Reid Garrett Hoffman
Reid Garrett Hoffman's Social Links
Reid Garrett Hoffman was born August 5, 1967, in Sanford, California. He is probably best known to the public as the co-founder of LinkedIn, the business networking and job searching site.
Hoffman's and his parents, Deanna and William Hoffman, Jr. moved to Berkley, California, where he grew up. Reid was a loner and avid game-player in his youth. After high school, he attended Stanford University where he received a Bachelor of Arts and Science from in 1990. It was there he met Peter Thiel, future world class venture capitalist. Next, he received a Master of Science degree from Oxford University, graduating to 1993.
Hoffman said in his book, “The Start-up of You” that he wanted to make a big impact on the world and decided he would start down the path of academia. It wasn't long before he decided that academia was too narrow and felt the he could have a bigger impact in business and entrepreneurship.
Hoffman was invited to join Apple Computer in 1994. He worked on what was an early version of a social network called eWorld. AOL bought eWorld so Hoffman moved on to work for Fujitsu 1996. Hoffman liked what eWorld was trying to do so, while at Fujitsu, he founded SocialNet. For help he brought in Allen Blue, a former classmate.
More or less a “dating service” and a vehicle to get people with a common interests together, SocialNet never got the traction he wanted. Considering the impact of Facebook and LinkedIn today, many have commented the SocialNet was simply a concept 7 or 8 years “ahead of its time.” After a disagreements with the board of SocialNet, he left to join his friend Peter Thiel, in 2000.
Thiel had launched a financial site called Confinity, which merged with Elon Musk’s (SpaceX, Tesla Motors) X.COM which turned into PayPal. Hoffman was hired as COO and brought in Allen Blue. Reid became an expert at keeping PayPal’s competitive and in business.
PayPal was struggling on several fronts. First of all, Visa was wary of PayPal and felt threatened by it, but they knew that PayPal could not survive without them.
On the other front, Ebay was promoting its own electronic pay system, BillPoint, which also could have driven Paypal into the ground even though PayPal had more volume. Peter Thiel dispatched Hoffman to Visa to calm their fears.
Hoffman convinced Visa to conduct a study (which would take a year or so) to determine if PayPal was really a threat. This bought PayPal time and that breather was very valuable to PayPal.
On February 15, 2002, PayPal went public, raising $70 million the first day. This was impressive for a company that was nearly broke just a few months before. After five attempts and five months after the IPO, eBay bought PayPal.
This made Hoffman a multi-millionaire, and he decided he wanted to start another company. After discussing and discarding many ideas with friends, they came up with LinkedIn. Instead of waiting to raise venture capital, Hoffman started LinkedIn with a “bare-bones” version with his own money. It was defined as “an online, social network for professionals.” They questioned if people would be willing to expose their actual identity and job history online. On May 5, 2003, LinkedIn went live to find out. Though at first they only had 2,200 members, Sequoia Capital led a deal to provide $4.7 million to LinkedIn.
LinkedIn makes money 3 ways. 1. Selling advertising. 2. Premium subscriptions. 3. Hiring solutions for companies (by far the most lucrative). With a focus on GROWTH, GROWTH, GROWTH, LinkedIn became profitable with 10 million users May of 2007. At 33 million users, Hoffman hired Yahoo executive Jeff Wiener as CEO in December 2008. When LinkedIn had their IPO in May of 2011, with a $4.24 billion valuation, Hoffman’s stake was estimated at $2.34 billion. As of November 2012, LinkedIn has more than 187 million registered users in more than 200 countries and territories. According to Forbes, “LinkedIn is, far and away, the most advantageous social networking tool available to job seekers and business professionals today."
Though Hoffman still keeps a regular hand in at LinkedIn, he spends most of his time now at Greylock Venture Capital where he became a partner in 2009. A few of his early investments include Facebook, Airbnb, Groupon, Shopkick, DIGG and Zyna. “When you’re the venture capitalist, the companies come to you with their toughest problems. Those are fun to work through.” As of March of 2013, Reid Hoffman’s net worth is estimated by Forbes to be $3.1 billion.
Companies and Investments
If what you are passionate about is a very crowded field (everyone wants to be a movie director), find something else you are passionate about where the field is not so crowded so you can stand out.