Transcript

5 leadership lessons from gaming with Reid Hoffman

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I first discovered Dungeons and Dragons when I was nine. The babysitter that my Father was hiring. Michael His technique for dealing with difficult to manage young boys was to introduce them to Dungeons and Dragons.

My dad caught on pretty quickly. This was a hit. Because I started campaigning for him. To go out more. Like well, we can do this Dungeons and Dragons thing. My dad thought it was very strange.

Like, oh my god, ma'v lost my kid to this role playing game cult. I was obsessed. with this role playing game RuneQuest. I started introducing it. to a variety my classmates

One of the people said Well, I live down the street from the game company. I'm like what? He said Since I'm a neighbor I can kinda go by, I could bring you with me. I'm like, Yes, please.

They'd rented a house. It was little inset from the street and was kinda long path to grass. Up a staircase. The Big dining room.

There's a Tolkien esque miniature figures. Stacks of the books and game systems. There was Steve Perrin, who is the editor in chief there. And he's like, Oh my God.

Who let the twelve year old in? And I started saying, Oh, I'm a big fan, I'd like to play games here I happen to have bought one of their new scenario packs. And I looked at it and said, Oh, this is really incompetently done. This is just bad math. This character design is wrong. This would be more interesting if it had this twist.

I were marked up in kind of classic red ink with bleeding. And said, You just published this and there's a much wrong with it. I wanted you to see it. I can see him rolling his eyes, like oh god.

And then he started really looking at it and went, Oh Mm. Uh. I got another thing you could look at. Would you like to look at another thing and I'm sure. So he gave me the next thing he was working on.

I went home and then brought it back just completely revised. And he said, Oh, this is real work. And so it gave me a check. I brought the check home. My dad was like, Oh, oh, okay, maybe this isn't such a bad thing after all.

That's the story. With games. As you heard. I didn't just

Play games. I dissected what worked. What didn't? And what lessons I could glean about human nature. And strategic thinking.

Throughout my life. Games have been one of the biggest influences on me as a business leader. And that's why I believe. That some of them was vital. And overlook entrepreneurial resources.

Might. Just be stored away. In your family's games cupboard. Ready to play? Let's go.

You gotta have incredible talent at every position. Huge push. There are fires burning when you're going out. Can you believe it? And then you go back to this is truly gonna be amazing. There are so many easy ways. So I have no idea what to do. Sorry, we made a mistake. But you have to time it right. Nutball ten years later and be like, well that's just how you do it. We haven't made it just how you do it. This

is masters of scale. I'm Reed Hoffman. Co founder of LinkedIn. Partner Greylock And your host.

And I believe that some of those vital and overlooked entrepreneurial resources might just be stored away. In your family's games covered. I think that games hold a deeper power than many realize. They're far more than an amusing pastime or something to do on a rainy day. They have real value in developing a whole host of core business skills.

Strategic thinking, tactical pivots, teamwork, resource management. And leading human nature are just a few examples. Today. We'll explore a few well-known games and the critical entrepreneurial lessons that they contain. Maybe Kane.

Aren't your thing. Or maybe they are. but you just don't have time to learn a new set of rules. In either case, don't worry. I'm going to distill some of the most impactful insights I've gleaned.

For my many hours of gameplay. And if you're inspired to try out any of these games, well That's a happy bonus. So let's dive into the first game. and what it can teach us about entrepreneurship.

Number one, Monopoly. Born in the 1930s, Monopoly mirrors the sweet, sweet fever dream of Rockefelling capitalism. Players buy and trade real estate in the hopes of total market domination. As the game develops, your strategy must shift from aggressive tactics like accumulating properties to defensive tactics like building up assets in the form of houses and hotels. Eventually forcing less affluent players to Into bankruptcy.

Tough luck, Charlie. So one of the things you frequently learn in playing a game Is All games have A somewhat fluid and changing structure.

