The Prof G Pod with Scott Galloway - Civility in Tech, Centrists, and Advice from a Lifelong Entrepreneur — with Reid Hoffman

Episode Date: October 13, 2022

Reid Hoffman, an entrepreneur and an investor, joins Scott to discuss his thoughts on identity, artificial intelligence, businesses with network effects, and why we need more centrist politicians in the House. Reid also shares career advice from his latest book, “The Startup of You.” Follow Reid on Twitter, @reidhoffman. Scott opens with his thoughts on Sheryl Sandberg’s $3 million donation to the ACLU, the benefits of failing fast, and Goldman Sachs’ missed brand opportunity.  Algebra of Happiness: talk about your emotions.  Learn more about your ad choices. Visit podcastchoices.com/adchoices

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NMLS 1617539. Episode 203. 203 is the area code of southwest connecticut in 2003 finding nemo debuted arnold schwarzenegger also became governor of california how does dory make money she started an only fins Welcome to the 203rd episode of The Prop G-Pod. In today's episode, we speak with Reid Hoffman, an entrepreneur, investor, and author of several books, including The Startup of You. Adapt to the future, invest in yourself, and transform your career. We discuss with Reed the sectors he's bearish and bullish on, his advice to founders, and how businesses involved with network effects have changed since he co-founded LinkedIn. Okay, what's happening? Well, in the mother of all virtue signaling, Sheryl Sandberg made headlines for donating $3 million to the ACLU, all in an effort to help support the organization's fight against abortion bans. This donation comes less than three days after her departure from Metta

and is one of the largest donations to the ACLU in support of abortion rights. First, I want to acknowledge that philanthropy at its core is a good thing. This on the whole is a net good thing, but I apologize. That's not going to stop me from reading in between the lines here. Cheryl's net worth is $1.5 billion, a $3 million donation from her as in 0.2% of her net worth is the equivalent to the average American family, which has a median net worth of $12 is when a household gives $240 to a charity, they don't issue a press release and start doing press conferences and posing for the camera. This is nothing more, in my view, than a $3 million loan to her future political campaign. This isn't philanthropy. It's bronzer or eyeliner or makeup or it's a tie or a pocket square.

This is not giving. This is the exact opposite of how Mackenzie Scott goes about giving. She gives away literally $15 million, $20 million, $50 million at the drop of a hat. Cheryl wants a press release and wants credit. And by the way, did you notice how she designated her donation to the ACLU in support of the organization's fight against abortion bans? And the press release said this was the largest donation to the ACLU in support of fighting for choice. Well, you know what? I've given some money to UCLA and Berkeley, so I'm going to redesignate it for the fight for choice, such that I can say I'm the largest donor in the history of education for the fight for women's rights. I apologize.

I realize how cynical this is, but again, this is not giving. This is posing for the history of mendacious fuckery in corporate America. And that is Sheryl Sandberg. Anyway, speaking of Sheryl, let's highlight what the New York Times revealed about the company she's moved on from Meta. Boy, I'm angry today. I think it's because I'm hungry. You know, by the way, when you're really pissed off or when I'm even more awful than I usually am, I just need to check in. I need to check in with my good friend, my stomach. My stomach. I don't like to eat. I'm not an eater. Unless I have someone feeding me, I will wake up or I will look up at 2 or 3 p.m.

and realize that, oh my God, why am I being such an asshole? It's because I haven't eaten. Eating for me is just something I don't especially enjoy or need to do a lot of. Anyways, a recent Times article noted that meta employees often complain that the company's frequent strategy shifts seem tied to Mr. Zuckerberg's whims rather than a cohesive plan. It appears that everyone is now playing Monday morning quarterback, recognizing that this shit just isn't working. And they're starting to drop a dime and complain about the Zuck, who they couldn't say was a big enough genius when their stock options were going up. Anyways, in addition, this article discussed how Meta executives are in disagreement over these said strategies and quoted one senior leader saying that the amount of money Meta has spent on unproven projects has made him sick to his stomach.

He's sick. He's just sick to his stomach. He works for a company that is depressing teens, weaponizing our elections and making discourse more coarse. But the wasted money on the Metaverse is just too much for him to stomach. Okay, boss. Well, who would have guessed this happened? Who saw this happening? I don to stomach. Okay, boss. Well, who would have guessed this happened? Who saw this happening?

I don't know. Spoiler alert. Here's what we said back in November of 2021. The Zuckerverse scares the shit out of everybody. And again, the only saving grace here is that there's just no way it'll happen. This is not an innovative company. And here's what we said just last month.

Think about the video game industry. For 30 years, they've been innovating, investing billions of dollars, incredible skill set, and they have got gaming not figured out, but they've done a great job. But here comes the Zuck and he thinks he's going to figure it all out, that he's going to replicate our world. Well, guess what, boss? You are wrong. This is the biggest tech failure of the last decade. Well, I sound so arrogant. I sound like such a, I don't know, I kind of sound like a jerk. Anyways, trust your instincts. So, what am I worried about? I'm worried about that this thing is such a disaster, such a flaming bag of shit that they're going to scale back. And this is my strategy. I would like to see the metaverse

show some signs of success here. And here's the learning. Here's the learning. What is the best thing that can happen professionally to you? Success. Success rocks. People find you more interesting than you are. You develop confidence, economic security. Everything gets better with success. Success is awesome. What's the next best thing? Failing fast. In 1999, Q4 of 1999, I raised $15 million at a pre-money valuation of $35 million based on a PowerPoint presentation. It was a company called Brandform. I was going to start an e-commerce incubator or did start an e-commerce incubator in New York. I said, look, there's no great e-commerce companies on the East Coast. Mostly a narrative because I wanted to live in New York and be fabulous and go out late night and drink. Do the things I love the most. Drink, talk to strangers, drink some more, go home,

sleep until 10, wake up, pretend to do some work, maybe teach a class, maybe go into my incubator, think big thoughts, wave my arms a lot, talk about new companies we should start. So I raised $15 million, leased a bunch of office space. And the idea was pretty simple. Have one infrastructure, one legal department, one technology department, one business development department, one office space, and punch out e-commerce companies. I launched three, Room 12, a high-end travel site, Gold by Lynn, kind of a red envelope or an e-commerce company for seniors. And then another company called BidShift, which was software scheduling for nurses. Room 12 didn't have a CEO. Shit got real. March of 2000, the whole world came apart for dot-com.

