Talking about how to be a great founder, Hoffman says that a founding team should ideally have at least 2-3 co founders as this compensates for the weaknesses of individual members of the team and can address the diversity of problems efficiently. He adds that there should be high preference on the level of trust that co founders have on each other.
Location too is a prime matter of importance as a firm needs to seek the networks that are essential to their problems and tasks. Hoffman says the choice of location is also one among the major test s to determine if one is a great founder. Hoffman’s metaphor for entrepreneurship is jumping off a cliff and assembling an aero plane as you go down. Explaining this, Hoffman says that once to make the jump off the cliff, whatever decisions you make next are hard and you are already quasi-mortal so you take very possible chance to win.
Having a contrarian idea, according to Hoffman, is another major point in founding a startup. Hoffman says to make an idea contrarian to popular beliefs is easy but it is very difficult to get a contrarian idea that is right as well. Explaining a contrarian idea in is words; Hoffman said that a contrarian idea would be one when a smart person disagrees with him on his idea.
He says that while building a contrarian idea, one should also know the ways to go about it in terms of building on the idea. One needs to know the idea to an extent that he/she knows so much about it that others don’t. and this contrarian idea was deployed by his team when they started with LinkedIn. Every member was asked to talk to some smart person who gave them feedback on their ideas.
Considering the various aspects of founding a firm, Hoffman talked about the need to work versus the need to delegate. He says it should be a combination of both and sometimes each separately at 100%. Another paradox that Hoffman talked about is flexible or persistent on their visions. Hoffman says that most entrepreneurs are advised to remain focused on their vision, to stay firm on their ideas so as to remain on track while they are also advised to listen to data, to listen to customers, to pivot and to be flexible. Hoffman says that the way to go about this is to conduct an investment thesis on the project one is working for and to decide accordingly based on certain parameters of the thesis whether it increases or decreases the confidence going ahead.
On the topic of a founder being confident or cautious, Hoffman points out that one needs to be a mix of both, as you need to have a clear idea of where you want to be and but also cautious enough to be smart to listen to criticism as you move along. One also needs to focus internally and externally while building a firm and needs to be flexible on these lines as to know what the current problem looks like and how to find the apt solution for the problem. One of the major actors in this is to decide whether to stick to the vision or to depend upon the data. Again, Hoffman says it is a mix of both as data exists within the framework of the vision that the firm is building towards. Data can be negative but one needs to understand how to it can alter the course of thinking and to learn from them. What one learns from data changes ones vision too.
Risk is what everyone considers entrepreneurship to be equal to. Entrepreneurs are perceived as risk takers as every contrarian idea that an entrepreneur brings up has risks associated with it. Founders need to be intelligent risk takers and need to understand how to take the intelligent, focused risk. Investment Thesis again comes in to play here as it helps determine the increase/decrease in confidence towards the firm’s goal and thus minimizes risks along the way.
Setting short term or long term goals is another r decision that is a major point of debate for startup entrepreneurs. Every short term goal deals with the progresses made day over day or week over week. What needs to be determined is if these goals are largely on path with the vision of the firm, which would be a long term goal.
Financing is an integral part that requires huge attention.
Product strategy is the most fundamental part of startup entrepreneurship as product distribution is more fundamental than the product itself, according to Hoffman. During every funding round, one needs to think of how to scale up and be ready for the next round of funding. Product distribution should be such that the financing works for the firm and a course strategy needs to be designed to understand how every process is executed.
Being a great founder requires a special set of super powers to understand if the software is useful as a product to the person. One needs to recognize if they are on track with their goals and this tracking needs to be based on investment thesis. A founder needs to have the ability to learn and adapt. He needs to have a vision driving him but should also be open to take input from all sources.
Insights are very helpful in understanding the nature of a firm but it also depends upon what stage the firm is at. Personally, he says, he prefers founders who have analyzed their data. He also mentions that each entrepreneurial pattern is unique and new and one can learn the new ones only by doing it or being a part of it. He emphasized the need for co founders to collaborate very well as a it leads to a diversity of strengths all across and results in a collective learning and problem solving environment in the firm.
Finally, explaining the need to pivot, Hoffman said that if one’s confidence in unmeasured or decreasing and then when one goes on an intense mode to figure out what would increase the confidence and fails, that’s when one should think about pivoting.