LinkedIn is not a social network.

A thing is defined by it’s major attribute.  While LinkedIn has aspects of a social network, it is actually a social database.

Hey Donato…But they say they are a social network!

In the early days they were.  As the network grew, savvy users realized they needed to grow their networks as large as possible to spread their reach.  In polls done over the last year in live webinars, I’ve asked groups ranging from 200-600 how they use LinkedIn.  Here are the questions and the responses.

1.  I get as many connections as possible and figure out how to contact people directly.

2. I use LinkedIn to as it was meant.  Connect with people through a series of connections.

3.  I don’t use LinkedIn.

69% of people choose option 1. Last year, it was only 50%. The trend is growing and…

LinkedIn is a social database.

That is how the majority of people are using it.  Social database.  Why does this matter?  It is about methodology. First, I will admit, in some cases, an introduction is the only way to get to a high level contact.  Admittedly…this is one way how I use LinkedIn.  However, connecting through a chain of 3 people is too slow. Painful. Sales and especially recruiting cannot work at those speeds.  If they guy at the second place in the chain of connections is on vacation, kiss your placement goodbye.  Another recruiter that goes direct is going to eat your lunch.  Sales is much the same.

LinkedIn promotes bad outreach methods.

Have you ever received a canned message from LinkedIn member that starts with  “Because you are a person I trust…”.   When I am in a particular mood, I will reply to those messages with “Send me $50 please…if you trust me”.   Sometimes this will get a laugh and people will realize how bad their outreach was.  Sometimes, I never hear from them again.  As yet… none of these trusted connections has sent me cash.

Bad outreach is easily cured. Remove the canned invites and force people to actually write a real reason of why they want to connect.  Score the text of the message for uniqueness.  This is not hard to do.  Flag messages that were mass mailed.  Give users the ability to automatically remove any messages sent to more than 1, 5, or 10 people. If I see a message that was sent to 50 people, I would delete it.  I have a personal policy to read all 1:1 messages that are sent with a reason.  I sent this suggestion to Reid Hoffman, the LinkedIn CEO at the time and he said “they were working on something like that”.   Based on the amount of unsolicited LinkedIn spam I get…bullshit!

LinkedIn makes money on quantity, not quality

The actions of LinkedIn show that they want to make it as easy as possible for you to connect to as many people as possible.  They know that they have a tremendously valuable social database.   This is good business sense.

LinkedIn: are you reading?  Recently on the focus.com site, my answer about the worst thing on LinkedIn got the most votes.  Everyone hates the canned invites.  Here is the link:  http://www.focus.com/questions/if-you-could-change-1-think-about-linkedin-what-would-it-be/

The quality of LinkedIn will continue to drop over time.  Unless some major changes occur to (1) stop the LinkedIn spam (2) Force quality outreach (3) Give users more control on what is sent to them   …  LinkedIn will experience the exodus.

The LinkedIn Exodus

The future of the web and of technological interaction must be permission based.  Today,  LinkedIn is mob-based-permissions.  Many of the recruiters and sales people I sell to on a regular basis are part of 50+ social networks and groups.  They are being bombarded with outreach, unsolicited from members of those networks.  Eventually, I predict, vendors such as Facebook and LinkedIn will continue to (1) Follow the money (2) Abuse users best interests and then (3) lose those users.   It will be interesting what Google+ ends up looking like.  At some point, users will take back control and all interactions with networks will be on the users terms.  A centralized (maybe mobile) set of permissions that *dictates* to the outside world how the network may interact with the user.  This will happen.

Positioned for permissions.

Which company is going to step up and have some vision?  Give the user total control over what and how often they receive any type of outreach.  It is against LinkedIn’s and Facebook’s short term financial missions.  Maybe Google?  Google does not have to make money on their social network.  That may be one of the key pieces of building a permissions technology.  If money is involved, if the need to sidestep privacy in the name of profit is anywhere in the equation… it won’t work.

Examples of permissions:

Facebook: Block all Apps from Posting on my wall.  I will accept any personal wall post, but darn it, I don’t want to join F*&@ing Branch out.

LinkedIn: Block any messages that are sent to more than one person.  Again: personally I like personalized messages and respond if I can.

