Reid Hoffman | Building Companies in Times of Change

Welcome back to the Gray Matter podcast. This is Chris Yeh, the co author of Blitzscaling, and I am joined by my co author, Reid Hoffman. Reid, today is Saturday the 27th. This morning I read an article that came out in Protocol, which is Biz Carson's publication, which talks about how will the startups created in 2020 be different than startups that were built before? And I noticed that the first person who is quoted in this article is you. So I guess the first question would be, why did you decide to participate in this article? What struck you about this question, and why did you think it was important to answer it?

Protocol is a good publication. Biz is very smart and tends to write insightful things. And I thought her question was really good. And as I started reflecting on it, I realized that what happens is that people have this tendency to think, oh, my gosh, we're in unprecedented times. We've had this pandemic. We have an economic collapse that is perhaps as severe as the Great Depression, but like, all at once and sudden, we have a, thankfully, an overdue return to the civil rights movement in protest. We have kind of a presidency that's in total disorder and a general weakening of the world order. We have just so many things broken all over the place. And so the tendency, when you put all these things together is to say everything's different, that we're now in a new world, a new rebuild. And as I thought about it, I realized that actually, in fact, there will be things that are very different. But actually, in fact, more of this is the same than different. That actually, in fact, to get to the things that are different actually requires some work in order to get there. And then with that thought, I was like, okay, yes, absolutely, I think I'll have something useful to contribute. So I told Biz I would actually, in fact, contribute to her very insightful question.

So that's interesting, Reid, because obviously many people are talking about how there is a new normal. And in fact, there is even a podcast by Rick Wilson of the Lincoln Project called the New Abnormal. So this is clearly something that's in the air. And yet, of course, as always, you're contrarian, you're going against the grain, and you're saying a lot of things are the same. So what are the things that are still going to be the same that maybe people are wrongly thinking are going to be different?

So when you look at this, and you know, Greylock has been doing investing and a number of other great investors have been investing, when you look at this, you're actually looking at a lot of the same things we were looking at last year. We're looking at massive new trends that can transform industries in 10 plus years. Those trends creating open spaces or shifts or possibilities by changes in technology, whether it's a change to mobile, a change to cloud, an introduction of artificial intelligence, introduction of synthetic biology, and all of these things are actually in fact the same kind of things. Because it's 10 plus years, it's not one year. These are in success, these huge transformative journeys that lead to things like Airbnb or Facebook or Microsoft, Amazon. All of them are all multi decade journeys. And so that's what you're looking at investing still. And you want to not be deluded by the next year. You want to not go, oh well, these are the things that are different in the next year. And so therefore this is the thing that's totally different. And the tech platforms are what create the shifts in open spaces. It still matters to have speed of execution. The first, the scale, the first realizer of the market. Opportunity is what's going to really matter. And so you're going to be working towards speed. Yes, endurance comes in a little bit because you have to get through down flips. You have to be able to raise the capital, you have to be able to recruit talent, you have to be able to survive adversity. And that when you have adverse circumstances that does play in those kind of adverse circumstances do make something different and possible in this. And that you still need by the way, like talent and founders and capital and your unique edge for making these things work is actually in fact still part of what you need to have happen when you are making these kinds of startups. And all of that, by the way, there may be nuances that difference, some which we'll get to, but all of that is exactly the same. In fact, that's what we've been seeing where we've got our presentations by Zoom and in Monday meetings onto kind of what companies coming into the partnership and presenting and the ones that we're making offers and term sheets on. And so those things are the same.

So many things are still the same. And yet of course, 2020 is this crazy year. I saw a tweet earlier today that really summed it up best, which was, well, obviously we don't invent time travel in the future because otherwise somebody would already come back and tried to stop this year. So things are different. What is the first thing that came to mind when it came to these differences?

