Social network moving from a gimmick to a business tool
THE pace of change on the internet means that businesses built on social networks, web 2.0 and the rest have already matured from website start-ups to established bricks-and-mortar companies.
LinkedIn, which now has 3,500 employees, started in a typical way for an internet business.
It seems like years ago when I first signed up to LinkedIn without really understanding what it was for – although on those days when I’m getting endorsements from people who wouldn’t recognise me in the street, I’m not sure that I understand it much better now.
But what is clear is that even if large swathes of the site’s 250m users are scratching around in the dark, it isn’t stopping LinkedIn maintaining an impressive rate of profitable growth. It generates $1.30 for every hour that a user spends on its site, compared with Facebook’s 6.2 cents.
Subscription models and display advertising are important, but its Talent Solutions offering – which facilitates a fast, targeted yet potentially global search for employees – set it apart and has given the company a great offer. It relies on having a huge base of active users, but doesn’t benefit if you check in a couple of times an hour rather than a couple of times a week.
It has made the leap from using technology as a gimmick to using technology to improve the way we do business.
LinkedIn’s chief executive, Jeff Weiner, talks impressively about his business, carefully treading the line as he emphasises corporate culture without making LinkedIn sound like a cult, and talking about revenue without giving the impression he would sell the data from his mother’s LinkedIn profile to the highest bidder.
His confidence is rooted in the foundation of LinkedIn’s success: getting the product right first in the knowledge that revenue will follow.
It means that while the aim remains rapid growth, the focus continues to be getting it right today so they get to where they want to be. Or, as he put it in CEO-speak: “Managing hyper-growth is like putting a rock in outer space – if you’re off by inches at launch, you can be off by miles in orbit.”