×

Reid Hoffman has billions of dollars and one of the best networks in Silicon Valley. Here’s how he’s using them to take on Trump.

  • One of Silicon Valley's growth areas in 2017 is politics, and Hoffman is now its most active investor.
  • Like many in the Valley, Hoffman's pique with the White House began almost immediately after Election Day.
  • Hoffman always felt Clinton was more than qualified to run the United States.
Reid Hoffman, co-founder and chairman of LinkedIn, Sun Valley conference in Sun Valley, Idaho, on July 7, 2016.
Michael Newberg | CNBC

It began with a simple card trick.

Reid Hoffman had grown tired of listening to Donald Trump trash talk Hillary Clinton and his ever-growing list of political foes. So the LinkedIn co-founder cooked up plans during the presidential election to challenge Trump at his own game — a card game, to be exact, where players could compete to outdo each other in crafting the most offensive phrases possible.

The release of "Trumped Up Cards" in the fall of 2016 marked a new turn for the affable, pensive Hoffman, who soon embarked on something of a media blitz, including a rare appearance on the "The Daily Show" to tout the game. The effort was really about trying "to help people understand what I believe was the absurdity of the Trump presidency," Hoffman recalled to Recode in an interview this August.

In 2017, though, there's nothing absurd about it: Trump now sits in the Oval Office. But Hoffman still isn't ready to allow the president to have the last laugh: He's gearing up to spend what could turn out to be hundreds of millions of dollars on campaigns, candidates and causes that can fulfill his vision for a better future for the United States.

Or, to translate it into the language of Hoffman's own industry: One of Silicon Valley's growth areas in 2017 is politics, and Hoffman is now its most active investor.

Though it initially seemed like a lark, Hoffman's Trump-focused card game grew into an early avenue for the LinkedIn co-founder to donate to the American Civil Liberties Union, which is aggressively fighting Trump's agenda in court. Recently, Hoffman has funded more substantive endeavors like Win the Future — an attempt to rethink the Democratic Party and how it drafts candidates — which he created with Mark Pincus, the co-founder of gaming company Zynga.

Newly, though, Hoffman is eager to open his checkbook for state and federal office-seekers, including for critical races in Virginia. There, he's already spent millions of dollars and tapped staff on the ground to study the state's local elections, hoping to fund get-out-the-vote initiatives and other ideas that might work elsewhere in the country — all the while nudging its Republican-dominated legislature in the direction of Democrats.

Like many in the Valley, Hoffman's pique with the White House began almost immediately after Election Day. And the rift between Trump and tech is likely to widen again come Tuesday, when the president is expected to terminate DACA, a program that prevents children brought to the United States illegally from being deported. The widely rumored end of those protections led Hoffman and more than 300 other business leaders to rebuke the White House publicly last weekend.

But what sets Hoffman apart, said his friends and political allies, is his deliberate, well-funded — and, to some, secretive — campaign to apply his smarts and investing acumen toward seeding a national political movement.

"I've seen him spend a huge amount of his mental cycles and time on politically related activities, from helping start new groups to [backing] candidates ... and really trying to be thoughtful about how he can contribute to the resistance," said Sam Altman, the president of Y Combinator, another techie who has become politically active since Trump's victory last November. "A lot of people are talking about this, but they haven't been allocating their time and money in the way [Hoffman] has."

The world of big-money politics, of course, is difficult terrain. For years, Democrats and their allies have struggled to match the savvy aggressiveness of Charles Koch and David H. Koch, the right-wing industrialists whose checks have become the seed corn for conservatives' greatest victories.

Hoffman and his lot may bristle at any comparison to the Koch Brothers; in fact, Hoffman recently visibly grimaced when a person close to him suggested he become "The Koch brother of the left." (His aides stress he's far more centrist, anyway.)

But Hoffman's allies still agree their geek-god, advice-doling friend is perhaps the only tech figure right now with the rare combination of cash and connections to become their political operator — providing the fuel for efforts to stop future candidates similar to Trump, if not Trump himself, in their tracks.

Even Hoffman gets it.

