Reid Hoffman: So what we would do — the business model for PayPal would be that we would charge people for taking credit card payments and that we would essentially be their merchant of record, even though… So usually as a merchant you establish your own relationship with a bank. By being a master merchant, we would have merchants who were not large enough to establish a relationship with a bank, but actually would have a direct relationship with PayPal. And PayPal would have the relationship with the bank. The second day, because Max, Peter, and I were, “Well, if this blows up, we’re going to have one of the spectacular Silicon Valley failures on our hands.” So we might as well do our next business together. So let’s each of us talk and say, “What is our best alternative idea?” and the early germinations of LinkedIn — some early components were one of the things I was working on. Because I had concluded from SocialNet that actually, in fact, your professional identity was really important. It had an effect on what your economic opportunity was. That everyone should have a public professional identity. It would help transform their work life, whether or not they’re an employee, or an entrepreneur, or a lawyer. All these things that having an identity would be really important. And that this could be a driver for how you lived and worked your work life. And so that was the idea I presented. And then PayPal worked out and so, actually, I didn’t go back and think about that idea until after we sold PayPal to eBay. I was like, “Well, what do I want to do next?” Because I now had what I was calling my ransom, which was enough money, a salary, so I could go back to being a public intellectual and writing books or something if I wanted to do that.
I realized the pattern of the consumer Internet company was something that was actually just beginning. Like the Silicon Valley had gone — the typical pattern for Silicon Valley is you all run to one technology trend and call it networking equipment or enterprise software or clean tech software. And you all do that, and then you run to the next one. And so they had all thought consumer net was over. And I was like, “No, no, it’s just beginning and there is decades of interesting companies and work here. And I would like to participate in those. I would like to invest in them. I would like to create them. I think one could have a massive change of the world through these companies.” And so I invested in such companies as Friendster and Facebook and Flickr and a number of others, Zynga. And then I started LinkedIn. And that was because this whole notion of how networks can be a platform for identity and for applications that help us navigate the world in a much better way. That was what I had started this whole thing — you know, my whole path in the Silicon Valley with. And now was at least a time, if not the time to really do that.