If the Shoe Fits: Role Models
by Miki SaxonA Friday series exploring Startups and the people who make them go. Read all If the Shoe Fits posts here
Who is your role model?
When asked, most Internet entrepreneurs talk about building the next Facebook as opposed to the next LinkedIn.
On the surface that’s not surprising.
Facebook has 900 million active users around the world vs. LinkedIn’s 150 million global users.
Mark Zukerberg is a household name unlike LinkedIn founder Reid Hoffman or current CEO Jeff Weiner.
Based on user time on site Facebook, at 6.4 hours a month, kills LinkedIn user’s 18 minutes per month.
Now, take a closer look.
Users add $1.30 revenue to LinkedIn’s coffers for every on-line hour, whereas Facebook generates a whopping 6.2 CENTS for each online hour.
When LinkedIn users started using it for job hunting LinkedIn jumped on the band wagon and created a product called Recruiter that costs as much as $8,200 a year per seat. (Adobe pays for 70 seats—do the math.)
LinkedIn’s top salespeople make as much as $400,000
I can’t find mention of Facebook salespeople.
Facebook’s share price is $29 (IPO price $38; no first day pop), while LinkedIn is $104 (IPO price $45; doubled first day of trading).
Facebook is desperately trying to monetize its users, but there are no products that have emerged as they did for LinkedIn, so all that is left is user data and user actions.
In an effort to boost its advertising revenue Facebook decided to use the names and photos of anyone who clicked a product’s ‘Like’ button to plug that product—referred to as “Sponsored Stories”—and, as usual, did so without notifying users let alone getting permission.
A class-action suite was filed and Facebook lost.
Until now, Facebook users were unaware when and how they were exploited for advertising, and they may not have realized that a click on something as vague as a like button could be used to enrich Facebook, the company.
Facebook settlement update.
And then there is Zynga, whose executives are being investigated for insider trading after selling off 43 million shares a few months before the stock tanked to $3, down 70% from its IPO price.
Zynga executives, including CEO Mark Pincus, CFO David Wehner, COO John Schappert, and general counsel Reginald Davis, as well as many heavy investors, such as Google, Venture Partners, Union Square Ventures, Reid Hoffman and others, all cashed out part of their stock in April, months before the stock cratered on the disappointing earnings report.
Google, under Larry Page’s leadership, is still making excuses for not fixing the privacy complaints in France (Americans have no privacy rights and so can’t complain.)
The French data protection authorities asked Google on Tuesday to examine private information that cars taking pictures for its Street View service collected, after Google acknowledged that it had retained some of the information despite promising to delete it.
You may want to rethink your role models along with your revenue model.
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