Reid Hoffman, founder of Linkedin, spent to achieve its goal of 8 years. He managed to create a social network that has experienced many of the projects Web 2.0, as well as an IPO at the most opportune moment.

Recently, the list of billionaires of the world have another party. Reid Hoffman, founder of LinkedIn, which could significantly increase his fortune in the course of the withdrawal to the exchange. The yield on the stock exchange LinkedIn started with $ 45 per share, and on the first day of trading value of shares increased by 109%, which amounted to $ 94.25. After that, the package on LinkedIn Hoffman was worth about $ 1.7 billion before the IPO, he was the owner of 22.1% of the shares, 1% it is already sold. To fund Greylock Partners, which works with Hoffman in 2009, the share price was $ 1.3 billion

Reid Hoffman is not like most of the residents of Silicon Valley, for which he is a major venture capital investors. Outwardly stout good-natured middle-aged, it differs from the creators of geeks and companies such as Facebook or gruponov. But he did for eight years to create a highly successful social networking site, which went through many of its competitors and quietly reached an audience of 100 million users, and then held one of the most notable IPO since the dot-com bubble (and the largest since the placement of Google). Such an impressive success was preceded by years of work. LinkedIn has always positioned itself as a rather boring and useful service than as the star of the internet. At the time of its foundation were popular MySpace, Friendster and most have already forgotten Plaxo Tribe.

LinkedIn for a long time remained in the shadows of fame Hoffman as a business angel. He invested in high-profile projects, most recently at the beginning of their activities: Last.fm, Facebook, Flickr, Zynga, Digg, Ning, Six Apart, Mixer Labs (which was later bought by Twitter). At the same time, Reid Hoffman did not leave the job with LinkedIn, improving services and gradually increasing the number of subscribers. He was able to keep its audience and is much ahead of major competitors such as Xing. Was chosen as the most opportune moment to go public: while growing expectation of IPO companies by Groupon and Facebook, LinkedIn’s stock price soared more than doubled.

Hoffman had burned to the startup in 1997, when a wave of the Internet boom. He decided to start a business, having worked at Apple and Fujitsu. “In the summer of 1997 I began to get nervous. I thought I needed to set up his own company as quickly as possible, when the Internet market is really warmed up, but it could not last long, “- said Hoffman for the Wall Street Journal. He calls SocialNet.com, a company that is open to them at that time, the “ordinary history” Project for the Silicon Valley. Hoffman went out of business in 1999 when it became apparent that success will not happen. This experience, coupled with losses brought him to an important point. “I used to think that the best way to establish a company in the economic recovery. But then I realized that you need to begin to decline. It is easier to pick a team and partners, and competitors will come later. ”

After a failed startup Hoffman began working with Peter Thiel at PayPal, and after a short time became its vice-president. From PayPal came more than a dozen investment professionals and start-ups, they are called “mafia PayPal» – Steve Chen, Jawed Karim and Chad Hurley, founders of YouTube; Jeremy Stopplmen from Yelp, Max Levchin of Slide. “The leader of the Mafia,” is Peter Thiel, who became a billionaire by Facebook – he invested in many projects, particularly in 2003 appeared in LinkedIn. To collaborate Hoffman invited colleagues from PayPal as well as from his first startup SocialNet.com.

The creators of LinkedIn from the beginning focused on the consumer segment, which differ from clients MySpace or Facebook, suggesting that young people are easier to draw, but also easier to lose, as shown by the example of MySpace. The audience of professionals who use LinkedIn to purely utilitarian purposes, grew at first rather slowly – 2-3 million subscribers a year, but still they were loyal customers.

LinkedIn itself announced that it is not necessary to wait on them a sharp rise in profits. They planned not to go, plus in 2011, as gathered to invest in technological development and business expansion. During 2010 the net profit stood at $ 15.4 million, compared to other social networks is a little bit, but advertising is not for the sole source of income LinkedIn, like Facebook. Provide a permanent revenue (which is $ 243 million, or $ 2.4 per subscriber) enterprises that use LinkedIn for recruiting (49%), advertising (almost 30%), as well as those who are connected with charge accounts (15%).

But despite such is not particularly impressive financial performance, Reid Hoffman, it seems, still enjoys the confidence of investors. The company is estimated at 37 proceeds ($ 243 million in 2010). Hoffman is definitely not in vain for so long, “worked hard” on this project.