TROVE BLOG

LinkedIn: Where Targeting and Advertising Have Replaced True Networking

LinkedIn is synonymous with professional networking. Since its founding in 2002, it has risen from startup to industry giant — 500+ million members in 200 countries will do that — and it’s gone from a pure play to the subject of a $26.2 billion bidding war. It is nearly ubiquitous on the phones and desktop browsers of the corporate world, with a mission to “connect the world’s professionals to make them more productive and successful.”

However, it’s also become almost useless as a professional network. Over 15 years, it has become as antiquated as the Rolodex. The fundamentals that drive LinkedIn’s business have put its goals in opposition to its users.

To understand that statement we need to understand LinkedIn’s business model. It derives revenue from three channels:

  • Talent Solutions: These are the fees that are charged to recruiters who are trying to reach you, LinkedIn’s actual product. They represent a little more than half of LinkedIn’s business. Since it’s the company’s most mature revenue segment and there are fewer and fewer people in the world left who aren’t on LinkedIn, it’s also slowing rapidly.
  • Marketing Solutions: In layman’s speak, this means advertising. From company pages to sponsored posts, and many ways in between, LinkedIn enables everyone from potential employers to Madison Avenue advertising agencies to reach you with powerful ads. It made nearly $200 million from advertising alone in its last quarter as an independent company.
  • Premium Subscriptions: You wouldn’t be faulted for thinking this was LinkedIn’s main revenue stream. But job seekers and sales people paying for premium placement, InMail, learning tools, etc. account for just 20% of LinkedIn’s revenue.

Those three revenue streams represent who LinkedIn is really serving: Recruiters, advertisers, and you — very much in that order. Users who should be LinkedIn’s customers are, in fact, LinkedIn’s product.

Diving in further, there are two big reasons why LinkedIn’s growth is driving its failure to its users:

Low-Quality Network Sprawl: Think of your own LinkedIn network. How many of those people do you actually know? How many have you ever met? Or how many have you even exchanged an email with? The average LinkedIn user has between 400 and 900 connections, and the vast majority of those come from suggestions that LinkedIn is making to its users with the goal of putting more people at recruiters’ fingertips.

Robin Dunbar, famed evolutionary psychologist, posited that a person could maintain around 150 stable relationships at any given time. LinkedIn doesn’t really help you exceed this limitation in a meaningful way. The other 750 in the average LinkedIn user’s network are usually suggestions, people that you’re afraid to turn down because they’re connected to your supervisor, etc. 900+ “connections” are obscuring the connections you actually have — to the point that you can’t find them!

For me, many of my connections on LinkedIn are random people I accepted early in my career before I adopted stricter guidelines for connecting only to people I truly know online. That means my LinkedIn network has as much junk in it as it does quality, rendering it difficult to use. And how many more real connections do you have that aren’t represented on LinkedIn at all because you never sent or accepted a manual invitation to connect with that person?

Crowd-Sourced Classification: The last time I logged into LinkedIn, it asked me whether I wanted to endorse my co-founder at Trove for “Network Security” because I am “skilled in Network Security,” I guess. Truthfully, as the CEO of Trove network security is incredibly important to me but I am not personally skilled in it. I hire people who are much smarter about network security than I will ever be.

So sure, Lindsay knows a thing or two about network security. More than a thing or two, in fact. But the algorithm that suggested that endorsement missed out on the fact that he’s also built software companies that have turned into $100M+ businesses, that he runs stellar engineering teams, and ships product on time, every time. Instead of truly knowing how to classify people based on real signal, it was happy to congratulate me for “only endorsing people for skills they truly have” when I elected to skip this suggestion. Skills displayed should be based on credible output, not popularity-driven endorsements from the crowd.

What’s worse, LinkedIn is classifying people by tags so that they can be targeted with ads or recruitment pitches they don’t want. I skipped endorsing Lindsay because I know he doesn’t want head hunters chasing him down with network security job opportunities on LinkedIn. And neither do I! However, despite all of this supposedly intelligent targeting, LinkedIn also suggested that I should explore opportunities “relevant to me” at the large gas station operator Speedway LLC. In my opinion, this is a highly unlikely match for someone who’s built their career in the high tech software industry. To maximize the usefulness of our professional network, we need to do things Malcolm Gladwell-style: mavens, connectors, and salespeople. A person’s type directly speaks to the utility they bring to you, even more than endorsements.

At Trove, we have the greatest respect for an industry giant, and one that is a big part of Microsoft’s future strategy. At the same time, we know what you know — LinkedIn’s time as the ultimate professional networking tool has mostly come and gone in its current form because it is stifled by being an antiquated passive network in a world where everything else has become dynamic and data-driven.

The future lies in a new type of active relationship network powered by artificial intelligence and machine learning that uncovers the types of people in your network and understands how strong your relationships truly are — even in the cases where you might not even know how you are connected yet. It lies in the safe collaboration and sharing within internal teams and across an entire enterprise.

The real power behind professional networking lies in the petabytes upon petabytes of communications history data that sits as cold storage in your email history, phone messages, Slack channels, etc. This data tells the full story of how you we are all truly connected and uncovers your Real Path™ to virtually anyone.

It’s real-time. It’s powerful. It’s at your fingertips. And it’s all in Trove.