LinkedIn Groups: No, because I joined a group, you cannot add me to your widget mailing list.  I must request it and you cannot prompt me.

Google+: Stop notifying me that someone added me to a circle….. score one for Google… they actually just did this!

Social Agents: Yes, my wife’s iPhone can check my iPhone’s calendar and meetings scheduled.

Newsletters: Only accept 1 newsletter per quarter from my financial advisor.

Email: If the person is not in my email history,  mark as low priority (this I already do)

Excessive?  You won’t think that when the RFID label on a bottle of water you just bought sends your iPhone and advertisement.  In a technologically explosive world, permissions that we control will be required to keep our sanity.

A permissions foundation?

What if an independent foundation was created by the major players out there?   Facebook, Microsoft, Google, Apple and …LinkedIn.  Mission: to create a portable technology that is tied to an individual.  It includes all the rules of how the world may interact with that individual.  The “profile” is portable and exclusively owned and controlled by the individual.  Profit could be made by companies that have a better mousetrap for managing those profiles.

Time to get disrupted.

The permissions technology/widget/APP would lead to other interesting side effects.  As it is a few years away, it will coincide with very fast mobile processors.  Good bye Facebook.  Reality: no one trusts Facebook with privacy.  Give people an alternative social network, with permission you absolutely control, that you carry on your hip on your iPhone or Android… why would you want Facebook?

Social Networking evolves:  Mobile Peer to Peer

How will Facebook stop this?  They can’t.  It is inevitable.  Every major technology starts centralized and then moves to distributed as the technology is democratized.   Create a news alert on social networks and violations of user trust.  You will see the trend.  10 years ago…how many people in the world could develop an app for a mobile phone and distribute it in days to millions of people?  Not many.  Today it can be done by an industrious child.

Mobile Peer-Peer social networking will look nearly like Facebook or Google+.  The only difference is that all the data is stored on your iPhone/Android/Device.  New picture of the kids?  … it automatically connects to all your friends devices and uploads the pictures…based on permissions.  Think of it as a group DropBox for pictures, status, check-in’s,  etc.

What needs to happen for Mobile Peer to Peer

Mobile phone processors need to have about a 2X improvement in processor and battery life.  The iPad2 is there today.  In a recent live talk, I demonstrated my iPhone acting as a mobile web server.  It was a bit slow, but the point was understood. Ten years from now, mobile phones will be hosting full blown websites.  Peer-peer social networking will be childsplay  comparatively.

Entrepreneurial opportunity

Google, Facebook, LinkedIn, Yahoo, Microsoft want to control your data, your friends and record your interactions.  What you do & say, who your friends are, etc.  They want to know, save it and use it.  It’s good business.  Chances are they won’t invest in something that takes control away from them.  This is the perfect recipe for disruption.  Pick the right time, build it and monetize.

Twitter:  idonato
LinkedIn:  http://linkedin.com/in/donatodiorio
Google+:  http://gplus.to/donato
Facebook:  Friends & family only  (my permissions)

On the other hand I had some great conversations, where, very early in the conversation I was informed that Broadlook did not match their portfolio requirements.  Even though this was the case, they freely spent time giving great advice for a fledgling company.  Some of them are my clients today.  Like every industry, VC has the good and the bad.  A book every VC should read is Blue Ocean Strategy.  Yes, sometimes you must bloody the competition and create the red ocean, however, more often than not, there is a blue ocean potential.  The lack of seeing the Blue Ocean potential is due to lack of desire, creativity, or core philosophy.

To digress a bit, we once had a team member at Broadlook that stated there is no such thing as win-win negotiating and that there always a loser.  Myopic Idiocy.  He left.  We are better for it.  I now ask more philosophical interview questions when adding team members.  One of my mantras when interviewing and coaching other team members to interview is this:  First determine who someone is and then and only then what they know.  Translation: no pricks allowed at Broadlook.

Fast forward to today.  When a Venture Capitalist calls, I am still excited.  When I say VC in this article, I’m lumping in Venture Capital, Private Equity and Investment Banks together.  Each have their place and focus, but the outreach tends to be very similar.  I guess I should set the stage.  Today, Broadlook has steadily grown for 8 years, sometimes a modest 15-20% and sometimes 200-300% in a given year. 

