Business Lessons From LinkedIn Co-Founder Reid Hoffman on How to Scale Your Business

“An entrepreneur is someone who will jump off a cliff and assemble an airplane on the way down.” ― Reid Hoffman 

Reid Garrett Hoffman, born in Palo Alto on August 5, 1967, is one of Silicon Valley’s iconic entrepreneurs. After finding Paypal, Hoffman made another significant contribution by establishing LinkedIn, which made him a billionaire. He was also an early investor in Facebook and is currently working as a partner at Greylock Partners, a venture capital firm. The entrepreneur-venture capitalist has also co-written books like ‘The Start-Up of You’ (with Ben Casnocha) and ‘The Alliance: Managing Talent in the Networked Age’ (with Casnocha and Chris Yeh).

In 2015, Hoffman started taking a computer science class called Technology-Enabled Blitzscaling at Stanford University, his alma mater, along with John Lilly (a partner at Greylock and former CEO of Mozilla), Allen Blue (co-founder of LinkedIn), and Yeh (co-founder of Allied Talent). Hoffman’s name is often associated with the term ‘Blitzscaling’. During an interview with Tim Sullivan, the editorial director at Harvard Business Review Press, in 2016, Hoffman explained the term saying ‘Blitzscaling’ is something one does when he/she needs to grow “really, really quickly.” “It’s the science and art of rapidly building out a company to serve a large and usually global market, with the goal of becoming the first mover at scale,” said Hoffman, who was convinced in his college days that he wanted to do something that would impact the world on a large scale. 

He further said that Blitzscaling is a “high-impact entrepreneurship”. “These kinds of companies always create a lot of the jobs and industries of the future. For example, Amazon essentially invented e-commerce. Today, it has over 150,000 employees and has created countless jobs at Amazon sellers and partners. Google revolutionized how we find information—it has over 60,000 employees and has created many more jobs at its AdWords and AdSense partners,” he told Sullivan.  

Hoffman is often asked about the business scales, for he was a brilliant insight into it. According to him, there are three kinds of scale, and people focus on two of them under natural circumstances. One is about growing revenue, and the other is expanding one’s customer base. He said very few businesses could taste success in terms of revenue and customer base without scaling the organization. Hoffman said the organization’s size and executing ability determine whether it can get more customers and revenue in the HBR interview. So, what lessons do Hoffman leave for aspiring entrepreneurs on scaling a business -- which means setting up the stage to enable and support growth in your business venture? What are the ways to follow to see your business grow smoothly without facing a significant hindrance? The process requires planning, monetary back-up, and most importantly, the right kind of mindset. We take a leaf out of Hoffman’s book to learn about scaling the business.  

Never be afraid to do something: 

Hoffman once said that starting a company is like throwing oneself off a cliff and assembling an airplane by the time he/she lands. He encourages people to try once, twice, and thrice till success comes but never stop trying. According to him, it is important to learn from your failures, and hence trying and retrying is the most important thing. Trying more means, you are also playing with new ideas and possibilities, and they have the potential to add wings to your dreams. Hoffman even suggests setting up a system where people will even learn from each other’s experiences. The sum-total of that will lead to such an environment where scaling a business looks easy. 

Show grit:  

For an entrepreneur, grit is a critical skill that is essential for success. Roughly, it is an individual’s perseverance and passion in pursuing a goal over a long period of time. Grit is often seen as a key differentiating factor between successful entrepreneurs and those who are not. In fact, if you do not have the grit factor, you can end up killing your venture. For many, grit is something connected to embracing failure. In other words, you are acknowledging the fact that it is okay to fail as long as you don’t quit. For Hoffman, entrepreneurs need to have grit, enabling them to remain loyal to a vision irrespective of different market cycles.  

Be a learner, always:

You are the ablest person to scale your business. And to continue to have the ability to do so, you need to talk more with your younger self. According to Hoffman, if you do not have the answer while facing questions from your younger self, you have not learned enough. Entrepreneurs who are successful need to continuously learn, invent and have a fair understanding of tackling problems. Hoffman feels infinite learning is something that scale entrepreneurs need to understand job requirements because “almost every scalable idea forces you to grapple with an emerging phenomenon. Everything around you is changing — your business, your market, your team — and you can’t turn to anyone expert for help — because there are no permanent experts.” 

Culture also matters in a company:

All companies aim to scale effectively, but of them, some are more successful than others. Hoffman attaches a lot of importance to the ‘culture’ factor. Reid has said that a company’s leadership needs to develop a codified culture that is embraced both internally and externally. On culture, Hoffman once wrote in a piece that he penned for LinkedIn: “Your culture should attract the talent you want and repel the talent you don’t want. But it’s critical to make sure that this focus on fit doesn’t lead you to create a homogenous, non-inclusive culture. Hire people who add to your company’s culture.” Hoffman wished he too had something like the Netflix Culture Document before he started LinkedIn.

Reed Hastings, the CEO of Netflix, also harbors a similar viewpoint. In one of the episodes of Masters of Scale, which Hoffman hosted, Hastings feels that one needs a strong culture to build a company that will scale beyond the early days of a startup. Strong company cultures only emerge when every team member feels they own the culture from day one. When two successful entrepreneurs say something similar, there must be a tinge of truth in it.  

Make that network: 

The process of scaling doesn’t take place in a vacuum. Even if you believe that you aim for something big and are also ready to do it, you may not always know how to proceed. According to Hoffman, the answer lies in reaching out to new networks. Hoffman feels that networking is a unique way through which entrepreneurs create a company. By getting close to many talented people, you get to work with several co-founders until you get the perfect match and go-ahead to set up startups. Networking is so very important in today’s world, and any successful entrepreneur will advise you to build strong networks if you are aiming to scale your business.