5 ms·

LinkedIn founder Reid Hoffman’s 10 rules of entrepreneurship

24 points by andrewlchen 16y ago

brandnewlow 16y ago
I was just in there listening to his talk and wasn't 100% clear on what #1 was supposed to mean. "As one rule-of-thumb on how to judge whether your idea is disruptive enough, Hoffman said it should take $10 revenue and replace it with$1 of revenue, because that’s creating opportunities for new ecosystems." Anyone have any good examples of this in action?
- keeptrying 16y ago
  When you change the pricing you basically destroy the cost structure that the previous company was built on and thus it cant survive anymore. One example is the whole "long-distance plans" business of telephone carriers. Once skype and other voip companies made it essentially free to call long distance - that whole business of charging exorbitantly for long distance for landlines disappeared. Basically if a business exists because its able to charge 10x for a service and if you can start charging 1x for the same service, then the previous business will not be able to survive in its present state as, usually, it only knows how to make a profit on a price of 10x. Any less and its facing huge losses.
- filiwickers 16y ago
  If you want a book full of examples check out The Innovator's Dilemma by Clayton M. Christensen. He explains the idea of disruptive innovation through a series of examples. A great example is CDs vs MP3s. A cd cost about $10. It was replaced with something that cost $1 - spawning new ecosystems.
- deleted 16y ago
  [deleted]
- petervandijck 16y ago
  He means that the oldstyle companies are making 10$ from X, and you will make 1$ from X and still be profitable. If you do, you will disrupt the oldstyle companies.
- yagibear 16y ago
  Craigslist.
- PakG1 16y ago
  Excellent post explaining this sentiment here: http://www.avc.com/a_vc/2008/11/trading-analog.html http://www.avc.com/a_vc/2008/11/trading-analog.html
ajju 16y ago
I like speakers who don't take themselves too seriously, especially when they are talking about a top 10 list. So, for me, the last rule adds 10x credibility to the first nine. It is: "The laws of entrepreneurship are not laws of nature. You can break them."
staunch 16y ago
Is there a video of this talk (and other SXSW interactive talks)?
pedalpete 16y ago
With respect to #1, I don't think the measurement of if an idea is disruptive should be fixed only on price reduction. I'm sure there are great examples of companies that were/are disrupting their markets through creating entirely new opportunities in the market, and charging for those. unfortunately, I'm stuck thinking of examples. Anybody have any good ones?

24 points by andrewlchen 16y ago

I was just in there listening to his talk and wasn't 100% clear on what #1 was supposed to mean. "As one rule-of-thumb on how to judge whether your idea is disruptive enough, Hoffman said it should take $10 revenue and replace it with$1 of revenue, because that’s creating opportunities for new ecosystems." Anyone have any good examples of this in action?

keeptrying 16y ago
When you change the pricing you basically destroy the cost structure that the previous company was built on and thus it cant survive anymore. One example is the whole "long-distance plans" business of telephone carriers. Once skype and other voip companies made it essentially free to call long distance - that whole business of charging exorbitantly for long distance for landlines disappeared. Basically if a business exists because its able to charge 10x for a service and if you can start charging 1x for the same service, then the previous business will not be able to survive in its present state as, usually, it only knows how to make a profit on a price of 10x. Any less and its facing huge losses.
filiwickers 16y ago
If you want a book full of examples check out The Innovator's Dilemma by Clayton M. Christensen. He explains the idea of disruptive innovation through a series of examples. A great example is CDs vs MP3s. A cd cost about $10. It was replaced with something that cost $1 - spawning new ecosystems.
deleted 16y ago
[deleted]
petervandijck 16y ago
He means that the oldstyle companies are making 10$ from X, and you will make 1$ from X and still be profitable. If you do, you will disrupt the oldstyle companies.
yagibear 16y ago
Craigslist.
PakG1 16y ago
Excellent post explaining this sentiment here: http://www.avc.com/a_vc/2008/11/trading-analog.html http://www.avc.com/a_vc/2008/11/trading-analog.html

ajju 16y ago

I like speakers who don't take themselves too seriously, especially when they are talking about a top 10 list. So, for me, the last rule adds 10x credibility to the first nine. It is: "The laws of entrepreneurship are not laws of nature. You can break them."

staunch 16y ago

Is there a video of this talk (and other SXSW interactive talks)?

pedalpete 16y ago

With respect to #1, I don't think the measurement of if an idea is disruptive should be fixed only on price reduction. I'm sure there are great examples of companies that were/are disrupting their markets through creating entirely new opportunities in the market, and charging for those. unfortunately, I'm stuck thinking of examples. Anybody have any good ones?