Broadlook started in 2002 and self funded without any outside investment.  Our team members are proud of our accomplishments and we have fun doing our jobs.  We have talented people in all areas and we are continuing our growth path. Broadlook has thousands of clients and is starting to be recognized as the defacto “high bar” (not standard) for company and contact data for sales and recruitment.  (I don’t say “standard” because what is accepted as “standard” from traditional data vendors is Zombie Data*).   Broadlook is not, and will not tie itself to any single CRM vendor (Jigsaw is now salesforce), we are agnostic to all systems that may hold the data our technology provides. 

*Zombie Data is data that is dead, but still making walking around (D&B, InfoUSA, etc)

Over ninety five percent of Broadlook’s sales are from incoming calls, emails or client referrals.  We just hired our person in Marketing.  It’s a good place to be in. We are still very humble and realize that there is much more work to do.   Broadlook is not actively looking for Venture Capital, but we receive many inquires, thus I wrote this article.

Why not take VC?  I didn’t say we would never take it.  The approach we take is this.  We know that there will be a point that there will be a tremendous market opportunity with a limited window to execute; we must scale quickly if we want to capitalize.  The age old question is how much of the company to give up in order to have the investment?   The age old dilemma for the entrepreneur.

Over the last three years, as Broadlook was noticed in the market, we’ve had increased outreach from VC firms.  Along the way, I learned;  somewhere in that journey I realized that VC’s needed our technology for their internal due diligence process.  I learned what research associates at VC firms did.  It was an interesting turning point.  It changed the nature of the conversation from a one way discovery call into a real conversation.   Today, Broadlook powers VC firms with technology that fundamentally changes the due diligence research process.

They have been great clients.  Some of the absolute smartest people coming out of the best Universities and go to work for these firms.  Bright people early in their career who absolutely “get” what Broadlook does.  I like people who get it.

Yes, this is a unique position to be in, but what was the *real* change in how I took those calls? How can someone else that is not in Broadlook’s position get the most out of an outreach from a VC?  Read on.  I am sharing my learning process and my stumbles.

The reality is that a more experienced executive (yes, I consider myself fledgling) would have entered the conversation with a greater level of  equivalence. Venture Capitalists are typically very smart.  They go right for the heart and will chew you up and spit you out to get the information they want. I’m basically a nice guy.  I’m still a nice guy, but now, after many calls that ended up in one-way conversations, I’ve established a set of rules for talking with VC’s. 

1.  Quality outreach

The best outreaches by VC’s that I have seen have come through referrals.  A mutual connection that can attest to the quality of an individual.  An email that looks like a form letter should get ignored.  This is my weak point… while I know I should ignore it, I usually write back and let them know how poor their outreach was.  Since I teach classes on how to use the Internet to make a quality outreach, I can’t help myself.  

2.  Equivilance

When the conversation starts and they only want to know your revenue, remind them that they called you.  Remind them they need to sell you first, and then there is no guarantee that you will be interested.  If if gets to the point of sharing confidential information, if they won’t sign an NDA…stop.  Think.  If they don’t want to sign one because they are making investments in your space, ask them for specifics.  This is all the more reason to sign an NDA.  If they are really interested, they can customize and NDA with specificity to protect both parties.  If they flatly refuse, remember, you are more unique than they are. 

3.  DWYSYWD; Do what you say you will do.  To be a liar you need to have a perfect memory.  If you slow down the process of discussion over several conversations, you have the chance to observe behavior.  If the VC outreach is of the class “Drain you for information”, he will have plenty of rope to hang himself.   The best VC’s will disqualify you openly if you do not meet their criteria.  I have had my share of liars calling.  Conversely, I regularly talk to VC’s that long ago disqualified Broadlook for not being a fit.  

4.  Revenge.  In a fun way.  Keep track of VC’s that were pricks.  Watch which companies they invest in.  When you have the chance, take extra pleasure in winning business from those companies.  If the portfolio tanks, send a nice “thanks for the motivation” card.   Recruit their analysts.  Robin Hood!

