LinkedIn Growth Engine
Raw Notes from GrowthHackers article “LinkedIn Growth Engine: The Never Ending Viral Loop”:
In 2002, Reid Hoffman gathered a team of old SocialNet and PayPal colleagues.
Hoffman and team were all set to build a new, lasting professional network based on indentity and connections.
After 6 months, LinkedIn got launched on 5th May 2003.
- After 1st week - 12.5k users
- After 4 months - 50k users
- After 1 year - 500k users
- After 3 years, in 2006, they achieved profitability
- After 8 years, in 2011, LinkedIn became a publicly traded company
Stats after 11 years (2014)
- $18 billion market cap
- 225 million users
- 200+ countries
- 4800 employees
Stats as of 2021
- 740 million users
- 200+ countries
- 15,800 employees
- 33 offices
Recent economic downturn (dot-com winter)
Difficulties in defining the core concepts of the company - a social network or something else?
How they overcame
Hoffman invited Silicon Valley’s successful friends and connections which quickly increased the appeal of LinkedIn.
Eventually, it became a must-have app for up and coming Valley workers to get connected with potential investors and advisors.
LinkedIn made easier for professionals to stay in touch even after changing jobs, phone numbers and email addresses.
Initially, LinkedIn mainly focused around the Silicon Valley. They kickstarted their network effects by tapping into a local population where it could reach critical mass.
- Facebook did the same after 5 years later - a single school.
- Uber did the same after a decade later - a single city.
This critical mass creates the utility needed in network businesses to create the high-quality must-have experience that breeds both user loyalty and word of mouth.
LinkedIn kicked off their monetization efforts with Adbrite ads in mid-2004, but unsuccessful.
They launched 3 lucrative revenue streams in 2005:
- job listings
And, just after a year, they became profitable in 2006.
Where they focused
It’s Easier to Focus on a Strength than Improve a Weakness. - Elliot Shmukler
40% of signups were coming from LinkedIn Homepage (strength) and just 4% from email invitations (weakness).
- On average, people who arrived organically visited 30 pages per session while people from invites visited just 10 pages per session.
Another example of focusing on strengths: “Who’s looked at your profile” emails had 20% CTR for active users and just 5% for inactive users.
- They A/B tested subject lines, copy, and formatting of the emails only for active users which further increased the CTR.
Active users play a critical role in bringing new users as well as re-activating inactive users.
LinkedIn’s virality was no coincidence.
Initially, most of the users had only 1 connection - means, they accepted someone’s invite but didn’t connect with anyone else.
- 25% new users actually typed email addresses to invite new users.
- LinkedIn went ahead and created an Outlook plugin which let users easily upload their email contact list to LinkedIn to find new connections. It was very unique at that time.
- 7% users uploaded their address books and invitations sent increased by 30%.
LinkedIn asked all new users about their current company and title - 90% people answered this question.
- After that they would be shown a list of people at their current company.
When new users sent invitation to connect, current users received notifications to approve. And, once they came on the site, they were prompted to invite and connect with others.
This Reconnect Flow significantly increaed virality.
- Pageviews increased 41%
- Searches increased 33%
- 38% more positions listed on profiles
- Invitations increased 16%
New users invite more new users and engage old users. And, then old users invite more new users. - That’s double viral loop.
- LinkedIn introduced Endorsement feature which further re-engaged inactive users.
This way, re-engaging inactive users is both less expensive than ads and more effective than reactivation emails.
LinkedIn made profiles public which brought a lot of traffic from search engines.
They waited until 2 million users before user profile indexing.
- When people clicked on someone’s profile from search engine, they had to sign up to connect with the person.
LinkedIn acquired Gmail plugin Rapportive for $15M which lets users connect with their contacts on LinkedIn [Feb 2012].
Because presentations are important for professionals, LinkedIn acquired SlideShare for $119M [May 2012].
In 2011, they launched LinkedIn Today which culled articles that a user’s coworkers and industry peers are sharing.
Users could also share and comment on those articles.
In 2012, LinkedIn launched an Influencer program which allowed selected thought leaders to create original exclusive contents and users could just follow without getting connected to them.
The influencer program is not just good for LinkedIn but for the influencers too.
- 22% influencer followers are entry level professionals
- 49% are director-level or above
41% of LinkedIn traffic comes from mobile devices.
In 2013, they launched a new app called LinkedIn Intro which allowed users to LinkedIn profiles right into the iPhone Mail App.
- Means, if someone receives an email from unknown sender, they will also be able to see their LinkedIn profile.