For any company and new venture, success is a combination of a various factors including choosing the right target market with the right product at the right time. At the center of these factors is the ability for their relationship with each other to produce a profitable and successful revenue model.
A perfect storm of factors has not occurred for the prominent social networks, such as Facebook and MySpace. LinkedIn stands as a Web 2.0 company that breaks the model of unprofitable social networking ventures. At the heart of the company is an unorthodox, Oxford-educated entrepreneur. His strong mind for the finance and quick-decisions has created a network of users connected by means of business commonality.
A number of factors of have served to lay a foundation to LinkedIn’s success in a tulmultuous economic environment, including:
- User Base:Nothing speaks greater volumes about the future of a new ventures success then the user base. In LinkedIn’s case, more then 53% of users are in jobs where they earn more than 100k.What does this mean? It means it is an advertiser’s dream: a user base with a disposable income (forgot about those poor college kids on Facebook).
- Working Revenue Model: It has become a common thought that online advertising has yet to see the fruits of its labor. In order for many online ventures to succeed, there needs to be various channels of revenue. Fortunately for LinkedIn, the premium service is a subscription fee that works. Moreover, as noted above, there is a right demographic for such a service.
- Finance Savvy: As one great rap song goes, my minds on my money and my money is on my mind. For LinkedIn, the founding entrepreneur Reid Hoffman, he has a mind for venture capital, angel investing, and using it to leverage his company.
LinkedIn stands as a formidable business venture which has done what other social networks are failing to do: Be Profitable.
