LinkedIn cofounder Reid Hoffman’s rule for hiring a replacement CEO

LinkedIn
cofounder Reid Hoffman has been a board member at PayPal, Airbnb,
and Microsoft over the years.
Drew
Angerer/Getty

• In his journey to becoming one of Silicon Valley’s most
  influential entrepreneurs and investors, LinkedIn cofounder and
  Greylock partner Reid
  Hoffman has seen the full scale of success, failure, and
  everything in between.
• Sometimes, a startup outgrows its chief executive.
  Hoffman stepped down as CEO of LinkedIn, twice, when he
  realized he wasn’t the best fit for the job.
• In an interview with tech industry veteran Elad Gil for
  his new book “High Growth Handbook,” Hoffman reveals what he
  looks for in candidates for CEO when the board of directors has
  lost faith in the current CEO’s abilities.
• Spoiler alert: It takes a founder’s mentality to
  succeed as CEO.

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Reid Hoffman
stepped down as chief executive of LinkedIn, the professional
network that he helped launch in 2003, as the company grew from a
handful of people in his living room to dozens of people in an
office. He decided he was more passionate about solving
intellectual challenges, as a founder does, than building an
organization.

Hoffman had a hand in hiring his replacement — twice — after
taking back the reins as LinkedIn’s CEO in 2009 and vacating the
position once again six months later.

The tech billionaire has learned a thing or two about hiring a
company’s next CEO, from having selected his own successor to
sitting on the boards of PayPal, Zynga, Airbnb, and Microsoft
over the years. Hoffman is now an investor at venture firm
Greylock Partners.

In an interview with entrepreneur and investor Elad Gil for his new book,

“High Growth Handbook,” Hoffman shares his secrets for what a
board of directors looks for in candidates for CEO when the board
has lost faith in the current CEO’s ability to succeed.

“The key dynamic — and it’s super hard — is one I’ve learned
through LinkedIn: You’re actually looking for a cofounder,”
Hoffman told Gil in an interview.

“You’re looking for a cofounder who may have a different skill
set than the people who are part of the initial ‘family’ or
‘tribe.’ But you’re looking for, essentially, a cofounder.”

Hoffman said it’s important for a startup to have someone at the
helm who has the commitment, the ambition, and the “I gotta make
it work” drive, if they are to turn the company’s early success
into lasting relevance. It takes a founder’s mentality.

There’s a simple way to test for this.

Hoffman said he liked to ask, “‘Would you do this job if we paid
you half of what we’re paying you? Because you’re really
committed to this thing?’ That’s not to say you should pay them
half, but you want someone who sees this as the thing they want
to do.”

Hoffman went on:

“People frequently say, about hiring a new CEO, ‘Well, I’m hiring
a skill set.’ Skills set’s important — which level you’re at,
your ability to make it work. The reason you’re hiring a new CEO
is because there are new skill sets that are critically
important.

“But if someone doesn’t have the founder’s mindset, they’ll be
fundamentally, at best, in asset management. They’ll make sure
that things keep running, keep going on a trajectory. But the
ability to change the curve means taking a risk that a founder
would take.

“That requires moral authority, but it also requires a mental
willingness — including risking hearing that, ‘You really screwed
up, you’re doing this really badly.’ You have to be willing to go
through that in order to make it happen.'”

You can read the complete interview with Hoffman — as well as
interviews with tech luminaries
Marc Andreessen, Sam Altman, Patrick Collison — in Gil’s book
“High
Growth Handbook.”