I've been using LinkedIn since 2004, and I must say that LinkedIn has so much potential that it has only scratched its surface so far. In FY 2019, Facebook’s annual revenue was $70B, and LinkedIn brought in $6.8B. Is it possible that LinkedIn can get in similar ballpark revenue as Facebook in a reasonable time frame - say, 2 years?
In order to explore the opportunity, let us examine a few stats first:
Facebook LinkedIn
FY2019 Revenue (USD) 70.6B 6.8B
Total users Unknown 660M
Monthly Active Users 2.27B 310M
Main revenue sources* Ads Talent Sol, Ads
Median connections/user 200 500-999
Daily time/user in min 58 10
*Revenue sources totaling more than 80% of company revenues have been accounted for. For the purpose of keeping blog focused, smaller revenue streams have not been included in analysis.
Note that Facebook earned almost 10x more than LinkedIn despite being a much thinly connected platform compared to LinkedIn. Given this discrepancy, LinkedIn for sure has the potential to earn in a similar ballpark. If LinkedIn can increase daily user engagement from 10 minutes per user to say 40 minutes, and fix a few things, the author believes that $50B per annum revenue is very much achievable for LinkedIn.
The 5 Steps:
Here is what needs be done:
1. Be a Business Network Platform instead of Job Seeker/Recruiter Platform:
LinkedIn needs to come out of the recruiter/job-seeker mindset and think like a business social network. A more engaged audience from a business perspective will mean a more valuable advertisement platform. Make content front and center of the platform. Make user profiles look like their business (or professional) social networks, not just glorified CVs.
In order to explore the opportunity, let us examine a few stats first:
Facebook LinkedIn
FY2019 Revenue (USD) 70.6B 6.8B
Total users Unknown 660M
Monthly Active Users 2.27B 310M
Main revenue sources* Ads Talent Sol, Ads
Median connections/user 200 500-999
Daily time/user in min 58 10
*Revenue sources totaling more than 80% of company revenues have been accounted for. For the purpose of keeping blog focused, smaller revenue streams have not been included in analysis.
Note that Facebook earned almost 10x more than LinkedIn despite being a much thinly connected platform compared to LinkedIn. Given this discrepancy, LinkedIn for sure has the potential to earn in a similar ballpark. If LinkedIn can increase daily user engagement from 10 minutes per user to say 40 minutes, and fix a few things, the author believes that $50B per annum revenue is very much achievable for LinkedIn.
The 5 Steps:
Here is what needs be done:
1. Be a Business Network Platform instead of Job Seeker/Recruiter Platform:
LinkedIn needs to come out of the recruiter/job-seeker mindset and think like a business social network. A more engaged audience from a business perspective will mean a more valuable advertisement platform. Make content front and center of the platform. Make user profiles look like their business (or professional) social networks, not just glorified CVs.
Here are a few tips to consider:
- Make users’ public activity front and center of their profiles so that the content in people’s profiles keep changing frequently. This will invite more people to check each other’s profiles and activities. Limiting to only 3 recent posts makes most of the profile stagnant, and not interesting enough for a revisit.
- Let people tag others in photos and videos. Use face detection technology for auto-suggesting tagging in photos. Let connections suggest tagging in photos. Let the networking effect take new roots.
- Promote LinkedIn Groups, like Facebook is aggressively marketing their groups features. Bring back polls feature, add group search feature, allow users to create events on LinkedIn and let people have a powerful platform for business social collaboration and networking.
- Make users’ public activity front and center of their profiles so that the content in people’s profiles keep changing frequently. This will invite more people to check each other’s profiles and activities. Limiting to only 3 recent posts makes most of the profile stagnant, and not interesting enough for a revisit.
- Let people tag others in photos and videos. Use face detection technology for auto-suggesting tagging in photos. Let connections suggest tagging in photos. Let the networking effect take new roots.
- Promote LinkedIn Groups, like Facebook is aggressively marketing their groups features. Bring back polls feature, add group search feature, allow users to create events on LinkedIn and let people have a powerful platform for business social collaboration and networking.
- Let people create events from post and invite each other.
- Hire sales people who would pursue businesses focused on creating business content (like Bloomberg, Fidelity etc) to create accounts on LinkedIn and publish content there. Give them an increased default reach of say 10% of page followers per post compared to 6% of Facebook.
- Let people create polls in posts.
- Hire sales people who would pursue businesses focused on creating business content (like Bloomberg, Fidelity etc) to create accounts on LinkedIn and publish content there. Give them an increased default reach of say 10% of page followers per post compared to 6% of Facebook.
- Let people create polls in posts.
- Allow people to import their phone contacts in LinkedIn, and send invites to people imported from phone contacts. This will accelerate the platform growth and will bring in the next 300M users.
- Allow people to invite connections to their business pages. I do not know how I will create a critical mass of followers on my business page!
2. Make Advertising Brain Dead Easy!
If there is one takeaway from this blog, this is it: Make advertising super brain dead easy! This is the area where LinkedIn really under-performs compared to other platforms.
- Allow people to invite connections to their business pages. I do not know how I will create a critical mass of followers on my business page!
2. Make Advertising Brain Dead Easy!
If there is one takeaway from this blog, this is it: Make advertising super brain dead easy! This is the area where LinkedIn really under-performs compared to other platforms.
There are number of opportunities which can be availed:
- Allow users to promote their own posts. Add an option for paid promotion while creating posts, and from the pre-created posts. Note that this is a novel idea, and not done before - possibly even patent-worthy.
- Make advertising so easy that it can be done within 1 minute even if a user has never run an ad. Create a simplified version of ad platform with basic options, and let users switch to the full interface for advanced options. Current advertisement platform is a nightmare to use! I gave up on it while trying to advertise - and I am a professional developer!
