Category Archives: Social Networking

Facebook: Questions anyone?

Facebook Questions

I am going to take a quick little dab at Facebook’s Question product. I am sure many of you would have noticed the sideways-charts-like icon sitting pretty beside the status icon on your news feed. I was excited to see a new product from Facebook that dramatically changes the way we interact with our small (or big) network of Facebook friends as well as the larger 600MM Facebook network. However, I was quite disappointed with some of the really obvious gotchas in – content discovery, noise-reduction and users/answers ranking. Why? This tool/product promises so much and yet manages to fail on some key areas that matter from Facebook’s perspective – User Acquisition, User Interaction and Retention.

Comeon. Let’s get our hands dirty.

Total time spent online in US

Your Facebook is one of the most visited websites in the whole “internets”. Yes. You. Your News Feed page.  You don’t believe me? Please see time spent on the web here and social networking here. Let’s just say most users spending time online spend an inordinate amount of time on Facebook than any other website. If I had to quantify that statement with the limited information I have, it is atleast 3X the time spent on Google which is by far the leader of the top-10 websites in the world pack- please see here. Analyzing each one of the “key areas” I mentioned above and some more:

1. User acquisition. Does not seem to be a problem for Facebook. It’s at 600MM users and growing. But, new product launches that alter user behavior will definitely need a “warming up” period to see if the product gains traction. New product adoption hinges on how easily the product is delivered to the user, the learning curve involved and how relevant (read interesting) it is for the user. In that respect, what percentage of the 600MM users would use Question and what percentage would really use it to ask a Question of their friends. That is the Question Facebook (pun intended) will try to answer with product improvements and more customer feedback.

My Verdict: Fantastic Job! I would temper that with the set of questions.. is Facebook rolling out Question to facilitate a rich source of quality answers/information, does FB have a set of rules to weed out noise or if not, is Question just a simple and handy polling tool? There does not seem to be a convincing answer for each of these questions.

2. Question Product. While Question hits the ball out of the park for the ease with which it is delivered to the user and learning curve involved. It is still a far cry from being relevant – purely, from a content discovery perspective. Ofcourse, that’s only my opinion and maybe, others think differently. I say that because I see a lot of noise rather than questions/polls I deem relevant. However, if  you see it as a product line extension to Status updates with questions seeking information about the best pizzeria in North Beach, San Francisco etc., it is an amazing tool.

My Verdict:  Question is a great product or substitute  for a subset of status messages. What it is not (yet) is that it is not a Quora or a typical forum to raise discussions.

3. User Interaction. Facebook has done a fantastic job of integrating Question at two levels that I believe are a core user-experience on Facebook. (a) Share status messages, links, questions etc., at the top of your Facebook page and as an (b) Application listed along with other applications such as photos, notes, groups, games, Marketplace etc. at the left-bottom. What is interesting is that Question doesn’t feature along with Messages or Events at the Left-Top which seems like a natural place for a new product to be rolled out. I’m sure the good folks @FB would have discussed this very question and figured Left-Bottom is the place to go. It is important to remember, all of this holds good only for the homepage and not your profile page where Questions features along with your Info, Photos, Notes and Friends at the Left-Top. This locations seems like a natural-fit and is probably a very good choice for a new product and a product such as Question.

My Verdict: Sharing Questions and using Questions is a breeze. It is just not relevant or robust enough at this stage for a wholesome experience. Not to mention the lack of features such as discovering and following interesting topics etc.

4. User Retention. This is going to take time and multiple iterations. Going by past record, Facebook really has its ears glued to what its users are asking and I believe, will continue to improve and iterate over Questions for the better and faster than most others would have you believe. If, say, Facebook hoped to tap into even just 1% of its regular users (assuming 200MM – 1/3rd of its current 600MM users) in the first month, I’m quite certain they succeeded, infact, I would bet more than 1MM users use Question. Of that 1MM, how many would continue to use it actively? What is the product position? Is it (as mentioned-above) a substitute for some status messages or is it just another application that you do not mute in the hopes of seeing some relevant news 1 in 10 posts? The answer seems to be yes and yes for both. Now, that’s a problem. You can’t be everything to everyone. Assuming, savvy users will figure out what to do with a product leaves a lot open to risk and consumer behavior. I doubt that is what some of the smart folks @FB intended. I would ask how do they plan to engage users if they plan to go beyond a status message substitute? How do they plan to allow users to look for topics of interest and discover questions aligned with their interest? Sure, I can “follow” questions but how do I get there in the first place? I am convinced it has to be easier if the method’s already available, it has escaped me completely.