Missing an analyst?  Ever wonder why that analyst left?  Does it seem like you keep losing them after they are trained?

Yeah that’s right… it was me  *#&%!

(You should have been nicer.)

Will Broadlook take VC/Private Equity/Investment Capital?  My answer: Absolutely!   Some day.  Will any potential investor run the other way when they read this?  Hopefully not the ones with a sense of humor.  Every industry knows the good and the bad within itself.  I’m trying to kill 2 birds here.  Share a bit, prepare a bit.
This is not a soliciation for capital.  While I may chase away potential future investors, I won’t have to search through my email to send my engagement criteria to reply to the next canned outreach. 

Broadlook’s Venture Capital Engagement Criteria

 1.  Do your homework.  I guarantee I will talk to any VC that takes the time to at least review our website, bad as it is, there is a good deal of information there. Read this blog: 11 rules to sell to me

2.  Don’t have a first year analyst call unless they are brilliant. Remember, I may recruit them.  If they sound like they are going through a checklist when talking to me, they are not ready.  That can be cured for $10,000 and a one day training session. 

3. Demo.  Take a demo of our technology.  If you don’t get it or don’t like it.  We are not a match.  When Broadlook takes capital, there is a high likelyhood it will be from one of our clients.  Include a decision maker on the presentation.  If this is not acceptable, there is not reason for us to talk.

My guarantee(s): 

1. You have no idea what Broadlook does (think iceberg)
2. You have never seen anything like it

4.  Portfolio.  If you invest in grain elevators you probably don’t have the connections, expertise and potential adivsors to help a software company making the transition to SaaS.  Show us high tech.  Show us software that scaled from 5 to 8 to 50 million.

5.  Enthusiasm.  Money is easy.  Thus far we are a lifestyle company where people love coming into work every day.  Show us passion for building great companies.

6.  Contribution.  aka Smart money.  People, people, people.  Who can be brought to the table in stategic positions as well as an advisory capacity?  While a marketing person that ran a billion $ division from IBM may sound like a great idea, it is not…not yet.

7.  Ideas.  What markets can Broadlook’s technology be leveraged…that we haven’t thought of yet?

8.  I don’t work on Isaac Asimov’s Birthday

9.  As long as I work at the company. The dog(s) stay.

What rights does an incoming caller have?  To be more specific, an incoming solicitor calling a place of business?

At home, we have the do-not-call list.  This could never be put into effect for business, nor do I think anyone sane would see it as a good idea.  Business would halt.

The general consensus that I have gathered is that callers to your home have no rights.  Hanging up on them is acceptable with a simple “no thank you” is status quo.  This I find fascinating.  When I polled regarding a caller to a business environment, the treatment is different.  Recipients of call to a business environment report that they will listen 1-2 minutes before exiting from a call they don’t want.  Some reasons why at home and office:

At Home

1. Home is sacred, people feel invaded and justified to not give up their home time
2. It’s usually at the end of the day, evening, people want to relax
3. Non equivalence.  You are home, the caller is at work

At the Office

1. Professionalism.  The Golden Rule.
2. Equivalence.  You are both in a work environment
3. You may be calling them tomorrow
4. You really may be interested in their service

In essence, this is a philosophical question.  What is your corporate belief system? What is your personal belief system?  For me, today was back to back  scheduled meetings and three solicitors got past my gatekeeper. Rare.  It inspired this blog and reminded me of one of my beliefs:

“I came here to say that I do not recognize anyone’s right to one minute of my life. Nor to any part of my energy. Nor to any achievement of mine. No matter who makes the claim, how large their number or how great their need.”

Ayn Rand, The Fountainhead.

Of the three in-bound calls, one lied to my gatekeeper to get to me.  This is plain stupid.  Alienate the person who manages my schedule.  The other two reached me while everyone else was at lunch.  Not one of the three had a coherent message.  How much of my time did they get? Less than five seconds.  Did I hang up on them?  No. There is another option!

About three months ago, in talking with our administrative staff, I came up with the idea for line 1300.

