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Q&A: Arvind Rajan, LinkedIn

'One of our biggest advantages is scale'

Read more on:    Linkedin | Arvind Rajan | Asian Markets
Arvind Rajan
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, the professional network on the internet with 135 million members, is increasing its focus on the , including India. As much as 51 per cent of its revenues come from hiring solutions which it offers corporations, 29 per cent from marketing solutions to advertisers and 20 per cent from premium (or pay) subscribers worldwide. Riding high with 12 million members in India, , managing director and vice-president, Asia-Pacific and Japan, LinkedIn, talks to Sayantani Kar about the ways the network is trying to customise for Asia and its strategy to stave off competition.

Q. How did the global financial crisis on 2008-09 affect the growth prospects of LinkedIn?
It is true that LinkedIn saw continued strong growth throughout the global financial crisis. I think 2008 was a pivotal year for LinkedIn. We definitely saw an uptake in synapses. But it won’t change as the economy improves. There are multiple ways of making money because of our scale and the number of members.

Q. How have you customised your offering for the Asia-Pacific market?
We will hire people on the ground to talk to members every day. We have already translated the site into Japanese. Our biggest countries in the region are Singapore, India and Australia; not surprising, given that the language of business in these countries is English. Clearly, part of the strategy for growth is adding more Asian language pages. We are now available in 10 languages globally.

Q. How different is the LinkedIn market in Asia from that in the US?
The biggest difference is the stage of evolution. In the US now, we have 70 per cent of the country’s professionals. Many of the issues we are running into in the Asian markets are the same that we ran into in the US in the beginning. In our early days in the US, we had to spend a lot on educating the market, which we have to do now in many Asian markets.

The mechanism through which we have to bring in new members is viral growth, that is, existing members bringing in new members. So LinkedIn has almost never spent any money in advertising to get members. Globally, it took us 477 days to get to the first million members and now we have a million members under a week. At a country level, it still takes time for traction. India, for example, is further along than Japan. In India we now have 12 million members; three years ago it was just half a million.

Also, across different countries in Asia there will be different kinds of connection behaviour. For example, India and Brazil are viral. But Japan is slightly less so because there are different social norms for business. On the other hand, there are markets like the Netherlands, which is a very egalitarian society. Everyone from the prime minister down is on LinkedIn.

Q. Where do you see growth in Asia coming from — hiring, marketing or premium subscriptions?
If you look at the three lines of revenues, hiring solutions and marketing solutions are fundamentally dependent on a sales team. Subscriptions are all over the world. So, the first two are possible in India and Singapore from Asia because we have our sales teams there.

Q. Have you done anything specific for the Indian market?
Japan had the first product development team outside the US. We have a large team in India but we don’t have a product-specific team for India. We have definitely tweaked our overall product strategy for India. After all, it is our second largest country in terms of members. We have tools for feature-phones because India is the only country which uses feature-phones more than smart phones.

Also, we have done a lot of innovation in consumer education. Our marketing team tells the LinkedIn story. A lot of the team’s insights into user behaviour have been replicated around the world. For example, the contextual-based marketing campaigns where the messages that the customers get are based on their profile. Volkswagen was able to ensure that every professional saw a different advertisement of theirs based on the profile, enabled by LinkedIn Company Pages. What got replicated elsewhere was the idea of using the trusted form of advertisement — recommendations. It was based on the philosophy that when a LinkedIn user recommends a product, she is linking her professional reputation to it but she might want to write one out to highlight her expertise in a field and add value to her connections. Volkswagen leveraged such recommendations of its cars to surf across the user’s network.

Q. How strong are your hiring and marketing (or advertising) revenue pipes in India?
In India, the online hiring solutions market is small. The online advertising market is again smaller compared to other markets. It is also a heavy B2C advertiser market. There is not a large online B2B market. In fact, LinkedIn is helping create that market. A large number of our advertisers are moving online to do B2B advertising in ways they haven’t done before in India.

Q. How will you stave off competition from job portals?
There have been such players all over the world. However, recruiting online is already being transformed by LinkedIn. Over time, almost all recruiting will be done through social media. Based on the information our members (135 million globally and 12 million in India) post about their professional background, our recruiting customers can find the right talent. Thanks to the social nature of the platform, recruiters can even reach out to passive candidates, who were not actively looking for a job.

Q. How have you seen recruiting trends change on LinkedIn?
When I had joined LinkedIn in 2008, it didn’t have any significant recruiting solution. Yes, there were people who pushed jobs on LinkedIn. But the core of recruiting solutions, the LinkedIn Recruiter platform, had not been launched yet. So, now companies are able to tap into a massive passive candidate pool. The Corporate Recruiter solutions is what they use to tap into them and also to cut down time and money they spend compared to traditional job boards. ING Vysya Bank was able to hire talent for key positions in a short span of just five months on LinkedIn.

Q. How do you compete with offline consultancies?
Recruiting agencies are also customers of LinkedIn and at every level — from small companies to the world’s largest executive search firms. Some of our hiring solutions/products are designed for agencies. We are changing the means in which they can compete because they can’t claim a proprietary database anymore. So they have to say, “I understand how to sell talent on your site,” or “I understand how to look for talent in ways that you can’t.” They have to differentiate themselves by saying, “Yes, there are people on LinkedIn, but I have personal relationship with five of them that are right for you,” for example.

Q. There are other peer to peer professional networks, some of which even use Facebook. How will you ensure that there is a considerable entry barrier?
We have a few advantages. One of them is scale. We are a global network and professionals around the world looking to build relationships are trying to do so on a global basis. Also, people are not joining LinkedIn because they are looking to be recruited. They are joining for other reasons such as building a professional identity online, building connections, business insights and opportunities. A recruiting site would tend to limit its audience to people looking for jobs only. In fact, a lot of the good talent out there actually doesn’t look for a job; they first try to see if there is something else out there.

Q. Would you also look at more offline ways to grow, especially in India?
We will continue to experiment. But for now, our focus will be on educating our member base. We have thought about events to educate people in India about professional networking. But events for 5,000 people are not that useful for us because we can do the same on a bigger scale online.

Q. Talking about scale, what is ‘critical mass’ for LinkedIn?
We begin with members to grow the membership base. Then we grow big enough for marketers to have an audience in a market and recruiters to find talent. Only when we have 10-15 per cent of the professional workforce in a country that marketers and recruiters will become interested. That is when we also invest in our sales teams. We are at 70 per cent of the workforce in the US, more than 30 to 40 per cent in Europe. In India, we have 12 million members (out of 70-80 million professionals), in Australia we are at two million out of six million.

As a network grows, growth accelerates. So having a local language helps. We had 9,00,000 members in Brazil when we launched in April last year. Once we launched in the local language, it shot up to 4 million members.

Q. What metrics does LinkedIn use to gauge the site’s success?
One thing that we rarely talk about in LinkedIn is a metric that a lot of others subscribe to — the time spent on the website. That is not the right measure for us. If someone comes on LinkedIn to research a person they want to interview, that can take five minutes but it is also a great interaction for me. So, I care less about the hours they spend and more about them coming back to LinkedIn on a regular basis. Hence, we have metrics such as cumulative members, unique users and page views to gauge the site’s success.

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