There is a lot of criticism being levied at LinkedIn nowadays from both users and analysts. While the stock has ticked back up slightly after dropping nearly 50% earlier this year, Wall Street is concerned about slowing growth. Meanwhile, users are weighing in on how much they hate certain aspects of the platform. One of the most notable and pointed LinkedIn critiques, enumerates many of the reasons why LinkedIn "sucks." Among the most common criticisms are:
- Spam. The torrent of spam Inmails from people trying to sell you something.
- Mining email addresses. LinkedIn forever harassing people for their email contacts so they can spam your friends with LinkedIn invites.
- No value endorsements. A meaningless tool with good intentions and no value: people you have never worked with endorsing you for skills they don't even know you have.
- Badgering for profile fills. Most person's profiles just don't change that often yet LinkedIn constantly badgers for updates.
- Garbage content. LinkedIn's move towards being a content platform has led the it down a sinkhole of user-generated garbage being posted which overshadows anything of value in LinkedIn Pulse. There isn't a day that goes by without another puzzle, photo of a woman in a tight t-shirt, or another "I normally don't post these this type of thing" post.
- False profiles. Linkedin requests from people that don't exist, followed by spam.
Certainly, all of these things are irritants and fair criticism. However, they are not the biggest problem for LinkedIn. In fact, they would all be tolerable if LinkedIn were truly of value. We trade off minor irritants for things of value all the time. We accept, for example, many of the same issues LinkedIn faces in email, no value emails, malware, etc. But we do it because email has lasting, recurring value.
The bigger problem LinkedIn faces is that it has ceased to focus on delivering additional value to its base of users. For most, the original value proposition of LinkedIn is the same value they still get from the platform: giving you an up-to-date public profile, connecting you to your network, and allowing you to contact them or their connections. However, LinkedIn hasn’t developed that value any further.
Instead, since amassing a huge base of users with that original value proposition, LinkedIn's sole focus has been on extracting value from its user base. Almost $1.9 billion of LinkedIn's 2015 revenue came from providing recruiters a way to find you on LinkedIn. In addition, they made over $530 million to advertise to you and the other more than 400 million users. Their third leg of revenue is selling you a premium membership to allow you to search for and connect with people that they restrict you from connecting with in the first place.
So, LinkedIn derives a lot value from you, what value are you getting from LinkedIn?
Little has changed since that initial value proposition. LinkedIn’s focus on creating the world's economic graph is only a prescription for more of the same: presenting you with ads and jobs, selling you skills-based education (via its recent$1.5B Lynda acquisition), and getting paid to help people find and recruit you. More significant may be that LinkedIn limited API access to its platform last year, restricting services other companies could create using your LinkedIn credentials and information.
Symptomatic of LinkedIn's problems, its last earnings call in January included one of the opaquest statements of all time as CEO Jeff Weiner tried to describe their 2016 product strategy, "Our strategy in 2016 will increasingly focus on a narrower set of high value, high impact initiatives with the goal of strengthening and driving leverage across our entire portfolio of businesses. Our road map will be supported by greater emphasis on simplicity, prioritization, and ultimate ROI and investment impact." All corporate buzz words used? Check, but what did that mean?
LinkedIn has tremendous latent value in its core user base. But it needs to find a way to create more value for that base by helping them work smarter and better, and create more new, real interactions, without selling them another subscription. If they can’t, they have a much bigger issue than spam.
The question is, can LinkedIn create new value for its customer base?