Reid Hoffman and Ben Casnocha on LinkedIn and The Alliance
Aug 4 2014

Reid Hoffman, co-founder of professional networking site LinkedIn, and Ben Casnocha, former Chief-of-Staff of LinkedIn, talk to EconTalk host Russ Roberts about LinkedIn and their book The Alliance. Hoffman and Casnocha discuss the founding and vision of LinkedIn along with their ideas in The Alliance on how to improve employee/employer relations when turnover is high and loyalty on each side is low.

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Explore audio transcript, further reading that will help you delve deeper into this week’s episode, and vigorous conversations in the form of our comments section below.


Aug 4 2014 at 11:41am

Excellent show.
I am one of those pesky recruiters who regularly uses Linked-In and I consider myself to be very astute with it. Hearing about some of the behind-the-scenes strategies and purposes of some of the features was helpful in how I use the tool.

Michael Byrnes
Aug 4 2014 at 6:27pm

I thought the “Tour of Duty” idea expressed by Hoffman and Casnocha sounded wonderful, but as an employee it doesn’t sound very realistic in the real world.

Such a concept would require an enormous level of trust of both parties, but especially of the employee (who usually has more to lose). Telling a supervisor that I was looking into new opportunities months in advance and with nothing certain lined up sounds to me like playing Russian roulette without knowing how many bullets are in the gun. I would need to trust not only my boss, but also his boss, and her boss’ boss, etc., including senior people that I may have no working relationship with at all. At times I have worked for people that I might consider trusting with that type of information, but more that I would not.

I’ve worked for some good people who I might trust if they tried to establish that kind of relationship, but I have also worked for those who were absolutely untrustworthy.

d s
Aug 4 2014 at 6:46pm

“The alliance”, “buy in to the mission…”, “tour of duty”, are you kidding me? Every time I hear this guy say “tour of duty”, I can’t help but cringe. Here is a new book to get your employees to drink the company Kool-Aide. Cha-ching. This is definitely for the anxious white-collar crowd. Try pedaling that snake oil on a building site or to a veteran. Wow.

And linked-in? This was a great business idea. Businesses have a new way to discriminate in a tight labor market and employees have a new service they feel compelled to participate in and/or pay for. Make both sides pay for this efficiency. Monetize the data. Once you get a lock-in affect, you have the psychology of ‘social proof’ on top of the psychology of the ‘reciprocity tendency’ that is in affect when you network. Cha-ching.

People have always been ‘networked’. That is nothing new; only previously it was more personal, maybe more local, certainly more private. Transaction costs? Sure. You had to buy someone a beer and make a phone call and spend some time with them. It showed sincerity and tact and could be pleasant. All of which you can learn to get around now by taking a ‘tour of duty’ with our new book and subscribing to a ‘premium’ service from linked-in.

Lei Feng
Aug 4 2014 at 9:11pm

It’s hard to imagine that the overuse of heisted military jargon like “alliance,” “tour of duty,” “mission,” and “forward observer,” etc was completely serious. But these guys seemed completely oblivious to the meaning these terms have in their original military context and how inapplicable those meanings are in the profit-over-people culture of “The Valley” and venture capital in general.

Greg Linster
Aug 5 2014 at 2:13pm

A resume is something created by the most biased source possible. A LinkedIN profile falls into that category too. Accordingly, there is an asymmetry in the network that makes its value dubious. Would anyone voluntarily maintain their account if it were full of negative information?

I’m not very familiar with Reid, and I like some of what Ben has written in the past, but I think they both are a bit too optimistic about digital networking. Trust is not built digitally, but rather in the flesh. I’m not suggesting that digital networking is useless; however, much of the value seems to come from doing it privately.

Also, I really appreciated the response to Ben’s comment about their being no side effects when it comes to taking the pill that allows one to “need” less sleep. It’s incredibly naive to think that one can interfere with a complex system, like the human body, without side effects. Thanks for the laugh, Russ.

Michael Byrnes
Aug 5 2014 at 6:57pm

Greg Linster wrote:

“Trust is not built digitally, but rather in the flesh.”

I think that’s largely true, but Reid and Ben had a good answer for that: second degree contacts. The people in your network who you know and trust can introduce you to the people in their network who they know and trust. It’s not as good as “in the flesh”, but it’s a heck of a lot better than a cold call.

Good post, BTW.

Greg Linster
Aug 6 2014 at 5:00pm

Michael Byrnes: I largely agree with you, but I fail to see how maintaining a public LinkedIN profile helps the situation with second degree contacts.

The trouble with resumes, LinkedIN, and career networking (in general) is that the people who are good at marketing themselves, not the people who are good at what you’re hiring them to do, are generally the successful ones. Obviously one cannot totally fake it on marketing ability alone, but I’m skeptical of the people who spend a lot of time carefully crafting their professional image online.

Dr. Duru
Aug 8 2014 at 3:06am

I also found the military references a little bizarre and surprised Professor Roberts did not explore the need for this kind of analogy. I am also a bit surprised Professor Roberts did not push the guests more on their natural incentive to encourage volatility in labor markets.

Finally, missing in this discussion (but maybe handled in the book?) is how does a company handle “alliances” and “tours of duty” for managers? VPs? The CEO? The Board of Directors even? There seemed to be an implicit assumption that employees get to move around while managers are attached to the companies offering the opportunities. Won’t managers want to move around too? And in such a world of constant flux with massive turnover, what does a company even mean anymore? Take this to its logical conclusion and you really just have some amorphous economic collective…that probably only works for limited types of white collar work that requires little to no physical presence of materials or production and where institutional knowledge and experience specific to a product are not very important (or again recorded somehow in this new economic collective).

Overall, does not sound practical….

Comments are closed.