I pulled the plug on that. BidShift actually went on to make money and got sold for actually a pretty decent return. And Gold Violin Kind of went sideways, got sold. We got our money back. But I closed Brandfarm down in about six months because the capital markets were just like not even going to entertain the notion of investing in e-commerce incubator about halfway through 2000 after the shit-kicking the entire market experience during the dot-bomb implosion. And you know what? That was a blessing. That was a blessing. That was a blessing. You know what sucked?

Was Red Envelope, which I founded or co-founded with my partner in 1997. A lot of signs of success. Early success, momentum, things would get tough, but then renewed signs of success. Things get hard. Then we get pull off the only retail IPO of 2002. Management tumult. Incredible, interesting warfare at the board level, but interested inquiries from acquirers. And then finally, 2008, a longshoreman strike off the coast of Long Beach that put all of our inventory on a tanker six miles off the California coast. And then credit becoming much tighter around the great financial crisis.

And boom, we were chapter 11. What sucked about that? Well, one, losing the majority of my net worth just about the time my son had the poor judgment to come marching out of my girlfriend. That sucked. But the thing that sucked most was that I failed slowly, that it took 10 years to burn through this idea. Brand farm, six months, boom.

This makes no sense given the economic client. You're out of business, fine, move on. Red envelope, Jesus Christ, let's get kicked into the nuts. You know, once every six or 12 months for 10 years and end up with nothing. So what I hope, what I hope happens to the good folks at Meta is in the next three or six months, there are signs of hope such that they will continue

to feel confident in this consensual hallucination that this megalomaniac who is totally out of touch can recreate the magic and mystery and alchemy of the real world, and they will continue pouring good money after bad. So let's hope, let's hope that the Zuck and Meta register a little bit of success because this thing is such a fucking disaster. I'm worried they're going to stop pursuing it and slow down the investment. No, no, no, no. Keep on doing what you do, you good people at Meta. This is absolutely going to open up new worlds, new worlds. Go for it. We're with you. Daddy's a little angry. Daddy's a little angry. Daddy's a little angry today. My, I just got food. It's next to me.

I don't know what it is. Some sort of pork thing. And my cleaning lady or nanny, that's probably a hate crime. I don't know what the word, cleaning lady. I don't know what it is. Has bought me a beer. Okay. Give that lady a raise.

It's a beer. I don't know why she brought me. I don't know what that says. That she decided to bring me a beer. Anyway, here I am. Here I am. And before I down my beer, I'd like to talk about something else in the world of brand. And that is Goldman Sachs takes the spotlight this week.

Full disclosure, I love Goldman Sachs. I know the CEO there. I know a bunch of senior people there. They manage my money. I trade through them or invest with them, I say, and I always find they're very straightforward and very good at what they do. All right, so full disclosure, they don't pay me. I'm not conflicted here, but I'm conflicted in the sense that I'm a customer. All right, enough of that. Wasn't that exciting? Goldman has been trying to crack into consumer banking for average main

street people since about 2016 when it launched Marcus, its banking product that offers online savings account. I said, no joke, directly to the good folks at Goldman that they should start a sub-brand called GS.com. Why? Why? Because the premier asset in a services firm is your brand. Because the people can leave, and they often do, every night to go home, or they can leave and go across the street to name the brand. The platform is the brand. The brand is the platform. And Goldman's brand is simple.

They are well-resourced, and they are an accelerant for people's careers. What do I mean by that? If you go to work for Goldman Sachs and you give your life to them in your 20s, and let's be honest, this is not a place for balance. We own your ass. But if you go in for that bargain, you're super smart, you work super hard, you can accelerate faster than almost any platform in the world. As a result of that acceleration or that promise of acceleration, they continue to attract the best and brightest. Because the reality is fixed income products, equity products, high net worth banking services, all the funds they claim that are proprietary that you invest in, it's all the fucking same. The only difference is,

is the person sitting on top of it that is advising you. But when it comes to Marcus, that was an error. That was a strategic error for Goldman Sachs, who is not in the business of product marketing. They are not a packaged goods company. They are not in CPG. Their best and brightest are not in marketing. They have screwed up here. They launched a new brand called Marcus, which made no sense. Bloomberg reported that the firm is now rolling back this consumer banking effort and moving some of its consumer products into its wealth management business. Bottom line, if they were going to go to consumer, GS.com, give people all over the world who aspire to, like me, say I'm involved with Goldman Sachs

because it makes you seem more important or wealthier than you probably are. To give people a little taste of that through something called GS would have been the gangster move if they go into the consumer business at all. And I'm not entirely sure they should be in a consumer business. According to Bloomberg, analysts project that profits for Goldman's consumer unit will decline more than 40% compared to last year's record. And with an impending recession, it looks even worse than that. In addition, the bank internally forecast that the unit's losses would reach more than $1.2 billion this year. Axios also recently highlighted Goldman's woes in consumer banking and noted that it's dealing with major staff turnover and is experiencing ongoing investigations from both the Consumer Financial Protection Bureau and the Federal Reserve.

