LinkedIn: The B2B iTunes Store?

Regular readers know that I am a big fan of LinkedIn. My interest, of course, has been in its database, which may be the most important biographical database ever created. But LinkedIn can’t rest on its laurels. That’s because it depends on user generated content, and the biggest threat to LinkedIn is if users start questioning its value. LinkedIn is already jokingly referred to by many as “the boring social network.” And while LinkedIn now benefits from lots of buzz and momentum, it needs to remain fresh in the eyes of users and give them a reason to interact with LinkedIn as frequently as possible, and to continue to deliver back some tangible value as well. LinkedIn thinks it can address all three of these requirements with content. As Deep Nishar, the company’s SVP of Products and User Experience puts it:

“We believe LinkedIn can be the definitive professional publishing platform – where all professionals come to consume content and where publishers come to share their content.”

So is LinkedIn positioning itself to become sort of an iTunes for professional content?

As of now, it’s hard to see how LinkedIn as a publishing platform will evolve – and the company itself may well not have a full vision. But I have already seen conference companies with their entire businesses based on LinkedIn groups. It’s entirely possible we will see new trade publications where the entire audience is composed of LinkedIn members, delivered via LinkedIn, with LinkedIn potentially supplying those members by somehow matching them to relevant publications.

But with this intriguing vision comes lots of equally intriguing – and potentially worrisome - questions. Will publishers be able to distribute advertising via the LinkedIn platform? Who will own the audience? Will LinkedIn seek transactional revenue of some sort from publishers? The more you look at it, the more you see the potential for a B2B ITunes Store, with all the attendant issues.

We may be at the early stages of a truly transformational shift in business and professional publishing as LinkedIn begins leveraging its massive audience of business people to move into content distribution. Exactly how it chooses to do so could have profound implications for B2B publishers.

Does Correlation Trump Causation?

A new book called Big Data: A Revolution That Will Transform How We Live, Work and Think, written by Viktor Mayer-Schonberger of Oxford and Kenneth Cukier of The Economist, raises some intriguing and provocative issues for data publishers.  Among  them is this one:

 “…society will need to shed some of its obsession for causality in exchange for simple correlation: not knowing why but only what.”

The underlying thinking as I understand it is that Big Data, because it can analyze and yield insight from millions or even billions of data points, is both incredibly powerful and uncannily accurate, in large part because of the massive sample sizes involved.

But are all Big Data insights created equal?

Without a doubt, some insights from Big Data analytics yields useful and low-risk results. If Big Data, for example, were to determine that from a price perspective, the best time to purchase an airline ticket is 11 days prior to departure, I have both useful information and not a care in the world about causation. Ironically, in this example, Big Data would be used to outsmart airline Big Data analytics that are trying to optimize revenues through variable pricing.

But riding solely on correlation often creates situations where heavy-handed or even ridiculous steps would be necessary to act on Big Data insights. Consider a vexing issue such as alcoholism. What if we learned through Big Data analytics that left-handed males who played tennis and drove red cars had an unusually high propensity to become alcoholics? Correlation identifies the problem, but it doesn’t provide much of a solution. Do we ban alcohol for this entire group? Do we tell left-handed males that they can either play tennis or drive a red car, but not both? Does breaking the correlative pattern actually work to prevent the correlated result? Things can get strange and confusing very quickly when you rely entirely on correlation.

Am I calling into question the value of Big Data analytics? Not at all. The ability to powerfully analyze massive data sets will be beneficial to all of us, in many different ways. But to suggest that Big Data correlations can largely supplant causation research plays into the Big Data hype by suggesting it is a pat, “plug and play” solution to all problems. Big Data can very usefully shape and define causal research, but there are numerous situations where it can’t simply replace it.

The lesson here is that while you should embrace Big Data and its big potential, remain objective and ask tough questions to separate Big Data from Big Hype because lately, the two have been tightly correlated.

Unlocking the Value of LinkedIn

TechCrunch posted a long and thoughtful analysis of LinkedIn this week. In short, it suggests that LinkedIn is at risk from a growing number of vertical market professional networking sites, and faces a "death by a thousand cuts." The risk of being "sliced and diced" is real. Any horizontal provider of information stands at perpetual risk of a competitor targeting an attractive vertical segment and doing a better job. The same holds true for professional networks. It might be nice that you could theoretically interact with any other professional anywhere, but in reality, most of your interaction is with others in your specific industry.

But is LinkedIn really at risk? I don't think so, primarily because I don't think of LinkedIn as a professional network.

Blasphemy? It may sound like it, since LinkedIn has routinely been classified as a social media play almost since its inception. Indeed, If you think back to the early days of LinkedIn, it was explicitly designed as a novel attempt to codify the concept of "six degrees of separation" among business professionals.  If you continue to think back, you will also remember how quickly that concept fell on its face. Nobody used LinkedIn as originally intended, but it was in the right time and place to become the largest and richest biographical database in the history of the world, and that's where its money does and should come from.

LinkedIn has reached a stage where your failure to have a LinkedIn profile raises questions about you in many circles. It has quietly grown its company profiles (all cross-linked to individual profiles) to the point where a number of business information providers are taking worried notice. Many individuals base their job hunting on well-burnished LinkedIn profiles. In some professions, having the largest number of connections is a sign of success. Increasing number of data publishers are tapping the LinkedIn API to gather, augment and maintain their own databases. I could go on, but in its own weird, wacky and wonderful way, LinkedIn has become part of the fabric of business.

