Web visionary believes in 'small good'
MOUNTAIN VIEW, Calif. - Reid Hoffman is a big man in Silicon Valley, and his stature just keeps growing.
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 in June that pegged its value at $1 billion.
"Reid sees the next move on the Internet better than anyone in Silicon Valley," said former PayPal and LinkedIn executive Keith Rabois, 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 venture capitalists today would swap 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 age 40, 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 a small two-bedroom apartment in Mountain View with 400 books and 900 DVDs. 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 expanding headquarters. He works in an unpretentious office that's chaotic and strewn with books.
He is adept at what he calls "context switching-" effortlessly moving from meetings to e-mails to phone calls to ordering 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.
Hoffman, who gains about 10 pounds each year in his sedentary life style, says he weights "too much." He is like a life-sized teddy bear with untamed hair, round cheeks and an easy smile. His uniform consists of polo shirts, jeans and running shoes. He is impatient with anything that takes him away from his fixation on LinkedIn.
His service lets professionals create online profiles that help them connect with other professionals to get advice, find jobs and make hires. Hoffman sees it as a karmic, self-perpetuating social circle.
More than 24 million people agree and have traded in their 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. That's Hoffman's theory of the "small good," something he's been practicing for years.
Hoffman is an avid user of LinkedIn himself, turning to the site to hire Dan Nye, an accomplished executive, to succeed him as CEO so he could focus on innovation.
Hoffman is still the nucleus around which LinkedIn revolves - creating what some people call the "Reidosphere." People file in and out of his office throughout the day to get his guidance.
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 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 Matt Cohler, a 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 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." He built up his resume at Apple Inc. and Fujitsu Software Corp., then started his own company, 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," said Siminoff. "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, at PayPal. Thiel persuaded Hoffman to take charge of the company's challenging relationships with eBay, financial institutions and government regulators.
After eBay bought the company, many PayPal executives scattered. But Hoffman used his PayPal payout to finance the dreams of young entrepreneurs as well as his own.
It proved to be a winning strategy.
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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