Monopoly is a good example that a lot of people are familiar with. Like First buy all the properties, but then what you're trying to do is trade out and aggregate to places where you can get higher predictive rents.

than other folks in order to be able to be leveraging that. And that's more of a mid game strategy. Leading into an end game strategy. So it's the phase nature of the game. Which is, you know, parallel to some entrepreneurship. So what will happen with With many especially technological entrepreneurial journeys.

As you get to different levels of scale The game structure changes. So like it may be initially You're LinkedIn, it's like get some good press, get people say, Okay, this is a reliable site. The journalists have checked it out, said it's kinda useful. Okay, I'm gonna potentially

Invest in it more, invite some people. Write a profile, play with it. But then Okay, what is the first million people to the The first ten million to the first hundred million. you know, the game changes as you're kinda going through it. Now sometimes it's not just through your levels of scale.

Sometimes it's a competitor comes in. And you're now competing for the same ground. Well now your game needs to change because you have a competitor. And there's various ways that you might play with this competitor. So For example, at PayPal, X.com was copying our go to market strategy. And it's like, well, it's more effective to merge with X.com than it is to compete with them. That changes the game now. And what got us here into this growing payment service, now to get to the next level, we have a new theory for how to do that. Ninety five percent the time.

The game will end up changing in different circumstances, and you have to adjust to that game change. And that's part of what then gets cashed out in that aphorism, what got you here won't get you there. Be paying attention. to how the game is changing. Relative to your goals and path and strategy. Whether it's a scale rule, a fatigue in a in a market rule, a Competition rule, like a set of different things which then change it up.

Number two. Settlers of Qatar Welcome to the uninhabited island. Of Qatar. Here.

Players embody the role of early settlers, building vital infrastructure while trading resources like wood, bricks, sheep. And all. The more you play, strategies begin to reveal themselves. Maybe you have an idea about diversifying resources or claiming a certain geographical position on the board. In a game as intricately strategic as Catan, the ability to communicate various tactics and philosophies

Cause. For an astute Learner. People say chess. is the king of games.

Well, chess has a bunch of problems with it relative to parallels to the real world. The bad thing is It's epistemologically shared. Which is We both see the same board. It has no randomness.

And Actually in fact he's might say, Well the world's not random. The world's complex enough. That The complexity mirrors randomness. Like

different startup competitors, different things that might be happening on the market. It's like you just can't predict all that stuff. So These are parts of the reasons why I'm such a public advocate of games like Settlers of Catan. As a good kind of model for

learning business, learning entrepreneurship, because it has the randomness, it has the interactions with other players. has the competitive gameplay with other players as part of it. One thing that I've got. I highly prioritize. In putting their teams and people invest in

is what I call explicit learners. Not only people who keep learning, infant learners But explicit learners, because they learn things that they can share with their fellow team members. Being an explicit learner. Allows you

to crystallize your learnings into language. That you can then discourse with other people around you. It's similar to kinda when people say, Hey, when I teach it, I learn it better. It's a similar version to the explicit learner, which is I by going through language and and kinda crystallizing components of what you're learning. That helps you solidify them, build upon them, think about it more crisply. So it does help you as an individual. But of course, it's also essential for teamwork.

Now when you get to settlers Obviously you have call the canonical thing is four people competing with each other, and you say, Well, how does explicit learning help here? Well Generally speaking, you're playing with your friends.

And you're trying to influence the other players to play more with you and more against the other people. One of the ways to do that is to share Theories of the game.

In frameworks that are lessons. Like, well oh look, that person has a two for one port And two for one ports. really accelerate. So like they make it ahead and we may may never be able to catch them. So it's like you're using the explicit Learning of the patterns of the game.

Ти інфлуенс the negotiation for why that person should trade with you and not the other person, you know, et cetera, et cetera. No. Personally, one of the things I find troubling and amusing

is everyone goes, Oh, Reed's really good at sellers of Gucatan, so when I start playing it, everyone's like We all gotta play against Reed right now, even at the very beginning of the game. And you're like, Wait! That's not fair. Let's see who gets ahead first. All right.

