Need to Know, w/Reid & Bob: Metaverse mania, the great resignation, Facebook quandaries, and more

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Hi everyone, welcome to Masters of Scale Need to Know, a periodic dialogue about the most important business topics impacting entrepreneurs right now. Between Reed Hoffman, the host of Masters of Scale, and me, Bob Safian, host of Rapid Response. Read? Great to see you. Bob, it's always great to see you.

So th there are so many challenging and intriguing areas for us to delve into from post COVID recess to the great resignation and more. So if you're ready. You ready to go right at it? Bob with you, always ready. You gotta have incredible talent at every position. There are fires burning when you're going out. Can you believe it? Such an idiot. And then you go back to this is totally gonna be amazing.

There are so many easy ways. I have no idea what to do. Sorry, we made a mistake. But you have to time it right. Oops. It just seems absolutely nutball. Ten years later I'm like, well that's just how you do it. We haven't made just how you do it. This is masters of scale. So I wanna start with An amorphous topic for a lot of people, and that's inflation.

There's a lot of uncertainty of inflation in the economy right now. What's genuine, what's transitory. I'm just curious if You have any sort of general reactions about what changes in the way you approach your business as a startup or a scale up if inflation is more of a factor. Generally speaking, you have so many different problems doing a start up or a scale up that you just put it out of your mind. It's not something that's within your zone of control. Now, inflation can affect appetite for investment and pricing because the people who are doing investing do worry about returns on capital and how inflation plays out on that. And so

It might affect your capital market, which you do have to have as a fundamental strategy as part of being an entrepreneur. But the rest of it is just as we say, let fires burn. Let as many other problems be an irrelevant factor to you because you have so many problems, either as a startup. Or is it scale up? And focus on those limited fires. That are really decisive.

And when it comes to these macro impacts, whether it's inflation or supply chain disruptions or things like that. It's more about reacting as opposed to planning. Well, it depends a little bit on which business you're in. If you're doing a e commerce business, where you're shipping things or You're relying upon something getting in from the port. The supply chain will make a substantive issue for you. Now, generally speaking, while in startups, you try to say, I want to plan for things that are long term.

Not for things that are femoral or temporary. Part of the supply chain worries is Is that Something that is Six to twelve months.

Or is that something that's three plus years? And if it's three plus years, you probably have to factor it in. With six months, you're gonna probably try to patch it as much as you can. And then in between it depends a little bit about how relevant it is. I know you're a believer that there's often opportunity in disruption.

Right. When you look at these larger things. Should you be looking for where the opportunity is? Inside it? It certainly depends on the business industry.

Most often you have to consider what is the time frame clock. It which you're looking for opportunities, and almost never is it short. Even if you're doing something like Games. Like casual games.

delivered through the internet, which is probably one of the fastest clock businesses where concept development maturity and existence and deployment of game may be in an order of months. Right, so like at three months you're done. From the whole product cycle. Even then you're kinda thinking about like well what does the next few years look like? Because

Even in delivering something that Short. Well, what kind of talent do you have? How are you organizing your product development? How are you researching, deciding on future products? How are you trying to build the right stability?

So even on the shortest one. You're probably in at least a two year time frame. You're developing semiconductors and chips. Then you're in multiple years. And so that means that usually when you say there's an opportunity, there's a supply chain travel, I could build my business to that opportunity.

Well Unless you think that the supply chain troubles are in the order of magnitude of years, then you shouldn't align your startup Strategy, business, product, service against it as a Ongoing differential.

'Cause you know, usually when I do an investment, it's on the order of decades. Like okay, this will be Persistent and valuable for decades. I love the way you describe that read because I think so many business people They're rushing or running from one opportunity or perspective opportunity to another.

'Cause you're so eager to like get that advantage, but sometimes all that energy, all that work is not actually taking you to where you ultimately want to go. Yes, exactly. Because you have to think about this as How am I building a persistent institution, even if by the way, of course. You're trying to keep it inventive and innovative and fast moving and non-bureaucratic. I don't mean any of those things by institution.

But a persistent like The market space you occupy is persistently valuable. Over years and preferably over decades. So the pandemic created

Big opportunities for some businesses. Now we're seeing some retreat and even some backlash in some of these areas. I was thinking about places like Zoom and Peloton that took off and they're now sort of experiencing a reset. Does deceleration for businesses necessarily indicate Trouble. If you're not scaling upwards in a straight line, is that a signal?

of weakness Look, there's a lot of details depending on What is the genuine momentum behind your business? What is your strategic position? What's the ongoing demand? If you just said look, it isn't that it's stalled, but it's volatile.

