On today’s show, we are happy to chat with Steve Hoffman. Steve, or Captain Hoff as he’s called in Silicon Valley, is the CEO of Founders Space, one of the world’s leading incubators and accelerators. He’s also an angel investor, limited partner at August Capital, serial entrepreneur, and author of Make Elephants Fly, the award-winning book on radical innovation.
Always innovating on his life, Captain Hoff has tried more professions than cats have lives, including serial entrepreneur, venture capitalist, angel investor, studio head, computer engineer, filmmaker, Hollywood TV exec, published author, coder, game designer, manga rewriter, animator and voice actor.
Hoffman was the Founder and Chairman of the Producers Guild Silicon Valley Chapter, Board of Governors of the New Media Council, and founding member of the Academy of Television’s Interactive Media Group.
In this episode, you’ll learn:
- What is the future of technology? Where are we headed in 20 years?
- Personal lessons shared from failing and succeeding in business?
- The reasons corporations have trouble innovating.
- One key piece of learning from your book: Make Elephants Fly?
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BOOKS AND RESOURCES
- Steve Hoffman on Linkedin
- Steve Hoffman on Instagram
- Steve Hoffman’s Book Make Elephants Fly
- Founders Space
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Disclaimer to the Transcripts:
Intro 00:00
You’re listening to The Silicon Valley Podcast.
Shawn Flynn 00:02
Welcome to Silicon Valley. On this week’s episode, we continue where we left off on our interview with Steve Hoffman, or Captain Hoff, as he’s called here in Silicon Valley. He is the CEO of Founders Space, one of the world’s leading incubators and accelerators. He’s also an angel investor, limited partner at August Capital, serial entrepreneur, and author of Make Elephants Fly, the award-winning book on radical innovation. On this week’s episode, we continue the conversation and we talk about what is the future of technology and where are we headed in the next 20 years, what are some personal lessons that Captain Hoff has learned from succeeding and failing in business, what are some reasons that corporations have trouble innovating, and one key piece of learning from his book Make Elephants Fly.
These and so much more on this week’s episode of Silicon Valley. And don’t forget to leave a comment and review on iTunes or any other podcast platform for your chance to win an autographed copy of Captain Hoff’s book, Make Elephants Fly. Now, let’s start the show. Enjoy.
Intro 01:03
Welcome to the Silicon Valley Podcast with your host Shawn Flynn who interviews famous Entrepreneurs, Venture Capitalists and Leaders in Tech. Learn their secrets and see tomorrow’s world today.
Shawn Flynn 01:26
You’ve also worked with corporations to help them in their innovation process. How’s its different working with corporations versus startups?
Steve Hoffman 01:34
Corporations are huge beasts. Where startups are, you know, they each have different advantages. The problem with a startup is that you never have enough money. You never have enough time. You never have enough resources. And then you look at a big corporation. They have so much money, so much time so many resources, they have everything you could dream of. Why are startups out-innovating corporations? Corporations naturally, I mean, they have the channels, the marketing, they can run advanced tests all across, they have endless resources, these huge multibillion-dollar corporations. They should be crushing startups, in terms of innovation. But they aren’t. And I will tell you why.
Steve Hoffman 02:11
I consult for a lot of corporations. I’ve consulted for Bosch, the big German automaker, I’ve consulted for Huawei, the big Chinese electronics manufacturer, I consulted for Gulf Oil, all these big companies. I go in there, and I will tell you, I see issues that they have that startups don’t. So, the biggest issue that I’ve seen with corporations is that a lot of them really don’t understand innovation at all. So, what they do is some of them say every employee should innovate. Every employee should innovate in my company. Well, that’s just some CEO talking. Not everybody is innovative. We know that some people are extremely innovative. And other people really just want to do what they do over and over and over again. They don’t want to change. They want to be comfortable. It’s not in them to innovate. So, saying everybody innovates never works.
Steve Hoffman 02:58
The number two thing they do wrong is they look at the idea. Remember, I just told your ideas. It’s not the idea that matters. It’s the process of innovation that matters. The idea is usually wrong in the beginning, or if it’s right, it’s never fully right. It’s only partially right. So, I have been to big companies, huge companies.
