Assembling a curriculum vitae used to be an artisanal task, almost of goldsmithing, to be able to stand out among so many information sheets that reached companies. From how to present the data to ‘sell’ better until, on some occasions, wait hours at the door of an office to reach the right person to give it to you. In many other cases, it was filed at an entrance table.
LinkedIn appeared more than 16 years ago to kick the networking table, which until now was limited to social events or personal references, and job searches.
He was born from the mind of Reid Hoffman, an intellectual who had had no luck in the social media business for having arrived "too early" and, in his own words, saw the light "in the midst of the winter of the dotcoms."
However, nourished by knowledge in philosophy and the art of strategy, learned thanks to spending hours and hours analyzing board games, he managed to create an online community that directly challenged companies.
Although it is always difficult to introduce changes, this platform went deep in the way companies look for talent and, in the same way, it served as a tool for employees to have direct access to managers and firms, within the reach of a click .
Hoffman went from ‘Mafia PayPal’ (a group of former PayPal employees and founders, including Elon Musk) to build his own venture in just six months, at the hands of former co-workers and the university.
With him in charge, as CEO, the firm grew. Although on the road, as in any project, there were stones and some quite difficult to erode. "You stand behind me, telling me:‘ Do this, do the other ’," a senior executive told the great founder of LinkedIn shortly before leaving his post.
However, the company made one of its most important decisions in mid-2016, when it realized that, if it wanted to continue climbing, it needed a broader structure, beyond which, in itself, had already become a benchmark from the techie universe.
Microsoft and its $ 26.2 billion appeared on the scene. Now, with more than 645 million users and 15,000 employees in 30 cities, the LinkedIn challenge is to get used to being a giant's subsidiary and recover the path of profit, which it abandoned some years ago.
The beginnings
Hoffman was born in Palo Alto, California, and grew up under the wing of fathers leftist lawyers (ideals that would later bring him more of a political discussion with his Republican friend, Peter Thiel). At age 10 he developed a special love for board games, with special attention to a nerd world classic, Dungeons & Dragons (Dungeons and Dragons).
His desire to be independent and learn new things led him to ask his family to enroll him in a ward school in Vermont where, in addition to the typical classes, he also ventured into carpentry, locks and crafts.
This baggage influenced him to choose which career to follow. He liked to know things, use tools and knowledge of various areas to apply them to everyday life. That is why he decided to sign up at Stanford University to study Symbolic Systems, an exclusive course of that entity that ranged from philosophy to mathematics and computing.
After completing it, he did not choose the "hero's path" typical of receiving and starting his own business, but did something out of the ordinary for most Silicon Valley tech entrepreneurs: he took a master's degree in philosophy at Oxford.
His desire was, in the beginning, "to become an intellectual", but he realized that the academic world, of essays and papers, was not enough to achieve a real impact. However, Hoffman says the study of philosophical treaties improved his analytical skills.
Meanwhile, his strategic look was obtained from board games, especially from the Settlers of Catan, created by the German dental mechanic, Klaus Teuber.
"I connected with venture capital investors. They asked me if I had developed something before since I was asking them to invest millions in my idea. When I told them no, they answered:" I got a job first. " That's how he started his career at Apple and then worked in the Fujitsu product management area until 1997.
He believed that he had collected enough experience to make the leap and created his first venture, SocialNet, a social network to get a partner, be it love, roommate or because one was missing for the Trick.
"I learned something from that initiative: everything good that you are building a good product also has to be to understand its distribution strategy," he said. The business model did not work and left the project in 1999.
One of his closest friends from the university era, Peter Thiel, tempted him to join his Confinity payment platform. Soon, this merged with X.com, founded by Elon Musk, and resulted in PayPal, where Hoffman held the position of Executive VP and in charge of business development.
There, the so-called ‘Mafia PayPal’ was created, made up of several executives and employees of the firm that, after their departure, began renowned enterprises, such as Musk, with SpaceX; the trio of YouTube founders and the creators of Yelp.
In 2002, eBay bought the company for $ 1.5 billion and with that money Hoffman decided, again, that it was his time. Although, on this occasion, it would not fail.