So sometimes it's really up, sometimes it's not really up, and it's kind of volatility. Your principal weakness there is that The market Tends to have a lot of buyers and sellers who are Quarterly.

And so they presume that when you have the pandemic as a gale force wind behind you. Zoom, Peloton, et cetera. They'll say, Well if it's happening right now. The default bet is that's just gonna continue and so I'm gonna bet on it.

And the moment doesn't happen is the the default thing is that you're gonna continue declining. So I'm gonna bet on you declining. And so You get volatility. Within the stock price, which then of course, as you know, because this is one of the areas many areas where you are much more expert than I, Bob, which is the press loves to write the stories of changes. So it's up, it's great, it's heroic, it's down, the game is over, you know, hurricane in the horizon. And so that capital market Stock market plus the press.

causes you some volatility. And that causes you some Trouble no matter what. Mm-hmm. And so the valuation tells part of the story about what's going on with the business. But it doesn't necessarily

indicate where the long term direction of the business is gonna go. Yeah. The business is predicated on a Larger shift. That's ongoing. Yep. Right. Like if you believe that more people are gonna be exercising from home.

in the case of Peloton. Or certainly what happened with Airbnb through the pandemic went the other way around. Right. Exactly. Now You know, part of Airbnb, which was you know one of mine and Graylog's investments. Was

We knew The networks are not just Compounding and up. But they're also adaptive. So part of the strategizing that Brian Chesky and I did together was

Actually, in fact. even though travel's getting really hit, people still have an intense need for travel. And Airbnb can adapt in a much better way than any other travel thing. And so That's part of the reason why Airbnb

Spent eight weeks in Oh What's happening land. And then quickly got back to

kind of a position of value and strength. One business that at least in some of the numbers has continued to perform in in revenue terms. Is Facebook. Despite all of the discussions around Facebook.

The numbers the revenue numbers still to be good or or meta now, as we should call them. Facebook finds itself, though, in the crosshairs of a a different kind of backlash than some of those other companies. What can an entrepreneur learn from Facebook's current Quandes. Well, I think there's a couple things.

One, by the way, is These quandaries are always the quandaries of success. And a scale. The real quadrants come once you're very big. You know, broadly speaking

I Think Zuckerberg's a learner. I think Facebook actually contributes a lot of good things. to society I think people forget how much Family share pictures and what

used to be very expensive for your average citizen. Now you have free communication and all the rest of that stuff. Now that being said It's clear that there's some real challenges, whether it's misinformation. Whether it's questions around what happens in democracy or whether or not it's kind of what Francis Hagen has been talking about. Well, is there impact on teenage girls that something disproportionate, something that Facebook could do something about.

А це і ов зі стен. The thing that Facebook at least is getting wrong. Is it's public communications because What it's saying is is oh, we're just the platform and users do what they do.

And we're believers in free speech. And it's not acknowledging You know, saying look, there is real concerns here. There's real concerns By the way, as serious as the concerns are in the US. They're much more serious.

When you get outside the US,'cause you go, Well, okay. Facebook's being used to perpetrate Potentially genocide amongst Minorities. Rahinga, etc.

And I think that what Facebook needs to be doing at a minimum is communicating What it's doing, what its view is. Does it reflect that it understands that it's a problem? what it's at least going to try to do to fix the problem.

That it hears people. They'll argue that they are trying to do that and the press isn't covering them. There's some Truth to that criticism. But I think that beholds them to say this is our vision for a healthy society and this is what we're doing. So, for example, it's great that they're doing the kind of study.

Of how are we impacting our users? And They didn't have to report it, but now that it's out. Because of Francis Hagin's Whistleblowing. It's like okay, so you got that study, what are you doing about it?

You're doing more research. What's that additional research? What are the things you're doing to help fix it? And saying Oh no, we're not as bad as Like Cosmo or Vogue.

isn't particularly compelling because you know that you're contributing to the problem. So what are you doing? To help it. the thing that entrepreneurs could learn. When you get into scale quandaries like this. is to bi More open and disclosive about I hear you what the problem is.

Here's how I think of the world that we're trying to create, and here's the things we're doing. Which we hope will have some effect. on the problem that you're talking to us about. And I think that's the general thing that other entrepreneurs who build

very scale products who might end up in a quandary like Facebook's. should think about doing differently as they approach They're mega scale. You're so focused as an entrepreneur.

On success and on building that scale. And then once you have it. And maybe sometimes before you realize how much you have it. you can be having impacts that you didn't necessarily plan for or prepare for and those are not easy to deal with and they're harder because sh you are bigger.