Number three. Poker. Smoke filled casinos around the world. Gamblers hunch over a stained green table. Strong cards and

Wagering on who among them holds the best hand. A game synonymous with a strategy known as Is bluffing. Bluff is when you bet or raise Known full well.

You don't have the best hand. You hope others are fooled by your confidence and decide to throw in the town. Once the moment of truth arrives and the cards fan out across the table. Ear bluff is revealed. in all its glory.

Congratulations. You've maintained the veil. Of an impenetrable poker face. Poker. has a valuable

simple stream of thinking about competition, probability, risk-based bets that change your set of actions based on how you think it's going on. There is no competitive game that doesn't involve some deception. The same thing is broadly true in business, too. Because Like which product am I gonna launch?

Which partnership am I gonna use to do that? What do I think is the right way to compete with my product and your product in the next generation of products? If you know what I'm doing and I tell you exactly What I'm doing. Then you can compete against me.

You can market against me, you can build the same product, you can potentially build a better product. And so all of that are forms of Deception, information gaps. just logical gaps in order for it to work. There's a

Example. When We were deploying PayPal on eBay. I'm competing with eBay's subsidiary billpoint.

We would take some things that were true. And really emphasize them in our public statements like Oh, we're much easier to sign up for. Totally true. And we said that's the reason why we're succeeding. Like we said, why is it you're growing so much faster than Bill Point? But part of the reason why we would beat the drum so loudly on that and focus on that. is that

One of the things that Bill Point and EBay hadn't realized is that the payments platform was actually email. So what we would do is we would Seek to get the e mail To saying pay with PayPal.

Auction. Before the eBay auction notice would show up. Saying You won this auction for this item on eBay.

And by doing that, of course, people will do the one that comes in. It's like oh Email came in from from PayPal. Sure, great. Now we would never say anything about that because they could make the auction stuff work in a way. That they could get the notice out first that they were to try.

But they didn't realize that was the battle. Now obviously. Not all deception's good. It's like, well, I'm hiding the fact that I'm doing really bad things to my customers, or I'm hiding the fact that I'm breaking the law. Like Theranos. They may help me win right now because it's like, oh look, I have this wonderful blood test. That really, really works. And it doesn't work at all.

That form of deception is, you know. Not only illegal. But immoral. And destructive. Should everyone go become an expert at poker, which takes a huge amount of time? The answer's absolutely not.

But should people understand what that lesson is that's generalizable to all the other games? The answer is yes. That kind of thing is very useful. And it doesn't have to be poker, but like which games Given that framework of setting up something. Where you could succeed or fail. based within the constraints of what's happening, then games knowledge is useful. After the break.

We'll explore even more popular games. and what critical entrepreneurial lessons we can uncover. So stick around. 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.

Creative planning works with business owners to build a strategy around concentrated equity. When to diversify, how to manage tax risk, and how to protect what you've spent years building. Creative planning where wealth works together. Learn more at creative planning dot com slash masters of scale. Oh

Humans will never be more intelligent than AI. There's gonna be two types of companies. Those were great at AI and those that went out of business because they weren't. How do we build a future? That is human centered. I'm Rana El Chaoyubi.

On my podcast Pioneers of AI, we answer that question and so many more. As an AI scientist, entrepreneur, and investor, I know what it takes to build AI that works for everyone. Every week, I sit down with the pioneers shaping our future. And we take you behind the scenes of the AI that's transforming our lives. Find pioneers of AI wherever you tune in. Hey listeners, Bob here. If you listen to Rapid Response on Masters of Scale, you may be missing half the show. Because every Friday we release a second rapid response exclusively in the Rapid Response feed. The guests and topics are just as compelling and timely from Ford's CEO to NASA's administrator to the lessons from The Devil Wears Prada. It takes about

10 seconds to find, just search rapid response wherever you listen to podcasts and hit follow to make sure you never miss an episode. I hope to see you there. Before the break. We dissected the vital entrepreneurial lessons within Monopoly settlers of Catan. And poker.

