Reid Hoffman, co-founder and executive chairman of LinkedIn, and Joi Ito, director of the MIT Media Lab, met at the Churchill Club in San Jose, Calif., recently to discuss the latest trends in innovation, including bitcoin and massive open online courses.

The discussion began with a story by Hoffman about how the two panelists met in a manner similar to the circumstance that ended up in the founding of LinkedIn. Peter Thiel, co-founder and CEO of PayPal, was having difficulty figuring out how to establish the product in Japan, with launch dates slipping. The first step had been "to hire lawyers to give us the risk factors," and the list kept getting longer by the week, including reasons not to launch at all in Japan. When he asked Hoffman to help him, Hoffman decided to look for an entrepreneur, rather than a lawyer, who really understood Japan, all roads led to Ito.

Hoffman explained that he was able to obtain a letter from the Japanese Financial Services Authority granting permission for the enterprise to take certain steps in order to get traction without running afoul of the authorities, and he went on to say that in many foreign jurisdictions the issues can be criminal, not just civil, if this were to occur, because a would-be entrepreneur can quickly end up in handcuffs at the airport.

Hoffman introduced Ito simply as a college dropout who is now at MIT, and he asked Ito how that could occur. Ito corrected Hoffman by saying he had dropped out three times, not just once, but having grown up surrounded by academics, he knew he didn't want to be one. It turns out MIT recruited Ito, and after two days of half-hour interviews with faculty, staff and students, he found himself addicted to the quality and energy of the interaction. He recalled a somewhat awkward moment near the end of the interview process when the dean remarked, "So I hear you don't have a degree."

When Hoffman asked Ito what his long-term vision of the Media Lab is. Ito replied that he got into entrepreneurship to disrupt big media companies he had seen that have been "moving slowly and destroying value." (For this writer, his statement captures in a short phrase what "too big to fail" banks have done to the U.S. economy with the cooperation of captured legislators and regulators.) He drew a distinction between projects venture capital would fund and those Media Lab was doing that were still in the exploratory phase and did not fit the model of venture capital.

Prompted by Hoffman to discuss the dichotomy that exists for some observers between academic and practical pursuits, Ito told of embracing it when challenged by an MIT professor who questioned the "academics" of Media Lab, but the Lab is funded by 80 companies at $250,000 each that act as a consortium of companies that make three visits a day, so that students are regularly engaged in building things and then explaining to companies what they are doing. He quipped that he is more interested in ideas that work in practice but not in theory than the converse.

(Archived video can be found here.)