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Business 2.0 - What's Next

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It's All About Who You Know
Social networking software is intriguing. But does it really =
replace the
old-fashioned method of making connections?
By Rafe Needleman, June 05, 2003

Today's column got its start when Kevin Werbach, another tech comme=
ntator, sent me a
request to join his "network" at the new site LinkedIn. I was curious abo=
ut LinkedIn, so
Werbach helped me contact its founder, Reid Hoffman -- even though Werbac=
h doesn't know
Hoffman personally (the two just "have friends in common").

Werbach helped me meet someone useful to my work. And this is just =
what Hoffman is
trying to systematize with his service.

LinkedIn is a tool for turning your friends' connections into your =
own. It allows
you to see a list of everybody in your own circle and in the circles of y=
our listed
friends. Now that I'm connected to Werbach and Hoffman, I might see that =
I have a
connection to, say, Bill Clinton. But I won't know the path -- which frie=
nd of mine is
connected to him or how many links away he is; LinkedIn doesn't tell me. =
But it allows me
to compose a note to Clinton, which is then routed to the closest of my c=
onnections to
him. This person, I hope, will then forward my message, essentially vouch=
ing for me as he
or she does so -- and so on, until Clinton gets my note and chooses to re=
ply to me (or
not).

The difference between LinkedIn and most other social networking sy=
stems, like the
first-generation Six Degrees or the newer Ryze, is that LinkedIn is invit=
ation-only. You
can't barge into the network by yourself. It's like a good cocktail party.

And no matter how much the system grows, the second-order connectio=
ns (friends of
friends) will be more likely to bear fruit than the more remote connectio=
ns (friends of
vague acquaintances), which is as it should be. And the vouching system d=
escribed above
should insulate users from people they'd rather not talk with, assuming t=
hat users'
closest friends exercise discretion in passing on messages. In the future=
, LinkedIn will
also have a feature that allows users to sever connections to people who =
they feel are
pestering them with too many bad referrals.

FAST FACTS
LinkedIn
http://www.linkedin.com
CEO Reid Hoffman, former executive VP at PayPal
HQ Mountain View, CA
FOUNDED January 2003
EMPLOYEES 8
FUNDING All private, will raise further funds this summ=
er
PROFITABLE? Hoffman says Q1 2004 is a "realistic" deadl=
ine
MARKET Social networking

LinkedIn is free in this early experimental stage, but the goal is =
to sell
memberships to the system, and the first big push to pay will come when s=
omebody you want
to contact indicates assent to establish the connection. For example, if =
Clinton were to
answer my query, I'd have to pay up to see the reply and establish the on=
e-on-one
connection. In that case, it'd probably be worth even a fairly high price=
(Hoffman hasn't
set prices yet).

I do have to point out that I didn't use LinkedIn to contact Hoffma=
n to write this
column, although if I had, the result would probably have been the same (=
a phone call with
him). Despite my love of new technology, when it comes to making personal=
connections, I'm
an old-fashioned guy, and I felt more comfortable with the inefficient jo=
urnalistic
nagging that has worked for me so far.

I still think this is a useful tool -- not every person I'd like to=
talk to is
likely to return my call without a referral. Hoffman said that, on princi=
ple, he wouldn't
have, had I not been a "celebrity journalist" -- thus illustrating his ex=
cellent grasp of
another one of the main tools of personal networking: flattery.

So the further away I get from my core business of writing about te=
chnologists, the
more I could benefit from LinkedIn. Indeed, via the half-dozen people I a=
m directly
connected to in LinkedIn, I see that I now have access to a network of mo=
re than 2,000
people, many with reputations I know and respect, but whom I've never met=
. Will it be
worth it to me, and others, to pay to connect to these networks? Well, ev=
en former
presidents go to real-world parties and conferences to talk with people a=
nd further their
own agendas, so there may just be an online analog to throwing these part=
ies. It's too
early to say whether LinkedIn has the mix right, and Hoffman admitted tha=
t he'll be
tweaking the system as he goes. Building the right venue for making valua=
ble contacts
online will be a challenge, but it's a worthwhile one. After all, at the =
heart of real
business is personal networking.

I'm taking next week off. What's Next will return June 16.

