Reid Hoffman is a big man in Silicon Valley. And, try as he might to remain in the background, his stature just keeps growing -- literally and figuratively.
It all began in the bleak aftermath of the dot-com bust, when despondent entrepreneurs and investors were throwing in the towel. Hoffman, never one to shrink from a challenge, rolled up his sleeves.
The PayPal Inc. veteran took some of the $10 million he made in 2002, when EBay Inc. bought the online payment service, and started financing some of the biggest success stories of today’s consumer Internet industry: social network Facebook Inc., user-submitted news site Digg Inc., photo-sharing service Flickr and blogging-tools powerhouse Six Apart Ltd., to name a few. Companies in which he made early investments have sold for a collective $1.4 billion, and he has many more in the pipeline.
Hoffman, who created one of the first social networking sites, Socialnet, followed up with another patterned on his vast network of professional contacts. That 5-year-old company, LinkedIn Corp., landed a fourth round of venture funding last month that pegged its value at a heady $1 billion.
“Reid sees the next move on the Internet better than anyone in Silicon Valley,” said former PayPal and LinkedIn executive Keith Rabois, now an executive at San Francisco Internet company Slide Inc.
Hoffman’s vision of the Internet as a way to connect people, not just computers, played a crucial role in the medium’s roaring comeback -- as did his willingness to bet his own money. By the time the rest of the world caught Internet fever in 2005 or so, Hoffman had already solidified an investment portfolio that most venture capitalists today would swap for theirs in a nanosecond.
“Reid’s big,” said a longtime friend, venture capitalist David Siminoff. “His ideas are big. His vision is big. His heart and brain are big. He’s almost one of those mythic characters like Babe Ruth who, when he ate, he ate nine hamburgers; when he drank, he couldn’t see straight; and when he hit the baseball, it would keep going until Monday.”
At the age of 40, with what he calls his “active but sedentary start-up lifestyle,” Hoffman just keeps getting bigger: about 10 pounds a year, he estimates. (He doesn’t step on scales. He simply says he weighs “too much.”)
There isn’t much about this Oxford-trained philosopher turned hyperintellectual entrepreneur that’s svelte.
Certainly not his e-mail account (10 gigabytes), his virtual Rolodex (1,684 connections on LinkedIn and counting), the number of corporate boards he sits on (seven), the number of companies he has invested in (more than 60), the number of computers he mans in a single sitting (three), the number of windows he has open on his desktop at any one time (a few hundred) or the way some of Silicon Valley’s sharpest minds describe him (with mega-respect and affection -- one friend even refers to him as His Reidness).
Just as the power of technology is expanding at an exponential rate, so too is Hoffman’s influence. Yet he’s so intent on driving technological change that he is reluctant to slow down long enough to spend a few hours a week with the personal trainer his friends hired to downsize his beefy frame.
The only thing that isn’t big is Hoffman’s ego. He receives scant attention compared with the entrepreneurs he has bankrolled.
Until a few weeks ago, he and his wife, Michelle Yee, shared an 876-square-foot, two-bedroom apartment in Mountain View with 400 of his books and 900 of his DVDs (many hundreds more are in storage). He agreed to move to a larger house to make room for friends to watch movies or play an addictive German board game, Settlers of Catan. He married Yee, his college sweetheart, in the same understated way: before a justice of the peace and three witnesses.
Hoffman is just as down-to-earth at LinkedIn’s rapidly expanding headquarters. He would prefer to occupy a cubicle if not for all the confidential, high-level meetings that pack his days. Instead he works in an unpretentious office that’s chaotic and strewn with books, yet he can still find anything he’s looking for in seconds.
He is adept at what he calls “context switching,” effortlessly moving from meetings to e-mails to phone calls to ordering another book or DVD from Amazon.com. He starts and ends each business day with meetings over breakfast and dinner. Weekends quickly fill up, too. The only thing that is sacrosanct is date night on Saturdays with his wife.
Said former LinkedIn executive and early Facebook employee Matt Cohler: “He’s oblivious to the external noise. He just homes in on the stuff that really matters.”
Hoffman is like a life-size version of your favorite teddy bear, with his untamed hair, round, stubble-covered cheeks and easy smile. His uniform consists of faded polo shirts tucked into worn jeans and paired with running shoes. The only stylized touch: modish eyeglasses his wife picked out for him in eight minutes, the extent of his patience with shopping or anything else that takes him away from his fixation on LinkedIn.
The service lets professionals create online profiles that help them more easily connect with other professionals to get advice, find jobs and make key hires. The uber-connected Hoffman sees it as a karmic, self-perpetuating social circle. John Lilly, chief executive of Mozilla Corp., creator of the Firefox browser, calls the service “a manifestation of how Reid’s brain works.”
More than 24 million people have followed Lilly in trading in their cardboard boxes and Rolodexes crammed with business cards in favor of LinkedIn, which makes money in a variety of ways, including advertising and premium subscriptions. The site offers people the chance to do small favors that could help others in big ways, Hoffman said. That’s his theory of the “small good,” something he’s been practicing for years.
Jeffrey Taylor, senior vice president at public relations firm Fleishman-Hillard Inc., scored $250,000 of patent work after a 10-minute phone conversation with a prospective client who found him on LinkedIn. Darrell Rhea, chief executive of strategic consulting and market research firm Cheskin Added Value, reconnected with a former client and landed a $1-million business deal. Scott Rafer became CEO of MyBlogLog, a Web service later sold to Yahoo Inc., after reaching out to its founders on LinkedIn.