- Allow businesses and users to promote their posts while creating the post itself!
- Create notifications for the ads run by connections (up to 3rd degree connections, maybe) on LinkedIn. This of course may need to be automatically toned down in case too many notifications start getting created for a user. Note that this is also a patent-worthy, novel idea and has never been done before!
- Allow users to promote their own posts. Add an option for paid promotion while creating posts, and from the pre-created posts. Note that this is a novel idea, and not done before - possibly even patent-worthy.
- Make advertising so easy that it can be done within 1 minute even if a user has never run an ad. Create a simplified version of ad platform with basic options, and let users switch to the full interface for advanced options. Current advertisement platform is a nightmare to use! I gave up on it while trying to advertise - and I am a professional developer!
- Allow businesses and users to promote their posts while creating the post itself!
- Create notifications for the ads run by connections (up to 3rd degree connections, maybe) on LinkedIn. This of course may need to be automatically toned down in case too many notifications start getting created for a user. Note that this is also a patent-worthy, novel idea and has never been done before!
- Allow people to run promotions from phone app! I cannot believe I have to add this point, but I cannot create a LinkedIn ad from the mobile app! I’ve run thousands of dollars worth of ads on Facebook, and every single time more than 97% of the audience viewed my ads on mobile app. This also means that the people publishing the ads are highly likely to be using phones while trying to create ads!
The author believes that a super difficult to use ads platform is blocking over 80% potential of LinkedIn!
3. Skills and Products Marketplace:
Allow people to sell their time for $ amount, making LinkedIn a skills marketplace. Freelancing is $1T market, and LinkedIn has been sitting on the gold mountain and doing nothing about it! All LinkedIn needs is to allow people to publish their hourly cost, mention that they are accepting projects, and let companies find and hire the appropriate freelance resources. With Glassdoor.com and Salary.com, the taboo for pay discussions has been long gone - everyone knows what others are getting paid!
Not to mention, allow people to promote their offerings, and allow companies to promote their freelancing requirements. More promotions will mean more revenue for LinkedIn.
Not to mention, allow people to promote their offerings, and allow companies to promote their freelancing requirements. More promotions will mean more revenue for LinkedIn.
Moreover, LinkedIn can also create a business marketplace. Allowing businesses to sell their products on their LinkedIn pages, and auto-creating marketplaces for different verticals and pooling in products from diverse companies for sales on marketplaces.
4. Fix the search for content:
The content on LinkedIn must be made a first class citizen in order to increase the time people spend on platform. Currently, if I search “10 ways to increase sales” on LinkedIn search, I get shown people’s profiles by default, and I have to click Content to see content results. The UX team needs to think out of the box, and figure out intuitive ways to show both content and profile results in default results list (maybe, side by side). This will also increase revenue for search ads.
5. Enable Developers to Leverage LinkedIn Platform:
Now that LinkedIn is owned by Microsoft, make the LinkedIn API supremely developer friendly. Remember what steveb said: Developers Developers Developers Developers!! It is very important to win the hearts and minds of developers to have a budding community of enthusiasts to drive the growth of platform. Facebook, Salesforce, Amazon, Microsoft, Google, Apple etc all have state of the art developer tools and platforms available, augmenting innovation for their platforms. Each of these company’s developer-facing platform is earning revenue in the range of $2B to $70B.
For example, if LinkedIn can allow my company Socol Corp to use appropriate apis, we’ll be happy to integrate our conference calling product with LinkedIn authentication, and give access to audio, video, conference calling and live webinars to all LinkedIn users for free. This will be superlative to Facebook’s messenger and live videos offering as the professional communication needs to be kept separate from personal, while still keeping it open to the public for a number of scenarios.
Conclusion:
4. Fix the search for content:
The content on LinkedIn must be made a first class citizen in order to increase the time people spend on platform. Currently, if I search “10 ways to increase sales” on LinkedIn search, I get shown people’s profiles by default, and I have to click Content to see content results. The UX team needs to think out of the box, and figure out intuitive ways to show both content and profile results in default results list (maybe, side by side). This will also increase revenue for search ads.
5. Enable Developers to Leverage LinkedIn Platform:
Now that LinkedIn is owned by Microsoft, make the LinkedIn API supremely developer friendly. Remember what steveb said: Developers Developers Developers Developers!! It is very important to win the hearts and minds of developers to have a budding community of enthusiasts to drive the growth of platform. Facebook, Salesforce, Amazon, Microsoft, Google, Apple etc all have state of the art developer tools and platforms available, augmenting innovation for their platforms. Each of these company’s developer-facing platform is earning revenue in the range of $2B to $70B.
For example, if LinkedIn can allow my company Socol Corp to use appropriate apis, we’ll be happy to integrate our conference calling product with LinkedIn authentication, and give access to audio, video, conference calling and live webinars to all LinkedIn users for free. This will be superlative to Facebook’s messenger and live videos offering as the professional communication needs to be kept separate from personal, while still keeping it open to the public for a number of scenarios.
Conclusion:
In a nutshell, if LinkedIn can make itself a business-centric platform, it has a much bigger earnings potential. Earning $50B revenue will be a cakewalk for LinkedIn when advertising is easy, marketplaces are developed, and when developers are empowered to fill in gaps for LinkedIn.
After all, almost all money is earned first by businesses, then by professionals!
Full Disclosure: I am long MSFT, FB, CRM, GOOG and S&P 500.
After all, almost all money is earned first by businesses, then by professionals!
Full Disclosure: I am long MSFT, FB, CRM, GOOG and S&P 500.
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