The Great Reset: How Reid Hoffman & James Currier See the Path Ahead for Founders
Today Reid Hoffman & James Currier discuss the path ahead for Founders in a post-COVID world. What you need to learn and unlearn to get your company through a crisis, frameworks for the tough decisions Founders are facing today and the way they see the world changing forever – opening new opportunities for savvy founders. Reid is the co-Founder and was the executive chairman of LinkedIn, and is now a partner at Greylock.
In this episode, we discuss:
- How to be human first
- The VC landscape post-COVID
- How to make decisions around risk
- The mental patterns Founders should unlearn
- Founders & frugality
- Silicon Valley’s involvement in COVID-19
- Zero-sum thinking
James Currier (00:00):
Reid Hoffman, you need no introduction. You and I have known each other for almost two decades now. You and I are both members of Henry Crown Fellows program where we’re really big fans of combining tech with humanities and humanism, basically, and philosophy. One thing you said recently I wanted to start talking with you about is, in this time of change, you said, “Be human first.” And since our stuff at NFX is about early-stage founders, when you think about being human first, what does that mean for early-stage founders during this time?
Reid Hoffman (00:30):
Well, part of the reason I said that is because the normal and very appropriate way for founders thinking about their businesses is to be thinking you’re all in. You’re at a 150, 200%. It’s the organization and the business first. And part of that’s because there’s this expression that I use that’s now widely attributed, which is, “A startup is like jumping off a cliff and assembling an airplane on the way down.” You need to be totally focused on, “Yeah, there isn’t balance in my life. I’m really making sure that this entity starts going.” And nothing like integrity and all the rest of the stuff matters. But just turn the rheostat up to 11. Put all your energy and all your sweat, all your tears, all your blood, make it happen. And then the people you’re recruiting on board, you’re basically asking for the same kind of commitment, the same belief in the mission.
Reid Hoffman (01:20):
And that is by and large the exact right way to be an early-stage founder. On the other hand, when you get to unusual circumstances like this, you say, well actually it’s not a question about like whether, or not you’re relaxed on a Friday evening. It’s not a real question about whether or not you’re maintaining your hobby while you’re doing your business. It isn’t a question about like, “Well, in a couple of years when I get this going, I can take a mini sabbatical, or a little bit of downtime. And I got to be all in seven days a week now.” Now the question is, “Well, what’s going on with public health? What’s going on with disease?” Your family is probably under unusual stress, right? Kids, your partners, what’s going on with your grandparents, your parents. All these things that are going on that that are like, “Okay.”
James Currier (02:04):
The network that has normally supported you now needs your support because you’re the one who’s the founder who’s got the strength and the knowledge and the energy to do these things. People around you now need you.
Reid Hoffman (02:15):
Exactly. And so part of the thing that is the setback from this normal reflex, which is the right thing to be in, and say, “Look, look. As I go to each day and as I get to each decision, I go, what’s the thing that I should do as a human being first?” And yes, maybe I’m taking a little bit of extra risk with the company. A little bit of extra risk with a startup. That’s fine. In these circumstances, you make that decision first. And it could be anything from, everyone’s trying to work, when they’re sheltering in place, work from home. But it’s like, look, they’ve got kids, the kids interrupting them. You make sure, are you trading of with your partner well, and managing kids? Are the kids doing okay in this stressful thing? And how do I help you be as productive you can, but while I know that you’re going to be spending time on these other things?
Reid Hoffman (03:02):
And you should be. And if you’re not, I’m going to be encouraging you to spend time on it, because that’s what matters in these times.
James Currier (03:08):
That’s the human thing to do.
Reid Hoffman (03:10):
James Currier (03:10):
And do you think it extends to how you might reduce your force? A lot of these companies are having to do layoffs.
Reid Hoffman (03:19):
Yes. In a couple of different ways. So one is how do you make decisions around RIFs? Now sometimes you just have to, it’s full stop. One thing is, the question is, is there some industries which are just slaughtered by the staying in place.