That sounds ugly. Goldman stock is down 24% year to date. To be clear, that's actually not that bad given what's happened in the markets. So this is a rookie move. They decided to go into consumer, the consumer business. B2B always thinks they should be in B2C and B2C always thinks they should be in B2B, and B2C always thinks they should be in B2B. And the reality is very few companies are able to cross over. And had they crossed over, they should have gone with GS and done some sort of app, some sort of investing app. My understanding

is they're involved with the Apple card, and that's been somewhat successful for them. But this was a bridge too far. This whole thing will likely be shut down slowly but surely. They won't want to take the hit with one press release, so they'll slowly but surely wind it down and return to the roots, which is what? Arguably being the premier council around capital markets for the world's most aspirational companies and the wealthiest individuals in the world, which, by the way, is a pretty good rep. There's a lot of opportunities for this company. The toughest part about Goldman and David Solomon's decision is not what to do, but what not to do.

And going into the consumer banking world with a distinct brand connotes that you have brand management as a core competency. No, boss, that is not your core competency. Anyways, we need, when we do something called brand architecture, and that is to say, okay, what are our competencies? If our competence is brand management, then we might want to think about brand extensions and develop a house of brands, like a P&G. What if our brand is technology? What if our brand is being aspirational for big companies and B2B? Then you have one brand. You're a branded house.

So what should they have done here if they wanted to go into the consumer world? Simple. It should have been a brand extension. It shouldn't have been Goldman Sachs Lite. But effectively, Goldman Sachs Lite was something called GS.com because this is still one of the most aspirational brands in the world. Extended to capital formation or investment banking or financial services for medium and small-sized companies where they likely don't go because the fees aren't that big. And perhaps offer some sort of investment app for consumers all over the world who aspire correctly to be affiliated with the Goldman brand. But Marcus, this is nothing but a lesson in poorly thought out brand architecture. I still love the folks at Goldman. Still love the folks at Goldman.

Stiff upper lip. Things could be worse. It could be meta. You could be meta. You're down 24%. Facebook off 60 plus percent. We love the good folks at Goldman. Meta, not so much. Not so much. We'll be right back for our conversation with Reid Hoffman.

The Capital Ideas Podcast now features a series hosted by Capital Group CEO, Mike Gitlin. Through the words and experiences of investment professionals, you'll discover what differentiates their investment approach, what learnings have shifted their career trajectories, and how do they find their next great idea? Invest 30 minutes in an episode today. Subscribe wherever you get your podcasts. Published by Capital Client Group, Inc. apps, and ideas about the work we do can be radically changed by the tools we use to do it. So what is enterprise software anyway? What is productivity software? How will AI affect both? And how are these tools changing the way we use our computers to make stuff,

communicate, and plan for the future? In this three-part special series, Decoder is surveying the IT landscape presented by AWS. Check it out wherever you get your podcasts. Welcome back. Here's our conversation with Reid Hoffman, an entrepreneur, investor, and author of The Startup of You. Reid, where does this podcast find you? Outside of Seattle, Washington. Good for you. So let's bust right into it.

I would love to get your thoughts, and we'll talk about your book. But first off, I'd love to get your thoughts. I wrote a post a couple of weeks ago called Identity, basically saying that we need some form of additional identity enforcement on our platforms that while anonymity has a lot of upsides, I feel as if our discourse has become so coarse that it's damaging our connective tissue in America. And also I think there's a lot of bad actors who are influencing the narrative around some key issues that shouldn't have that type of influence. And an example I cite is I find generally I'm spending more time on LinkedIn because I find that the general gestalt or vibe is more civil. And I don't know if it's because

I would argue it's some of its identity, or I don't know if it's the way it was founded, but I find I'm just less likely to walk away from LinkedIn upset and angry than I am at some of these other platforms. I'd love for you to comment on whether that was intentional as part of the DNA of LinkedIn, and also what your thoughts are on some sort of additional identity enforcement across all the social. So, definitely deliberate. Actually, one of the things that I've had as a kind of theme to my own, you know, call it techno-entrepreneurship and humanism, has been much more on identity-based platforms. You know, so I, if you, I was on firing line in 1996, you know, arguing that the government can and should regulate speech on the internet. I get the general alternative point of view, which is by having non-identity, you can, or, you know, anonymity, you can speak more freely,

you can potentially protest against, you know, kind of harsh, autocratic, repressive regimes, other kinds of things, that there's a variety of things where it's also important to have spaces where anonymity allows. But once, of course, we get to a society and the internet, you know, and the networks and so forth are getting to society, you need to have identity. And part of LinkedIn's design was how do you give every individual the most ability to make economic progress, take control of their work and their career and economic progress. And the civility that comes with identity and principles that go around identity is really essential. And obviously, and you know, obviously it deeply ties to LinkedIn mission because you can't

really have that kind of economic progress on an anonymous system. So identity is essential there. And I'm generally speaking a fan of identity in all of these different systems. So obviously I'm a fan of the increase of identity within Twitter. I think that the questions around having identity as a platform creates a lot of natural governance and allows a much more basis for a lightweight touch to make better general governance within the system

and what the mission of a system is and what its participation is. So I'm generally a fan. And I think part of obviously how you have to do that when you have these global systems is how do you do identity globally? Part of the reasons why people tend to initially stay away from it, because what are the identity mechanisms? Most identity mechanisms tend to come from governmental systems, financial systems, other kinds of things. And so getting that identity system well done is more challenging globally. But the question is, is how much water

do you need to carry within your specific system? You spend a lot of your career and you're known or you have warranted domain expertise around networks or network effects. How have networks changed and how, as intelligent managers, employees, investors, citizens, should we be thinking about network effects and how they've evolved over the last decade? Well, I think part of it is a lot of people talk about network effects. It's a buzzword bingo term in Silicon Valley. Relatively few people understand them. So just because you have a network doesn't mean you have a network effect. There's actually different kinds of network effects and different ways that they play in. Obviously very valuable from a business construction perspective because network effects

tend to create compounding patterns for growth. They tend to create moats for differentiation when you may not have any other moats as ways of doing it. And moats are part of what create some ability to create kind of economic returns within business. And sometimes moats, there are other moats than network effects, but those kinds of things as ways of doing it.

