LinkedIn to Microsoft: connecting global and corporate professional networks

Companies have many founding moments. Founding moments are the key inflection points when leaders decide to change a path in order to better, or more quickly, realize their mission. We typically only think about the first founding moment, hiring a CEO, or the IPO, when in fact there are many. Today marks a founding moment for us: the decision to enter into an agreement for Microsoft to acquire LinkedIn.

Great companies have great missions. LinkedIn’s mission has never wavered. Our mission is to connect the world’s professionals to make them more productive and successful. As a professional, your network is your competitive advantage: in skills, in intelligence, in opportunities, in connection, and in collaboration. In this networked age, it is the key advantage. When you marry our mission with Microsoft’s mission, to empower every person and every organization on the planet to achieve more, it’s impossible to not imagine the massive opportunity for our members and customers.

It’s natural to be surprised that we are so excited about being acquired. Most companies view independence as key to realizing their mission. This is why so many founders struggle with finding the right CEO and in some cases, the right buyer. There is some merit to their concern; if two companies aren’t aligned on a mission, the combination will ultimately fail.

Because we are so completely aligned, joining forces with Microsoft amplifies our mission, and it amplifies Microsoft’s mission. Bringing together the world’s leading professional cloud and the world’s leading professional network will help deliver a more connected, productive, and intelligent experience to our members and customers worldwide. It is our next re-founding moment.

Let me tell you what gets me so excited as we join forces. Think about what happens when we combine our network, our platform of identities with Microsoft’s world-leading set of productivity tools, ranging from Office to Dynamics to Communications to Cloud to Windows to Cortana to Bing. Consider, for example, LinkedIn’s network enabling Active Directory and integrating into Office Productivity. Consider, additionally, connecting LinkedIn identities to Outlook and Skype. Moreover, Microsoft has a great suite of technologies, such as artificial intelligence and Cortana technology, that can add game-changing new capabilities to LinkedIn.

Microsoft has also had a re-founding moment under Satya’s leadership. Jeff and I have so much respect for the transformation he has driven. Satya and Jeff are natural partners and our organizations will thrive under the purpose driven cultures both have built.

Satya’s leadership reflects great human and technological intelligence. Jeff is laser focused on realizing LinkedIn’s full potential and purpose. Satya and Jeff share the same vision. They both practice leadership as service to the mission. They have both built and scaled organizations with intelligent, compassionate management.

Personally, I could not be more excited about what lies ahead. With LinkedIn, I’ve been through a number of re-founding moments – from the start of the company to bringing Jeff on-board. I believe we have found the ideal partner for our next chapter. When I co-founded this company 13 years ago, I imagined where we could go. I could not be more proud of what the LinkedIn team has achieved or more bullish about what we will achieve together with Microsoft in the years to come.

…And, as is customary in these matters, here’s the legalese:

Additional Information and Where to Find It

In connection with the transaction described above, LinkedIn Corporation (the “Company”) will file relevant materials with the Securities and Exchange Commission (the “SEC”), including a proxy statement on Schedule 14A. Promptly after filing its definitive proxy statement with the SEC, the Company will mail the definitive proxy statement and a proxy card to each stockholder entitled to vote at the special meeting relating to the transaction. INVESTORS AND SECURITY HOLDERS OF THE COMPANY ARE URGED TO READ THESE MATERIALS (INCLUDING ANY AMENDMENTS OR SUPPLEMENTS THERETO) AND ANY OTHER RELEVANT DOCUMENTS IN CONNECTION WITH THE TRANSACTION THAT THE COMPANY WILL FILE WITH THE SEC WHEN THEY BECOME AVAILABLE BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION ABOUT THE COMPANY AND THE TRANSACTION. The definitive proxy statement, the preliminary proxy statement and other relevant materials in connection with the transaction (when they become available), and any other documents filed by the Company with the SEC, may be obtained free of charge at the SEC’s website (http://www.sec.gov) or at LinkedIn’s website (http://investors.linkedin.com) or by writing to LinkedIn Corporation, Investor Relations, 2029 Stierlin Court, Mountain View, California 94043.