My Verdict: One problem that Facebook has answered and is continuing to improve upon is slicing and dicing all its data to present in a very simple format for all the users. It is an exponential problem for a product such as Questions though. How do you ensure the right topics, Questions are provided to the user? How do you eliminate all the myriad “noise” sources to enable users to get to data they find interesting and relevant. In other words, how do you retain users or how do you enable users to actively use your product as compared to infrequently?

What can be done?

a) Clarify Customers: Yes. Question can be rolled out to all Facebook users. But, depending on who is targeted, the use-case and flow would obviously change. Hence, clarifying who the target customers are should be the first task. In other words, if Question is just a “sharing” method to ask questions of your core network of friends, Question is good as it is. Ofcourse, it needs to improve in how it is delivered in the news feed etc. but it is a great start. However, if Question was intended to be a Quora like service (as Facebook seems to tout the product), focus more on setting it up as an application/page along with notes and allowing sharing your questions/answers with your friends based on topics/questions you frequent. In fact, following high-quality users “experts” could be turned on as well. Although, I’m not sure, if that feature’s something Facebook would consider enabling. I don’t see why not though. It just gets a little messy unless rules are setup automatically to exclude personal information, wall-posts etc from being visible to users who follow you through Questions. This reinforces my belief that Question is better served as a separate application/page rather than just a “sharing-tool”.

b) Clarify Positioning: Depending on the choice of target customers, Question needs to be refocused for that target segment. Or at the very least, features allowing such users to engage with other similar users and use Question need to be delivered. I believe this would be an important step in articulating what the product can do and how it can be used. Why? Well, if I wanted to follow topics, if I wanted to follow some “experts”, if I wanted to have Questions/Answers delivered in a more intuitive way and not just as a list of Questions my friends answered, I don’t have a choice now. I am going to have to sift through all the information on my news feed or the Questions page to get to interesting Questions or topics.

c) Question Product (My Strategy): The answers to the above 2 questions would help create more relevant use-cases and product features including its position on your Facebook Page’s real estate. If I were to redo Question, here’s what I would do:

Facebook Ask and Questions ?

1) Separate Question into 2 products: One a dumbed-down, simpler “poll” version that can be used in the News Feed to share with my friends that I would call Facebook Ask and another full-fledged product, Facebook Questions, directly competing with Quora (atleast, a part of Quora’s market) and/or the market Quora doesn’t necessarily address – soccer-moms (eg., best recipe for home-cooked 10-min pasta), uber-geeks (eg., how best to setup a wordpress account), soccer-dads (eg., how to file state taxes without getting swindled by a local tax agent) etc. I think these questions/topics often lend themselves well to a majority of the Facebook users without estranging some sections. For example, a discussion on QE3 may not be an ideal discussion over a cup of joe on Facebook.

2) Design Use-cases and Flows for each product allowing Discovery: In the early stages, obviously, there isn’t a lot of data (questions/answers) to be discovered. But, with millions of users, it would be easy to build a huge database in a matter of weeks or months. Considering the 2nd Question product geared towards segments I described above, use-cases intentionally designed to encourage relevant content discovery would ensure Question gains traction quickly and as desired.

3) Sharing: Facebook has scale both in terms of users and customers such as NY Times, CNN etc using FB-Sharing icons. An easy extension to the Question product would be to “ask” a relevant group/friends-list their opinion on an article or explain concepts mentioned in articles. There’s just an insane amount of possibilities. Which is why I believe, it is important to disambiguate, Question as a sharing tool on your News Feed etc and the product that enables content discovery, answering questions and following experts.

4) Monetization: 2 Revenue Channels would be partners such as NYTimes, Forbes etc and clients advertising on the Facebook ad platform. Imagine, a tax service such as H&R Block advertising on a Question about the best tax agent in Palo alto luring potential customers with discounts and engaging customers with good-quality answers and not spam. This is just the tip of the ice-berg of possibilities.