-Rafe Needleman

What's Next: http://www.business2.com/whatsnext

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Related Articles
=95 Kevin Werbach on LinkedIn - (Werblog)
=95 As the Virtual Worlds Turn - (Business 2.0)
=95 Can't Get to That Meeting? Send a Bot - (Business 2.0)
=95 Toward a Better Business Conference - (Business 2.0)
=95 The Napster Founders' Next Act: A Little Black Book - (Busines=
s 2.0)
=95 Down and Out in the Magic Kingdom, by Cory Doctorow - (Craphou=
nd.com)
=95 Joi Ito Discussion on LinkedIn - (Joi Ito's blog)
=95 Web of Trust - (Ross Mayfield's blog)

Recommended Links
=95 Ryze
=95 Friendster
=95 Plaxo
=95 Good Contacts
=95 Match.com
=95 Matchmaker

Today's Top Stories
=95 Operation Harry Potter
=95 The Unquiet American
=95 It's All About Who You Know

Recent What's Next Articles
=95 Distributing the Search Burden - Jun 02
=95 Can't Get to That Meeting? Send a Bot. - May 29
=95 Internet Videophones -- Is Anybody Watching? - May 26
=95 Read More What's Next Articles

Rafe Needleman is the Silicon Valley insider's insider. For years h=
e's led loyal
readers of his Catch of the Day column to the hottest new technologies. N=
ow he's bringing
his latest finds to you with What's Next, his twice-weekly online column =
for Business 2.0.
You can reach Rafe at [hidden email].

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ls you how well
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eting is worth
your money..
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Every other Friday, Erick Schonfeld shrewdly sizes up t=
he people and
businesses that are gung ho to remake the economy.

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<TBODY>
<TR>
<TD vAlign=3Dtop width=3D"100%" bgColor=3D#ffffff><BR>
<CENTER><FONT face=3D"Arial, Helvetica, sans-serif" =
color=3D#999999=20
size=3D1>advertisement</FONT><BR><A=20
href=3D"http://www.sas.com/b2-intelligence0303"><IMG height=3D60=20
alt=3D"Click here to visit our advertiser."=20
=
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<TBODY>
<TR>
<TD><FONT class=3Dx16 face=3D"verdana, arial" size=3D4><B>It's =
All About=20
Who You Know</B></FONT></TD></TR>
<TR>
<TD><B><FONT class=3Dx12 face=3D"verdana, arial" =
size=3D2>Social=20
networking software is intriguing. But does it really =
replace the=20
old-fashioned method of making =
connections?</FONT></B></TD></TR>
<TR>
<TD><FONT class=3Dx12 face=3D"verdana, arial" size=3D2><I>By =
<A=20
href=3D"mailto:[hidden email]">Rafe Needleman</A>, =
June 05,=20
2003</I></FONT></TD></TR></TBODY></TABLE><BR><FONT =
face=3D"verdana, arial"=20
size=3D2>Today's column got its start when Kevin Werbach, another =
tech=20
commentator, sent me a request to join his "network" at the new =
site=20
LinkedIn. I was curious about LinkedIn, so Werbach helped me =
contact its=20
founder, Reid Hoffman -- even though Werbach doesn't know Hoffman=20
personally (the two just "have friends in common"). =
<BR><BR>Werbach helped=20
me meet someone useful to my work. And this is just what Hoffman =
is trying=20
to systematize with his service. <BR><BR>LinkedIn is a tool for =
turning=20
your friends' connections into your own. It allows you to see a =
list of=20
everybody in your own circle and in the circles of your listed =
friends.=20
Now that I'm connected to Werbach and Hoffman, I might see that I =
have a=20
connection to, say, Bill Clinton. But I won't know the path -- =
which=20
friend of mine is connected to him or how many links away he is; =
LinkedIn=20
doesn't tell me. But it allows me to compose a note to Clinton, =
which is=20
then routed to the closest of my connections to him. This person, =
I hope,=20
will then forward my message, essentially vouching for me as he or =
she=20
does so -- and so on, until Clinton gets my note and chooses to =
reply to=20
me (or not). <BR><BR>The difference between LinkedIn and most =
other social=20
networking systems, like the first-generation Six Degrees or the =
newer=20
Ryze, is that LinkedIn is invitation-only. You can't barge into =
the=20
network by yourself. It's like a good cocktail party. <BR><BR>And =
no=20
matter how much the system grows, the second-order connections =
(friends of=20
friends) will be more likely to bear fruit than the more remote=20
connections (friends of vague acquaintances), which is as it =
should be.=20
And the vouching system described above should insulate users from =
people=20
they'd rather not talk with, assuming that users' closest friends =
exercise=20
discretion in passing on messages. In the future, LinkedIn will =
also have=20
a feature that allows users to sever connections to people who =
they feel=20
are pestering them with too many bad referrals. <BR><BR>
<TABLE cellSpacing=3D0 cellPadding=3D1 width=3D170 align=3Dright =
bgColor=3D#990000=20
border=3D0>
<TBODY>
<TR>
<TD vAlign=3Dtop>
<TABLE cellSpacing=3D1 cellPadding=3D3 width=3D"100%" =
align=3Dcenter=20
bgColor=3D#ffffff border=3D0>
<TBODY>
<TR bgColor=3D#990000>
<TD colSpan=3D2>
<DIV class=3Dx12 align=3Dcenter size=3D"2"><FONT=20
face=3D"Arial, Helvetica, sans-serif" =
color=3D#ffffff><B>FAST=20
FACTS</B></FONT></DIV>
<DIV class=3Dx14 align=3Dcenter><FONT=20
face=3D"Arial, Helvetica, sans-serif" color=3D#ffffff=20
size=3D2><B>LinkedIn</B></FONT></DIV>
<DIV align=3Dcenter><FONT face=3D"Arial, Helvetica, =
sans-serif"=20
color=3D#ffffff size=3D1><A =
href=3D"http://www.linkedin.com"=20
target=3Dblank><FONT=20
=
color=3D#ffffff>http://www.linkedin.com</FONT></A></FONT></DIV></TD></TR>=