The Company and its directors and executive officers are participants in the solicitation of proxies from the Company’s stockholders with respect to the transaction. Information about the Company’s directors and executive officers and their ownership of the Company’s common stock is set forth in the Company’s proxy statement on Schedule 14A filed with the SEC on April 22, 2016. To the extent that holdings of the Company’s securities have changed since the amounts printed in the Company’s proxy statement, such changes have been or will be reflected on Statements of Change in Ownership on Form 4 filed with the SEC. Information regarding the identity of the participants, and their direct or indirect interests in the transaction, by security holdings or otherwise, will be set forth in the proxy statement and other materials to be filed with SEC in connection with the transaction.

This post was originally published here on June 13, 2016

The Power of Purpose at Work

In 2002 at LinkedIn, there were very few of the perks that Silicon Valley is famous for. Our company headquarters was my apartment’s living room. Free lunches? Yes, if there was an extra yogurt in my refrigerator, or if you consider a can of Coke "lunch." Nap pods, on-site yoga classes, wellness centers, concierge services, or haircut days? No.

And yet every day my co-founders came to work early and stayed late. We were on a quest to augment search, data analytics, and network connectivity with real identity, reputation, and trust. The goal: Building a platform that creates economic opportunity for every member of the global workforce. It was an ambitious vision and it gave us a great sense of purpose.

In a start-up environment, when teams are small and most everyone who’s involved is, by nature, a risk-taker with a desire to create something that will potentially have outsized impact, it’s relatively easy to find purpose-driven individuals.

But to become the company we wanted to become, we knew that we’d eventually need more employees, with different skillsets and different temperaments. And inevitably our culture would change. As I and my fellow instructors explain in our Blitzscaling class at Stanford, a company with 100 employees cannot function effectively using the tactics that work for a company with 10 employees: You need an updated playbook.

Still, my co-founders and I were determined to preserve our shared sense of purpose as a core value, even as we grew. In job interviews, and then again, in new hire orientations, we always emphasized our guiding value: Individual LinkedIn members always come first. Any addition or change we make to the platform must improve it in ways that help individual members increase their economic opportunities.

In emphasizing our philosophy so persistently, we inevitably dissuaded some talented potential hires for whom it did not resonate. But we also attracted individuals who did connect with it, and thus ensured our ongoing cohesiveness even as we started to expand beyond our core team.

Today, LinkedIn has more than 9200 employees. Needless to say, we’ve moved out of my living room, into offices in more than 30 cities around the world. Our selection of complimentary beverages has scaled up rapidly.

But while the Wild Alaskan Salmon with Avocado-Corn Relish in our café and our 401K matching program make it nicer to work here, a strong sense of purpose remains the defining attribute of our employees.

In fact, a consultancy called Imperative that publishes a national index measuring how purpose-oriented the U.S. workforce is across industries, job types, and more, recently surveyed 2000 of LinkedIn’s global employees. It found that 41 percent of them fit its purpose-oriented profile – they prioritize meaning and fulfillment over money and status. That’s nearly twice as high as the U.S. tech industry average of 21 percent.

LinkedIn benefits from this orientation in a number of ways. According to Imperative’s research, purpose-oriented employees are:

* 54 percent more likely to stay at a company for 5-plus years

* 30 percent more likely to be high performers

* 69 percent more likely to be Promoters on Bain & Company’s eNPS scale, which measures employee engagement and loyalty

In The Alliance, my co-authors and I present the "tour of duty" as a mechanism for creating and maintaining engagement in an era when lifetime employment is no longer a given. The key to a successful tour of duty is a high degree of alignment between employer and employee. And the key to a high degree of alignment is a shared sense of purpose.

When that shared sense of purpose exists, employees stay at a company longer. Their high level of engagement leads to higher levels of loyalty and performance.

In the old days of lifetime employment, the presumed payoffs were security and predictability. Now, more and more professionals look for positions at companies where they can create meaningful impact and experience personal growth.

Companies that understand the increasing emphasis of purpose in today’s professional landscape improve their ability to attract such employees and also their ability to retain them for longer periods of time.

And of course a virtuous loop inevitably kicks in. At LinkedIn, when I see how thousands of LinkedIn employees are committed to creating economic opportunity for every member of the global workforce, I get even more inspired about where we’re headed. Jeff Weiner calls this shared sense of vision LinkedIn’s true north. It has guided my own efforts for more than a decade now, and it continues to help us attract and retain exactly the kind of committed professionals who are helping us realize our vision.

This post was originally published here on November 6, 2015

What I Wish I Knew Before Pitching LinkedIn to VCs

At Greylock, my partners and I are driven by one guiding mission: always help entrepreneurs. It doesn’t matter whether an entrepreneur is in our portfolio, whether we’re considering an investment, or whether we’re casually meeting for the first time.