More from Recode:

"I got past my dismay in November, and in December, started thinking about my responsibility as a citizen," Hoffman told me. "I tend to think when you've been lucky and fortunate enough to make some money, you have a position of power, it's like Spider-Man ethics — with power comes responsibility."

For months, he had been quietly advising Hillary Clinton as the Democratic presidential contender formed her views on technology.

In Clinton, Hoffman had found a sharp, seasoned candidate receptive to his ideas, including a desire to rethink U.S. education. And in Hoffman, the former secretary of state had embraced a walking, talking rolodex who could connect Democrats to the well-heeled tech types they needed to fund their bid for the White House — and, eventually, support Clinton's administration.

By election night, Hoffman figured his work was just beginning. He had even spoken to Clinton's team about sliding from his loose advisory role during the campaign into some sort of position aiding her expected transition to the presidency. It would have been a powerful perch, affording Hoffman a unique chance to shape an Oval Office by helping to hand-pick some of the very people who would compose and advise it.

To his peers in Silicon Valley, such a move might not have seemed like an incredible upgrade. Often wary of the stuffy suits of Washington, D.C., the tech industry tends to view its own backyard — however solipsistically — as a much more powerful economic epicenter with the real, true power to rewire the whole of the country.

Hoffman had benefited from tech's rise, already enormously wealthy, as the founder of seminal companies like PayPal and LinkedIn, and as a leading investor at Greylock Partners — a firm where he and his team profited considerably after an early bet on Facebook. He is now worth more than $3 billion.

But his cachet transcends cash: He's the Valley's fountain of advice, a big-ideas type, a former student of philosophy at Stanford and Oxford whom the New York Times dubbed the "startup whisperer" in 2011. Many in the Bay Area see him in the mold of the late Bill Campbell, the longtime tech executive who was called "Coach" for his role advising tech moguls.

In politics, Hoffman had bigger aspirations last year than merely funding the next hot app. And like many in the tech universe, Hoffman assumed on election night he would be celebrating Clinton's victory. He planned to exercise and then meet his wife, Michelle Yee, who was watching state-by-state returns with a family friend.

"I got out of my workout, and I had this text on my phone saying, 'Come over to our friend's house,'" Hoffman recounted to Recode. "And I was like, 'Oh, this has got to be bad news'."

The night quickly devolved from bad to worse for Clinton, and it soon became clear to Hoffman that he certainly would not be celebrating — or whispering into the president's ear, either. He and his wife went home, he said, and "watched the first episode of the first season of 'West Wing.'".

The early 2000s political drama that reassured Hoffman last fall now seems like obvious fantasy compared to the tumultuous Trump White House, where the president's penchant for conflict over inquisitiveness is evident in his ever-souring relationship with the tech industry.

Initially, though, Trump tried a reconciliation of sorts with the help of Peter Thiel, the only major tech titan to back the president before his election. Before inauguration, Thiel even officially joined Trump's transition team — assuming the sort of kingmaker role that his friend, Hoffman, might have held if the election had resolved differently.

And as one of his first, major acts, Thiel organized a peace ceremony with the leaders of Apple, Amazon, Google and other tech giants — companies Trump had mocked on the campaign trail. With noses pinched, those leaders publicly offered early, though tepid, praise for Trump — and even pledged to work with him. But their uncomfortable truce lasted mere weeks before the two sides began battling over issues like immigration and equal rights.

Hoffman didn't attend that meeting, but his absence wasn't too surprising: The president-elect wanted to meet only with those he considered major chief executives, and many didn't receive an invite. (Just ask Twitter.)

Then again, Hoffman had never really been the type for that sort of public political showmanship. Despite his prominence in Silicon Valley, he long maintained a much lower profile in matters of government, remaining more of a quiet political confidant. In easier times, Hoffman dined privately with former President Barack Obama during his few trips to the Bay Area. And while Hoffman later donated $1 million to Obama's reelection effort in 2012, he never became a public campaign trail surrogate for the now-former Democratic leader.

