Ben Casnocha:

Today’s episode is about the vital topic of competitive advantage. What should I do with my life? What kind of career should I forge? What kind of job should I pursue? What do I do next?

The right answer to these oh-so vital questions is: you develop, articulate and invest in your competitive advantage.

Competitive advantage is the thing that makes you stand out from everyone else in the job market. And Reid, there’s a billboard on Highway 101—near where both of us live—that once said, “A million people can do your job. What makes you so special?”

And so this is an incredibly important topic for everyone thinking about their career, but it’s also a topic that’s really core to the process of entrepreneurship. Entrepreneurs are always trying to figure out how to stand out from the competition.

Reid Hoffman:

So one of the things I think that is key for this: most people, their brain kind of fuses when they get here because they go, “Well shoot, if I know the math, there’s billions of people in the world. What can make me different?”

Well, actually, there’s a bunch of things that actually make that smaller. It’s like, well, what about in your industry, your region, the particular things you’re doing? Like the competitive set, depending on what you’re doing, might actually, in fact, be pretty focused, and therefore your competitive advantage is much more easily recognizable.

So you might say, “Well, I’m smart. I learn fast.” There’s a lot of smart, learn fast.

But maybe in this particular way, the fact that I’m smart and learn fast in my particular competitive set is actually in fact a competitive advantage.

Ben Casnocha:

And that’s such a great point. You know, there’s often this misconception that companies need to be better than every other company in the world. No, of course not. They’re focused on some niche of some industry, of some customer set.

And, similarly, in the career landscape, you don’t need to be the absolute best human on Earth; you don’t need to be better than everyone else, every other LinkedIn member; you need to be better relative to whatever small group of professionals who share your aspiration, who share your set of skills, who are competing for the same kinds of jobs.

And that’s not a billion people that’s maybe more like million, five hundred thousand, two hundred thousand other professionals who you are comparing yourself to.

Reid Hoffman:

And then the other one—to use a sports analogy—is people tend to think, “Well, I have to be the gold medalist in the Olympics.”

Actually, in fact, you just have to be like, kind of one of the professional sports players. Like you don’t have to be the best NFL player, the best basketball player; you just have to be a good one that would be recruited by a good team.

That’s what setting the competitive standards look like. Now, you may aspire to be the MVP. You may aspire to be the gold medalist. That’s great. And that’s a particular path. And you have to, you know, invest and take risks in order to do that.

But usually, when you’re thinking about competitive advantage and you think, “Okay, well, how do I play within the space that I’m playing?”

Now, the next thing that we talk about a lot in The Startup of You is people tend to do their competitive advantage on, you know, kind of completely their own specific attributes, and they don’t think about, well, okay, so actually, in fact, “I have a good network. That network can help me. I have knowledge of resources or knowledge of a market space that other people don’t have, so I can take risk in a more intelligent way and do something bold, like join the startup, or move to this location, or try out this industry, or start this company, or any of these other things because I know something other people don’t know.”

And knowing that…even though you say, “Well, I do math the same as them; I learn at the same speed; I code the same way; I market, you know, in a similar capability.” Those other things can still be the sufficient competitive differentiation.

Ben Casnocha:

Totally, and differentiation’s, I think—is a different word than competitive advantage.

And I think it’s really helpful in this context because all startups, all entrepreneurs are always thinking about how they can have their company differentiate from their competitors.

And one company that I’m a huge fan of— bought tons of shoes from: Zappos. When Tony Hsieh launched Zappos, he did something that was really interesting, which is: he noticed that all of his competition—other ecommerce retailers, including Amazon, before Amazon bought Zappos—would always minimize the availability of live customer service.

If you had some question about your order—like you can actually try this, listener. Try to get someone from Amazon on the phone to help you with your $16.99 order that you placed last week; it’s almost impossible to get a human to answer a phone call. You can fill out a form, you can send an email.

And so when Zappos launched, they plastered their 1-800 number all over the website. It said, “If you have any questions whatsoever, just call us.” And it was no call center, like in India, that answered these phones. These are human beings in Nevada who answered your call and helped you through your order.

And these are relatively low-margin orders, so it defied all conventional wisdom about efficiency and productivity, but it really stood out. It was really different. And it was all about love of customer and being the best at customer service with this very specific strategy of “We will answer your phone call; please call us if you have any questions.”

Another thing Zappos did: in those [traditional] call centers, compensate and incentivize call center reps to get off the phone as quickly as possible, right? They record every call and they tell reps, “Keep these calls short because every minute on the phone is cost.”

And Zappos did the opposite. They said, “If you’re talking to a chatty customer”— in America today, there’s this thing of senior citizens often call customer service numbers ‘cause they’re lonely. It’s really sad, like they call the bank with a question, but then they want to keep going on and on. And you know, Wells Fargo say, “Get these people off the phone.”

Zappos did the opposite, and said, “Keep talking. Stay on the phone. Entertain them, engage them.” And that’s part of what it means to have a heart. And that’s what it means to love the customer.