What was your first thought well, my first thought, which I think reflects what a bunch of the co writers to Biz's excellent question. You know, people I know, and I'm friends with Kirsten and Anne Marie Koh and people I don't know but respect was we're in this reopening this civil rights movement kind of version V2, and, you know, past time, and I'm very glad we're doing it. And so everyone kind of went and jumped with the hope that now maybe this is actually finally back on track to making progress and solution. And so diversity inclusion, of course, not just race, but gender within the tech industry, within founders and entrepreneurs, within venture capital and investors, within the capital being deployed. And I definitely share the hope with all of my kind of fellow protocol writers on this. And beyond hope, part of the thing we already had like multiple meetings at Greylock are what are the ways that everyone at Greylock can actually work on this to make the hope better? How do you make hiring in a Greylock better? How do you help our startups be better? How do you help the early teams and recruiting be better? How do you help the investing be better? How do you make sure that you're doing diversity inclusion in which companies you're financing this whole kind of a stack of things that you're doing? You know, we've got work groups on them and we're reporting back in the way that businesses operate on. Look, here's the ideas, here's the people we're talking to, here's the things we're testing to see if they'd work that actually make a difference. Because you don't want this to just be one more of those civil rights, you know, issue a press release, make a donation to the naacp, say, hey, we're good people, we care about this. And then, okay, whatever happens, happens. You're like, no, no, we went and worked and we moved the needle. And so I share that hope and difference, but I also kind of on the reflections of it went well, actually. In fact, I'm quite certain that one or more people are going to write about this because it is the current time of our week and that usually what I try to do is the thing that other people haven't thought of, the thing that might be new to most people who are looking at it, who are thinking about it, to provoke thought and make entrepreneurship better and more capable. Because the only way we're going to get out of the economic side of this pandemic is entrepreneurship, the creation of new businesses at all scales. From what Ann Marilco said, solopreneurs to small businesses, to medium sized businesses, to possible giant tech businesses. We're going to need all of that to rebuild the economy.

And one of the things that is so pernicious about racism and the way it blocks diversity and inclusion is the fact that racism does not necessarily require people to have bad intentions in order to have ill effects. And in fact, I would believe that very few people that I meet in Silicon Valley have any sense of I want to be part of a racist system. I think everyone wants there to be justice. But racism, like many other things, has these powerful feedback loops. Right? It becomes important. We can't just sort of say, oh well, we view the world differently now. It's actually important to do, as you said, which is to have a careful set of meetings and to settle on interventions that are designed to disrupt those feedback loops that make it so powerful.

Yeah. One of the turns of phrase that I really like on these kinds of problems, which is if you're not part of the solution, you're part of the problem. How that plays out in these systemic problems is to say, look, you may say person X white male, like myself. You may say, look, I take the hidden bias classes. I listen very carefully to all sources of perspective on diversity inclusion. I try to change my own behavior, I watch people around me, I try to change the organization, I try to make sure the culture is diverse and welcome. I recognize that tokenism is ridiculously short and can actually even be its own problem. That in order to have good diversity inclusion, you have to actually have the sub communities, not just individuals within what you're doing and doing all of those things. But even then the challenge is somebody, a white man like myself could look at yourself in the mirror and say, look, I'm doing all these things, I'm trying to be good. And you say, well, the problem is if you're silent in the overall system, then you allow the things that create the system bias to go so badly wrong, you allow them to persist, you allow them to happen. So for example, take obviously a popular thing today which is criticisms of the police force. And obviously there are many great police officers, there are many people there who put themselves in between the rest of us, civilians and citizen and harm and dangerous criminals. And in many ways it can be a thankless job. But if you have a police department whose culture or police public sector union allows there to say, well, this person has been reprimanded 20 times for excessive force, excessive force with minorities and with black men and so forth, and we allow them to persist, then you're actually part of the problem. Because what happens then, of course, is that one bad person then makes terror. Right? It's the. Like I was in a room where we were talking about race and one of the questions that was asked was, you know, everyone who has been approached by a police officer with their hand on the weapon, please raise your hand. All the black hands went up, none of the other hands went up. And you're like, oh my God. Right? That was like years ago. And that was like, oh my God. Like, that's clearly you have a sign of a problem. And so, you know, and I think it was, I saw the stat on John Oliver, which is a black man is two and a half times more likely to die than a white man at the hands of the police. And you're like, okay, that's not good. These people are supposed to be protecting us. These people are supposed to be violence at the last resort. And so you go, we know we have a problem. But if you're not doing anything, if you're just standing on the side when these other people are doing this bad stuff, whether it's them as individuals who may have their own problem that manifests itself as racism, may not even be in its heart racism, but manifests as racism or anything else, then you are in fact, actually in fact part of the problem. And that's part of the reason why I think the turn to saying it's not good enough to be not a racist. You need to be an anti racist needs to be that you need to take accountability for the system. You need to take accountability for the fact that there is a significant, there's a minority that's being deliberately and systemically oppressed and that your standing on the sidelines, even doing your own, like, oh, look, I do my own personal hygiene. I'm trying to be good isn't good enough. You have to lean in and you have to help solve the society problem. And it's past time. And that's, I think, one of the things that's very, very good about today's moment.

