Advertisement
 
YOU ARE HERE: LAT HomeCollectionsWeb Sites
(Page 2 of 2)

Connections are his currency

Reid Hoffman's wealth is based on valuable relationships. His firm, LinkedIn, offers others similar opportunities.

January 21, 2008|From the Associated Press

For instance, Hoffman hadn't felt compelled to invest in YouTube when he had the chance, depriving him of a huge payday when Google Inc. bought the popular video-sharing site for $1.65 billion in 2006. Instead, LinkedIn provided some initial office space to YouTube founders Chad Hurley and Steve Chen, who worked with Hoffman at PayPal.

Hoffman hasn't been wrong too often.

Three of his start-up investments have been sold since 2005 for more than $1.1 billion combined, although Hoffman got only a sliver of that. They are the photo-sharing site Flickr, bought by Yahoo Inc.; music network Last.fm, bought by CBS Corp.; and computer security specialist IronPort Systems Inc., bought by Cisco Systems Inc.

Besides Facebook, the list of promising prospects in Hoffman's portfolio includes blogging software maker Six Apart, blogging search engine Technorati Inc., online content-ranking site Digg Inc. and another online social networking service, Ning Inc. He also holds stakes in a variety of lesser-known start-ups too.

Hoffman's connections and investments frequently have ties to PayPal, where he accumulated stock as a director and then as a top executive. He first met PayPal's co-founder and chief executive, Peter Thiel, while both were at Stanford University in the 1980s.

Thiel, an early LinkedIn investor who is now a venture capitalist and Facebook director, is one of the more than 1,500 connections that Hoffman lists on LinkedIn's site.

"I pay a lot of attention to building relationships," he said.

"Part of how to create a lot of value and goodwill in the system is by doing something that is a little bit of work for me and massively valuable for you."

Thiel marvels at how well the philosophy seems to work for Hoffman.

"Everybody in Silicon Valley is no more than two degrees away from being connected to Reid."

Advertisement
Los Angeles Times Articles
|
|
|