And so I myself am a huge student of network effects in part because if you look at me as an entrepreneur and me as a primary investor, it's how do you have human society redesigned, amplified in various ways through networks, through human participation in networks? It's not Cisco networking, it's human networking. And I wouldn't say necessarily that network effects themselves have evolved, although maybe we've discovered different types and different ways that those work. So one of the things that I think is something of a challenge is the internet has, generally speaking, been much more open and free, So you get a variety of businesses, whereas mobile platforms tend to be more constrained and kind of, for some good but also ill, less open than the internet. And so therefore, the kind of how do you establish network effects within a mobile universe is actually, in fact, much more challenging because you have players that have monopolies on stores or distribution of applications within it.

And I think one of the really important things is to allow some degrees of freedom there in terms of how that is made. And so I think that those would be some of the evolution, which is constraint from the internet moving to mobile within network effects. But I'd say the network effects themselves are still generally, it's almost like natural law patterns that if anything we're discovering, it isn't more reinvented as we get a more and more globally connected world. So I'd love to get your thoughts. I feel like AI, and I fall into this trap, is that, or in this category, I kind of get what it is. But I'd love for you to give sort of a

layman's definition of what artificial intelligence is. I know you co-founded a software company focused on AI or helping AI and humans to communicate. Can you give sort of a layman's definition of AI and where you think are the most likely use cases that will impact our lives in the near future? So my undergraduate was called Symbolic Systems, which is cognitive science and artificial intelligence. So I've been doing this for a bit, although I kind of went to go do a much more human networks and then came back to what is kind of a renaissance or resurgence in artificial intelligence. And roughly speaking, the way to look at it is, can we have implemented on computers an ability to do cognitive tasks that we generally ascribe to humans. And that level of cognitive task, you know, by the way, we have done them. We have that chess programs and we've had, you know, kind of like search, Neva and Google

and others as a form of cognitive task, which is, please help me find this document or find me this piece of information that would be helpful to me. So we've been on this progression. And artificial intelligence tends to be, well, what's the next leap that's closer to the kinds of things that do human levels? And it's one of the reasons it's always tend to be a little bit like kind of the carrot in front of the horse, you the horse attached on a stick. You're running towards the carrot and the carrot keeps going

because as we go, well, we got the computers to do that. Well, that's not artificial intelligence, that's computers. And the next thing is artificial intelligence. But what we do have through generally what is called large language models and foundational models, although there's other interesting artificial intelligence programming techniques, is we've had computers able to learn things that are really, really interesting in ways that create elevated performance. And, you know, DeepMind with AlphaGo demonstrated a really challenging thing, which is it was thought, well, maybe Go was beyond the ability for computers to do,

and now it's most highly performative. But then you say, okay, how does this affect everybody, people? Because some people play Go, but more generally. Well, I think we've already begun to see some of them. So, for example, OpenAI and Microsoft have released this product called Copilot, which is off Codex, which is taking these large language models and enabling engineers to code much better. And if you thought, well, they're accepting, you know, 35% on last year's model

and last year's code of the coding suggestions, that's a 35% increase in productivity. It's an increase in quality of code because generally speaking, the thing that is being suggested is robust, doesn't have typographic errors, doesn't have a bunch of those kinds of things as ways of operating. And you can look at that as a lens to everything else that's going to be created. Because like, for example, when OpenAI releases DALI, and now there's a wide diffusion of them,

what I think you're seeing is across a wide variety of human kind of cognitive tasks, you have amplifiers. And part of the reason I use DALI is the thing I wrote this essay on LinkedIn about, which is if you had no skilled visual creation, low skilled, medium skilled, high skilled, all of them get amplified. So the usual reflex of concern is to say, well, does that mean all graphic designers are going to go out of business because now just the AI and Dolly will be doing them? And the answer is actually, in fact, it's now a tool that no matter where you are between no skill and high skill, you'll now have to use. But it'll just be like using Adobe, Photoshop, or Figma, or any of these other things. It's an amplifier. And so, yes, that technological

skill set for what is required for high-level performance goes up because you'll now have to be using these tools. But it's the same way as you have to be able to use these tools. You have to be able to use a word processor if you're a writer. You have to, you know, like these kinds of things. And I think that's what we're going to see across an amazing range of all the things we do in cognitive tasks. So, I don't know how to bridge this gap here. I'll just start. Twitter question mark. You'd initially had some reservations about or concerns about the deal. I'd love to get your thoughts on the platform and if and what or what is your view on

a Musk-owned Twitter? So, I've obviously known Elon for quite some time when we put x.com and PayPal together and, you know, have done a bunch of different work together. Obviously, an amazing innovator.

And I think some of the ideas that he's been public about around Twitter I think are essential. I mean, I agree with the identity post that you did, the thing that Jonathan Haidt wrote in The Atlantic. And I agree with that. And so I think that's great, and I think that's a good thing. I think you also had something where you were pulling together some activist thing also because of the need for innovation within Twitter. And identity as a base of that, I think, is really good.

