Reid Hoffman, co-founder of professional networking site LinkedIn, and Ben Casnocha, former Chief-of-Staff of LinkedIn, talk to EconTalk host Russ Roberts about LinkedIn and their book The Alliance. Hoffman and Casnocha discuss the founding and vision of LinkedIn along with their ideas in The Alliance on how to improve employee/employer relations when turnover is high and loyalty on each side is low.
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Readings and Links related to this podcast episode
About this week's guests:
Reid Hoffman's Home page
@reidhoffman. Reid Hoffman on Twitter.
Ben Casnocha's Home page.
@bencasnocha. Ben Casnocha on Twitter.
About ideas and people mentioned in this podcast episode:
The Alliance: Managing Talent in the Networked Age by Reid Hoffman, Ben Casnocha and Chris Yeh, 2014, at Amazon.com.
The Start-up of You: Adapt to the Future, Invest in Yourself, and Transform You Career by Reid Hoffman and Ben Casnocha, 2012, at Amazon.com.
"Don't Send Your Kid to the Ivy League," by William Deresiewicz, NewRepublic.com, July 21, 2014.
Entrepreneurship, by Russell S. Sobel. Concise Encyclopedia of Economics.
Ronald Coase. Biography. Concise Encyclopedia of Economics.
Web Pages and Resources:
Hope Street Group.
Open Source at Zynga by Paul Bakaus. Nov. 1, 2011.
Podcast Episodes, Videos, and Blog Entries:
"Talking with Jeff and Reid About The Alliance" on Ben Casnocha's blog. Video, 25 minutes.
"Brilliant Management Advice From LinkedIn's Billionaire Founder". Richard Feloni, July 13, 2014. Business Insider. 60-slide summary of The Alliance.
Sam Altman on Start-ups, Venture Capital, and the Y Combinator. July 2014. EconTalk.
McAfee, McArdle, and Ohanian on the Future of Work. EconTalk.
Brynjolfsson on the Second Machine Age. EconTalk.
Podcast Episode Highlights
Intro. [Recording date: July 24, 2014.] Russ: Let's start with the origins of LinkedIn. What was the original concept? It's, surprisingly to me, maybe to you, it's over 11 years old, correct? So how did it start? GuestH: Well, not surprising given I lived it. But the highline was--the idea about things, I think about, what is the world as it should be given certain kinds of technology? I've been thinking a lot about over the decades about identity, networks, and how this helps us navigate having better lives both as individuals and society. And so after I helped sell PayPal to e-Bay, I was like, what should I do with--this is new language--but my new tour of duty, my next tour of duty? I said, Well, actually in fact I see this future in which it's much better off for every individual to have a public professional identity, a network that associated with that applications built on top of it. Most people don't see that right now. But I do think that they, and as companies and as a society, all better off for that. I think I have an opportunity to create that. And so as opposed to taking a year off, which was my initial plan, post-PayPal-- Russ: Which you earned, I suspect. A little bit intense. GuestH: Yes, it was very intense. And so I took 2 weeks and went and visited a friend of mine in Australia and went and stayed at his beach house, and then came back and started LinkedIn. Russ: And your original concept--you've given a broad outline, but how did it start when it was actually up and going? GuestH: Well, part of how you do consumer internet--the vast majority of consumer internet companies--is you think of what is your minimum viable product by which you can launch? You have to have answers to questions like, how does it spread? How do people encounter it? What are the first value propositions? And even though we knew there was going to be this entire stack of things, including things that work on today, which is: How do you have best business content for every individual, [?] the relevancy from getting from shares from the network intermails[?]--even though we knew all that, we didn't start with any of that. We started with, you have a profile, you have a network of people around you, you have an ability to do search, you have ability to communicate. And we just started with that. So the first, say, month, was: What was the minimum viable product that we can launch such that we can iterate as we go? Russ: And, being an academic, I don't use LinkedIn perhaps as much as I might. When I looked at it originally I thought, Well, this is just a place you post your resume. It's like a bulletin board. Is that how you saw it initially? Because it's certainly much, much more than that now. But that was how it looks for an outsider hearing about it, in say 140 characters. GuestH: Well, we knew that that would be the first interpretation of it. And we knew that that would be the first solid business model part of it. We knew that when people say, well, I have a public professional identity and I have a network; what do I most use that for? Well, like job searching or recruiting. There would be economics associated with that. But part of the reason that we knew--like I've been talking since the beginning about network as a platform, is because your identity and your network is a platform for a set of applications that help you work better, help you navigate your career better, help you be better informed. And we knew that that was a--and we built that into our data structures. We knew that that was part of where we were going from the beginning. Even though we actually focused for years on just solving, primarily, the work circumstance. Now, from very early most people--I'll give you two examples of how most people don't know how to use LinkedIn. And in fact-- Russ: Even now. GuestH: Even now. Russ: It's possible. I have a profile. Evidently you are supposed to have a picture on it. I don't. I'll fix that before even this airs. GuestH: A picture is useful. And that also will condition which of the two things I say first. The first thing is, if you ask most people, Do you understand that you're living and working a network age? They'll say yes; they'll wave to their cell phone. They'll see, You see, I'm connected. To have a strategy in a network age, you have a strategy for how you're being found. Because there's millions of people out there. And of course you don't want all million to contact you. You want the relevant people, the people who are