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Podcast Episode Highlights
0:33Intro. [Recording date: July 24, 2014.] Russ: Let's start with the origins of LinkedIn. What was the original concept? It's, surprisingly to me, maybe to you, it's over 11 years old, correct? So how did it start? GuestH: Well, not surprising given I lived it. But the highline was--the idea about things, I think about, what is the world as it should be given certain kinds of technology? I've been thinking a lot about over the decades about identity, networks, and how this helps us navigate having better lives both as individuals and society. And so after I helped sell PayPal to e-Bay, I was like, what should I do with--this is new language--but my new tour of duty, my next tour of duty? I said, Well, actually in fact I see this future in which it's much better off for every individual to have a public professional identity, a network that associated with that applications built on top of it. Most people don't see that right now. But I do think that they, and as companies and as a society, all better off for that. I think I have an opportunity to create that. And so as opposed to taking a year off, which was my initial plan, post-PayPal-- Russ: Which you earned, I suspect. A little bit intense. GuestH: Yes, it was very intense. And so I took 2 weeks and went and visited a friend of mine in Australia and went and stayed at his beach house, and then came back and started LinkedIn. Russ: And your original concept--you've given a broad outline, but how did it start when it was actually up and going? GuestH: Well, part of how you do consumer internet--the vast majority of consumer internet companies--is you think of what is your minimum viable product by which you can launch? You have to have answers to questions like, how does it spread? How do people encounter it? What are the first value propositions? And even though we knew there was going to be this entire stack of things, including things that work on today, which is: How do you have best business content for every individual, [?] the relevancy from getting from shares from the network intermails[?]--even though we knew all that, we didn't start with any of that. We started with, you have a profile, you have a network of people around you, you have an ability to do search, you have ability to communicate. And we just started with that. So the first, say, month, was: What was the minimum viable product that we can launch such that we can iterate as we go? Russ: And, being an academic, I don't use LinkedIn perhaps as much as I might. When I looked at it originally I thought, Well, this is just a place you post your resume. It's like a bulletin board. Is that how you saw it initially? Because it's certainly much, much more than that now. But that was how it looks for an outsider hearing about it, in say 140 characters. GuestH: Well, we knew that that would be the first interpretation of it. And we knew that that would be the first solid business model part of it. We knew that when people say, well, I have a public professional identity and I have a network; what do I most use that for? Well, like job searching or recruiting. There would be economics associated with that. But part of the reason that we knew--like I've been talking since the beginning about network as a platform, is because your identity and your network is a platform for a set of applications that help you work better, help you navigate your career better, help you be better informed. And we knew that that was a--and we built that into our data structures. We knew that that was part of where we were going from the beginning. Even though we actually focused for years on just solving, primarily, the work circumstance. Now, from very early most people--I'll give you two examples of how most people don't know how to use LinkedIn. And in fact-- Russ: Even now. GuestH: Even now. Russ: It's possible. I have a profile. Evidently you are supposed to have a picture on it. I don't. I'll fix that before even this airs. GuestH: A picture is useful. And that also will condition which of the two things I say first. The first thing is, if you ask most people, Do you understand that you're living and working a network age? They'll say yes; they'll wave to their cell phone. They'll see, You see, I'm connected. To have a strategy in a network age, you have a strategy for how you're being found. Because there's millions of people out there. And of course you don't want all million to contact you. You want the relevant people, the people who are thinking about something that could be really interesting to you, could be a business opportunity, could be a job, could be a piece of intelligence, could be a person for your show. Or something like--how are you found the right way? Now you do the podcast, and else. But searching for people--searching is part of what happens in a networked age. And how are you discoverable. Russ: That last part's the part you forget about. Because you are usually seeking. Forgetting that people are looking for you. GuestC: Yes. It's actually one of the amazing things-- Russ: This is Ben. Go ahead, Ben. GuestC: They get people to update their resume when they are not looking for a job. Was actually a profound accomplishment. That was really a shift for people. I'm not actively looking for a job, and yet I'm going to continue to update my profile in pursuit of being found in some kind of abstract, long-term way. GuestH: Yes. Well abstract in that you don't know exactly what you are hoping to be found for, because you don't know what those millions of people--but sometimes the absolute best things come in that way. And that's super important both for you and for your company. Because sometimes being found sometimes helps your company sometimes as well. Russ: And we forget about this--maybe you do, maybe you don't. But I think those of us who are not paying close attention to LinkedIn--I mean, one of the most extraordinary things about it, looking at it as an economist, is that it lets you look for a job in a quiet way, without looking for a job. And as an economist I look at that and I think that reminds me of Ronald Coase, because Coase is about transactions costs and how transactions costs disrupt markets. And what LinkedIn does more than anything, it seems to me, is lower transactions costs. Which means more transactions. Which means are put in better places where they are more productive, more happy, etc. It's a good thing. GuestH: And actually, by the way, so all of the--most of the economic thinking was there from the beginning. So the lowering of transactions costs, the increasing transparency, increasing liquidity--but also, by the way, one of the really key things is adding in reputation. So the fact that, for example, someone who is diligent, who essentially does the work, is a good collaborator, doesn't have anger management problems--you know--goes the extra mile in order to get the outcomes--that reputation now is much more discoverable. Much more shareable. As is the inverse. And by having essentially reputation that also increases the director[?] for good people, and creates the better allocation of better assets to great projects.
7:26Russ: And the incentives for bad people to be good people, which sometimes isn't a matter of skill but a matter of diligence or focus. One thing I think about--I'm sure you guys have thought about this a lot--is, a lot of what we are talking about in the networked age, from Yelp to Google to Amazon Books to LinkedIn to AirBnB is about relying on the ratings of others--users. People who have actually experienced the product rather than experts--say, Consumer Reports--who tells you the best dishwasher. That's a glorious thing. At the same time, it's hard for people to be honest sometimes in those situations. I've had people tell me, oh yeah, AirBnB, everybody gets a rave, because people feel guilty; they've stayed in their house, can't really say bad things about them. I know that on Uber if a driver gets less than a 4.6, he's fired. So, it makes me worry. It makes me feel guilty giving a guy a 4. So, similarly, without naming names and without naming details, I've been praised for skills, endorsed for skills I don't have. How do you--there's a lot better way to say this. There's a lot of noise in the LinkedIn reputational stuff. How do you think that plays into the effectiveness of it? GuestH: Well, many of the reputational pieces, especially the skills and endorsements--very early, it's kind of like a .5-version of the feature. And there's things that we need to build in that help enhance like the--for example, you've been endorsed as an economics, as an expert in economics, by people who themselves have economic skill. You know, that kind of thing, the kind of natural evolution in order to make that better. Russ: Yeah. That should be worth more points. GuestH: Yes. And then were featured more prominently. Part of the reputation, when you look at the profile--these sorts of things. Russ: And so, there's a bunch of stuff to build towards. GuestH: Now, that being said, a frequent comment that we get is we also have these kind of equivalent of book blurbs, kind of endorsements; say those are all positive. Like book blurbs, by the way, which are all positive. Russ: Strangely enough. GuestH: But they are still useful intelligence because it says that someone's willing to go on the record, who they are with their identity; they say this is something that's important. And that's a valuable additional source of intel, when you are trying to figure out, Should I approach this person, should I do business with them, should I? There is some noise. But there is valuable signal you can discern there as well. Russ: So, let's go back to the evolution of the site. When you started there were a lot of people doing stuff like what you are doing. Friendster, MySpace, Facebook. Some of them fell by the wayside, and a couple of them got really, really big. Why do you think that--besides the fact that you are really smart--why do you think that happened? What did you do right? You can mention what you did wrong along the way if you want. GuestH: The primary thing we did right is we stayed current to our vision, which was: We're about people's economic lives; we're about their career; we're about how they work. And so