The Surprising Success of LinkedIn
Reid Hoffman conceived LinkedIn as a professional network in 2003. It now has 740 million members in 200 countries. However, the platform was slow to get off the ground.
Hoffman focused on customers who could generate the highest number of profiles and become brand champions. He launched it in San Francisco Bay because he saw this area as being the most sophisticated and would ‘get it’—but they didn’t. The professional target market did not understand the value of the platform, which was evident by its sluggish launch.
By the end of 2004, it had only 150,000 members.
LinkedIn also struggled to raise finance. Out of 26 pitches, only two, Sequoia and Nokia Ventures, showed interest.
In 2009 LinkedIn brought in Jeff Weiner as CEO. He recognised that LinkedIn was a B2B platform. It connected people who knew what they wanted with the people they were looking for. This binary model was best suited to employers looking for recruits to fill vacancies. LinkedIn charged a fee for these focused connections, but this was not enough for Weiner. He looked to expand its revenue stream with bolt-ons such as advertising and marketing, targeted at the professional audience.
LinkedIn then generated relevant content with thought leadership pieces written by journalists from the Huffington Post and Financial Times journalists.
LinkedIn evolved through Weiner’s persistent innovation from a career portal to a ‘multi-speciality professional platform’. In 2016, Microsoft acquired LinkedIn for a whopping $26.2 billion.
But is the success of LinkedIn driven by the misconception among professionals that a substantial database of professionals is synonymous with networking?
LinkedIn is careful not to shatter this illusion. It refers to its professionals with an online profile as ‘members’, but this term is misleading. The ‘members’ do not pay a subscription. Professionals with a LinkedIn profile have not joined a ‘club’.
There is a popular notion that we are only six links away from the President of the US, but if we cannot use these connections to get across our message what is the point? LinkedIn offers connections with other professionals which gives the illusion of networking but the success rate of winning business remains stubbornly around the average percentage for cold calling and mass marketing.
Most professionals ‘network’ by attending a ‘suitable event' where they hope to meet other professionals with clients they want to work for. At these events, the professionals collect business cards, arrange to meet for coffee, and exchange brochures. Usually, the professionals file the unopened brochure in the bin and win little business.
This is ‘traditional networking’ . According to our research, 88% of professionals spend 20% of their time engaging in ‘traditional networking’, and 82% say it produces a poor return on their time and investment. Could this poor success rate for traditional networking be a contributing factor to the success of LinkedIn - which, from its sheer size, looks to be a better alternative - but still only produces a poor return?
In my experience, successful work origination does not come from contacts but from strategic connections and client mapping and matching.
For example, you may be skilled at boundary disputes. Still, you will want to connect with very different professionals if your expertise is solving disputes between the owners of No’s 2 and 4 Acacia Avenue or between neighbouring African countries.
The key to successful networking is meeting with professionals who work for your ideal clients - strategic networking. Then, the connection needs to be complemented with effective communication, which sidesteps the natural resistance we have to product push. As a psychologist, I have researched the cause of this resistance and, post-COVID-19 Covid-19, built a platform to provide our members with what to do, why to do it and how to originate business. Our Members have access to the members-only aspects of a specially designed platform, Caroline’s Club, which gives our Members the tools they need to originate business. Traditional networking is a shotgun in a blizzard Caroline’s Club is a rifle in broad daylight.
LinkedIn is a B2B binary platform with limited usefulness, focusing on the skill set of professionals. Caroline’s Club, however, is a highly targeted tertiary B2B2B&C platform, focusing on ‘client types’, ‘client problems’, and the skill and experience of the professional to resolve them.
Members of Caroline’s Club network only with other professionals with similar client profiles—the 20% that produce 80% of the profit—their Target Clients.
If you would like to know more about the What, Why and How of Caroline’s Club where networking works and business is originated, email or phone Caroline’s Club to find out more.