thinking about something that could be really interesting to you, could be a business opportunity, could be a job, could be a piece of intelligence, could be a person for your show. Or something like--how are you found the right way? Now you do the podcast, and else. But searching for people--searching is part of what happens in a networked age. And how are you discoverable. Russ: That last part's the part you forget about. Because you are usually seeking. Forgetting that people are looking for you. GuestC: Yes. It's actually one of the amazing things-- Russ: This is Ben. Go ahead, Ben. GuestC: They get people to update their resume when they are not looking for a job. Was actually a profound accomplishment. That was really a shift for people. I'm not actively looking for a job, and yet I'm going to continue to update my profile in pursuit of being found in some kind of abstract, long-term way. GuestH: Yes. Well abstract in that you don't know exactly what you are hoping to be found for, because you don't know what those millions of people--but sometimes the absolute best things come in that way. And that's super important both for you and for your company. Because sometimes being found sometimes helps your company sometimes as well. Russ: And we forget about this--maybe you do, maybe you don't. But I think those of us who are not paying close attention to LinkedIn--I mean, one of the most extraordinary things about it, looking at it as an economist, is that it lets you look for a job in a quiet way, without looking for a job. And as an economist I look at that and I think that reminds me of Ronald Coase, because Coase is about transactions costs and how transactions costs disrupt markets. And what LinkedIn does more than anything, it seems to me, is lower transactions costs. Which means more transactions. Which means are put in better places where they are more productive, more happy, etc. It's a good thing. GuestH: And actually, by the way, so all of the--most of the economic thinking was there from the beginning. So the lowering of transactions costs, the increasing transparency, increasing liquidity--but also, by the way, one of the really key things is adding in reputation. So the fact that, for example, someone who is diligent, who essentially does the work, is a good collaborator, doesn't have anger management problems--you know--goes the extra mile in order to get the outcomes--that reputation now is much more discoverable. Much more shareable. As is the inverse. And by having essentially reputation that also increases the director[?] for good people, and creates the better allocation of better assets to great projects.
Russ: And the incentives for bad people to be good people, which sometimes isn't a matter of skill but a matter of diligence or focus. One thing I think about--I'm sure you guys have thought about this a lot--is, a lot of what we are talking about in the networked age, from Yelp to Google to Amazon Books to LinkedIn to AirBnB is about relying on the ratings of others--users. People who have actually experienced the product rather than experts--say, Consumer Reports--who tells you the best dishwasher. That's a glorious thing. At the same time, it's hard for people to be honest sometimes in those situations. I've had people tell me, oh yeah, AirBnB, everybody gets a rave, because people feel guilty; they've stayed in their house, can't really say bad things about them. I know that on Uber if a driver gets less than a 4.6, he's fired. So, it makes me worry. It makes me feel guilty giving a guy a 4. So, similarly, without naming names and without naming details, I've been praised for skills, endorsed for skills I don't have. How do you--there's a lot better way to say this. There's a lot of noise in the LinkedIn reputational stuff. How do you think that plays into the effectiveness of it? GuestH: Well, many of the reputational pieces, especially the skills and endorsements--very early, it's kind of like a .5-version of the feature. And there's things that we need to build in that help enhance like the--for example, you've been endorsed as an economics, as an expert in economics, by people who themselves have economic skill. You know, that kind of thing, the kind of natural evolution in order to make that better. Russ: Yeah. That should be worth more points. GuestH: Yes. And then were featured more prominently. Part of the reputation, when you look at the profile--these sorts of things. Russ: And so, there's a bunch of stuff to build towards. GuestH: Now, that being said, a frequent comment that we get is we also have these kind of equivalent of book blurbs, kind of endorsements; say those are all positive. Like book blurbs, by the way, which are all positive. Russ: Strangely enough. GuestH: But they are still useful intelligence because it says that someone's willing to go on the record, who they are with their identity; they say this is something that's important. And that's a valuable additional source of intel, when you are trying to figure out, Should I approach this person, should I do business with them, should I? There is some noise. But there is valuable signal you can discern there as well. Russ: So, let's go back to the evolution of the site. When you started there were a lot of people doing stuff like what you are doing. Friendster, MySpace, Facebook. Some of them fell by the wayside, and a couple of them got really, really big. Why do you think that--besides the fact that you are really smart--why do you think that happened? What did you do right? You can mention what you did wrong along the way if you want. GuestH: The primary thing we did right is we stayed current to our vision, which was: We're about people's economic lives; we're about their career; we're about how they work. And so for example I got from friends of mine, from highly intelligent commentators, I got told all the time, You're being an idiot; you should put social games on it. You should do all these things; look at how big these things are getting. You should do that. I was like, No, we're staying to what our value proposition is, what our promise is, where it is we play a role in people's lives. And we're focused on that. And that was seriously important. Russ: How hard was it to ignore those? GuestH: It's hard