for example I got from friends of mine, from highly intelligent commentators, I got told all the time, You're being an idiot; you should put social games on it. You should do all these things; look at how big these things are getting. You should do that. I was like, No, we're staying to what our value proposition is, what our promise is, where it is we play a role in people's lives. And we're focused on that. And that was seriously important. Russ: How hard was it to ignore those? GuestH: It's hard because when people adopt technologies they generally don't start within the productivity suite. They start within entertainment. They start within kind of consumer. They start within optional. So, photo sharing is easy. Social games is easy. And it's kind of like, I'll go play with it and if I don't like it I'll stop doing it. Things like for example affect my economic life, like, how will I be looked at if I have a profile at LinkedIn? Because if it goes down, that's a seriously important thing. So people are much more risk averse, much more hesitant to do that sort of thing. And that's the reason why everyone else thought they were being just product geniuses. Like for example a common thing I hear about LinkedIn is: LinkedIn is boring. Right? Russ: Stodgy. GuestH: Exactly. And you go, Okay, maybe it's true, because we're not focused on pictures; we're not focused on entertainment; we're not focused on 5 minutes of give me an adrenalin hit. We're focused on: how do we help you work, how do we help your career, how do we help add value to what you are doing over days, years, decades. And that sometimes means we don't invest in something that's lightweight and entertaining. We invest in other kinds of things. That has I think been very successful for us in terms of staying focused on the long term. Now, I think some of the things we did wrong--we launched our Groups too early. Groups is an important part of work, it is an important--trade associations, company alumni groups, university alumni groups all important. We launched it early because we were worried about some competitors trying to compete with us by doing groups. And actually in retrospect, what I would have done is, No, let's wait until Groups are right. Like, do the right thing and we really put a lot of work into them, which is what we've been doing for the last year. And hopefully we'll continue. But that would be the kind of thing that we did wrong. GuestC: When you said there are some competitors as early as LinkedIn that actually had a very different thesis, that every individual can have their own individual identity. Again it's something that seems so obvious now. But early days, to have your own page that existed free, that is your own kind of personal brand. What was the company that was linked[?] wherever you worked, that was the identity? GuestH: Yeah. There was--80% plus of our competitors. We didn't look at the social networks competitors. We looked at Rise and ZeroDegrees and a bunch of other things. Russ: That were doing what? GuestH: Well, some of them were doing--Rise was a little more like us. ZeroDegrees and VisiblePath were both in the category of your company owns your network. Yes, it's a network world. But it isn't you having your individual identity. It's: You're part of a company. Russ: In a way that's the way Gmail became so attractive. Because it wasn't your company's email address any more. GuestH: Yes. Russ: Or your school's. Wherever it was. GuestH: Exactly. What I knew to be right, and this is actually part of the intellectual foundation of The Alliance as well, was, what I knew to be right is: It's how do you align interests between the individual and company? It's not the individual's subsumed in the company. It's the individual has their own identity, their own persistence that goes with them their entire career, even if they work their entire career at a company. Happens less and less these days, but even if they do. And then the company should view the individual's network as assets that the individual brings into play, in just like their skills and everything else. But they are the individual's. They are not the company's. Right? And that, when you get them aligned, you get an allegiance between them, then great things can happen.
14:27Russ: How much of the evolution of what is there now came from that original vision versus user experience and what you saw they were looking for that you weren't providing and decided to provide? GuestH: 95% of the features and everything else we've done were all part of the initial conception. There's a bunch of things that are also part of the initial conception that aren't all on the site yet. Those are relatively robust, like you take what is this vision of individuals having an independent brand, network and identity, aligned with companies, project it over time, and what is that a platform for? We had all of those. Now, the details, the order in which they came, the way that the minimum viable product, the way that they were iterated, all of that came from market feedback. All of that came from, Oh, well now it's time. I'll give you an example--something we launched much earlier than we were thinking. We thought we were going to be completely individual for years and years and years. And we started having companies come and knock on our door and say, How do we buy your product? We want to buy your product as a company. Why? 'Oh, we were expecting you to call. We were expecting you to call like three years later, not right now.' So what we did is we said, let's mock up something. Let's put these two engineers in a corner, build up something specifically for companies, and let's hire a salesperson and let's see how that goes. And, oh, that's going really well. Okay, let's invest much more in that. So, timing and sequencing-- GuestC: That was a recruiting product. GuestH: That was a recruiting product. Yes. Very specifically. Russ: How much--for example now, and originally--I think a lot of people think of LinkedIn as a job search company. But you are much more than a job search company. You are a way people find people they want to do business with. Sale people use it. Not just recruiters. And in dramatically different ways than people had access to information 10 years ago. Did that come from the beginning? Did you see that as part of the vision? GuestH: Yep. Because the idea is: What happens when you tie search to a trust network, and how does that affect all forms of business? So this is the other thing--I told you I was going to tell you two ways in which people don't understand the network page[?] at LinkedIn. This is the other one. Which is, basically, take some problem that you are trying to solve. Go to LinkedIn and type in some terms that are appropriate to that and search around your network. Literally every single person I've done this with, every single time, has been surprised by it--Oh, so and so is two degrees out from me and they could be really helpful. They could take the time I'm trying to solve this problem from 3 hours to 15 minutes. I can ask the person I know, Is this person really good at it? Should I talk to them? I can get an introduction to them? And yet very few people do that because they don't think that they are living and working in the networked age. And so that problem set--look, this goes back to, one of my co-founders, Jean-Luc Vaillant, and I had a conversation like a year and a half into LinkedIn, Well, I totally get this for recruiting case, but really how do I tell my friends how to use this? I go, Well, what kind of problem are you trying to solve? 'Well, I'm trying to figure out right now if we should use this new kind of hosted data center.' And I forget the term--this was years ago, like a decade ago. He said, okay, these terms. And I went and typed them in, in his account, and said, okay, these three people are two degrees away from you. Would it help you to talk to them? And he's like, 'Yup.' And could you ask the person--the person you know in between them? Would that person be a good judge if they were expert and be able to give you a good introduction? And he said, 'Yes.' Your problem just goes from weeks to days. GuestC: Well, most people don't even think about two degrees away. It's funny how natural that comes. But it is the profound difference between LinkedIn and Facebook. Right? Facebook shows your friends, and that's it. LinkedIn, from the very beginning, had this two degrees, three degrees of separation. And so it really made central the idea that if you can get an introduction and have a warm referral and it's somebody you can help be in your network is bigger than you think. GuestH: It was our first tag line. Russ: It's nice. It strikes me that, for those of us who blog or have a podcast, we have a broadcast medium. Where we can ask people stuff. We can get our problems solved. People do it on blogs all the time. I don't think--as you say, most people don't realize that they have such a megaphone if they want to use it. GuestH: Yes. And it's all levels. For example, a step up is just having a LinkedIn profile. It's not a megaphone. Maybe it's saying a word. And that kind of scales up. I actually think generally speaking it's wise for most people who are ambitious in their career to think about how they participate in social media. They may elect to do very little. That's a perfectly acceptable answer. But, what is your strategy for being found? Russ: Yeah. But of course, some people don't want to be found. As we know. And it may be being found makes them uneasy. They also--I just think about wife, who has a religious aversion to being on social media. It gets lonelier and lonelier. People say, Did you see this? Where'd you get that? "Everybody's" seen it. Different world. Amazing thing. GuestH: It becomes a competitive disadvantage. I actually [?] that if you take the network page and you say, I don't want to be found, it's a strategic and ongoing structural disadvantage. Russ: Yeah. Well, it depends on what your goals are in life. But in many areas, for sure. I was talking to a person in sales the other day, and he said, Most people don't like technology. I think they view it as sort of like cheating. It's like, I just used my charisma and my charm and I remember everything I need to; maybe I have a notebook. But the idea that--that's a disadvantage. Obviously.