Internet Advertising 2010

Lastly, I will leave you with some more recent news that describes online advertising to be a bigger market than print media. Facebook can not only take a piece of the print media advertising, internet advertising but also, TV advertising. In fact, most companies are using a social media campaign in tandem with their usual advertising channels and as Question gains traction, you will see more engagement from companies going above and beyond a Facebook Page.

As always, that’s my 2C and it has been done with limited time and research. So, take it all with a liberal dose of salt.

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Filed under Digital Media, Social Networking

Teamcoco, Twitter, Facebook and Conan peek into the future

As I grapple with a case titled “TV Everywhere” and consider the possibilities ahead of Amazon in a fast converging digital media landscape – TV, Internet Video, Content  Owners/Providers, Broadcasters and the infrastructure providers – I wonder if we haven’t seen it all already and why some of these players refuse to be “Frenemies”.

I would like to walk through an example to illustrate why we might have seen it happen already.

Teamcoco

Conan O'Brien

Conan O’Brien, without any reservations, has disrupted the strangle-hold broadcasters cast upon the hapless content creators. I have watched Conan for 6 years now and continue to enjoy his shows and brand of humor. (Please don’t hold that against me). Conan, a Harvard graduate, is probably one of the most educated and intelligent night-show hosts on TV. After the much debated NBC fiasco (involving Jay Leno, who I have to admit sadly, is a fossil in this dynamic digital media landscape), Conan picked up after himself. But not on his own. A fan started a Facebook page, another fan started a Coco (as Conan is fondly referred to) support page and overnight hundreds of thousands of fans joined hands. Conan candidly admits he knew zilch about the possibilities with current technology and how he was asked by NBC to _stop_ the negative press on Twitter about which he had no idea. Soon, his team crafted a plan to circumvent clauses in the NBC severance contract using social media technologies – Twitter and Facebook.

Now, Conan’s shows are made available the very next day with excerpts and teasers presented to users well before the shows. Teamcoco is a really busy webpage for its content and layout. It’s updated multiple times everyday. It has Twitter and Facebook widgets – not a big leap considering that’s how the team got its new start. What’s surprising is that Teamcoco has embraced technology just as any savvy TV producer has to by using Foursquare, Getglue, etc to allow users to engage with the team for real-time “checkins”. I doubt if Conan reads all comments, but, I bet, his team draws his attention to some witty comment, tweet, or feedback from his fans. He has 1.5 MM fans on Facebook according to his website.

Takeaways:

1. TV Content should be free: Maybe, not all. Although, I can’t think of any reasons why all content shouldn’t be free except ofcourse justifying the huge investments and operational costs ;-). If TV content is made available for free, you will have more eyeballs than when it is not. Unless, somebody figures out innovative business models around content, there will always be bootleg sites offering “free” content or customers will opt for cheaper options than expensive packages.

2. Content Ownership: Ideally, content creators should own content than the broadcasters or production houses. But, then, the media industry may need a bigger incentive to even fund new ventures.

3. Revenue Streams: If content is free, it imposes more restrictions on the broadcasters ability to make money or enjoy the same riches they did a few years back. The broadcasters need to come up with innovative business models and additional revenue streams to counter the loss of revenue in making content free. At least, this prevents the bootleg sites from eating into the broadcasters revenues.

4. PEOPLE: Whichever way you look at any business, it all boils down to the customers. No matter how good your analytics are, market research and marketing plans are, customers still have to buy your products/services. In the entertainment industry, people play a bigger role than in other businesses. Hence, it is important to think along the lines of social networking websites or businesses. Successful businesses are those that can start from the people (customers), provide a perception of “openness” and have short feedback loops (with customers) to actively indicate that the businesses put people first.

Why?

Both entertainment businesses and social networking seem analogous to me. Acquiring customers, retaining customers and engaging customers are the 3 edicts of a successful social networking business or entertainer (Read TV host or show)

Customers enjoy feeling wanted. This means, you are only helping your cause by engaging with your fans rather than pretend it is all a passive interaction where TV shows don’t really involve fans’ participation.

How are Conan’s shows on TBS different from his shows on NBC?

