⚡ Signal - Taking a Piece of the $30 Billion LinkedIn Pie
How I'd do a better version of LinkedIn, for the tech industry.
|Sep 11, 2020||4|
Excited to be back with another edition of the Signal, where I deliver one trending business idea that we break down, discuss and develop a game plan for.
This week is a goodie (I think).
Also - good news - we’ll be returning with the normal weekly programming here!
PS: Sorry about the late delivery, I came back to check in on the engagement this morning, and noticed I’d scheduled the delivery for next week Tuesday. Anyway - see you on Tuesday again next week.
🚀 Startup Labs
// A business idea, explored
A Better LinkedIn
LinkedIn is the social network for professionals, supposedly.
I know it’s not just me who think’s it’s terrible. People don’t like LinkedIn, and there have been quite a few calls for a better replacement.
Think about it like this:
Feed = Full of useful information. People sharing genuine experiences and learnings.
DM’s = (Mostly) Useful connections with people who want to engage with you further.
Feed = People boasting/putting forward a facade of themselves/business. “Congrats on your new position!” “Wow, you’re so right.”
DM’s = (Mostly) Random people trying to sell you something.
I only recently started on Twitter, and it has been one of the most valuable things in the last year that I’ve done for my professional career. Sounds dramatic, but a change in perspective is super powerful.
The difference between the two? Twitter let’s you build a tribe.
You know the saying; You are the average of the 5 people you spend the majority of your time with. Well, with Twitter, you don’t have to know those people to surround yourself with them. You can build yourself a little bubble - a narrative - a way of thinking. You can move (virtually) to any part of the world and immerse yourself in that culture.
Now, I’m not saying the two are trying to compete, they’re clearly not trying to fulfill the same value proposition. What I am saying though, is that Twitter is doing a better job of doing what LinkedIn should be doing, than LinkedIn is.
⚡ The Opportunity
Take the best parts of Twitter, merge them with the best parts of LinkedIn and build a platform for people to find their tribe.
The elevator pitch for this would sound something like…
[Insert Clever Name Here] is where you connect intellectually with the people that matter to your career. It let’s you find and build a tribe of people that all align around a common goal: Moving forward together. If you’re a highly-motivated, driven individual who cares about having a successful and fulfilled career, this is where you can come to meet and connect with the people who matter.
Another way to think about this is:
Instead of building a social network, you’re enabling a more efficient, engaged and interconnected environment by building a framework for connectivity, on top of the day to day running of a business.
This is the hybrid of features that I’d build:
Allow for groups to be created. Almost like incubator meetups are. People in the same industry (world wide or local) are able to connect, share ideas, and engage with each-other.
Karma rating for engagement and spam filtering. (Upvote/downvote)
Enable easy setup of group calls + in-built features for conversation initiation: “This month the topic is Growth Hacking.” Please come prepared for a conversation on Growth Hacking in B2B Saas sales etc.
Admins/moderators of the groups can toggle to pay to enter groups. Keeps the riff-raff out.
Build In the Open
Build features which allow people to share the experience of building their company.
Building in the open invites collaboration and feedback - two important ingredients in every startup.
It’s also free marketing. If people watch something from it’s genesis, they feel like they have a vested interest and will be more engaged with the product.
Career In the Open
If you could get this right, it would make the platform.
Have a place where people can share the problems they’re facing in their jobs. Something like, “We’re having a problem scaling this feature. It’s not getting traction in the audience. Not sure how to tackle the problem.” Or another example… “I’m starting a newsletter, but can’t decide which platform to use. I’ve looked at Substack and Revue, but not sure which is best for my use case.“
This would then become a knowledge base of industry-specific news.
Allow people to choose what DM’s they see.
Only trusted ‘friends’ or ‘connections’ will be able to send direct messages without prompting.
You can ‘opt in’ to sales messages from companies/individuals who you want to see them from.
On the sign up flow, allow users to fill their feeds with information from certain well-known and highly regarded newsletters.
Digital Business Cards
To keep track of the people you deal with on a day-to-day, have a quick-connect digital business cards.
This would allow quick and easy intro’s and perspective: “You met Dale at a conference in Virginia on 21 February. He wanted to connect because of x, y and z”.
Sharing of business cards easily. This would replace email introductions.
A way of connecting businesses who are complimentary.