19:58Russ: I saw from data from last year that LinkedIn has 225 million members. GuestH: I think we publicly announced over 300 million. Russ: Okay. The United States at the time was 77. What are we at? GuestH: Um, I don't actually know what the public-- Russ: It doesn't matter. But the United States is not half. Which is surprising. Perhaps. Is LinkedIn used differently outside the United States than in the United States? We have a very unusual business culture. Do you see those business differences? Do you know of them? GuestH: Well, first let's start that we designed LinkedIn to be the right economic system. So, we actually, even though we are rooted in American culture and whatnot, and obviously that informs some of our decisions in ways that we are blind to and we try to correct for, the actual thing is: What's best for the individual, for the company, and for the society. An economic basis--how should the system work. That's what we build to. Now [?] to that, we do have some areas which are massive. So, for example, for years, the highest per capita usage of LinkedIn was actually in the Netherlands. The Prime Minister of the Netherlands was the first government official who started using it actively--not just having their staff set it up, but I use it, and I'm using it for things. And that's because a small country does a lot of cross-border trade, is used to the notion of action[?]; in fact, we have to be out there in the network and so intense usage. Singapore also very similarly intense usage. Other countries--Japan, for example. Well, even though the job landscape has changed, even though the whole salary-man, you live there, you work there, it was one company your entire life, has radically fallen off, it's still, oh it's a little shameful. For example, one of our earliest--we got a pitch from a Japanese company that we really love your product; we want to do a joint venture in Japan. The one thing we have to do is we have to remove people's names. Like, No, that's not our product. You want a different product; but our product is real identities. GuestC: And Japan for many years has been pseudonyms, right? GuestH: Yes. Well, because all online has been pseudonyms-- GuestC: Really interesting, called Troll. GuestH: As a cultural phenomenon--Korea has, you know, challenges in what it looks like, loyalty to the company. Russ: LinkedIn appears to me--tell me if I'm wrong--to be mainly for educated people, white collar occupations. Is that true? And do you see an opportunity for LinkedIn or another product to help coordinate work activity for blue collar workers? GuestH: So we think that blue collar workers is a long term part of the strategy. It starts with the high end, the people with the most elite skills, most in demand, highest kind of career prospects. There's the natural intersection of why companies would use the product, why individuals use the product, and that's why it starts there. Ultimately LinkedIn should be useful for anyone that has some notion of career, some notion of getting better at their job, some notion of making progress. Because, how do you invest in yourself, how do you get new opportunities--all of that, ultimately in a network age comes down to identity in network. So LinkedIn should be applicable everywhere. Russ: I just think about unemployed construction workers in Nevada who maybe are still sitting there hoping the housing boom is going to come back. And they sit there. And they should move, some of them. A joke I've used before in here is, the problem with some areas is luggage. You just need to get people out the door. They need to be someplace different. That's the best way to help them. GuestC: One of the terrible things about housing policy in the United States. If you own a home it tends to lock people in. Russ: Correct. It tends to lock people in. People seem to forget that when they talk about the virtues of home ownership. It drives me crazy, that home ownership is this religious, romantic ideal. It's silly. It's just a house, just an asset. Often a bad one, an expensive one. For some people not the right one. But anyway, I just think about them, thinking, there are jobs for my skills somewhere else. Or if there are skills I could acquire. Or if they are just sitting there. GuestH: Or, thinking about, for example, doing some internships. Trying some other work. Even if you say, Look, my long term strategy I think two years the construction market is going to come back. What do you do while you are doing that? Do some freelancing. Try some other things. So you have adaptability, you have flexibility. In case you are wrong about the two years. In case you discover something interesting. Russ: Absolutely. Yeah.
24:29Russ: What do you think is the biggest education or training problem in the workforce today? And do you see that? do you look at that? do you keep an eye on it? Because you are seeing these searches. So you know what people are looking for. Do you see what people are having finding? GuestH: We publish a bunch of things in terms of what skills are most trending at LinkedIn, what buzzwords not to use in your LinkedIn profile. Russ: What would be one of those? GuestH: Let's see. I think 'leverage' was one from last year. GuestC: Yeah. 'Innovative.' 'Creative.' GuestH: Yeah. Russ: You are not supposed to use those? I am creative and innovative. I mean, what do you do if you are one of those people? You have to find a synonym? GuestH: It's not very creative and innovative to use those words. Russ: Okay. GuestC: Especially in succession, separated by commas. GuestH: Yeah. Don't think of your public identity as buzzword bingo. Russ: That's a bumper sticker. GuestH: Yes. And so, but we do actually, we work with entities like Hope Street Group to try to figure out how do you publicize what the terms are so educators can prepare for it and governments can figure out how to do the right programs. Obviously here in Silicon Valley we tend to think a lot about--like I'm a massive supporter of this initiative, Hadi, Partovi called, which makes sure that CS (Computer Science) is taught in every high school. That doesn't mean everyone should be a computer programmer. Russ: Computer Science. GuestH: Yes. Russ: We're in the heartland here; you've got to remember, outside-- GuestH: For example, obviously computer science software is changing all industries. Everyone should understand something about computer science. Whether or not you become a computer scientist or a programmer yourself or not is--yeah. It should be in every high school. So those are kinds of things. But it goes across the--it changes based on industry. I don't know what the trends are, what's happening in the energy industry, and petroleum, but I'm sure they are, too. We see that because it shows up in people's profiles; it shows up in jobless things; it shows up in what happens when a person gets a promotion, what do they add to their profile. These sorts of things. Russ: So, let's do a thought experiment. You are going to take your year off now, and at the end of that year you have a lot of deep thoughts. And then you are going to run a high school. And you know that work is not the only thing people care about, but it's an important thing. Tell me what that computer science class there is going to do for me as a Junior, say. Because the seniors, they don't pay attention. But say as a Junior. And what else would you put in that school that would get people ready for their careers? GuestH: So, I'd say three things. The first thing is, I would actually make as part of classroom instruction, bringing in various professionals, teachers, everyone else, and talk about what their work life is. So people have some visibility. The whole notion of separating the academy from the work life is insane. Russ: Bizarre. GuestH: Yeah. Insane. GuestC: And the failure of imagination is what bedevils so many people in thinking about--they can't actually imagine more than four or five professions. GuestH: Yes. Russ: And they are usually preceded by Law School somehow. So, I know I've got to go to college. But then after that, I probably should do something. It ought to be Law School. And then, since I don't want to be a lawyer, I'll figure out something else. GuestH: Yes. Exactly. So, bring in a scope. Have almost like a fireside chat. The person doesn't actually have to prove[?]. You ask, what are the key skills? How did you learn them? How did you discover this? What did you think when you were in high school you were going to do? How did that change? So people are going to say, Oh, I get to see how to navigate this. This is a little what Ben and I for example were talking about in The Start-up of You, the earlier book. The second thing is, in specific, obviously if you have an aptitude for software and computer science it's an enormously lucrative career; you should consider doing it. It can be done remotely; it can be done in many regions. People think that it's all like Google and LinkedIn and Facebook. Actually, every company is hiring software engineers. I am quite certain that within Caterpillar there are software engineers. It's a very wide range. That's why it's important to do it. Now, even if you don't have an aptitude toward it, knowing it, so you know how your job changes and industries change, so you are familiar with how software creates a different product, a different pattern of work within a company is super helpful to you no matter what you are doing. Even if you are, for example, being a barista at Starbucks. Russ: Isn't that a hard thing to teach in high school, other than the school life? You know as much about that as anybody in the world. Maybe there's three people that know more. But you've seen a lot, learned a lot, both of you. It's hard to tell people that. So you think about what you'd do in that classroom--it's hard to think about what that might be to give people that appreciation. What would you do? GuestH: Well, so-- Russ: I'm bringing you in. You don't have to run the school. You can run the computer science part of the class. GuestH: No, I understand. But there's a bunch of online resources. And CS works this way. And that's part of the reason why I [?], and various--there's a whole bunch of online things like Treehouse and other programs for doing this. Go and bring a whole bunch of--that's why all schools should be network-connected. The Khan Academy. There's a ton of resources out there. And so how do you bring those resources into the school in a way that you say, Look, whether it's how to do it--the actual skills and construction--and how to learn it; but also what to do with it. There are those resources, too. Like, for example, you'll have podcasts like this one. Where the person is saying, Here's how CS matters. I go find those. I would clip them. I would make sure that that's part of what students are learning. So they go, Oh, I get it. It's not just do I learn this little computer trick and game, but actually knowing this will help me no matter what career I go into. GuestC: And you were on the Zynga board for several years. Do you think every [?] CS class in the future is going to be Zynga games? Like, are they all going to be game of 5? Because part of what I think Russ is interested in is the motivation question. You are 15 years old; you have a lot more years before you necessarily need to earn income; and someone says, CS is actually important. How do you actually on-board[?] them into an experience that's engaging? GuestH: Look, I think one thing--I agree. Yes, game dynamics. Yes, more [?] content. Yes, more bite-size. Yes, doable online, like Khan Academy and everything else. One of my investments at Modo[?]