Tony Hsieh and his team built a billion-dollar business based, in large part, on this identity. And that’s what competitive differentiation looks like in business. And in the career landscape, we should all have a similar philosophy. We should all think about, “What does everyone else think? What does everyone else believe? What sorts of skills is everyone else have? How can I do something different? Have a different approach to how I live my life? The kind of skills I develop? The kind of network I build?” And so on…

Reid Hoffman:

By the way, you have a theory of it. You have to test the theory in the market, you have test the theory against competition.

For example, when I started my own—you know, kind of, I decided that the academic path wasn’t going to be for me; that was my Plan A. I moved to my Plan B, which was moving into industry, and then started being refined.

It was like, “Okay, well, you know, should I get a job at a big company? Should I do a start-up? Oh, I should get a job at a big company first in order to learn skills, you know, etc, etc.”

I then thought, “Okay, what’s my theory of why I’m the one out of—one of a million people, you know, in this kind of thing?” And I said, “Well, what I’ve learned a lot through Stanford and Oxford is: I’m really good at building complex theories, of learning complex things, of putting these systems together.”

And so I said, “Okay, that is one of my key portions of competitive differentiation. That will be something that will make me very useful. That turned out to be naive because actually, in business and in strategy, it’s the simplest thing that’s valuable. Now, sometimes you need to get complicated in order to get to delivering what you’re doing; you know, a complicated project, a electric car, or something else. You know, at large-scale AI model.

But, you know, most business strategies are actually at their core simple, partially because you can—as you scale an organization and go from hundred people, a thousand people, and ten thousand people who are executing along a path, you need a simple plan.

Ben Casnocha:

So you’re saying most differentiated business strategies are simple at their core.

Reid Hoffman:

Yes. Exactly. And so then I realized that my application of where I was going to apply what my theory of my competitive advantage was, was wrong. And I should actually, in fact, seek simplicity, not complexity, and that there were other things in order to have the right kind of competitive differentiation or to be successful.

Ben Casnocha:

So when an entrepreneur is thinking about what kind of business to build, you know, we often advise them to think about three dimensions to a potential entrepreneurial path.

The first is for the entrepreneur to reflect on his or her existing assets:  this thing of their existing strengths, experiences, skills, know-how that might give them an edge.

The second is to think about their aspirations, like what do they want the business to look like in ten or twenty years? How do they want to impact the world? What are their values? How can they bring back to bear in a business?

And the third dimension is the market realities. What actually is the competitive landscape? Where is the customer demand?

You know, in The Startup of You we talk about these as the three gears to competitive advantage, both in business and in careers. Any one of them is insufficient, right? If you just are thinking about your passion and your aspirations, but there’s no market demand for that passion, you will not be successful.

Or if you just obsess about the market realities—“Oh, there’s a huge demand for nurses in California, I should go to nursing school and become a nurse”—but you hate nursing, you’re likely not going to last very long at that job.

And so the competitive advantage framework we describe in The Startup of You is about how to integrate all three of those gears, where they can turn in on each other to sort of synthesize into something that’s uniquely you; a competitive position in the career market that leverages your assets brings you closer to your aspirations and accounts for the market realities.

So let’s get into what each of these three gears really is. And let’s start with assets.

Assets: these are your strengths, your interests, your experiences, resources, your existing network. And in the book, Reid, you know, we kind of geek out on different categories of assets. We talked about hard assets and soft assets.

So hard assets are, you know, the money in your bank account; the car that you own; other sorts of possessions like that. Soft assets, the thing we spend a lot more time talking about, which is: these are your skills, your network, your personal brand, and really the area where most people need to be thinking there is how to develop their soft assets, right?

Reid Hoffman:

Yes, it’s not investing in the next year. It’s investing in three years, five years, ten years.

And soft assets tend to be the things that will compound better, right? So, for example, if you learn certain skills to become much more capable of becoming a manager, or learning how to do a much more valued skill, whether it’s software engineering, marketing, selling, etc, that when you have that then that changes the trajectory of the path you’re in.

And so a variety of the things that we talked about are how to essentially invest in yourself in those soft assets, in order to have both much greater upside, but also resiliency in your career, because when you have those soft assets, you’re also much more in demand from many different employers, many different job functions.

Ben Casnocha:

Totally. It’s a common mistake people make; it seems when they think about their careers, they spend too much time thinking about how to maximize their short-term hard assets (i.e., just cash money in the short term, right?), and not enough time thinking about how to invest in their soft assets, right?

Too much time thinking about the allocation of a stock market, which bank account offers the highest savings rate, you know: “I’m gonna compare six different banks, or I’m gonna match, you know, my credit card points, all these kinds of things” and too little time thinking about “How do I actually build the skills that will allow me to produce the accomplishments that will long-term make me a lot more money, and probably, by the way, lead to a more fulfilling and satisfying life?”

