LinkedIn and the future of B2B, social business
As I type, the LinkedIn (LNKD for you day-traders out there) IPO still has yet to open for its inaugural day of trading and already tech and finance journalists are buzzing about what this will mean for investors, every-day business managers and the entire social media IPO pipeline, some of it silly speculation, some of it precious nuggets of insights.
Among some of the wackier things I’ve read, the prediction that LinkedIn is a lock to be a $25 billion company in the next five years is easily the most foolhardy prediction out there. That would mean it would have to trade at greater than 100 times full-year 2010 revenues. By the same measure, Facebook’s wet-thumb-in-the-air valuation of $70 billion (on $2 billion in revs) strikes me as plausible, conservative even.
As any investor who lived through the dot-com implosion will tell you, five years is a LOOOONG time. Let’s stick with the immediate future to measure LinkedIn’s potential impact. LinkedIn is already having a profound impact on these areas of the business world, a trend that will only go up:
It probably won’t surprise you that greater than 40 percent of LinkedIn’s revenues from last year came from recruitment services. (The other sources of turnover were advertising and premium subscriptions.) And a quick glance of Twitter will reveal just how many daily Webinars there are out there on the art of recruitment via LinkedIn. When the economy perks up and companies actually start hiring again, they’ll turn to LI first, no doubt.
2) Cultivating contacts and funding leads
Just moments after LNKD shares went public this morning (and, yikes! what an open) the company posted to its blogs a few vignettes of in a post entitled “LNKD: Changing the way professionals do business.” Among the examples it leaves us is this about a young entrepreneur who built her business through a series of fruitful LI connections. Nick Besbeas, VP of marketing at LinkedIn writes:
…take, Cecilia Pagkalinawan, who after being laid off from her job in the retail industry bounced back to start her own business thanks to the overwhelming support she received from her peers on LinkedIn. Cecilia reconnected with Jim Robinson IV, a managing partner at RRE Ventures, who had kept track of her career on LinkedIn and who encouraged her to return to entrepreneurship. With RRE’s backing, Cecilia started StyleTrek Inc., a website that helps independent designers reach new and existing customers online. Cecilia raised $1 million in seed round funding to launch the business and now, as an entrepreneur, also uses LinkedIn to recruit others.
3) B2B goes social
Russell Glass argues in Forbes today that the success of LinkedIn is a victory for B2B marketers everywhere. Glass writes:
Simply put, they’ve hit the tipping point where they have enough people connected (over 100 million worldwide) to be in an incredibly strong position to help businesses and business professionals alike tap the value of these connections in areas like:
- Business Networking, helping entrepreneurs start companies, sales people sell into companies, and job seekers land their next gig; and
- Recruiting, helping recruiters leverage our aggregate connectedness to locate, understand, and recruit talent; and
- Precision advertising, giving marketers the ability to hyper-target their ads to very specific business demographics across the LinkedIn network.
4) Peer-reviewed brainstorming
We established a group for SMI on LinkedIN a few years back. It’s not perfect. There are the occasional overzealous members whom I’ve had to speak to in private, asking them to refrain from spamming the rest of us with irrelevant offers, gimmicks and off-topic or out-of-date business proposals. But for every piece of spam there are ten times as many insightful posts about new research or surveys that help inform us here. Some of the most valuable are the surveys that ask us to pitch in our thoughts. One of which recently was from an author who wanted to know if he should forgo the print route and instead publish his next book on digital business in e-book only form. The answer? Most of the respondents (like me) say they still prefer to read print books still, while we remain intrigued by digital copies. I don’t know what he’ll end up doing, but the survey response from about 80 of us on LI will stick with me for some time.
Looked at in this way, the future of LI is promising. Just don’t ask me to bet on its share price in another year.