because when people adopt technologies they generally don't start within the productivity suite. They start within entertainment. They start within kind of consumer. They start within optional. So, photo sharing is easy. Social games is easy. And it's kind of like, I'll go play with it and if I don't like it I'll stop doing it. Things like for example affect my economic life, like, how will I be looked at if I have a profile at LinkedIn? Because if it goes down, that's a seriously important thing. So people are much more risk averse, much more hesitant to do that sort of thing. And that's the reason why everyone else thought they were being just product geniuses. Like for example a common thing I hear about LinkedIn is: LinkedIn is boring. Right? Russ: Stodgy. GuestH: Exactly. And you go, Okay, maybe it's true, because we're not focused on pictures; we're not focused on entertainment; we're not focused on 5 minutes of give me an adrenalin hit. We're focused on: how do we help you work, how do we help your career, how do we help add value to what you are doing over days, years, decades. And that sometimes means we don't invest in something that's lightweight and entertaining. We invest in other kinds of things. That has I think been very successful for us in terms of staying focused on the long term. Now, I think some of the things we did wrong--we launched our Groups too early. Groups is an important part of work, it is an important--trade associations, company alumni groups, university alumni groups all important. We launched it early because we were worried about some competitors trying to compete with us by doing groups. And actually in retrospect, what I would have done is, No, let's wait until Groups are right. Like, do the right thing and we really put a lot of work into them, which is what we've been doing for the last year. And hopefully we'll continue. But that would be the kind of thing that we did wrong. GuestC: When you said there are some competitors as early as LinkedIn that actually had a very different thesis, that every individual can have their own individual identity. Again it's something that seems so obvious now. But early days, to have your own page that existed free, that is your own kind of personal brand. What was the company that was linked[?] wherever you worked, that was the identity? GuestH: Yeah. There was--80% plus of our competitors. We didn't look at the social networks competitors. We looked at Rise and ZeroDegrees and a bunch of other things. Russ: That were doing what? GuestH: Well, some of them were doing--Rise was a little more like us. ZeroDegrees and VisiblePath were both in the category of your company owns your network. Yes, it's a network world. But it isn't you having your individual identity. It's: You're part of a company. Russ: In a way that's the way Gmail became so attractive. Because it wasn't your company's email address any more. GuestH: Yes. Russ: Or your school's. Wherever it was. GuestH: Exactly. What I knew to be right, and this is actually part of the intellectual foundation of The Alliance as well, was, what I knew to be right is: It's how do you align interests between the individual and company? It's not the individual's subsumed in the company. It's the individual has their own identity, their own persistence that goes with them their entire career, even if they work their entire career at a company. Happens less and less these days, but even if they do. And then the company should view the individual's network as assets that the individual brings into play, in just like their skills and everything else. But they are the individual's. They are not the company's. Right? And that, when you get them aligned, you get an allegiance between them, then great things can happen.
Russ: How much of the evolution of what is there now came from that original vision versus user experience and what you saw they were looking for that you weren't providing and decided to provide? GuestH: 95% of the features and everything else we've done were all part of the initial conception. There's a bunch of things that are also part of the initial conception that aren't all on the site yet. Those are relatively robust, like you take what is this vision of individuals having an independent brand, network and identity, aligned with companies, project it over time, and what is that a platform for? We had all of those. Now, the details, the order in which they came, the way that the minimum viable product, the way that they were iterated, all of that came from market feedback. All of that came from, Oh, well now it's time. I'll give you an example--something we launched much earlier than we were thinking. We thought we were going to be completely individual for years and years and years. And we started having companies come and knock on our door and say, How do we buy your product? We want to buy your product as a company. Why? 'Oh, we were expecting you to call. We were expecting you to call like three years later, not right now.' So what we did is we said, let's mock up something. Let's put these two engineers in a corner, build up something specifically for companies, and let's hire a salesperson and let's see how that goes. And, oh, that's going really well. Okay, let's invest much more in that. So, timing and sequencing-- GuestC: That was a recruiting product. GuestH: That was a recruiting product. Yes. Very specifically. Russ: How much--for example now, and originally--I think a lot of people think of LinkedIn as a job search company. But you are much more than a job search company. You are a way people find people they want to do business with. Sale people use it. Not just recruiters. And in dramatically different ways than people had access to information 10 years ago. Did that come from the beginning? Did you see that as part of the vision? GuestH: Yep. Because the idea is: What happens when you tie search to a trust network, and how does that affect all forms of business? So this is the other thing--I told you I was going to tell you two ways in which people don't understand the network page[?] at LinkedIn. This is the other one. Which is, basically, take some problem that you are trying to solve. Go to LinkedIn and type in some terms that are appropriate to that and search around your network. Literally every single person I've done this with, every single time, has been surprised by it--Oh, so and so is two degrees out from me and they could be really helpful. They could take the time I'm trying to solve this problem from 3 hours to 15 minutes. I can ask the person I know, Is this person really good at it? Should I talk to them? I can get an introduction to them? And yet very few people do that because they don't think that they are living and working in the networked age. And so that problem set--look, this goes back to, one of my co-founders, Jean-Luc Vaillant, and I had a conversation like a year and a half into LinkedIn, Well, I totally get this for recruiting case, but really how do I tell my friends how to use this? I go, Well, what kind of problem are you trying to solve? 