We had a guest on Rapid Response who I know you know and you work with Sri Dar Ramaswamy, who was at Google and now is at Neva. But he talks about how the business model of your scaled organization can sometimes work against your efforts to control the impacts that you're having. That it can distort or impact how you're dealing with those new challenges.

It's another version of the innovator's dilemma that you have to pay attention to. So for example, in the Facebook case You know, the criticism Because it sounds very good. It makes Facebook sound demonic. is they're prioritizing profits over people.

And it's like, wow, that seems like those are just bad people. And Look, I talk to a lot of people, I know a lot of people there, I understand how they think of the world, they're not actually thinking about it that way. However, the way they got to scale and the way that they

Became the dominant platform. is what they did is they prioritized engagement. over everything else. And engagement is measured by Well, how long does the person stay with the site? How many times they come back?

Are they active? Do they click on things? Do they post things? So they're prioritizing engagement. Over everything else. And by the way, there's an argument about well Prioritizing engagement is democratic. It's giving people what they want to do. They demonstrate by their action of their fingers.

By the action of their clicks. Now I Myself, um Only partially sympathetic.

with that Facebook answer'cause I think the answer is also like, well You can pretty easily cause people to spend a whole bunch of time Engaged. But enraged. But it's that success by which they say, Well, we're giving people what they want. It's demonstrated by engagement.

That is the actual thing that's going on, not the Oh look, we make more money. Now they do make more money for it. If they lost money for more engagement Then engagement wouldn't be their focus. So Facebook took on the name Meta. Trying to assume the benefits of an association with the metaverse.

When you hear talk about the metaverse How realistic or far along should we think about it being? I mean, I know Nike. asserted its rights to all of its shoes, how they might be used in a meterse. Should businesses be looking to protect themselves, prepare themselves for a metaverse? Is the metaverse an arena where entrepreneurs and startups should be looking? Like, oh, this is some where I can launch new ideas? So first

We're already in a metaverse. Right now, Bob, you and I are in the Zoom metaverse. Right. The internet and actually telephony before it has all been versions of the metaverse and we're continuing To iterate. And so most often

People say Oh no no where we're gonna be in haptic suits and goggles and in a virtual reality that might be Mars or something else. So there are gonna be multiple metaverses. in various ways and they're gonna play different roles in our lives.

So then You get to the strategy question. You say, Well How do I think the metaphor is going to be evolving? And then under which time frames? Oh, I need to be prepared. It's like a ready player one.

Like experience where we're like All gonna be living in the metaverse. Well, not any time soon. That's not a suit thing. And so if you really prepared for that now.

you're going to really miss your investment opportunities. So you need to be looking at What are the things for me, and there's something I should assert That's fairly cheap to assert, all a Nike. Say well we own our shoes. You know, in the metaverse.

Like, okay, great. You know, like that's not expensive to assert. It's a legal kind of thing, probably good thoughtfulness. Oh, nothing really plays out there for ten years. Right. Or twenty, or whatever.

On the other hand, if you think something's coming very soon That's when you may really adjust your business around it. It is fundamental. That you should be thinking about as a scale business. is you should

You know, every quarter to every year, list every technology. Artificial intelligence, synthetic biology. Virtual reality or augmented reality on the metaverse. Quantum computing, crypto currencies, and you say Is there a big shift coming in my industry or my business?

Potentially off this. And you might go, Well, look, I'm doing a restaurant chain. And I looked at crypto and go, No. Nothing for crypto. Not gonna be paying with it any of the fine. That takes you fifteen seconds.

Metaverse is one version of that. You should be thinking about it. But your thought might be five minutes up, nothing near term. Nothing long term. I'll think about it again in a bit. Earlier this season, I spoke with the CEO of gaming company Electronic Arts, Andrew Wilson. Andrew says that there are two distinct

Groups of industries that will be clawing at the chance to scale in the metaverse. But how will it play out? Let's listen. What the metaverse really is is a 3D virtual representation.

of a social space. You should think about entertainment, you should think about education, you should think about exploration, and ultimately you should think about corporate enterprise. And I think we're gonna see two groups kind of running towards this. You gonna see groups that have this kind of social interaction is their core conceit or their core motivation. Think Facebook, think Snapchat, think Twitter, who are gonna look to try and build out 3D virtualizations of that space. At the other end of the spectrum, you have games companies who already build out 3D virtualizations who start to kinda work backwards.

