200 Of Reid Hoffman's Closest Friends

Tonight was yet another sold out social networking event -- it was IBD Network's Under The Radar. The CEOs of LinkedIn, Spoke, ZeroDegrees and VisiblePath all presented their businesses. Esther Dyson of Release 1.0, Pradeep Tagare from Intel Capital and I were on a panel to discuss their respective business models. Based upon what I heard this evening, here is how I would sum up the different companies' business models.

LinkedIn -- subscription (eventually) service to input and manage one's own contacts to search for connections.

Spoke -- deeply integrated enterprise solution extracting contact data from enterprise applications (e.g. Outlook, Notes, etc.) to establish and leverage connections.

ZeroDegrees -- Outlook plugin and related service to input, manage, prioritize and search connections.

VisiblePath -- social networking software engine for prioritizing and understanding connections for integration into traditional enterprise software applications (SFA, CRM, etc.).

If you're thinking that they all sound pretty similar, I'm with you. These companies have way more in common than not. After the companies presented, the panel and audience voted on what they believed was the most interesting business. The audience preferred the model described by Ben Smith of Spoke, while the panel collectively preferred the business described by Reid Hoffman of LinkedIn. Interestingly, both Spoke and LinkedIn announced at the event that they had recently come to terms on financings -- Spoke wouldn't yet say from whom they were raising money, LinkedIn announced that it will be funded by Sequoia -- whereas ZeroDegrees and VisiblePath remain angel funded.

One thing that did surprise me tonight was the percentage of the audience who were users of LinkedIn. By show of hands, the LinkedIn members outnumbered the Friendster members by over 2 to 1. It looked like two-thirds or more of the audience had signed up to LinkedIn. Those are pretty surprising numbers. Of course I don't think there is another audience in the country that could replicate those statistics, but it tells you that the Bay Area entrepreneur community has bought into social networking on some level (either that or Reid had packed the audience with a couple hundred of his closest friends). It will be interesting to see how that scales beyond the Bay Area.

Comments

[tomislav]

VisiblePath has one of the worst user experiences on the web. Every single tab I attempted to click on (including News) resulted in a Network Password pop-up. Unbelievable.

[dick]

I'd be very curious to hear what the former management and BOD of companies like six degrees have to say about this resurgence in social networking. It certainly sounds awfully familiar, and six degrees had its millions of users back in the day, didn't it? That didn't stop them from going graveyard. I do agree that LinkedIn seems to have the most believable/achievable biz model, although the road to bankruptcy is well-paved with "it's free now, but eventually...."

[Marc Canter]

Nothing like a new bubble to get Sand Hill excited - huh? Any questions into 'how much was Reid's (LinkedIN) sub model? Is it worth $10 a month? $50 a month? I'm not sure if I'd value it at anything - per month - or at all? While I might in fact place some value on these connects AFTER one of them turned real - but there's no proof that "hooking up" with people - this way - works.

[Dan Cornish]

will Vc's actually use tols like this to meet new people? What is the value of deals that would not come any other way? this is how you can value it

[ned]

These people sound like egomaniacal navel-gazers. One site doesn't load, another requires registration just to read. There are a lot of ex management consultants swimming in this pond; I wouldn't let them anywhere near my Exchange server.

[Mike]

Argh! I first noticed the company bullet points in the article, so I thought "Hmm, let's see what sort of interesting things these companies are doing." Then I read the descriptions and found out they're all doing the same thing. ;)

Are we back in '99 here? Friendster gets a few mentions in the media so let's clone four more just like it? SV really is under a bubble--I don't use Friendster and don't know anybody else who does. Of course, Friendster first requires that you have at least one friend to join, and I don't have at least one friend.

[Encacher]

I would propose that companies set up something like a Virtual Negotiating table (VENT) for hiring managers.

Members subscribing to this VENT can keep a track of employee interests, and also try to continue renegotiating with employees who leave.

If a subscriber's(employee's) interest in a new

company dips, then the hiring manager of the previous company can keep some addition perks on the VENT to

hire the employee back :)

Hows that for a unique networking service?

[Nathan Dintenfass]

Having an account on LinkedIn (or the others) and being an active user are very different things. The series of sold-out events shows that social networking has a lot of buzz, and many people I know have created accounts on the various sites, but whether that translates to actual customers is another issue altogether -- isn't that, if anything, the primary lesson of the boom? I'm always very skeptical when I hear about the numbers of "users" reported by these sites.

[Director Mitch]

I'm agree with Nathan. Here's how I would vote:

Q: Do you have an account on LinkedIn?

Hand goes up.

Q: Have you ever used it to find a contact or been contacted by anyone on it?

Hand goes down (am mkt director at a large tech company. I needed the VP of a large SC company lately and called an ex-colleague - that isn't going to change)

Q: Would you ever pay money for this service?

Hand stays down

Q: As a marketing/sales manager, would you allow your staff to expense fees to this site?

Hand stays down

I think VCs are missing the next generation of networking. It's not going to be this stuff - it's going to be the "blogosphere", and that's where I'm putting my energy.

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