Reid Hoffman Quotes

Permanent beta is about the power of yet.

As Paul saw it, the projections, the spreadsheets, the grand marketing plans were all secondary. First, you had to build something that a tiny cohort of users would love. If they loved it, presumably millions of others would, too. And since love tends to be shared, your product or service would have the best kind of marketing, the kind money couldn’t buy — and it would grow and grow. Paul’s point was that in order to build something Brian’s core user would truly love, he needed to meet them where they live — literally. He had to talk to them, listen to them, watch them, and try his best to understand them. And as Paul told Brian, this was the moment to seize that opportunity. “It’s the only time,” Paul said, “you’ll ever be small enough that you can meet all your customers, get to know them — and make something directly for them.” In 2013, Paul would codify this advice in his famous essay “Do Things That Don’t Scale,” which also serves as #6 of my Counterintuitive Rules of Blitzscaling.

A big market has both a large number of potential customers and a variety of efficient channels for reaching those customers.

To change the world, startup entrepreneurs need to capitalize on the relatively small number of transformative opportunities they encounter early on in their journeys. This is equally true when it comes to your career.

The real value creation comes when innovative technology enables innovative products and services with innovative business models.

One of the most underrated and underappreciated proven patterns is the news feed. Facebook’s powerful network effects allow the site to attract its users, but its innovation of the news feed has made it a world-class business.

In the Family stage, you should hire only generalists.

Twitter came close to melting down in the same way, but managed to recover in time to build a massive business. When Twitter began its rise in the late 2000s, it became infamous for its “Fail Whale,” a whimsical error message that appeared whenever its servers couldn’t handle the load. Unfortunately for Twitter, the Fail Whale made fairly regular appearances, especially when big news hit, such as the death of the recording artist Michael Jackson in 2009 (to be fair, Twitter was hardly the only website that had these issues when the King of Pop passed away) or the 2010 World Cup. Twitter invested serious resources into rearchitecting both its systems and its engineering processes to be more efficient. Even with this strenuous effort, it took several years to “tame” the Fail Whale; it wasn’t until after Twitter made it through the 2012 US presidential election night without melting down that the company’s then–creative director Doug Bowman announced that the Great Blue Whale had been put to death.

Having “extra” capital gives you a cushion for when outcomes do not in fact follow your plan. Moreover, it increases your optionality — if you need to invest in growth, you can do much more without having to go through the time-consuming process of raising another round. As Mariam Naficy, CEO of Minted, told me, “Act like you’ve got half the amount you have in the bank because you’ve got to factor in all the failures and all the optimizations that kill great entrepreneurs and businesses all the time. Both of us know so many people who had good ideas and were on the right track, but just ran out of money.” At both PayPal and LinkedIn, we raised large financing rounds right before a market meltdown (2000, 2008), and we sure were glad we did. In the case of PayPal, that money allowed us to keep growing during the dot-com bust; without it, we wouldn’t have made it to our IPO. In the case of LinkedIn, the situation wasn’t as dire, but I realized that the value of the optionality from additional funding far outweighed the potential negatives of equity dilution.

The second growth factor needed for a strong, scalable business is distribution.

What can we do to surprise you?” or “What would it take for me to design something that you would literally tell every single person you’ve ever encountered?

Chesapeake moved faster than any other company in its industry, deploying an army of land men to aggressively lease as much land as possible, with instructions to pay whatever was necessary, without knowing whether the gas deposits would justify the price. Hiring an army of land men and paying top dollar for leases sight unseen seemed inefficient…until the wells started producing.

in one of the most influential business books of all time, Geoffrey Moore’s Crossing the Chasm. Moore argues that technology companies often run into problems when they try to transition from a market of early adopters to the mainstream — the proverbial “chasm.” He recommends that companies focus on niche beachhead markets, from which the company can expand outward using a “bowling pin” strategy in which these markets help to open up adjacent markets. This strategy is even more important for network effects businesses.

Even if the money doesn’t prove to be necessary, a major financing round can also have positive signaling effects — it helps convince the rest of the world that your company is likely to emerge as the market leader, and can discourage investors from backing additional competitors

You’ve got to keep your personal learning curve ahead of the company’s growth curve.