And what they do is that a lot of them, they run contests, they say, “We want all of our teams to submit ideas. And then we will pick the best ideas, and we will fund those.” I’ve been brought in after that selection process is done. And then I start looking at their ideas. And I’m like, oh, “Why was this chosen?” Well, whoever was on the management decided that this was a good idea, for whatever reason, it could be personal, like their group needed it. It’s enshrined in their own thinking, their corporate thing, right, why these ideas are good. And what proof do they have? Nothing, just that somebody suggested it and they thought it got voted and be a good idea. The problem is that as soon as this happens in a big corporation, a structure forms.
So the person, the employee of the company who came up with that idea is automatically made the lead because they came up with it. It’s their idea, right? So, they get to be the lead. Is this person necessarily a good leader? Not always, right? Remember, I said leadership and the qualities around being an entrepreneur have nothing to do with the idea, right? Quality of leadership, stamina, you know, never giving up all these things are separate from whether you could come up with a good idea. So they may be the wrong person with the right idea. And I tell you the wrong person with the right idea, nothing ever happens. It never goes anywhere. Because the idea is a starting point. It’s not the final product, it’s just the beginning. You have to bring everything together.
Steve Hoffman 04:33
The second thing is, more often than not, the idea is flawed in some way. But because the person thought of it, they don’t want to change it. They have won this contest amongst all their peers. They cannot go back and then tell everybody, “You know, this idea actually sucks. Like it’s not a good idea, even though I thought of it and I was given the chance in my company to prove it’s right and I’m staking my reputation on it. It actually sucks. I’ve changed my mind.” They won’t do that, right? So then they are going to try to make it work.
So their whole intent is to prove that this idea works to their boss. I’ve been with teams, and I’ve actually had them go out, I said, “Get me the proof that your idea works. I don’t want to judge your idea until we have proof.” I make them go out, talk to their customers, do all this stuff, they come back to me. And I look inside a corporation that the person will tell me, the project lead will say, “You know, the customer doesn’t really want it.” “Yeah, that’s right. Look, they don’t want it right. They don’t really want what you thought they want it. Can we kill the idea?” And you know what they’ll say? “No.” “Why you told me it doesn’t work? We know this doesn’t work.” “Well, my boss wants me to finish this one.” “But you we have proof that this is going to result in nothing.” “You don’t understand. My boss told their boss, he told their boss.” And they all have approved this idea. They don’t want to change. Nobody wants to go back. So even if that team realizes the idea isn’t working, then it’s like, “Can we just keep this thing alive?”
Steve Hoffman 05:55
A lot of these projects just are perpetuated onward and onwards, sucking up more money, because nobody wants to admit they don’t work. So, one of the hardest jobs I have is to go into companies and get them to kill ideas. I always say it’s the entrepreneurs’ job, their number one job isn’t to prove their ideas, right? Because the idea will… the data will show that. And you can never know until you actually released the product. Your idea is to prove it doesn’t work. Because you can do that much earlier than you can prove it’s right.
By the time you’re proving it right, you’re actually shipping the product and looking at the sales number, then you’ve wasted like a year and a lot of money or more. What we want to do as an entrepreneur, is push that date of killing the project up as early as possible. Like I go into these corporations, and then my job is how can we kill your idea as fast as possible? I want to figure out all the data, we could prove this doesn’t work. Because if it doesn’t work, then we can figure out why. If we can fix that problem, we can move forward. If we can’t fix it, we can focus your energy and resources on something better. You’re not wasting your time.
Steve Hoffman 06:54
Now Google figured the same thing. You know, they have the Google X, their labs for experimental projects. You know, 98% of those don’t work. We kind of read about them like space elevators and teleportation and all this stuff. Google’s working on them, we never hear about them again, because they were too early or there were some other problems.
But what they do well now is when somebody comes forward and says an idea doesn’t work, they actually don’t shame the person. They don’t say, “Oh, you are…” You know, they actually reward the person. They say, “Bravo, let’s throw a party. Let’s come in and explain to us what you learned through this project, and why it doesn’t work so that all of our teams can learn.
