For a stretch of asphalt that has seen trillions of dollars of wealth creation, Sand Hill Road in Menlo Park, Calif., the Main Street of venture capital, is rather unassuming. A few bikers heading for the fog-covered hills, a Tesla passing a Prius, low-slung office buildings. One building houses Greylock Partners, where I sit in a conference room with entrepreneur Reid Hoffman, who has been in the middle of this wealth creation and now sees some of its destruction coming soon. "If companies haven't embraced that they are operating in a networked age," he says, "then they will probably be on their way to not surviving."
The 47-year-old knows networks. Mr. Hoffman built his reputation by founding the business social-networking platform LinkedIn and serving as chief operating officer of the e-commerce site PayPal, both billion-dollar powerhouses. He was an early investor in YouTube, Yelp, Flickr, Zynga and, oh yes, Facebook.
He has a theory on what makes ventures work: understanding that information is no longer isolated but instantly connected to everything else. Call it the move from the information age to the network age. Mr. Hoffman thinks that the transformation is just getting started and will take out anyone who stands in the way.
But what is a network? It's an identity, he explains, and how that identity interacts with others through communications and transactions. It's not just online, on Facebook and Twitter, but everywhere. It is the sum of those communications, conversations and interactions.
"Your identity is now constituted by the network," he says. "You are your friends, you are your tribe, you are your interactions with your colleagues, your customers, even your competitors. All those things come to form what your reputation is." In short, you are no longer the only one in control of your résumé.
Mr. Hoffman, who grew up in the Bay Area, has long been an independent guy with a contrarian spirit. After beginning high school in Berkeley, he applied and was accepted to boarding school in Vermont without telling his parents. He returned to the West Coast to attend Stanford University, which he felt best combined the intellectual and practical. A Stanford adviser told him to look through the course catalog, see what he liked, and only then pick a major. He chose Symbolic Systems, the same course of study Yahoo CEO Marissa Mayer pursued a few years later. Symbolic Systems, he explains, is basically "how we think and speak, how we communicate with each other, how we reason—really, who we are."
In college, he spent a year interning at the renowned idea factory Xerox PARC, and after graduation in 1990 he studied philosophy at Oxford University on a Marshall scholarship. Both experiences, he tells me, influenced his thinking about how people communicate. But he didn't like the narrowness of academia and the lack of practical application so gave up life as a scholar.
Yet he still wanted to understand people and shape how society communicates, and he thought "the way to do that might be to create media objects that people interact with, and cause them to interact with each other."