<TR>
<TD width=3D"20%"><FONT class=3Dx10 color=3D#990000=20
size=3D-2>CEO</FONT></TD>
<TD width=3D"80%" bgColor=3D#e5d7a4>
<DIV class=3Dx10 size=3D"-2">Reid Hoffman, former =
executive VP at=20
PayPal</DIV></TD></TR>
<TR>
<TD><FONT class=3Dx10 color=3D#990000 =
size=3D-2>HQ</FONT></TD>
<TD bgColor=3D#e5d7a4>
<DIV class=3Dx10 size=3D"-2">Mountain View, =
CA</DIV></TD></TR>
<TR>
<TD><FONT class=3Dx10 color=3D#990000 =
size=3D-2>FOUNDED</FONT></TD>
<TD bgColor=3D#e5d7a4>
<DIV class=3Dx10 size=3D"-2">January =
2003</DIV></TD></TR>
<TR>
<TD><FONT class=3Dx10 color=3D#990000 =
size=3D-2>EMPLOYEES</FONT></TD>
<TD bgColor=3D#e5d7a4>
<DIV class=3Dx10 size=3D"-2">8</DIV></TD></TR>
<TR>
<TD><FONT class=3Dx10 color=3D#990000 =
size=3D-2>FUNDING</FONT></TD>
<TD bgColor=3D#e5d7a4>
<DIV class=3Dx10 size=3D"-2">All private, will raise =
further funds=20
this summer</DIV></TD></TR>
<TR>
<TD><FONT class=3Dx10 color=3D#990000=20
size=3D-2>PROFITABLE?</FONT></TD>
<TD bgColor=3D#e5d7a4>
<DIV class=3Dx10 size=3D"-2">Hoffman says Q1 2004 is a =
"realistic"=20
deadline</DIV></TD></TR>
<TR>
<TD><FONT class=3Dx10 color=3D#990000 =
size=3D-2>MARKET</FONT></TD>
<TD bgColor=3D#e5d7a4>
<DIV class=3Dx10 size=3D"-2">Social =
networking</DIV></TD></TR>
=
<TR></TR></TBODY></TABLE></TD></TR></TBODY></TABLE>LinkedIn is free in=20
this early experimental stage, but the goal is to sell memberships =
to the=20
system, and the first big push to pay will come when somebody you =
want to=20
contact indicates assent to establish the connection. For example, =
if=20
Clinton were to answer my query, I'd have to pay up to see the =
reply and=20
establish the one-on-one connection. In that case, it'd probably =
be worth=20
even a fairly high price (Hoffman hasn't set prices yet). =
<BR><BR>I do=20
have to point out that I didn't use LinkedIn to contact Hoffman to =
write=20
this column, although if I had, the result would probably have =
been the=20
same (a <A=20
=
href=3D"http://www.business2.com/webguide/0,,611,00.html">phone</A> call =

with him). Despite my love of new <A=20
=
href=3D"http://www.business2.com/webguide/0,,197,00.html">technology</A>,=
=20
when it comes to making personal connections, I'm an old-fashioned =
guy,=20
and I felt more comfortable with the inefficient journalistic =
nagging that=20
has worked for me so far. <BR><BR>I still think this is a useful =
tool --=20
not every person I'd like to talk to is likely to return my call =
without a=20
referral. Hoffman said that, on principle, he wouldn't have, had I =
not=20
been a "celebrity journalist" -- thus illustrating his excellent =
grasp of=20
another one of the main tools of personal networking: flattery. =
<BR><BR>So=20
the further away I get from my core business of writing about=20
technologists, the more I could benefit from LinkedIn. Indeed, via =
the=20
half-dozen people I am directly connected to in LinkedIn, I see =
that I now=20
have access to a network of more than 2,000 people, many with =
reputations=20
I know and respect, but whom I've never met. Will it be worth it =
to me,=20
and others, to pay to connect to these networks? Well, even former =