Steve Hoffman 07:36
What you need to change in corporate culture are a couple of things. If a corporation is going to innovate, number one, you want to have a culture where killing ideas and changing ideas often is a sign of strength, not weakness. It’s a sign of making progress, not failure. Like killing an idea, we’ve made progress. We got rid of a bad idea. Not, “Oh, we just wasted a lot of money and time.” It’s a totally different mentality, you have to change that. Number two, you don’t want to prioritize the idea itself. You want to prioritize the selection of the right people, getting people who are leading those teams, who are natural born leaders, natural-born entrepreneurs. Intrapreneurs, they call them inside a corporation, who can actually lead the team.
Getting something pushed through in a corporation is really tough. You have to be like dogging. Like we think entrepreneurs have a hard time raising capital. Well, getting all these different departments that may have no win for actually giving you resources or helping you because you’re just this crazy outlier in the company, which has no P&L and you know, you’re just sucking up resources and you don’t have any proof that your thing is going to be big. Getting them to dedicate their marketing resources or their R&D resources or anything else to you? You have to be that type of person who’s like made of steel.
Really intrapreneurs inside corporations need a lot of the same quality that entrepreneurs need. They can never give up. They have to be sometimes a little abrasive, always pushing. They have to be leaders, convincing all these people, even when it doesn’t seem like it’s in their best interest to actually jump on board and help them and make this a success. They need those. That is more important. Because I tell companies do not start with an idea. Don’t start with a contest. Start with a direction. First of all, put all your time, 90% of your time into selecting the right people. When you have the right people, have them pick a direction, but have them understand it’s just a direction. We’re going to take IoT. And we’re going to focus on supply chain inside our company. And we’re going to see what we come up with. And we’ll use various different types of technologies: blockchain, AI, whatever else. And we’re just going to play with this and see where we can go.
Because innovation, the core of innovation, it isn’t going from point A to point B. If you could see the destination, right? If you knew where you were going, you wouldn’t be innovating because somebody else would have already done it, you know, they would have done it. So, innovation is actually going from point A to B to C to D to E, in a blind way. Like each time bumping into a wall, figuring out, “Oh, that isn’t the right direction.” Reorienting yourself and going off in a new direction until eventually, you come out of the woods. And suddenly, you see wow, I’m at a destination. I didn’t know where I would be. But it’s a pretty cool place.
Shawn Flynn 10:19
Steve, with all this innovation happening with startups, corporates, everywhere in the world, what excites you about future technology? Where are we headed in the next 20 years?
Steve Hoffman 10:28
I spend huge amounts of time traveling around the world looking at the latest technologies, what entrepreneurs are doing, what’s emerging, going to universities, and I will tell you, it’s both glorious, it’s going to blow our minds away. And a little scary, because this technology is evolving so fast, and I don’t think our society or institutions, you know, democracy can even keep up with these things. What I’m seeing is really exciting me are different areas. So, one area is where we’re merging biology and technology.
We all know CRISPR gene editing software. CRISPR is amazing, right? You can go in there and edit genes and actually begin to cure diseases. You can start to create crops that can be resistant to climate change, you can develop new types of animals and plants that never existed before. It’s like we’re taking the power of evolution and natural selection into our own hands, we can literally do this. So, there are now doctors using CRISPR. And there was a big case in China, with that HIV baby, to make the babies HIV resistant. The problem is, in theory, it would be great if every human being was HIV resistant. If we could modify all the whole next generation so nobody ever had to suffer.
But we don’t know the long-term implications of changing a genome, like of snipping out genes or inserting new genes. We don’t know what the long-term implications are in our food. We don’t know what the long-term implications are in that cattle and the livestock we eat, or in our own bodies. In other cases, there are companies out there doing miraculous things like there’s Spark Therapeutics. They actually use gene therapy for this rare eye condition where a child is going blind, totally reverse and cure the eye condition, your gene therapy. So, somebody who would be blind can see for the rest of their life, absolutely amazing. You can actually go in now through in vitro fertilization. And actually, you can’t do this in the US because it’s prohibited.
