What is LinkedIn up to? — #MyProduct Perspective
LinkedIn has become fun
Do you find yourself logging into LinkedIn more often? I have started to scan LinkedIn feed at least once a day to read about acquisitions, follow company news and other tech advancements. What changed? Here is what I believe is keeping the PMs at LinkedIn busy.
LinkedIn is facing a lot of competition in its space from companies like Google, Facebook, Glassdoor, AngelList, Hired to name a few. It’s interesting that there is so much competition in a space where LinkedIn seems like a clear winner. There are many reasons to that.
1. It takes little time to build a job post/search site.
2. Job sites have a successful business model.
3. LinkedIn like every company has a few gaps.
To understand LinkedIn we need to understand its user base and revenue model. LinkedIn has three types of consumers
1. Professionals who I call primary users.
2. Headhunters, I call them secondary users, they thrive on a platform where primary users are active.
3. Advertisers, also secondary users whose presence is dependent on primary users.
LinkedIn generates revenue from each of their user base which is pretty impressive.
1. Professionals — 22% Revenue from Premium Subscriptions
2. Headhunters — 40% Revenue from Talent Solutions
3. Advertisers— 30% Revenue from Marketing Solutions
Low Engagement Rates
Until a couple of years ago, LinkedIn focussed on its secondary user base by building their Talent and Marketing Solutions. This definitely helped generate revenue for their business but the primary users had little to engage with the app every day. This lead to low engagement rates and less time being spent on the app, a study from 2012 suggested an average user spent 12 minutes on LinkedIn per month whereas an average user spent 6 hours and 33 minutes on FB per month.
Why is Primary user engagement so important?
If primary users find a better, more engaging platform and decide to switch from LinkedIn to the new platform then LinkedIn will have nothing to hold on to. Secondary users will follow primary users, taking their business and revenue with them. This gap I believe is why competitors like Facebook with the strong primary user base and high engagement rates see themselves having an edge over LinkedIn if they added a job search marketplace.
LinkedIn is filling the gap
This competition actually proved healthy for LinkedIn. LinkedIn has started to focus on its primary user base. They acquired Lynda.com to create LinkedIn Learning, introduced the LinkedIn Feed, redesigned the LinkedIn Inbox Messenger to look like Facebook Messenger app. These features and products have helped increase user engagement and time spent on the app. It’s also helping LinkedIn realize their mission to “make professionals more productive and successful”. I find myself spending time on LinkedIn more than ever!