1. Actively engages customers/fans: For example, last night, Coco walked into the audience to select a fan to give him a free ticket to New Orleans. To use a digital camera and capture festivities in Mardi Gras. Conan was sitting with the audience briefly as well. Message to viewers: Conan “cares”.

2. Seeks feedback: Everyday, teamcoco sends updates, invites comments about shows or some activities such as Live cam, and more importantly, includes those in their commentary or show itself. For example, for Conan’s twitter anniversary, they invited fans to write his bio for twitter. How many of us have engaged with a celebrity as closely?

3. Listens to Customers: On the day of Steve Jobs key notes and official release of iPad 2. Conan had a mock advertisement of Apple’s iPad advertisement. See here. On the same day, they had a stage setup similar to Angry Birds and played a “real” Angry Birds(See here here) in front of the audience. Even though his fans couldn’t have cared less if he had talked about the iPad or Angry Birds. It conveys, to atleast a portion of his target segment, that the team commentates on key current events (albeit in a fashion that best suits his fans and sometimes, more knowledgeable than your average Joe) and hot topics of the day.

4. Conan Owns: Conan owns the content. Which is why you see his shows being made available the same night or night after. His team has the liberty to use the show’s content to generate more eyeballs, engage fans across various media, devices and ultimately, keep his fans happy and excited. For its part, TBS, (this is purely conjecture) may be getting a portion of the revenue alongwith the TV ads during Conan’s TV show. I don’t have data to analyse how much $$ TBS might have enjoyed if it had operated under its old business model, but, I believe this might be more profitable.

So, we have seen how content creators, broadcasters and content owners have disrupted the status quo in the media industry with Conan’s example.

Now, consider the problem at hand: Amazon needs to roll out new services/products with not just a viable business model to stay in the game, but, actually disrupt the tug-of-war between broadcasters (CBS, NBC), service providers (Comcast, Verizon), internet video providers (Hulu, Netflix) and other players (Google/Youtube, Apple). I don’t have all the answers. But, here’s what I am considering:

1. Kindle is one of the most successful products from Amazon. It has been going through price-cuts over the years while improving in its feature set and core capabilities. It sells for only $139 and $189 with free Wi-Fi and 3G+Wi-Fi connectivity respectively as compared to the price-points for iPads or tablets that range from $399-$799.

2. Kindle Store offers around 810,000 books. Not to mention the newspapers, magazines, singles and blogs.

3. Prime Subscription: The newly introduced Prime Subscription offers 2-day shipping and 5000  “commercial-free”  TV shows and movies for $79/year.

4. Amazon Elastic Compute Cloud (EC2) web services: Interestingly, they are priced based on data usage or per hour used with a tiered pricing scheme.

5. Customers: Amazon has slightly more than 100 MM customers. This implies, they have around 100MM credit cards information,  analytics on customer behavior and purchase patterns.

If Amazon can’t roll out a product/service that disrupts the media industry, there are very few players with that scale and free cash flow to roll out “TV everywhere” services. Admittedly, Amazon’s core strengths lie in its retail operations, but, since it diversified into Kindle and Cloud Computing, it has looked like a different business altogether.

Unfortunately, it needs to play ball with CBS, TBS, NBC, Disney etc. It needs to work with service providers such as Verizon, AT&T and Tmobile to gain any significant momentum. But, all of these players are rolling out services on their own or working with Hulu or Netflix. Not to mention the elephant in the room Google/Youtube which will start airing live NFL matches later this year.

I go back to my earlier Conan example. All that matters is eyeballs. In other words, all that matters are the customers (your people). How many of Amazon’s customers might be inclined to subscribe to the $79/year plan? How many new customers might be willing to subscribe to the $79/year Prime membership even if Amazon throws in 2-day shipping? Therein, lies the rub.

Here’s my Billion $ idea: (Inspired by various ideas people more qualified than I have floated around)

1. Free Kindle. Offer Kindles for free. Introduce a new product line specifically for the Tablet PC segment leveraging the Kindle brand.

2. Prime Subscription. Offer it for FREE. But, customers need to sign up for a  2 year PRIME subscription equaling $158 over 2 years.