Yes, and it definitely feels like it is a moment where there is a lot of energy. I see more efforts to tackle this problem than I've seen in the past decade. And so I am definitely hopeful. But that was just your first thought. There were a couple of other things that you actually ended up writing about in this article. What were the differences that you wrote about in protocol and why did you pick those particular differences?

As I mentioned earlier, I was Trying to look for the things that wouldn't be kind of readily apparent. Like I looked at the now of diversity, inclusion was so intense. I was certain that other people would contribute ably and effectively there the way that some of the other respondents did. And so I was looking for something that was perhaps a bit more around the corner or a side or something that in a set of pieces is a persistent difference that wouldn't likely be commented on. And I ended up doing two things. One, which was based off the theme of a comment from Satya Nadella, the CEO of Microsoft, which is in two months at Microsoft, they've seen over two years of digital transformation of businesses that the move to making everything work digitally has been just stunning. Move to cloud, move to digital tools, move to digital workflow, move to digital creation, move to digital meetings. Like just huge, huge, huge moves. And I said, okay, what would something that would fit with this within entrepreneurship? And I realized that what I think we're finally going to see because one of the things that happens with an entrepreneurship is frequently the wave that gets the scale is actually not the first wave. Like there have been multiple waves of virtual reality. There have been multiple waves of lots of different things. It was like now's the time where it's going to be ready player one. And actually, in fact, you know, in those times, those didn't turn out to be the time yet. And telehealth is one of those because people have said, look, it would be so much more effective and high leverage of doctors. It'd be better for rural areas. It allows a much faster kind of quick check. It avoids the expense of going to hospitals or emergency rooms or even the expense of going to a doctor. So the telehealth, like here it is and the technology is here to enable it. That story has been sung at least one or two generations before where very few of those companies have actually in fact made it. And when you look back, because we should all respect the when we were doing entrepreneurship is like, okay, what was it tried before? Why did it fail to see? Because by the way, things change. And entrepreneurship is about frequently succeeding at this thing for the first time, at least here and now in this place and so forth. But the huge scale is usually for the first time here. And the previous failures were, I think, a combination of two things which had related One is a lot of entrepreneurship starts at how do you attack a good pile of money? It's either a big spend, you know, wealthy clients or a very large market. And how do you convert that and when you get to that in the first world within medical, it tends to be seniors, you know, older people. And the problem is seniors and older people do not tend to be tech deductors. So you go, hey, we could do telehealth. And I was like, no, no, I still want to go see my doctor. Like I'm familiar with it. Health is super important to me. It's worth it to my drive ding down there, doesn't matter. And of course don't have an economically rational system here. And since it's all paid for by the state or by insurance. Right, that's what I want, that's what I'm going to take. And that's how it plays out. And so you had a market failure for these things that made it very difficult for these things to get in the market. And then you had the concomitant thing, which is regulation, which is people said, well, it's really in fact important that this is done in a way that is perfect and there's no legal downsides because we make our regulators responsive to litigation in ways. And so, okay, this all has to fit within the absolute maximum care with a litigation threat and a regulation side. And so we're not going to allow any changes to the small iterative in place system that we have, full stop. Well those two things, you get a change of market in the current pandemic because everyone's like, no, no, I don't want to go to hospital. I might get Covid and I still need to consult a doctor. I still need to consult is this finished bad? And okay, sometimes I may go to the hospital and the hospital's done amazingly good job at making themselves non Covid transmitters. So now I think it's generally speaking safe depending on if they get overwhelmed by this second wave of COVID that we're just seeing the beginning of and we're hoping is not too big that can go back to the hospital. But now they have been spending weeks with like, okay, well I'm, I'm living through digital video conference and I might have been seeing my trainer through digital video conference. I might have been seeing my physical therapist through digital video conference. When I needed to see the doctor, consult with a doctor, I consulted through video conference. And actually I found that it actually worked a lot better than I thought. And so now, and by the way, concomitantly with that, regulators went, well shit, get the regulation out of the way, make that work. Because we don't want the pandemic to spread. We want people to maximally consult through a video conference, make it work, change the HIPAA regulation, change the technology regulation, make this possible. And so since you got those two things, and I don't think that they were going to roll back. Cause we're gonna have hopefully only one more wave of COVID Although I think it's possible that it's more than one and you know, kind of uncertainty. And I hope everyone list has the compassion and the intelligence to know that wearing a mask when you're outside is part of how you don't spread it to other people. And if everyone does that collectively, we all don't spread it to each other. And so it's a sign of love, it's a sign of compassion, it's a sign of strength, it's a super important thing to do. But I think that this persistent