Reid Hoffman:

Yes, exactly. And so to think a lot about soft assets—I mean, it’s almost a bit like the kind of question of look, hard assets are an absolute necessity; you want to have a safety net; you want to have a good living condition; you want to be able to do the things, take some vacations or so forth…

But the way that you will make money three to five years from now, if you’re investing in yourself, which is a lot of soft assets, a lot of things like skills, network, etc., and how to do that – in fact your earnings five years from now will be totally different than your earnings now.

Ben Casnocha:

In the annals of entrepreneurship, we see entrepreneurs—when I think about what kind of business to start—some of the greatest entrepreneurs ever often inclined toward ideas that leveraged their existing assets.

So you know, when Larry Page and Sergey Brin started Google, they were starting a company that built upon their computer science expertise and research. When Sara Blakely started Spanx, she was drawing upon her years of experience doing sales selling fax machines door to door; direct-to-consumer brand like Spanx made a lot of sense relative to her existing skill set.

So Larry Page and Sergey Brin trying to start Spanx, Sara Blakely trying to start Google would make no sense. And so you’re always drawing upon—when you’re thinking about a business idea, you’re thinking about what existing assets do you have that you can build upon?

Reid, looking back at your career, what would you say have been the most important soft assets that you’ve had to develop the strengths and skills that have defined your career?

Reid Hoffman:

You know, people would normally think, “Well, okay, it’s infinite learning, high learning speed, and ability to encapsulate lessons,” in ways that I can share them, you know, a bunch of those things. Those are very useful.

I think the less well-understood ones are the fact that I collaborate well with people—so I have a very strong network, and I’ve got people that I work with, and I’ve helped various projects that go all the way back to my college days, and my undergraduate days.

And, you know, part of the way that I work when I work with people, when I’m working with them in projects or companies, the goal is to work with them in ways that you would work together for decades; that relationship will ongo, so that people can call, and say, “Oh, I haven’t talked to you in three years. But I’m looking at this. Could you help me with this?”

Ben Casnocha:

So I love that. What is the skill behind that skill? Like, so you’re saying one of the underappreciated soft assets that you possess the ability to collaborate well with others, which allows you to pursue really ambitious projects because ambitious projects are teams of people that get anything done.

Like, what’s the thing that you know, about collaboration and others don’t?

Reid Hoffman:

Well, I think there’s a whole set of different things, but part of it is that I’m paying attention to other people, and where they’re going and what they’re doing. And I learn about it, and I explicitly collaborate on it, and so forth.

And so, it’s part of the reason why the Masters of Scale episode that has me as the interviewee is “Be the hero of your own story” because that’s the way I work with other people is we are each trying to be the heroes of our own story: how do I help you be the hero of your story? How do you help me be the hero of my story?

And that recognition of who they are, what they’re doing, what are the things you can do—that led to, kind of, this thing that also had kind of a part of a founding idea of LinkedIn, which is kind of this theory of small gifts. Like if there’s something small you can do for something that’s huge for them, well you should always be doing that with your allies, right? And your friends, because it costs you this much, and it’s this valuable to them—for the audio, that’s small and large—and that is huge.

And if there’s someone who values their friendship with you, their alliance with you, then that will come back in multiples because you’re both doing that with each other. And I think you shouldn’t actually keep count exactly. It’s—it should be the “We are going through life, and we’re creating amazing things together.” And I think there’s a whole set of skills as it were behind the skill.

Ben Casnocha:

So when we think about investing in your soft assets and growing your soft asset base…in the book, we talk about a bunch of sort of specific tips/tricks, and we’ll run through a few of them now.

So one of them is that soft assets are really valuable in combination. And so it’s usually, like, your ability to collaborate combined with your network—that they’re very similar but different. Like, you can have the greatest, like, set of meta skills around collaboration and know exactly how to communicate, but if you have no network that won’t feed actually the collaboration and emigrate successfully, so a strong network and a skill of collaboration coming together is really powerful.

When you think about listing out your soft assets and taking stock of your current competitive position, think about how soft assets can uniquely come together to form a real edge. We talk in the book about myself as an entrepreneur—I’ve been an entrepreneur my whole life, started lots of businesses, and also loved writing—and bringing together those two skills of entrepreneurship and writing have led me to add unique value in the world in different contexts.

There are a lot of amazing writers or a lot of amazing entrepreneurs; few people have both of those skill sets. And so if you can find especially soft assets that pair together in unusual combinations that can lead to competitive differentiation in the market.

Another thing we talked about, Reid, in the book is, you know, is: it time to earn or is it time to learn?

Different seasons of life can call for different priorities, right? And you always want to be learning at some level, but you know, as we’ve talked about elsewhere in our other conversations, sometimes you want to prioritize earnings, sometimes you actually just need to maximize the income that you can make any given year, your family needs, whatever.

And so it’s not always the case that you maximize soft assets at the expense of hard assets; as you would say, it’s nuanced, you need to do both, but you either want to be earning or learning. If you’re doing neither in a job—if you’re not earning a lot of money or learning very much in the way of soft assets—get a different job. Ideally, you’re both earning and learning at the same time.

