Wednesday, December 26, 2007

Using LinkedIn (or Facebook?) for Business

I promised you guys I would write a post about LinkedIn and here it is. I would have been perfectly happy just using Facebook as my business networking site of choice but so many of my friends nixed it, saying that they just used it for connecting socially. My LinkedIn profile had been half-finished for months until I realized that when I google myself (which many people seem to be doing lately), my LinkedIn page shows up as the second item on my results page. A site that can get that kind of ranking definitely commands my attention. And if people are going to be clicking into it, I better make sure the content has all the important information about me and what I do. So I dedicated the past few days to finding out how to use LinkedIn for business, and how it compares with Facebook. Here's what I've uncovered so far...

Launched in 2003, LinkedIn is now the sixth-biggest US social network, according to a recent article I found commenting on rumors about News Corp.'s interest in buying the company. They also say that it logged the biggest growth among its peers in October and topped the expansion rates of both MySpace and Facebook, according to Nielsen. LinkedIn attracted about five million US visitors in October, up from 1.7 million a year earlier, and the company estimates it has 17 million users (compared to 59 million for Facebook and something like 300 million on MySpace).

Basic Features
LinkedIn offers some of the functionalities I covered in my 'Facebook 101' post, like you can fill out your 'Profile' to let people know what schools you went to and the companies you've worked for. (The more keyword rich you make this part the better the chances of ending up on more search results.) However, LinkedIn has a system that rates your contacts by degrees of separation: 1 degree means you know them and they know you, 2 degrees means they are a friend of your friend, and so on.

The section called 'Recommendations' allows you to leave or request endorsements from your contacts, which you can only do informally on Facebook by posting messages on people's 'walls'. Facebook also lacks the 'Q&A' section, where you can either ask or answer questions and interact with the entire LinkedIn population, not only your contacts, which can be helpful in getting exposure for your business and driving traffic to your website.

I asked Howard Greenstein, co-founder and NY Chapter Leader of the Social Media Club, (photo below) how effective the site had been for him. He says he recently identified a person he needed to connect with, got a quick introduction from a contact and then hooked them up with a company that wanted to business with them. He likes how with 'Q&A' you can send a question to your friends to get recommendations on potential hires.

"Some companies are encouraging their salespeople to find LinkedIn contacts in firms they're trying to sell to. Corporations are realizing that there's value in being outward facing, and that making more connections can expand their bottom lines," he adds.

Howard believes that people keep stronger business contacts on Linkedin vs Facebook so there's potentially more interesting data for companies to leverage. LinkedIn recently announced that they're opening up the site to outside developers to create unique applications that are specifically tailored to business users. Howard expects that in the near future the online social network will look for additional ways to make it easier to find people in your 2nd & 3rd degrees.

New Features
Here's some cool things that will soon be available on LinkedIn (from the company's Dec. 10 press release):

Partner Applications:

"LinkedIn’s first publishing partner, BusinessWeek, is developing an Intelligent Application that will reside on the website. The application will enable readers of to access their professional network to look up profiles of people and find connections at companies featured in articles."
Conference Calendar application:
"The conference calendar application has a view of upcoming events and people in one’s LinkedIn network who are attending upcoming conferences. Dates are color-coded to indicate how popular the conferences are amongst a user’s professional network, and users can see suggestions of people they may want to meet at the conference based on common network connections. The demo may be viewed at:"
Up until now it had been difficult to differentiate friends from business contacts on Facebook. However, that's now changing with Facebook allowing businesses to set up their own"fan" pages, as they explain in their Nov. 6 press release:

"Just like a Facebook user, businesses can start with a blank canvas and add all the information and content they want, including photos, videos, music and Facebook Platform applications. Outside developers have created a range of applications to enhance Facebook Pages, such as booking reservations or providing reviews of restaurant pages, buying tickets on a movie page or creating a custom t-shirt. Companies launching applications for Pages include Fandango, iLike, Musictoday LLC, OpenTable, SeamlessWeb, Zagat Survey LLC and Zazzle."
This move towards a more business friendly environment has ticked off many old time Facebook fans, and some are jumping ship.

So what will it be for businesses, Facebook or Linkedin? The race is on... What do you think? Share your thoughts!

Thursday, December 13, 2007

Mediabistro: Time Line to Success

I've been running around left and right trying to get my little operation into high gear and as usual fretting about the future, until I read an article (The Accidental Entrepreneur) in this month's New York Enterprise Report. It was about how Laurel Touby sold her company, Mediabistro, for $23 million this past July. It took her just 13 years...but she didn't make a profit for the first 9 of them, and she didn't generate any money for the first two. That really helps to put things in perspective!