reconditioning of the market will happen. And then, by the way, all kinds of new things open up. So all of a sudden it's like, well, we're using telehealth and we're using the camera on your smartphone. Well now actually, in fact, AI will start applying that. It'll start applying to their conversation, it'll start applying to the picture on the camera, it'll start applying to the description of symptoms. It'll start applying to an AI assistant that you can consult to say, hey, actually, in fact, here's a preliminary thing. But hey, look, this isn't a doctor. Here's how you consult the doctor. Da da da da. As ways of doing it. Those AI may even be available to people who are uninsured or people in other areas of the world. And that kind of gets to the fact that you're going to start deploying in rural areas, start deploying in Africa, that while it starts with the wealthy markets, it goes to the entire kind of scope and area of things that happen. And then actually I'll do one more thing here and then I'll do the mildly paradoxic statement for this is you're going to have a broadening of access to health care professionals. Because actually, in fact we currently kind of go, well, it's nurses and doctors and so forth. Well, what about community workers? And having those community workers be available by telehealth and having those available within a broader range and having those available on call because you have the AI tools that then also enable them to be kind of, as it were, a first responder video that then can also escalate to doctors. Now we'll have to have the litigation and lawyers and all the rest kind of fit within that, but that can fit within a mechanism for making this happen. And so that kind of new change in market adoption is one of the things. And the health, obviously with the pandemic and obviously with a bunch of other things, became the very first thing that I wrote about in the protocol. Now the second thing that I wrote about, because I see you about to ask the question, is the changes in founding teams. Because the proxy is that usually what happens is one or two or three people kind of get together. Sometimes it's one who finds two or three others. You know, me and LinkedIn, I found four of my friends who are my co founders. But generally speaking, people they know, they go sit in a room, they ideate, they have lots of meals, they have lots of coffee together, lots of whiteboard writing and rewriting and so forth and that kind of thing. And you're like, well, if you're doing the shelter in place, that's not actually in fact how founding teams are going to come together. And it will, I think, kind of go back to a little bit of like, well, people will more intensely go to people they already know and start zoom chatting with them. But that will create something of a how to solve this problem. How do you find your co founders? How do you put that co founding team together? And I think there's basically kind of two answers to this. I think one answer for just kind of broadly is a little bit like what we talked about in the hello Monday with Jesse Hempel is to be more proactive about networking. It's very much startup of you. It's the spend more time deliberately trying to get out and be serendipitous and talking to people and allocate time for it. Like one of the things that Ben Kasnoca and I wrote in the Startup U is to have a little like little lunch fund for taking people out to lunch to talk to them. Well, now you're going to want to have a Zoom fund or a teams fund or a Google Meets fund or that kind of thing to say, okay, I'm going to go out and I'm going to spend a little bit of serendipitous time talking to people in order to do that. And you have to be more proactive about it because it's of course, much harder virtually. It's more draining, it's harder to get that energy, it's harder to get that spark of inspiration. So you're going to have to work at it. And I suspect we're going to see interesting content coming out of how people run small meetings, one on one meetings in order to prompt to the kind of creativity or at least a percentage of the creativity that we see in the in person meetings and so forth. And then there's other organizations that are trying to solve this problem. Now the one that I'm most familiar with is one that Greylock and I invested in called Entrepreneur first, which their whole thing is to find entrepreneur deep technical talent that is entrepreneurially inclined and to find them and to bring them together into classes by which they can ideate ideas and that they can work with each other. And so there was a huge, of course, moment of uncertainty in Entrepreneur first to say, well, shoot, we know how to do this really, really well in a class, in a we bring the group of people together, we pair them and remix them and we get them exposed to how to think about generating ideas and how to generate ideas in order to have class launch. Okay, can we do that virtually? And one of the benefits of them already being an organization, you know, in London and in Berlin and Paris and Bangalore in Singapore, and already an organization doing these things that they said, okay, well we've already got some of the digital tools because we've already been building them to support it when the entrepreneurs go back to their apartment to work and so forth, because it's all very garage and bootstrappy tools to help each other and coordinate, collaborate. Let's now beef that up to being all virtual. And the good news so far is it seems to be working out very well. The, the NPS scores to be entrepreneurs is high, the ideas are interesting. Looks like that we're getting similar kind of financing interest that we get from a number of VCs in it in each of these areas and also more globally. And so I think that the path is working, but you could also go and do something like on reverse. And I suspect that Stanford StartX is also doing something like this because Stanford has a come and learn entrepreneurship within Stanford. And I suspect they're also going, okay, let's try to make this work a lot better virtually. I don't know if they broaden it beyond the Stanford ecosystem yet, probably haven't, but I suspect they're also on track with this as well.