But you can go to the Ukraine, for example, and you can get a baby that has three parents. It has the DNA from the sperm, the chromosomes from the egg, and then it has mitochondria from a third party and mitochondria also influences how the baby will come out. And so yes, a baby can technically have three parents or 100 parents if we want and they’re doing this right now today. In the United States, it’s still legal, you can actually go to a fertility clinic, and they can look through the different eggs. And they can actually allow you to pick out certain traits, like the eye color of your baby. So you could pick out yes, you could do this today, you could pick out a baby with green eyes, or brown eyes or blue eyes, whatever you want, and have that. It cost a lot of money. So you have to have some money. But this is possible today. Can you imagine tomorrow? What we can do, you know, we could have designer pets, you know, I want my pet to look this way. I want this type of fur. I want a purple cat.
Steve Hoffman 13:34
You know, they are actually in this whole convergence of technology and biology. They are actually able to take stem cells now and do incredible things in like a petri dish. You can grow brain cells right now. And they call these mini-brains. Why are scientists growing mini-brains? Well, they’re growing them and they’re actually using them to test for diseases like Alzheimer’s disease, Parkinson’s disease, to test drugs to actually cure these diseases. So these miniature brains, they can do that. But there’s no reason these brains have to be miniature. In fact, they can grow out of stem cells, a brain if they wanted to, and they haven’t done it yet. But a larger and larger and larger brain, eventually the size of the human brain. Now is that conscious? You know, a scientist at Reading University in the UK, they actually took one of these mini-brains. They had a little robot car that they built; they hooked the mini-brain up to the robot car. And that mini-brain could actually be used to help the car avoid obstacles and navigate. Well, you know, when do these mini-brains become conscious? Where are we headed with this? This is just one area.
Steve Hoffman 14:40
Then there’s AI, which is exploding, the power of AI. So, Facebook actually recently did an experiment on their users. Well, they’re always experimenting on their users, who are their guinea pigs. What Facebook did was they ran an experiment where they asked their users what videos would you click on? What articles would you click on? And the users would say, “Oh, I would do this article, I would do that video. That’s what I will do.” Then they ask their AI what the users would do. Who do you think was right most of the time? You telling Facebook what you would do, or an AI telling Facebook what you would do? Well, I will tell you that the AI was right more than you are. The AI knows you and what you will do better than you know yourself. You’re like, “How is it possible? I mean, I know what I will do.” But the sad thing is, human beings don’t know themselves that well. A lot of times you say, you know, I would read that really intelligent article on climate change. But what we are doing is we’re looking at the cat video, we’re watching the cat video, because that what we’re interested in, you know, the viral video.
Steve Hoffman 15:43
So, AI actually looks at what you actually do, and what you’ve done in the past. And then they extrapolate from that. It doesn’t have to be a genius. It doesn’t have to be a sentient AI to do that. It just has to get enough data and statistics. This is the essence of AI. This power now resides in big companies like Facebook and actually predict not just what we’ll do on Facebook, but as we walk around with our mobile phones, interacting with them, everywhere we go and everything we do, we are giving them data about every decision we make, where we go, what we decide, where we decide to eat, what friends we decide to meet. All of these things.
They can gather data on these different apps. And they could begin to use this data for very useful things for us, like, read through all the reviews, because that’s a pretty cumbersome, just tell me what the restaurant I’ll like it. And then the AI will basically be able to tell you, “You would love this restaurant, all the qualities… and this is what you should order. And in fact, I’m ordering it for you. And I know you’ll be there around 12:30. So I’ll have it all set for you at 12:30. You just walk in and sit down. I’ve reserved a table. The food will be there everything.” This is the future of where we’re headed.
Steve Hoffman 16:52
You look at companies like Amazon and why people are so worried that they have so much power. It’s because they have so much of this data on what we want to buy and what we’ll do. So, I’m looking out there at AI. And I’m saying that AI is going to really deeply affect all of our lives. AI is going to change, basically, because it’s so convenient and so useful, how we live. All the things that we do now, that are chores to us that take up our time, but don’t really gratify us? Eventually, we’re going to opt to hand them to an AI. So, everything, from picking your kids up at school, to even answering your phone, to scheduling meetings. AI will do all of this, but it will do much more than that. So Amazon right now, the reason they can offer you one-day shipping, at no extra cost a lot of the time is that statistically, they’re looking at how many people in a given region, like a city, order a certain product on any given day. So, they are shipping those in advance. Essentially, the product, if you’re buying razor blades, those razor blades are already waiting for you because statistically, they know so many people will buy razor blades today, and they can ship them to your house today.