. All these things, doable. However, I actually think that one of the responsibilities for all teachers, including CS teachers, including computer science teachers such as in this hypothetical experience, is to say, Look, what is the economic future of your students really matters? So it's beholden upon you to try to get as much access as possible to say, By the way, you are going to have to look at yourself economically, you are going to have at it, and here are some ways to do it. And you should try to make it as interesting as possible. You should try to make it as engage-able as possible, as understandable as possible. But you should be assembling resources however you can to try to help students understand that they are going to need to be economic actors. That's like almost everybody has that thing. And if they don't start understanding that soon, you are doing them a serious disservice.
31:49Russ: So, I'm going to push back on that. I'm going to bring in an essay that Ben and I were talking about before we started taping. There's an essay running around on the web--it's by William Deresiewicz--I don't know how to pronounce the last name. But it's a rant saying that the Ivy League is just, now, a networking opportunity for bright, inside-the-box people who really don't know how to think any more; they don't see college as a thinking experience, a place to explore identity. And as a result they are missing out. All they become focused on is getting a great job when they get out of school. So, what's your response to that, and how do you--Ben, you recently wrote a very nice post about getting meaning from life and meaning from your job. How do you reconcile the fact that, if we focus on our careers and the 'start-up of me,' we're going to have something other than a commercial, material existence? GuestC: Well, a college drop-out--do I want to comment on this? Russ: Go ahead, Ben; you go first. GuestC: I'm not sure I completely understand your question, Russ. Russ: So, Reid just made the case for--I mean, I try to teach this to my kids. And by the way, one of the things parents can do if schools aren't doing it: They can tell their kids what they do. I thought my Dad all his work life drank coffee and talked on the phone. Actually, he had a job. There was more to it. And I think it's important to talk to your kids about what you do just to give them the experience of what they might want to do and might not want to do. But my question is, if you are constantly thinking of yourself as a brand, and if you see school as a way to enhance your brand, you are missing out on some things. And I wonder if you agree that tension, and if that softens your interest in this sort of-- GuestC: Vocational-- Russ: Yeah, exactly. GuestH: I want to say one thing. [?] GuestC: [?] GuestH: So, Ben is so intense about kind of the going and accomplishing new experiences, doing things. Part of the reason, he's essentially very entrepreneurial; left college--he said, like, it's time for me to get doing things. He himself doesn't brand, whatever--it's: I go accomplish things. Now-- GuestC: I guess the thing--I agree. I've heard this critique a lot. If you turn high school--the high school experience is going to be to bring in professionals to talk about their careers-- Russ: Just to get you ready for business school. That's what it's for. GuestC: Right, right. That you lose out on some kind of intangible experience, as you put it, Russ, exploring identity and reflecting on the deeper questions. I actually think there's a lot of that learning that can happen in the world of work. I think the notion that in the workplace as you pursue a career you somehow have to stop thinking about those questions is actually quite misguided. And, the exploration of those questions can often be more productive when pursued in concert with living in the real world. As opposed to: we are going to lock everyone up in the classroom and read books and then just reflect on what really matters. So I think you can pursue them in tandem, and in fact they can be mutually enriching, in a sense. And you've talked about this in other shows, Russ, how vocational [?] has a bad rap and how that's so problematic given the trends of the American economy. And I think this is one of the [?] contributions in terms of how he thinks about LinkedIn and even users, members of LinkedIn thinking about their professional lives in an expansive way and thinking about how their career shapes their value system and all that kind of stuff. So, I think it's a mistake to think that, reflect in professional life means you can't also reflect on what really matters. GuestH: I 100% agree. And I think whether it's a school context or a work context, the false dichotomy of saying, while[?] focus on the business and economics you can't be focused on the other. So you're teaching students, you say, No, you should be paying attention to what their economic life and their economic identity is. But they can also talk about art and ethics and meaning and philosophy, and those are important, too. And when you get in the workplace, you shouldn't say, Well, I did that in school and now I don't do that any more. And so many of the many interesting meaning-of-life questions come down to people and how humans work together. And what I love about business is that it's all applied psychology, all day long. Because you're working with people to create things; and really is an exercise--I've learned so much more about how people, humans work together through business and real life rather than reading, you know, psychology texts-- Russ: Freud-- GuestH: Things like that. Or Freud or even philosophers. There's something to reading those books, but you just learn so much about so many of those important issues through the world of work. Russ: Yeah. It's an interesting niche that I don't think is being filled by anybody about what you just said: How do you--we all understand, we learn a lot as we get older, just from those experiences. But nobody really tries to organize it other than show "The Office." And that's where we mock it. And watch it unfold in comical, satirical ways. But it's interesting that we don't think about--we talk about lifelong learning but we don't think about ways to organize our thinking about these adult topics other than the occasional book like The Alliance--which we are going to get to in a second. But it's an interesting question.
37:04Russ: Let me ask a different question of both of you, which is: I argue on--I'll say it over and over again because I think it's true and important--that this is in many ways the greatest time to be alive for a large number of people. In that--well there are two things that I see that are so obvious. There's, if you want to learn something you can, in a way that you couldn't do 20 years ago. The opportunity to use information is unparalleled. But the other thing is that work is more exhilarating and more meaningful for more people than ever before in human history. Having said that, there are many people still who aren't part of that process. When you are here in Silicon Valley, we are taping this in the LinkedIn headquarters, it's so tangible that you can feel it. When you walk around, literally you can see and feel how dynamic people and the ideas are here. And the things you hear about. But there's a big sleepy part where there's a bunch of people, especially at the bottom, who aren't getting a good education; can't be part of this because they don't get those computer science skills. Does that worry you? GuestH: Very much. I think that part of the thing that is beholden upon us as technologists, as inventors, as investors, and entrepreneurs, is how do we help create as much systems as possible to give as many people, as broad a swath of people, a shot. We talk about meritocracy, but let's make it real and possible. So that's part of the reason why all the kind of online education efforts, they get connected to the internet, because it's kind of like saying, How do you do that? Well, if everyone has a device or everyone has access to a device, and the device has access to free education, at least--it's not as helpful as being in a classroom is doing it the right way. But at least you are getting them closer to having a shot at it. And as much as we can do on systematic, leveraged ways, we should do. [background speaker, can't make out words--Econlib Ed.] GuestC: It's just a question for me because I never actually debriefed after your panel with Andy McAfee and Peter Thiel and your [?] because this is-- Russ: What was the topic? GuestC: The topic's on the future-- [?] GuestH: Andy's book, which is The Second Machine Age [?-too many people talking at once for me to make out.--Econlib Ed.] Russ: Yeah. His co-author's been a guest on the program and Andy was part of a panel about future of work, and what do we do about folks who aren't--who not just aren't contributing to this; there can never be a large number; but people who aren't engaged in it, connected to it. GuestH: The principle thing--there's many great things in Andy's book. The principle thing though, I think that it's a very good call to action, which is part of the reason I did the panel with Andy, talk to Erik and Andy, but [?], is: How do we then, as [?] to technology being something that moves a lot of jobs out of the workforce--right? Which will happen. That's part of productivity, it's part of [?], it's a good thing to happen. How do you also have technology that also helps create channels of employment? Helping get people be skilled, kind of educational stuff; helping create new kinds of jobs that create paths [?] of people. And we have to think about that, as technologists and inventors, entrepreneurs: how do we create that more? And I think their book is a very good call to arms on that. Russ: Any other comments on that, Ben? GuestC: No.