Well, as a fellow member of the Stanford teaching community, I can tell you that everything did in fact shift to online and zoom. But the school has been doing a great job of figuring out how to support those teaching teams as they make that transition. Believe me, we've talked before about zoom fatigue for instructors who are teaching multiple classes a day. Apparently it is a profoundly difficult challenge. But as you pointed out, while these are barriers, people are working hard and finding ways through them. And it sounds like Entrepreneur first is definitely doing the same thing for sure.

And actually seems to be doing it quite well. There may be a something to write up about that later. Although of course they're still in the middle of it and they're still in that fast invention cycle and iterate and repeat. You know, part of being an entrepreneurial leader is being the first to learn what the product market fit is, what works, what doesn't, and that kind of thing. And Entrepreneurs First, I believe is the first out the gate doing this in a strong way. Although by the way, there's also some other things that are similar projects like Daniel Gross's Pioneers and other things that also have been out the gate totally virtually for a while. Although Entrepreneurs is the founding team.

And what's interesting, I think about both your points that you make is that it really is about how the pandemic has caused a multiple orders of magnitude shift in behaviors. Right? We've often heard that things need to be a 10x solution to break through and overthrow the incumbents. And, and in this case we have things like telehealth going up by one or two orders of magnitude in terms of frequency, and we have things like remote and distributed formation of founding teams going up in frequency 10x100x. And it's this dramatic change that is driving the ability to actually get people to make that leap. Those elders or seniors that you described suddenly getting into telehealth or founders saying, you know what, I'm not restricted to the people who happen to live within a one mile radius of me. I can actually form a team with people all over the world.

Exactly right.

So those were two predictions that you did make in the protocol article. What are some of the predictions that you didn't have room to write about, but you'd also like to share now?