Entrepreneurs often ask me for help with their financing decks. Because we value integrity and confidentiality at Greylock, we never share an entrepreneur’s pitch deck with others. What I’ve honorably been able to do, however, is share the deck I used to pitch LinkedIn to Greylock for a Series B investment back in 2004.

This past May was the 10th anniversary of LinkedIn, and while reflecting on my entrepreneurial journey, I realized that no one gets to see the presentation decks for successful companies. This gave me an idea: I could help many more entrepreneurs by making the deck available not just to the Greylock network of entrepreneurs, but to everyone.

And so today I’ve published LinkedIn’s Series B deck on my personal website. There are three thematic emphases:

  • how entrepreneurs should approach the pitching process
  • the evolution of LinkedIn as a company
  • the consumer internet landscape in 2004 vs. today

To help you figure out what aspects of the pitching process you’d like to understand better, I’ve summarized seven prevalent myths below, which I address more deeply in the full presentation.

1.

MYTH: The startup financing process is about one thing — money.

TRUTH: A successful financing process results in a partnership that delivers benefits beyond just money.

A successful financing process obviously results in you raising capital for your company. But there are other critical outcomes you should shoot for as well. For example, great investors can significantly boost the strength of your network, which helps in recruiting employees and acquiring customers. Great investors can also be a source of network intelligence, so you can better prepare for likely challenges and opportunities ahead.

Put another way, the ideal financing partner is a financing cofounder. This is why already-wealthy entrepreneurs raise money from experienced investors for their next startup: they know partnering with angels and venture capitalists is about more than just the money.

Sadly, many investors actually add negative value, so an investor who adds no value (“dumb money”) but who doesn’t interfere with the operational process can sometimes be a decent outcome. But ideally you find an investor who can proactively add value (“smart money”).

How do you know if an investor will add value? Pay attention to whether they are being constructive during the pitch and financing process. Do they understand your market? Are their questions the same questions that keep you up at night? Are you learning from their feedback? Are they passionate about the problem you’re trying to solve?

2.

MYTH: If your team is strong, show the team slide early in your pitch.

TRUTH: Open your pitch with the investment thesis.

You have the most attention from investors in the first 60 seconds of your pitch, so how you begin is incredibly important. Most entrepreneurs start with a slide on the team. The team behind your idea is critical, but don’t open with that. Instead, open with what the investors have to believe in order to want to want to be shareholders in your company — the investment thesis.

Your first slide should articulate the investment thesis in generally 3 to 8 bullet points. Then, spend the rest of the pitch backing up those claims and increasing investors’ confidence in your investment thesis — which includes background on the team. Clearly articulate your investment thesis so investors can offer feedback that helps you refine it, eventually getting to a place where you both agree on it.

This advice applies to seed funding rounds, too. Yes, seed investors understand that early stage companies have many unknowns and the idea will change a lot, so they look carefully at the people to see whether the team will be able to adapt. But even at this stage, lead with your overall investment thesis. Persuade investors your investment thesis is intriguing, then show who can make it happen.

3.

MYTH: All investment pitches have the same structure.

TRUTH: Decide whether your pitch is a data pitch or a concept pitch.

Your investment thesis is either concept-driven or data-driven. Which kind you are pitching?

In a data pitch, you lead with the data because you are emphasizing how good the data already is. Investors therefore evaluate your company based on the data. When LinkedIn went public, it was a data pitch to public market investors. We showed investors a multi-year track record of data.

If it’s a concept pitch, on the other hand, there may be data, but the data supports a yet undeveloped concept. A concept pitch shows your vision for how the future will be and how you will get to that future, so investors will want to buy a piece of it. Thus, concept pitches depend more on promised future data rather than present data.

4.

MYTH: Avoid bringing up anything that might paint your business as risky and decrease investors’ confidence.

TRUTH: Identify and steer into your risk factors.

Experienced investors know there are always risks. If they ask you about your risk factors and you can’t answer, you lose credibility because they assume you are either dishonest or dumb. Dishonest because if you’ve thought about the risk factors, but choose not to share them, you’re implying you’re not committed to a partnership. Dumb because you aren’t smart enough to understand that all projects have risk factors — including yours. Explicitly identify the one to three risks that could thwart your success and how you will mitigate them.

5.