3. Content. Offer more content. Sign up more partnerships and make more movies and TV shows available.

4. Live Content. Importantly, sign up to offer LIVE streaming games and music concerts. Create another pricing scheme for people watching LIVE matches.

5. App Store. Set up App Store similar to Kindle store. Make more apps available, including those tailored towards amazon’s businesses, products and services.

6. Location-based Services. Amazon is one of the most qualified companies enjoying deep synergies with location-based applications. Infact, it may not be too far before Amazon sets up partnerships with other retailers and resellers to offer a “Same day Pick up” option to consumers where you can purchase from Amazon and based on your location, pick up the purchased item from the nearest store. Or push coupons from nearby based on the items on your “wish-list” matching prices on Amazon.

Rationale: When iPad2 has been released and there are 100 different tablets in the pipeline or to be released in 2011 including competitive products such as Xoom etc., Amazon really has no play without dangling a service alongwith its tablet PC play. It can leverage its Kindle brand to offer a tablet PC specifically for this market and customers interested in watching TV shows/movies. But, why would anyone choose Amazon’s new “Media” Kindle over iPad or the Android based tablets? Well, if it’s free… it makes the choice easier. Ultimately, it’s the other revenue streams that can make money for Amazon. Not the price of the hardware. And to drive more eyeballs to its video service, this is probably the best option for Amazon.

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Filed under Cloud Services, Digital Media, Social Networking

LinkedIn – Tip of the Iceberg

 

LinkedIn
LinkedIn

On January 27th, 2011, Steve Sordello, LinkedIn’s CFO, wrote on his blog that LinkedIn has filed a registration with the SEC for a proposed initial public offering for its Class A common stock. The blogosphere, alongwith several reputed magazines immediately touted this move as the firing of the first salvo for all the hugely promising social networking companies such as Facebook and Zynga. For example, see positive news here, here and here, but, if you would like some caution, see what Jim Breyer from Accel Partners has to say.

How does this move matter?

1. In an economic climate that has been anything but rosy for the majority of the population in the US with 9.4% unemployment in Dec, 2010 (See: http://www.bls.gov/), this is indeed a great shot in the arm for all the pre-IPO hopefuls. Why? Innovation is not only driven by the GEs, Googles/ and Microsofts of the world, but also and infact, more so, by the entrepreneurs who disrupt the status quo in the industry.

2. Social Networking has gained so much traction in the last couple of years and most of us are aware of the Facebook juggernaut and Google’s woes (Please take a bow Google Buzz and Wave) in putting out a social product that matters. Lots of valuation numbers have been bandied about for Facebook including the more recent Goldman Sachs’ $50B valuation. Now, LinkedIn’s IPO will put things in perspective and test the waters in terms of how the public reacts to its shares. Not that the public sentiment towards a stock is a great metric, but, it does act as a data-point towards measuring the general consensus in social networking stocks. It might be prudent to be wary of a social networking bubble.

3. LinkedIn itself needs to up the ante and move on to the next level. Now why would I say that about a company that has released multiple products every month over the last 4 years and doubled its workforce in a year to about 1000 in 2010? Please read on as I try to dissect LinkedIn’s value-proposition, user-base and possible revenue models.

I. VALUE PROPOSITION:

LinkedIn – A Professional Social Network; A social networking website connecting professionals. The LinkedIn website acquires users, engages and retains them through a wide variety of products. It has morphed into a job search tool, recruiters’ go-to product for head hunting and a collaboration website for current and ex-employees.

User Acquisition:

1. Job seekers use LinkedIn to actively search for jobs and apply. (in some cases, companies post specific jobs only on LinkedIn). Competitors include HotJobs (which Y! sadly sold to Monster early last year), Monster, craigslist, indeed, careerbuilder etc.,

2. Recruiters use LinkedIn to make a more informed decision on candidates based on their profiles, recommendations, connections and activities. Competitors include the above-mentioned, as well as, Viadeo and Xing etc.

3. Corporate/Companies use LinkedIn to create a “presence” on LinkedIn and try to lure potential candidates.

User Engagement/Retention:

1. Users (Job-Seekers, Recruiters and the rest) use LinkedIn to communicate with their network to provide updates about their career  moves, key industry events, blogs and status messages about their activities.

