Reid Hoffman is one the original tech leaders of Silicon Valley. He – along with Elon Musk and 13 others – was one of Paypal’s first employees, and is part of the elusive ‘Paypal Mafia’ – early members of the company who went on to become billionaires and influential members of the tech world. Hoffman co-founded LinkedIn in 2003, a business-focused social networking company which was sold to Microsoft for $26bn in 2013. With that acquisition, along with the success of several other investments, Hoffman has amassed a net worth of $3.3bn. He is currently a Partner at Greylock Partners, a successful Venture Capital firm with investments in companies such as Instagram, Airbnb, Facebook, and Linkedin.
Hoffman’s other interests also include his tech and business related podcast ‘Masters of Scale’ – a show in which he talks to some of the world’s most influential business people about how they’ve grown their companies. His guests have included the likes of Mark Zuckerberg, Sheryl Sandberg, Reed Hastings, Sam Altman, and Peter Thiel.
Hoffman and the skill of decision making
Reid has made a habit of fast-paced decision making – something which he has implemented throughout his career to ensure his companies are always moving forward and trying new things. Hoffman employs several decision making hacks to prioritize speed as a factor for determining which option is best in the long-term:
“In order to move fast, I expect you’ll make some foot faults. I’m okay with an error rate of 10-20% — times when I would have made a different decision in a given situation – if it means you can move fast.”
Hoffman uses this valuable decision making process to help him make optimal choices without suffering from excess deliberation or the results of poor, hastily-made decisions.
How to build a habit of fast-paced decision making
1. Make provisional, instinctive decisions
Hoffman takes the approach of making intuitive decisions based on what he already knows about a situation. He then uses his intellect and attempts to prove that decision wrong by finding out additional information rather than trying to make a decision and prove it correct.
Spend 5 minutes each day trying to prove an instinctive decision wrong
Listing all the decisions you have to make will get you in the habit of making at least one choice using your intuition. You can then spend 5 minutes using your intellect and employ further research in order to try and prove that decision wrong. It’s a simple way of speeding up your decision-making one decision at a time. You can increase the number of decisions you do this for over time as you get comfortable using your intuition.
2. Simplify the decision making process
By splitting your possible options for each decision into easy, medium or hard in terms of their difficulty, you make the decision making process quicker for yourself and your team. Hoffman used one question in particular to help him organize his potential solutions for decisions in order of importance: “How intensively do we want to go after this?”
Before making a decision, separate your options into easy, medium or hard
This will help you speed up the process by figuring out which solutions or choices require quick, easy actions and which require more resource intensive research and execution, and thus, more time investment.
3. Get comfortable functioning at 60% effectiveness
Something that rather caught a lot of people off guard were Hoffman’s comments in an interview with the New York Times where he claimed, “I’m functioning at 60% effectiveness”.
For someone renowned for his success and years of solid work, it was surprising to hear that he thought he was only functioning at a fraction of his capabilities. What would he be capable of if he functioned at the 80% or 90% that many people had assumed he had been? In other words, Hoffman considers failure/inefficiency as inevitable. Accepting and getting used to functioning at a lower efficiency than 100% is part of an entrepreneur’s job as you’ll undoubtedly have fingers in many pies.
Each day, write down one decision that was a failure
Over time, you’ll notice that more things failed than you’d have probably expected or liked, but you can use these to reflect on what you’ve changed and improved upon later. Reflection is an important part of a decision making process and it’s something the both Oprah and Tony Robbinsuse as part of their daily routine as well.