I think if I recall that post as well, so you've got those things that I intensely agree with, with, you know, Elon's, you know, recognition of opportunity and gesture and progress. But I also think that we frequently get the dialogue around freedom of speech incorrect. I think one of the things you said in your post was that, you know, applies to freedom of speech restrictions from government. That actually coherence within the platforms and a well-designed, you know, civic space is actually, in fact, a good thing. Now, how to do that? Now, one discussion that, you know, Rene DiResta has brought forward that I've seen some echoes from Elon in his public tweeting is freedom of speech is not the same thing as freedom of reach. And I think we need to design these things both with the notion of, of kind of, you know know individual rights and freedom of oppression

from government but also coherence and i think part of what we want from these media ecosystems is where where we are are collectively learning right and learning means that we're as a society as a group as a people are trending towards more truth by learning from each other. And you want to design the systems that way in order to make that happen. And, you know, it makes sense to say, well, you don't want us being the, you know, the truth determiners. And it's like, no, no, but you want a, just like scientific inquiry, just like discourse, you want that to progress towards truth by the operation of the system, because there is such a thing as truth. And so, like, for example, if it were me, and Elon hasn't asked me this and so forth, but you say, well, you know, should we replatform

former President Trump? And the answer, my answer would be is, look, he violated the terms of service based on whether intentionally or unintentionally advocating violence against governmental institutions and propagating conspiracy theories that lead to the erosion of democracy. But the violence is the most important part of this on the terms of service. And he did that intentionally or unintentionally. And so, I would say, well, you'd be allowed to come back on the service if you don't even have to acknowledge that you did it deliberately, because then you maybe didn't. But you'd have to make a public commitment to nonviolence, like e.g. do not use violence to undermine the institutions of functioning democracies like the U.S. and other

countries around the world. And I abjure it, I abhor it, and none of my words should ever be taken to mean that. And if I state that publicly and agree to that, then I would say, okay, then let's replatform until you do something similar against terms of service, and then you go through it. And it's an objective measure held to all parties. You know, obviously, Elon's public statements have been more, you should just replatform, which I think it's fine to do if you go through the policies of embracing the terms of service and the importance of a civic discourse for truth

and getting to judgments in democracy and not doing, specifically, not advocating violence against our democratic institutions. Coming up after the break, the corrosion of belief in voting and the democratic system and so forth is as anti-American

as anything in my lifetime I've seen. Stay with us. Hey, it's Scott Galloway, and on our podcast, Pivot, we are bringing you a special series about the basics of artificial intelligence. We're answering all your questions. What should you use it for? What tools are right for you?

And what privacy issues should you ultimately watch out for? And to help us out, we are joined by Kylie Robeson, the senior AI reporter for The Verge, to give you a primer on how to integrate AI into your life. So, tune into AI Basics, How and When to Use AI, a special series from Pivot sponsored by AWS, wherever you get your podcasts. your company knows what really matters when it comes to AI. As part of their 2024 Tech Sector Report, Alex Partners spoke with nearly 350 tech executives from across North America and Europe to dig deeper into how tech companies are responding to these changing headwinds. And in their 2024 Digital Disruption Report, Alex Partners found that 88% of executives report seeing potential for growth from digital disruption, with 37% seeing significant or even extremely high positive impact on revenue growth. You can read both reports and learn how

to convert digital disruption into revenue growth at www.alexpartners.com. That's www.alexpartners.com slash V-O-X. In the face of disruption, businesses trust Alex Partners to get straight to the point and deliver results when it really matters. So I absolutely love the work you're doing around political causes. You seem very concerned with getting more moderate Democrats in the House. And I think we could also benefit from moderate Republicans, just more moderates generally. And your political advisor told CNBC that far-left groups such as the Justice Democrats helped the MAGA movement by attacking centrist Democrats who can win general elections. If the Democrats were a business, how would you advise them? What does success look like

in your view based on the efforts, your substantial commitment of human and financial capital here? Well, it's funny. One of the things that people don't often, I mean, you're a teacher of business and a B-school prof, but one of the things that people frequently don't emphasize in these things is you actually sometimes fire customers. And what I would recommend in the Democratic case is to say, go to the bulk of the country, the moderates, the centrists. Don't try to overly cater to the very vocal, very energetic left wing of the party. I mean, frequently, by the way, I think they have good intent and good causes because we want to be more inclusive and pay attention to the people who are downtrodden in society and make sure they have opportunity. But, you know, such things as, like I've been trying to get national Democrats to just say this sentence, business is good. You can say whatever version of it you like.

Small business is good. Businesses that create middle-class jobs is good. You know, like, whatever version you like. Because business is what powers all of the rest of the goods that we have in society. Medicine and education and infrastructure and all that kind of stuff. And so you need to have that as a kind of a pro-business thing and that's partially the moderate position.

Whereas on the left side, the fact is when you try to get to the purity test of are you at the most edge of things where, for example, if you can't say business is good, it's because you're catering to that far extreme left. It's like that far extreme left thinks business may be bad because they don't understand how society works. And so I think that would be the kind of thing. It's fire those customers. Focus on this kind of like what it is for the majority of Americans trying to live their lives, have a job, you know, be good to their communities, be good to their families, and focus on that as a platform by which we are building towards the future. Yeah, I think a lot of people would agree, especially the biggest party by self-indication is independent or none of the

above, 41% now. And I think extremism on the far left or extremism on the far right, I think a lot of people, maybe even the majority of Americans see that as not appealing. Do you think that in order to get to more less minority rule, more majority rule with more moderates, it feels like we'd need structural reform, specifically redraw the districts such that the primary election isn't the general election, try and get money out of politics, rank choice voting. Are you focused on any of those things? The short answer is all. So, I mean, there have been various states that have been doing the anti-germandering

unfortunately for the democratic side most of the ones have been like New York more democratic states versus Florida and other places that should also do this and I think it's just fair and pro-democracy and pro ethics and integrity to do the anti-germandering Catherine Gale in our Pick Five initiative, because to try to get the incentives

as opposed to the go crazy right, go crazy left, and then try to maybe tack towards the center, have the whole thing be towards who is representing for the majority of people's interests and needs and have the whole process go that way. So, we support efforts across that. Now, that being said, I think that one of the things that we're facing right now as a country is this question around the corrosion of democracy. And like, you know, the theory, the big lie theory that like the state party state Republican Party of Texas is holding as a major plank is, in their words, sleepy Joe Biden stole the election from Donald Trump in a variety of states which had Republican secretary of state, secretary of electors, and stole it only for himself and not for any of the down-market ticket