James Currier (03:34):
Reid Hoffman (03:35):
Travel’s an obvious one. Sometimes it’d be like you’re a SaaS business serving small businesses. Well, okay, small businesses, a lot of them are going to be intensely impacted. And so you might go, “Look, I have to do a RIF, because the recovery pattern here for me is at least a year out.” Right? It isn’t like in three months we’re going to get to a place where it’s like, “Well, okay. It’ll be like a recession. We’re 20, 30% down, growth rates slower.” It’s like, “No, no, no, no, This is slaughtered and I have to do that.”
Reid Hoffman (04:07):
But then, the next question is, is, okay, when you’re doing a RIF, are there options to do things like furloughing? Are there options to do reduce salary, reduce bonuses? You say, “Look, this is what we’re going to do”, and people can sign up for it or not. That’s the next level down on it, because then you could say, “Look, we keep more people in place.”
Reid Hoffman (04:25):
And then the next layer below that is you can go, “Well, are there ways that I can help people get their next jobs?” We’re going to do a reduction in force, but we’re going to find the resources, give them the resources, actually ask people in the company to say, “Hey, be a reference.” If there’s other things you know about, refer people to them. We’re going to do things to try to help that transition.
Reid Hoffman (04:49):
So I think it goes the whole stack down on RIFs. Now at the end of the day, you’re doing no one any favors if you say, “We don’t do a RIF”, and then the thing just goes out of business in two or three months. That doesn’t help anybody. So actually in fact, a couple of my startups have done RIFs. It’s working through it. It’s applying all these principles in terms of how you’re doing it.
Reid Hoffman (05:08):
Then the last point, which was the point I was making. The first thing is sometimes people go, “Oh my God, uncertainty. We just got to go. We’ve got a plan on no revenue for six months.” And for the majority of our tech businesses, if you’re really planning on no revenue for the next six months, that’s a different universe. So I tend to say, “Don’t plan on that. Plan on really challenged and recession, but don’t plan on no revenue.” Like if we’re in a place where a B2B business and enterprise has no revenue for six months, then you’re in a different place altogether as an industry, as a society, everything else. And we’ll be sorting things through there.
Reid Hoffman (05:43):
So with that plan you also monitor, because maybe I’m wrong. So you go, “Okay fine, we won’t plan on no revenue for six months. We’ll plan on no revenue for a couple months, or it takes two X as long and it is only 60 or 70% as much revenue as we’re getting.” And that’s what we’ll plan, but we’ll be monitoring to see if it’s right, or not in order to recorrect.
James Currier (06:04):
Got it. And so what are some of the things that people you think need to be unlearning right now? If you’re an early-stage founder, you said, “Look, normally you’re operating in one mode, which is just the go go mode.” Now you need to be a little bit more human and realize that they need your support as much as you needed their support before when you were out slaying the dragon, what are some of the other things that we need to unlearn? The mental patterns that we need to throw out the window?
Reid Hoffman (06:28):
Typically, what you try to do as an entrepreneur is you try to simplify the problem that you’re doing. You try to have a specific set of hypotheses that you’re testing, usually around product market fit, or scale product market fit. Sometimes micro ones on, “Oh, I’m going to hire this person who I think has the talent, although not the experience. They’re going to learn.” There’s a set of things that you’re testing. The problem is that you have to kind of now do is you have to realize that there’s a set of things that you think you’ll be learning now, that you won’t actually really learn. They’re unique versus repeatable things. Although you have to learn and adjust and adapt to the new circumstances. And you have to be thinking about like, “Okay, so what are the things that we’re going to do that are now that are just getting through the worst of this crisis? What are the things that we can now learn that we wouldn’t have prioritized learning, but we’re good to learn now?”
Reid Hoffman (07:19):
Like so for example, a really classic one across the whole startup universe is, “Well we should really learn remote interviewing. We should learn to say, “Okay.”” Separate from the circumstance, we wouldn’t have bothered learning remote interviewing. It just not a skill that’s on the short list of priority, but we’ll do it now. And that could be helpful to us as we’re recruiting talent from across the country, around the world, opening up new areas like learning distributed work. Some places really should learn distributed work very early. Some places shouldn’t bother learning distributed work until much later. Well, we’re going to learn that now and then that could help us with talent and being in Boulder, in Austin, or somewhere else, at the start up.