Steve Hoffman 18:04
What Amazon wants to do, and the big companies like Alibaba in China, what they want to do, where they want to go with AI is they don’t want to just do it on a group basis. What they want to do is eventually know exactly what you want before you know it. So just like Facebook can predict what you will click on before you click on it. They want to know what you will order before you order it. Why do they want to do this? So, they can ship it to you before you even make the buying decision. Because you understand when somebody makes a buying decision, they can shop around, they can say, “I want to buy from Amazon, or I find it cheaper here.” But what Amazon wants to do in the future, if they can, is actually ship a product to you in advance. You open up the box you’re like, “Oh. Here’s an Amazon box.”
You’re used to getting them, because you get them all the time. You open it up. “Oh my god, there’s that gadget. I was just thinking of buying this gadget.” Why were you thinking of buying this gadget? Well, because maybe they got data view browsing, other websites looking reading articles. So, Amazon’s goal is to take the buying decision out of buying, by knowing as much about you as possible with their AI and big data. So that whenever you need products, whether it’s toilet paper, you’re about to run out, some new item that you covet, a gift for your wife or your husband. That item, the perfect gift. You open the box, it’s there, they show you what it is, and its already gift wrapped. All you have to do is hand it to your loved one. This is where e-commerce is going.
Steve Hoffman 19:35
Other areas of technology, extremely exciting, our space exploration. We all know Elon Musk and Jeff Bezos are leading the charge. You know, Jeff Bezos with Blue Origin, Elon Musk, with SpaceX. These are billionaires who have the money and are really pushing the limits of where humanity will go. So, I see Elon Musk goal is to get humans living on Mars. And he’s doing this now for practical reasons. He’s doing it for existential reasons, philosophical reasons. He believes that a single asteroid, which is true, like one that wiped out the dinosaurs could come any time, and literally wipe out most of the world’s population or solar flare. Throughout the billions of years of Earth’s history, that happened quite often some of them on such a massive scale that they could literally fry humanity. So, Elon Musk believes that we have to colonize other planets. That doesn’t mean it’s practical or easy. It just means he’s a determined entrepreneur, and he’s going to do it… and visionary. Now, if you talk to the scientists, most of them would say it’s crazy in our lifetime, unless we extend life. Elon Musk probably won’t get there… To really having people more than just… if he’s lucky, an occasional visitor to Mars, but to actually set up a colony?
Steve Hoffman 20:49
What’s more likely, we’re going to see is that our machines are going to be the first inhabitants of these planets. We’re going to be building robots, large and small. Everything from big robots to nano robots, which are going to be converting Mars over many, many years, it could be 100 years, into a habitable planet.
Now a hundred years in the scheme of things, it’s a lot for us to imagine. But in the scheme of things, you know, if you look at… Humans have been around… Modern humans have been around 100,000 years. Homo erectus and all the precursors, a million years, you know, these apes transforming into humans, you know, 100 years is nothing and in the course of the world, being four point something billion years old, 100 years is nothing. So, we will be using new forms of biology which will be seeding these planets and robots. That is actually where the action is in space. And also pulling resources from these planets, pulling minerals, rare earth minerals, you know, gold, platinum, all these things. They may be in abundance, definitely on meteors on these planets. Will we mine these planets? How will that look? What type of ecosystem will develop? And will it be an ecosystem that is sustainable? Will there be enough money? Money from colonizing these planets that we can actually afford to keep investing in them? Or are they a boondoggle for the near term with our current technology? Those are open questions.
But no matter what happens, we are seeing space as something that only existed in the realm of big governments, being able to launch satellites and do these big space projects like the moon landing, is now in the commercial sector. That is a huge dramatic change. And that is a whole ecosystem where young entrepreneurs with new ideas can make this more efficient to do things we never thought were possible. And can actually have a lot of potential. That’s another area I’m excited about.
