Today Reid Hoffman sold his company, LinkedIn, to Microsoft for $26 billion in cash. It’s a major milestone in his 23 year journey of “networking while not working” that began in 1993:
As Reid says, when he tried to start his first business after graduating “It was the beginning of the online revolution, in 1993. This was when America Online was starting to drop floppy disks to everybody to try to get people online.”
“I networked my way to a couple of different venture capitalists. They said, “Have you shipped software before? You’re asking us to invest millions of dollars in your company. You’ve done this before, yes?” I said, “No, not really.”And they said, “Go get a job first.”
So Reid joined Apple to build ‘eWorld’ – an early social network. eWorld didn’t work, but Reid’s network grew, and he launched his own social network, SocialNet, in 1997.
As he remembers, “SocialNet focused on online dating. It also had some activities like finding golf partners and roommates and that kind of stuff.”
But SocialNet didn’t work either. “We had a bad model at Socialnet. We thought we were going to partner with newspapers, and that didn’t work.”
Again, Reid’s product didn’t work and, again, Reid’s network grew.
A friend of his, Peter Thiel, was quick to act: “When I decided to leave Socialnet to start another business, I went to Peter and he said, “No, don’t do that yet. Come join us now. We’re sitting on a powder keg. The rocket is about to start taking off.”
The rocket was PayPal. Reid joined in 2000 to look after all PayPal’s external relationships. Peter said Reid “was the firefighter-in-chief at PayPal. Though that diminishes his role because there were many, many fires.”
After a decade of Reid networking while finding out what was not working, and after two years at PayPal, eBay bought the company for $1.5 billion. Reid took his share and launched LinkedIn, aiming to grow it into the World’s No.1 Professional Networking site.
13 years later, and Reid is now selling LinkedIn – with its 433 million members – to Microsoft for $26 billion. It’s the biggest acquisition that Microsoft has ever made.
Are you “networking while not working”?
Your network is your net worth and, as Reid says, “The fastest way to change yourself is to hang out with people who are already the way you want to be.”