The eleven individuals responsible for founding the business oriented social network LinkedIn are themselves linked by different strands, from previous shared work experiences at companies such as PayPal and SocialNet.com to undergraduate degrees earned at Stanford University. Remarkably, just three years after the company’s launch in 2003, it became cash-flow positive thanks to a premium services subscription model.
Cinco de LinkedIn
Because the LinkedIn application went online on May 5, 2003, employees have since affectionately referred to this date internally as “Cinco de LinkedIn,” a sly nod to the Mexican holiday of Cinco de Mayo. From CEO Reid Hoffman’s living room brainstorming session in the fall of 2002, LinkedIn moved quickly to 350 invitations sent out to close friends in the spring of 2003 and a $4.7 million initial round of funding in the fall of that same year.
The annual growth of LinkedIn’s membership has been exponential: 81,000 members (end of 2003); 1.6 million (2004); four million (2005); eight million (2006); 15 million plus (2007); 33 million (2008); 40 million members (May 15, 2009); 70 million (July, 2010). Equally impressive is the fact that executives from all Fortune 500 companies belong to the network.
Paid Subscription Service
In March, 2005, LinkedIn added its first premium paid subscription service, LinkedIn Jobs, which enabled members to better leverage their contact networks to find employment. Within a year, the average user on Linked In was signed up for the equivalent of $200 to $300 worth of tiered services per year, with some spending as much as $2,000 annually.
LinkedIn Goes Global
After two more rounds of private financing and a pair of corporate office moves within the Silicon Valley area, LinkedIn launched its first international office in London in January, 2008. Since then, the excessively user-friendly application has raised several more rounds of capital, expanded to additional corners of the world and is presently being used in 200 different countries.
A more recent phase of LinkedIn’s growth has involved product partnerships with companies such as the New York Times, Twitter, Blackberry, Microsoft, IBM and Palm. The company also tries to profit from its own user base when recruiting job candidates, stressing that those who have accumulated recommendations from others within their LinkedIn network will be given first order of preference. The current CEO of LinkedIn is Jeff Weiner who, prior to joining the company in June, 2009, worked in venture capital and served as an Executive Vice President at Yahoo!’s Networks Division.