40:13Russ: Okay, let's move to The Alliance. So it's a new book. It came out, I think, this month? Last month? GuestH: A couple of weeks ago. GuestC: July 8th. Russ: Yeah, and it's also a call to arms. It's suggesting we need a different relationship between employer and employee. So, lay out the case. GuestH: Well, I guess I'll give some maybe more macro context, given the show and your background, Russ. For most of the 20th century, companies in America organized themselves and thought of themselves as families. And if you went to school and landed an entry-level job at a GE (General Electric) or GM (General Motors) or IBM (International Business Machines), you would join the IBM family. And IBM would in effect guarantee lifetime employment and commit to train you and invest in you and the employee for their part would pledge loyalty. Sign up and be fully excited about being a company man. But in the last couple of decades with globalization and technology and those twin forces among many others, IBM and GE and GM can no longer afford to offer that kind of deal. And I think what's most striking about the shift, and we mention this in the book, in I think 1963, an exec at GE said 'employee job security is a prime objective.' You can never imagine an exec today saying employee job security is one of our top corporate objectives. And then in the early 1990s, Jack Welch[?] said, If you want loyalty, get a dog. At GE we have 1-day contracts. Prove yourself every single day or you are out of a job. And that's because GE can no longer afford to make employee job security a prime company objective. The problem with how companies have shifted from family to what we call kind of free agency is that in this free agent, minimalist, laissez faire relationship you are not actually building the trust in relationship with your employees that allow employees to do their best work, or allow both sides to do their best over the long term. And it's that long-term investment that creates innovation and actually creates the kind of adaptation that companies need to be competitive. And so given that shift from family to free agency, the birth of the Alliance was, is there a third way forward, a better path forward, that can involve the benefits of both prior models. Still create an atmosphere were relationships and trust can develop like the family model. Still have the flexibility that companies seek in this kind-of free agent model, whereby you can move talent around, fire talent, hire people with different sets of skills in order to adapt to a global world. That's the macro context for why we felt we needed to do this book now. Set forth a new framework for companies for this modern era. GuestH: I think the thing that I would add to that is, people frequently--the real baseline of the Alliance is recognize the fact that all industries, all companies are heading more to a place where a person works at a company for a while and then goes and works at another company. That's undisputable trend, not just the United States. It's true in Japan, Korea, Europe--everywhere. It's true in China. And so, the question is: Given that's a fact, how do both sides play in a way that's great for both? How do you take that fact and how do you make that an important part of the way you actually get good results? And so, what we said is, the problem is what's happened over the last 10 years is it's just not talked about. So you essentially have these lies of omission, where in that conversation--people go, well, I didn't know [?] you want to work, so you might go work somewhere else, but I'm not going to talk to you about it. I might work somewhere else or you might not have me working here, and we're not going to talk about it. And so therefore with a lot of omission you have a decrease in trust. And a decrease in trust means a lack of investment, means a lack of ability to coordinate, means a lack of productivity. And so the question is how do you get back to trust? We have those open conversations. And we can be adults; we can have open conversations about this. And then that sharing of mutual interest now allows you to invest in the future, and allows you to actually know how to play forward. Russ: My feeling is, the way a lot of companies cope with it now is they just pretend it's not there. We do that in marriage, too, of course. We all I think have this ideal--which I'm in favor of--that we're going to marry for life. It's not a very realistic ideal for most people. So it's an interesting question, whether you should confront that or not. Most people would say, no, you want to make sure there's a likelihood that it lasts. But in the workplace, where we don't have, I think, the same costs and benefits of divorce that we do in the family, it's absurd that we don't talk about it openly, and plan on it and act accordingly. So what's your solution? You have a simple idea to start with, but then it's got some rich components. GuestH: So the book, what we detail in The Alliance is how to think about this as a manager. Now, obviously employees and people interested in being managers can also find the book useful. Or just students of companies. But it's basically to say, the managers should start a conversation which says, what our compact is, is we help you be lifetime-employable. We help you with a tour of duty, a set of projects that help transform your kind of work and career prospects and economic potentiality. And in return, you invest very seriously in the company. And we agree this is a project over a realistic time frame, generally speaking 2 to 5 years. It can depend on the industry and the region and the country and all the rest of that stuff. And, we will have open conversations about it, where we know that part of what happens in a tour of duty is the company may say, well, that's not really working out; we're changing directions. Or the employee may say, I've got this other offer from this other company or this other thing I want to do, and that's a perfectly fine thing. And both sides recognize that it's honorable. But, that both sides also--and we wrote a post about this called "The Right of First Conversation"--which is to say, look, part of our loyalty to each other, about being on this team, because it's 'team' rather than 'family' together, that we will then say, we'll talk to each other first. Before making a decision we'll talk to each other and say, will we do another tour of duty together? Right? So that we can have that kind of conversation. And we detail a bunch about how managers can have the conversation, about why managers rather than employees should start it, and how paradoxically, because people are always worried about retention, being open about this actually creates longer retention. Because people feel that you are looking out for them and you are having a work environment of trust. Russ: Yeah, I always find it strange when a company gets alarmed that its employees are getting job offers. That should be a glorious thing, which, as we understand, sometimes you would encourage your employee to take another opportunity. GuestH: Yes. Russ: And what you talk about in the book, which I find so useful and powerful, that it's actually good for the company. Not because you're glad to get rid of the employee, but because it's going to lead to other connections that are useful. GuestH: So, part of the thing, again, once you realize that what happens with this change in work, workforce, is that all companies have a large alumni base of people who are still very active. And you spent this time together. You hopefully built an alliance of trust. Well, why not have that trust still be active? Why not still be able to help each other, still have a relationship that's going? How to you have this [?] not lifetime employment, but lifetime relationship that can help you with network intelligence, what's going on with industries that can refer customers, that can refer employees. Now, think only what happens when companies do this, they say, great, since you worked here, you should do that for me. A relationship is bi-directional. So in order to have the employees, the now-alumni, still doing that, you should be investing in your alumni. And part of what we talk about is, here's how we keep the relationship alive. Here's how you help invest in them; here's how they feel that a relationship is still active, so when they go away, this piece of intelligence, this is useful for the company. Or this person, they may want to work there. They go, I have a relationship; I should help facilitate that connection for the manager, for the company. GuestC: It really is a little known secret of [?], I think, which is how porous the walls are between a given company and its peer companies. And how active the intelligence flows from alumni back to companies and employees to employees at other companies. Because all the companies in the Valley are trying to adapt as quickly as possible. And to do so you want information about a great new strategy for uploading address books more efficiently or a better way to do search engine optimization, or you want to get a tip on a great new engineer that you can hire. And so, so much of the culture and policies and philosophies are structured on maximizing the intelligence that flows back and forth. And yeah, there are some risks that emerge from that. But we argue in The Alliance is that you can actually coach your employees and develop a framework for enabling them to be powerful actors in the ecosystem both while they are employed, and then when they inevitably leave some day, to still be excellent sources of information back to you. And of course on the condition that you as the employer need to help them in whatever their current problem or challenge is. GuestH: Yeah. The alliance continues.