Reid Hoffman:

Yeah, so I think we lightly emphasize learning because people tend to under-emphasize that, it tends to be a little vaguer, tends to be a less certainty of payoff when you’re doing it, which is one of the reasons to push learning towards, you know, to something that’s more front of mind.

Now, exactly as you say, there’s a whole wide variety of things where earning can be important. Could be important, as you mentioned, for family; it could be important for, “Look, I want to be able to have a safety net”; it could be important, “I want to be able to afford a house”; you know, it could be, “I want to take a year off, I want to do something,” like there’s all kinds of reasons where you go building up net asset value is important for any—you know, there’s retirement ultimately.

And so I think that balances it, and to some degree, even when you’re learning—to totally discount earnings—like well, you’re learning with a plan to be earning. I know that I’m going to need economics to look like this; let’s make sure that’s part of my plan, or at least I know that—we’ll say it’s much harder I plan right now—in the next couple years I’m gonna have to build a plan that includes it.

Ben Casnocha:

A common question that people wrestle with when they think about how to invest in themselves and grow their soft asset base is, you know, which skills should they invest in? Like, what skills should they actually develop?

And of course, that ties into a topic we’ll talk about soon around your aspirations and where you want to go. But it sort of nets to sort of an interesting tactical question, which is: should people focus on becoming more specialized in their skillset, or become more of a general? So in other words, they may already know—say, they have, you know, four or five years of product management experience at a tech company, and they are trying to develop their soft asset base, and they’re thinking, “I could really double down and become really specialized in product management: read ten more books, go to different classes, find mentors, build my network among PMs.”

Or I could say, “Alright, I’ve already done four or five years of product management. How about I do four or five years in some other functional area? How about I actually spend my weekends not reading about product management, but instead reading about leadership, so I can go be a CEO or something like that?”

And this sort of specialist versus generalist debate—of course, it’s hard to generalize; it depends on the person and where you want to go. But for what it’s worth, my take—and I’m curious if you agree or disagree, feel free to push back—is early in the first half of your career, pays to have specialties; it pays to actually be deep on one thing, even if narrow, because you’ll be of great value to your network and the career marketplace if they understand that there’s a specific thing that you’re one of the best in the world at.

So specialize in the first half of life. And as much as you want to be more of a generalist, and sort of a CEO, do that sort of later in life once you’ve already developed a specialty. You don’t want to end up at like being age forty and sort of knowing a little bit of a lot of things, but not world-class in any one thing. Agree? Disagree? What would you change?

Reid Hoffman:

You know, classic is no one should need both. Part of it is you need to have enough good—in this language—specialties, that you’re a useful addition to a team. You’re a useful like, “Oh, okay, yeah, in our company, and our group and our project, we need somebody who can do that sort of thing.”

And if you don’t have some abilities—it could be sales, could be marketing, could be engineering, could be product management, could be financial, could be legal, could be you know—if you don’t have some of that, then you don’t have enough to play a role on the team.

On the other hand, by the way, part of the thing is, is the deeper you go on a specialty, the more it tends to track you, the more it tends to maybe, you know, like if you go, “Well, it’s not just product management; I’m going to be product management in electric vehicles. Well, I’m not going to just be product manager in electric vehicles; I’m going to be product management on the battery systems in electric vehicles, you know, etc, etc.”

And that, on one hand could get you into, you know, the specifics of like a really great job, you know, over time—but you have to be careful about like, “Well, does that work for me? Does that work for the industry? Does that work for change?”

And one of the benefits about also being a good generalist, is that like, for example, one of the things I do in very early startups is I always hire at least a few like, as it were, superpower generalists: people who are like, like, “I can go look for office space. No, I can go work with the accountants and close the books. No, I could go help with a partnership discussion. No, I can actually go help generate the financing deck.” If you go across it, that kind of utility player is also valuable in different cases.

Ben Casnocha:

Yeah, that’s great point. I mean, I think Eric Schmidt and Jonathan Rosenberg, in their book, they say one of the key lessons on recruiting talent was smart generalists…as key to the building of Google. I mean, certainly if you want to work at a startup—early-stage startup—generalists tend to dominate. The bigger the company, the more specialized the role, right?

Actually, I was talking to a friend of mine who’s an attorney at Microsoft, and I said, “What kind of stuff do you work on?” and it’s like this ultra-niche type of the Microsoft business. I’m like, “Wow, there’s a legal team devoted to that part of a part of a part?” And like, that’s what happens at large organizations.

So if you work at a large company, you will get put into a super niche specialty, and that can be good or bad. If you want to work at startups, you have that general skill set. But you know, you and I probably both know lots of people who’ve spent like ten to fifteen years doing like BD, strategy, rough high-level product management at startups. And after fifteen or twenty years of their career, they don’t—it doesn’t feel like they have one specific skill-set that they’re world-class at.

Reid Hoffman:

Yeah. And it depends, again, what game you think you’re going to be playing, right?

