Here is something to think about: could LinkedIn become the Uber for Professionals?Just like Uber empowers taxicab drivers with the freedom to work when and where they want, wouldn’t it be great if LinkedIn could enable professionals to do the same…
Last week I had a great call with Tristan Pollock, the co-founder of Storefront, about how his company is revolutionizing the Commercial Retail Marketplace and creating a “Pop-Up Retail Market” by unbundling retail space in terms of time (unbundling the 5 to 20 year lease term into a daily, weekly, or monthly rental license) and space (partitioning off square footage). In the same manner, perhaps LinkedIn could revolutionize the Professional Talent Marketplace and create an on-demand “Pop-Up Professional Talent Market” by unbundling professional talent in terms of time (unbundle the traditional long-term employment agreement into hourly, daily, weekly, or monthly project assignments) and space (professionals could work virtually for a series of companies instead of just for one company at its office). And just as Storefront matches supply (retailers, brokers, and landlords that have available space) with demand (artists, designers, brands that are looking for space), couldn’t LinkedIn also match supply (i.e. professionals with leveraged skills that have available time) with demand (i.e. companies seeking intellectual expertise on a specific project).
The magic of Sharing Economy companies like Storefront and Uber is that by harnessing technology to create a two-sided Social Sharing platform, they are able to empower individuals and businesses to monetize their idle/under-utilized assets by providing the underlying Process Capital, or what Thomas E. Stewart refers to in his book “Intellectual Capital”, as Structural Capital and Customer Capital. However, LinkedIn would differ from Storefront and Uber as a Sharing Economy company as it would be focused on the monetization of Human Capital. If we look specifically at Human capital, according to Mr. Stewart, there are three different skill sets: 1) Commodity Skills; 2) Proprietary Skills; and 3) Leveraged Skills. And what’s interesting is that we are seeing the emergence of a wide range of Sharing Economy companies that enable individuals with the first two skill sets to generate income by monetizing their Human Capital:
- Commodity Skills – personal tasks (TaskRabbit), local tour guide services (Vayable), dogsitting (DogVacay), household services (Handybook,Homejoy), caregivers (Care.com,UrbanSitter), mobile corporate gigs (Gigwalk)
- Proprietary Skills – chefs (Kitchensurfing, Munchery), tutors (WyzAnt), instructors (Skillshare), creators (Gumroad, etsy, CustomMade), freelancers (Elance-oDesk)
What’s exciting is that these Sharing Economy companies are accelerating the shift from reliance on the corporation (i.e. job income) to reliance on self (i.e. portfolio of income generation). As Heather McGowan proposes inPart 2 of her recently published four-series set of articles titled “Jobs are Over: The Future of Income Generation”:
From 1950-2000, the “job”, a discrete event that consumed 35-50 hours per week in a set location with predictable tasks and clear career pathway for forty-some years, provided income generation from the paycheck and the pension…Many people will not have annual salaries or set jobs in the traditional sense, but rather they’ll generate income from leveraging and monetizing a combination of their physical assets and talents in an income-generation portfolio.
But where does that leave professionals like you and me that have a leveraged skill set? Although it might be fun for us to earn extra income by acting as a local tour guide or by dog sitting, I don’t think that would be the best return on our assets. As J.C. Larreche discusses in “The Momentum Effect”, although we may be great at originating value through our Intellectual Capital, we need to find a way to extract that value (i.e. turn our talents into actions) and most importantly, capture that value (i.e. turn our actions into money). And this is where I think LinkedIn could come in…
This visual articulation of the three levels of the Social Economy illustrates how LinkedIn could evolve from being a Social Marketplace to a Social Sharing company.
- Social Mission. LinkedIn’s members see themselves reflected or self-actualized in the offering.
- Social Marketplace. LinkedIn’s members provide data and content that becomes part of the offering.
- Social Sharing. LinkedIn’s members themselves (through their monetizable Intellectual Capital) become the offering.