presidents go to real-world parties and conferences to talk with =
people=20
and further their own agendas, so there may just be an online =
analog to=20
throwing these parties. It's too early to say whether LinkedIn has =
the mix=20
right, and Hoffman admitted that he'll be tweaking the system as =
he goes.=20
Building the right venue for making valuable contacts online will =
be a=20
challenge, but it's a worthwhile one. After all, at the heart of =
real <A=20
=
href=3D"http://www.business2.com/webguide/0,,121,00.html">business</A> =
is=20
personal networking. <IMG height=3D14=20
=
src=3D"http://a1555.g.akamai.net/f/1555/606/6h/www.business2.com/images/d=
ingbat.gif"=20
width=3D15 border=3D0 NOSEND=3D"1"> <BR><BR><I>I'm taking next =
week off. What's=20
Next will return June 16.</I> <BR><BR>-<A=20
href=3D"mailto:[hidden email]">Rafe Needleman</A> =
<BR><BR>What's=20
Next: <A=20
=
href=3D"http://www.business2.com/whatsnext">http://www.business2.com/what=
snext</A>=20
<BR><BR><BR></FONT><BR><BR clear=3Dall>
<CENTER><FONT face=3D"Arial, Helvetica, sans-serif" =
color=3D#999999=20
size=3D1>advertisement</FONT><BR><A=20
href=3D"http://www.sas.com/b2-intelligence0303"><IMG height=3D60=20
alt=3D"Click here to visit our advertiser."=20
=
src=3D"http://ar.atwola.com/creative/GALLERY/2003/04/01/AAAAABHWEM.JPG"=20
width=3D468 border=3D0 NOSEND=3D"1"></A> </CENTER><FONT =
face=3D"verdana, arial"=20
size=3D2><BR>
<DIV class=3Drelated>
<DIV class=3DrelatedHead>Related Articles</DIV>
<DIV class=3DrelatedRow><SPAN =
class=3DrelatedBullet> =95 </SPAN><A=20
href=3D"http://werbach.com/blog/2003/05/14.html">Kevin Werbach on=20
LinkedIn</A><SPAN =
class=3DrelatedSource> - (Werblog)</SPAN> </DIV>
<DIV class=3DrelatedRow><SPAN =
class=3DrelatedBullet> =95 </SPAN><A=20
=
href=3D"http://www.business2.com/articles/mag/0,1640,47499,00.html">As =
the=20
Virtual Worlds Turn</A><SPAN =
class=3DrelatedSource> - (Business=20
2.0)</SPAN> </DIV>
<DIV class=3DrelatedRow><SPAN =
class=3DrelatedBullet> =95 </SPAN><A=20
=
href=3D"http://www.business2.com/articles/web/0,1653,49786,00.html">Can't=
=20
Get to That Meeting? Send a Bot</A><SPAN=20
class=3DrelatedSource> - (Business 2.0)</SPAN> </DIV>
<DIV class=3DrelatedRow><SPAN =
class=3DrelatedBullet> =95 </SPAN><A=20
=
href=3D"http://www.business2.com/articles/web/0,1653,47054,00.html">Towar=
d a=20
Better Business Conference</A><SPAN=20
class=3DrelatedSource> - (Business 2.0)</SPAN> </DIV>
<DIV class=3DrelatedRow><SPAN =
class=3DrelatedBullet> =95 </SPAN><A=20
=
href=3D"http://www.business2.com/articles/web/0,1653,45292,00.html">The=20
Napster Founders' Next Act: A Little Black Book</A><SPAN=20
class=3DrelatedSource> - (Business 2.0)</SPAN> </DIV>
<DIV class=3DrelatedRow><SPAN =
class=3DrelatedBullet> =95 </SPAN><A=20
href=3D"http://www.craphound.com/down/">Down and Out in the Magic =
Kingdom,=20
by Cory Doctorow</A><SPAN=20
class=3DrelatedSource> - (Craphound.com)</SPAN> </DIV>
<DIV class=3DrelatedRow><SPAN =
class=3DrelatedBullet> =95 </SPAN><A=20
=
href=3D"http://joi.ito.com/archives/2003/05/07/linkedin_launches.html">Jo=
i=20
Ito Discussion on LinkedIn</A><SPAN =
class=3DrelatedSource> - (Joi=20
Ito's blog)</SPAN> </DIV>
<DIV class=3DrelatedRow><SPAN =
class=3DrelatedBullet> =95 </SPAN><A=20
=
href=3D"http://radio.weblogs.com/0114726/categories/socialNetworks/2003/0=
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