Because if you said, “Well, I ultimately want to perhaps go get a job at a larger company,” then the question is, “Alright, well, maybe you would need to be refining that into IP, or, you know, like IP discussions or international, or, you know, in China, or cross border, or in this industry,” I mean, so, you know—on the other hand, if you said “No, no, actually, I want to continue to play in the startup ecosystem,” then it’s like, “Well, actually in fact, I should make sure that I’m well connected to network, that I have the ability to bring other networks to bear on this particular startup problem, etc.”

Ben Casnocha:

Okay, so we’re talking about competitive advantage. And we’ve talked a lot about assets, how to invest in yourself, how to grow your soft asset base. But of course, so much of how you invest in yourself is informed by where you’re trying to go: what are your goals? What are your ideas, values, deepest wishes, vision for the future? And the more you know about yourself along those dimensions, the more those elements can serve as kind of a career compass, and really guide your investing.

And I’m curious, Reid, how much clarity did you have early in life as to what your deepest aspirations were? Your core values? Did you have a vision for your future that made the process of composing your asset base really straightforward? Or did it unfold a bit unexpectedly?

Reid Hoffman:

I think most people imagine that what they should have is like very specific, like, “I want to be an astronaut. I want to be an entrepreneur.” It’s part of what we asked children like, “What do you want to be when you grow up?”

Actually, in fact, I think most of us, when you do have an answer, it’s actually almost certainly too specific and based on too little knowledge of yourself, too little knowledge of the environment, too little knowledge of the industry, competition, etc.

And then—so I think it’s actually much better to be kind of almost thinking of it as kind of like a camera coming in focus. When you’ve got ideas and kind of lenses in it, like you’re, “Well, I’d really like to be working on a team, I really like to be working in technology, I’d like to be creating something…” Obviously, those are all still pretty vague. It’s kind of a blurry lens camera. But you sharpen that, as you learn about yourself; you sharpen that as you learn about what the opportunity set in front of you is; you sharpen that as you learn what might be possible in terms of doing this. And so for me, you know, maybe it’s because I read too much science fiction as a child—

Ben Casnocha:

What was your top science fiction as a child?

Reid Hoffman:

Well, it was a bunch of classic; it was, you know, Robert Heinlein and Isaac Asimov, and, you know, kind of other folks that was kind of this, this grand history of what we as human beings might be able to achieve and become, and so forth.

And I was like, “Well, I want to help in that journey. I want to be someone who contributes to that journey.”

And so…and that was reason why I initially said, “Well, okay, because I like ideas, I like thinking, I think I come up with new ideas, I think I’m creative in a different way of looking at things, I’ll be a public intellectual. I’ll write the ideas about who we are as individuals and society, and who we should be. And I’ll read some books and essays, and that’ll be it.”

And then I was like, “Well, what do I do that? I can maybe do that through academia. Oh, look, academia is not a very good platform for it. It actually focuses much more on disciplinary scholarship as a way of doing it versus this kind of grand evolution and kind of the pure ideas in that.”

And so it was like, “Ah, I’ll shift over.” But it was partially ‘cause I had this, like, “Well, I want to be moving in that direction where you kind of put these kind of two things together, like oh, being an academic professor somewhere writing books.”

“Oh, no, actually, in fact, you’re first going to be a product manager at Apple Computer and E-World. And then you’re going to become an entrepreneur. And you’re not even going to have a goal of being an entrepreneur. You’re just going to try to create these kinds of products. And that leads you into entrepreneurship.”

And so I think that people too often, when they’re thinking about goals, they tend to think, you know it’s “I want to be an astronaut, and I want to land on the moon.” And that’s the thing. It’s like, well, actually, in fact, if you can articulate your goals in a much more flexible way that are true to the things that really matter to you, then you can be learning and adjusting dynamically, and focusing and focusing that lens based on the world as you find it.

Ben Casnocha:

It’s such a great point. And I think there’s so much mythology around this topic that needs to be vanquished.

I mean, one is that like, perfect self-knowledge exists. It doesn’t. That it’s fixed. It’s not, it’s dynamic, as you said. That perfect self knowledge can be found through a search process—like take out your flashlight, look through the forest: “Hey, there it is, there’s who I actually am!”

And I think there’s such mythology around successful people, that they must have had some perfect awareness of what they wanted, like they had this deep passion that was within themselves that they articulated, and then pursued unwaveringly.

And that’s just not how really interesting lives unfold. And so I think a key message from us in The Startup of You is: if you don’t know what you want to be when you grow up, that’s okay. If you don’t know what your core three values are, that’s okay. If you don’t have a really specific vision for your life right now, that’s okay.

You can figure it out. It can unfold. And I think the reason why we have so much conviction in that thesis is that that’s how entrepreneurship works. Almost no startup entrepreneur begins their journey with this perfect like, “Ten years down the road, here’s exactly how it’s gonna look.” It actually unfolds really organically, and so to be okay with that uncertainty, and to nonetheless, develop plans, and to articulate hypotheses about what you might like or dislike, and to live with that uncertainty—but to continue to try to refine it and clarify it—that’s the skill that we’re talking about here.