'Well, I'm trying to figure out right now if we should use this new kind of hosted data center.' And I forget the term--this was years ago, like a decade ago. He said, okay, these terms. And I went and typed them in, in his account, and said, okay, these three people are two degrees away from you. Would it help you to talk to them? And he's like, 'Yup.' And could you ask the person--the person you know in between them? Would that person be a good judge if they were expert and be able to give you a good introduction? And he said, 'Yes.' Your problem just goes from weeks to days. GuestC: Well, most people don't even think about two degrees away. It's funny how natural that comes. But it is the profound difference between LinkedIn and Facebook. Right? Facebook shows your friends, and that's it. LinkedIn, from the very beginning, had this two degrees, three degrees of separation. And so it really made central the idea that if you can get an introduction and have a warm referral and it's somebody you can help be in your network is bigger than you think. GuestH: It was our first tag line. Russ: It's nice. It strikes me that, for those of us who blog or have a podcast, we have a broadcast medium. Where we can ask people stuff. We can get our problems solved. People do it on blogs all the time. I don't think--as you say, most people don't realize that they have such a megaphone if they want to use it. GuestH: Yes. And it's all levels. For example, a step up is just having a LinkedIn profile. It's not a megaphone. Maybe it's saying a word. And that kind of scales up. I actually think generally speaking it's wise for most people who are ambitious in their career to think about how they participate in social media. They may elect to do very little. That's a perfectly acceptable answer. But, what is your strategy for being found? Russ: Yeah. But of course, some people don't want to be found. As we know. And it may be being found makes them uneasy. They also--I just think about wife, who has a religious aversion to being on social media. It gets lonelier and lonelier. People say, Did you see this? Where'd you get that? "Everybody's" seen it. Different world. Amazing thing. GuestH: It becomes a competitive disadvantage. I actually [?] that if you take the network page and you say, I don't want to be found, it's a strategic and ongoing structural disadvantage. Russ: Yeah. Well, it depends on what your goals are in life. But in many areas, for sure. I was talking to a person in sales the other day, and he said, Most people don't like technology. I think they view it as sort of like cheating. It's like, I just used my charisma and my charm and I remember everything I need to; maybe I have a notebook. But the idea that--that's a disadvantage. Obviously.
Russ: I saw from data from last year that LinkedIn has 225 million members. GuestH: I think we publicly announced over 300 million. Russ: Okay. The United States at the time was 77. What are we at? GuestH: Um, I don't actually know what the public-- Russ: It doesn't matter. But the United States is not half. Which is surprising. Perhaps. Is LinkedIn used differently outside the United States than in the United States? We have a very unusual business culture. Do you see those business differences? Do you know of them? GuestH: Well, first let's start that we designed LinkedIn to be the right economic system. So, we actually, even though we are rooted in American culture and whatnot, and obviously that informs some of our decisions in ways that we are blind to and we try to correct for, the actual thing is: What's best for the individual, for the company, and for the society. An economic basis--how should the system work. That's what we build to. Now [?] to that, we do have some areas which are massive. So, for example, for years, the highest per capita usage of LinkedIn was actually in the Netherlands. The Prime Minister of the Netherlands was the first government official who started using it actively--not just having their staff set it up, but I use it, and I'm using it for things. And that's because a small country does a lot of cross-border trade, is used to the notion of action[?]; in fact, we have to be out there in the network and so intense usage. Singapore also very similarly intense usage. Other countries--Japan, for example. Well, even though the job landscape has changed, even though the whole salary-man, you live there, you work there, it was one company your entire life, has radically fallen off, it's still, oh it's a little shameful. For example, one of our earliest--we got a pitch from a Japanese company that we really love your product; we want to do a joint venture in Japan. The one thing we have to do is we have to remove people's names. Like, No, that's not our product. You want a different product; but our product is real identities. GuestC: And Japan for many years has been pseudonyms, right? GuestH: Yes. Well, because all online has been pseudonyms-- GuestC: Really interesting, called Troll. GuestH: As a cultural phenomenon--Korea has, you know, challenges in what it looks like, loyalty to the company. Russ: LinkedIn appears to me--tell me if I'm wrong--to be mainly for educated people, white collar occupations. Is that true? And do you see an opportunity for LinkedIn or another product to help coordinate work activity for blue collar workers? GuestH: So we think that blue collar workers is a long term part of the strategy. It starts with the high end, the