Reid Hoffman (07:56):
So it’s a shift of mindset about which things you’re going to learn now. Why are you going to learn them? Learning them for just the crisis, learning them for repeatable work. And those are the kinds of things to trade mindset. Now the other thing of course is the generalization of the point that I just made is to say like for example, in typical world, your startups making progress, you’re going to get financing. There’s enough focus on entrepreneurship, new products. We’ve shopped, product market fit. We’re going to scale. It may not be the pricing you like, may not be from who you like, but you’ll get financing.
Reid Hoffman (08:27):
Now, one of the things is external financing’s are going to be very difficult through probably at least August. Maybe if you’re really lucky, it’s July. September, October, I think pricing may get reset, but it’s there. I think it will be back there. But in that interim period, new financing from a new player is super difficult, and so I’ve seen a couple of them happen and there are two categories of which I’ve seen happen. One good for NFX and the other is scale companies where investors have been pursuing them for over a year. And said, “Well, we’re going to do a round of financing anyway.”
Reid Hoffman (09:03):
And they go, ” We’ve been wanting to be in this company for a year anyway. We’re going to go in no matter the fact.”
James Currier (09:06):
So where the VCs know the founders already and having established rapport and knowledge exist.
Reid Hoffman (09:12):
And have been pursuing.
James Currier (09:14):
Reid Hoffman (09:14):
And then the other one is Series A. And the reason why smart folks are still doing Series A’s is because they go, look, as long as we make sure that we’re doing a Series A with 18 months plus of capitalization so that we’re on the other side of this, then you got a pricing mismatch. Maybe the pricing is going to get hit a whole lot more than we think now. And what the pricing is, we may make an error in pricing investing now, but the things we invest in now will get money later. So those are the only two. Other than that, no external financing’s that I’ve seen.
James Currier (09:42):
Yeah, right. And the companies with the Series A’s, the money becomes a competitive weapon.
Reid Hoffman (09:47):
James Currier (09:48):
Reid Hoffman (09:48):
James Currier (09:49):
As others are skimping or laying off or pulling back, if you’ve just raised a Series A in this time then you’re going to have a little bit of an edge in moving forward in the markets that are moving.
Reid Hoffman (09:58):
Yep. And the one thing I would add to the companies that did raise a Series A, get that money to last you minimum 12 months, preferably 18 plus months from now.
James Currier (10:08):
We’re saying 24, but yeah I think that’s right. I think 18 to 24 is probably right. Now one of the things that people have been telling us they’re learning right now that they hope to keep after the crisis is the DNA of frugality. Learning how to keep costs down, reviewing just software subscriptions that everybody’s signing up for. Real estate cost containment, not over- hiring, that sort of thing. Number one, do you think that, that’s a good thing to learn? Number two, how does that play into the blitzscaling concept because I know that would be in a way, an opposite. I think probably Jeff Bezos has done both, but very few do both. How would you see frugality as being a new learned behavior? In the depression my grandparents learned to be very frugal and they stayed that way their whole lives.
Reid Hoffman (10:54):
Learning frugality is a good and smart thing to do. This is actually one of the things that we in Silicon Valley get a little too lazy at is because there’s so much capital, and the capital is there because it knows it generates a bunch of results that relative you and I have known each other 20 years. Back when we started this, oh my God capital was extremely important.
James Currier (11:12):
Yeah, there were about 120 venture firms.
Reid Hoffman (11:14):
Yes, exactly. And you were watching every dollar because it really made a difference.
James Currier (11:19):
Reid Hoffman (11:19):
And now you’re like, wow, hey, rents are expensive. We’ll still get the nicer place and it’ll be more expensive. And there tends to be more of that. And it’s good to really be strategic about capital’s expensive, sometimes impossible to get. Like kind of a pandemic adjustment period. And we should spend it as carefully as possible. And that’s always a good thing to learn. Now, that being said, within blitz scaling, there’s kind of two things. One is, blitz scaling is relative speed. It’s a, am I moving faster than my competition at being the first to scale? Either my real competition or the potential emergent competition, or that kind of thing. And that really matters in a bunch of markets, especially those with network effects, right?