Steve Hoffman 22:37
A fourth area that I’m really excited about is brain computer interfaces. I have actually consulted on these projects. I’ve done extensive amounts of research on how do we connect our brains to the internet, because honestly, that’s the next big frontier. You know, phones are pretty efficient. Phones are very good for most of what we need, but phones are still slow. Like inputting to a phone, typing on a phone is still painful. And even talking with your voice in a phone is painful and you don’t often want to do it in front of other people. It’s awkward. So, what happens when… And Elon Musk is working on this, many people are working on it. Actually, Mark Zuckerberg is working on it. What happens when we are able to literally take our thoughts and translate those into actions over the internet?
Steve Hoffman 23:23
So Facebook, they are working on a technology right now, where they hope could read the thoughts in your mind and actually allow you to just send a text message and you say, “Oh, I’m going to send a text message to Shawn.” And I think it, and it happens, it’s done. So, you order a product online, you just think, “Oh, I need this. Oh, my cereal, box is empty.” Amazon got the message; the cereal box is on its way. It’ll be at my house in an hour. So this whole huge promise will open up something that will make Android and iOS look like operating systems from the cave era, right? It’s like when we look back at those old computers. No, the Altair or even the early versions of Linux, which, you know, command line you had to do. We never use those right?
You’ll be like, “Oh, I had to use an Android device when I was younger. That’s crazy.” The beauty of this is that it would be so convenient and so easy. The scary part of this is, we all know, without a doubt, we can trust Mark Zuckerberg with our data, and Jeff Bezos, we can trust them with their data, because they will never abuse. That’s not true, right? We found that out the hard way. That company’s primary concern is monetizing your data, how to make money off of your data, their secondary, or maybe third or fourth or fifth concern is your actual privacy, if they have any concern at all. And so when you open up the mind to these new devices that can actually read your thoughts.
You are opening up all your innermost thoughts potentially to some corporation, which may or may not have your best interest in mind. It may or may not use that data in a responsible way. This is serious, it gets even more serious when you talk about writing to the mind. Now, DARPA is actually building helmets right now, smart helmets for the military, where they want to have two-way communication. They have a whole program now for two weeks, not just reading what soldiers are doing so that they can coordinate everybody on the battlefield, but writing and telling them what to do next, and maybe even before they know it.
Steve Hoffman 25:27
Now, what people don’t realize is that 90% of your actions, actions that you actually take every day are actually triggered by your subconscious, not your conscious. Your consciousness, if you read about neuroscience is a very small part of your overall brain activity. And it’s only when you have time to really think about and make a decision on something, all the reactions and stuff you do every day, and even what decisions you make are all influenced by data that you’re gathering without even being aware of it. So when people have the ability to influence your subconscious or actually even write into your mind without you being conscious of it, it’s one thing for them to have for your identity to be hacked, you know, your identity to be hacked, and they steal your credit card and they go out and they pretend they’re you and order all these products. But it’s another thing to have your real identity hacked. You may actually not know they’re doing it. And they may be… there’s a lot of paranoid schizophrenics who think they’re being mind controlled. But we are, you know, within our lifetime, we will probably be at the point where we can actually write into the brain to some degree or control.
Steve Hoffman 26:35
Now, why say in our lifetime? It’s because it’s happening right now. And people just don’t realize it. And I’m not a conspiracy theorist, but it’s happening with rats in a lab. So scientists in a lab have actually taken a rat, and they have actually controlled the rat, implanted a chip in the rat’s brain, and we’re able to control the rat. Everything the rat does, and the rat didn’t even know it was being controlled. So we can do this with a chip, a wireless chip in a rat’s brain. If Elon Musk puts his chip in your brain, are you going to get it? You have to have a lot of trust there. Because at a certain point, you could be giving up your autonomy. So these are really important decisions. You know, when we’re talking about CRISPR, when we’re talking about AI, when we’re talking about brain computer interfaces, all of these technologies have amazing benefits to humanity, amazing things they’re going to do. They also have a dark side, you know, so it’s like everything we’ve invented, you know, all the new technologies can be put to good uses or bad uses. And this is where society comes into play and us as individuals, in actually making people aware of this and opening it up into a discussion.
Shawn Flynn 27:43
With all your… I’m thinking about all these technologies and your experience. What lessons have you learned in your business career from failing or trying something new?