Well, a natural generalization of the telehealth one is the changing conditions in the market, because that obviously applies to work, applies to education, applies to life, applies to fun, all of these things. And so like in Greylock, we see it in the work side with Coda and Figma, in changing the way that we work, in how kind of knowledge stores work, how work processes. You know, like part of the whole thing with Coda is say configure your work process to a digital tool, a knowledge store, the way that you want to have your work, how do you work in recruiting people? How do you work in and doing meetings, how do you work in. And the pattern of play between people who are working together and do all that as part of it. Figma, how do you design together, putting that kind of creative process together with tools that are based essentially in the cloud. And so you have all of this stuff that's transforming, that's part of the cloud transformation. So that's one thing is you can look in depth at any of these areas, whether it's work, education and so forth. Changes in digital life, like things that we see within the Greylock portfolio, Roblox or Discord, you know, there was a bunch of comments, I guess, mostly by Anne Miraco, but we're through it also about what we have is the increase in the passion economy. Because one of the things that's happened with YouTube, with Twitch, or with Caffeine or with Patreon or with Etsy or with Kickstarter, all of these things allow individual creatives to suddenly like find a market to get capital to deploy, to have people discover them, to get supporters for the things that they're doing. And I think that is also, of course, things that are being delivered either by digital or by E commerce are actually in fact, because that's the paradox which actually didn't get back to doing, which is some of the paradox of these things is a massive increase in digital, but also by the way, certain increases in physical like E commerce. So like, for example, I think we'll see more in the health area of mail, in health tests. Right? Because that'll be the E commerce version of it. And so I think we see all of those things as changes in digital life. And so all of those areas, each of them has potentially new shapes. And the things that I would say as a way for an entrepreneur predicting, because what you're really trying to predict out is 5 years, 10 years, 10 years plus is to say look at the current times as what changes persistently from that. And then look at the current times as kind of what might help you launch into the five or 10 years. But don't necessarily predict that everything that's different now because you know the kinds of things that are like, well, okay, are you going to be sitting with your family by yourself at your house for the rest of your life? Seems to be not so likely.

That's very true. Now what about some of the things that you just hear in general? Maybe not necessarily in the protocol article, but just in general, a lot of folks are talking about differences that are going to occur. What are some things you're not certain of? Like what are some things that you're still like thinking to yourself? I'm not sure.

Well, let's see. So the general advice that I give entrepreneurs now is to experiment with the things you may keep, you know, test to go to market, test hiring work processes, just like the work process stuff with coda, all the rest do all that things. Now one of them that is that I'm fairly uncertain about is how much will all companies go to distributed, even if they kind of can. I think that so far there have been a small handful of companies that have made it work, you know, very well. You know, whether it's automatic, right. Or which is kind of a classic or, you know, GitLab or 37signals or these things have made it work really well and have have been part of the distributed work pioneers that have published a bunch of information on this. Matt Mullenwe, enormously thoughtful. We did a Masters of Scale podcast with him and I think there's a bunch of stuff here. But I think their tendency to say, oh, everything's going distributed. And I actually think that that's very unlikely. I think it's more likely that it goes from where it might have been previously within a company 5% to 10 to 20%, where there may be the, hey, it's Wednesday's new meetings day or Wednesday day work from home or two half days of work from home, or there may be certain tools of an asynchronously and written basis that are then adopted and used more fervently in the way you operate. You may have a lot more remote workers by hiring remotely and bringing in that specialized talent from different places versus just simply a set of distributed offices. There may be all that stuff I think will increase, but I don't think it'll increase to we're now all distributed companies, which tends to be the way that everyone kind of draws the line to the endpoint. And in fact, I think that there will be a lot of pressure to getting back to working in groups, to having the energy and drive and time because, you know, one of the things that a Stanford professor's thing, they ran this experimentation of opt in within this Chinese company called ctrip where you could opt to work from home for, you know, for nine months and then stage the productivity. And some people were much more productive and some people were much less productive. And so what you need to do is you need to get that right blend so that you're getting the people who are naturally more productive at home, can be working at home, can be doing that and contributing in. The people who are much more productive working in an office with a team are doing it that way. And then the blend works out in a really good way. And that's, I think, where you're going to end up. So that's one. Now, the other area, which, you know, we talked about a little bit at the beginning of the podcast and a bunch of my protocol articles, is there's this kind of hope that when you squash geolocation, that this hope extends other aspects. So, you know, one of the problems when you say, well, why is it that we have persistent, you know, kind of call it white founding teams, which, you know, frequently includes Chinese, frequently includes Indians from the Asia continent. Why does that that happen? Is because, well, they tend to have run in a pack before, they tended to have hung out at college before, they tend to hung out at the office before, and they tend to be the people that they draw into this homophily of a founding team. Then they tend to hire people who look like them, even with a right sinking mindset, as we talked about before, even realizing that they have. They might have unconscious biases or homophies in their network. And the real hope is that this gets squashed. That just like the move to saying blind resumes leads to increased diversity and representation, you'll have increased diversity in race, increased diversity in gender, in founders, in founding teams and folks you hire, and also in geolocation entrepreneurs in Mary areas that can then scale that. And we'll have opportunity for that and we'll get a much broader range. And I have that hope and I'm working towards it. But I would say that, you know, look, the power and importance of networks is still there. The power and importance of the Silicon Valley network is still there. The power and importance of networks that people have when they are founding is still there. And so the things that we need to do to actually work, it won't just be, oh, hallelujah, we have the pandemic now everything's going to be diverse. We have to work towards it to making sure that you have the network access for people of color, you have to have the network access for women and for gender, yet you have to work towards that and make that happen. And, you know, fortunately, that's one of the things we got now, multiple initiatives both spinning up and under consideration at Greylock. And I suspect that's happening in other places too.