The project
"How do I make humanity evolve?" Asked Hoffman, a more philosophical and profound doubt, difficult to sell to investors in a pitch.
He tried to shrink his panorama a little more. And, finally, the conclusion came: "The notion of getting everyone better prepared through their network to maximize their economic opportunity is a way to move forward as a society." This is how LinkedIn was born, as a platform to connect people, more focused on the work streak.
The project was formally initiated at the end of 2002, but it only came online in May 2003. While the number of members did not grow as expected, that was not their priority for the first year, but they aspired to achieve a good base, Big enough to make searches and publish offers worthwhile.
The seed capital was contributed by Hoffman, who was responsible for diagramming the founding team. However, soon, the company got its first great support with an A series of US $ 4.7 million led by Sequoia.
Of the five founding members, the only one still in the company is Allen Blue, former director of product design for SocialNet and VP of Product on LinkedIn.
In 2006, two of the founders left the ship: the German Konstantin Guerike became CEO of the Jaxr startup, although the experience lasted only two years; and the Vietnamese Eric Ly, CTO during the first triennium, chose to found his own ventures.
The dotcom bubble and its facet as an investor
His business model focused on three units. The two main ones had to do with ‘recruitment’, that is, with providing tools to talent scouts so they could find the best candidate, and subscriptions, which gave premium members better weapons to create profiles and conduct searches.
The third, and in which the team had less confidence, were online ads. To this was added that 2002 was not a great time to start an internet business.
Hoffman had the strong conviction that "starting a business during an economic crisis plays in favor. It is more difficult to raise capital, but if you succeed, it gives you an advantage."
By 2004 he had already achieved his second round of financing with $ 10 million. Meanwhile, members grew by leaps and bounds. Two years after his B series, he had not only achieved his first year with profit but had also reached 9 million users.
At that moment, Hoffman realized that he needed someone to take over the executive direction, since he felt he could contribute more from the product side. That's why they hired Dan Nye as CEO, under whose leadership the company reached 35 million members.
Two years later, Nye surprisingly left the company. "The structure was complex. There were two CEOs and one was the main shareholder," said the outgoing executive. Jeff Weiner, former director of Yahoo! and Warner Bros, who ended up being the ideal candidate for the position. "He acted as if he were one of the founders," Hoffman explained.
Hoffman always stayed close to the company as chairman, however, management was not his thing. Then he started his facet as an investor, while controlling his car not to crash.
He became a Greylock Partners fund partner and faced successful bets such as Airbnb and Flickr. His greatest success happened in 2004 when a young Mark Zuckerberg asked him to invest in his company. While Thiel made the big outlay, the founder of LinkedIn injected his share.
Numbers in red, success on the web
On its eighth anniversary, LinkedIn debuted in the stock market. It sold 7.48 million shares at $ 45, so it was valued at $ 4.2 billion (it had become a unicorn in 2008). The price soared more than 80% during its second day in the New York parquet. For that year he added two new members per second.
This success was based on investor confidence and not so much on the company's balance sheets that, in 2009, they had returned to red (losses of US $ 4 million).
2015 was his last full year on the Stock Exchange, since Microsoft proceeded to delisting in 2016. At that time, LinkedIn had a turnover of $ 2,991 million and its bankruptcy was $166 million.
The main axis of billing (60%) was the Talent Solutions unit, integrated by the recruiters tool and a vip content platform, followed by ads (known as Marketing Solutions) with 20% and subscriptions with 17% .
Since joining the Microsoft product portfolio, the company remains independent but is officially a subsidiary of the Redmond giant. In 2019 (the fiscal year runs from June to June), its revenues rose 28% and exceeded US $ 6750 million.
However, in its annual report, Microsoft details that LinkedIn was one of the main responsible for the increase in costs: from marketing expenses to administrative costs. In turn, it acquired the Glint platform, which provides insights about the corporate culture of a company, to expand its offer for recruiters.
However, despite the balance in red, the company achieved its mission: it went from 112 members to more than 600 million in a decade and a half, and among its users there are executives from the world's leading industries, those whose decisions move billions of dollars every day. The cover letter became, today, a request to "Connect" on LinkedIn.
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