Reid Hoffman (12:00):
A la NFX. And so the first, we call these Glengarry Glen Ross markets. First prize Cadillac, second prize steak knives, third prize you’re fired. The difference when one, two and three really matters. And so relative speed does really matter. Now that being said, it’s relative speed. So if all of a sudden capital’s drying up and actually in fact everyone’s being, okay, we got to make sure we get to the right milestones. Then what you’re doing is not saying speed doesn’t matter anymore. What you’re saying is actually in fact, I can now be more efficient in my capital spend and still be moving faster than my competitors.
Reid Hoffman (12:33):
And that’s the mindset that you need to essentially shift to with this. It isn’t that the rule of, first to scale really matters. Now sometimes in your industry it might be … You might say, look actually in fact the one who’s going to be the first to scale is the one who gets across the pandemic desert, the pandemic crisis. And the one who gets across it actually in fact it’s the survival of going across that matters. And that’s going to be the speed because it’s speed that compounds over time to scale, not speed today, speed this week. It’s speed that is relative to when you’ve really established your scale product-market fit and have gotten the flywheel and the engine going.
James Currier (13:09):
Right. Relative to the market that you’re in.
Reid Hoffman (13:11):
James Currier (13:13):
And your competitors. Yeah. Got it. Yeah. Yeah. Just being the last one standing is often the path forward.
Reid Hoffman (13:21):
James Currier (13:22):
A lot of this is going to come and go, and I’m just wondering if you’ve got any ideas already about what’s going to change around human behavior? Work or maybe social that you think you’re already starting to see this adjustment being made to how we work or how we’re going to be socially. Some things will drop away. People say, Oh, we’re going to get back to normal. Everyone’s going to be at the bars, at the restaurants. We’ll all be at the Golden State Warriors games within a year. It’ll all be back to the same. Are there things that you think that you can anticipate changing?
Reid Hoffman (13:50):
Well, I tend to think the changes. We all see the changes that have happened, like shelter in place, a bunch of other stuff. The changes that persist tend to be the ones where there is either a negative force to keep that in place. Or an absent of a positive where people kind of go, well we were doing a bunch of that, but maybe we didn’t need to do as much of it. So I tend to think that some of the changes will stay is I think there’ll be a slower return in the events business because I think a lot of people, and especially travel as well, because the people think well, in fact, I can get a bunch of this done now that I’ve actually really had to dig into it. See how video conferencing works. Now I can get a bunch of that done this way, and that’s actually much more time efficient for me.
Reid Hoffman (14:33):
That still allows me things. And I think you’ll see more virtual events still. Before when people said, “Hey, we’re going to do a virtual.” It’s like, I’m just going to wait to do the in-person one. The in-person one’s better. It’s like, well actually in fact, maybe some of these events or some of these things I will do as virtual events. But I think that pattern. I think similarly distributed work, I think people will learn things like, well actually in fact getting a day a week working at home or a day a week working with no meetings or a day a week or two half days doing no meetings and so forth. That’s actually going to be much more productive. We’re going to do that. And I think those kinds of things and the set of tools that go with it I think will play it out.
James Currier (15:07):
It does feel like the days of the five day work week in the office are over for at least information workers.
Reid Hoffman (15:13):
Yeah. Or at least a version of it that says, hey, we’re going to focus on these kind of new pieces of productivity we found. And so even if we’re all going to go to the office, we’re going to actually do like it’s like no meetings Wednesday. So nothing scheduled so we can kind of work through, are those things happening? I also think by the way, unfortunately, it’s one of the things we need to put the most attention to is I think the restaurant business will come back more slowly in part because I think people will have the residual worry about, well what happens if the disease kicks off again? And this is compact space. It isn’t so much they didn’t like the restaurants, didn’t enjoy going and seeing people. It just I think it will be a slower return, in which case that will be a, it’s an industry that employs a lot of people, provides a bunch of service and glue within the culture of the community. And I think that will be one that will be in terms of life will be slower as well.
