Our lives are irreversibly entwined with social media. Millions of people spend a huge chunk of their time on Facebook, Twitter, Instagram, Pinterest, Snapchat and many other social media platforms. Yet until recently, most of us have resisted the temptation of exchanging professional details on these networks. Most of us also refrain from adding people from our professional network on social networks. Also, we have sometimes bumped up security settings to avoid embarrassing situations. LinkedIn was the first to capitalise on this and build a network that was purely focused on the professional side of things. Interestingly, professional networks have gained momentum since then and now various professionals have their own networks. These niche networks are called vertical networks.
Vertical networks are attracting highly skilled professionals. They are catering to software engineers (GitHub and StackOverflow), doctors (Curofy and Doximity), mechanical engineers (GrabCad), IT professionals (Spiceworks), academicians (Academia.edu and ResearchGate), data scientists (Kaggle), teachers (Edmodo), militarymen (RallyPoint), lawyers (Avvo), athletes (Strava), chefs (Chef's roll), designers (Behance), marketers (Inbound.org) and many other categories of professionals. Academia.edu boasts more than 25 million users, GitHub reports having more than 12 million users and over 5 million IT professionals use Spiceworks. The huge amount of funds raised by these networks demonstrates their potential, as well as provides them with fuel for future growth. GitHub raised $250 million last July, at a valuation of $2 billion, from marquee investors such as Andreessen Horowitz, Thrive Capital, IVP and Sequoia Capital. Spiceworks, Doximity and Edmodo have also raised big money â€“ $111 million, $82 million and $87.5 million, respectively.
These vertical networks are now posing a serious threat to LinkedIn as highly skilled professionals are flocking to their own niche networks, with recruiters in their wake.
Inherent advantages of vertical networks
Trusted peers: Users can reach out to people who have a similar mindset, can understand each other and, most importantly, with whom they are comfortable sharing their ideas, views and intellectual property without any security concerns.
For LinkedIn to sustain itself in the long term, it will need a network of networks model, under which it can aggregate smaller networksRelevant content: Consumers get relevant content as these vertical networks act as a virtual network for niche consumers, giving them a chance to interact with like-minded people via technology without losing out on the experience they would have in an offline interaction with their peers.
More engaging: Vertical networks add value in the lives of professionals on a daily basis. For example, StackOverflow helps software engineers to find solutions to their problems whenever they are stuck and GitHub provides the capability to commit code together. ResearchGate gives researchers the ability to search and share research papers. Curofy helps them coordinate to solve patient cases. All these things can't be done on Linkedin properly.
Targeted audience for marketers: For marketers too, the vertical networks provide a targeted audience that is already segmented. Also, these audiences can be used for any new market research that is to be done.
Why vertical networks may overpower LinkedIn?
A couple of months back, The Guardian reported that LinkedIn's share price fell 43.6 per cent in a single day, wiping out nearly $11 billion of market value, after its revenue forecast fell far short of market expectations. The share price has stagnated around the same range since that day.
LinkedIn is the world's largest professional network with over 414 million members. It had 37 billion page views in the last quarter of 2015 itself. Then why is LinkedIn losing out?
A major problem for LinkedIn is low user addiction. LinkedIn's monthly active user base (MAU) today is 24 per cent of its registered users against 27 per cent one year back. Even its MAU growth has been very low over the last three quarters. Compare this to Facebook, whose 1.6 billion MAUs equal 50 per cent of the internet population of the world. Facebook's 65 per cent MAUs are active daily. LinkedIn doesn't report daily active user data.
Most people aren't looking to change jobs all the time. Instead, they want to communicate and build relationships. However, because LinkedIn's revenue streams and design restrict typical business forms of communication and facilitate paid ones, most interactions on the platform are low-frequency and one-directional in nature, such as recruitment offers and sales pitches. Spotting the best talent is easier with tools like Talentbin, StackOverflow and Github, which aggregate or facilitate positive interactions and allow skilled individuals to display their work — showing why they're good at what they do.
People today have very short attention spans, and hence marketers are concentrating on focused channels. The rise of vertical network is an outcome of this focused approach. This is where LinkedIn is losing out.
What LinkedIn can do?
LinkedIn has realised the importance of content and its acquisitions have certainly indicated the same. Its acquisition of Pulse, Lynda and Slideshare indicates it is moving towards the content side of things. Though LinkedIn is winning the B2B content space, this is a niche space and hence monetising content has been problematic.
For LinkedIn to sustain itself in the long term, it would need a network of networks model, where it can aggregate smaller networks. Like Facebook acquired WhatsApp and Instagram to protect its two major features (photo sharing and messaging), LinkedIn may soon have to acquire such smaller networks to regain similar levels of engagement and traction. These acquisitions can act as a starting point to gain focus on providing relevant content and experience to different professionals. Also, it will provide tools to the marketers for niche segmentation of the audience.
The author is co-founder of Curofy.