2. Recruiters use LinkedIn to mine the available users data to scout for talent, actively reach out to professionals to gauge interest in positions they are trying to recruit for, and engage with other recruiters.

3. Companies actively engage their “followers” with polls, press releases and products announcements, post jobs and information about company culture etc..

4. The rest of the products such as integrated applications including TripIt, Amazon, dropbox.net, slideshare etc help users add more information to their profile and update their network about their activities.

5. Products such as Groups, Polls, LinkedIn Answers and Signals enable communication amongst unrelated professionals (unrelated through their network) but sharing a common group.

Clearly, LinkedIn’s value proposition is in the strength and quality of its social network. As CEO, Jeff Weiner once famously responded to a question about Facebook rolling out a similar product with 2 words: “Keg Stands”. Those two words rightly answer the question about the competitive advantage (credibility and authenticity) of a niche professional network site such as LinkedIn and how Facebook with its seemingly loose and personal network value-proposition may never be able to achieve the same credibility and authenticity in a professional setting.

II. LINKEDIN TIMELINES AND USER-BASE:

LinkedIn Timelines
LinkedIn Timelines

A quick look at the LinkedIn Timelines tells us that LinkedIn has basically doubled in users and number of employees since it was founded in 2003. It has also secured funding at key junctures from some of the most reputed venture capital funds in the industry including Sequoia, Greylock Partners and Bain Capital. After the first 2 years, with around 4MM users, LinkedIn started experimenting with paid services and products.

LinkedIn Worldwide Members

LinkedIn Worldwide Members, 2011

As of January, 2011, LinkedIn has 90+ Million members worldwide. The image on the right attempts to split the membership across different countries. It is obvious most of the growth has been in the US with over 50% subscribers in the US and some interesting numbers in Europe. Netherlands has the highest penetration rate. China is completely off the radar at this stage. There is a huge growth prospect. As of 2010, the world working age population is 4.5B (Data Source: United Nations, World Population Prospects). So, even if we assume LinkedIn can convert 10% of the working age population by 2015, we are looking at 450MM users by 2015!!!

 

LinkedIn Users Forecast
LinkedIn Users Forecast: 450-500MM by 2015

I have attempted to forecast potential user-base for LinkedIn for the next 5 years (including 2011). I have used two simple projections: an aggressive estimate that uses historic data and forecasts till 2015 by doubling each year and a conservative estimate with 40MM users added each year. (40MM users were added in 2010 and assuming LinkedIn has the same marketing expenditures, acquisition costs and target customers interest remain the same). The aggressive estimate yields 1.4B users by 2015 whereas, the conservative forecast results in a “meager” 220MM users by 2015. Finally, I chose the middle path and decided a 10% conversion of the 4.5B working age population across the world would yield closer to 500M users by 2015. And by no means, would this be a very aggressive target considering the fact that LinkedIn is still nascent in its market. Infact, I would hope and bet that they reach 500MM users sooner than 2015.

Now that we have addressed LinkedIn’s value proposition and user-base, we will move on to the most interesting (personally) aspect about LinkedInits revenue models!

III. LINKEDIN REVENUE MODELS:

(a) Current Revenue Models

1.  Upgraded Acccounts: Business, Business Plus and Pro Accounts provide extra features, including thorough lists of who’s searched for you and your company.

2. Hiring services.

3. Advertising – DirectAds.

Nothing fancy in these revenue models. These are quite straight-forward considering LinkedIn’s target customer segment (users and recruiters). Job-seekers will upgrade to one of the above accounts, recruiters and companies will use the hiring services or recruitment products and advertising on webpages with LinkedIn’s proprietary DirectAds technology (which, btw, is different from Google AdWords meaning there is no option to trigger ads based on keywords). The modus-operandi has been the tried and tested method of acquiring a lot of users and then generating money off of them. What’s unique about LinkedIn is that it didn’t have to search too far and long for a revenue model because its value prop is a revenue model in itself: People looking for jobs are willing to pay premium prices for advanced subscription services and similarly, recruiters are willing to pay a premium for access to a more targeted user profile and analytics or hiring products.