Democrats. And that's the theory. Like, that's the theory, let alone, like, all the facts against it. And so, the corrosion of belief in voting and the democratic system and so forth is as anti-American as anything in my lifetime I've seen. Yeah, you said it earlier that there is a truth. And until we rally around or acknowledge that there is a truth. And until we rally around or acknowledge that there is a truth, it's just hard to imagine how we progress. So I wanted to talk a little bit

about your book, The Startup of You, Adapt to the Future, Invest in Yourself, and Transform Your Career. We get a lot of questions. We focus on young people, specifically young men who I think are really struggling in our society. But I get a lot of questions from people in their 30s who say, you know, I'm a little bit further along in my career, but I want to pivot. Can you offer some advice to those looking to change their career plans and strengthen their personal networks? 100%. And strengthen their personal networks. A hundred percent. And look, I think the thing that, part of the reason I ended up writing this book is I gave the commencement speech to my high school,

the Putney School, thinking about what advice I could give to, you know, young kids just graduating from high school, some going on to college, some others. And it's like this whole career ladder, career escalator thing that has been taught implicitly by a bunch of universities and everything else is now gone. We all need to be essentially entrepreneurs of our own career and our own lives.

And that doesn't necessarily mean you need to start a business. It's just you need to think with the same concepts and tool set. And some of that is pivoting, as you're describing. It's like, okay, I've gone down this path and I need to make a jump to a different path. And by the way, entrepreneurs, creating a business is a pivot. They frequently pivot in the businesses. This is the same kind of skill set that applies to them. And the way that you do that is you have essentially what a kind of like, first you have to develop what is a possible theory?

What are the possible places that I could go? For that, you need to kind of, the best thing is usually networking. Yes, you can search on search engines and kind of think about what are the other kind of things. But you go and talk to people, people who know you, people who may know somebody, like the most often thing. Like one of the, I was talking to a friend of mine in Boston and he was saying, look, thank you for LinkedIn because part of what the advice he gave his kid was, hey, look, go, you know, you had just graduated from university. He says, go and search for people who are graduates of your university

here in Boston and go do international interviews. You know, say, hey, I'm a graduate here. I'm looking at this. By the way, it doesn't have to be just a college graduate. It could be any community connection. It could be a shared university. It could be a shared community organization, a shared religious organization, a shared neighborhood, you know, anything.

And say, a shared friend, you know, and say, hey, can I talk to you about what the opportunities are here and what it would take to get here and what the job looks like and so forth. Then once you have a theory of that, you could say, okay, well, how would I get there? What would be the things I need to do? Would I need to go take an intern job? Would I need to get some education? Would I need to get a network opportunity where someone will take a risk on me, even though I don't fit the characteristics of the job description, but they know that I work well and I'm committed and I'm learning and that's what I'll do. That's how I got my first job at Apple was like, I had no background as a user experience designer, but they went, oh, you're smart and you'll learn and

you're going to have to work really hard. You're going to have to learn through the weekends and so forth, but come and be a contractor with us. I was like, okay, great. I'll try that in order to learn the job. And so you develop that theory of the game, and then you have your network help you figure out how to get there. Any advice for small and medium-sized companies as we enter what looks to be a recession here? How they should change or how they should be thinking about strategies or changing the way they operate? Well, you know, obviously we could do your whole podcast on this, but first you

always attend the defense line because you want to be able to persist and continue to play the game. Like in the startup of you, that's part of why we have this A-B-Z planning framework. The Z is the lifeboat plan. You always have a, you pivot and to do that. And then once you do that- What does that mean? Does that mean the six months of cash in reserve? What do you mean there? When would you need to make a very big change? So, one of the mistakes about how people think of this, they think I have a plan A and I have a plan B. And actually, in fact, you have plans B because you have, well, if it's not working out, what can I change? Could I change this a little bit? Like during the pandemic, you know, we cover this on Masters of Scale, but it was like a restaurant

started going, okay, you know, like I'm going to do a takeout window, right? Like I'm going to start doing really, really good takeout windows so we can adjust to the pandemic. And that worked well. And that's like a plan B. I'm still doing a restaurant. I'm still doing it, but I'm now emphasizing the takeout window. But say none of that's like a plan B. I'm still doing a restaurant. I'm still doing it, but I'm now emphasizing the takeout window. But say none of that's working. It's like, okay, what do you need to be able to do to reset entirely and have an entirely new plan A? That may be like in my case,

that was go back, live with my parents. What's my plan Z? Get a job. Use that to rebound after starting a company to rebuild my savings account. So what like what's your plan Z for a company is sometimes what you need to have as well. You know, you kind of sketch those out and then you know what the thought, oh, shit, this is where it's trending, let me correct early in order to do that, whether it's a plan B or a plan Z, is the only way that you professional, but things that, because I think the two are intertwined in terms of success. What are your thoughts on the institutions or individuals that have had the biggest impact on your personal and professional life? Well, I think, you know, we all, I think life's a team sport, not an individual sport. I mean, part of the thing we said in the startup view is that you plural, not just singular.