Right now, LinkedIn profits handsomely selling access to its structured database to recruiters and others. But this is just the beginning. LinkedIn is poised to become a critical backbone database with numerous uses. In one obvious application, CRM software companies are all rushing to integrate LinkedIn into their applications. But think beyond the obvious. For example, LinkedIn could be a hugely powerful trust and identity tool. After all, it's hard to fake more than a handful of connections, and are you likely to blatantly misrepresent your career in front of all your friends and colleagues who you invited to link to you? There is very valuable confirmation and verification locked up in all this linking that remains to be fully exploited.

The LinkedIn database could be used in a number of ways to tune up spam filters. You might even use it to prioritize incoming messages from your connections. LinkedIn is ever-eager to suck in your contact list from your computer, but what if it maintained that list for you (remember Plaxo)? Suddenly, LinkedIn would become the central database of business. And let's get inferential for a moment. I am certain that someone somewhere is trying to correlate the number and quality of LinkedIn connections with creditworthiness. And what about evaluating the quality and prospects of a company based on the extent and quality of the LinkedIn connections of its management team?

Crazy ideas? Maybe. But all I am trying to do is illustrate that while the social elements of LinkedIn are nice and necessary, don't lose sight of the fact that it has only just begun to mine one of the most remarkable databases ever created. There's gold in them thar hills!

History Matters

A fascinating article in Technology Review highlights and quantifies a problem that is also an opportunity: disappearing data.

The article reports on the findings of a new research study of social media that finds that in an analysis of recent major cultural events (e.g. Arab Spring), 11% of the social media content had disappeared within a year and 27% within 2 years. Beyond that, the study authors have calculated that the world loses 0.02% of its culturally significant social media material every day.

Keep in mind that what the study authors are measuring is not the number of tweets that are disappearing, but the web pages that these tweets are linking to.

And while this study only looked at headline news events, you've probably had experiences similar to mine: links to news stories and press releases that are no longer active, businesses removing all traces of failed product launches from their websites, online stories that are undated and thus difficult to rely on, news outlets that continue to treat yesterday's news like yesterday's news - and the list goes on.

The short message is that historical knowledge is always valuable, and it becomes even more valuable as it becomes less available. And that's what we are seeing online. Whether by accident or design, more and more content is "aging off" the web, creating opportunities for those companies that hold onto it in an organized fashion.

Yes, there are amazing resources like The Internet Archive that attempt to maintain searchable, historical copies of the entire web, but as you might suspect, this is hard, and there is a limit to the amount of detail it can store. But taking on this task on a vertical market basis is do-able, and potentially quite remunerative.

Many data products are designed to provide the latest and most current data, and that's smart. But as you add new data, don't delete the old data. It's amazing what insights can be gleaned by watching the changes to a business over time, and as the art of data analytics evolves, this capability will only get more compelling. But you can't analyze data you don't have. More than a few data companies I know owe their strength and their profitability to the fact that they maintained historical data. And as you become the sole source for content that has disappeared elsewhere from the web, you create a proprietary aspect to your content, along with an often insurmountable competitive barrier.

So take a little time to think about what information (specific data points or full-text documents) you can preserve, and how valuable this information might become if it wasn't available anywhere else, because that's the trend I see. What's past isn't just prologue; it may also be a new profit center!

Micro-Monetization

Yes, I just made up a new buzzword, micro-monetization, which is meant to describe a huge trend online to create services to monetize things that previously couldn't be monetized because they were too fleeting, too small or too difficult to bring buyer and seller together. It's a fascinating area full of large, latent opportunities, and I believe B2B publishers can find opportunity here as well.

What they heck I am talking about? Consider one of the best-known examples of the genre, AirBNB.com. This service allows people to rent out their apartments or even spare bedrooms to strangers as a low-cost alternative to hotels. Not to be outdone, another service called Camp In My Garden actually allows people to rent out their backyards to campers. And it's not just real estate. RelayRides will let you rent out your car to strangers by the hour or by the day.

There are also numerous services that let car services sell their down time efficiently. Consider PlaneFinder.com and EmptyLegMarket.com, both of which sell empty legs on private jet itineraries. My point is that that there is remarkable activity, creativity and opportunity in this area, but the focus so far has been consumer-oriented. Can this work in business? Absolutely. Consider the example of GetLoaded.com, one of several services to help truckers find cargo to haul on what would otherwise be an empty trip home.

Companies such as LoopNet help businesses sub-lease excess space. Put your creativity to work. Does your vertical market have expensive capital equipment or facilities that typically aren't fully utilized? Are there inefficiencies you can address on a spot market basis - opportunistically matching buyers and sellers? Here are just a few top-of-head examples to get you thinking: would restaurants rent out their kitchens on the days they are closed to the growing number of people creating small batch products for sale? Could companies rent out their parking lots at night to truckers seeking a safe, hassle-free place to park overnight? Could companies rent out their conference rooms to other companies looking for a place for out-of-town meetings? Crazy ideas? Perhaps. But who would have thought that you could build a business letting people rent their backyards? And don't get caught up in liability and other legal concerns right out of the box - many of the companies cited above pushed ahead despite myriad legal vagaries.

So put your thinking caps on. You know the players in your market, and as importantly, they know you. That gives you a credible, neutral central market position that will go a long way to building out a micro-monetization opportunity in your market.