49:46Russ: I can't help but think of a couple of things. One is the portrait of Steve Jobs and Apple and Walter Isaacson's book. Which is very different. What are your thoughts on that relationship there? It's much more paranoid. People are not supposed to talk about anything related to the company outside. It's very unporous. GuestC: Jobs himself was probably most committed to network intelligence than anyone. He frequently met with founders and folks at other companies all the time. And so-- GuestH: [?] GuestC: But one of--[?] GuestH: He really took on the burden of intelligence himself. Perhaps to an extraordinary degree for a single executive. Where he was constantly wining and dining founders and folks at other companies, gathering intelligence and bringing that back to Apple. The precise relationship he brokered with his employees was rather unique and I think different from most of the Valley. GuestH: Yeah. And actually, frankly, my view is, as amazing and as strong and as transformative as the company Apple is and has been, it would be stronger if more of the employees were actually more connected to the other things that were happening in Silicon Valley. Understanding what's going on with cloud services, understanding what's going on with search. GuestC: As an Apple alumn yourself, you don't have much ongoing-- GuestH: Yeah. They don't actually do anything for alumni. There's no real connectivity tissue there. And I think you can see that in an instance of their Maps launch. If they had actually had connectivity to understand all these kind of cloud services, how to play and what the requirement was and all the rest of the stuff, I think people would have been much better served in the launch of Maps. As just one instance. But there's a bunch. Russ: Another thing I think of when I hear about your idea, is the employee tells his boss, I've got a new opportunity; I'm afraid I have to take it. And the boss says, well, we'll be ushering you out of the building with a security guard by you; you have 20 minutes; empty your desk. You are really talking about a different kind of exit relationship. GuestH: Yes, because the question is it's actually valuable to have a relationship with them, post their employment. Now, if you think something was wrong, if you have to do an emergency circumstance--there are still some cases in which you would do that. The question is, what kind of ongoing relationship do you want to have with them. And frankly you actually would rather have, so the whole like we want to issue up[?], that causes your other side to be brinksmen. So they come in and give you, oh, by the way, I'm taking a job in two weeks. You have no transition planning; you have no continuity. You'd much rather have the, hey, come and talk to me months earlier. Spend time, like we detail with David Han[?] in the book, spend time kind of, how do you make that transition work well? Far better. GuestC: Because really the question for companies is how can you invest over the medium and long term? And to invest, you need to have some predictability about people being around. And even if they have an opportunity, they'll really make sure the transition is smooth in order to enable the ongoing investment. And so companies historically, in the family era, could count on all their employees being there forever; and so they can make these really long-term human-capital-type projects work. But in the current era, companies are locked into that. We even hear from our job people--they don't want to do any kind of training program; they want to slice professional development budgets because we don't want to train them and then have them leave the next day. And so, if you can have an open conversation and have trust, whereby both sides can commit incrementally toward a series of tours of duty, then, you know, I'll invest in you the employee; I'll put you on a long-term project; I'll launch the project; I'll even train you. Because I know that you're going to stick around. And if you have to abandon the tour midway, I know you'll come to me as early as possible and we'll collaboratively work together to make sure that the project can endure. Russ: And of course you might come back. Which people often forget when they burn those bridges the way they do. GuestH: Come back, refer someone, refer a customer. It's a networked age. Russ: It sounds great. One of the challenges is, it seems to be a little bit monitoring-intensive. So, one of the challenges--when I tweeted about this interview, somebody said: Make sure you ask Reid and Ben how you get people to take the long-term interests in the company into account if they are only serving a two-year term of duty. And when I thought about that, I thought, well, you've got to interact with that person to make sure that they are aligned with the longer term interests of the company. What are your thoughts on that? GuestH: Well I do think it's part of, like, some parts of what we are describing, has historically been done for stars who are on rotations, within a company that are being grown for management, and so forth. And our recommendation is to bring that through as much of the company as possible. But to make a collaborative project between the employee, as opposed to like the paternalist--you know where what we have, a training program, it's like no, we are collaborating together. And you may come and say, hey, I should go do this training or class or I should get this skill--I think this is kind of something that is going on in the industry, and we should collaborate together. So that takes a lot of that burden down, in terms of the management side. The second thing is, is that actually, in fact, look: Having an active conversation about what the future of the company is, what the future of the individual is, actually is good management. If you are not putting time into that, you know, you have a different, serious problem. The techniques in The Alliance are a way to do that in a high trust, high honesty, high effective way--a high effectiveness way of doing that. Russ: We can write in there--one of my favorite lines in the book: "Great companies have specific missions that differ from those of their competitors." How do you get employees to buy into that specific mission? GuestH: Well, part of it is, everyone's been, it's been [?], like you were earlier for the office and companies that have said, We're the greatest technology company in the world. And you're like, okay-- Russ: Now what? GuestH: What's that? And so, part of it is, you have some specificity about, for example, at LinkedIn, it's collecting talent opportunity. Or realizing the, essentially the economic graph, which is all economic skills, opportunities, deals. All realized and visual space that you can navigate much more effectively. And when you say, Well, this is what we're about; and we're not about [?] because to answer the question is also to say what you're not. And so, when you do that, people come and visualize it. They can get behind it. They can go, okay, this is power identity, this is real. This isn't just vaporware. It's not a just empty slogan. GuestC: There's an additional nuance to this privy[?] alliance, because the phrase in your question, Russ, was revealing. You said: How do you get employees to buy in to the mission. And actually I think one of the themes we are navigating here in The Alliance is both trying to get employees to sign up for an inspiring company mission. At the same time, you the company are trying to understand what that employee's personal mission or vision is in their own life. And trying to define it toward the view that it's both of those missions at once. Right? So it's not longer: Subsume yourself toward corporate mission--rather than: Hey, maybe your long term vision is you want to start your own company someday. Or you are really interested in some other field in addition to this field. So you are going to sign up for a tour because you care about our mission, sure. You really care about your mission. And we're going to make sure that this tour of duty helps you get closer to being able to fulfill that mission. But it's that recognition of the fact that there may be some difference. And that you are only looking for sufficient alignment, for a specific tour of duty. I'm sure there are lots of employees at LinkedIn who find connect talent[?] with opportunity at massive scale really inspiring. And there are probably other employees who say, That's inspiring, but I'm actually really passionate about something else, and I'm doing a tour of duty here because I'll learn this specific skill. That I'll then take with me when I pursue that other mission. And that's actually totally fine. GuestH: Totally fine. Although, by the way, part of what you do when you say, when you say, Look, we understand this is a tour of duty with this mission. Of course it should still [?] have some connectivity to the mission. Even though there is other mission that they have much more connectivity with.