I'm eager to keep the game night rolling. So here's the next game we'll explore. Number four Your mission should you choose to accept. Code news.

One of the most popular party games in the last decade. A spy master scans a list of words for their team to identify. The spy master then offers them a series of one word clues. Being mindful. To avoid linguistic landmines and Hence the opposing team's cards.

While the game functions simply, it demands complex strategy around communication, Risk taking. And channeling an external perspective. Now, back to Hoffman. Read Hoffman.

Organizations Play simple games best. Like once you get to twenty people. Fifty people, a hundred people, a thousand people. The game has to have a much simpler structure for them to all coordinate.

and playing that game together. One of the things that I Can't do Like when I'm helping Portfolio company COs

I don't tend to give them fifteen pieces of feedback. Because fifteen pieces of feedback Tend to mean. Well the

And the twelfth seeds of feedback is there's still deserve to be on the same list. Usually when I'm giving feedback I give them Like this is the thing that matters it's as short a list as possible. Do that.

And then I'll get to the other things. You know,'cause Generally speaking In the principles of communication And Jeff Wiener may have said this on his episode, but

It's like You have to keep saying the simple thing. And only when you've gotten so sick of saying it Are people starting to hear it? And part of how you recruit and lead.

Teams is understanding their world views. But One of the things you're trying to do as a company is you're trying to get people Have most naturally aligned worldviews. Now sometimes to get to the aligned world views

You'll do some problem solving, some team building stuff, etcetera. You might even start. Meetings with like personal check ins, like What's a good personal win from last week to kind of build connectivity between people.

And That's of course. Important. in our organizations. Number five.

Gather out. For I'm to tell you of a merry role-playing game by the name. Of Dungeons and Dragons. Players develop their own unique character and embark on a fantastical campaign as a band!

Ragtag Adventures A dungeon master. ODM acts as a referee! Chief Storyteller, guiding the group through an interactive journey filled with beasts, fisticuffs, Lucky.

Roll of the dice. A good DM fosters a collaborative and inclusive environment, ensuring all of the characters, from barbarian to bad, are giving them moment to shy. And feel like heroes. Of their own story.

I basically played Fantasy role playing games from age nine to about age Fourteen and I was the game master. I was the person who was setting out the world. I'm saying okay. Here's how the adventure is gonna run. Here's what the set of characters are, here's the non player characters that you encounter. Here's how they

Interact with you. And There were a number of different things I learned. And some of it is like hey, we're collaborating together about how do we Go save the town from the dragon and you know the bandits or the orcs or the whatever else.

And part of what you learn from D is giving people the How is it that my role in this really matters. Like, well, let the thief do it, or let the wizard do that, or let the fighter do that. And in organizations. What heroes quest is this person on? What is the

Can that be aligned to what the OKRs are? In the mission. You're dividing up the roles and some strengths. you know, really good product execution.

Really creative out of the box thinking. deep technical skills, deep marketing skills, et cetera. And you're kind of composing that. For this particular project. A lot of the RPG games are actually in fact playing out a narrative. Okay.

What I learned was that a lot of people wanted to ha be the hero of their own story. Та дава фундаментал кана хума дrive окрас. Almost everybody. And You want everybody on the team.

You don't want to say I'm the hero You guys are all the minions. What is each person bringing in? As their Heroic story.

Each of their own heroic journey stuff can be Synergistic. How to Does the set of different characters

and create an overall greater story. To this day. I find playing games to be a great way. to communicate and connect. Board games.

Have become a meeting place for my friends and I to discuss everything. From philosophy and politics to business obstacles. And personal goals. I encourage you to blow the dust off your old family games. Not only are you likely to have fun.

You might just develop. Some useful skills along the way. I'm Read Hoffman. Thanks for listening. Hey there, it's Jill Slesinger. I'm launching a new show. It's called Money Moves, and your money is going to move.

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