Four years later, Hoffman didn't begin the 2016 presidential race with a full-throated, shout-it-from-the-mountains endorsement of Clinton, either.

"Part of it is, it is a little confusing as to how this is all going to play out. I say it is likely that I'm going to come out, depending on how you read the tea leaves, supporting Hillary," Hoffman said at a conference in 2015, as Hillary Clinton and Bernie Sanders duked it out for the party's nomination.

"But to some degree it is kind of like, okay, it hasn't yet been important for me to get involved," he continued. "The way that I tend to get involved is: Do I think that I can make a big difference? If I think I can make a big difference, I get involved."

To be sure, Hoffman always felt Clinton was more than qualified to run the United States. He matched his confidence with an early donation and quickly found himself in contact with her campaign chairman, John Podesta, talking about ways to help her administration on "Day 1," according to hacked emails published by WikiLeaks.

By the spring of 2016, Hoffman even had a hands-on unofficial role as part of a close circle of tech thinkers who were helping draft Clinton's tech policy platform. Those who participated said Hoffman focused much of his time on education.

Automation and the impact of gig-economy-style companies — the stuff of Greylock's own portfolio — long had concerned Hoffman. And he had been particularly worried about the way U.S. schools prepare students for the workforce. At one point, Hoffman had argued that college degrees had become outdated in the fast-moving digital economy.

That desire to map the skills in greatest need in the U.S. job market — and to rethink work altogether — helped form the bedrock of LinkedIn's own push to start crunching the data it had amassed on its millions of users, which it ultimately shared with Obama and the U.S. government. With Clinton, Hoffman saw a similar opportunity to shape an administration's thinking before it even became an actual administration, sources said.

The resulting 14-page tech policy platform that Clinton released in June 2016 mirrored some of Hoffman's beliefs in STEM education and other programs meant to spur entrepreneurs. "I think he wanted to bring his private-sector, personal experiences to bear," Sara Solow, the top policy adviser for Clinton at the time, told Recode in an interview.

Almost eight months after Trump first stepped foot in the Oval Office, Hoffman has grown increasingly fearful about the state of U.S. politics.

The often soft-spoken entrepreneur grew fiery when he started to think aloud about the implications of the new leader of the free world: "[Trump] claims he has a tremendous medical plan; he has no medical plan. He was relying on Republican congresspeople, who also mostly have been campaigning against Obamacare ... as opposed to having a plan of [his] own. [Trump] says, 'Hey, I'm going to do these great trade deals,' but doesn't understand how the modern trade [system] works. He wants to do the presidency as a whole reality TV show, not exactly as a serious theory of governance."

We spoke in August, weeks before reports emerged that Trump might end deportation protections for children brought here illegally — called Deferred Action for Childhood Arrivals, or DACA. It's a program that Hoffman, and others in his camp, have vigorously defended.

As the threat of Trump has matured, so have Hoffman's political endeavors — beginning with his new efforts to find and fund solutions to some of the country's most intractable political ills. It's a role well-suited for him, his friends and co-workers say, as the people person of his own industry.

"As with any startup investment, I think he's making a decision based in one part on the people, the specific people, and his belief in people," said Matt Cohler, a former LinkedIn executive, who is now a prominent venture capitalist at Benchmark.

That transcends political party, Cohler added: "I think he's much more focused on the positives of what needs to happen to ensure the country remains healthy, as opposed to being really politicized."

Still, it's who's in power that counts, which is why a key early target for Hoffman is the state of Virginia. Its statewide election this year will determine whether Democrats retain control of the governor's mansion and dislodge the Republicans who currently dominate the legislature. In addition, Virginia is in the midst of a major battle over the invisible lines that compose federal congressional districts. State lawmakers play a major role in ratifying that redistricting plan, which is why the upcoming 2017 election contest is all the more crucial for Democrats.

But turnout there and elsewhere in the United States always tends to suffer in years when a presidential candidate isn't on the ballot. Meanwhile, the same political ills that pervaded the last election — like fake news — certainly haven't diminished in resonance this time around. That's why Hoffman and his team began discussing in March how to use Virginia as something of a tech test bed, said Dmitri Mehlhorn, a well-wired political strategist who's been helping the LinkedIn co-founder with his political activities.

