Case Studies

Six Degrees to Connection

LinkedIn.com puts the power of technology behind managing your network of business contacts
This story appears in the August 2005 issue of BizTech Magazine.
LinkedIn CEO Reid Hoffman, left, Vice President of Desktop Products Eric Ly and
LinkedIn CEO Reid Hoffman, left, Vice President of Desktop Products Eric Ly and Vice President of Marketing Konstantin Guericke
Credit: Robert Houser

Forget Kevin Bacon. There are 1,323,200 people just four degrees from Diana L. Ferguson. Of them, 813,900 are looking for jobs. One of them was Michael Dowling.

Ferguson, a senior technical staffing recruiter at Wells Fargo, had been searching fruitlessly for a level-five applications system engineer to work in the company's San Francisco offices. She had spent four months reading resumes, searching Monster.com and tapping her usual contacts. "I had no luck in getting it filled," she explains.

A few months earlier, a Wells Fargo vice president had invited her to join a Web site called LinkedIn, an online network that lets professionals pull together and manage their contacts. Ferguson decided it was as good a time as any to try it. She put the word out to her network, and two days later she got Dowling's name. "It was a perfect fit," she says.

Personal relationships have always ruled business, but in this age of mobile phones, instant messaging and e-mail, it plays a larger role than ever before. In an age of information overload, the need to cut through the clutter and get to the right content and contacts couldn't be greater.

Enter LinkedIn, a Palo Alto, Calif.-based startup that aims to make putting the right people together much easier and much more concise.

Building a Network

Launched in May 2003, LinkedIn is an online network that allows members to invite their own personal contacts into the resource pool, thereby lessening the degree of anonymity among members. An individual member's network grows as contacts invite other colleagues to join. Users looking to find or fill jobs, seek venture capital funding or locate potential partners or mentors, for example, can then search through their "linked" networks for people who meet specific criteria, such as location, skills and endorsements by others.

"Universally, people tend to underutilize their existing network of contacts because they don't take as systematic an approach to managing their networks as they do to developing other parts of their careers, like skill sets," says Reid Hoffman, LinkedIn's co-founder and CEO.

LinkedIn's five founders practice what they preach. They came together through Hoffman's personal network of former colleagues, competitors, contractors and classmates. The 45-person company has itself grown almost entirely through word of mouth. About 97 percent of LinkedIn's 3 million users joined because they got an invitation from someone they know, says Konstantin Guericke, co-founder and vice president of marketing.

"In order to have LinkedIn be useful, you need to have your trusted sources on it," Guericke explains. "It's the same with hiring. You're more likely to feel confident about an individual's skills and compatibility if someone you know can attest to their business as well as professional acumen."

Privacy Screen

Dowling's been happily employed in what he describes as his "dream job" at Wells Fargo since February. Yet he still gets inquiries from potential employers. While that may sound like a nice problem to some, it turned problematic for Dowling, so much so that he updated his profile to state that he's not interested in full- or part-time employment.

Still, Dowling opts to receive messages from anyone on the network, but he receives those missives via the LinkedIn site rather than having them sent directly to his e-mail address. Dowling says he still wants to be accessible to those trying to reach him for other reasons, but just not for employment.

Incorporated into LinkedIn's design are privacy features, which enable users to determine when and by whom other members will contact them, and also how they'll be contacted—either through a message sent by LinkedIn or by an introduction from one of their approved connections.

"No contact information provided to LinkedIn shows up in profiles—it is only released by the owner of that contact," says LinkedIn co-founder Eric Ly, vice president of desktop products. "It's up to the members to determine whether they want to follow up with the individual who sent them a proposal through LinkedIn.

"We ensure that end-user data is private, and that they can share information with only those people that they want to share it with," Ly says. "Within their personal network of three degrees, we show the profiles including names, but no contact information. For results from the LinkedIn network, profiles are shown without names to ensure that members don't receive unwanted calls from salespeople or recruiters."

According to Ly, spam hasn't been a significant problem for LinkedIn's network, but the company wanted to give users the option of limiting the number of e-mail invitations they receive as contacts join. As such, users like Dowling, for example, can choose to receive each new invitation directly via e-mail or hold new invitations on the Web site to view at their discretion.

LinkedIn's rapid growth has been a blessing, but it's also required the company's 28-person IT staff of operations and development to hustle to scale the service.

LinkedIn's development team continually updates the service with new features and downloadable tools to keep users engaged, Ly says. The company wants its tools to be accessible to the maximum number of users, which means testing each new feature to ensure that it's compatible with the different operating systems and browsers. LinkedIn is built on a standard three-tiered architecture, which includes Oracle databases, a J2EE application layer in the middle and a Web-based Java front-end.

As LinkedIn's founding chief technology officer, Ly designed some core pieces of the Web site, but about a year ago he started creating a LinkedIn presence for the desktop so users can integrate their networks into their everyday tasks. For instance, LinkedIn has a toolbar that downloads onto Microsoft Outlook and sifts through e-mail boxes to find contacts. The tool ranks contacts based on how often the user communicates with them, and automatically adds them to the user's address book. The user can also upload those contacts at LinkedIn.com so they can invite them to join the network.

"We really want LinkedIn to be an everyday part of our users' experience," Ly says.

Spreading the Word

Dowling can testify to the value of a strong network. He joined after receiving invitations from two former bosses, and before he knew it, he had about 40 first-degree connections. "It seemed to grow like mad," he says. "People found me. I found other people."

Dowling knew the importance of networking long before LinkedIn came along. He's always kept in touch with former colleagues, but LinkedIn helps him manage his network more successfully, he says.

Bringing job seekers and employers together makes up a significant part of the company's revenue, officials say. The company also will start offering subscription services this month.

But LinkedIn is more than a job search tool. A friend of Dowling's used it to search for funding from venture capitalists, and one VC firm required applicants to use LinkedIn profiles to show whom their contacts were and what they had to say about them.

"Almost everyone I know knows about LinkedIn," says Dowling. "It's become indispensable."

Ferguson agrees. She has access to peers, mentors and potential hires around the world. But, she adds, people get out of it what they put into it. "I don't think it takes a whole lot of time," she says. "I maybe put in an hour a month, and I get a lot out of it."

"Networking is like the four-letter word that people just hate," she says. "This is a nice tool because you're not having to go and grin and shake hands. It can be very direct and specific and quick, but it's warm enough.

"It could change the course of the way people network," she predicts.

CEO Takeaway

Is Your Rolodex Your Weakest Link?

As your business expands, you may need to turn to additional resources to help fuel that growth. The following are a few tips from LinkedIn that might help:

When it comes to your own growth, network vertically and horizontally. Peers as well as traditional higher-level mentors can provide insight into solving business problems.
When hiring new staff, go beyond the usual suspects and look for referrals from current employees and others to help sort through resumes that come in over the transom.
When hiring IT staff, referrals become critically important as it may be difficult for a business-savvy yet possibly technically clueless hiring manager to evaluate the importantce of the right technical skills and project management expertise required for technology projects.
IT and business mentors are hard to come by; encourage staffers to seek out both senior managers and peers when they take on new roles, so that they don't feel overwhelmed by the challenges of a new position.
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