Held in Austin, Texas every year, South by Southwest brings together the divergent industries the city is home to, including technology and music. This year, Reid Hoffman, the co-founder and chairman of networking site LinkedIn, gave a speech to attendees about the trick to building a successful, “massive” company.
Hoffman knows what it takes to build a company that fits those guidelines. LinkedIn has grown from a small social networking site into a veritable behemoth; the site now counts 100 million users amongst its members and is often cited by career counselors and human resource representatives as an ideal place to look for a new job and build up your professional network.
What, then, does it take to build a company like LinkedIn or Groupon? Hoffman says that entrepreneurs must abide by 10 rules if they hope to achieve business immortality. His first bit of advice is that entrepreneurs must always look for an industry or service where there is a need that can be filled in a way that wasn’t possible before. For example, when Hoffman started LinkedIn, it was during the worst time in the recession and employers had no way to contact the best candidates for a job.
Hoffman also advices entrepreneurs to aim big with their ideas and build up a network of smart, savvy people to help realize those goals; big companies weren’t built by one person and the people you surround yourself with are just as important as the genius spearheading the project. Hoffman also advices entrepreneurs to plan for the best and worst possible outcome in any situation, allowing for time to adapt to failed ideas – and successful ones too.
Moreover, Hoffman asserts that entrepreneurs must adapt to the challenges they face and remain persistent in the face of adversity; Hoffman calls this delicate balancing act “flexible persistence.” His next guideline is somewhat counterintuive: Hoffman affirms that entrpereneurs must launch the first version of their product early enough to be embarrassed by it. While no one likes to be the butt of a joke, Hoffman told the crowd at SXSW that if you’re not embarrassed by your first release, you’ve waited too long to launch.
Entrepreneurs must also learn on the fly, he avers; when launching a product, it’s important to listen to feedback to determine whether your vision is in line with others and if your product is fitting a certain need. According to Hoffman, a great product is not the best tool an entrepreneur can have; he thinks that a great distribution tool that helps deliver a product to the greatest number of people is a powerful tool in an entrepreneur’s arsenal.
Hoffman also stresses the need to hire quality people when you’re first adding employees. These employees will help set the tone of the office and the culture of your company; if you hire low energy, negative people – well, you get the picture. Lastly, Hoffman advised the crowd of one thing for sure: Don’t pay too much attention to rules set by other people. Entrepreneurs often invent their own rules as they go.
Steve Jobs, Bill Gates and Mark Zuckerberg didn’t achieve success in business by sitting back and letting things happen to them; they made their own legacies. An entrepreneurial spirit is not something that can be taught necessarily, but it can be cultivated. If you’re thinking about starting a company and you’re unsure of how to proceed, take a cue from some of the great business leaders of the past 50 years and make your own rules. Who knows, you could be the next genius celebrated by the public.