Reid Hoffman: Entrepreneurship, AI, and the Battle for Democracy

I think the effort goes on to try to be our better selves, right? That we have had setbacks. I mean, we, you know, this country, we had to fix the slavery problem. Like people say this is the worst time ever. It's like, well, look, Civil War was really, really bad, right? It's bad now, but it doesn't mean that's the worst ever. You continue to fight for what's good about the human spirit, about you know America.

Well, it was kind of an absolutely crazy dogfight of a time. When the PayPal business started, it was encryption on mobile devices. Max Levchin and Peter Thiel each invited their best, you know, knowledgeable startup friend to be on the board. So it was Scott Bannister for Max and me for Peter Thiel. And it started with encryption on mobile devices, which of course is not what anyone would think about looking at PayPal today. And then part of the culture at PayPal was very fast iteration. So encryption on mobile devices, cash on mobile devices. You and I remember what this is: cash on Palm Pilots. Palm Pilot, you like, hey, what's that? You know, like people are thinking, are you talking about records and LPs? Like, what is the thing you're talking about? And then to a Palm Pilot plus payment service, and then an online payment service. And that kind of iteration obviously gave birth to a bunch of different things, an additional large, you know, public company. But like the PayPal Mafia, we had all kinds of things where the number of things that could have killed the business and made it worth zero, we could literally spend two hours talking about just that. So it was a crazy dogfight of a time, but really amazing. You could make the case that if PayPal had failed, democracy might be safer today, but we'll come to that, right?

Oh yeah, and there were more. So I actually have a kind of a framework for this, which is you have a theory of what your four-game is with your startup. You could think of it as an investment thesis. It's the following things need to be true, including what I can, uh, make happen. Usually you try to keep it to the most essential bullet points. And then what you're doing is you're tracking is your confidence in your investment thesis, your theory, again, going up or down. Now, if it goes down a little bit, you might then you kind of say, okay, let's see. But as it's really going down, so you don't wait to zero. Frequent mistake in pivot is wait until you've crashed into the wall, you're just dead. Then you have to call the pivot much earlier. You have to call the pivot when you have market opportunity, when you still have a team, when you have cash in the bank, a bunch of other stuff. And so you go, okay, this theory of the game is not working. What is a different theory of the game that I can do? And that's what a real pivot is. Going into and do you think it's worse to pivot too early or too late? Almost always too late is worse. And that's one of the reasons for the discipline of thinking about pivoting early. Now, generally speaking, pivoting too early is rarely an entrepreneur's problem because she or he has a conviction of what they're doing, a conviction of what the market opportunity is, etc. So usually the 'oh, I'm really going for something else too early' is rarely the problem. Can happen, okay, yes.

Um, I would say that I'm friends with Peter and more challenged in the other two. Well, I have what's called the shopping center test. So let's suppose you're at Stanford Shopping Center and you saw Peter or you saw David or you saw Elon and they haven't seen you yet, right? Yes. So do you walk up to them and say hello, do you avoid them, or do you go to another shopping center? Peter, I would walk up to say hello. And Elon, I would go to another shopping center.

So look, I think part of strengths and weaknesses can frequently go together. Among the amazing strengths that Elon has is an absolute conviction in the thing he's thinking about the world being true. And so therefore he has taken on amazing major tasks like revolutionizing the space industry, you know, launching like a new satellite industry, and then of course electric vehicles, all of which any one of which would be enough for a storied career and just like, you know, epic inclusion in the history books. And then the combination is just stunning and amazing. But unfortunately, he applies that same conviction to his view of society, to his view of social media. And like, I think NBC did a systematic story on Twitter and the most frequent retweeter of like Russian Times links is Elon. The number of conspiracy theories he peddles is, you know, frankly kind of a little nutty. It's like, you know, X is kind of a microcosm for what he seems to be going on and believing. It's a tragedy because this other stuff is just so heroic.

Well, um, it's different for different folks. There's this old Roman expression, 'in vino veritas,' which is when you've drunk wine, you see the truth, or they get drunk, you see them as a true person. There's a part of that that is also true for how wealth plays out. Like when you make money and you're given this freedom, this power, et cetera, what do you end up doing with it? And so there's clearly amazing positive examples: Bill Gates with what he's done with the Gates Foundation, solving child mortality, you know, and just a host of diseases, a host of other problems. And there's a number of folks who do it that way. And then there's other people who use it for their own, you know, greater glory or other kinds of things. And so I think you see a whole range. But it kind of the world starts reinforcing you as you're amazing and wonderful, everything you do touch because you're rich. Because you're rich, and so you have to have that own internal compass to what you're driving to. That's actually, in fact, so critical.

Um, well, I think look, ultimately it's that's part of the reason why we have this kind of term character. So it's kind of there's something that's internal to you always. But obviously it's like, well, do you have friends? Did your friends help you? You know, like in your relationship with your parents, even if you had some contention, was it a growing experience? Did you learn good things about it? Um, for me, I'd say it comes down to choosing your friends. I think your friends are part of who you become. Like for example, you know, in my first book, 'The Startup of You,' what I wrote was you are the combination of your five, you know, closest friends, right? It's kind of a way of steering on how you and how you grow.