TRUTH: Acknowledge all types of competition and express your competitive advantage.

Entrepreneurs often say they have no competition, assuming that’s an impressive claim. But if you claim that you don’t have competition, you either believe the market is completely inefficient or no one else thinks your space is valuable. Both are folly.

The market is efficient, eventually — if a valuable opportunity emerges, others will discover it. To build credibility with investors, you want to show that you understand the competitive risks and show why you’re going to win.

Express your competitive advantage this way: Why are you going to break out of the pack? What is your advantage? If you aren’t clear and decisive, investors won’t believe you have an edge that can lead to success.

TRUTH: Pitch by analogy.

Every great consumer internet company grows up to be a unique organization. But in the early days, you want to use analogies to successful outcomes to describe what your company is and what its potential could be. Time is short — it helps to refer to what those investors already understand.

The best pitch I heard of was in Hollywood for a film called Man’s Best Friend. The pitch was “Jaws with Paws.” Investors were told that if the movie Jaws was a huge success, a similar plot but on land with a dog could also be a huge success. The movie turned out to be terrible, but the pitch was excellent.

To be sure, pitch by analogy but don’t necessarily reason by analogy. Reasoning by analogy, when you’re developing your business strategy, is dangerous. In startup land, you’re running across a minefield, so the details matter and you have to be careful with your analogies as you conceive strategy. But for high level pitches, analogies work great.

7.

TRUTH: Think also about the round after the one you’re currently raising.

Every time you raise a round, you should be thinking about the subsequent round of financing. Assuming you successfully close the current round, how will you raise money later? Who will be the next investors you pitch? What will their concerns be? What will you need to solve next?

Expect that Series B investors will want to see some slides from your Series A deck. Series C investors will be similarly interested in your Series B deck. Etc. When I created our Series A deck, I presented a growth curve that would be good enough to get an investment, but I also had confidence that I could beat it. I wanted to be able to go into my Series B presentation and say, "Here’s what I said before, and here’s how I did." Because we beat our Series A expectations for network growth, investors could comfortably trust our promise to build revenue with our Series B financing.

Want to dive deeper and better understand how to pitch your startup? Read the full presentation at my personal website.

(Photo: Digital Vision via Getty Images.)

This article was originally published here on October 15, 2013

If, Why, and How Founders Should Hire a “Professional” CEO

Originally published January 21, 2013

20 years ago, the classic startup model was to have young founders start a breakthrough company, then bring in “grey hair” in the form of experienced executives once it was time to scale the business. Key examples included Cisco, Yahoo, eBay, Google, and many smaller companies. In the last decade, however, that common wisdom has shifted, at least for consumer internet companies.  The new received wisdom is that the best entrepreneurs can stay CEO through the entire growth cycle of the company. Think of Jeff Bezos, Larry Ellison, or the late Steve Jobs. My partners at Greylock and I have invested in a number of young founding CEOs who match this pattern and are doing a fantastic job leading their companies through hypergrowth, such as Brian Chesky of AirBnB and Drew Houston of Dropbox.  The question is, why has this shift occurred?

Last year, Ben Horowitz of Andreessen Horowitz articulated a well-thought-out philosophy on why he prefers to back Founder-CEOs and keep them in charge as the company grows. His essay, “Why We Prefer Founding CEOs” lays out three key ingredients that great founding CEOs tend to have, and that professional CEOs often lack:

  • Comprehensive knowledge
  • Moral Authority
  • Total commitment to the long term

Ben’s point is that without these three key ingredients, a CEO won’t be able to maintain the rapid product innovation that is a prerequisite for success in today’s startup world. Ben cites Google and Cisco as rare exceptions where a professional CEO helped steer a company to market leadership and that the evidence is “one-sided and overwhelming” that you shouldn’t bring in a professional CEO.  In other words, Ben asserts that bringing in a professional CEO should be a last resort for a founder.

And yet, many of the greatest success stories of the internet era involve founder/professional CEO partnerships. During the dot com era, Yahoo!’s Tim Koogle helped build Jerry Yang and Dave Filo’s startup into the world’s most valuable internet company.  Meanwhile, Meg Whitman helped Pierre Omidyar’s eBay become the second most powerful ecommerce company in the world (trailing only Amazon). The Web 2.0 era provides successful examples like Joe Kennedy and Tim Westergren at Pandora, and the current social era provides even more, including Dick Costolo at Twitter and Tony Zingale and Dave Hersh at Jive.