Reid Hoffman:

Yeah. And as you know, one of my favorite movies is The Hudsucker Proxy by the Coen Brothers. It’s the kind of the Disney tale of entrepreneurship. Now, when Tim Robbins’ character is asked, what is his goal, and he’s gonna work his way up to the mailroom.

And he pulls this little piece of paper out of his shoe, and holds it up saying, “This is what I’m going to do.” And it’s got a circle drawn on it. And so people kind of look at him and go, “You’re crazy.”

And then as obviously, the film develops—spoiler alert—you know, it becomes a hula hoop. And you’re thinking, “Oh, he’s thinking, just of the hula hoop. And he’s got this specific idea. And it’s just not communicated well, and he got this amazing new product.”

But actually, in fact, part of what I love about the movie is that—again, big spoiler alert—it goes all the way to the end, and he says, “I got this new thing that we’re cooking up, and it’s the Frisbee.”

And so, it’s actually in fact, when you look at what that symbol of that circle drawn on a piece of paper stored in his shoes, so it’s always with him, isn’t, “I have this one concept of a hula hoop,” it’s, “I have this way that we can interact and play with things in circles that can be done in various ways; can develop a sequence of different products that are still the kind of thing that families and children and other things can, can enjoy.”

It’s not just one idea; it’s a way of approaching it. And I think that’s part of where the thinking of goal-setting, the thinking of self-knowledge is—it’s that dynamic path. It’s that learning path; it’s that exploration in the things that you were going into—

It’s not, it’s like—too often people say, “Well, I go sit in a dark room, and I will discover myself by sitting in a dark room.” It’s like, “No, what you’ll discover, is you’ll discover what it is to discover about yourself sitting in a dark room. That’s not the only things you’re going to discover about yourself.”

Ben Casnocha:

Totally. And it’s such an entrepreneurial idea. The way that you discover things about yourself in the world is through action, through doing, through experimentation.

And so if you’re not sure what your aspirations are; if you don’t really know what your long-term vision is; you don’t know what core values you have or what your intentions are, don’t just reflect on the question. Go out and have contact with the real world. And you’ll learn the things you like, things you don’t like, what you’re good at, what you’re not so good at. And so this is really a framework about action. And if you think you can just reflect your way to figuring out your long-term aspirations, you’re probably in for a world of disappointment.

You know, one of the things that Dan Pink says in one of his books—and we’re fans of Dan, and he’s been kind enough to be supportive of The Startup of You—is he’s like, “You know, people in work, they want mastery, they want autonomy, they want responsibility.” And those are just a few values that seem solid—that resonates with me as true anyway, of like jobs where you have a lot of responsibility, where you have some sense of autonomy, where you can achieve a sense of mastery. Those are likely to be jobs that fill you up.

And you can think of five or ten other things that you care about that you want to integrate into your decision process as you’re thinking about what kind of career to pursue, what kind of job to accept. And so there could be other examples like that that could be somewhat general, but are still sort of good base rock principles to think about that likely point to an exciting career opportunity.

Reid, let’s now talk about the third part of competitive advantage. So we’ve talked about assets, right? Your strengths, your skills, your network, your personal brand, and how to invest in those things.

We’ve talked about how you also want to be attentive to your aspirations, right? Where do you want to go in life? Do you want to be a public intellectual? Do you wanna start a company? Do you want to write books? Do you want to be a nurse? And if you don’t know the answer to that, that’s okay. It’s one of the key messages of this book: you can figure it out through action, through experimentation.

The third gear, as we say, in the competitive advantage is the market realities, which is: you look out into the world and to see what people pay me for, right?

I may have a passion to play violin, I may be really good at playing the violin, you know, aspiration and asset. But there may not be demand for that skill for which I’m passionate. And that’s a problem, right? You have to account for all three of these.

And market realities is one of these interesting ones where it can be sad, it can be depressing, it can be demoralizing, but it doesn’t have to be, right? It can be limiting, it can be that, “Oh, I love violin. I’m good at the violin, but there’s not a market reality. That’s a bummer.”

But it can also be something that’s uplifting, it can be looking out into the world and saying, “Oh my gosh, there’s so many smart people thinking about crypto; there’s so many people thinking about the future of China and India; there’s so much demand for people who speak Spanish.” Whatever.

And it can excite you to go pursue those sorts of opportunities where there’s a lot of market demand. So it doesn’t have to be just constraining on your assets or aspirations; it can actually be enlivening and exciting as a topic too.

Reid Hoffman:

And also—once again, there’s nuance to it.

So, like, take the violin example: one of the artists I like is Lindsey Stirling and she got, “Okay, well, I’m really good at the violin. Well, what I’m gonna do is I’m gonna do it in different music types, and I’m gonna do it with a kind of approach through the modern internet and kind of social media and kinds of ways of doing it, and develop a career doing it that way.”

So—now, by the way, it’s a hard path. You have to really go, “I just really wanna do this,” ‘cause what’s your tolerance for difficulty, tolerance for, you know, kind of possibly failing on your path, and you know, acting, playing in music and stuff. Things that have a very broad set of people who want to do them is always kind of challenging.