(b) Future Revenue Models [This is where I am going to let my imagination run amuck]

1. Collaboration Tools: Oftentimes, users have all of their current work-groups on LinkedIn, but don’t necessarily leverage their expertise except to post status messages or share posts. It would be a great idea to use some of the integrated applications such as dropbox.net, MS outlook, tungle.me etc to create a seamless collaboration platform for a project workgroup that interacts using email and IM on LinkedIn (or integrated apps) and shares documents etc. After the project is complete the workgroup can be dynamically removed. This is an important potential revenue stream because sharepoint and salesforce are offering similar services right now. None of these services are perfect yet. It is a case of what makes the most sense and is the least painful to adopt. If LinkedIn can offer a compelling product rather than just plugins through 3rd party apps, it will have a winner and a better use of its platform by users who remain dormant when not searching for jobs.

2. Search: Indeed or Careerbuilder offer a simple easy-to-use interface for job search tool. If LinkedIn is like Yahoo, these sites are like Google. There ends the analogy though because it is still an apple and oranges comparison. Search is very important and the current growth in data and users on LinkedIn has created an overload of information. I have 500+ connections and let’s say I care only about 10% of those connections at any given instance. I would like to know what they say, what they share, if there are interesting developments from companies etc. In the current LinkedIn homepage or profile setup, chances are I would have missed most or all of the interesting information I deem relevant due to “noise” from the rest of the 90%. Yes, I can “hide” users, use “signals” etc but the solution to delivering relevant content should not be to impose such conditions on the users, but, should be a “fuzzy logic” system that learns as it tracks users behavior patterns. The end result should be an uncluttered homepage with minimal user intervention while delivering the most relevant content to the users and a spanking-new search that enables users to get to the information they want which may include: a) searching for information shared (posts) b) searching through status messages for interesting links c) searching for recent job postings users may have missed d) searching through product announcements or twitter updates and lastly, e) use Google’s Adwords to feed these keywords searches as another source of revenue.

3. Interactive Games: To engage users LinkedIn has come up with polls, groups, answers etc. The users who use these products already heavily use LinkedIn. What about the majority that don’t? To lure the dormant users back to LinkedIn, it must offer social networking games including location based services for the professional network. I am not talking about the “Angry Birds” or “Mafia Wars” variety, though, it would be interesting to see how many people actually play those games if made available on LinkedIn. I am talking about games that meaningfully engage companies, work groups and LinkedIn networks.

For example, companies can tie up with their healthcare providers and use a “checkin” system similar to Foursquare allowing users to form “informal” fitness groups at work and checkin whenever they go to the gym. Team-building exercises such as company off-shores etc can be brought online to mini-games that simulate team-building exercises. Ofcourse, “checkins” at company cafeterias is a no-brainer extension to the same theme. This is yet unchartered territory and there’s much scope for innovation here. Gamification is one of the most important emerging trends and there’s a lot that can be done in a work setup…ofcourse, not to the extent where all employees spend all the time playing “angry birds”.

I would like to add more such revenue models but I will save it for another post. I don’t want to write a very long article and make my unfortunate readers run away.

Problems and Potential Pitfalls:

1. With more cash comes more responsibility. With a $2.3B valuation and an imminent IPO, there is always the potential of bad execution on strategies or bad investments in highly ambitious or irrelevant projects  with the increase in cash flow. But, I really liked the conservative statements issued by LinkedIn “for 2011, the cash would be used to invest in CapEx, R&D, Sales etc for future growth and LinkedIn may not be profitable in 2011″. This augurs well for a company preparing for the long haul.

2. Older User base. More than 50% of the working-age population in the world is under 30 with most of them in developing economies. The average age of a LinkedIn user is 41 and obviously more affluent than your average Joe in the US or Ram in India or Chang in China. One good thing for LinkedIn in India is that the language of communication amongst the working populace is English. China might be a different beast altogether. All that said, how is LinkedIn going to target the <30 segment? Maybe, the games I mentioned might be of some help.. *hint*hint*

3. Data and Information overload. As connections grow, data and information that a user has to consume grows as well. LinkedIn has to innovate in the user-interaction space and make some bold moves. While the homepage is good as it is, it’s far from perfect or helpful. Case in point: How many of you find asking a question and receiving answers straight-forward before it turns into “noise” or how many of you use Groups in a really constructive way.