1. Social Mission
Joining the Sharing Economy would advance LinkedIn’s Social Mission “to create economic opportunity for every professional in the world” inspired by Reid Hoffman in 2003 when he founded LinkedIn and planted the seeds for his“Start-Up of You” movement.
2. Social Marketplace
Over the past eleven years, LinkedIn has developed a social networking platform that empowers professionals to “connect the world’s professionals to make them more productive and successful”. This provides LinkedIn with a deep foundation of Structural Capital as it has the ultimate Screening Process and Social Verification. As I discussed in my May 2012 in-depth research report on LinkedIn titled “LinkedIn: Disrupting By the “Power of We“”, LinkedIn enables professionals to build the following two forms of Social Capital:
- Bonding Capital – enables professionals to connect with former colleagues, clients, business partners, and classmates.
- Bridging Capital – enables professionals to form weak ties with professionals two or three degrees of separation by facilitating what Stephen M.R. Covey and Greg Link refer to as “Smart Trust” through providing transparency into its members’ credibility in terms of their:
- Competence. Professional Profiles, Updates, and the new Publishing Platform provides insight into the level of competence by listing capabilities and track record of results.
- Character. LinkedIn’s platform enables its members to check the integrity and intent of members two or three degrees of separation away through shared contacts.
3. Social Sharing
Unlike most Sharing Economy companies that face the challenge of building Customer Capital by creating marketplace liquidity, LinkedIn has already created a two-sided marketplace comprised of 300 million professionals (189 million of whom are active) and over 2 million companies. In essence, LinkedIn has already created what Chris Anderson calls “The Long Tail” of the Professional Talent Market through its platform which:
- Democratizes the tools of production. LinkedIn’s platform encourages professionals to self-populate its member database through creating Professional Profiles and connecting with other members.
- Democratizes the tools of distribution.LinkedIn’s platform empowers its members to become distributors by posting comments and news articles to share with their contacts and the Groups they belong to, and build their emotional and intellectual capital. With the recent launch of its Publishing Platform, LinkedIn has created the ultimate distribution platform for professionals to build their Social Capital.
- Connects supply and demand. By capitalizing on the filtering efficiency of social networks and facilitating trust, LinkedIn has lowered the search costs for its members and its corporate clients to find niche talent and resources.
At its current stock price of $187 per share, LinkedIn is valued at over $22 billion and trading at the astronomical multiple of 75 times next year’s consensus EPS estimate of $2.50. But as evidenced by the current $18.2 billion valuation of Uber, which has been in existence for half as long as LinkedIn, the higher a company moves up the Social Economy Pyramid, the faster the rate of value acceleration as it is able to achieve a higher level of disruption and access multiple social value drivers. With its compelling Social Mission and deep foundation of Structural Capital and Customer Capital, LinkedIn is ideally positioned to ascend to the peak of the Social Economy Pyramid and transform the way we work and live. As Jeff Weiner, CEO of LinkedIn, stated back on September 9 at the TechCrunch Disrupt Conference in San Francisco, according to a CNET article titled “LinkedIn wants to map, improve the global economy”:
LinkedIn, he said, wants to digitally represent every full- or part-time job, every skill, every company, every higher education institute, and every professional. “Our goal would then be to get out of the way and allow each of those nodes to connect where it can create the most value — or capital, all forms of capital: intelligent capital, working capital, human capital,” Weiner said. “And in doing so we hope to play a role in transforming the global economy.”
And when this happens, investors will realize there is much more to the LinkedIn story than the numbers currently reveal.
Disclosure: I have a LONG position in LinkedIn Corporation (LNKD-NYSE).
Note: This article is a collaborative effort withHeather McGowan, an Academic Entrepreneur and Innovation Strategist, who reached out to me after reading my June 4th LinkedIn article titled “Social Capital: The Secret Behind Airbnb and Uber” and shared with me her four series set of LinkedIn articles titled “Jobs are Over: The Future of Income Generation”.