Social Networks Transform World: Hoffman
Special to CNBC.com
If you have a company, or an idea for a company, that can make an impact on people using social media, Reid Hoffman wants to talk to you.
Hoffman, a partner at venture capital firm Greylock Partners and the executive chairman of LinkedIn, told CNBC Friday he sees a lot of opportunity for "great businesses" that create social networks that "can change people's lives."
"We always look for great entrepreneurs that bring us interesting ideas," said Hoffman, author of "The Start-up of You" and a founding board member of PayPal. "The things that I tend to look for are networks, platforms and marketplaces."
One example: Airbnb, a company started in 2008 for backpackers and others traveling on the cheap who needed a spare couch to spend the night. It has since expanded to rentals of everything from a couch to an apartment to a castle, said Hoffman, who likened it to "the eBay of space."
"It’s a marketplace that transforms the world," he said.
Not everyone can pitch a Zynga, on whose board Hoffman sits. There are only a "certain number that you think have a chance of being massive and you can help," he said.
That's why the person who gets his interest and his financing "has to be focused on building a great product. They have to have a drive for how it gets to hundreds of millions of people, an insatiable curiosity for learning…It has to be a unique idea that can fit a role in all of our lives."
Unlike the tech bubble of the 1990s when companies went public on little more than descriptions of what would happen in the future, the new companies such as LinkedIn , Twitter and most notably Facebook have a good revenue stream and cost structure.
As an investor "we try to be focused," he said. "It’s not to say you’re always right in placing bets. But If you’re right about couple of key ones everything else works."