4. Users spike. From my research, I learnt that most users create a LinkedIn profile and forget it until they have to look for a job. Or login once a week or month. Clearly, there’s much to be done if more than 50% of your users don’t actively use your product.

5. Sounding intelligent conundrum. On Facebook, you can do keg stands and you can say stuff that you won’t at work, in short, you can be yourself. On LinkedIn, you better be on your best behavior. Not only is LinkedIn suffering from such restrictions by design, but, it also has the big problem of enforcing users to say something intelligent when they share status messages. This is a good and bad thing. You go figure.

Summary: LinkedIn deserves much more than the $2.26B valuation. But, this is a good start. It has the strongest value proposition and competitive advantage of all the social networking pre-IPO stocks including Facebook and Zynga! Its niche market will continue to grow and it has to figure out innovative ways to lure users (dormant and new), engage them with new applications and retain them. Lastly, this is just the tip of the iceberg for LinkedIn, in terms of possible innovations in business models. Miles to go before you can claim victory…

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Social Networking – How it all happened!

Social Networking is not a hype any more. It’s not a phenomenon any more. It is the present. We live it, breathe it and thrive in it. For the laggards, you have to try it. Well, what is “it”? Social Networking is the concept of communicating with friends (acquaintances) in lieu of email (the chosen form of communication for the last 15 years), sharing information such as images, videos, web-content etc., For the purposes of this post, let’s just focus on social networking for people building personal networks. At this stage, Facebook is synonymous with Social Networking. In fact, it is fast catching up as a verb just as Google did.

Social Networking Timeline
Social Networking Evolution

I thought I went back a long way (depending on your perspective ofcourse) with social networking. From the picture, it’s obvious I don’t. From the late 70s till now, we have been exposed to variants of “social networking”.

For those of you who don’t have the patience to read the whole post, I suggest watching this interesting video from Time.com (< 3 min). Unfortunately, Time.com hasn’t provided a source, but, I believe the sites and/or events mentioned are in the ball-park.

The Why, How and Who?

All along people have tried to form communities, chat rooms, forums etc., but none offered an intuitive and easy solution. For instance, with chat rooms, it quickly gets ugly to manage and contribute effectively. And there always remained a small matter of anonymity that the internet fostered. To be fair, these problems haven’t been solved completely, but, we are moving along in the right direction.

Early in the decade, when Friendster was launched, I tried it once. Then came along, Hi5 and then myspace, followed by Orkut. I spent a fair bit of time on Orkut because most of my friends were on Orkut. I got myself a facebook account just for the heck of it really early. Everyone, soon followed me. As you can see, most of these sites’ success depends on their ability to attract users and more importantly, engage and retain them. As Mark Zuckerberg says in his interviews, the human element is important for “social networks”. He should know. He took down myspace and the rest of the competition that had a stranglehold in some markets. For example, Orkut was really popular in Brazil (Latin Americas) and India. Now, there’s been a huge immigration to Facebook. In fact, last year (barely a few months back) Facebook overtook Orkut in India.

 

Social Networking - Facebook+iPhoneIt’s hard to predict technology trends. Mary Meeker is probably as accurate as anyone can get. She’s a Cornell MBA as well [Shout out to her]. Her Internet Report published in 1995 was called the Bible. See here – The Internet Bible. In Google’s atmosphere event, she presented an interesting report on mobile internet. The slide on the right [with some modifications from me] depict an example from the current hyper-growth technologies – Social Networking (Facebook) and (iPhone) What’s interesting is that Social Networking is increasingly mobile and by design, enable communication on the go. Tying back to my cloud services posts (here, here and here) earlier, this goes to show social networking will be one of the biggest drivers for cloud services. Currently, Facebook hosts 15B photos and has more pictures than Photobucket, Flickr or Picasa combined and people upload 100MM pictures daily. As can be seen from the above slide, applications at the cross-roads of mobile and social networking will be the real hyper-growth areas and to a large extent, applications without a mobile flavor don’t make sense. All the Fortune-1000 companies are investing in cloud services, social networking and mobile applications to enable better productivity for their employees.

We’ll explore if enterprises are right to invest their $$ on their own versions of social networking applications or are better off leveraging existing platforms in a later post.

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