people with the most elite skills, most in demand, highest kind of career prospects. There's the natural intersection of why companies would use the product, why individuals use the product, and that's why it starts there. Ultimately LinkedIn should be useful for anyone that has some notion of career, some notion of getting better at their job, some notion of making progress. Because, how do you invest in yourself, how do you get new opportunities--all of that, ultimately in a network age comes down to identity in network. So LinkedIn should be applicable everywhere. Russ: I just think about unemployed construction workers in Nevada who maybe are still sitting there hoping the housing boom is going to come back. And they sit there. And they should move, some of them. A joke I've used before in here is, the problem with some areas is luggage. You just need to get people out the door. They need to be someplace different. That's the best way to help them. GuestC: One of the terrible things about housing policy in the United States. If you own a home it tends to lock people in. Russ: Correct. It tends to lock people in. People seem to forget that when they talk about the virtues of home ownership. It drives me crazy, that home ownership is this religious, romantic ideal. It's silly. It's just a house, just an asset. Often a bad one, an expensive one. For some people not the right one. But anyway, I just think about them, thinking, there are jobs for my skills somewhere else. Or if there are skills I could acquire. Or if they are just sitting there. GuestH: Or, thinking about, for example, doing some internships. Trying some other work. Even if you say, Look, my long term strategy I think two years the construction market is going to come back. What do you do while you are doing that? Do some freelancing. Try some other things. So you have adaptability, you have flexibility. In case you are wrong about the two years. In case you discover something interesting. Russ: Absolutely. Yeah.
Russ: What do you think is the biggest education or training problem in the workforce today? And do you see that? do you look at that? do you keep an eye on it? Because you are seeing these searches. So you know what people are looking for. Do you see what people are having finding? GuestH: We publish a bunch of things in terms of what skills are most trending at LinkedIn, what buzzwords not to use in your LinkedIn profile. Russ: What would be one of those? GuestH: Let's see. I think 'leverage' was one from last year. GuestC: Yeah. 'Innovative.' 'Creative.' GuestH: Yeah. Russ: You are not supposed to use those? I am creative and innovative. I mean, what do you do if you are one of those people? You have to find a synonym? GuestH: It's not very creative and innovative to use those words. Russ: Okay. GuestC: Especially in succession, separated by commas. GuestH: Yeah. Don't think of your public identity as buzzword bingo. Russ: That's a bumper sticker. GuestH: Yes. And so, but we do actually, we work with entities like Hope Street Group to try to figure out how do you publicize what the terms are so educators can prepare for it and governments can figure out how to do the right programs. Obviously here in Silicon Valley we tend to think a lot about--like I'm a massive supporter of this initiative, Hadi, Partovi called Code.org, which makes sure that CS (Computer Science) is taught in every high school. That doesn't mean everyone should be a computer programmer. Russ: Computer Science. GuestH: Yes. Russ: We're in the heartland here; you've got to remember, outside-- GuestH: For example, obviously computer science software is changing all industries. Everyone should understand something about computer science. Whether or not you become a computer scientist or a programmer yourself or not is--yeah. It should be in every high school. So those are kinds of things. But it goes across the--it changes based on industry. I don't know what the trends are, what's happening in the energy industry, and petroleum, but I'm sure they are, too. We see that because it shows up in people's profiles; it shows up in jobless things; it shows up in what happens when a person gets a promotion, what do they add to their profile. These sorts of things. Russ: So, let's do a thought experiment. You are going to take your year off now, and at the end of that year you have a lot of deep thoughts. And then you are going to run a high school. And you know that work is not the only thing people care about, but it's an important thing. Tell me what that computer science class there is going to do for me as a Junior, say. Because the seniors, they don't pay attention. But say as a Junior. And what else would you put in that school that would get people ready for their careers? GuestH: So, I'd say three things. The first thing is, I would actually make as part of classroom instruction, bringing in various professionals, teachers, everyone else, and talk about what their work life is. So people have some visibility. The whole notion of separating the academy from the work life is insane. Russ: Bizarre. GuestH: Yeah. Insane. GuestC: And the failure of imagination is what bedevils so many people in thinking about--they can't actually imagine more than four or five professions. GuestH: Yes. Russ: And they are usually preceded by Law School somehow. So, I know I've got to go to college. But then after that, I probably should do something. It ought to be Law School. And then, since I don't want to be a lawyer, I'll figure out something else. GuestH: Yes. Exactly. So, bring in a scope. Have almost like a fireside chat. The person doesn't actually have to prove[?]