Lessons from Auren Hoffman

Auren Hoffman, a seasoned entrepreneur and investor known for his contrarian thinking, has shared a wealth of knowledge on building companies, the future of data, and personal growth.

On Entrepreneurship and Strategy

On the nature of entrepreneurship: "An entrepreneur is someone that steals office supplies from home and brings them to work." [1] This quote humorously illustrates the dedication and resourcefulness of entrepreneurs.
On project management: "How to manage a project: Limit it in scope. Make it simple. Get success. Then iterate." [2] This highlights his philosophy of starting small and building on successes.
On timing in success: “If you're 6 people, a false positive is so destructive to your company that hiring somebody really bad can be a really real bad thing… when you're 200 people it's not nearly as destructive.” [3] Hoffman emphasizes that the stage of the company dictates the impact of certain decisions.
On market selection: Go after a small market that you can own and that is going to grow really, really fast. [4] He advises against targeting large, competitive markets from the start.
On strategic focus: Publicly state what your company will not do. This provides clarity to your team, customers, and investors. [4]
On being a Data Business: "The good thing about a Data Business is also the bad thing in that you often can sell data to lots of different types of customers... you're never great for anybody, you're just okay for everybody." [5] This underscores the challenge of finding focus in a horizontal business model.
On the difficulty of data businesses: "Being in the Data Business is incredibly hard." He notes that many companies pivot to applications after realizing the challenges. [5]
On raising capital: "Anyone that tells you that raising money is easy is either completely high or lying. It was a crazy amount of work and super intense." [6]
On choosing investors: "If you are picking a venture capitalist to be your financial partner, find the firm that most loves your business." [6]
On failure: Hoffman admits his success rate isn't perfect, stating, "About 300 have completely failed... Another 20 mostly failed. Five were successes to some degree. So my hit rate isn't so good." [7]

On Talent and Hiring

On hiring executives: "The worst thing you can do is hire executives." [8] He argues for renting senior talent and promoting from within.
On the problem with traditional executives: Many experienced executives "don't want to do that grind that they used to do... they feel like they've earned the strategy spot of working 40 to 50 hours a week." [8]
A contrarian hiring approach: Instead of hiring a seasoned executive, hire a "learn it all" who is early in their career and has the potential to become that future star. [9]
On delegation: "Delegate the things that you are good at." [10] He explains that you are best equipped to hire and manage for tasks you understand deeply.
On hiring 10xers: "If you want to hire a 10xer, that person will almost certainly have glaring faults. Anyone that you can hire without glaring faults will, at best, be good — they will certainly not be great." [10]
On company culture: "Culture is something that your company does that other companies like you don't do." [3]
On talent density: "Any company that is not ultra committed to continually growing and upgrading its talent will eventually become a sinking ship." [11]
On vendor management: Hoffman believes vendor management is the most critical skill for the future, advocating for "renting" a high-caliber talent pool. [12]
On the two types of salespeople: He distinguishes between "product-oriented salespeople" (introverted, deep product knowledge) and "relationship-oriented salespeople" (extroverted, builds strong connections). A company needs to know which type it needs. [4]
On spotting talent: He emphasizes looking for value in unexpected places and recognizing strengths in those who don't fit a typical mold. [13]

On Data and a Data-Driven World

On the moral obligation of data: "Most of the world's data is sitting on a shelf, being used in a very narrow domain. This data, if properly activated, could solve some of the world's biggest problems." [9]
On democratizing data: "I'd like to see a world where the data itself is not a gate to innovation, but ingenuity is the core gauge for innovation." [5]
On the nature of data companies: He categorizes data companies into four quadrants based on two axes: Truth vs. Religion and Data vs. Application. [14]
'Truth' vs. 'Religion' in data: "'Truth' companies are backward looking... 'Religion' companies predict the future." [14]
'Data' vs. 'Application' companies: "'Data' companies just sell data... To really get benefit out of data, you need an application." [14]
On the importance of data accuracy: "The most important thing in data is that it's true because you're just selling facts." [12]
On the role of AI: "AI really helped us like significantly become more efficient, reduce cost... the company's a very profitable company and became way more profitable in 2024." [8]
On data as an ingredient: "If it's a pure Data Business then you're you're really just an ingredient. You're not actually the solution." [5]
On the scarcity of successful data companies: Hoffman notes there are far fewer billion-dollar data companies than SaaS companies, highlighting the difficulty of the business model. [5]
On the future of data access: He foresees a future where open access to data will fuel widespread innovation. [5]

On Personal Philosophy and Productivity

On happiness: "If you are unhappy you better have a good excuse for being unhappy." He argues that for those in the "blessed class," minor inconveniences shouldn't disrupt happiness. [8]
On associating with happy people: "I decided right there and then that I would only associate with other people that are happy." [8]
On setting goals: "I don't set goals for myself. Never have." He distinguishes between "wanting things" and setting rigid goals, especially for things like money or happiness. [4]
On productivity and time scales: "I think one of the things if you want to look at just generally look at people is look what time scale they operate in." He identifies himself as a "plotter" who works well in 25-minute increments. [2]
On handling infrequent tasks: "Whenever you have to do something that doesn't happen all the time, it's very hard to like optimize around that." [2]
On personal finance: "If you have under $3 million of investable assets you shouldn't even think about [actively investing]." He advises focusing on growing your income first. [4]
On self-awareness: “One easier way to figure out what your strengths are is to figure out what they aren't.” [3]
On being a low-EQ leader: He acknowledges the disadvantages of being a low-EQ CEO and has written about overcoming them. [15]
On learning: "If you find something that's true in more than one field, it's probably important." [15]
On playing your own game: In a world of imitation, it's more important than ever to follow your own path. [6]

Contrarian Takes and Learnings

On procurement departments: He believes procurement is often a "negative value" function that slows things down for minimal savings. [10]
On MBAs: He has expressed the belief that an MBA often has a negative return on investment. [12]
On private equity: He argues that private equity has shifted from improving companies to financial engineering. [10]
On the decline of ownership: He theorizes that the internet is revolutionizing our concept of ownership. [16]
On the information advantage of 'who you know': "The insights that live in the heads of the smartest people are not shared widely and require a personal relationship with someone to be able to access that information." [13]
On the value of being different: "Your values should be some sort of like cultural thing that makes you different, that doesn't appeal to everybody. That's a little bit odd or a little bit quirky or something like that." [17]
On the illusion of paper wealth: "You know what being rich on paper feels like? Worse than before because you're still broke but with a lot to lose." [7]
On the importance of being able to walk away: To avoid unethical situations, it's crucial to not be in a position where you are forced to do something you don't want to do. [4]
On the myth of the single-minded entrepreneur: He points out that even highly ambitious people like Elon Musk spend significant time on leisure activities, suggesting that life isn't about optimizing a single metric. [13]
On killing parts of your company: "One of the hardest things to do at a company is to kill off the parts that aren't working... To keep the business healthy, you have to take a hard look at operations and get rid of areas that are no longer important or contributing to growth." [11]

Learn more:

Lessons from Auren Hoffman

On Entrepreneurship and Strategy

On Talent and Hiring

On Data and a Data-Driven World

On Personal Philosophy and Productivity

Contrarian Takes and Learnings

Written by Antoine Buteau

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