How LinkedIn survived its early years in startup wilderness

Konstantin Guericke reveals the inside story of building LinkedIn

LinkedIn on a mobile device

You may scoff at the constant stream of nagging emails LinkedIn sends, but there's no question the site is a success - Microsoft's $26.2 billion acquisition will have any investor in the company smiling. 

Possibly not Konstantin Guericke, who left the social network ten years ago, though the venture capital investor told attendees at Slush in Helsinki he was happy to go as he revealed the inside story of the social network Microsoft shelled out for.

Advertisement - Article continues below

In the early days, one consideration was to not appear too much like social network Friendster. That site may be long forgotten, but at the time LinkedIn was so worried about being seen as a copycat of the social network that it eschewed profile photos in order to differentiate itself and look more professional, Guericke said.

The move was roundly mocked - photos were one reason Friendster became so popular, after all - and though LinkedIn outlasted its rival, at the time it didn't look as though the professional network would compete. "Friendster was huge - when we launched and grew for six months... and got funding, we had 40,000 users," said Guericke. "Friendster had four million... Friendster loomed very large."

But being the first to market doesn't mean you'll necessarily win, he added. "It's not about who's first, you can always take a good idea from someone else," he said, adding LinkedIn focused on piling up user numbers in order to take advantage of the network effect.

Advertisement
Advertisement - Article continues below
Advertisement - Article continues below

That was problematic as LinkedIn is a bit less exciting to use for the first time as other social networks. Guericke pins that on the "delayed gratification" versus social sites, where your friends tag you and post photos, giving you an instant buzz. With LinkedIn, the "benefit is two years later, when a recruiter calls you."

Another LinkedIn move that was criticised was charging a subscription fee. Guericke said it simply made more sense than hoping to capitalise on professionals getting sucked into the social network, as users don't have the time to click around. Plus, he said creating something that someone is paying for "feels very good", whereas "giving someone a space so Gap can sell T-shirts" is less encouraging. "You're not paying me, but willing to pay Gap for a T-shirt, it doesn't make me feel as good".

Guericke said he's often asked what made LinkedIn a success. "I can't point to one thing we did that made us successful and others fail, but I can tell you for each 30 or 40 competitors, I can tell you what each of them did wrong," he said. "We didn't mess up in a major way."

Advertisement - Article continues below

He admitted that sounds contrary to what startups are supposed to do - take risks and be willing to make mistakes - but pointed to rival Zero Degree, saying it had a "better product" but was "a little too aggressive" in its marketing, costing it users.

The most successful social networks have come out of the US - could one have ever succeeded out of Europe? Guericke thinks so, and advised startups not to worry too much about where they're based but to target the best market for their business. "You can start the company from here," he said. "It doesn't mean you have to have everything [right here], you pick and choose," he added, advising startups to look for funders anywhere they can find them.

"Don't think 'I'm from Europe, I need to get everything here'... Just because you start in Europe, your initial market doesn't have to be in Europe." He pointed to another social network startup, Zing, which had success in Germany but never broke through into English markets.

"You have to do whatever it takes to be successful, and don't worry about if the time zone is six or nine hours different," he added.

Featured Resources

Top 5 challenges of migrating applications to the cloud

Explore how VMware Cloud on AWS helps to address common cloud migration challenges

Download now

3 reasons why now is the time to rethink your network

Changing requirements call for new solutions

Download now

All-flash buyer’s guide

Tips for evaluating Solid-State Arrays

Download now

Enabling enterprise machine and deep learning with intelligent storage

The power of AI can only be realised through efficient and performant delivery of data

Download now
Advertisement
Advertisement

Recommended

Visit/business-strategy/chief-executive-officer-ceo/354935/western-digital-hires-ciscos-david-goeckeler
chief executive officer (CEO)

Western Digital hires Cisco’s David Goeckeler as its new CEO

6 Mar 2020
Visit/strategy/28047/what-is-digital-transformation
Business strategy

What is digital transformation?

6 Mar 2020
Visit/business-operations/sales-crm/354863/salesforce-co-chief-keith-block-steps-down
sales & CRM

Salesforce co-chief Keith Block steps down

26 Feb 2020
Visit/business/business-strategy/354677/what-can-silicon-valley-learn-from-the-rest-of-the-world
Business strategy

What can Silicon Valley learn from the rest of the world?

30 Jan 2020

Most Popular

Visit/infrastructure/server-storage/355118/hpe-warns-of-critical-bug-that-destroys-ssds-after-40000-hours
Server & storage

HPE warns of 'critical' bug that destroys SSDs after 40,000 hours

26 Mar 2020
Visit/software/video-conferencing/355138/zoom-beaming-ios-user-data-to-facebook-for-targeted-ads
video conferencing

Zoom beams iOS user data to Facebook for targeted ads

27 Mar 2020
Visit/software/355113/companies-offering-free-software-to-fight-covid-19
Software

These are the companies offering free software during the coronavirus crisis

25 Mar 2020
Visit/security/phishing/355120/hackers-pose-as-three-to-exploit-high-data-demand
phishing

Hackers target Three customers with "sophisticated" phishing scam

26 Mar 2020