And what other things can you do in a game beyond just the core conceit of the game? I would tell you we're at the very inception of this. The very inception. And so it's hard to understand how it's all going to play out. When you've built substantial wealth through your business, it's often tied up in a single equity position. The upside is real, but so is the risk, and knowing when to act isn't always obvious.

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go to masters of scale dot com slash membership Before the break, Reed and I spoke about inflation, supply chains, the potential of the metaverse, and the lessons of Facebook. Now we move into the opportunities around AI and crypto. Plus reads great advice on the great resignation. Why LinkedIn pulled back in China. And what the backlash against big tech is missing about scaling itself.

Let's dive in. So you mentioned a list of technologies there to keep track of, and one of them you mentioned was artificial intelligence. Yep. I I did a segment with Eric Schmidt, who's just come out with a book called The Age of AI, and the dialogue was almost schizophrenic. Like on the one hand, Eric talks about these amazing benefits of AI and how if business leaders don't follow along, they're gonna be completely disadvantaged. And on the other hand, he also talks about These like risks to humanity.

How should I think about AI like as a business person, what's my responsibility for? deploying it or considering it. Do I need to Use AI

Can I afford not to use AI, you know? So the right way to think about AI in a very broad brush is it's an amplification of how software E. G the world of bits. is gonna be affecting everything.

The world bits and the world's atoms. And AI is a At the minimum, a new programming routine that can create programs. In ways and of shape and capability that we've never seen before.

A very simple way of putting this In terms of developer productivity. is twenty years ago to write a spell checker. was like thousands of lines of code. Months of debugging.

And lots of corner cases. Now it's about a hundred to two hundred lines of code. Well you basically say ingest the internet. And learn to make a spell checker. Right. And then it generates a spell checker that was probably better than the ones you did before.

Now, obviously spell checking is a well understood problem and not one that's particularly revolutionary. But you get to revolutionary when you say, Well When there's things that by ingesting lots of data You can suddenly Do something or know something that people didn't know before.

So we're gonna be making engineers and developers two X or three X more productive. We almost certainly have a revolution in robotics. Which will lead to manufacturing, you know, not just autonomous vehicles, but a bunch of things there. Already they're doing sensors and plane engines to make sure that they're maintained well. You begin to funnel that through AI and you learn other things about how to better build them, design them, repair them, you know, maintain them, et cetera.

The New Zealand Sailing team one Bye. Using a boat. Design by AI.

Right. So That's how broad all of this goes, and so. More or less. Every business is question probably around AI.

Ізна A Yes. But a when And aha.

Now the wind may still be a fair ways out. 'Cause most of the really strong amazing results come from super expensive compute. And it's beyond What most companies can do. I think that mostly when you get to new technologies, everyone starts with fear, hence

Terminator film, et cetera, et cetera. And I'm a techno optimist, not a techno utopian. Just because you build the technology doesn't mean you get a utopic outcome. But optimism means you can build towards a utopic outcome and you can steer away from dystopic outcomes, and you have to be thoughtful about it, and you have to be putting work into it. So I applaud Eric's book.

Along with you know Henry Kissinger and Dan Huttenlocker. Let's pay attention to how do we steer this to where it's great and amazing for us, where it's the amplification of our humanity. It's part of the reason why Stanford started the human centered Artificial intelligence institute. But I think those questions are answerable and so I'm In AI, like many other technologies, I'm a techno optimist.

I want to play this back to you, make sure I understand it. And so on an individual and a business level. You wanna learn about AI, engage in AI, leverage what you can from what others Who may have more resources or doing to help your business. And be mindful about when you can make the best use of it. А на соціаллево

We wanna be keeping our eyes On making sure that the AI doesn't disrupt things about our social contract and the way we operate. It's humans.

Without it being intentional or at least being discussed. Yeah, and involved. So like a classic one is We know from sociological patterns. That the communities of people of color are much more highly policed. And so if you just feed all this data in

What you're essentially Training the AI on is People of colour. Need much more high policing. And so it delivers results on parole and on

credit scores and on everything else. Which is only a result of enshrining bias. Nothing that has to do with The society that We should be in.

That we aspire to be in. That naturally we should be in by ethics and by right. And so you have to pay attention to that kind of thing. And that kind of paying attention is not just a societal question. You can't wait for Society to be the whistleblower.

You as a business leader, if you're Deriving revenue and economics and profits. From this. need to be paying attention to these questions. To make sure you're one of the good guys.

Not. One of the bad guys. Reed, you mentioned the list of technologies, right? Bob, you went into AI, but wondering if we could splice into going to more of those. That's the voice of senior producer Jordan McLeod, who chimes in with a follow-up question from time to time. This is usually cut out of episodes of Masters of Scale and Rapid Response.

