LinkedIn: A D&B For People?

I joined LinkedIn in 2004. I didn’t discover LinkedIn on my own; like many of you, I received an invitation to connect with someone already on LinkedIn, and this required me to create a profile. I did, and became part of what I still believe is one of the most remarkable contributory databases ever created.

Those of you who remember LinkedIn in its early days (it was one of our Models of Excellence in 2004), remember its original premise: making connections – the concept of “six degrees of separation” brought to life. With LinkedIn, you would be able to contact anyone by leveraging “friend of a friend” connections.

It was an original idea, and a nifty piece of programming, but it proved hard to monetize. The key problem is that the people most interested in the idea of contacting someone three hops removed from them were salespeople. People proved remarkably resistant to helping strangers access their friends to make sales pitches. LinkedIn tried all sorts of clever tweaks, but there clearly wasn’t a business opportunity in this approach.

What saved LinkedIn in this early phase was a pivot to selling database access to recruiters. A database this big, deep and current was an obvious winner and it generated significant revenue. But there are ultimately only so many recruiters and large employers to sell to, and that was a problem for LinkedIn, whose ambitions had always been huge.

Where things got off the tracks for LinkedIn was the rise of Facebook, Twitter and the other social networks. Superficially, LinkedIn looked like a B2B social network, and LinkedIn was under tremendous pressure to accept this characterization, because it did wonders for both its profile and its valuation. LinkedIn created a Twitter-like newsfeed (albeit one without character limits), and invested massive resources to promote it. Did it work? My sense is that it didn’t. I never go into LinkedIn with the goal of reading my news feed, and I have the same complaint about it as I have about Twitter: it’s a massive, relentless steam of unorganized content, very little of which is original, and very little of which is useful. 

Today, LinkedIn to me is an endless stream of connection requests from strangers who want to sell me something. LinkedIn today is regular emails reminding me of birthdays of people I barely know because I, like everyone else, have been remarkably undisciplined about accepting new connection requests over the years. LinkedIn is also just one more content dump that I barely glance at, and it’s less and less useful as a database as both its data and search tools are increasingly restricted in order to incent me to become a paid subscriber.

Am I predicting the demise of LinkedIn? Absolutely not! What LinkedIn needs now is another pivot, back to its database roots. It needs to back away from its social media framing, and think of itself more like a Dun & Bradstreet for people. LinkedIn has to use its proven creativity and the resources of its parent to embed itself so deeply into the fabric of business that one’s career is dependent on a current LinkedIn profile. LinkedIn should create tools for HR departments to access and leverage all the structured content in the LinkedIn database so that they will in turn insist on a LinkedIn profile from all candidates and employees. Resurrect the idea of serving as the internal company directory for companies (and deeply integrate it into Microsoft network management tools). Most exciting of all to me is the opportunity to leverage LinkedIn data within Outlook for filtering and prioritizing email – big opportunities that go far beyond the baby steps we’ve seen so far.

I think LinkedIn’s future is bright indeed, but it depends on management focusing on its remarkable data trove, rather than being a Facebook for business. 

LinkedIn's New Corporate Directory

In my view, the future of LinkedIn depends on finding ways to get itself inside of business workflow – the essence of infocommerce – because the history of databases that remained standalone reference products is a sad one.

LinkedIn’s first big push to build ongoing user engagement was to add user-generated content, lots of it, creating a B2B Facebook if you will. This is certainly a valid approach, but with the Internet already groaning under the weight of endless content, much of it free, this is a tough road. I think workflow integration is a lot easier and ultimately much stickier. It is, fundamentally, the difference between logging into LinkedIn to “stay current” or perhaps find a useful morsel of information through sheer serendipity, and logging into LinkedIn because you need it to do your job.

Well, LinkedIn took a small but important move in the direction of workflow this week with the launch of LinkedIn Lookup. Very simply, this new app allows you to turn LinkedIn into an internal company directory.

As you can imagine, if you were to filter all LinkedIn profiles by current employer, you would essentially get an internal company directory. And it would be better than almost any company directory that exists given the depth of its profiles and the high level of data accuracy. But the new LinkedIn app does more than just filter listings, it also prioritizes fellow employee listings over your own connections so you’re really using it as an internal directory. Corporate email addresses are shown as well.