If you end up in line 1300, you get a recording that sound something like this:

“Hello. You have have reached line 1300 at Broadlook Technologies because you were either unclear or perhaps rude in your outreach.  This is your chance to get it right.  At the sound of the tone please leave a clear, articulate message detailing how your product or service is right for Broadlook.  We listen to this voicemail box once per week.  If we are interested we will contact you.  Thank you.”

What does line 1300 do?  It empower the people that support me.  They do not have to take crap from rude callers.  It gives your staff an immediate out from a monotonous, unclear, script-reading telemarketer.  In addition, it covers the litmus test of professionalism.  We DO listen to 1300 once per week.

Line 1300 is NOT about being mean.  It is fair.  Personally I give sales a step by step guide on how to sell to me. If they don’t follow it, line 1300.

Try adding a line 1300.  Your staff will love your for it.

Unlimited bandwidth.

Ask any of the iPad user that got one in the early days. Unlimited bandwidth is no longer available on the iPad.   I am one of the lucky users. With a combination of my travel schedule,  high Bandwidth using applications like Netflix and Broadlook’s Profiler, I regularly top 12-15 Gigabytes per month in data transfer.  Data plans today cover 2GB which means I am using 6-8 times the bandwidth that new iPad users get.

I am a bandwidth hog.   I am one of the 2% of people that use the majority of the bandwidth and I’ve got a message for AT&T…I’m keeping my plan…forever.

Why blog about this?  It is a warning for the uninformed.

Guess what?  Very soon you will be a bandwidth hog.  AT&T, Verizon and the other carriers understand this.  It is the nature of technology.  More and more applications, business logic and media rests in the cloud.  Now Apple and Google each want to offer streaming music services.  No longer will you have your iTunes on your desktop, laptop or iPad.  Nope.  They want all your music in the cloud.  Why?   Apple gets a piece of the service fee that you pay AT&T for your iPhone or iPad.  Bandwidth is the new electricity.

This is reminiscent of 2002–2008 when every idiot said that you must make your software offering SaaS (Software as a service).  SaaS is mostly good for service providers since it gives them reoccurring revenue, but it is not always the best solution.  Don’t get me wrong, I am huge believer in SaaS, but it is not a panacea.

Now they (the same smart zealots who want your $$)…are saying that they want all your stuff in the cloud.  Why?  Simple, if you store everything : backups, music, CRM, etc in the cloud then you need bandwidth to access it.

Whose cloud?

At the recent Oracle OpenWorld conference, Larry Ellison, CEO of Oracle talked about the cloud NOT being a single set of servers but a flexible appliance.  Thank you Larry!  He gets it. Most don’t.

The Flexible Appliance

What is it?  My iPhone is a flexible appliance.  In a recent talk at the MRI Worldwide conference (The Near and far Future of Recruiting), I demonstrated on stage the advent of the mobile web server.  My laptop connected to a website that was hosted on my iPhone and one person in the front row said “that’s cool!” out loud.  Not the response I was hoping for, but it sunk in to enough  people that had time to think about it.  It inspired some great conversations about the future of recruiting.

I used an iPhone app called ServersMan that makes your iPhone a web server.  Being able to run a web server on a mobile phone has huge implications.

If you want to test the vision of a technical leader ask them this question:

When mobile devices (iPhones, iPads) can act as functional web servers, what does that mean for the technology landscape?”

They should be stunned, they should be wondering, they should be smiling.  If they don’t, then they lack vision.  The advent of the true flexible appliance will bring:

-Massive bandwidth usage.  Via your mobile flexible appliance/personal web server, you will be connected to everything

-Downfall of Facebook.  News to Zuck.  The future social networks will be controlled from the pocket.

-movement from “their” cloud to “my” cloud.

When I have proposed the above, among tech folks, they remind me that some sort of middleware needs to facilitate one mobile web server finding and connecting to another.  This already exists, it is called dynamic DNS and their are a bunch of companies that offer this.   With DynamicDNS, my iPhone web server could very quickly connect to 200 of my friends and update my status on their mobile devices.   No cloud, no Facebook needed.   The only limitation is bandwidth and mobile processing speed.