But Reed and I are making Jordan leave his voice in this time. I think a lot of entrepreneurs, especially marketplace and retail and restaurant entrepreneurs, are wondering if they should start accepting cryptocurrency. I know that Veriphone is gonna start accepting crypto on all their credit card machines, which includes Taco Bell and gas stations and all these places, right? Reed, do you think using crypto as a payment in retail is gonna stick? Well, so Payments is something I have a fair amount of experience from my very early days with PayPal.

Obviously I've been doing A number of different crypto investments. Including Zappo and other ones. We had Wences Casaris. on masters of scale.

And What I would say is payments is generally one of the ones where You rarely want to be a leading. Adopter of Unless you have a specific thesis that's valuable.

It helps you brand. You actually happen to know that you will get new customers, you'll have a higher conversion rate because of it. On the accept crypto as payment. I think you need to have an active thesis, not a default yes, because it'll be a bunch of work. A bunch of the businesses that started accepting Bitcoin a year or two ago. They saw almost no traction.

They saw almost no one using it. Why? Well, because Bitcoin isn't really a stablecoin. It isn't really a currency of payment. It's a currency of asset. It's a I buy it because I think My one dollar is gonna go to three dollars.

Right. Now crypto In all kinds of ways, I think will continue to be. A major force defining the future. I think it'll be like say for example, cross-border flows are really broken, and now we can use crypto to do cross-border. to a wide variety of countries and not have the

Like having to establish a credit card relationship with the banks in each market. That could be a good reason that you might experiment with it. You could say that the notion of how crypto is doing escrow. Hey, crypto really plays to the kind of digital goods that I'm doing. And they don't even have to be NFTs. But it's an active thesis for something specific versus Boy, I'm reading a lot about crypto.

I guess I should take it. Right. Would not be A smart active thesis. I love the way you frame this because so much of the media attention about crypto is about the side that you call the Currency of assets.

Right versus a currency of payment. And as you talk about it, even in that currency of payment. What sort of transaction you're talking about? The kind of crypto and whether or not you should Consider it depends on those things.

Exactly. So it could be a really good thing to do. But generally speaking in payments Being a trailing adopter is perfectly fine. And for some of the retail outlets that we hear talking about, you know, embracing crypto.

That has more to do with marketing, maybe, than it has to do with practically affecting their business. Very likely. Very, very likely. So we've we've talked about a lot of things already. We're gonna talk about a bunch more. I wanna get to LinkedIn and China and some key scaling lessons around big tech and speed. But first, I want to ask you a little about the workplace and the great resignation. I spoke on rapid response with Sarah Hirschland, the CEO of the US Olympic and Paralympic Committee. And she talked about the new challenges in managing talent and workplace dynamics.

Here's how Sarah talked about it. In an environment in which talent and the workplace is probably one of the more difficult things all of us as leaders are dealing with right now. The sort of return to work post-COVID, is it home, is it hybrid, is it hub, is it remote? How are we gonna create an environment that works to attract and retain talent and a lifestyle that people want and like? Add that to the vaccine mandate and the COVID environment that we're all trying to build.

add that to the employment nature of the country and I'm spend more time on workplace than I have in my three years right now and trying to ensure that we can attract talent, retain talent. But also create a work culture that's one that everybody is proud of. That is a modern еволюці аз і канбі. But also a highly functioning, highly productive організацію. This idea of the great resignation, I'll confess that when I first heard it, I thought oh, this is just

Another media person's like well phrased amplification of an anecdotal situation. And that it was isolated and narrower than the media makes it sound. But as time's gone by, my initial reaction seems to be clearly wrong. There are numbers that say there's something significant and different afoot in the workplace right now. What do you think? Ar lessons or what is going on?

Well, I think any time you have a world shifting crisis. That will cause a big reshuffling in the workforce. You know, when you get this kind of reset. It isn't just that oh I started working from home and then I decided I might as well go to where my family grew up, or

This beautiful place, and I really like it there. But also you go, Oh, I'm I'm now rethinking and I'm resetting and this other thing appeals to me. Now that being said You know, my second book The Aljanz.

was addressing this fact that there is this huge elephant in the room. When it comes between Most companies And

Most employees. Which is that the two sides are telling each other We're gonna work together forever. Right. And y you know.