Sure, there are plenty of cautionary tales about how VCs have ousted founders in favor of “professional CEOs” who run companies into the ground. But it’s hard to call the evidence “one-sided and overwhelming” when there are so many strong counterexamples.

Noam Wasserman of Harvard Business School has been studying what he calls “the founder’s dilemma” for nearly a decade.  In his academic paper, “Rich versus King”, he looked at 460 American startups from the 2000s.  His statistical analysis showed that, paradoxically, founders maximized the value of their equity stakes by giving up the CEO position and board control: “The results show that, controlling for company size, age, and other factors, the more decision-making control kept (at both the CEO and board levels), the lower the value of the entrepreneur’s equity stake.”

In another study of 212 startups, Wasserman found that it was rare for Founder-CEOs to run their companies in the long term; less than half were still CEO after 3 years, and less than a quarter of the CEOs of the companies that reached an IPO were Founder-CEOs.

Given the evidence that bringing in an outside CEO can often pay off financially and, more importantly, in terms of overall scale and impact of the company, it’s important to explore the possibility—even if it isn’t your first choice.  I speak from personal experience, since I hired and partnered with a CEO, Jeff Weiner, very successfully at LinkedIn five years after co-founding the company.

Once you decide to evaluate the option of bringing in a professional CEO for your start-up, the real questions are, “Should I replace myself?” If the answer is “yes,” then “How do we make the transition?” And once you make the transition successfully, “How can I play a constructive long term co-founder role at the company?”

How do I know when to replace myself?

I love the early stages of building a company.  The small team, building a brand-new product, out-innovating complacent incumbents…not only is the experience fresh and exciting, it also focuses on the things most founders love—especially technical ones: Solving interesting problems, developing new technologies, devising a unique strategy.  But if you’re successful, the job of being CEO shifts dramatically over time.  All of a sudden, you need to focus on a different set of challenges and concerns like establishing standard procedures and managing a large number of employees.

To remain successful, you have to be passionate about that kind of work as well.  Ask yourself, “What am I focused on?  What am I world-class at? What am I really committed to?”  The answers will help you determine if you should bring in a CEO.

In my experience, CEOs need to derive satisfaction from the nuts and bolts of building a company, not just building product and articulating the vision.  They need to be passionate about leadership, management, and organizational processes as the company scales.

To be a successful growth-stage CEO, you need to be ready to manage a 1,000 person organization and devote substantial time to time consuming things like running meetings and other business process. You can’t just do the exciting stuff like making the final call on product and speaking at conferences, while shuffling off everything else to the mythical COO who loves doing all the dirty work and doesn’t want any of the credit.

I went through this self-examination while I was still CEO of LinkedIn.  I have always been passionate and committed, both to the company, and to its mission.  I want to enable individual professionals to have more successful careers and to increase the productivity of mankind across entire industries and countries.  I want a company that lives up to the original standard that Hewlett-Packard set for Silicon Valley—a great place for high-quality people to work that provides an experience that would continue to benefit them even after they move on to other things.

But as we scaled from a handful of people in my living room to dozens of people at an office, I saw the job of the CEO shifting. At 50 people and beyond, a CEO increasingly has to focus on process and organization, and that wasn’t what I was passionate about.  For example, I didn’t like running a weekly staff meeting.  I could do it, but I did so reluctantly, not enthusiastically. I’d rather be solving intellectual challenges and figuring out key strategies, not debating which employees should get a promotion, or configuring project timelines.

I co-founded LinkedIn in 2003, and by 2005, after asking myself the key questions about my passion, focus, and commitment, I knew I wanted to bring in a CEO.  When I brought this up with my main VC, David Sze at Greylock, he had the same reaction I suspect I would have had: “Are you sure?  Couldn’t we just hire a COO and have you stay as CEO?”

I had thought about the COO option, but I knew that the company needed someone who felt like they “owned the ball.” And I was confident I could partner well with a CEO, given my experience partnering with the various CEOs of companies being on the board. What’s more, the kind of person who has the capacity to be a great leader usually wants to be CEO, not COO.  Sheryl Sandberg is one of the few great leaders who has been willing to be COO, and even then, she’s a unique COO.

At the time we began the search, I wouldn’t have believed how long the process would take.