It's that blur between individual and singular, you know, your team. And so I think I've been, you know, very lucky and, you know, fortunate to have like great friends. Part of the reason I gave the commencement speech at Vanderbilt this year on friendship, because I think, you know,

think of it as a life as a team sport. And so it's a combination of various friends that have kind of elevated my thinking. I mean, some of the folks I wouldn't have thought to be a software entrepreneur if I hadn't been at Stanford, if I hadn't had friends who were talking about how technology redefines the world and thinking about that, because I didn't have entrepreneur as a life mission. I'm one of those people who, after I'm starting my second company, I go, oh, I realize entrepreneur applies to me, right, as a category. And so, you know, there's been professors, teachers, you know, family members. You know, I think, you know, part of how you should approach everyone that you're interacting with is how do I learn from these people?

How do I learn from these people? How do I learn? What have they seen in the world that can add to my delight, skill set, ability to see the world better? And if you're not approaching everybody you meet that way, then you may be learning less than you could. Yeah, we often say here that greatness is in the agency of others. So, right before we started, Reid, you said, we agree on 70%. And one of the reasons I was excited to have you on the pod is you've carved out what I think is a fairly unique position. You're sort of seen as this elder statesman, despite the fact you're still a relatively young man in the world of tech. And I think a lot of that is that you're forceful, yet dignified. You have opinions. You're not afraid to share them. But you're very civil.

I've never seen you shitpost people. I've never seen you. I can't think of any time you've been critical of somebody or made a personal attack, which requires increasingly more discipline in this era of a course discourse, the 30%, and I'm asking this because I want to learn, not because I want to get into a debate with you, where do I get it most wrong? Because I'm super flattered that you appear to be fairly familiar with our content. So as a means of educating our readers and listeners, what key themes do we need to recalibrate or rethink? Well, so by the way, I deeply respect the stuff you do. It's part of the reason I pay attention to it. And I'm not just saying that because you just described me as civil. That is true. And I, by the way, it's what's most useful at getting to the future, right? So if being uncivil was

more useful to being in the future, then I'd be uncivil. And so, for example, Trump supporters probably think I'm very uncivil to Trump, although I find that I'm speaking much less, speaking much more charitably than perhaps the man deserves. Yeah, I would agree with that. But like, for example, the areas. So, we're obviously living in a time where it's very popular to have um you know tech lash against big tech i actually think most of that not all there's elements that are very important most that's misdirected um i actually think that for example part of the the fact that we tech is now a global thing and the question is you know what are the platforms for the world is super important not

just the platforms the u.s and when i think about like, what should be done with, you know, the top five big tech companies is, how do we help harness them to help, you know, A, the rest of the country, but also the world in terms of things. And like, what are the things that we'd be asking for? Because I think a lot of good things are coming out of it.

If you say, what is any big problem that you'd want to solve? Anything from like economic justice to criminal justice to climate technologies, between 30% and 80% of the solution, and we should be very leaning into that technology. And a lot of the big tech companies are actually, in fact, the sources of the technology.

The AI revolution that's coming really started with the large tech companies actually, in fact, doing this. So that would be one area. I think another area is I would agree if the whole gig economy kind of stopped at that's it and that's the lacuna and keeping everybody in this thing. Career pathing is super important. It's part of the reason why I do LinkedIn the way I do. And part of the discussions we have is how might you start as an Uber driver and then be able to go places with it? And how do you invest in yourself and the book, Startup View, and make yourself better?

So I actually think that the network orientation of the system can be good for all parties, but we need to figure out those paths of progress a lot more. So I'm not as, because I tend to be, like you said, well, this is a failure of the gig economy right now. It's like, well, okay, but is it intrinsic? Does it, can it be improved? What would be the thing that we would do to improve it? What would be the thing where the features of it would be really good and then the negative things could be improved to being amplified in a good way? So that would be another area that I think you and I could possibly have more extensive conversations on. But those would be areas of the, what I was saying to have good career paths for everybody, you know, like, you know, for the vast majority of people. That's part of what a healthy society is.

Have those happen, right? Yeah, look, I think a lot of your comments in the gig were kind of directly relate to Uber. And I have found that under Dara Kasrashahi's leadership, things have gotten better. I was personally offended by what I saw is software being used to circumvent minimum wage loss. And I see less of that now. And also, there's just no denying. Every Uber I get into, I ask the driver, do you like Uber? Do you like what you do? And 80%, 90% like it or love it. And so there's something to the notion that I don't need to infantilize these people. They have free will.

And in London, there's this thing called Uber Lux, which is the best value in the world. And I guess there's a lot of private drivers here. And you can get an S-Class or a 7 Series for what feels like the price of a regular Uber. And these guys are happy to do it. Anyways, I think there's some common ground there. So, I would just love to get – I don't know much about your personal life. Do you have kids, Reed? Nope.

No kids? Nope. It's the only thing that allows me to work as insanely hard as I do. Happily married to my college sweetheart. No kidding. How long have you been married? Well, we got married after college, but I guess it's approaching 20 years now. So I'd love, I don't know if it's the Japanese silk screens behind you, but you come across as just incredibly thoughtful and soulful. I would love, do you have any thoughts on or hacks or best practices around being a good partner in terms of a 20-year relationship or being with your college sweetheart, obviously since college? Well, let's see.

Look, I learned from lots of people on this. All right. So, I'll offer a few, but I think I probably learned them from other people. So one is always ask what can you give versus what can you get. Start with the give as a function of it. Take partnership very seriously. That when you disagree, don't start with, well, you're wrong because it's different than what I've learned. It's like, well, what can I learn from this?