It would be truly remarkable if the COVID 19 pandemic ended bigotry and overturned systemic racism. But I get the feeling we're going to have to work at doing those. It's not going to do it for us.

Yes. The short answer is, and as I mentioned before, this is one of those problems that when you think to yourself, well, I'm not a racist, you go, well, if you're not part of the solution, you're part of the problem. So you'd better be very specific and itemized about where you're putting in real work. And now what do you think is real work or real assets? It's something that you'd miss, that you would have liked to have allocated to something else. It's like, no, I put in enough time to this. Why I would have liked to have been doing something else with that time, possibly to benefit myself, or I put enough money into this that I would have liked to have been doing something else. And that's how you know that you're actually working on it.

Now, that's one of the things that I admire about your approach, which is to say, I'm not just going to fight for the things I believe in when it's convenient and when it doesn't cost me anything. The whole point of commitment is that you're willing to do it even when it costs you something, even when it is inconvenient.

And actually, you're not really fighting for it. You're not really working on it unless it is inconvenient.

Excellent point. So one last question, because it is a topic that many people ask us about, and we've written about it multiple times. A number of the people in the Protocol article talked about how we're moving away from this focus on growth. And there's some discussion of, well, how do we build companies minimalistically, or how do we build companies without necessarily raising money or taking money from venture capital? And of course, we've written a book, Blitzscaling, which is all about the pursuit of rapid growth. And the question is, what does this pandemic really imply for blitzscaling?