James Currier (16:06):
Yeah. And given that some of these things are going to change and persist, are there things, are there opportunities you see for the startup founders? A lot of people talking about, oh, I got to do a RIF or I can’t get capital. Or, it’s hard for me. Well, yeah it’s hard, but where’s the opportunity within that changing landscape? Are there some things you see people doing?
Reid Hoffman (16:26):
There are. That’s a little bit of the reason I was mentioning remote hiring and interviewing, kind of patterns for asynchronous or distributed work, the tools and improving the tool set. Kind of getting the, how do we make the two to three hours of work without interruption efficient, right? As part of productivity. All those things will persist. A lot of people tend to say, oh, we’re going to do stuff because it’ll be the market driven by the pandemic. And obviously there’s some areas where that’s super important. Testing equipment or kind of measurement diagnostics that may persist for a while. There’s a bunch of stuff that’s like, no, no, you got to think about the real product-market fit that you’re always working towards is two to three years out. And as part of that kind of two to three years out, you got to think, all right, I know things are going to be weird this year, but what are they likely to be like next year?
Reid Hoffman (17:15):
And in which case, target that. And that’s a little bit like the earlier lesson I was mentioning is, there are some things that will look like lessons this year that are actually only lessons for this year. Not lessons for 2021. And you won’t fully know. You have to make an informed, intelligent risk bet on it. But that’s the kind of thing to do. And so I think patterns of work, patterns of company operations I think will be persistent. I think some parts of product market fit will be persistent, but some will also just be highly volatile.
James Currier (17:44):
Yeah, yeah. We’ve seen a lot of companies renegotiating all their contracts down to lower their total cost basis. We’ve seen them resetting all the salaries, including the founders down.
Reid Hoffman (17:55):
James Currier (17:55):
We’ve seen some of the companies go after competitors. Just directly go after their competitors saying, okay, we’re going to take market share.
Reid Hoffman (18:02):
James Currier (18:03):
Because they’re on their …
James Currier (18:03):
… because they’re on their heels, and we can choose to be on our heels or we can choose to be more aggressive.” Some of these companies are moving to virtual products. So these events planning company, they’re moving toward how can we turn this, using WebRTC, how can we now create a product that does something digitally that we used to do physically. Some of these major pivots, I think, are giving opportunities in the desert at this point.
Reid Hoffman (18:30):
Yeah, I think that’s totally smart to do. It’s good to recognize this is a wildly different time. The only super crazy people think that two months from now, it’ll be just back to where it was in January. That’s the insane point of view. Now, some things are more opportunities. Some things are, because like the example of your competitors might be really slowing down, et cetera. You’ve raised the Series A, your competitor hasn’t. You have an ability to grab customers, do things. You have ability to figure out a go-to-market motion that may actually, in fact, be lighter weight and more globally distributable like these kinds of things. Those are good opportunities to grab. Then sometimes you also have to say, “Well, but actually, in fact, we also have to focus on cost and longevity.”
James Currier (19:13):
Yeah, totally. Are there some areas, Reid, where you think that founders should be focused on in terms of making an impact over the next few years as we come out of this next year or the year after, where there are startups that are needed to put people back to work or there are startups of need that might not exist? We’ve seen a torrent of remote working applications in the last few years already. Always hard to know which ones of those will catch on and be big, but beyond that, are there areas that you think founders will start to see a greater return to speed that could really make an impact?
Reid Hoffman (19:47):
The natural impulse for most people is how do I get medical tests to the hospital, equipment to the hospitals, which was a very good thing to be doing a month ago. How do I finance science, and vaccinations, and inoculations? How do I support my local restaurants and so forth? I tend to think that the top focus, obviously, for most startups should be is like, look, if I can get a really good business going, I’ll be creating jobs. That’ll be a back to work kind of thing for people. That is actually a super important thing for me to do, and I shouldn’t get too distracted. Now, that being said on a secondary order, it’s kind of the we’re going to make our products free for hospitals and first responders. When we’re going to be catering at our startup as we’re going back to work, we’re going to make sure that we’re going to be ordering food from restaurants around, like choose some restaurants to help get back on their feet. We’re going to be a persistent orderer from them, right? As a way of doing.