Overall, LinkedIn Lookup is a fairly weak version 1.0 app. But if LinkedIn sticks with it, it could take this product in some very interesting directions. Consider:

·        Setting up the product with a corporate administrator could help make listings more accurate (many people don’t update their employer information if they are not immediately going to a new job). In addition, LinkedIn could make this administrator the point person to maintain the company web page as well, helping to insure deeper and more accurate data

·        With listings now used for employment purposes, employees will be more diligent in maintaining their listings to the benefit of both the company and LinkedIn

·        By letting employees see all the connections of other employees, an extremely powerful networking tool along the lines of those offered by Reachable can be offered.

·        Non-public fields could be made available for corporate directory purposes such as reporting relationships, and this could in turn enable real-time organizational charts

·        The product could offer links to a company’s payroll system (as many internal company directories already do), to help insure even higher levels of accuracy

And that’s just a starting list. Indeed, an enormously powerful product platform exists for LinkedIn to exploit with only some additional programming effort. And this product, properly evolved, is certainly one LinkedIn could charge for. No company wants to maintain its own internal directory if it can avoid doing so, and LinkedIn would bring to the table features and functionality no company could duplicate on its own because of its connections data.

Best of all, as companies adopt LinkedIn as their internal directory platform, LinkedIn automatically becomes a stronger database as a result. Employees who haven’t yet built a profile will do so; and those with existing profiles will be motivated if not required to keep them current.

Sure, there are some data governance issues that will need to be addressed and doubtless some technological and structural bumps in the road will emerge; as the saying goes, “hierarchies are hell.” But these issues will come to the fore because LinkedIn is simultaneously becoming more important and the end result of that is a more comprehensive and accurate database for LinkedIn, that will give it the basis to chase even more data-driven workflow opportunities.

If LinkedIn wants to offer high quality user-maintained data that gets accessed frequently, there’s no better way than to help it enable daily business activities. LinkedIn Lookup can be an important first start in this direction.

Taking on LinkedIn

I read a fascinating blog post yesterday by  venture capitalist Hunter Walk musing how (or indeed if) there might be some way to compete with LinkedIn. In addition to Walk’s insights, the post attracted a number of comments from other venture capitalists and entrepreneurs. Apparently, taking on LinkedIn is a growing topic of discussion, at least in Silicon Valley.

The post discusses a number of different approaches:

·        Vertical Markets – could one create a better version of LinkedIn for specific vertical markets? The post doesn’t dismiss this as a potentially viable approach, but does correctly note that simply imitating LinkedIn isn’t likely to work.

·        Project Focus – LinkedIn is designed around the traditional resume and with that comes the expectation of fixed employment at specific companies for fixed periods of time. There are some who are speculating that the growing “gig economy” is creating a need for individuals to showcase what they’ve worked on as opposed to where they have worked. I would argue that Houzz, the wildly successful site for architects and designers to display their projects, is in effect a vertical and project-focused version of LinkedIn, optimized for a specific market and its way of doing business.

·        Data Verification – All the information on LinkedIn is user generated. That used to be considered a feature; now some are suggesting it’s a bug. My question here is how many people want/need verified data badly enough to justify ripping up the existing LinkedIn model?

·        Public and Private Data Control. There are some who suggest that there is room for a LinkedIn competitor that gives users more control over who sees their personal details, presumably at a fairly granular level. This is an interesting concept, but how much more personal information would people put online if they had more control? This new service would quickly start to bleed into Twitter and Facebook. That might sound like a big opportunity, but to me it sounds like a big mess, raising issues about separation of one’s business and personal life that I don’t think anyone has figured out yet.

·        Transactional. I’m a huge fan of B2B marketplaces, but the notion of essentially putting a “buy” button on people’s resumes strikes me as a limited opportunity. There are a very limited number of jobs where the work is project-based and people are hired strictly based on their skillsets. In addition, I think if you opt for this model, you necessarily have to fold in the data verification model as well because trust becomes paramount.