In Mehlhorn's eyes, Hoffman had a particular goal in mind: "How can we take scale-up expertise from Silicon Valley," he recalled, "to create platforms that make American democracy more robust, so that after 2020, we are resilient against fake news, we are voting at high levels [and] we are voting in an enlightened way?"

To start, Hoffman has shelled out about $1.4 million so far to a series of groups including Vote.org and Democracy Works, which aim to help get voters — regardless of party — to the polls on election day. Another slice of his early aid has gone to Higher Ground Labs, sources said, a collection of Obama's former digital advisers who are trying to help their party take advantage of new, cutting-edge campaign technology.

With these and other projects, Hoffman's allies told Recode, it's all about trial-by-error. Much like any traditional tech investment, there's always a chance the ideas might not work — in Virginia or elsewhere — but nonetheless the potential that they could instead pay dividends at a critical time in U.S. politics.

"The thing that Gen. Mattis said to his troops" — "hold the line" until America becomes less divided — "that's part of what we're talking about," Mehlhorn said in an interview, referring to the secretary of defense. "How do we get society working again?"

Meanwhile, Hoffman has doubled down on Democratic causes in the state, opting earlier this year to write a $50,000 check to Win Virginia, a political-action committee run by former Congressman Tom Perriello, according to local campaign finance disclosures.

Executives like Hoffman "understand this is the best beta test for anything next year," Perriello said in an interview. That's when many lawmakers in the U.S. Congress, currently controlled by Republicans, are up for reelection, and Democrats hope they can recapture the House of Representatives.

Nationally, Hoffman has focused his early 2018 efforts on another body, the Senate, where Democrats are at greatest risk of losing seats in states that Trump carried. Chunks of the total $76,000 he's donated at the federal level since early January 2017 have landed with candidates such as North Dakota's Heidi Heitkamp, Missouri's Claire McCaskill and Pennsylvania's Bob Casey, federal records show.

It's important since Trump has specifically targeted McCaskill. He visited her home state last week, pledging to help oust her, while unveiling his short-on-details tax plan. Heitkamp is also vulnerable: She's probably the only Democrat who could even compete in unfriendly territory like North Dakota, and without her, the party's already difficult task of taking back the Senate gets even less realistic in 2018.

Hoffman's support isn't exclusive to Democrats: Since the beginning of 2017, he has contributed $10,000 to a fund to help Massachusetts Republicans and another $1,000 to Charlie Baker, Massachusetts' Republican governor. Soon, Hoffman also hopes to recruit his own candidates, potentially through another one of his investments, Win the Future. Together, he and the group's founder, Zynga's Pincus, have poured $500,000 into the effort so far.

Pincus had been "talking on the side with Reid Hoffman about this idea for 15 years," he told Recode earlier this year before launch of the group, known as WTF. What they had lacked was a "catalyst," Pincus said — something Trump provided.

"And then along came Trump, and he seems like a wave machine," said Pincus at the time, "activating a lot of people."

Hoffman hasn't forgotten old political friends either, including Obama. He's now a major donor to the former president's foundation, which will be the hub for the construction of Obama's official library in Chicago.

As with many of Hoffman's commitments, he won't talk about the size of his donation to Obama's effort, which so far has revealed little about its plans. But Hoffman says it is a three-year cash pledge — and hinted it could be in the millions of dollars.

Still, the foundation is one of a number of nonprofits working at the nexus of policy and politics that he is newly supporting in 2017, as he seeks to fund potential solutions to some of the most urgent problems in the age of Trump.

In a bid to facilitate new debate over issues like critical justice reform, for example, Hoffman recently has backed The Dream Corps, an outfit founded by CNN's Van Jones, who's been traveling the country talking about those issues. With an eye on the divide between urban and rural communities, Hoffman has put new cash toward the Center on Rural Innovation, a relatively unknown Vermont group that studies and tries to help local regions improve their economies and jobs, he said.