I mean they're just so obviously wrong in the vast majority of cases. companies don't know what else to do, so they just kinda say, Well it's a family You know, it's your life work and that's what we're all doing. And you're like, well, look, some folks will do that. That's great. Identifying which ones, nurturing what we call in the alliance the foundational tour of duty is a very good thing. But what if you don't? And one of the problems is is if you don't address the elephant in the room

Yeah. massively erodes trust. It's because Your relationship can't handle the truth. Hey, look, I'm working here. That's great. I'm having a great time. I plan to work here for a while, but I'm probably gonna end up working somewhere else.

At some point. And I think you know the great resignation shows More than ever. The fact that the frameworks that we sketched in the аліянс. Or some other way of addressing

This elephant. is critical. Yeah, well, this idea that you've talked about of a tour of duty is just more realistic about the way Work is done now. And I guess I feel like the pandemic, the robustness of the economy and the job market together, a lot of people have just sort of Realize like

You know, my job kinda sucks. You know, I'm not gonna do that anymore. And it's some ways it's like that the demands, the compensation are sort of Out of whack. You know, like some people are saying, Oh, look, they're being pampered, they're pre Madonna's, these Gen Z or whatever. But in a capitalist system, if you can't get people to take on jobs. Then the rewards must not fit the task? The task must not be set up the right way?

The capitalist system was how do you create? The kinds of jobs. The kinds of work that people want to do. Yeah, and the kind of work that leads to somewhere. That's not just busy work.

You know, covet has disrupted also the workplace, this prospect of Work from home versus in office is up in the air. It separates industries, how different industries are doing it, how different companies are doing it. Do you think a business has to decide if it's We're work from home place, or work from office place. How do you decide if you have to take sides? You don't wanna seem Like you're a heavy handed autocrat.

Who doesn't care about the health. of their employees, whether it's the Illness, health. Or the psychological health. But we can get to certain amount of dynamism.

And Hey, we're gonna start with a couple days back at the office. And kinda rotating, we're gonna see how that works. I myself am a strong believer in saying Hey, um you know, you have to get vaccinated because

Vaccine is not just a question of your own health. There's also a question of how much you're risking the people you're around. Now that being said I think that many more businesses and many more employees are gonna realize that they're gonna Wanna be in the office.

than they currently do because what they're normalizing on all these people who say I like working home. This works really well. is what they're normalizing on is an environment where everyone's working at home. And if that's not gonna persist. For sure.

A limited number of all distributed companies. That will persist. For those companies. But a lot of companies will go Actually, in fact, we get a lot more creative work. When we're in the office together done.

We get some innovation. We make decisions faster. There's all these reasons that a lot of work will happen back in the office. Some people say, Well, I really look working at home so much. I'm gonna orient toward a no office company or One that's really investing heavily in hybrid.

And others will go, No, actually in fact personally The times that I been Back. In working with people In person.

has been a great joy. And so I'm a great believer there's gonna be a lot of return to the office. And once it's there Then there's gonna be a lot more return to the office. Uh, follow up about great resignation, when you were talking about workplace, they're very related in my mind. It's like I'm going to start working at the company that lets me work from home more often, rather than working at the one that's forcing me to come back to the office. I hear my entrepreneur friends, as it were. Saying that a lot.

Right. So I'm wondering how much those two pieces are connected. In the great Puzzle of the workplace. Look, some percentage of people above zero. Will have now discovered that they really like working at home.

And that that has all kinds of Beneficial features. You know, whether it's a creativity mindset, they're an introvert. An easier connection with family. The location that they can then choose is so much better.

I also think that employers will go, Wow. Some of our really important talent. is going to decide that and some of that really important talent It's really important to keep in the company. And so we're mostly coming back to the workforce.

We're gonna add functions of doing hybrid. So I think all of this dynamism and a stronger companies, a stronger set of selections for Talent. And how the talent best expresses itself and Hopefully overall. Everyone's happiness.

Yeah, I mean there has been increasing flexibility in how work gets done. Before the pandemic. Right, like that was already coming. And like many other things, the pandemic accelerated it. That doesn't mean everyone's gonna jump into doing it, but the breadth of options available to us

Or the breadth of opposites that people will expect. is gonna continue to expand. Exactly. Former PepsiCEO Indre Nui was on an epic episode of Masters of Scale at the start of this season. How she builds a supportive workplace is truly instructive in its clarity.

Let's listen in. I looked at each person in my company not as a tool of the trade. But I looked at them as an individual asset. and had to bring their head, heart and hands to the company For the company to be successful.

And if you were not treated For who you were. If I didn't bring out the best in you The company lost out. How do we get

All of the people. Who are talented in our economy. to serve the economy because that's what we need. We need all the talent. Lots of women graduate with top grades. They are sixty percent of the professional degrees.