For example, business X works in financial services, so does business Y. Business X has a very large distribution network, business Y has a very large product base and relationships. The two would be a good fit, and might want to be connected.
Matching highly capable individuals with high-potential ‘rocket ships’.
Matching algorithms used properly to find the right fit based on culture, work hours, remote work etc.
“I am looking to join a Saas tech startup, willing to work for minimal pay for 2 months to prove myself. Prioritizing personal growth of salary. Skills in Engineering, but a quick learner” etc.
Remote hiring. Hire from a wider talent pool.
The traditional employee-employer relationship is changing. More and more individuals are choosing to work for themselves and work as contractors.
That comes with it’s own challenges. Ask any freelancer who has battled to file for unemployment, get health insurance or most other perks that are offered under full-time employment.
Company Employee Churn
A big problem for companies is retaining employee’s. Especially in today’s remote-first world that is extremely interconnected. The next opportunity is just a click away.
The ability for companies being able to predict their employee’s being on the brink of leaving is huge. It gives them time to either persuade or replace.
Because of the positioning of the platform, it’s likely there will be data which can be interpreted to predict when someone is job-hunting.
Because constantly hiring and firing is expensive, and a drain on productivity, companies will pay for this information.
One of the biggest issues with most social networks is their ability to control your attention.
I think a large majority of this target market will be time-poor, high-intellect individuals who want their circle of influence to be relatively small.
“Volume” control would allow you to filter your content feed to only see the posts and information that has been upvoted by a certain amount of your network. So you’re only seeing the cream of the crop.
This may fit into the next point where consistent high-value contributors are rewarded by allowing access to a wider audience.
Foot Note: Decentralized
This is one I’ve been toying with and just threw in here to stir the pot a bit.
I think there is space for a ‘decentralized social network’. This would essentially mean the social network is owned by the people who contribute most to it.
The most ‘giving’ users in terms of value created for others on the platform, are the ones who benefit from it most.
I don’t know enough about blockchain and decentralized tech to understand fully how this would work (or if there is a decent business case for it), but the concept behind it is very valuable - and one that I foresee being a big part of the our lives going forward.
65% of LinkedIn’s revenue comes from their ‘Talent Solutions’ which sells features to recruiters and employers. It’s comprised both of hiring tools and an educational content.
18% of revenue comes from their ads.
The remaining 17% of revenue comes from premium subscriptions.
Because this platform is about genuine connection, it’s going to require that revenue model to change. This would require the majority of revenue to come from premium subscriptions.
Customers would pay for premium access to groups, information, connections etc.
LinkedIn’s pricing table makes it clear why their revenue split is the way it is:
$30 USD gets you the basic premium plan (This is for added features which help job-seekers)
$60 USD gets you the better premium plan (This is also for job-seekers, with additional added features which would help you find out and reach a wider network of businesses)
$80 USD gets you a Sales Professional account
$120 USD gets you a Recruiter account
What’s evident here is that people are paying for connections. They’re paying to get their face in front of someone else. Job seekers pay to have the ability to find and cold-contact.
When designing the revenue model for this business, that is something to keep front of mind. It’s a model which is clearly working.
Kinsta estimates that 44% of LinkedIn users take home more than $75,000 per year, which is above the national median in the US.
And despite the high price of premium, over 39% of all users on LinkedIn have a premium account.
So, how to go about making this?
Choose A Niche
The best entry is going to be picking a niche.
If it were me, I’d pick the tech startup space. Companies in their first 5 years of operations. They’re tech-savvy people, don’t mind switching products and are mostly young individuals which are slightly more fluid in their choices. It’s likely they don’t have a huge follower base on LinkedIn already, so the data-hangover from switching is minimal.
The biggest user base from a specific country is the US with 150 Million users. And considering the high percentage of users which are college users (According to Pew Research’s 2018 Social Media Study), this is a good space to start in.
Overcome the Network Effect
Probably the biggest reason that no one has built a better LinkedIn is because of the power it has through it’s network effect - everyone is on there.
So, how to overcome that?
Chicken or the Egg
This is a bit like the supply-demand marketplace dilemma. How do you get new users onto a platform that promotes connectivity and engagement, if you don’t have any users on that platform connecting and engaging?
My answer would be to use a combination of scarcity, PR, picking a fight and ‘influencers’.