The LinkedIn co-founder has renewed his investments this year into three companies — including Change.org, PopVox and, soon, Crowdpac — that help citizens sound off to government, track their policymakers' work and back candidates for office, respectively. And Hoffman has offered new financial help to the Union of Concerned Scientists, a coalition that long has advocated for more federal science spending. The aid comes at a time when Trump has clamped down on climate-change research and other government programs that fund science and medicine.

For these civically inclined startups and campaigns, the donations come at an urgent moment. Many investors on Silicon Valley's legendary Sand Hill Road always have looked skeptically at cash-strapped, policy-inclined companies, choosing instead to support commerce-focused founders with the greatest chance of delivering a much-higher-return public offering.

But startups and nonprofits in the political space have proliferated wildly in the months after Trump's election — from groups that try to arm political campaigns with tech-engineer expertise to apps and other services trying to nudge Congress on policy issues like health care. The new field is so crowded that other leading investors, like Ron Conway, earlier this year put together a cheat sheet — sent to other, like-minded donors — on who or what to fund.

Hoffman's assistance, at least, seems to carry a unique upside. "One of the greatest things about Reid's approach, specifically to the civic space, has been to provide some investment and see where it goes," explained Marci Harris, the CEO of PopVox. "He's not a micromanager."

Hoffman still hasn't talked to Trump. And, at the current rate, he might not ever talk to the president.

From Apple's Tim Cook to Laurene Powell Jobs, whose group, Emerson Collective, has been active on immigration issues, some tech executives have tried to whisper into Trump's ear. They've angled to shape the White House's agenda in secret, aiming to avoid the wrath of their president-hating peers in the Valley. Still, though, Trump has persisted with policymaking efforts considered anathema to more than just the tech industry.

"Look, I think my answer earlier in the year would have been, 'I would talk with you and I would try to provide advice, but I hold in reserve my willingness to speak publicly about what I think is right,'" Hoffman said.

But now, he added: "That ship has sailed."

The public breaking point for him — and the rest of tech — came in August, when Trump refused to blame neo-Nazis for violence in Charlottesville, Va. Before Trump's comments, companies like IBM, Intel and Dell tried to advise the president through formal channels, hoping to shape policy even tech employees protested their work with the White House. But Trump's remarks left those industry leaders no choice but to cease assisting his administration on two, key business advisory councils.

Consider the difference that seven months makes: On the eve of the president's inauguration, tech giants seemed reluctant to engage the White House in open warfare, sitting with him publicly at Trump Tower in a bid to make peace. They had few qualms ditching him last month, and by September, some companies — Apple and Facebook and Google — issued a preemptive, night-before statement slamming the president for rethinking the DACA program that protects undocumented young adults.

But it isn't clear that Hoffman's Silicon Valley peers even now appreciate their power to affect Trump — or that they understand their role in catalyzing some of the massive economic changes that undergirded his election.

"I think they've learned a number of things; I don't know if I'd quite characterize them as lessons yet," Hoffman said. "I think they've learned there's a bunch of the swath of the country that's in pain."

Within the industry, Hoffman said the same old thinking remains: "Let's just build the future, let's just build new technology, let's make the future better through what we're building. If we get bogged down in local political conflict ... [we're] not creating. There's deep concern and some confusion about how we should get into the specific politics of it, and how much should we just continue to try to build the future."

At the same time, donations alone don't elect candidates, as tech leaders learned from Clinton's loss. Investments by themselves aren't going to temper the country's omnipresent political anxieties. And, for sure, statements deriding the president aren't sufficient to neuter Trump's most controversial moves, and they most certainly aren't going to end his term any sooner.

A better, less tragic American politics instead requires more careful study, commitment and conversation, if not a wholesale tinkering of government itself. Hoffman might not be able to achieve that, perhaps on his own, but he's certainly trying to help his own industry get better at playing their Trump cards.

"I would characterize what Silicon Valley is doing as learning," Hoffman said.

By Tony Romm, Re/code.net.

CNBC's parent NBCUniversal is an investor in Recode's parent Vox, and the companies have a content-sharing arrangement.