. You ask, what are the key skills? How did you learn them? How did you discover this? What did you think when you were in high school you were going to do? How did that change? So people are going to say, Oh, I get to see how to navigate this. This is a little what Ben and I for example were talking about in The Start-up of You, the earlier book. The second thing is, in specific, obviously if you have an aptitude for software and computer science it's an enormously lucrative career; you should consider doing it. It can be done remotely; it can be done in many regions. People think that it's all like Google and LinkedIn and Facebook. Actually, every company is hiring software engineers. I am quite certain that within Caterpillar there are software engineers. It's a very wide range. That's why it's important to do it. Now, even if you don't have an aptitude toward it, knowing it, so you know how your job changes and industries change, so you are familiar with how software creates a different product, a different pattern of work within a company is super helpful to you no matter what you are doing. Even if you are, for example, being a barista at Starbucks. Russ: Isn't that a hard thing to teach in high school, other than the school life? You know as much about that as anybody in the world. Maybe there's three people that know more. But you've seen a lot, learned a lot, both of you. It's hard to tell people that. So you think about what you'd do in that classroom--it's hard to think about what that might be to give people that appreciation. What would you do? GuestH: Well, so-- Russ: I'm bringing you in. You don't have to run the school. You can run the computer science part of the class. GuestH: No, I understand. But there's a bunch of online resources. And CS works this way. And that's part of the reason why I [?] Code.org, and various--there's a whole bunch of online things like Treehouse and other programs for doing this. Go and bring a whole bunch of--that's why all schools should be network-connected. The Khan Academy. There's a ton of resources out there. And so how do you bring those resources into the school in a way that you say, Look, whether it's how to do it--the actual skills and construction--and how to learn it; but also what to do with it. There are those resources, too. Like, for example, you'll have podcasts like this one. Where the person is saying, Here's how CS matters. I go find those. I would clip them. I would make sure that that's part of what students are learning. So they go, Oh, I get it. It's not just do I learn this little computer trick and game, but actually knowing this will help me no matter what career I go into. GuestC: And you were on the Zynga board for several years. Do you think every [?] CS class in the future is going to be Zynga games? Like, are they all going to be game of 5? Because part of what I think Russ is interested in is the motivation question. You are 15 years old; you have a lot more years before you necessarily need to earn income; and someone says, CS is actually important. How do you actually on-board[?] them into an experience that's engaging? GuestH: Look, I think one thing--I agree. Yes, game dynamics. Yes, more [?] content. Yes, more bite-size. Yes, doable online, like Khan Academy and everything else. One of my investments at Modo[?]. All these things, doable. However, I actually think that one of the responsibilities for all teachers, including CS teachers, including computer science teachers such as in this hypothetical experience, is to say, Look, what is the economic future of your students really matters? So it's beholden upon you to try to get as much access as possible to say, By the way, you are going to have to look at yourself economically, you are going to have at it, and here are some ways to do it. And you should try to make it as interesting as possible. You should try to make it as engage-able as possible, as understandable as possible. But you should be assembling resources however you can to try to help students understand that they are going to need to be economic actors. That's like almost everybody has that thing. And if they don't start understanding that soon, you are doing them a serious disservice.
Russ: So, I'm going to push back on that. I'm going to bring in an essay that Ben and I were talking about before we started taping. There's an essay running around on the web--it's by William Deresiewicz--I don't know how to pronounce the last name. But it's a rant saying that the Ivy League is just, now, a networking opportunity for bright, inside-the-box people who really don't know how to think any more; they don't see college as a thinking experience, a place to explore identity. And as a result they are missing out. All they become focused on is getting a great job when they get out of school. So, what's your response to that, and how do you--Ben, you recently wrote a very nice post about getting meaning from life and meaning from your job. How do you reconcile the fact that, if we focus on our careers and the 'start-up of me,' we're going to have something other than a commercial, material existence? GuestC: Well, a college drop-out--do I want to comment on this? Russ: Go ahead, Ben; you go first. GuestC: I'm not sure I completely understand your question, Russ. Russ: So, Reid just made the case for--I mean, I try to teach this to my kids. And by the way, one of the things parents can do if schools aren't doing it: They can tell their kids what they do. I thought my Dad all his work life drank coffee and talked on the phone. Actually, he had a job. There was more to it. And I think it's important to talk to your kids about what you do just to give them the experience of what they might want to do and might not want to do. But my question is, if you are constantly thinking of yourself as a brand, and if you see school as a way to enhance your brand, you are missing out on some things. And I wonder if you agree that tension, and if that softens your interest in this sort of-- GuestC: Vocational-- Russ: Yeah, exactly. GuestH: I want to say one thing. [?] GuestC: [?] GuestH: So, Ben is so intense about kind of the going and accomplishing new experiences, doing things. Part of the reason, he's essentially very entrepreneurial; left college--he said, like, it's time for me to get doing things. He himself doesn't brand, whatever--it's: I go accomplish things. Now-- GuestC: I guess the thing--I agree. I've heard this critique a lot. If you turn high school--the high school experience is going to be to bring in professionals to talk about their careers-- Russ: Just to get you ready for business school. That's what it's for. GuestC: Right, right. That you lose out on some kind of intangible experience, as you put it, Russ, exploring identity and reflecting on the deeper questions. I actually think there's a lot of that learning that can happen in the world of