From starting during an economic downturn to being a Professional Social Media: LinkedIn
“I have a strong belief that starting businesses during an economic downturn is the exact right time to do it because it gives you runway. It’s harder to raise capital, but if you can do it, it gives you an advantage.”
Reid Hoffman’s words from an interview, when asked as to why did he think of starting a company during the 2002 economic downturn, the dot-com winter. These words demonstrate unadulterated ideation and shows how committed he was to make LinkedIn a success despite the struggle that would come their way. As foreseen, it wasn’t a cake walk for them but they treated every challenge as an opportunity Like the companies of the Information Age, LinkedIn started with a very niche audience. They leveraged the connections of their co-founders and every member of the founding team to focus on acquiring users from the Silicon Valley tech scene. Initial user acquisition was slow but they stayed focused on growth. This is a great learning for planning and execution of an information strategy. Sometimes, these strategies can be long tailed and it is essential to be patient and not change the strategy unless there is a strong reason too.
Facebook started up for a university, Uber focused on the niche audience who wanted to be ballers, LinkedIn followed the same approach and gathered some quality audience in the target zone before focusing on a larger geography. This created the initial traction for them and gave them a rich user base. This user base in turn attracted the other users who wanted to be in touch with the Silicon Valley tech scene. From the graphical representation above, it is evident how the exponential growth in the user base was experienced my merely being patient and taking a step- by-step approach.
LinkedIn’s chances of survival were laughed over because of the then existent Friendster, a social media platform for networking in general. However, LinkedIn positioned itself very well. A social media network for professionals. For an average human being a day is divided into three main parts. 8 hours of sleeping, 8 hours of working and 8 hours of recreation! While Friendster occupied the later, LinkedIn was trying to fill the void in the work class category. They controlled the way, how professionals connected with letting people add each other with only a certain level of acquaintance or through referrals. This eliminated a lot of spam users, which made it more likeable as a professional platform. Further, they continued expanding their user base by using original growth hacks. They focused by working on their strengths rather than improving their weaknesses. A simple example of focusing on their home page user leads rather than email leads was a far-fetched thought a decade back when data analytics and insights were non-existent. Monetize on what you have was LinkedIn’s point of view when they started with charging users for the premium level of access. According to me, what they did best was still let the regular users have a cost-free access to its most basic services. The ‘Freemium’ service made every user feel important but at the same time offered variety of options to target different segments of the market for its premium product which included basic users to corporate recruiters.
The LinkedIn’s journey was an insightful one, since it gave us a detailed story from starting in the founders living room to its public offering, all with untainted hustle. It was evident that LinkedIn was ready to experiment with various growth strategies to discover the correct value of its platform for its various users.
If one thinks about this, Facebook, Instagram, Snapchat and other technology companies have a lot of features in common and they can be copied. However, LinkedIn is a in uniquely sweet spot where they have unique features, unique audience and the most important unique data. LinkedIn can influence the future of analytics and insights in a unique way. Microsoft publicly quoted that it is acquiring LinkedIn basis the fact that they are a data rich organization. LinkedIn has strategically unique data which essentially forms a part of the monetary aspect of our lives. Microsoft $26.2 Billion is the answer to how valuable the LinkedIn data is. It works both ways, LinkedIn also adds a unique value to Microsoft’s portfolio and the affluent flow of cash can help LinkedIn focus on innovation. The incubation by a tech giant like Microsoft can help LinkedIn unravel the true power of its data and contribute to the future of business by predictive analytics. LinkedIn holds the unique position where it acts like the Google for Professionals. It leads the open source search for opportunities, influencers and business leaders. It also holds a unique position of facilitating networking amongst professionals like Facebook. LinkedIn Pulse produces a lot of rich information while Lynda helps to cover the education side of things. With Microsoft’s products added to the armor it opens many new possibilities.
A LinkedIn profile is a live resume which doesn’t get redundant like your paper resume. It holds the most recent data about a user. Jeff Weiner’s vision of LinkedIn’s future about building the world’s first economic graph using insights from their big data, shows a solid future for analytics at LinkedIn. This will aid in bridging the problem that has existed for the longest of time in the recruiting market, demand-supply of skilled talent.
The Time to Come!
The ultimate target for a company is to maximize revenues by increasing the market share and create a unique value. In addition to the market LinkedIn has already captured, I have two more product ideas which will help LinkedIn capture a different market and thus more information. First, with large organizations that work globally, matching the right expertise with the right project can sometimes be a problem. I have experienced this first hand during my tenure at Ernst and Young. LinkedIn can have a corporate product made for being an intra-organization social media. Built over its already existing analytics and big data infrastructure, LinkedIn can bridge the demand-supply gap in these global organizations.
Second, a functionality built over its existing platform to aid more collaborative form of working especially for people who free-lance can be of great help. This can work towards connecting people looking for specific skill on a temporary basis to a person who possesses that skill. This will be like a market place, just like Uber for free lancers.
Using the power of analytics, LinkedIn can pretty much do anything that in the talent pool space. In today’s world, an average person doesn’t believe in working with the same employer for their entire life. This helps LinkedIn be in demand always which I believe looks like a bright future for the company.
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