Steve Hoffman 27:54
I have failed more times than I care to talk about. Just like most people, my feeling is that if you try enough things, and they’re crazy enough ideas, you’re going to fail. But if you do, if you never take any risks, you will probably never fail. But you’ll also never achieve anything. That’s a breakthrough in my life. I’ve had companies fail, totally fail. And I look back on them. And now that I look back on them, it has taught me more about helping entrepreneurs, than my companies that have wildly succeeded. So, my successes, they’re great. But when I look at my failures, I was really humbled. You know, I believed in the idea, I thought it was the right thing. I kept pushing on it. And you know what? Most entrepreneurs, including myself, when I fail, I didn’t fail because I gave up, because I’m the type of person who gives up. I actually failed because I refuse to give up in a wrong way.
Steve Hoffman 28:48
There are two ways to fail. So, one way is to say right away when something isn’t working when the data is there. Oh, this isn’t working. I’m just going to go on and do the next thing. And you just cut your losses and move on. The other way is to say to yourself; I cannot fail no matter what I’m going to make this work. And sometimes when you say that you end up practicing what we call self-delusion, right? You end up convincing yourself that you know, we all filter data, we all have biases. So, you end up not looking at the real data. And understanding that no, this is not something you can change. So, what I learned through failing was, you should not continue with a project ever because of your ego, because you feel like it would reflect badly on you. If you fail, you should only continue on a project when the data supports you to continue on it. If you find out that this product is not taking off, that customers don’t… the fundamental core value you are delivering to your customer, they don’t really care about. At that moment you figured that out, you should kill the product. No matter how many changes you make. If you usually, usually in a startup, you can never change the core value you’re offering the customer. You have to start over. So that is one of the things I learned.
Steve Hoffman 30:02
I developed many games, some of the games were like big hits, some are failures. You know if that core game mechanics, which is the value you’re offering, the customer isn’t working, no matter how many superficial things you change, that game is dead, it will never go anywhere. With any product, it doesn’t matter if you’re making a gadget for people’s homes or, software application, whatever it is, that same thing holds true.
Steve Hoffman 30:24
The other thing I’ve learned by failing is that it’s okay to fail. And that when you fail, you don’t spend time beating yourself up. First of all, be realistic. Say I failed. Admit it. It’s like going to Alcoholics Anonymous, I am an alcoholic, you have to say I’m a failure. I totally screwed this up, then you have to analyze what you did wrong. So, and say, next time, I’m not going to do these things again, right? I’m going to change how I do them. Whether it was hiring the right employee and sticking with them too long, because you didn’t want to hurt their feelings and fire them and they weren’t very good or whether it’s pursuing another idea to an extreme, even when there’s no data to back it up.
Whatever it was or spending too much money on something that didn’t matter, all those things you need to list out. And then you need to move on. You cannot sit there and say… I had a choice. So, my first startup was very successful, very successful. My second startup failed. And after my second startup, I could have given up, I could have said to myself, and I did say to myself, originally, I should just never do a startup again, it was too painful. It was like, too brutal. I should never do this again. If I had done that, after my failure, then I would’ve never achieved what I’ve achieved now. It would have been a shame. And I would always feel like a failure, because I basically branded myself as a failure.
Steve Hoffman 31:41
The other thing you need to understand in that I’ve learned is that everybody has different talents. Like some people are really good at organizing other people. Some people are really good at leading other people. Other people are really good at solving hard problems. You know, some people are really good at sales, but nothing else. They’re like an individual seller. You need to know what your skills are and amplify those. Put your energy into those and you need to partner with people with other skill set, who have what you lack. And if you can’t do that, you will not succeed. So, part of being successful is strictly knowing what you’re good at. And there are some people out there who cannot handle being an entrepreneur at all, they should not be an entrepreneur. They would might make a brilliant professor, or a brilliant author, but they should never run a company. And they need to learn that about themselves. So, part of failing is a lot of times it teaches you that. You thought you wanted to be this, but actually your real talents lie elsewhere. And if you just focused on those, you could be incredibly successful. So that is part of the whole process I think of anything in life, learning anything, doing anything.
