Yesterday, Artfinder was privileged to host Reid Hoffman, one of the most successful tech entrepreneurs of recent times and Artfinder investor via Greylock, the VC firm where he is partner.
His CV makes for impressive reading: part of the hugely successful ‘Paypal mafia’, he has invested in Facebook, Zynga, Groupon and Flickr, but he is perhaps best known for co-founding LinkedIn, the business networking site that successfully went public earlier this year.
He is a man whose time and advice is highly sought after, so the Artfinder team were delighted when he agreed to share some of his considerable insight into the start-up world and run a Q & A session:
A start-up is no place for the faint hearted. Reid describes the experience as ‘throwing your-self out of a window and then having to assemble the plane on the way down.’ The key to not crashing, it would seem, is having the ability to identify and solve your problems in the right order.
Great tech businesses are built around three areas: the idea, the space and the people. One of the most important factors is to be a first mover in your space, but first you have to ask yourself why the category is unpopulated. Is it because no one has tried to establish themself within your chosen space yet, or is there really no solution? The ultimate accolade to those who succeed is to own the verb or noun for that space.
Some people view successful start-ups as being all about speed and Reid believes that your first product should have the minimum set of features to allow you to launch. “You should be embarrassed by your first product – if you are not, you are probably too late” goes his famous aphorism.
With customer attention being key, getting users is more important than the business model in the beginning. Reid describes the ideal cycle as: get the interaction going, obtain feedback and then iterate across all aspects of the business. This can even extend to your code base; a lot of tech firms in the Valley are now re-writing their code every 2-3 years to adapt to new product and their customer’s needs.
You should also think big (being able to scale is paramount) and focus on the ways in which you can get traction to achieve this. ‘In the early days of LinkedIn, we were adding 2000 users per week – continue at that rate and you are dead. You need to figure out what it will take for you to reach that inflection point and make you relevant to tens of millions of users.’
Reid advises team members to use their product every day (something that Artfinders love to do!) and importantly, to conduct a weekly audit to ask what they have learned and how that can be applied in order to facilitate greater customer engagement and advance the company’s competitive position. Most businesses focus their innovation on either the product, distribution or business model. This is risky says Reid, as you need to innovate across all three.
Reid’s success with LinkedIn is proof that he knows what he is talking about – the community currently has 131 million members and is adding 2 new people per second. He concluded by saying that ‘we are in this journey together.’ The Artfinder team is glad he is.