LinkedIn

(By Richard Holway 4.00pm 29th Apr 09) On Tuesday I met with Reid Hoffman – founder of LinkedIn – at the Guardian’s HQ at the invitation of my friend Sherry Coutu who sits on their advisory board.

Although I have had my profile on LinkedIn for some considerable time, I’ve made little use of it. In preparation for the meeting, I decided to compare my Outlook contact list with those already on LinkedIn. I was amazed to add about 300 new connections! That’s c20% of my business contacts.

I was equally impressed at the response I got to my request for your comments on LinkedIn. Clearly LinkedIn is well established amongst our readership.

Recruitment goldmine
However, the feedback from our readers is far from positive. It appears that the real value most see is the database of profiles. Indeed, I was impressed with how many of the most senior CEOs in our sector had full LinkedIn profiles thus providing a goldmine for recruiters. Are they all wary of losing their jobs? Indeed, it appears that ‘recruitment’ is the key use of LinkedIn. Either to identify and approach people to hire or to make sure you are seen to be ‘available’. Indeed Hoffman stressed the importance to many of having a Public Profile. (It’s interesting that many of you expressed to me that that was exactly what you didn’t want! Maybe that’s an age thing?)

Of course, this is where some organisations are a bit fearful of LinkedIn. It was interesting last night that Hoffman mentioned several times that LinkedIn would never produce ‘organigrams’ – even though they could. Clearly, many enterprises think that’s a step too far!

Profitable
Unlike other Web 2.0 enterprises, Hoffman told me that they have been profitable for the last two years. The main part of the revenue comes from subscriptions with recruiters topping the customer list. Advertising is a minority source. Hoffman is now concentrating on building market share. Just like in the dot.com era, clearly eyeballs still determine your exit valuation!

Disappointments
If LinkedIn is going to really take off, it has to be more than a recruitment goldmine. For example, that’s not an area that greatly interests me. Here, many readers are less impressed. Those that thought it might be a business social network are disappointed. LinkedIn’s status reports are not a patch on Facebook or Twitter. There is no real incentive to use LinkedIn for email. Even Hoffman suggested I emailed him rather than messaging him on LinkedIn. Connecting with others requires an ‘introduction’. Many of you expressed reluctance at doing that.

Groups
I think the LinkedIn Groups feature has great potential. But it has to be used correctly. Many of you hated the current unregulated groups where anyone could join. But I do see potential in private employee networks (internal and/or external) administered by LinkedIn. Indeed, many have suggested we start a LinkedIn closed group for TechMarketView subscribers. What do you think?

Answers
Hoffman made great play of LinkedIn Answers. So, in the interests of research I have just posed a question on LinkedIn. I thought the process was clunky. I could only ask 200 connections and I had to select them all individually. But I’ll report on the answers in a subsequent post. As Hoffman himself said last night, whether these answers will provide “The Wisdom of the Crowds” or the “Stupidity of the Masses” we will see!

Dangers
One of the other attendees last night commented that LinkedIn was like a Rolodex. She added that when staff left they used to take their Rolodex with them. So the company invested in expensive CRM systems to ensure that the network belonged to the company – not the individual. Now LinkedIn was turning the clock back. One of the principles of LinkedIn is that the network created belongs to the person – not the company.

Conclusion
I was greatly impressed with Hoffman. A really likeable guy – not always the case with rich, successful silicon valley types! I am genuinely interested in the enterprise uses and benefits (or even disadvantages!) of using social networking – as I know many of our readers are too. I’m sure this will not be my last post on the subject.