I remember going to a few of her events and have seen her company grow right before my very eyes. Her story is so inspiring to me that I wanted to piece together all the details of how she did it, so I looked up a few other articles on the sale and put together a time line:

1994 - Laurel, a struggling freelance writer, starts organizing after-work cocktail parties for journalists - 10 people showed up at the first one but within months that turns into one hundred ( that database is about 700,000) - however, she wasn't making money from it

1996 - Started an email newsletter with job listings (still no money)

1999 - Started charging HR people $100/month to post jobs - got 8 checks the first month, then 16, then 25, 35, 45 (ka-ching!) - that's when she ditched her freelance writing and decided to make this a business

2001 - Received $1 million in funding in March (a big ka-ching), then 9/11 hit (took back some of that ka-ching - read Laurel's account of how they managed to pull through after the terrorist attacks:
The Strength to Lead in the Face of Crisis, from The Huffington Post)

2002 - Laurel follows a colleague's suggestion to add courses for journalists to her list of services, and later that year launches a premium content subscription membership (ka-ching, ka-ching)

2003 - Became profitable

2006 - Got approached by buyers

2007 - Sold Mediabistro to Jupitermedia in July for $23 million, pocketing $12.4 million (she owned 62% of the company's stock) (a really big ka-ching)

Here's more related articles on the story:

-Village Voice: The $23 million Boa

-NYC TV's NYC 360 (video): Interview with Laurel Touby

-Washington Post: Journalism Morsels Make for Profitable Dish at This Bistro

As senior vice president, Laurel will still oversee Mediabistro but now she will also report to her new bosses at Jupitermeda. NY Enterprise Report asked if her life has changed now she's wealthy and her answer was "no, I still take the subway. Maybe I’m eating out a little more often. The one thing I’m going to spend the money on is a gigantic loft apartment so I can have all my journalist friends over for dinner." Sometimes the more things changes the more they stay the same...

My take home message out of this? Create a community of like-minded souls, find out what they need, and deliver it to them. It's that simple. Do that long enough and eventually the money will come.

Monday, December 3, 2007

The Tao of Web 2.0

When I first signed up for the lecture entitled "Beyond the Web 2.0 Revolution" at the New School last week, I expected to get the latest scoop on some newfangled technology that will drive the Internet to higher heights. Was I ever wrong. I left there with so many ideas swirling inside my head I just had to write them down. Below you'll find a summary of the main points...

Dr. Hiroshi Tasaka, President of the think tank SophiaBank and professor at Tama University in Tokyo, had already started his presentation by the time I arrived (fashionably late!). The classroom was almost full but I managed to find a lone, empty seat in the second row. It took me a few minutes to catch on to what he was saying, and his thick accent took some getting used to, but slowly it started to make sense.

He was talking about how, at the same time that we move forward into to the future, there's also a resurgence of the past - but with an "upgrade". For example, auctions have been around for centuries, but online auctions have taken the concept and made it much more efficient. Similarly, e-learning adds additional value to the education process by allowing anyone to sign up to online classes with say, Harvard professors (also see "Yale to Make Select Courses Available Online").

He then talked about mutual infiltration, where systems in competition become similar to each other. In the past, businesses were either in cyberspace or in a physical space. Now all businesses are using both real and virtual spaces, evolving into a new integrated system.

Dr. Tasaka went on to define complex systems, which are living systems characterized by evolution and the formation of eco systems. He says that the information revolution has made all systems complex - for ex. companies, markets, society. The Internet is the largest man-made complex system. It's a huge system that no one can control and it's comprised of many eco systems - so it's difficult to predict or analyze or divide into parts. In cyber space, evolution happens quickly, so laws don't work. There's also the "butterfly effect", when small actions can change whole systems, making it difficult to predict the future.

He cited the iPod as an example of eco systems. Its success was due to the evolution of eco systems - both products and services. The Internet, digital music, licenses, lifestyles all had to evolve for the iPod to encounter such huge demand. So when creating a product, companies need to promote the evolution of the whole eco system.

Then he asked, what is the most complex system in this planet? The answer: the human psychology. It's the result of 13.7 billion years of evolution.

Dr. Tasaka foresees changes happening in 7 areas:

1. Innovation
We'll move from beneficiary innovation to participatory innovation.
Web 2.0 is about the wisdom of crowds, or our collective intelligence. To promote this he predicts there will be a new style of innovation. Up until now the government and large corporations were the ones pushing for innovation, with users and customers benefiting from it. From now on we'll see users and customers themselves participating in the process of innovation. The "prosumer", or the producer/consumer, will emerge, just as Alvin Toffler predicted in his book, "The Third Wave".

