LinkedIn's missed connections
What the largest professional network needs to unlock the next levels
Welcome! This week we explore LinkedIn’s impressive growth and obvious misses. If you are new here and are looking for recommendations, you’ll like this article on Edtech and this article on a Chinese giant’s unique approach to healthcare. Cheers!
LinkedIn launched Stories recently. Stories has made its indispensibility to social media clear. Snap launched it, Instagram stole it and rode on its success as outlined here, so did Facebook and recently, Twitter also launched Fleets. All the other examples are entertainment media, however, LinkedIn (conceptually) is more utilitarian. So does Stories make sense ? Is it the right strategy for LinkedIn? What problem is it solving and is it the best way to solve this problem?
As I answer this question, let's dive into the history of LinkedIn to build context.
LinkedIn is the largest professional network around, at 650+ million registered users, of which 310+ million are monthly active. It's growth came largely from 5 product and growth hacking factors that Reid Hoffman now describes as Blitzscaling -
Localised targeting - focusing on a narrow group of users (Silicon Valley tech stalwarts like Marc Andreesen etc) and building a hype that eventually brought in more users
Public profiles - making LinkedIn profiles public added to the SEO advantage that anyone on Google searching for a person could now land up on LinkedIn
Aggressive email lists exploiting - LinkedIn used to import a user's contacts through an Outlook plugin and spam these contacts with LinkedIn emails
Reconnect flow - When people signed up for LinkedIn they were asked about their current company and title, and over 90% of people answered this question. The genius behind the flow is that it not only allowed users to connect with contacts, but it also built out the new user’s profile—every piece of information entered was listed as part of their work experience. Furthermore, as more people joined and sent invitations to connect, current (though perhaps unengaged) users were brought back to the site—at which point they too were prompted to invite and connect with others.
Free-to-use - Pretty common for social networks now, LinkedIn kept signups free for all users, while slowly increasing revenue streams, first with ads in 2004 and then with subscriptions and job listings in 2005.
Product and growth hacking are not the only things LinkedIn has been good at. It has been consistently punching hard on revenue as well, quite commendably.
LinkedIn offers three categories of monetized solutions: Talent Solutions, Marketing Solutions, and Premium Subscriptions, which includes Sales Solutions.
Talent Solutions is comprised of two elements: Hiring, and Learning and Development. Hiring provides services to recruiters that enable them to attract, recruit, and hire talent. Learning and Development provides subscriptions to enterprises and individuals to access online learning content. This makes up >50% of its revenue.
Marketing Solutions enables companies to advertise to LinkedIn’s member base.
Premium Subscriptions enables professionals to manage their professional identity, grow their network, and connect with talent through additional services like premium search. Premium Subscriptions also includes Sales Solutions, which helps sales professionals find, qualify, and create sales opportunities and accelerate social selling capabilities.
However, there are numerous untapped opportunities with LinkedIn.
Let's break them down by the type of users
Job seekers
Job doers
Job givers
Advertisers
Job-givers
Hiring managers and recruitment agencies are looking to get people to fill their requirements. Usually, two factors are required to make that decision
Competency (current and potential)
Interest
Assessing competency usually involves either direct assessment or referrals.
The ones on the bottom were low-hanging fruits to LinkedIn, which it let slip away. Create a HackerRank within LinkedIn and it could have easily solved the hiring for software engineering. Similarly for jobs such as designers etc as well.
The ones on the top are tougher. They are mostly managerial jobs and the problem with managerial jobs is that
in a lot of cases, the output is not measurable. How good a project manager are you? How do you say you did a good job at 'streamlining the pricing process at Amazon' or 'setting up a sales org'? This is especially true for projects where returns are not as visible in the short-term.
Even if it is, it is not possible to normalise it by context. 100 cr P&L management might be good in one company vs mediocre in another. Product role might be scoped larger in one company vs another.
So, this leads to direct assessments being tough, leading to credentialing. People overstate their achievements in their profile and there is no way to confirm that. In a system where high index is given to brands (especially in education institutes), credentialing at least acts a basic filter.