After more than a year of searching, we brought Dan Nye in as LinkedIn’s new CEO at the beginning of 2007.  Dan Nye came to us as CEO with a strong organizational background, having been a general manager at both Intuit and Advent, where he had responsibility for organizations many times the size of the early LinkedIn.  In addition to strong capabilities, Dan is also perfect on integrity and culture.  My idea when hiring Dan was that I could handle the product, and he could handle everything else.  Dan helped us evolve LinkedIn from a product-focused startup into a complete company.  During his time as CEO, he built a real sales department, rebuilt the executive team, and doubled the size of the company.  But after a couple of years, I realized that as we continued to make major changes to the product, we needed a CEO who would “own” product as well.

My mistake was thinking you could divorce product strategy from the CEO role. It was a mistake related to the broken “grey-haired supervision” approach to professional CEOs.  20 years ago, you could count on product cycles lasting years, which meant that constantly developing new products and refining the vision was relatively less important than aggressive execution. The “professional” CEO back then just had to be a superb executor for the founder’s vision. The rise of internet time has reduced product cycles to months and weeks.  As such, a CEO can’t focus solely on scaling concerns—today, the CEO has to be involved in the product.

So I decided to step back in temporarily as CEO and tried to find a new CEO with consumer internet product experience and organizational experience at scale. (Dan went on to continue being a very successful company builder, becoming the CEO of Rocket Lawyer and, among other successes, quadrupling its revenues.)

James Slavet, a partner at Greylock, introduced me to Jeff Weiner. James and Jeff had worked together at Yahoo!, and Jeff at the time was also an executive-in-residence at Greylock. As I got to know Jeff, I became convinced that he was the right choice to LinkedIn.  I believed that Jeff’s experience at Yahoo! could help us by spreading a deep focus on consumer product insight and strategy throughout the entire company.

We named Jeff CEO of LinkedIn in the middle of 2009, about four years after I first approached David Sze about replacing myself.

How do we make the transition?

If it’s ideal for a CEO to have the knowledge, moral authority, and commitment of a founder, the answer is simple: Your transition process should bring the new CEO in as a co-founder of the company, not as an “adult supervisor.” Jack Dorsey has said as much: “Companies have multiple founding moments. I consider Dick Costolo to be a founding member of Twitter.” Dick wasn’t named CEO until 2010, four years after the company’s official start.

Think back to the list of all the successful Founder/CEO pairings.  With almost no exceptions, four things were true:

  1. The decision to step back from being CEO is a function of self-realization. It doesn’t work if the plan is being externally imposed by investors, for all the reasons Ben H. outlined.  If you’re passionate about the nuts and bolts of building your company, and your VC simply thinks they know better, it’s probably a mistake to acquiesce.
  2. The outside CEO was brought in early, so that he or she could play a real role in shaping the product, business, organization, and culture of the company.  There is one exception to this pattern, which is when a company has lost its way, and the new CEO is essentially re-launching the company.  The classic example here is Lou Gerstner, who transformed IBM from a failing hardware company to a services powerhouse.
  3. The original team of founders was a small group of two to three people, making it easier to form strong co-founder bonds.  Being able to build a trusting relationship is critical.  In the cases of both Yahoo! and Google, Jerry/Dave/Tim and Larry/Sergey/Eric built warm and trusting relationships that lasted for years.
  4. The new CEO had prior experience running a large organization.  The whole point of hiring someone from the outside is to bring in skills and experience you don’t have, which will help scale the company.  Here, Sheryl Sandberg represents the classic example—her management and people skills were brought in to complement Mark Zuckerberg’s great product vision and strategy.  Notice how even as COO rather than CEO, Sheryl is accorded co-founder status, and is the lynchpin of the company’s management team and strategic decision-making.

Yahoo! presents a particularly fascinating example of these principles at work.  When Tim Koogle came in as CEO in 1995, all four principles applied: The founders knew they wanted a CEO, Tim came in early, he formed a tight management triumvirate with the founders, and he had experience running large organizations from his time at Motorola.  Later Yahoo CEOs failed to follow these principles, largely sidelining the founders until Jerry Yang’s return.

More recently, Marissa Mayer joined Yahoo at the Lou Gerstner phase—everyone acknowledges that Yahoo! needs to be remade.  While her success is far from certain, if she does succeed, she will be viewed as a re-founder, not just a management caretaker.

My own experience bringing Jeff Weiner into LinkedIn stuck pretty close to these four principles.

