What is Linkedin? Wikipedia describes it as a “Business and employment-oriented online service,” but in reality it’s many things. Pulled in multiple directions, Linkedin is something of a job listing site, something of a networking site, something of a social media site, something of a news site, but not entirely anything of the above. It’s often chided for adding social networking features that users don’t need or want, like when the site added “stories” similar to Instagram and Snapchat’s last month.
All these disparate functions of Linkedin have VCs eyeing it as a target that has potential to get broken up into or taken over by several valuable companies. Harry Stebbings of Twenty Minute VC tweeted earlier this week with his thoughts on the platform and its multiple use cases.
“The unbundling of Linkedin will create 20+ companies worth $5bn+,” he wrote. “Heavily segmented, heavily verticalized, with highly specific functionality for each vertical. Let the unbundling of Linkedin begin…”
The tweet, which racked up 1,300 likes, generated discussion as to how these hypothetical companies would operate, but was potentially revealing that VCs may be eyeing companies that have potential to bite off chunks of Linkedin’s market. In other words, the famous image of Craigslist's multiple competitors may soon be supplanted by one of Linkedin.
Jeff Fluhr of Craft Ventures, also the creator of StubHub, predicted something similar in May of last year in a Medium article titled “LinkedIn is the next Craigslist.”
“That same unbundling that happened to Craigslist is now about to happen to LinkedIn,” Fluhr wrote. “While LinkedIn will remain a valuable property… it will give way to a number of vertical specialists who go deeper solving problems for a particular job category.”
Similarly to Stebbings, Fluhr predicted that these companies will thrive off a specificity that Linkedin lacks. “These new specialists may look quite different than LinkedIn — just as Airbnb and Tinder looked quite different than Craigslist — but the common denominator will be the hyper-verticalization of labor/service marketplaces,” Fluhr wrote.
The core issue Stebbings and others highlight is that Linkedin does too much, and none of them as well as it could.
One user asked, “Linkedin is about the network and people. So how do you get the people or the network on a completely new platform that already does something similar to the platform they already use? Why would they switch?”
“So I agree and disagree,” Stebbings replied. “The challenge with Linkedin now is discovery and UGC is largely broken. Due to the lack of connectivity between the network, the content matching is so broken, the creation is highly clunky and generalized.”
What Stebbings is speaking to is that Linkedin’s disparate parts have no natural interaction with one another, so it may be better for competitors to remove them entirely and focus on one specific service the site provides. If a person is on Linkedin purely to look at available job listings, what reason do they have to interact with Linkedin News? Why would they engage with posts or make any of their own. For someone trying to expand their following and network, what use does the job-hunting aspect of Linkedin provide? Why focus solely on platforms like Linkedin when Twitter, Facebook and others can provide a much broader audience?
Founder and former Uber employee Scott Gorlick agreed with Stebbings' assessment, writing “[There are] so many opportunities in industry-specific vertical networks: - anything that makes it easier for companies to find, pay and recruit workers. - for professionals to get hired. - Vetting/references/anything else Linkedin is dropping on the floor.”
Even once broken apart, there is space for expansion within any of the stray pieces. A site that focuses specifically on professional networking could be broken up by industry. A business-focused social media and networking site could focus on a highly-personalized algorithm that has helped lead companies like Twitter and TikTok towards success.
Defenders of Linkedin chimed in almost immediately after the initial tweet, claiming it would be harder to compete with the site than most think.
“I have worked at LinkedIn for 10+ years now and think this you are underestimating just how hard this would be,” wrote Stephen Gundee, whose Twitter bio says he is a Global Client Executive at Linkedin.
Others chimed in similarly. Josh Elman, who has served on the board of companies like Medium, Discord, TikTok and Houseparty, said that he thinks it will be the hardest network to disrupt because its value is not in its active uses - posting, networking, and so on - but in its passive uses.
“Most people aren’t active except when necessary - but available in search terms. That is the value. Hard to displace,” Elman wrote. In other words, people benefit from existing passively on Linkedin and may be unwilling to be active there or anywhere else because the nature of the job hunt is temporary.
Another user, designer Max Wendkos, said that LinkedIn had a “strong moat” because the cost of switching platforms is very high for users. Like Elman’s reply, Wendkos is speaking to the benefit of existing passively on LinkedIn and not having to move your entire profile and professional image elsewhere.
In response to all these counterpoints, Stebbings clarified his original tweet, stepping back from the original claim and away from Fluhr’s article from last year.
“Haha, actually, I kind of misphrased this Tweet,” Stebbings wrote. “I see these networks as additional to Linkedin. Linkedin will be the core system of record that is not changed so often.”
In another reply, Stebbing wrote that he thinks these companies will take shape as “adjacent/additional verticalized networks that provide highly tailored content, connection and community.”
Some VCs feel that if Linkedin doesn't shape up and improve upon its services, it's only a matter of time before it gets pulled limb from limb.
I do not disagree! ;)— Harry Stebbings (@HarryStebbings) October 11, 2020