But They're not rising in their careers. The issue is not the women. The issue is that we don't have the support systems to enable them to have Families. And be in the workplace.

And as a country we don't have enough support systems either from families From the government or from our communities. to enable them to balance the two. So families become a source of stress rather than A string. I think it's a loss for the country. I'm not talking as a feminist, I'm talking as a economist.

And so we have to fundamentally tell ourselves We want the entire talented population. to be in the service of the country. We better look at them as A system.

They're holistic. Life. We look at them as real assets. You'll worry about them? Their families.

How are they gonna balance all of this? You'll come to very different solutions. So the next topic I want to ask you about was LinkedIn, your creation And your legacy in so many ways. And there was news not long ago that LinkedIn would be suspending its operations in China. And

I wonder if there's any perspective you can give us on the pros and cons of doing business in China. The trade offs that a business struggles with. Yeah. Oh it's a Great.

Topic. Very complicated. that too many people try to make simple and that's a mistake. So I've been

A student of China. For its Amazing successes. And its challenges

For a number of years. I talk to a lot of Chinese experts. That's part of the reason why You know, LinkedIn was the only of the social networking services that has a license to operate in China.

And The critics say Well, it's an autocracy that is growing to have a negative influence on the world. And

You know, is directly in contention with The Western powers, US, Europe, others. And there's some issues around that. Which are one hundred percent legitimate, including human rights issues.

On the other hand You know, here is also a government that has raised more than the entire population of the United States. Out of poverty. In terms of their economic progress. In terms of the Well being for that.

Who are systematically trying to invest in various efforts to Change the directory of climate change. They're investing in

carbon removal just as we should be. But they're doing it. And so there's you know, those things are on the positive side. Look, I'm not naive. I know that there are gonna be areas of conflict. But what are the ways we could make the world better? And part of my theory between LinkedIn and China was to say, look, the more that we are doing

good business with each other and that will make the world a better place. And LinkedIn. is a very natural place thing to be doing that. It's like Who do you hire, who do you fund, who do you do business with, et cetera. And so that's part of the reason why

LinkedIn has invested so much relationship with China. Now Problem is the tensions escalate. Everyone tries to use everything in the middle as a punching bag. And his LinkedIn was just trying to figure out how to help

the world do business with each other, including, you know, US and China. We were getting more and more difficulties and challenges from both sides. And so we made the very hard decision that Took a lot of consideration.

To say look, let's try to reduce to the minimum set. Where we're not in the crossfire of this criticism. So let's go to hey just job listings, just employment. You know, just find a job. None of the Sharing of business intelligence that LinkedIn has been investing in over the last ten years.

available in China'cause that's where we get the Conflict from both sides. Let's just do the jobs side of it. And so that's why we retrenched to it. Obviously, I think the world is better if we can do more.

But it's also important to'cause like for example, part of our duty to our members is to not endanger them at all. by their participating in LinkedIn. And this was a way to kind of say, hey, everyone can participate in LinkedIn as they want. And there's no Criticism from either side in this activity. Mm.

It does sound like it was a hard decision to make. It was a hard decision to make, and we put years of our sweat. And our efforts and our innovation in the China. We will continue To do so as it makes sense.

But you know, it's like sometimes you have to take a A step or two back in order to take the path forward. So the last question I wanted to ask you about Read. Is about

The Plight? I guess of big tech. You know, the scaling that has gone on for large tech firms Has been spectacular.

We've benefited from it. A lot of investors, a lot of workers, others have benefited from it. You and I are both big believers in technology. And yet there are things about the scale of technology companies today at trillion dollar valuations. And the reach of all their businesses that is sometimes Disquieting. Is there Something

As Being too big. Huh. A great question for Masters of Scale. I fundamentally think that

Big Can be great. And it's not necessarily bad. at uh whatever levels of scale of bigness. Now there are times where you go, Well you're so big That you disbalance society. You're so big.

that you corrupt the mechanisms of rule of law and government. Or so big That you Prevent. Innovation. Or delivery of quality goods or products or services. And so for example

When I think about our current tech giants in the US and there are tech giants elsewhere. I am actually Broadly speaking, think we're in a pretty healthy spot because those five huge tech companies are all competing really heavily with each other. If you said, Well, what's likely three to ten years from now is the answer is well that could be seven, or eight, or nine, or ten. large companies competing with each other.

In that competition, they create a lot of productivity, they create products and services. They make products and services cheaper. The only particular area that makes me nervous is the mobile app stores. I think there is some legitimate questions around that and and are they quelling

Start up. Opportunities and other kinds of things. And then you go to the kind of things that people are saying, Well, this is why we should do an antitrust. So for example You know, we talked about Facebook. We should be breaking Facebook apart for privacy. You like.

