Born in Stanford, California, he was raised in Berkeley. High school took him to Vermont where he attended The Putney School which combines the New England work ethic with a strong academic program with focus on coeducation and community service. From there he attended Stanford University earning a degree in Symbolic Systems and Cognitive Science. He moved on to Oxford University earning an M.A. in philosophy from Wolfson College.
It was 1993 and while at Oxford, Reid Hoffman realized he wanted to have a broader relevance in people’s lives. The internet was exploding – the online revolution had begun. AOL was distributing floppy discs to drive people online. Hoffman determined that he should start a software company – after all software reaches millions and he was a Stanford graduate. His search for capital was woefully unsuccessful as no one would invest millions in a company being started by a complete novice. He was urged to get a job to gain experience and knowledge.
Hoffman began to use his connections to find employment. He had a checklist of what he needed to learn in order to do a startup. With software development number one on his list, he networked his way to Apple. Later he used relationships to get on with Fujitsu to learn product management and the business side. Feeling he was ready to start a business, he created SocialNet in 1997.
That effort didn’t fare very well but it provided Hoffman with invaluable experience. Once again connections came in to play in his journey. He went to PayPal when its founder and his friend, Peter Thiel, convinced him to join the company. It was there – as Executive Vice-President for business development – that he began to realize how the business world was changing. He needed a variety of disciplines – e.g. banking, internet, regulatory and payment experts – to help PayPal reach its goal. That meant having – or finding – the right connections to discover the best people for those roles.
Things went well enough at PayPal that E-Bay purchased them. Hoffman now had both time and his own money – he knew it was time for his next startup. He recruited many of the connections he had made at SocialNet and PayPal and began to develop his idea that a platform based on building and finding connections would be viable. Planning began late in 2002 – the site launched six months later.
At the beginning they moved slowly – testing and tweaking. Hoffman’s approach was get to a million people engaged and then build a business model on top of that. By 2005 the site had easily surpassed that hurdle and three revenue streams were launched – job listings, subscriptions and advertising. The next year saw the addition of recommendations and ‘people you may know’ – significantly, the company earned a profit. Hoffman stepped down as CEO in 2007 to focus on product development – a move which lasted for two years. The site had grown to 35 million in that time, but lacked focus.
Hoffman hired former Yahoo! exec Jeff Weiner to be president and then CEO. Weiner went on a ‘listening tour and focused on getting the basics right. He stated Hoffman’s original vision in seven words “connecting talent and opportunity at massive scale” – and that’s exactly what the company has done.
Today they are growing at a rate of two new members every second and have 300+ million members in over 200 countries. They earned $1.5 billion in revenue and $26 million in profit in 2013. Those are the results, but LinkedIn is a fearless brand because it was built to be one.
Fearless Brands adjust, adapt and evolve yet remain true to their vision.
LinkedIn started with the idea of individual professionals doing business with their network. That’s still what the site is all about. Jeff Weiner has brought the execution of that vision to new heights. He defined three areas from which LinkedIn makes its money which he displays in three concentric circles – a target if you will. The outer circle is subscriptions, The middle is marketing and advertising. The innermost circle represents their most lucrative opportunity – monetizing the information and talent which exists in those 300 million profiles.
LinkedIn’s business model is unique in that it profits from its members’ information – whether the members are online or not. Had they relied solely on advertising their earning opportunities would be limited to the members’ time on the site. Instead, they have harnessed the tremendous interest and needs of recruiters – thus the name of one of their most significant products – Recruiter. Companies, recruiters and human resource professionals pay for access to the pool of profiles. Searches via Recruiter take less time, yield more and better matches and cost less than traditional recruiting methods – having a significant impact on those companies.
LinkedIn has become an internet juggernaut in just over ten years. Their size and scale is matched by only a handful of companies yet there is much to learn from them.
Stay focused – As LinkedIn developed, several interesting opportunities were pursued – too many in fact. Under Jeff Weiner’s leadership, the company pared down their efforts and focused on the areas of greatest potential – those that were most aligned with Hoffman’s vision. That’s an easy trap to fall in to – unless your company keeps it simple – and focused.
Connections build business – In the case of LinkedIn this is true in two ways. Professionals connecting with each other is the core premise of the business. Hoffman was able to get the experience, guidance and talent that he needed to launch LinkedIn due in large part to his connections. Your network is one of your greatest assets. Build it and nurture it but remember, successful relationships are a two-way street…keep giving at the forefront of your efforts.
Provide great value – The majority of members have free profiles yet have access to literally millions of potentially beneficial business connections. LinkedIn’s paid subscribers – both individuals and recruiters – are able to fulfill their needs faster, more effectively and more affordably. Virtually everyone using LinkedIn receives more in value than they give in payment – a sure path to building a successful business.
LinkedIn was built by people with vision, commitment, and connections. As you build your fearless brand ask yourself three questions.
- Am I in synch with my vision?
- How strong is the company’s commitment?
- Am I building a viable network?
If you answered no to any of those questions – it’s time to take action. Use your connections. Find the solutions you need. Discover the best resources. Remember, relationships matter.
Friday's Fearless Brand
Coach, International Speaker and Thought Partner - Bill’s mission is to add value to the world – one brand at a time. Bill guides individuals and companies alike in building what he refers to as a ‘fearless brand’. This is the process of discovering, embracing and delivering their greatest value – which allows them to realize greater profit. Read More