Referrals
Here's a 2004 Forbes article explaining the genesis of LinkedIn. “the most critical step towards finding a job, finding an employee or finding a business partner is getting a high quality referral.” Yet referrals aren’t always easy to come by, especially because people typically have no way of knowing who their connections know. LinkedIn draws upon the theory of six degrees of separation—or, the idea that people are six introductions away from anyone they want to meet.
As you see, the core reason for starting LinkedIn was high quality referrals. Initially, this worked well when LinkedIn as a closed invite-only platform. As it became bigger, more people started coming in and 'connecting with people'. There is a News Feed and a Two-way connect system for LinkedIn. The combination of these two leads to garbage.
News Feed, unless curated, is the main place in a social media platform to gain vanity. Think of it as the Main Street of your colony, where you can go and shout anything and most houses around will hear. And since attention-seeking is in our core need, we eventually start shouting for every small thing. That alone is not a major problem however, it is common to all user-generated-content networks. The problem gets exacerbated when there is a two-way connect.
There are two problems with it
An attention seeking user will send out connection requests randomly. A lot of those requests will be accepted, either as a way of reciprocation or as expectation of future favor ("He'll also hear me when I need to shout in the future, so let's just keep it in the store.")
Users look at it as a way to up-network — If a person I admire is on Linkedin, I want to connect to that person just to feel good about having them in my network.
Combine both of these and you have a network which is shitty for referrals, since no one hardly knows any other person.
The solution to this — make the news feed restricted, either in terms of user base (e.g. Groups) or frequency of posting. Engagement on news feed posts (e.g. likes) would also not be necessary considering the nature of content, hence it can evolve more to a WhatsApp-like UI.
Job-doers
This class of users are interested either in
upskilling
through courses
through peers
business relationships (vendors, partners etc)
The first is where LinkedIn learning and SlideShare come into picture. LinkedIn learning started as an acquisition of an already existing player in the space, Lynda.com, for $ in 2015. LinkedIn Learning now has 14,000 enterprise customers, 17 million enterprise users (roughly the size of SAP's learning business), 12,000 high-fidelity courses, and a pace to publish more than 60 new courses every week.
Selling LinkedIn Learning modules to enterprise customers for their training programs is a major contributor to LinkedIn's revenue. And one that it seems to be doing quite well.
Peer-Learning
Today, there are numerous Whatsapp and Telegram groups as a hub for people in the same function or industry. For a person looking to hone their craft in the same domain, these act as a brilliant platform for posting doubts, leveraging cross-industry learnings and even job postings.
LinkedIn also aimed to get something similar through LinkedIn groups. However, the product went more the Facebook groups way (News Feed including) rather than Whatsapp groups. While that might solve for post views, it does not solve for 'relevant' network. Tying back the point made in Referral section, the latter group type is more suitable, can build an invite-only network and is more engaging and relevant, and dies into oblivion lesser than FB group type does.
Job-seekers
The job searching process is divided into
Selection of a pool of jobs, either by function or company or industry etc
Reaching out to the relevant people in target jobs
Preparing for those jobs — involves resume-making, preparation for interviews etc
Background checks of employers (through referrals)
Salary negotiations
Linkedin Jobs solves the first quite well, and fifth with its salary benchmarks. With a little additional effort (basically a job preparation repository), it can solve the third one as well, at least partially.
For 2 and 4, the best solutions are a combination of referrals and groups, which face the problems outlined above.
Considering the above situation, the pressing problem for LinkedIn to solve is 1) building for professionals with low dependency on external factors (as an entry strategy in that market) and 2) referrals and groups to remove the opacity in other white-collar professions (as the winning strategy in its home market). Not engagement (or advertising revenue). Most users coming to LinkedIn are coming for specific agenda - be it look for jobs, connect to people, hire people etc. The ones that aren't scroll through News Feed, again a feature that needs restructuring. Stories not only dont add to the value, but also hurt LinkedIn as it becomes a more 'informal' network, rather than a 'solution for everything career'.
Considering the structurally opaque space it is in, it has made tremendous progress in building a holistic platform for the entire ecosystem, despite some obvious misses. And it should devote it's energies in filling those misses, rather than vying for cheap attention.
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