57:48Russ: In many ways, the manager then becomes a counselor, a mentor, more than just: How do I get the most out of this person? That's what I really see as the focus. Is that correct? And managers maybe aren't so good at that. I'm not sure they are good at the other thing, either. GuestH: Well, I think the language we suggest as Allies, and it may include mentor, mentorship. But the alliance can actually in fact be a lifetime alliance. And part of reason to get good at it, to manage that way, is because that lifetime alliance can improve both you--you as the manager--and the employee. That can be massively beneficial over a career. And so you do have to learn the skills of being a good ally. You do have to learn the skills of preserving that trust. And for example not just showing, well, I only care about what you can do for me here and I don't care otherwise, because otherwise you are not a lifetime ally. But you do need to have those. And we think that the people who have those skills will be much more successful. Russ: You believe in non-compete clauses and contracts. Which is a clause that says when I leave my company I can't go work for a competitor. GuestH: Broadly no. It's one of the things that helps benefit Silicon Valley. Because the usual non-compete clauses are actually not applied to Giant Company A and with Giant Company B. They are usually applied to the startups. They are usually applied to forking off. GuestC: And they are not enforceable in California. GuestH: And they are not enforceable in California, broadly. Little nuances. And so I actually think that the kind of the predatory raiding is bad. Like the, oh, I go hire a whole department or that kind of thing. That kind of thing should be still penalized. But the notion of [?] an individual, I can work where I best think I should work, I think that's part of what we are. That's a good economic system and that's part of what's good for the-- GuestC: It helps everyone run faster. Per one of Reid's [?] petition. And how maybe a competitor today on certain thing--maybe Amazon, Netflix case today is the most extraordinary case of Amazon being head on with instant video against Netflix streaming, and yet Netflix running their entire business on Amazon AWS [Amazon Web Services] servers. Russ: AWS being Amazon Web Services. GuestC: You know, all the Netflix back end technology is on Amazon servers. While at the exact same time, Amazon in a separate part of the company is launching a video to compete with Netflix. Russ: Yeah. GuestC: And that idea that you can actually cooperate on things and compete on other things is really powerful but complicated idea that many people miss. And the effort to bash competitors or to be worried over a fact that an employee is now working at a competitor. Russ: Yeah.
1:00:28Russ: Given that we live in a networked age, how do you think the Internet is doing? Do you think there ought to be less government or more government, with respect to taking care of the Internet? Net neutrality? Whatever is the next big thing? GuestH: Very positive, net neutrality. It allows a lot of entrepreneurial innovation. Actually creating, you know, kind of ask for permission rather than forgiveness, is a real calling of challengers to incumbency. So I think net neutrality is good. I also think that the, the threats of the Balkanization of the Internet are really bad. I think it's bad actually not just for entrepreneurs but I think it's bad for consumers and countries. Of course, a decreased trust environment from Snowden and the NSA [National Security Agency] is a seriously bad thing; and I understand that, because people say, well, maybe we should Balkanize the Internet. But actually I think having a more global Internet is generally better. So, I think the Internet has been doing pretty well. And part of it is we should learn from what are the things that have done well. And have gotten us to a really good place to make sure we preserve this. Russ: Comment, Ben? You want to add anything? GuestC: I think it's inspiring to see what Google and Facebook in particular are doing, in trying to bring connectivity to parts of the world who are not yet connected. And I believe, I have not seen the latest stats for how many people are online, but I believe there are more people coming online and have been online. Right? And so, it's still very early days in terms of what, this network world vision that we've been talking about in this episode. I mean, it's so very early on to see how that will fully play out when you have billions more people participating in these networks together. Russ: So, you are both involved in venture capital, and not just LinkedIn, and we recently had Sam Altman on the program. And he talked about, he talked about, the next big thing. We talked about health, wearables, Bitcoin; and then he talked about energy, where he thinks we need to--where he thinks there are big opportunities. GuestH: Nethorium[?] Russ: He didn't talk about it. He did, indirectly. He talked about nuclear power. Um. Where do you guys thumbnail on the next big thing? Are these the next big thing? Any of these things? Or they are kind of lay as [?] GuestH: I think the people overemphasize--I think wearables is interesting. Broadly. Love Sam. Agree with all that stuff. Russ: Well, those are mine. Sam agreed--he said health was big, wearables were big. And he thinks BitCoin--he's still skeptical. And then he added energy. GuestH: Yeah, uh huh. So, I think BitCoin's very [?] potentially superinteresting. I think wearables tends to be because it's a little, people are going to visualize it a little bit more. I think there'll, it'll be a slower process than people think, although it'll be important. I think that things you continue to add that in terms of things like the data revolution in terms of how what is called, quote-unquote, "big data" transforms the applications of the world, and like a simple one is like Waze, which is like traffic routing. Russ: W-A-Z-E. GuestH: And that's just, big data creates applications that has you do navigations [?] like one up that I think is lost in that list is the intersection of biology and computing. Personalized medicine. Which medicines really work for your genetic type. What things are actually going on. I think that is--and it's both two directions. It's how do we read and understand, but it's also how do we make. And I think that's a massive transformation. Russ: I agree. GuestC: Yeah, for me I want to add that on the [?] and the medical team is still cognitive science. We still know so little about our brains' consciousness. And I'm very intrigued, and Reid has heard me talk about this for a couple of years, about cognitive superpowers. Russ: Well, Lucy is coming out, I think this week or next with Scarlett Johansson. She uses more than 10% of her brain. So she's got cognitive superpowers. GuestC: I saw a billboard for that. Russ: That's what it's about. She's-- it's just around the corner. GuestC: Yeah. Very exciting. Moving to a movie near you. Russ: Seriously: what you do you think is coming there, in terms of cognitive skills? GuestC: I think I'm very--I think one of the most interesting ethical issues that are planned out in classrooms, on Wall Street, and increasingly in Silicon Valley, are the use of very easy-to-obtain drugs that help you focus, that help you stay up and not sleep. And I just think that's Chapter One in a very long book of drugs to come and techniques to come that will allow us to hack our brains. And do all sorts of things. And I think, for people who are driven and ambitious, they seem to be willing to pay any price, both monetary as well as to accept a certain amount of unknown side effects to increase their [?] ability to think and to do. So, both from an entrepreneur perspective, both as their way to [?] on that front and then also from an ethical perspective, how are we to [?] even from an inequality perspective? Imagine if people who have the money to spend $200,000 a year, taking drugs that make them think faster, that make them think more creatively, that make them only have to sleep 3 hours a night, with no side effects--what is that going to do in terms of the inequality question? I think really complicated, really interesting, and we're basically starting to live it now--I have friends taking modafinil[?] two or three nights a week. Which are the drugs that airforce pilots take when they start missions in the middle of the night to basically stay up for 24 hours. Russ: So it appears. GuestC: So it appears. But even longer-term [?] side effects. Russ: So far. I have a friend who is in that sphere. And I'm a little worried about him. Because he says, studies show no side effects. How do you know? GuestC: Yeah. Yeah. Yeah. But it is this steroid era in baseball. Of course. Russ: Yeah, I'm thinking the-- GuestC: The cognitive side of that is far more interesting, far more important in terms of society. Russ: So basically the chess championship is going to be a test for modafinil[?] or whatever it is called, to make sure you are clean. GuestH: I'm surprised there aren't any tests [?] any chess tournaments and all that. Russ: I think [?] it'll be a fascinating, I think that line's already been so blurred, handicapped. A person studies a fiew hours a night. Where do you draw the line between what's called fair and unfair? I think it's going to be very difficult, I think. And it's all going to happen.
1:06:58Russ: Last question. What's the next tour of duty for Reid and Ben that you can talk about? GuestH: Collectively, or individually ...? Russ: Individually. What do you think you are doing now, and what do you think you are going to be doing? GuestC: For me it's obviously spreading the word about The Alliance. And helping propagate that around the world. Russ: What I'm here for, Ben. I'm here for you! GuestC: One of the things Reid and I, and we both have been spending a lot of time thinking about the future of news journalism and information: I'm very--these sorts of podcasts are obviously just sorts of the beginning of what would be a large reinvention of how people consume information. And gets back to back to our discussion of how the ideal high school classroom: Is there a way that you can better empower people to get information about what is happening in the world that is actionable? That can allow them to improve their life as it's lived on a day-to-day basis and improve the world? Is there a business opportunity to do that? Is that just a philanthropic opportunity to blow off all the existing journalistic institutions and create something new there? That's something that's really interesting. So, we've been spending a lot of time thinking about those sorts of ideas. [?] GuestH: And one of the benefits I have of being an investor is actually to pursue additional tours of duty that are, synchronous. So, I have a whole bunch of stuff I'm doing on LinkedIn, bunch of stuff I'm doing with Brailog which is a venture firm, but we could use things with Ben. I've just recently announced an investment in Xapo, which is this BitCoin wallet. Because BitCoin really attracts. So that's starting a tour of duty as a poor observer. And that, and, so for me I have a number of concurrent tours of duty because of the scope of what I'm doing, however it is. Russ: And I'm sure you are only sleeping three hours a night. GuestH: A few more.