Look, for me, like a lot of folks in Silicon Valley, I tend to think my best applied talents are building technology companies, you know, these kind of Archimedean levers to change the world. But I also think, somewhat unusual for Silicon Valley, that we live in a society of a collective form of laws, governance, and so like government matters. Government isn't just an organization of inefficiency, but actually what creates the place of talent, laws, other kinds of things, an investable environment, a market to do business in. And so I think with power comes responsibility. And like Voltaire and Spider-Man: with great power comes great responsibility. And so for me, my involvement in politics is because I've been, you know, kind of fortunate enough to be in this amazing place, Silicon Valley, the US, etc., and being able to do stuff. How do I help contribute to society? And sometimes the way to do that is to go get involved in politics. Because I don't get involved in politics ever for my own business interests. There's nothing that for my business interest that matters. My business works just fine however politics is going. Whether my business is entrepreneurship or investing or anything else, I get involved because I go, how do we help build a better society together? What is the role of technology? What is the role of entrepreneurship? What is the role of business? And what couple pieces of insight might I be able to give our political leaders who are also trying to figure out how to make a better society?

Um, a substantial number. I don't tend to answer that question because I tend to think it tends to give people to think in the wrong direction, okay? Which is like it's a numbers game versus a what kind of society you're creating game. Let's just say that. I assume it's lots of money. It is a lot. Does ActBlue see you? And like now you get a text message every five seconds because I have given nothing close to you and I get one every 30 seconds. Yes. Um, well, I do try to give out my cell phone as little as possible, and I mark all incoming things as delete with junk when there are those kinds of things, and opt out and so forth. I do probably get something on the order of 200 emails a day from ActBlue in all political campaigns. You know, besides the fact that I hope Kamala wins, the next best thing about the election is maybe I'll get less ActBlue. The most common word I type on my phone is 'stop.' Uh-huh, yes, exactly. Um.

Well, I think Trump is the definition of a coin-operated president, right? Like, I mean, it's basically insert coin, get result. And some of the coins are like, I'll put justices on the court that will repeal Roe v. Wade because you'll support me in my election. You know, it's similar. It's like, why is he very pro-crypto? Maybe he can make money in crypto, so he's, you know, launches a proverbial what we call shitcoins, right, in the technical parlance of the crypto industry. And so I think that basically a huge amount is I am buying something for myself. And part of why I abhor that approach to politics is that politics and our democracy should be what's good for us. You should never be buying something for yourself.

So look, I totally agree. And also, by the way, it's kind of the question of, again, how do you have the world be a much better place? It's not life is not a game of whose bank balance at the end most counts. That is a sad game. For life, friends, loved ones, better society, like amazing contribution to society, those are the things that matter.

I think that could really happen. Oh, I think it's possible. I mean, I think one of the things that happens is Trump gets elected, you know, and Elon is put in any position. What does all the conflicts of interest look like, right? So like, what does that mean? Like a bunch of Elon's businesses have deep relationships with government, you know, policy, payments, regulation, space, satellites, cars, everything. And so you have to go, how do you have this be not corruption, not crony capitalism? And you'd have to really try to demonstrate that. And I think challenging. And obviously part of it would be, you know, um, whatever Fortune 100 company, Fortune 10 company, uh, would have to kind of say, okay, this is a new environment that I have to navigate, which we shouldn't have in the US, okay? But we shouldn't have. But how do they negotiate that environment? Well, um, you know, obviously we've had a varied number of different circumstances. I think part of it is to try to make sure that we stay at an equal rule of law for all American citizens, all American businesses, etc., and that there is process and fairness in place with that. But other than that, I, you know, we have to look at it. I believe in Santa too, yes. Um, hey, Santa's nice.

So I would wave that wand. Um, I would want it to be in a place where you could have like it's a little bit like the public access cable shows, and so that you actually have kind of a shared media palette for talking about things. But I would prefer, and I, you know, supported some of Larry Lessig's work on this and so forth, I'd prefer to really diminish it if possible. Now, if it's not, then you have to participate because it's part of the important thing about how American elections work. So then we're fighting fire with fire. If you got a PAC, I got a PAC. Yes, and I would prefer it's not the case, but I also prefer not to fight fire with, you know, oxygen. Right, right.

One of the best ways to learn a set of like being strategic about such things in life. And why be strategic? It's like, well, being strategic about your career, being strategic about your work, being strategic about your job, uh, thinking about what industry to join, etc. Is that games are a really good way of kind of thinking about a lot of the problems we find in life. And so, and then if you learn games and then learn to transfer them to other domains, it's a great way of learning this kind of problem solving, a great way of learning thinking strategically and tactically. And so that's really good. And also, by the way, frequently if it's like board games or interpersonal games, then it's also a great way of realizing that life is a team sport, not just an individual sport. That your relationships and how you work together really matters. And so there's a whole bunch of really good attributes. And by the way, that can be video games too. Like one of the funny things about like playing Halo in a team, you're learning stuff by playing in a team. Even Halo, even Halo is.