The above scenario will happen once people realize they don’t want Facebook storing everything about them.  Due to the nature of the beast, they will continue to violate the privacy of their users.  Eventually it will go away.  Don’t get me wrong, I like Facebook.  It gives me a way to connect with grandma and show pictures of the kids.  Facebook may change and become the king of the middle, middleware the ties everything consumer together.  But do you trust them?  I don’t.

It’s all about the middleware.

As I look at SaaS (Software as a Service) and then PaaS (Platform as a Service) combined with the advent of the flexible appliance, I realize that my previous thinking was limited.  In the mobile future,  the mobile is the cloud, the flexible appliance.  For consumer apps like Facebook, people will eventually prefer to keep their personal data in a place they control it.  However, for business applications like CRM and ATS (Applicant Tracking), I see a new class of business.  Middleware as a service (MaaS).

Middleware as a service will balance the load between the cloud and the flexible appliance.  Unlike the limited browser-based applications today, MaaS systems will balance the rich interface and local power of flexible appliance with the security, flexible business logic and data storage in the cloud.  It will be interesting to watch it evolve.

With all this stuff in the works… if you get an unlimited bandwidth package, read the contract and if you can, never give it up.  Providers will offer unlimited bandwidth as a promotion and then like AT&T/Apple, try to get you to downgrade from $30 per month to $25 per month to relinquish your unlimited package.

Did I mention that once you get it, never give it up?

Here is the premise:  You get invited to the project and the person that invites you gets points.  They can then create their own link and get points, etc, etc.   In a perfect world, the person with the most influence would yield the most points.  The fun part of the project is a very well done user interface that visually shows you all the people involved.  You can navigate through connections and influence points.

I want to thank John Sumser for creating the post that influenced me to review the Project.

After I clicked on John’s influence link I had a blast reviewing the site and then went back to my work.  Enjoyable experience.

Then the mob took over.

Emails, Twitter direct messages, even a phone call.  People were asking me to use *my* influence to help promote them so they could be near the top of the list.  Influence?  It is no secret that Broadlook, the company that I founded, develops list generation technology.  People wanted “my list”.  One individual even offered to purchase a list on behalf of their chief executive.

If you are reading this and you are one of the people on LinkedIn or Twitter or some other social disaster and you want be at the top of the list, (1) you can’t have my list and (2) think about what Edgar Allan Poe said:

The nose of a mob is its imagination. By this, at any time, it can be quietly led.
-Edgar Allan Poe

In reality, the Fast Company Influence Project will not come near to predicting real influence online.  What it will do is spotlight some people who desperately want to be leading the mob. Guy Kawasaki, while well respected, also seems to want to be at the top of the mob. He talks about it in this article.  I think it would be more fun to pick a person of total obscurity and put them at the top.  Similar to the Search Engine Optimization (SEO) initiative that pointed the search for “Miserable Failure” to George W Bush.

I would welcome human suggestions as to the most influential person online. How about the web master at Google?  What if Google posted a single link on their home page “Vote for Sergey”?

Overall, I am disappointed, it would be nice to have seen a scientific study.  I’m somewhere on that list, but shouldn’t be.  Thanks John ;(

Caveat: My friend, John Sumser did influence me, but did not ask.  Big distinction from the “help me be influential” contingent.

###

More mob quotes

The nineteenth century lynching mob cuts off ears, toes, and fingers, strips off flesh, and distributes portions of the body as souvenirs among the crowd.
Ida B. Wells

The vision that the founding fathers had of rule of law and equality before the law and no one above the law, that is a very viable vision, but instead of that, we have quasi mob rule.
James Bovard

There can be no such thing, in law or in morality, as actions to an individual, but permitted to a mob.
Ayn Rand

There is no logical reason why the camel of great art should pass through the needle of mob intelligence.
Rebecca West

There is no necessity to separate the monarch from the mob; all authority is equally bad.
Oscar Wilde

There is nothing more foolish, nothing more given to outrage than a useless mob.
Herodotus

We grew up as kids watching those movies and we were exposed to themes of civil rights, unfairness, bigotry and fathers struggling against the kind of mob of the town, so you remember how you felt as a kid being taken seriously, that you are part of the human drama.
Rachel Griffiths

When the theater gates open, a mob pours inside, and it is the poet’s task to turn it into an audience.
Franz Grillparzer

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