This sounds dumb, but the influencer model works, and it might work here. No, TikTok, I’m not looking at you.
As we highlighted earlier, people are paying to be seen. They’re paying for exposure.
One of the plays I’d make here is finding 100 high-profile individuals in the niche I chose (young tech companies). These would be C-level execs and directors. The type of people you might find on Clubhouse.
I’d say something along the lines of “I’ve contacted this list of people, I’m taking on Microsoft and LinkedIn, this is what I’m building, do you want to be apart of it?” And then I’d badger them. I would be relentless in contacting them until they either said “NO!” or “Sure, why not.”
Then, I’d go to the others and say “Hey, he’s in, are you in too?”.
When you’ve got a bunch of high-profile individuals on the platform, you’ve got something that will attract the masses: If I can get my name in front of those people, why wouldn’t I sign up?
The second part of this plan would be actually restricting access.
The thing about the tech industry is that everyone wants to be in early. Investors and users alike, they want to get in before everyone else and say “I was there first”. You just don’t know when you’re going to be hopping onto the next Facebook.
Using this to our advantage, I’d only open up to beta users on an invite-basis.
So people would have to go through a vetting process to make sure they fit our ideal customer profile perfectly. If they don’t they get the boot. If they do, they get to invite 3 of their friends in the industry. Because they only get 3, they think carefully about who is most like them. Who is this going to resonate with?
Those users then get vetted too. Soon, you’ve got a very targeted, highly engaged niche of users that you can get feedback from on your product, and then use to create a bit of hype.
Pick A Fight
Copying a few marketing tactics from the launch of HEY, I’d pick a fight with the big, ugly beast of a corporation that everyone loves to hate - LinkedIn. I’d make them the enemy, and make a lot of noise about it.
The conversation would be polarizing. You’re either against them, or against us. And everyone loves an underdog, especially if the underdog looks like it’s got a good shot. (We’re not trying to replace LinkedIn, we’re just stealing a piece of the pie)
The pick-a-fight tactics and scarcity only really work when there is a media storm surrounding the issue. That would require some PR.
Some projects/businesses can be bootstrapped slowly with ads - some require a big kickstart - this is one of those.
Because this is not going to be a quick and easy, build-it-in-a-weekend type project, it’s likely that you’ll have a bit of marketing budget to throw at some PR. I wouldn’t skimp here.
Jobs, Jobs, Jobs!
A huge component of the LinkedIn current value proposition is jobs. It’s the place people go to hire, or get hired.
That’s something that is going to be very difficult to replicate.
The niche I chose lends itself to a very specific type of job board that could be very beneficial for the industry - internships and jobs at ‘rocket-ships’. I haven’t thought this through thoroughly, but it will be a big factor to the success of the platform.
One thing I’d do is essentially allow for a person to use their profile as a virtual resume. So instead of sending off a document to an employer of “Here’s who I am, here’s what I did in High School”, you send them a link to your profile which is essentially, “Here’s a look inside my brain”. It’s all the content I consume, the people I listen to as mentors, the people I connect with, how my thinking works etc.
A secondary effect of this is that people will be much more mindful of what they post on the platform - thereby increasing overall quality too.
I believe this is a much more thorough way of getting to know a potential employee, and will provide companies and individuals with a much better employee-company fit.
Work in hooks and virality to your platform so that if people consider any alternative, they’re immediately put off by the inconvenience of starting everything again.
Everyone complains about Facebook knowing everything about them. But it’s that exact fact that makes them successful. If we (most of us) all didn’t have hundreds of friends, with all our pictures etc. on Facebook, it would be much easier to switch to something else. But because it’s all there, we stay.
For the sake of brevity (this is getting long), I’m going to end it there. Hit the Like button (the little heart) if you want a continuation of this before the next Signal.
// The tweet of the week, from someone I follow over at @simon_blogs
Continuing the topic of idea validation…
Greg Isenberg’s tips for finding product-market fit:
// Valuable tidbits from around the interweb
🎷 If you like vibey retro-techno music to work to, Poolside.fm is a nostalgic 90’s themed online radio who have just released their mobile app. (The OG desktop version is great, too).
🎭 How to maintain company culture when you’re scaling, from the founder of superfood brand Four Sigmatic.
👋 The End Notes
That took me quite a while. I hope it was valuable for you. If it was, consider sharing it with a friend: