Blunting Trump's clout, Silicon Valley style

Reid Hoffman, the founder of LinkedIn and a billionaire Silicon Valley venture capitalist, has made a half-dozen or so investments in recent months with a specific aim: to counteract the influence of President Donald Trump.

The venture-style investments include starting a new group, Win the Future, whose self-described goal is to make the Democratic Party relevant again. He also invested $1 million in Cortico, a startup that encourages online discourse between people with opposing political views. And he invested hundreds of thousands of dollars into Vote.org, which has a goal of getting all eligible Americans to vote; Higher Ground Labs, a startup for progressive politicians; and the Center on Rural Innovation, which is working for economic improvements in rural areas.

“My approach to political investing is the Silicon Valley approach,” Hoffman, 50, said in an interview. “Find and back powerful entrepreneurs.”

Hoffman has emerged as Silicon Valley’s prime behind-the-scenes political influencer. A Democrat with a net worth of more than $3 billion, he has spread his cash this year by financing groups that want to restore dialogue and inclusion to politics. The moves put him at the vanguard of a political awakening of technology leaders, who are emerging as a potential West Coast power center that could help invigorate Trump’s opponents.

But how effective a Silicon Valley approach to political change can be is a question — and Hoffman has experienced stumbling blocks before.

In 2014, he invested personally in Change.org, an online petition startup. Last fall, the company laid off more than a third of its employees after burning through more than $40 million in venture capital. Years of mismanagement, Hoffman said, had “essentially atrophied” the startup and it was always running a deficit.

In the spring, Hoffman pumped almost $30 million in new financing into Change.org and installed new board members, to try again.

“I’m optimistic about where we can get to,” he said, “but it doesn’t mean it’s not a bumpy road.”

Debra Cleaver, a former Change.org employee who now runs Vote.org, said it was important to pursue innovative ways for achieving change. But, she added, politically driven investments can be more successful when they are “treated with the same level of accountability” as traditional venture capital investments.

Hoffman is motivated by a sense that people are morally obliged to participate in civic society, said Peter Thiel, the Silicon Valley investor and a founder of the digital payments company PayPal. Thiel, a supporter of Trump, has known Hoffman since both attended Stanford University in the 1980s.

“I would describe Reid as left of center, with a very strong sense of empathy for those who are less fortunate,” Thiel wrote in an email. “It’s more of a character trait than an ideological position.”

Unlike many of his tech peers, who are only now becoming more politicized, Hoffman has long been interested in government. A native of Palo Alto, California, he attended boarding school in Vermont and graduated from Stanford, where he was an ultraliberal member of the Student Senate alongside his conservative classmate Thiel. He later attended Oxford University on a Marshall Scholarship.

In 2000, he joined Thiel as an executive at PayPal, a stint that made Hoffman a millionaire. He founded LinkedIn, the career-oriented social network, in 2003, spurred by trying to connect people and the openness of online communities.

While continuing to lead LinkedIn as chairman, he joined the venture capital firm Greylock Partners in 2009 to invest in startups. LinkedIn went public two years later, making Hoffman a billionaire. He added to his fortune last year when Microsoft bought LinkedIn for $26.2 billion.

By then, he had become involved in policy. During President Barack Obama’s administration, Hoffman nurtured ties with the White House and Democratic politicians like Sen. Cory Booker of New Jersey.

“Reid was among the top leaders in Silicon Valley to whom we looked for good counsel” on issues like immigration, said Valerie Jarrett, a former senior adviser to Obama.

Last year, Hoffman joined the Pentagon’s Defense Innovation Advisory Board, a group helping to modernize the military. Hoffman offered

ideas about the impact that artificial intelligence would have on combat, and suggested ways to improve the military’s personnel retention, according to a person who works with the board but was not authorized to speak publicly about it.

He also was involved with Hillary Clinton’s presidential campaign and spoke out against Trump. At one point, he offered to donate up to $5 million to veterans groups if Trump would release a copy of his tax returns.

Clinton’s defeat forced Hoffman to recalibrate in various ways — especially in his view of social media. Reddit, Facebook and Twitter had given Trump and his supporters vast platforms, and tech companies like Facebook had given mass distribution to misinformation campaigns.

Hoffman decided the tech industry had to confront the challenges created by social networks, including their potential to undermine democracy. He said the industry would at some point need to regulate itself with a standards body like the Motion Picture Association of America.

Trump also embodied a specific cause of anxiety for Hoffman.

“We’re in turbulent times, when concerns about the future tend to lead us to try and enshrine the past,” he said. He began hosting discussions to generate policies for creating economic opportunity and how the government can serve broader swathes of people.

Chris Lehane, head of global policy and public affairs at Airbnb and a former top adviser to President Bill Clinton, said, “Even before the election, Reid talked about the idea that the technology industry has to own its responsibility for the changes in society that it is driving.”

Hoffman has since used his cash and connections to shape the organizations and startups that support the issues where he wants to exert the most influence. He has also tried to convince the tech industry to take responsibility for how its products are built and used.

In the spring, Hoffman convened a small group of tech leaders to dine with Tony Blair, the former British prime minister, at the Rosewood Hotel in Menlo Park, California. The group discussed the prospect of governments trying to regulate tech companies and, in particular, the unemployment problems being created by automation and artificial intelligence.

Sam Altman, president of the startup incubator Y Combinator, offered a suggestion: universal basic income, under which the government provides poor citizens with a guaranteed check. Hoffman worried the idea did not account for how work can provide a sense of purpose and community.

“At the end of the day, most people don’t want a handout,” he said. “Given a chance, they’ll work hard.”

Altman said he agreed with Hoffman’s concerns and appreciated “his willingness to debate issues.”

Hoffman has also given money to organizations like the American Civil Liberties Union and the Union of Concerned Scientists, which are explicitly resisting Trump’s agenda. He increased his venture-style investments in new civic and political startups, as well as continuing to fund some he had previously invested in, like Change.org and political fundraising startup Crowdpac.

One result was Win the Future, which hopes to crowdsource ideas for the Democratic Party and field political candidates from outside the party’s mainstream. The group, which got its public start in July, is led by Mark Pincus, a friend of Hoffman’s and a founder of the mobile game company Zynga.

Win the Future has already drawn criticism for floating the possibility of billboards with crowdsourced ideas to shape the Democratic agenda. Pincus said most things in the startup ecosystem took time to evolve and that early criticism of the new group was helpful.

Hoffman’s colleagues said his startup method to politics was the right one. “It’s a different approach, so naturally there will be skeptics,” said John Lilly, one of Hoffman’s partners at Greylock. “But entrepreneurship has been the driver of the economy. It will work.”

Hoffman said he would judge his investments in civic-change startups by their ability to affect society, not by any financial return.

“One of the things that I get most frustrated with is this kind of American business psychology, this view that I’m only responsible to my customers and employees and shareholders,” he said. “We have to be part of the political process. We can’t just invent the future without some kind of connectivity.”