Now—that’s when it also gets into, like, how do you combine your soft assets and what do you do? The kinds of things we’re talking about. And so I think that one of the key things of the reasons why market realities is so important is that: some degree, it’s our critique of what’s most often kind of taught in career centers at universities and high schools and books.

It’s what we think is kind of wrong in the approach of What Color Is Your Parachute—which obviously is a great set of things about kind of self-discovery and other things that it’s an important part of the equation—but if you’re not paying attention to market realities now, and market realities as they’re trending, as where they’re going, that can lead to some great dislocutions, you know, suffering—things that really don’t work out.

And, you know, so it might be that, “Oh, a hundred percent I love violins…but maybe 80%, I love graphic design, and that graphic design actually plays across all these other things.”

Ben Casnocha:

And by “plays across,” well you mean, “Maybe you’re not quite as passionate about graphic design, but there’s tons of market demand for that skillset. So when I look at the whole picture, maybe graphic design’s a better path than violin.”

Reid Hoffman:

Yes, exactly. Because maybe I’ll work in technology and user experience; maybe I’ll work in designing physical objects; maybe I’ll work in, you know, advertising. There’s lots of different places where graphic design can play out.

I can look at where do I have network access to, what’s going on in the region that I am either living in or willing to live in in order to do it. And I go, “All right, well, I’m pretty passionate about that. So that’ll work.”

Ben Casnocha:

And researching—this is a key skill, and it’s actually a super important entrepreneurial skill.

When Howard Schultz started Starbucks, he spent months in Italy researching, patronizing, talking to the owners of small coffee shops, and trying to understand how it worked before setting up stores in the U.S.

David Neeleman, when he started JetBlue, was obsessed with researching, understanding every aspect of the airline experience before starting the airline.

So, as the VC Marc Andreessen like to say, “Markets that don’t exist don’t care how smart you are.” You need to first really understand what’s out there. Who’s doing what? What’s growing? What’s shrinking?

And actually, I think LinkedIn the product is an incredible resource for this. When you’re thinking about your career, and trying to think about what skills are in demand, using LinkedIn to look up job postings; keywords that are mentioned in those jobs postings; looking up the profiles of people you admire and seeing what sort of skills they have; what their experiences were; seeing which markets might be growing or shrinking; I think even LinkedIn the company produces reports on, you know, hot job titles, things like that…

So really take a research-oriented mentality to understanding the market landscape before you accept a new job, forge a new career path.

Reid, there’s sometimes a thing we say—people say this in careers, I think we say it in the book, too: pick an industry, not a job. Expand on that.

Reid Hoffman:

Well, part of the thing is if you say, “Well, I just really love this job,” but the industry doesn’t exist, or the industry is shrinking or collapsing, it can make the whole path much harder.

Now, it doesn’t mean sometimes you say, “Well, I just have to do it. I really love it. Or, it’s the only thing that’s really available. I have to stay in this town. It’s the only thing that’s really available in this town.” But, by the way, if it is, then you should be doing your strategy based on the fact the industry may be undergoing turmoil or collapsing or so forth.

Ben Casnocha:

Like if you had to pick like a Senior VP role at Kodak, or a Junior PM job at Facebook, one industry’s going one industry isn’t. One job has a higher title, more pay, whatever, but is a much riskier, long-term career move, perhaps, than the more junior role at Facebook.

Reid Hoffman:

And may end very quickly.

And so part of choosing industries—and this is one of the reasons why to understand things like, well, technology is changing all industries—some very fast, some more at moderate speeds—but I’m just saying that technological transformation, markets are transforming with globalization, other kinds of things, and so go okay—

And you don’t have to be an expert on all this stuff. And a lot of it is just like, “Well, what does it look like? Which way is the wind blowing? Which way is the tide going on this stuff? And what should I do about that as part of it?”

And it’s one of the reasons why keeping a learning mindset; learning through people you talk to; you know, reading some stuff on the internet; doing a little bit of research, as you were mentioning earlier, is really important, but the picking an industry is—if you pick a great industry, it’s almost easy to have a really great, you know, lifetime/career.

If you pick a bad industry and stay with it, it’s much, much harder.

Ben Casnocha:

Totally. And in the startup game and the entrepreneurship game, I mean, there are lots of kind of mediocre teams with mediocre ideas that picked the right industry to build a company in, and had massive success.

Whereas there are a lot of brilliant entrepreneurs with brilliant ideas and teams assembled in a dying space or dying technology that just didn’t go anywhere. And so picking the right industry, picking the right trend to surf, this is—

In the book, we tell the example of career advice that Eric Schmidt gave Sheryl Sandberg when she went to him with a whole matrix of pros and cons and all these different opportunities for what to do, I think after her tour of duty at the Treasury Department.

And Eric Schmidt said, “No, no, no, you’re doing this all wrong. Get out of the weeds. You need to go where all the growth is, the growth in Silicon Valley and tech. Just move to California and figure it out.” And that’s in fact what she did in her career…the rest is history, as they say.