work. I think the notion that in the workplace as you pursue a career you somehow have to stop thinking about those questions is actually quite misguided. And, the exploration of those questions can often be more productive when pursued in concert with living in the real world. As opposed to: we are going to lock everyone up in the classroom and read books and then just reflect on what really matters. So I think you can pursue them in tandem, and in fact they can be mutually enriching, in a sense. And you've talked about this in other shows, Russ, how vocational [?] has a bad rap and how that's so problematic given the trends of the American economy. And I think this is one of the [?] contributions in terms of how he thinks about LinkedIn and even users, members of LinkedIn thinking about their professional lives in an expansive way and thinking about how their career shapes their value system and all that kind of stuff. So, I think it's a mistake to think that, reflect in professional life means you can't also reflect on what really matters. GuestH: I 100% agree. And I think whether it's a school context or a work context, the false dichotomy of saying, while[?] focus on the business and economics you can't be focused on the other. So you're teaching students, you say, No, you should be paying attention to what their economic life and their economic identity is. But they can also talk about art and ethics and meaning and philosophy, and those are important, too. And when you get in the workplace, you shouldn't say, Well, I did that in school and now I don't do that any more. And so many of the many interesting meaning-of-life questions come down to people and how humans work together. And what I love about business is that it's all applied psychology, all day long. Because you're working with people to create things; and really is an exercise--I've learned so much more about how people, humans work together through business and real life rather than reading, you know, psychology texts-- Russ: Freud-- GuestH: Things like that. Or Freud or even philosophers. There's something to reading those books, but you just learn so much about so many of those important issues through the world of work. Russ: Yeah. It's an interesting niche that I don't think is being filled by anybody about what you just said: How do you--we all understand, we learn a lot as we get older, just from those experiences. But nobody really tries to organize it other than show "The Office." And that's where we mock it. And watch it unfold in comical, satirical ways. But it's interesting that we don't think about--we talk about lifelong learning but we don't think about ways to organize our thinking about these adult topics other than the occasional book like The Alliance--which we are going to get to in a second. But it's an interesting question.
Russ: Let me ask a different question of both of you, which is: I argue on--I'll say it over and over again because I think it's true and important--that this is in many ways the greatest time to be alive for a large number of people. In that--well there are two things that I see that are so obvious. There's, if you want to learn something you can, in a way that you couldn't do 20 years ago. The opportunity to use information is unparalleled. But the other thing is that work is more exhilarating and more meaningful for more people than ever before in human history. Having said that, there are many people still who aren't part of that process. When you are here in Silicon Valley, we are taping this in the LinkedIn headquarters, it's so tangible that you can feel it. When you walk around, literally you can see and feel how dynamic people and the ideas are here. And the things you hear about. But there's a big sleepy part where there's a bunch of people, especially at the bottom, who aren't getting a good education; can't be part of this because they don't get those computer science skills. Does that worry you? GuestH: Very much. I think that part of the thing that is beholden upon us as technologists, as inventors, as investors, and entrepreneurs, is how do we help create as much systems as possible to give as many people, as broad a swath of people, a shot. We talk about meritocracy, but let's make it real and possible. So that's part of the reason why all the kind of online education efforts, they get connected to the internet, because it's kind of like saying, How do you do that? Well, if everyone has a device or everyone has access to a device, and the device has access to free education, at least--it's not as helpful as being in a classroom is doing it the right way. But at least you are getting them closer to having a shot at it. And as much as we can do on systematic, leveraged ways, we should do. [background speaker, can't make out words--Econlib Ed.] GuestC: It's just a question for me because I never actually debriefed after your panel with Andy McAfee and Peter Thiel and your [?] because this is-- Russ: What was the topic? GuestC: The topic's on the future-- [?] GuestH: Andy's book, which is The Second Machine Age [?-too many people talking at once for me to make out.--Econlib Ed.] Russ: Yeah. His co-author's been a guest on the program and Andy was part of a panel about future of work, and what do we do about folks who aren't--who not just aren't contributing to this; there can never be a large number; but people who aren't engaged in it, connected to it. GuestH: The principle thing--there's many great things in Andy's book. The principle thing though, I think that it's a very good call to action, which is part of the reason I did the panel with Andy, talk to Erik and Andy, but [?], is: How do we then, as [?] to technology being something that moves a lot of jobs out of the workforce--right? Which will happen. That's part of productivity, it's part of [?], it's a good thing to happen. How do you also have technology that also helps create channels of employment? Helping get people be skilled, kind of educational stuff; helping create new kinds of jobs that create paths [?] of people. And we have to think about that, as technologists and inventors, entrepreneurs: how do we create that more? And I think their book is a very good call to arms on that. Russ: Any other comments on that, Ben? GuestC: No.