I mean, the first thing that you and I always remind people is speed is relative, right? So the whole point of Blitzscaling is relative speed. And the relative speed point is still true, 1000%, right? The relative. The first to market scale is the winner. And in Glengarry Glen Ross markets, first prize, Cadillac, second prize, steak knives, third prize, you're fired. So it still matters. Now, what's happening in the Pandemic is several things are slowing the whole market down, right? There's challenges in accessibility of capital, there's difficulty of hiring talent, there's a difficulty of ideating and collaborating together remotely. All of these things lead to challenges in how the teams are operating. And so that means a little bit like the old joke, you don't have to be faster than the bear, you just have to be faster than the other hiker. That relative speed has slowed down some. And so maybe kind of the what people were looking at as the totally crazy moves of three years ago, of course people are not doing those crazy moves now. They don't need to. Right, because no one else is. There's other things, but the relative speed to scale is still in fact the driving rule. And one of the principal virtues of startups versus incumbents, because incumbents have huge advantages of brand and revenue and assets and customers and so forth, is speed. And that speed really matters. Now the interesting question that we're going to see is all of the lessons that we kind of detailed in blitzscaling for blitzscaling companies was ways that to really scale talent is one of the reasons why we, we took the underlying metronome as. As orders of size of the company, as the levels of magnitude. Because. Because while of course you're looking to scale revenue, you're looking to scale profitability, you're looking to scale customers, and those are obviously the business metrics and you want to have. Highest revenue per employee is an obvious business metric for how you're looking at it actually. In fact, when you look at all of these blitzscaling companies, they all end up with trying to fill out a staff to realize the scope of their opportunities. Even if they end up with very high revenue, very high operating margin, very high revenue per employee, they still go through these orders of magnitude sizes of growth of employees. And that's part of the reason we use that as the metronome within blitzscaling as the way to kind of think about these things. Now the thing that will be interesting is what does talent scale look like if we have a enduring kind of. Major tech companies like Microsoft and Google and Twitter and LinkedIn have all said, hey, you work at home for the rest of the year. What happens if that rolls into next year too and you have this kind of work at home thing? And how do you get to the talent scale? Because so far the only two patterns that I've seen deployed because none of the distributed work companies have really done blitzscaling on the talent side, the only two distributed yet. That's a. Yet as on all entrepreneurship stuff that's a Yet the only two patterns is either you only scale up your massive headquarters before you're really going everywhere else, or you scale up your headquarters and then you start scaling up scale offices like Uber did with different city regions and everything else, in which case you're kind of taking your headquarters and using them to really quickly start city offices as things you're doing, which of course all tech companies end up doing eventually with countries and other kinds of things, as is a way of happening. But that's been the pattern that all started with a. We started with a real scale office. Well, what happens when you hire people? Do you deploy them in team, maybe deploy them in a team for a year where you've never been in a room together? How does the hiring practice work? How does the speed of execution process work? How does the ideation work? How does the hard turns that you need to do? And the dog fighting? There's the startup journey, there's the blitzscaling journey. Like all of that is yet to be written. Now, I'm certain that the longer that we stay in this kind of lockdown, people will start experimenting with that. Because the principle is still the same. The principle is first to market scale is what matters. Right. And getting the capital to enable that, the revenue to enable that, there's still the pattern that matters. And entrepreneurs know that. And so entrepreneurs will be trying to figure that out, how to realize these critical opportunities just that important amount faster than their competitors, which are frequently other startups versus large companies, as we wrote. Although there's nuance to that. And the rest of that obviously is in the book.

Now let's bring this conversation full circle and return to the beginning, which is the consideration of the class of 2020. We've talked about just the incredible environment they find themselves in. It's so unprecedented. Yet many of the underlying principles remain the same. You've gone into some of those details. But looking back in the big picture for the class of 2020, what kind of words of encouragement would you have for entrepreneurs who are starting their companies right now? What message would you like to leave them with?

Well, it is a normal part of the entrepreneurial journey that you convert challenge and opportunity. Right. So entrepreneurs, my most often repeated quote on this is jump off a cliff and assemble an airplane on the way down. That's a intensely scary like you can't have a full plan. You're trying, you're getting other people to join you is challenging. You face lots of mortal risks to the business. And where 15 minutes is the difference between exaltation and terror that persists. But when you look at it, you say, look right now is precisely when people with entrepreneurial skills and doing stuff, because generally speaking, it's actually better to successfully start a business in a recession than it is in a bull market. You have many more predictions of success, the things that survive and get through the recessions. It winnows out a lot of competition. If you can get your company started, then it's actually in fact really valuable. And what you need to look at. When you look at like some of the challenges we talked about in the podcast, when you look at the challenges around you say, how do I convert the challenge to an opportunity? How do I make that somewhat differential? And that's kind of like one of the core tools for entrepreneurs. And obviously it'll be different whether the area is telehealth, whether the area is work, whether the area is games, whatever these things are, you know, and different markets and different knowings. But realize that it's a little bit like when the times get I think it's Linda Rotenberg of Endeavor who's told, who repeated this to me or generated this. When the times get tough, the tough entrepreneurs get going. It can be a huge opportunity to be differentially strong and with all the adversity. Remember that as you go forward because we're only going to solve the economic side of this pandemic with successful entrepreneurship at all scale from individuals to small businesses to giant businesses.

Well, class of 2020, we're all rooting for you. On behalf of Reid Hoffman and Greylock Partners, this is Chris Yeh and thank you for listening.

Listening. Thank you.