Reid Hoffman (20:49):
I think those things are also very good to do, but things that kind of say, “I’m focused on my startup and my business first because that’s creation of jobs and industry.” I mean we’re going to be in X quarters recession. And the question is is it a small number X or a large number X? Is the only real question with that.
James Currier (21:10):
Yeah. That’s right. I think it’s an instinct to try to take care of everyone around you in the micro. I think this idea that just by creating a scalable enterprise and creating a foundation that could produce hundreds, thousands of jobs in the future is actually quite an ethical thing to do.
Reid Hoffman (21:31):
Yeah, exactly. It’s important. It doesn’t mean that you don’t care, right? You care deeply, and you could do things that you can to help, but the only way that this recession really gets back and the SMB jobs get recreated and everything else is that we move out of recession back into the normal growth of an economy. And that sometimes you have to have a longterm focus for that.
James Currier (21:53):
Agreed, agreed. It does feel as if what you’re saying is that the changes that we’re going to have here for the next one need to be around the shelter-in-place because the economic impact of this, the economic virus that this is may prove over the next two or three years to be more impactful than the virus itself. We have no idea, but it could very well be. The response of shelter-in-place is probably not the optimal response we can have. And so it’s almost as if we need some cultural entrepreneurship, not just entrepreneurship, entrepreneurship, but cultural entrepreneurship to shift what our playbooks are as a community and a society.
Reid Hoffman (22:30):
Yeah. We’re in the emergency playbook, which is the we fumbled. We’re going setback. I mean like the kinds of things would be some to say, “Well, look, the moment that we see a pandemic start to happen, you say, ‘Look, we’re going to shut borders for the moment, and we’re going to ramp up testing intensely.'” We go, “For that, we need to make sure that we have high testing capability.” By the way, if we’d done that here, we might have been able to shut the borders, just shut the borders of the US for a week, ramp up testing, be capable on healthcare stuff, and it would have been an entirely different curve that we were in.
James Currier (23:04):
Yeah. The network here is interesting also though because this virus connects all the countries. If one country tries to do herd immunity, and the others don’t do that, it creates a lot of suffering for the ones that try to do shelter-in-place while someone else is just out frolicking, and then their people are spreading the virus around. So it’s interesting, the sort of network effects, if you will, the different cluster implications of how everyone’s policy rolls out because we’re all interrelated now.
Reid Hoffman (23:32):
100%. It basically says doing shelter-in-place doesn’t really help you very much unless you also close the borders for that relevant time. One of the weirdnesses in the US is you got some states, you have California, Washington, now New York going, “Okay, we’re going to do the shelter-in-place.” Then, okay, well, what should we do? Should we then say, “Okay, no one from any of the other states is allowed to come? Unless you’ve gone through your own quarantine process, we’re not going to allow it.” Baseline intelligence to say a quick, brief shelter-in-place coordinated, then actually has the least economic impact and the highest impact on the RO of the spread of the virus.
James Currier (24:11):
We need to at least understand the math behind that, and then educate the decision-makers about that at every stage so when the next one comes, they’re ready for it.
Reid Hoffman (24:18):
James Currier (24:19):
Do you think there’s any role that Silicon Valley has in what happens next or is everyone just mad enough at Silicon Valley at this point about our social media and all the chaos that that causes that our voices just aren’t really welcomed anymore?
Reid Hoffman (24:34):
Crises come with opportunities, and, obviously, people were pretty, decades of the young, swashbuckling technology entrepreneur being the hero, Dread Pirate Roberts or the Johnny Depp character where it’s actually heroic. Then the last five-plus years has been the Techlash, and people pretty angry across a number of things like did social media break democracy and truth-telling. Is the disbalance of wealth causing extra suffering, and we’re not taking responsibilities for the things we should be doing? Some of that Techlash, I disagree with. I think some of it’s the media being extra unhappy because people aren’t paying enough attention to the media as they’d like, but the business models are being challenged and those kinds of issues. So they amplify that without taking honest responsibility for that being part of the perspective and motive there.