Russ: Okay, let's move to The Alliance. So it's a new book. It came out, I think, this month? Last month? GuestH: A couple of weeks ago. GuestC: July 8th. Russ: Yeah, and it's also a call to arms. It's suggesting we need a different relationship between employer and employee. So, lay out the case. GuestH: Well, I guess I'll give some maybe more macro context, given the show and your background, Russ. For most of the 20th century, companies in America organized themselves and thought of themselves as families. And if you went to school and landed an entry-level job at a GE (General Electric) or GM (General Motors) or IBM (International Business Machines), you would join the IBM family. And IBM would in effect guarantee lifetime employment and commit to train you and invest in you and the employee for their part would pledge loyalty. Sign up and be fully excited about being a company man. But in the last couple of decades with globalization and technology and those twin forces among many others, IBM and GE and GM can no longer afford to offer that kind of deal. And I think what's most striking about the shift, and we mention this in the book, in I think 1963, an exec at GE said 'employee job security is a prime objective.' You can never imagine an exec today saying employee job security is one of our top corporate objectives. And then in the early 1990s, Jack Welch[?] said, If you want loyalty, get a dog. At GE we have 1-day contracts. Prove yourself every single day or you are out of a job. And that's because GE can no longer afford to make employee job security a prime company objective. The problem with how companies have shifted from family to what we call kind of free agency is that in this free agent, minimalist, laissez faire relationship you are not actually building the trust in relationship with your employees that allow employees to do their best work, or allow both sides to do their best over the long term. And it's that long-term investment that creates innovation and actually creates the kind of adaptation that companies need to be competitive. And so given that shift from family to free agency, the birth of the Alliance was, is there a third way forward, a better path forward, that can involve the benefits of both prior models. Still create an atmosphere were relationships and trust can develop like the family model. Still have the flexibility that companies seek in this kind-of free agent model, whereby you can move talent around, fire talent, hire people with different sets of skills in order to adapt to a global world. That's the macro context for why we felt we needed to do this book now. Set forth a new framework for companies for this modern era. GuestH: I think the thing that I would add to that is, people frequently--the real baseline of the Alliance is recognize the fact that all industries, all companies are heading more to a place where a person works at a company for a while and then goes and works at another company. That's undisputable trend, not just the United States. It's true in Japan, Korea, Europe--everywhere. It's true in China. And so, the question is: Given that's a fact, how do both sides play in a way that's great for both? How do you take that fact and how do you make that an important part of the way you actually get good results? And so, what we said is, the problem is what's happened over the last 10 years is it's just not talked about. So you essentially have these lies of omission, where in that conversation--people go, well, I didn't know [?] you want to work, so you might go work somewhere else, but I'm not going to talk to you about it. I might work somewhere else or you might not have me working here, and we're not going to talk about it. And so therefore with a lot of omission you have a decrease in trust. And a decrease in trust means a lack of investment, means a lack of ability to coordinate, means a lack of productivity. And so the question is how do you get back to trust? We have those open conversations. And we can be adults; we can have open conversations about this. And then that sharing of mutual interest now allows you to invest in the future, and allows you to actually know how to play forward. Russ: My feeling is, the way a lot of companies cope with it now is they just pretend it's not there. We do that in marriage, too, of course. We all I think have this ideal--which I'm in favor of--that we're going to marry for life. It's not a very realistic ideal for most people. So it's an interesting question, whether you should confront that or not. Most people would say, no, you want to make sure there's a likelihood that it lasts. But in the workplace, where we don't have, I think, the same costs and benefits of divorce that we do in the family, it's absurd that we don't talk about it openly, and plan on it and act accordingly. So what's your solution? You have a simple idea to start with, but then it's got some rich components. GuestH: So the book, what we detail in The Alliance is how to think about this as a manager. Now, obviously employees and people interested in being managers can also find the book useful. Or just students of companies. But it's basically to say, the managers should start a conversation which says, what our compact is, is we help you be lifetime-employable. We help you with a tour of duty, a set of projects that help transform your kind of work and career prospects and economic potentiality. And in return, you invest very seriously in the company. And we agree this is a project over a realistic time frame, generally speaking 2 to 5 years. It can depend on the industry and the region and the country and all the rest of that stuff. And, we will have open conversations about it, where we know that part of what happens in a tour of duty is the company may say, well, that's not really working out; we're changing directions. Or the employee may say, I've got this other offer from this other company or this other thing I want to do, and that's a perfectly fine thing. And both sides recognize that it's honorable. But, that both sides also--and we wrote a post about this called "The Right of First Conversation"--which is to say, look, part of our loyalty to each other, about being on this team, because it's 'team' rather than 'family' together, that we will then say, we'll talk to each other first. Before making a decision we'll talk to each other and say, will we do another tour of duty together? Right? So that we can have that kind of conversation. And we detail a bunch about how managers can have the conversation, about why managers rather than employees should start it, and how paradoxically, because people are always worried about retention, being open about this actually creates longer retention. Because people feel that you are looking out for them and you are having a work environment of trust. [More to come, 47:04]