Oh. Your theory is that if we had ten Facebooks You'd have better privacy? Like How do you cut to that theory? Literally, you're wrong.

You say, Well, I wanna be having companies build in systems for protecting misinformation. Right. Okay, well you have to be investing like in AI, you have to be investing like a billion dollars a year in that. So If we had ten Facebooks, we'd have better thing on misinformation. No, you have one that can spend the billions on the misinformation, you're better.

Right. On preventing, you know, misinformation. From occurring in various ways. So the anti trust thing Isn't about any of the things that they're actually talking about. It's like well, we're uncomfortable that you've grown bigger and more powerful. We're uncomfortable that

you have a company that's kind of in control of this thing that's really important to us. But by the way, we've always had companies that are in control of things that are really important to us. We've had media companies, we've had oil companies, we've had car companies, right? This is not actually in fact a unique thing. Okay. From an American society, an American values point of view, it's really great. That we have all these giant tech companies.

By the way, the vast majority of whom over half their revenue comes from outside the US. That's prosperity for the country. But then we want to influence it. We want to say, well, we want the internet to run this way. We want this to be the case. Well, we can do that.

When we have this thriving set of tech industries. And so, you know, I've been a little disheartened, you know, or bemused. by all of the te clash. Because I'll make this very last point.

Whatever you care about. Scale Tech. Is part of the solution. You care about climate change. Well, the only way we're gonna get the earth to not warm as much and to cool some

is through technology, clean energy, carbon capture, geoengineering, working in the oceans, et cetera, et cetera. Tech is only gonna happen. You can have every Paris cord you want. You can have 10x the Paris Accord you want, and it's only gonna happen with technology. So how is that technology gonna be created? How is it gonna be brought to scale? What's gonna happen? Medical. You want to solve pandemics.

We blitz scaled. on the MRNA vaccine. We need to get the safety trial split scaled. But it was technology. Otherwise, think where we be today. Right. As pathetic.

Аз ар глоба публик хелс бити на пандемії. Think of how much worse it would be without the MRNA technologies. We want better education, creating a whole bunch of new educational AI, software, other kinds of things. Could scale every world, could bring literacy to every single child. On the entire planet.

is doable. With technology. And look, startups are one central way. And that's a great way. Large companies do a lot of investments too. And so I think all of that is really, really important. And so, you know, I don't think that the kind of the oh, that's big. You're like, Well, look, what are we creating with it? What are we making? And what can we make?

Yeah, I mean I I think some of the discomfort Is that Like historically big Meant slow. Right. And today the biggest firms in some ways are the fastest.

And they're taking us in places where Certainly for governments that are slow. It can feel disconcerting because control has gone to these entities that are rivaling governments, but as you say When the challenges are planetary.

Right. Global health. Climate change. We need the facilities that can move at pace globally. And right now the way governments work, the only place that's happening is through technology platforms.

Exactly. And so the question is. We should be playing into that future. With Ambition With heart.

With so With speed, and by the way, to your point, Bob. It is really interesting how these companies continue to compound at scale in various ways. And don't slow down as much as they used to slow down. Startups are still moving faster.

So As fast as you see these big companies moving, you're like wow, they're releasing new products and everything else. What's going on on startups? is even faster. So this is part of the thing. Boy, we're accelerating into this future.

And trying to enshrine the past To prevent the future is a disastrous idea. probably the best that will happen is you say, Well, we'll give up the future. And someone else will do it.

На нас. And I don't think that should ever be our position. I think our position should be as We create the future and we make it available.

Broadly and to everyone. And dynamically as we do it, but accelerating to creating that future. is actually the goal. And that's part of the reason why we do podcasts like this, because we're trying to help everyone understand how to scale More effectively. Ethically, humanly.

But also Fast and competently. And so all of those things can be done together. And that's the game we seek. To play. That's the

Future. We seek to create. Yes, and to pull along. All of those organizations that may not be the fastest tech companies and may not be the fastest startups. But can be faster and help us solve all these problems and challenges.

More effectively. Exactly. Yeah. Well, Reed, as always, it is a pleasure to talk with you and to learn from you and to share ideas. So thank you. And Bob and likewise and on our next conversation can't happen soon enough.

Amen to that. I'm Bob Safian. And I'm Rid Hoffman. Thank you. Hey listeners, Bob here. If you listen to Rapid Response on Masters of Scale, you may be missing half the show.

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