These are all interesting concepts, but they all come with issues. The biggest opportunity (and exposure) for LinkedIn is that it exists outside of workflow. If your job doesn’t involve hiring people, you likely don’t interact with LinkedIn too frequently. But what I’ve realized over time is that LinkedIn has become my Rolodex. If this is true for lots of other people (and I suspect it is), then LinkedIn needs to focus on better email integration and even more importantly, a light contact management capability. Why should I use a separate CRM system (which more likely than not is sucking limited data in from LinkedIn already), when I could keep all my contact notes in one central place in the cloud? This, by the way, is something that LinkedIn could sell as a subscription service.

Right now, all of this is just talk and conjecture, but it’s useful to note that in many respects, LinkedIn is no different from most other commercial data products.

Deals of Excellence

It’s been a banner few weeks for deal making for companies honored as Models of Excellence by InfoCommerce Group.

In the mega-deal category, we have 2006 honoree real estate data powerhouse Zillow, entering into a $3.5 billion deal to acquire arch-rival Trulia. This will of course put pressure on market leader Home.com, which operates the Realtor.com website. The whole real estate vertical has been one to watch from a data perspective. Zillow was not only an early innovator in the area of map-based user interfaces, it also blew more than a few minds by not only aggregating property data on almost every home in the country, but creating a home price estimate for every home as well. If this merger goes through, expect even more extreme innovation as these two giants battle it out for audience and advertising.

In the smaller (but hardly small) category, we have the $175 million acquisition of 2009 Model of Excellence honoree Bizo by 2004 Model of Excellence honoree LinkedIn. From a strategic standpoint, I’d rate this acquisition as nothing short of brilliant. At a high level, you are putting together “who” (the LinkedIn database, with “where,” (the Bizo B2B ad network). The potential opportunities are endless.

And while we’re in the world of high finance, a shout-out to 2010 Model of Excellence honoree SmartZip also seem in order, as they’ve just closed on a new $12 million financing round.

Where do these and other Models of Excellence companies meet each year to get their deals on? InfoCommerce Group’s DataContent gathering, now part of an even bigger show, the Business Information & Media Summit. See you in Miami!

IDG-Linkedin Partnership: Re-Defining Publishing?

Just yesterday, the major business publisher IDG, through its Custom Solutions group and its ComputerWorld, InfoWorld, CIO and CSO media properties, announced a partnership with LinkedIn to create “targeted marketing opportunities for b-to-b brand marketers.” So what does this partnership means? It appears that IDG will sell to its advertisers the right to sponsor an IDG owned and operated LinkedIn group on either a specific IT-related topic, or a custom LinkedIn group likely tied to things such as new product launches. In the latter case, the advertiser controls the direction of the group.

On its face, this seems like a clever sponsorship idea. But then you might ask why does IDG need to partner with LinkedIn to create a LinkedIn group? Anyone can do that. For that matter, why does the advertiser need IDG to create a LinkedIn group? The answer is partly content, and mostly audience. And here’s where it gets interesting.

LinkedIn’s role in this partnership, according to Folio, is to “be responsible for promotion, content distribution and member recruitment.” Yes, LinkedIn is going to be supplying both audience and content distribution. What IDG is bringing to the table is the advertiser, the content and management of the group.

Traditionally, the role (and much of the value) of the publisher was building an engaged, target audience and charging to deliver messages to it. Here, both the audience and the distribution platform no longer belong to the publisher.

I’m not disparaging this deal; indeed it has hints of brilliance showing through. But what intrigues me is that LinkedIn, a professional network and data content company, can now so effectively perform most traditional publishing functions.

While I admire LinkedIn for building the most important biographical database in the world (still the primary source of its revenue), it is also both a powerful network and content distribution platform. LinkedIn groups thrive for tens of thousands of specialized audiences, and LinkedIn has shown real talent in selective news distribution to users. LinkedIn has all the elements necessary to be a major publisher in its own right. To date, however, it has chosen to be a platform rather than a publisher.

It’s likely we will see a greater shifting and blurring of roles over time. Already, we have examples of companies that leverage LinkedIn groups to build publishing and events companies. And IDG shows us here an example of a successful publisher leveraging the power of the LinkedIn platform.

I don’t see LinkedIn trying to muscle itself into B2B publishing, but I think this is the first indication of a profound re-definition of the publishing business. This is not necessarily bad news, but if you thought things were settling down, you better fasten your seat belt.