  1. As I’ve already detailed, the decision to bring in a professional CEO was one I initiated back in 2007, after a lot of self-examination.
  2. While LinkedIn was already six years old when we brought Jeff in, it was still a relatively small company.  Jeff was our 338th employee, and helped us launch our Talent Solutions business, which is now a key revenue driver for us.
  3. Thanks to our strong mutual connections via Greylock, Jeff and I were able to bond and build a relationship both before and during the process of bringing him on to the team.
  4. When Jeff was an EVP at Yahoo! he ran a 3,000-employee division.  Not only was that far larger than LinkedIn at the time, it’s about as many employees as we have today!

What long term role can I play in our company?

I wanted to make sure that people made the shift from looking to me for answers to taking their cues from Jeff.  Bringing in a CEO is like performing a brain transplant—you need to wire in a whole new set of connections.  If the founder is still in the building, it’s all too easy for people to keeping checking with him on every decision, rather than with the CEO.

When Jeff came in as CEO, I booked a hefty amount of travel for his first 6 months. When employees tried calling me to double-check a decision, I replied, “Sorry, I’m in Rome, talk to Jeff.”  Jeff needed build up his own connectivity within the organization. By the time I returned from Europe, those connections were hard-wired.

For Jeff’s part, he went above and beyond to immerse himself in the company. For example, just a few months after Jeff joined LinkedIn, several engineers were sitting around at midnight in between bug fixes for what ultimately turned into a very late night product launch that extended into the wee early morning. One of the engineers decided to pull a graph of their new CEO’s login activity on LinkedIn.com. People were shocked: the only time period during the launch when Jeff was not consistently logged into the site was between 3:30 – 4:00 AM.  It turned out he was obsessed with the product quality — just like a true founder. To this day, Jeff is renowned for being one of LinkedIn’s most active users and is known for his ability to catch bugs before our developers.

Today, as Executive Chairman, my office at LinkedIn is next to Jeff’s, and when I’m not on the road or at Greylock, I’m on the LinkedIn campus most of the week. I enjoy helping the team on strategy, corporate and business development, and product vision. The most important thing I do, though, is sync up with Jeff every week about what’s on his mind. In our catch-up meetings, I’m able and willing to challenge his ideas. It’s hard for a CEO to get honest feedback and candid advice; so, provided you do not undercut him or her in the organization, as a founder you can play a uniquely helpful role in this respect. (And any CEO you hire should be eager to accept your honest counsel.) When it works, it makes the loneliest place in an organization—the CEO’s corner office—somewhat less lonely and potentially a lot more effective.

Of course, it might be that you’d rather transition out of a regular role after hiring a CEO. This can work, too. After bringing in Meg Whitman to run eBay, Pierre founded the Omidyar Network to make philanthropic investments, and returned to his native Hawaii where he’s done wonderful work for the community where he grew up.  He’s still actively involved in eBay as chairman of the board, but he’s not at the office every week.

Conclusion

20 years ago, venture capitalists were in a hurry to bring in professional CEOs.  Today, many of the same VC firms are busy touting their support for long-term Founder-CEOs.  Both approaches can work, which means that as an entrepreneur, you should focus less on what’s fashionable, and more on what’s right for you.  This is a highly personal decision, and the right answer depends on you and your team—including your co-founders and your VCs.  You might be a Steve Jobs, or you might be a Pierre Omidyar.  As an investor, I’m willing to back you, even if you’re not sure which one you are yet.  In every investment we make, we hope that the Founder-CEO will be able to lead the company to success, but if not, and if you realize as I did that you want to bring in a professional CEO, we’ll work with you to find someone who is a true partner.

So as it turns out, Ben was right.  You always do want a Founder-CEO.  But that person doesn’t always have to be the Founding CEO.  Being there at the start isn’t the only path to being a founder.  “Founder” is a state of mind, not a job description, and if done right, even CEOs who join after day 1 can become Founders.

Photo by Christian Joudry

LinkedIn to Microsoft: connecting global and corporate professional networks

LinkedIn to Microsoft: connecting global and corporate professional networks

Companies have many founding moments. Founding moments are the key inflection points when leaders decide to change a path in order to better, or more quickly, realize their mission. We typically only think about the first founding moment, hiring a CEO, or the IPO, when in fact there are many. Today marks a founding moment for us: the decision to enter into an agreement for Microsoft to acquire LinkedIn.

Read my full post at LinkedIn.