Hoffman is proud of these “ah-ha” moments. He’s also an avid user of LinkedIn himself, turning to the site to find his replacement. He hired Dan Nye, an accomplished executive, to succeed him as CEO so he could focus on innovation and building the organization.
Hoffman is still the nucleus around which everyone at LinkedIn revolves -- creating what some people refer to as the Reidosphere. People file in and out of his office throughout the day to get his guidance. Leaning back, he swivels rhythmically in his chair, hands fidgeting, deep in thought.
While reviewing a marketing video frame by frame with LinkedIn’s director of marketing, Surya Yalamanchili, Hoffman spots places to refer to social networking in warmer, more emotional terms.
“Networking has gotten a bad brand,” he told Yalamanchili, a Procter & Gamble Co. veteran who appeared on the reality TV show “The Apprentice” in 2007. “It’s not about being an asset, it’s about collaboration. It’s about doing the right thing.”
He peppers these conversations with lively references to literature or film. While debriefing LinkedIn’s new chief scientist, DJ Patil, after his first few days on the job, Hoffman invited him over to watch “Equus,” the film adaptation of the play, to more deeply explore how people define their identities.
How people define their professional identity in a virtual world was the question that inspired Hoffman to start LinkedIn. He wanted to help workers gain more control over their careers and destinies. His solution: Turn everyone into the CEO of their own business -- themselves.
“Reid has a belief that every person is his or her own brand,” said Cohler, the former LinkedIn and Facebook executive. “He means that in a good way, not a cheesy way. He believes that we are all our own organizations in the world today, and that the things that power and drive goodness in the world are relationships and trust.”
It’s that humanist quality that sets Hoffman apart in Silicon Valley. He sees technology as a tool for social betterment. He feels the same way about money.
“Many people in Silicon Valley are motivated by one of two things: Either they love technology or they want to be rich, important and powerful, or they are both,” Hoffman said. “I am probably a little strange in that I am substantially neither.”
Hoffman is a Democrat in an industry filled with free-market evangelists (he calls himself a “free-market socialist”). He was politically isolated at PayPal, a libertarian stronghold, but was widely respected for his intellectual sparring, said PayPal co-founder Max Levchin. Hoffman’s genuine compassion toward others, particularly those less fortunate, impressed Levchin.
“I make fun of it now,” he said, “but I hope to become more like him at some point.”
Hoffman became self-reliant at an early age, persuading his father to send him to boarding school in Vermont, where, in addition to classwork, he learned how to blacksmith, drive oxen and farm maple syrup.
At Stanford University, he studied symbolic systems and was fascinated by the scientific examination of human and artificial intelligence. A Marshall Scholarship took him to Oxford, where he studied philosophy. But he decided that academia didn’t touch enough people’s lives.
“I lose interest when things don’t have scale,” he said.
Hoffman returned to Silicon Valley to pursue his calling as a “public intellectual” in a different way. He built up his resume at such large companies as Apple Inc. and Fujitsu Software Corp., then started one of his own, Socialnet.com, in 1997, years before the social networking boom. Too far ahead of its time, the company was ultimately sold. But it still captured Hoffman’s vision of the Internet “as a place for massively social applications” and cemented his reputation as an original thinker.
“Reid’s got wax wings and flirts with the sun a lot,” his friend Siminoff said. “He likes to take risks, to do things no one else thinks can be done.”
After Socialnet, Hoffman joined a college chum, PayPal CEO Peter Thiel (the two met as classmates in a sophomore philosophy course), on the PayPal board. Thiel soon persuaded Hoffman to sign on as an executive in charge of the company’s challenging relationships with EBay, financial institutions and government regulators.
After EBay bought the company, many PayPal executives scattered. Thiel started a hedge fund and former top executive David Sacks headed to Los Angeles to make movies. But Hoffman doubled down, using his PayPal payout to finance the dreams of young entrepreneurs as well as his own.
Hoffman’s style of investing is “almost an extension of his Democratic convictions,” like his support of Sen. Barack Obama’s presidential candidacy, Levchin said. “He invests in things that need nurturing at a very early stage.”
It proved to be a winning strategy. Hoffman did miss out on some biggies. For example, he gave office space but no money to YouTube, the video site that Google Inc. bought for $1.65 billion.
But one of his biggest scores may be coming. Hoffman was one of the earliest investors in Facebook, which landed a $15-billion valuation during its recent funding round and is moving toward an initial public stock offering in the next few years.
The irony for Silicon Valley’s top social networker? He doesn’t see himself as one. With his overloaded life, Hoffman has no time to be social.
“A networker likes to meet people. I don’t,” he said. “I like accomplishing things in the world. You meet people when you want to accomplish something.”
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Quite a resume
Name: Reid Hoffman
Title: Founder, chairman and president of products at LinkedIn, a professional networking website
Education: Bachelor’s degree in symbolic systems, Stanford University; master’s in philosophy, Oxford University
Career: Former executive vice president and board member of PayPal Inc.; co-founder, board member and vice president of products at Socialnet.com; director of product management and development at Fujitsu Software Corp.; senior user experience architect at Apple Inc.
Investments: Social networking sites Facebook, Ning and Tagged; blogging software company Six Apart; blog search engine Technorati; social news site Digg, among others
Corporate boards: Kiva.org, Tagged, Mozilla Corp., Vendio, Grassroots, Six Apart, Lulan
Pastimes: Playing Settlers of Catan, a German board game; watching movies on Blu-ray DVDs; buying and reading books from Amazon.com
Source: Times research