it makes for a cautionary read. “The old way of the world has gone,” he warns.

The book promotes the maxim that everyone can, and should, be selfish (and by implication, disloyal to employers) in the pursuit of their careers, by exercising the entrepreneur within.

Indeed, with LinkedIn arguably acting as a global CV store, a broadcast vehicle for talent to auction their skills to the highest bidder, his views can seem somewhat anti-engagement in tone. Is this the case?

“Two years ago, I tried to figure out what employees entering work need to know,” he explains.

“I concluded that they should think in terms of the ‘me-trepreneur’. It’s not saying that people should work for themselves, outside organisations; it’s more about working on investing in their own capability.”

Being entrepreneurial, he argues, is about investment in oneself, and if leaders fear it for creating a flawed future of work, full of self-centred staff ready to jump ship, he says that they only have themselves to blame.

“It only made sense for organisations to train people up when they had other jobs they could promote them into, but this is happening less and less. People are forced to invest in themselves.”

Not surprisingly, Hoffman says the key to this self-improvement is the networks people develop, and that despite repeated warnings about the peripatetic nature of talent, much of management is still rooted in the past.

“Firms still pretend workers are going to stay with them forever,” he observes. “People are much more likely to sign up instead for what they see as short tours of duty, to improve their skills before moving on.”

Hoffman is not the first to theorise about the emerging power struggles between leaders and the next generation of employees, but talk to him for long enough and you begin to notice that he expresses it all very differently.

With a lightness of touch, he’ll start using phrases such as the “efficiency of the networking ecosystem”, the “efficacy of wealth creation” and “promotion of value”.

Smart connections

It sounds odd until you learn that Hoffman’s first love was philosophy – he has an MA from Oxford University and wanted to become a professor.

Before that, he majored in symbolic systems (focusing on studying the relationship between humans and computing) at Stanford University alongside Peter Thiel, who later founded PayPal. 
Hoffman and Thiel used to debate the merits of Margaret Thatcher’s opinion that there was no such thing as society.

Hoffman’s view is that communities are the modern expression of society, and it’s this intellectual approach to LinkedIn that explains his thoughts on how leaders need to respond.

“Communities of employees won’t be saying ‘I know nothing – teach me’ to their line managers anymore,” he says. “They’ll be saying, ‘Here’s what I know, here’s what I can do.’”

Hoffman argues that the best companies will not treat this as justification for halting investment in their staff in the belief that they’ll leave anyway.

“Companies full of people looking after themselves will, by default, make their companies better too,” he argues. “In this sense, leaders don’t need to lose hope; they just need to play the game better.

“They may have to play the game two or three times to get used to it, but these are the new rules. The way leaders keep hearts and minds is by allowing everyone to share, because for every tour of duty they lose, they’ll gain someone else starting their own new tour of duty.”

It’s the classic ‘what goes around, comes around’ theory, but Hoffman says this is simply what business must agree is acceptable.

He is unapologetic about how LinkedIn has helped create a culture of transferability, and also about the recent case of John Flexman, the HR executive with a gas exploration firm based in Reading, who was fired at the start of this year for uploading his CV onto LinkedIn.

Forward thinking

“Companies who ban activity on LinkedIn, or any other social network, just don’t understand the connected world,” he says. “Would they rather keep someone through the threat of being fired? It’s extraordinarily foolish.”

Grounded in academia, Hoffman is evidently far more of a futurologist – a dreamer, if you like, of better business systems – rather than a destroyer of them.

He doesn’t understand those who see LinkedIn and other social networks as disruptive, especially because he knows there is an in-built hypocrisy at work: many leaders who berate losing staff lured by new connections will themselves join LinkedIn at some point for their own personal benefit.

So does that mean everyone – from the top to the bottom at work – is simply waiting for the ‘better offer’ that being linked into communities might bring?

It’s a question he stops to think about.

“Those who are serious about connectivity know it takes time to manage connections,” he says. "In life you have to make judgements about where you devote your time.

"My hope is that people will start to reduce the number of random connections they have. They will begin to work out who their ‘trigger’ connections are – those people who can actually make a difference to their careers.”

This is one rule Hoffman already follows.

Despite being one of America’s most influential billionaires and angel investors (he has invested in the likes of PayPal, Groupon and Airbnb – a website where people can advertise their spare room to travellers), he famously has only 2,600 connections.

He has a strict rule of only accepting people he actually knows (which could be a swipe at the Facebook phenomenon where the ‘friend’ count has almost become a pursuit in itself), or someone he’s talked to for more than an hour (I, alas, only notched up 45 minutes).

“The whole point of connections is mutual interest,” he reaffirms, perhaps in defence of LinkedIn being increasingly seen as a recruitment brand.

“The next big thing is leaders using their time much better,” he argues. “People will start to use tools for pulling associations back and forth.

“It’ll be more like radars. People will be able to show the different ‘radars’ – the spheres of influence in their life – and be able to say, ‘Here’s all the information you need about it, with me updating it.’”

It’s a confident prediction from a man who was unsure if LinkedIn would even reach its first year, but who, with wisdom behind him, is certain of its impact on the workplace.

“We launched with brash expectation; we were confident we had something, and we were confident it could be a framework that every working professional could align with,” he says.

“I’m really grateful and humbled that people chose to go down this road.”

Tipping point

In the UK, LinkedIn has been a slow burner, taking until 2007 to reach its first million members. However, by June 2008 it had hit the 4 million mark and today it has more than 8 million users.

Currently, 60% of LinkedIn’s total membership comes from outside the US, and interesting quirks still exist – such as the Netherlands scooping the number one spot for member penetration.

“We just didn’t ever give up,” he says.

Giving up would have been his so-called “plan Z”, a concept he pursues in his book: the last throw of the dice, or the moment when people simply have to accept that they should do something else.

“Giving up would have been fine though, because if there’s one lesson in the work of work, it’s knowing when to give up one idea and move on to the next.”

If connections have taught the business world anything, he argues, it’s that there’s more out there, and life needn’t be so challenging for the sake of it.

“I call it having persistent flexibility,” he announces. Hoffman says this applies equally to new joiners as it does to old hands.

Perhaps this is the real legacy of the business social network he created. “Change is totally up to the individual now,” he says.

“Everyone needs to keep asking themselves if they still believe in their skills. If not, consider transitioning early. It’s better to proceed with something else than be stuck where you are.”


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