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"Not only couldn't I get a job as an actor, I couldn't hold down the temporary non-acting jobs I managed to get," recalls Hoffman.
"I got fired as a waiter in restaurants and as a lifeguard at a spa."
Hoffman was working in a New York deli when he got hired as the prep school snitch in Scent of a Woman.
"If I hadn't gotten into Scent of a Woman, I wouldn't be where I am today. It's been a domino effect ever since."
And those dominos just keep piling up.
Hoffman has turned into one of Hollywood's most sought-after character actors.
He was the obnoxious tornado tracker in Twister, the giggling assistant in The Big Lebowski and Robin Williams' sanctimonious roommate in Patch Adams.
He's better known for his darker roles such as the shy production assistant who has a crush on Mark Wahlberg's porn star in Boogie Nights, or the obscene phone caller in Happiness.
"These two are definitely the character most people want to talk to me about.
"I don't think it's my performance that motivates this interest. It's because people obsess about their own sexuality and other people's sexuality."
With the release of Flawless on Wednesday, Hoffman is bracing himself for more guarded but voyeuristic attention.
In this bittersweet comedy, Hoffman plays Rusty, a streetwise New York drag queen who's the host and music director at a drag club.
Rusty reluctantly agrees to give singing and speech lessons to a homophobic neighbour (Robert DeNiro) who has recently suffered a stroke.
"I was filming Patch Adams when the script for Flawless came to me. The character intrigued me because Rusty isn't the stereotype sentimental drag queen.
"Rusty is a transgendered individual. She is a woman trapped in a man's body. That's why she is so desperate to have a full sex change procedure," explains Hoffman.
Hoffman, who is heterosexual and a former high school athlete, knew accepting the role meant a great deal of research.
"I studied three famous documentaries on drag queens, including Paris is Burning and What Sex Am I? I also went to several New York drag clubs to observe the performers and the audience members," he says.
Once filming began, Hoffman was surrounded by some of the best advisers available. Rusty's friends are played by legendary drag queens Wilson Jermaine Heredia, Nashom Benjamin, Scott Allen Cooper and Rory Cochrane.
"The drag queens were so accepting and helpful. They wanted to see me succeed."
Joel Schumacher, who wrote and directed Flawless, says he auditioned dozens of drag queens and A-list actors for the role of Rusty.
"Philip was the only person who read for the part who realized immediately that he was not playing a gay man. It makes all the difference in the world to the performance.
"See the subtle difference in Rusty when he's around Bobby DeNiro as opposed to when he's with the other drag queens," says Schumacher.
"Philip makes Rusty more feminine whenever there is a man around because Rusty sees himself as a woman."
Schumacher was so determined to have Hoffman play Rusty that he organized the shoot around Hoffman's schedule.
"Philip had already agreed to play a small role in The Talented Mr. Ripley with Matt Damon and Gwyneth Paltrow that was filming in Italy.
"Whenever he had to fly off to Italy, I would film the few scenes he wasn't in. "
Hoffman admits this is possibly the most difficult role he has played.
"I had to change my whole being. It wasn't the physical transformation. Rusty is an emotional volcano so I was exhausted every day."
Schumacher is convinced Hoffman won't be unemployed again.
"The bad news is Philip will never make $25 million a picture.
"The good news is he'll be working for the rest of his life. He is quite possibly the best character actor of his generation."