Reid Hoffman (25:27):
I think that the opportunity for Silicon Valley is to say, “Look, step up and help people in this crisis.” We, as a valley, what are the things we can do in terms of helping people get back to work, helping with jobs, helping with vaccines, and inoculation, and pandemic, helping with information? You see some defensive game going on right now, which is like, well, let’s stop the spread of bad pandemic information, right? Which is the kind of thing that social networks need to be doing more of, which is stop the flow of what is just very clearly bad information anyway. But let’s also now figure out how to help. How do we get good information? How do we build those trust things? So what are the things we can do where people said, “Okay, you stepped up, and you did a lot more than you had to do than the minimum to help the rest of us navigate this pandemic?” I think there’s an opportunity there, and I think people should be doing it.
James Currier (26:21):
Yeah. Is there something that’s going on that’s really unnerving to you right now? What’s the thing that sort of stands out as, “Wow, that’s something we need to stop right away or that’s a mindset or an attitude or a set of language that’s..”
Reid Hoffman (26:34):
You mean within Silicon Valley?
James Currier (26:35):
Within Silicon Valley in particular, but staying focused on the environment that these early-stage founders are in that are listening to this.
Reid Hoffman (26:42):
Well, this may be less the early-stage founders, but the one that I’ve been particularly irked is about is that Silicon Valley, because of its focus on the future, has been beating the drum on UBI, universal basic income. The way that they’ve been beating the drum is this kind of really terrible marketing. It’s misleading and terrible marketing. It’s like, “Hey, we’re creating all these technologies. It’s going to take all these jobs away from you…
Reid Hoffman (27:03):
It’s like, “Hey, we’re creating all these technologies it’s going to take all these jobs away from you, but don’t worry, we’re going to put you on welfare.” And it’s just like, “Oh my God, you’re wrong.” The speed at which the jobs are going to be taken away and change is not the speed at which you’re envisioning. I understand you understand the speed because of the speed at which the technology industry moves.
Reid Hoffman (27:20):
Take one of the favorites which is truck drivers. Right now there’s a massive shortage of truck drivers and you say, “Well but AV is going to take that away.” It’s like, “Well, yeah, okay, when the autonomous vehicle trucks start getting manufactured, 10 years from then, is when they’re going to be at rough scale that actually in fact the truck driver industry will be hit.”
Reid Hoffman (27:40):
Okay, so when’s one of those trucks going to be manufactured? I don’t see it in the next couple of years. Maybe it’ll be manufactured in the next couple of years. And that will be the first one, not the scale manufacturing. Stop with this, like say, “Hey guys, don’t worry about the tech industry cause we’re all going to put you on welfare.” Stop with that discussion.
Reid Hoffman (28:01):
Say, look, there’s a lot that we’re doing with technology. It’s going to be creating new jobs. Now, there’s going to be adaptability, there’s going to be transition. It’s like the same transition from agriculture to industry. There’s going to be pain. And we’re going to need to help with that. And we’re going to need to participate. Because yes, it’s not to say there’s your pain, but that the UBI thing is a ways out.
Reid Hoffman (28:18):
And by the way, the precise limitations of the pandemic response of writing minimum wage checks will show the exact current gap between now and a star track future of UBI. Because if you go to most people and say, “Would you like six weeks of minimum wage check?” The answer is, “Absolutely, yes, of course I’d like that.” Would you like that or would you like your job back? They’re like, “I’ll work out what the six weeks looks like, give me my job back. I really need the job.” That’s what we’re going to see.
Reid Hoffman (28:45):
And so that’s what I would say. Now that’s not a Silicon Valley activity thing as much as a way that we talk to the rest of the world.
James Currier (28:51):
Yeah, it does feel tone deaf to suggest that people don’t get meaning out of their work. And that they’re going to be happy on welfare.
