In 1997, Reid Hoffman threw himself off a cliff: He cofounded SocialNet, the evolutionary predecessor to our present social networks. The early network's scope was all-encompassing: You could find someone to date, someone to go into business with, or a tennis partner.
Fellow PayPal-er, college friend, and rich guy Peter Thiel would say that it was a social network that was seven to eight years ahead of its time—correspondingly, it crashed.
But Hoffman learned something important: that, as he tells Bloomberg, you need to focus on one domain that really matters to people, rather than provide a platform across all of them.
Though the professional network is now 10 years old and sending you emails all day, as Hoffman describes, it nearly crashed at the outset.
"Starting a company is like throwing yourself off the cliff and assembling an airplane on the way down," he tells Bloomberg, with all the velocity, time pressure, and mortality that implies—and the prospect of making something that can fly before you hit the ground.
From the way Hoffman describes the way LinkedIn launched, the startup suffered from a bit of frustrated hubris: They thought people would see the opportunities and "the transformation of careers" that LinkedIn represented, and so naturally the growth would pick up by itself. They soon found a small trickle of early adopters, but not the explosion they were expecting.
This presented a distribution problem of existential importance—a situation Hoffman associates with the hyper-uncertainty entailed by entrepreneurship:
A startup, to a some degree, is a set of those challenges of 'if you don't solve this, you're dead.'
LinkedIn's challenge was to figure out why people weren't joining fast enough. What they discovered was that people didn't want to join a not-social-enough social network—no one wants that feeling standing alone in an empty bar. What LinkedIn needed was a way to give potential users some social proof, some evidence that LinkedIn wasn't a lonely place.
"People were most curious about who else was here when they first joined," Hoffman recalls. "We said, 'we'll allow people to upload their address book and see who else they know who is here,' because they said, 'Is this an empty club or a network with people?'"
What happened after LinkedIn implemented the address book? "That caused our growth curve to go from this to this," Hoffman says, miming a spike in adoption with his hand.
"Without that," he says, "death."
Bottom Line: A startup is a set of challenges. A company is a set of solutions.
[Image: Flickr user Michael Gil]