So, don’t lose the force from the tree—step back and ask yourself, “Across the entire economy, across the entire world landscape, which industries/technologies/companies are growing?”, and try to align yourself with those trends. And then from there, figure out the right job for you.

In summary, this topic of developing a competitive advantage is all about these three gears, and how they work together: your assets, your aspirations, and the market realities.

Anyone independent is insufficient. “Follow your passion” is just one of these three gears. If you are just following your passion, you will not be successful. You have to pursue a passion that’s aligned with your assets and aligned with the market realities.

Similarly, another piece of career advice, play to your strengths. Playing to your strengths—it’s good advice. But if you’re playing to your strengths in a direction that’s not aligned with your aspirations, you won’t do it for very long. And if it’s not a market need for that strength, you won’t be able to monetize your life.

And finally—the sort of tough, maybe Jordan Peterson-esque—a philosophy of just, you know, buckle down and do the thing that the world needs of you. Well, if you’re not very good at that, and you don’t like doing it, you’re ultimately not gonna have a lot of success.

So all three of these work in tandem, and that can be hard for people to sometimes acknowledge because it’s a more complex framework perhaps than just any one piece of advice. That’s the key to competitive advantage.

My only question, Reid, for you is: we have assets, aspirations, market realities; why couldn’t we have thought of a market reality word that started with ‘a’, so we’d get the perfect triple-a alliteration? That’s a failure on our part as authors.

Reid Hoffman:

Oh, I think we tried, but there is some limitation to the words.

Ben Casnocha:

The ‘a’ is silent in market.

Yes, exactly. Or the ‘m’ is silent in market.

Yeah. That’s right, yeah. Oh, that’s good. Yeah. The ‘m’ is silent. Yeah, we should put M in parenthesis. “M”–“arket” reality.

Reid Hoffman:

Yes, exactly.

Ben Casnocha:

So in close, we’re gonna talk about a few action tips: how to invest in yourself to be better at competitive advantage.

The first tip—really practical for everyone—is to identify three people in your network or your broader network who are striving toward aspirations that are similar to your own. Use them as benchmarks, deconstruct their journey—

I love doing this, especially for people who are like ten or twenty years ahead. Sort of see where they are today, and see what their journey’s been and how they got there. Bookmark their LinkedIn profile, subscribe to their blogs and tweets, track their professional evolution. This is a way you can take inspiration from other people’s journeys as you codify your own aspirations.

Second tip: you know, literally write down your top soft assets and think about where you want to invest to make them stronger. So what are your three to five most distinguishable skills, right? If you’re not currently looking for a job, just pretend you’re in a job interview and someone says, “What are your top strengths? What are your top three to five skills?”

Write those down; write down some of your unique experiences that set you aside; write down you know, your top few allies or people in your network who you care about; sort of write all that down and take stock of it, and then underscore some areas where you want to invest and where you wanna get better.

Maybe it’s growing your network, which is, you know, the subject of a different episode, and a huge chapter of our book. Maybe it is a certain skill that you wanna develop. Maybe it’s a unique experience that you wanna develop that will sort of compliment your other life experiences that will make you stand out in the marketplace.

But really inventory your soft assets, and then from there, see where you want to double down or where you may need to add a new skill or asset that is nowhere on the list.

And then finally, another tip—just coming back to aspirations, ‘cause I think this is something people struggle with a lot—you know, our friend Gretchen Rubin said this once, and I really took it as helpful, which is: when you wake up on a Saturday morning with nothing to do, which many of us have a lot of things to do on a Saturday morning, but let’s just suppose, you know, “Oh, I got locked out of my computer, I can’t access, I have nothing to do.”

How would you like to spend your time? Maybe this is a clue to what really makes you rev. Maybe this is a clue to where you spike in life. Where do you find yourself gravitating to if you have some open time in your calendar? Hey, four meetings got canceled, what do you wanna do with yourself?

Again, this journey of self-discovery is never-ending, and it will unfold in ways that can sometimes be frustrating, but be patient with it. And over time, if you can get in touch with what you most deeply care about, and you can make that part of your competitive advantage—not only will you be more successful in your career, you’ll probably live a happier and more fulfilling life.

Reid Hoffman:

Yep. And I think that part of the ways of thinking about all of these kinds of exercises is not just think about doing it as a kind of a solo journey—one of the things we talk about in The Startup of You is that life is a team sport, but actually in fact, other people can help you see things in yourself that you don’t see.

You can crosscheck these kinds of things, saying, “Hey, would these three kind of people be the right kind of interesting things,” and we can help each other. And it’s exactly the thing where the team can help amplify your strengths, cover your weaknesses, help you see things you don’t see, keep up your energy and your kind of creativity, and doing things, and so all of these exercises are also better done with your friends, with your allies.

Ben Casnocha:

Talk to your network about this topic. Show them your list of assets. Swap notes, get better. It is a team sport. It’s a great point to end on.

Thank you, Reid.

Reid Hoffman:

Thank you, Ben.