Reid Hoffman (28:59):
Yes. And actually in fact the truth of matter is there’s going to be a lot of work for at least the next 20 years. And probably longer than that, until the next 20 years. Well, 20 years is half a career of someone who’s graduating this year.
James Currier (29:15):
So, instead of having no jobs, it’s just a matter of having to adapt to new types of jobs every 10 or 12 or 15 or 20 years?
Reid Hoffman (29:21):
And how to help with that, is the actual focus.
James Currier (29:25):
Anything else that’s going on that’s unnerving you, is there anything that the VCs are doing that’s bugging you?
Reid Hoffman (29:30):
Well, not particularly. I mean, I do think that, I’m less of a fan of what some VCs do, which is go back and try to renegotiate drastically term sheets or other kinds of things. I get it, responsibilities to LPs and so forth. But it’s kind of a shared thing. And so I tend to think the right approach is how do we share the pain.
Reid Hoffman (29:50):
And creating, one of the things that is awesome about the industries we build and thing we do as investors and things that we do as entrepreneurs is we play these non zero sum games. And we go and build something that’s new and much bigger and additive. One plus one is 10 not two.
Reid Hoffman (30:06):
So, that tends to be the share of the pain. Don’t say, “Well, okay, it’s a zero sum game.” You’re in a position where you’re in dire need. I’m going to try to get every last penny out of it. It’s like, look, let’s share the pain through this. And some VCs are going and being a little bit more rapacious than they should be. It’s more individuals than firms and so forth. But I don’t think it’s the industry.
James Currier (30:29):
It is interesting how people snap back into a zero sum thinking sometimes in times of crisis. It’s so hard to train people out of it to begin with. And then they snap back into it.
Reid Hoffman (30:39):
James Currier (30:40):
Yeah. I remember that moving out of Europe and the East Coast and finding how much non zero sum thinking that is out here. And how different that is, how fundamentally different that changes the human relationships between people. And maintaining that through ups and downs is pretty critical. And it’s a cultural thing. It’s a learned thing. It’s a network thing, where because you feel that way, I feel that way, because the two of us feel that way, other people are forced to feel that way. But it starts to break down and it can get bad quickly.
Reid Hoffman (31:08):
Yeah. And there’s a direct tie obviously, they’re siblings, between non zero sum thinking and growth psychology. Because if you think that actually in fact the pie is growing, yes, you want to make sure that you get a good portion of the pie and everything else. But if the pie is growing then it isn’t a, well for me to win you have to lose. And that growth psychology, that non zero sum thinking is part of how we make progress in the world. And so holding onto that and making that the way the world works is super important.
James Currier (31:39):
All right. How much of your time are you spending investing these days and what sorts of stages are you investing in?
Reid Hoffman (31:46):
There’s a “these days,” pandemic days; and there’s a “these days,” outside of pandemic days. So these days, pandemic days, it’s mostly working with the existing portfolio, my own, across Greylock and so forth. A bunch of my partners are still out there really looking at new businesses and so forth. But I’m probably playing more of a, when an entrepreneur gets introduced to me right now, I’m like, “Hey, meet Sarah Guo, meet Josh McFarland meet, you know.” And I’ll help them and work with them on it. Just for the near pandemic days.
Reid Hoffman (32:15):
Generally speaking, I’m part of how I describe a venture investor to people who don’t understand the business, that you look at 600-800 deals a year and you do zero to two of them. The benefit of my network is that I don’t have to look at 600 to 800, I can look at a smaller number, but I’m still doing zero to two deals a year. Just like every GP.
James Currier (32:31):
Got it. Good for you. Well, it’s been great to see you today, man. I really appreciate you taking the time out.
Reid Hoffman (32:36):
Yeah, likewise. Look, the entrepreneurship stuff is really important. What you guys are doing it NFX is great and really shining a spotlight on the things that matter. Building the new global world, these businesses with network effects really matters, so it’s awesome.
James Currier (32:50):
Yeah. Well, it’s great to see you, my friend. Thanks for the time and we’ll see you soon. Be well, be safe.
Reid Hoffman (32:55):