A veteran of successful start-ups, Arvind Rajan, LinkedIn’s managing director and vice-president of Asia-Pacific and Japan tells Emily Tan why the networking site’s time has come.
Articulate and intelligent, Arvind Rajan fits the Silicon Valley profile of the brilliant technology executive from his Stanford degree to his history with successful start-ups, with one major difference. He wears a suit.
“I left my job as a managing consultant at Boston Consulting Group to join a start-up in a garage with my sister and brother in-law. They were both graduates from MIT and I joined as the suit... because I had one,” says Rajan with a chuckle. The company became a market leader in hybrid electric vehicles but, Rajan admits, the market in the early 90s wasn’t ready for what they had to offer. Solectria was bought out and Rajan went on to be a ‘management generalist’, as he terms it.
Several C-level and turnaround roles later, he co-founded Grassroots Enterprise a tech company that turned into a communication services firm. “Grassroots found that the best value it could provide was managing grassroot support for campaigns — people in the space didn’t want to buy technology, they wanted to buy services,” explains Rajan. The firm was acquired by Edelman Public Relations three years ago.
When Rajan joined LinkedIn in 2008, it had been around for five years and was just starting to come into its own. “Across all the companies I’ve been at, they’ve all been pioneers. If you’d asked people in 2003 if they wanted to use LinkedIn they would have said, ‘No’. As a social network, what LinkedIn needed was time to grow and its founder and chairman Reid Hoffman kept the company small intentionally.”
In 2007, LinkedIn still employed less than 100 people, but that was the year things started to accelerate and “explode”, says Rajan. “For a professional network to be valuable it needed scale. I signed up when it first launched, I knew Hoffman and he sent me an email, but it took a couple of years for it to become valuable for me.”
Today, the firm has over 2,400 employees working in 25 offices, nine of which are in Asia-Pacific, including in Hong Kong, Singapore, Japan and India. Of the site’s 161 million members, 25 million are from Asia-Pacific.
2011 Managing director and vice-president of Asia-Pacific and Japan, LinkedIn
2009 Vice-president, international, LinkedIn
1999 CEO, Grassroots Enterprise
1995 Market manager, Cellnet Data Systems
1992 Vice-president, marketing and business development, Solectria
1990 Associate, Boston Consulting Group
Part of LinkedIn’s success has been its ability to hold true to its founding goals, he says. “When we went public last year we went through some of LinkedIn’s original documents and found the presentation LinkedIn used to raise start-up capital. The business that presentation described is the exact one we are in today — to connect the world’s professionals and make them more productive and successful.”
LinkedIn derives its revenue from three main sources: in the first quarter of 2012, it made US$102.6 million from hiring solutions, $48 million from advertising and $38 million from premium subscriptions. However, the network’s most important stakeholders, Rajan is quick to stress, are its free members, who generate the most value.
Brands on LinkedIn can market themselves to the network’s 161 million professionals either as an employer or as a product or service. “We have completely reshaped how professional hiring is done. People will log in and keep their profiles up to date even when they’re not looking for a job,” says Rajan. This makes the network invaluable to employers because management studies have shown that the best time to hire talent is before they are completely disengaged with their current job and are looking to move.
“Build your brand on LinkedIn and hit them at the right time. There’s a module on every LinkedIn home page and profile called ‘Jobs you may be interested in’. Even if you’re not thinking of changing jobs, if you see something exciting you may click on it. We also have a product called ‘Work with us’ which companies can have appear on their employee’s profiles which advertises vacancies available in the organisation,” he says, reasoning that if you click on someone’s profile you’re likely interested in doing business with them.
LinkedIn has also seen tremendous growth in its marketing and media business, because brands can reach their audiences when “they’re thinking about business”, he says. “Let’s say you ran a company making routers. With targeted ads you can filter ads so they appear in groups where people were talking about tech issues, you could also target individuals based on their companies and even level of seniority.”
For companies who have built a strong following, they can market both their jobs and services directly to a group that has actively expressed professional interest. Another way of building engagement is via LinkedIn Groups. “Philips built two very large stakeholder communities on LinkedIn around two of their main businesses — lighting and health care. Rather than just selling, the aim is to provide value so people come back to read and you can engage and influence opinion,” he says.
LinkedIn’s next step will be to leverage the huge amount of data it has accumulated. “There’s just so much more we could be doing: data driven insights, things that are scalable — things are moving very fast for us right now.”