Cheatsheet: "The Alliance" by Reid Hoffman, Ben Casnocha, and Chris Yeh

Recommended for Startup Investors?

Yes

Why

Short read. Hoffman is PayPal Mafia and cofounder of LinkedIn, which sold to Microsoft for $26.3bn in 2016. Useful and primarily written for managers, but the ideas of network intelligence are still very valid for investors. If the SIFA community is one network, tapping into network intelligence inside and outside is basically what a venture capital firm does. Note that Hoffman is a principal at Greylock and he has taken the exact same network ideas to VC.

Of note, Casnocha is friends with Scott Young and introduced him to Cal Newport. Networks.

Concepts

• Firms can't guarantee lifetime employment anymore, so now you have a "dominant strategy" problem between employers/employees.
• Employees can solve these problems by establishing a hybrid employee-contract model: essentially, hire people as full-time employees but define it as explicit projects, with clear value to the org and to the employee. Authors call these "tours of duty"
• Three types of tours of duty: rotational, transformational, and foundational. There was a fourth one in there but not frequently mentioned because it's not aspirational.
• "No one ever washes a rental car."
• How to get aspirations and values to employee objectives
• Asking intense questions for an hour can jumpstart trust, but requires interviewer to share self story
• Think about companies as professional sports teams, not families
• In the networked age, the speed of publication is too slow and the best organizations need access to live-to-the-second experts hence social networking.
• Network intelligence story of PayPal against their competitor.
• A16z pays $100 for "best rumor brought up"
• "Who are the smartest people who don't work in the company?"
• See employees as entrepreneurial assets and not commodities.

Facts

• Benjamin Black was a reliabity engineer at Amazon when he suggested to his manager that Amazon should start AWS. Interestingly enough, Bezos then took the idea and ran with it, giving Black's manager the right to start the business. Black is now a founder of a startup and CTO.
• John Lasseter is an example of an entrepreneurial employee. He was fired from his animation job at Disney in 1983 after suggesting the company make an entirely computer-animated movie. Lasseter pursued this idea at his next job with Lucasfilm. The division for which he worked was sold to Steve Jobs (1955–2011) and renamed Pixar. Its first movie, Toy Story, came out in 1995. Realizing its mistake, Disney purchased Pixar for $7 billion in 2006, bringing Lasseter back to the Disney fold, where he became the chief creative officer of Disney Animation Studios. By treating Lasseter as "a commodity rather than an ally," Disney lost a valuable employee and a lot of money.

Procedures

• Alumni network. Lots of resources on theallianceframework.com and link in bonus resources section.
• Pay for employees to network, as long as they prepare reports on what they learned

Bonus Resources

https://www.coursehero.com/lit/The-Alliance-Managing-Talent-in-the-Networked-Age/chapter-1-summary/