2. The Economy
We'll move from a monetary economy to a voluntary economy.
The monetary economy, which values the bottom line and is motivated by people wanting to acquire money, will merge with the new "voluntary economy", which is large and invisible, and made up of jobs you don't "see", like housework, and childcare. Web 2.0 will increase the importance of this because social networks give people the ability to pose a question and receive multiple answers. In essence it's people giving out free advice - it's like they're imparting wisdom on a voluntary basis - and that will drive the monetary economy. He cited Amazon's grass roots reviews as an example. Amazon reviewers are the voluntary economy but Amazon is the monetary economy, generating profits from people's reviews. Once at opposite sides, there will be a process of mutual infiltration between the voluntary and monetary economies. (here's an interesting post from about what might motivate people to contribute reviews on Amazon)

3. Culture
We'll move from an indirect to a direct democracy of culture.
The professor says that historically the sequence of events that brought a product to market would look like this: the company does market research, they develop products and services based on that and then sales will drive their decision making. There's a hidden vote present - consumers vote with their wallets, and if sales are high the company will increase production. Similarly, in the music industry, a music producer will discover an artist, create a huge promotional campaign to generate buzz, and then look for further opportunities to create buzz. But with the advent of Web 2.0, all that is turned upside down. Because many niches exist in cyberspace, an independent artist can release his music on the Internet and become an instant hit when music lovers of his particular genre find him and tell others.

4. Talent
We'll move from single talent to multi-talent professionals.
It used to be that if you wanted to be a professional photographer you would have to train for years and work for peanuts as an assistant until you "paid your dues." But now with digital cameras and editing software it's much easier. People can leave comments on your site and you can improve your work based on their critiques. Then there's the "Da Vinci" effect, where we embrace our many talents and let them blossom. For example, you can be a sales manager by day and an ecologically-minded social entrepreneur during the weekends, compose songs and then release them on the Internet, write a series of essays on your blog and publish them as an eBook with photos that you've taken yourself, and finally you can produce a movie of your last trip to Europe and screen it on YouTube. Phew! Just writing about it makes me tired!

We'll move from a single personality life to multi-personality life
Web 2.0 allows people to express themselves in many ways, through daily blogs, photos, videos, podcasts, etc., which can have a healing effect. We have many personalities deep inside us, but we repress most of them to avoid confusion in daily life. So how can we express our hidden selves? Dr. Tasaka says Web 2.0 gives us three ways:

  1. non-verbal expression (like a painting)
  2. playing a character in a drama (Ever try playing Second Life?)
  3. in an anonymous message (writing a short story)
6. Paradigm
We'll move from a mechanical system paradigm to a living system paradigm
Because we've been successful with science and technology, we tend to view the world as a large mechanical system that we can control, but we're just fooling ourselves. Nature is unpredictable - look at Katrina or global warming. The world is not mechanical - it's a large, living system. In the Internet, all systems are complex living systems. People organize themselves into groups that emerge, evolve, co-evolve and create their own ecology. Because of this, Dr. Tasaka says we will go:

-from analyzing to using intuition
-from controlling to promoting emergence
-from learning the laws to changing the laws
-from using power to creating empathy and coherence
-from predicting the future to creating the future

7. Civilization
We'll move from western civilization to eastern civilization
According to Dr. Tasaka, Eastern civilizations have espoused the living system paradigm more than Western cultures. Chinese medicine uses a holistic approach to cure illness - a change of diet, breathing, meditation, exercise. Western doctors on the other hand, look at the problem and say, let's eliminate it, let's cut off the organ or prescribe medication to cope with it - without investigating the cause. Dr. Tasaka says that same holistic approach used in the East can be used to change the problems of the world.

Diversity is very important in the evolution of eco systems, and the Internet can be used to promote that diversity of value systems. He says that Japan should use the web to introduce the following concepts to the US and the world:

, which means eight million Gods, or the co-existence of many value systems

-Sansen-soumoku-kokudo-sikai-bussyo, which is animism/pantheism, or the ability to role-play and become someone else temporarily

-Enishi, the feeling you get when you meet someone - is there a deeper meaning to this encounter? Nothing is by chance...

Web 2.0 makes it possible for us to see what daily life is like in the other side of the world (with for ex. YouTube videos). If we see how other people live, we will be more in touch with the state of the earth. There are many problems on a global level - global warming, terrorism, hunger. The Internet, he believes, was given to us to overcome these problems and grow as human beings.

And that, I finally realized with surprise, is the next "new thing". That's what's beyond Web 2.0. It's not about a new technology or a new gadget that will revolutionize our lives. It's about the Internet becoming an agent for peace and harmony through expanded use of social online networks. As more of us express ourselves freely and openly online, we access our true purpose, our spiritual core. Web 2.0 then allows us to come together with others that are doing the same, which will lead to ever expanding levels of integration and community. For Dr. Tasaka, that's what the next "wave" of the internet is, and he believes we're at the start of what will be a wonderful story for mankind.

Do you agree, disagree? And how might we apply this as entrepreneurs? Share your thoughts!