And what can we learn from this? It doesn't mean you give up your own position, but you approach it. Be proactive at steering into things where you think there might be conflict or there might be growing divergence and address them. And so, we sat down in front of marriage counselors a number of years ago and surprised them because we said, well, we really love each other, but maybe the marriage thing isn't quite working. And they're like, oh, we love each other. It should work. No, no, no. We're just trying to sort this out.

And we figured having another party talking with us could be helpful, right, to kind of talk this through. And it was great. And part of that was steer into it early. Steer into it. Don't wait for a crisis moment, but be intentional and directive about how you're a good partner to each other and positivity to your interactions is a kind of a fundamental goal for how you go through life together. I mean, but, you know, these are all things that, you know, maybe the vast majority of listeners would go, yeah, yeah, that's obvious. But, you know, maybe it's the obvious things that are most important. All right, quick lightning round before we let you go,

Reed, you've been trying to save your time. Last piece of media that you binged? Sandman on Netflix. Lowest moment professionally? A whole stack of those. You know, my first startup, SocialNet, I'd gotten kind of crosswise with the VCs. And in a financing round, they removed me from the board in the legal paperwork. I learned about it in the legal paperwork. I was kind of particularly classless. Yeah, I learned about it on the way to the airport that I'd been kicked off my board. The company I started by Mike Moritz from Sequoia Capital. And I remember going into the parking lot and getting out of the car and literally being frozen. I didn't know how to process it. I didn't know what to do next. I didn't know, do I call a lawyer? Do I call Mike? Do I? And I remember just sitting outside my rental car in the Hertz parking lot and the guy had to come up to me and be like, are you all right? Do you know where to

go? And I'm like, no, I'm just kind of standing here trying to process what just happened. I think that happens. I mean, I love hearing that because someone looks at your success and it's like that Adam Grant cartoon. They think success is up and to the right. I find there's almost no such thing that everybody has those moments. And anyways, back to the lightning round, your next life, if you can come back as anyone and it can't be you, who would you come back as? Great question. Never been asked. Someone whose life you just hugely admire and you think that would be a kick in the ass to come back as that person. Um, well, I really love these, uh, grand histories of humanity. So, you know, um, Yuval Harari, Jared Diamond, Robert Wright.

You know, like I've actually even been thinking if I should try to write one just because of how much those influence me and how I think. So maybe one of them. Best advice you've ever received? From my father when I was a kid, which is the trouble of making decisions,

the reason why making decisions. The reason why making decisions is difficult is it reduces opportunity in the short term, but it's the only way that you get opportunity in the long term. And if you could say anything to your kind of 22-year-old self, what would it be? Always avoid the beaten path. Reid Hoffman is an entrepreneur and investor. He is currently a partner at Greylock, where he's been since 2009 and focuses on early stage investing. He's also the author of several books,

including The Startup of You, Adapt, Take Risks, Grow Your Network, and Transform Your Career. In 2003, he co-founded LinkedIn. And before that, Reid served as executive vice president at PayPal. He joins us from his home just outside of Seattle. Reid, I'm so appreciative of you coming on. I generally admire you.

I think you're a great role model, not only just for young men and entrepreneurs, but just a great spokesperson for the tech community. I appreciate your time. Thank you. And likewise, I look forward to our next conversation. Algebra of happiness. There are some wonderful things that have happened in our society over the last five decades. One, we have destigmatized cancer. You're no longer weak or weird if you get cancer. We've also started to destigmatize mental health, but I think it's nuanced. Specifically, we have destigmatized it for women. Imagine the reaction that your friends, your parents, your colleagues, and your coworkers get when a woman says, I'm down, I'm feeling depressed, and when a man says, I'm feeling down, I'm feeling depressed. In the 70s, when I was growing up, I first got exposed to mental illness when my mom would talk about her friends having what she referred to as a nervous breakdown. That's

what we called mental illness back then. It was only something women did. They had nervous breakdowns. They were the weaker sex. So we acknowledged it, but it was a nervous breakdown. What did men do? They stayed quiet until our good friend Charlie Evans went into his garage, got a shotgun, and stuck it in his mouth. That's what we did. That's how we handled men in mental illness was keep it to yourself until it becomes unbearable

and you stick a fucking gun in your mouth. Well, here's the thing. Here's the thing. Young men and older men need to be more emotive, more in touch with their emotions, and be comfortable saying, I feel down. I feel depressed. I don't know why, or maybe this is why. And you know what, boss? That's okay.

That's a key part of healing. That's a key part of getting better. If you don't mourn, if you're not upset, and maybe that's not depression, that's fine. That's just being upset. But where depression and sadness can lead and is more often indicative or an outcome of male depression, it can lead to addiction. It can lead to really unfortunate outcomes, self-harm. Certain forms of violence, I think, are directly linked to suppression of sadness or depression. But you are doing yourself, you are doing your family, and you are doing society no favors by keeping it bottled up. Young men and older men need to be more emotive, more in touch with their emotions, and more supportive of a basic notion.

And that is life is hard, and occasionally you're going to be down. And part of the healing process is to acknowledge that you are struggling. That is okay. That is part of the road to recovery. Our producers are Caroline Shagrin, Claire Miller, and Drew Burrows. Sammy Resnick is our associate producer. If you like what you heard, please follow, download, and subscribe. Thank you for listening to the Prof G Pod from the Vox Media Podcast Network. We will catch you next week. My stripper name is Julius. Daddy got some sleep last night. Daddy got some sleep. I went and worked out. I had a nice lunch. My dog's late on me, which is always restorative. I think I'm in the zone right now. I think I'm in the zone.

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