Reid Hoffman on entrepreneurship

Yesterday I had the pleasure of listening to Reid Hoffman address a room of A-level students on entrepreneurship. The context was a NESTA event designed to get young people thinking about their career pathways and talents — as a Starter for 6 alum I was along for the ride. (Note, Starter for 6 is, er, starting back up — if you’re a young creative business in Scotland, definitely check it out.)

As founder of LinkedIn — described by a student in the room thus: “It’s more professional than like Facebook and stuff” — Reid’s had an interesting journey. Here are some of the key points he made to the teenage audience:

Know what you don’t know. On leaving academia, Reid realised he needed to learn how to ship stuff. Figuring the best place to do that would be in a large company, he joined Apple — but lesson number two, there’s more than one way to ship a product. In big companies, you have three types of product design cycle: version 0 to version 1, 1 to 1.1, and 1 to 2. Creating something from nothing, iteratively improving something, and redesigning something.

In a startup, you run through all three design stages, but the first is the most important — in a big company, you’re far more likely to skip this stage entirely. So if you’re trying to pick up a ‘startup skillset’, don’t join a big company and learn how to do version 1.1 — join a startup.

Another reason to join a startup: brand matters. There are tons of smart guys in Silicon Valley. Smart guys with a proven track record are much rarer. Joining a startup that flops? No change. Joining one that succeeds? Suddenly you’re not Joe any more, you’re “Joe who was part of Facebook’s success”, or similar. Personal brand is paramount — even brand by proxy. Get networking. Know your options. Know your routes.

Doing a startup is like jumping off a cliff and trying to assemble an aeroplane on the way down. I love this simile. Don’t look down.

A few words of wisdom that need little explanation: Fail fast. Make decisions quickly — decisions can always be remade. Plan for both good and bad luck. Of course, if both your Plan Bs succeed, you end up very busy.

Finally, an audience member asked “What’s the best route, becoming an investor or an entrepreneur?” — Reid’s answer being that they required different skillsets. Entrepreneurs need total dedication and passion to their cause or it won’t happen. Investors need to be good partners, rather than good drivers. And which will make you richer, faster? That’s all a matter of risk versus reward. Investment (as a career) isn’t going to give you the biggest payoffs, but it’s safer; with entrepreneurship, you could lose it all, or win big.

Probably says far too much about me that I didn’t understand the question itself. “You mean, there’s an option to not be an entrepreneur?” :)