Shawn Flynn 32:47
Speaking of achievements, your book Make Elephants Fly is a huge success. What’s one key takeaway from that book that you’d like to share?
Steve Hoffman 32:57
I came up with the title Make Elephants Fly because of this key thing about the book. So, the key thing is the elephant is your big idea. It’s that dream you have, but it’s so big, you feel like it’s impossible to get it off the ground. Like you’ll never make an elephant fly. But that’s the goal of an entrepreneur. The goal is to make that elephant fly. So, the book, actually, the best thing about the book is that it takes you step by step through a lot of studies, many who have been successful, but others who have failed. And it shows you exactly what they did right, and what they did wrong. And the biggest idea, and there are many ideas in this because it’s never one thing. It’s a lot of different things.
But the biggest idea in Make Elephants Fly is that you should treat all of your endeavors, whether they’re your job in a company, whether it’s being an entrepreneur, whether it’s your family or home life, you should treat all of it as experiments, as a learning process. Like how do you form a good relationship with somebody you love when you’re fighting all the time? You can’t just keep repeating the same problems, right? You’re just going to continue fighting. You need to devise with that partner experiments that you could do, like if we communicate in a different way. So sometimes, like with my wife, we made a rule which works really well. We found out that we only really were fighting late at night. Like when we were exhausted right before we went to bed, we would both have an idea. And we would start arguing about it. So, we made a rule past 9pm, no serious discussion, none. Fighting evaporated, right? No arguments, right? Because we weren’t tired. And we talked about it in the morning when we’re fresh. So even if you feel compelled, don’t do it.
Steve Hoffman 34:41
In a company, it’s the same way. When you’re running a company, whether it’s managing the book or managing employees, coming up with ideas, innovating on products, all these different things and how you structure those things. You should take an approach that I don’t know what to do, but I’m going to try many different things and we’re going to figure out what works best, especially when you’re pushing the limits when you’re innovating.
Shawn Flynn 35:05
And then Captain Hoff, you’re working on a new book right now? Can you give our listeners just a little tease of what it’s going to be about?
Steve Hoffman 35:13
I have a new book that’s completed and waiting to be published. So, the publisher will be coming out with it soon enough. It’s called Surviving a Startup. And what is it about? It’s about surviving everything entrepreneurs need to know like, the fundamental thing I had when I was an entrepreneur. It’s like, how do you survive? How do you get by next month? Like how can you keep going? So it’s all the core knowledge that I have accumulated running multiple companies myself, but working with hundreds of entrepreneurs around the world and mentoring them through that process of watching many of them die off, and watching those who succeed, how they succeed. And the third book, which I just begun on, is about the future, how all of these new technologies, AI, nanomaterials, CRISPR, all of these will change the world we’re living in, what that will mean for our personal lives and for business going forward.
Shawn Flynn 36:06
When that book comes out, we have to have you back on the show. And if anyone wants to find out more information about you, or get in touch, what’s the best way to go about it?
Steve Hoffman 36:13
If you want to reach me, you can reach me… My nickname is Captain Hoff. That’s what people call me. So, you can go to my Twitter handle. It’s @captainhoff. My Instagram handle is @CaptainHoff. On LinkedIn, I have Captain Hoff or you can go to www.foundersspace.com and you can email me right from the site and contact me and I love to get feedback.
Shawn Flynn 36:17
And Steve, or Captain Hoff, he’s also given us an amazing gift. So, if you like the episode, and you write a review, we have a signed autographed copy of Make Elephants Fly. So, this will be raffled off for people that make comments on the show. So leave a note on iTunes or whatever podcast platform you use. And all the links for Twitter, Instagram and all that will be in the show notes at Silicon Valley or The Investor’s Podcast, click on Silicon Valley. And with that, I have to say once again, Steve Hoffman, Captain Hoff, thank you for your time today on Silicon Valley.
Steve Hoffman 37:10
Thank you.
Outro 37:12
Thank you for listening to The Silicon Valley Podcast. To access our resources, visit us at TheSiliconValleyPodcast.com and follow our host on Twitter, Facebook, and LinkedIn @ShawnFlynnSV. This show is for entertainment purposes only and is licensed by The Investors Podcast Network. Before making any decisions, consult a professional.
