It was an exciting day as the very first professional social network went public and climbed to astronomical levels upon its debut as the largest IPO since Google! I’m sure you were watching from your offices as I was from mine, because we love this stuff. I’ll never forget the Google IPO back in 2004 and certainly wish I would have had a better understanding of the company, and its tremendous impact on the growth of the internet. Unfortunately, I didn’t invest.
There are certainly plenty of naysayers about the LinkedIn IPO, and even Jim Cramer‘s calling this “silly deal” a bubble! Maybe the naysayers are correct. Trading at 44x sales is pretty crazy. However, I’m not sure that most investors truly understand the power of this firm and what they’ve built. Much of Google‘s success was based on gaining and directing internet traffic, and being able to monetize that traffic effectively. LinkedIn has a strong (and massive) membership, traffic, attention, they’re directing valuable referral traffic out to other websites, and they’ve got a monetization strategy built into the site.
In addition, let’s not forget that LinkedIn, the largest social network for professional job seekers, is sitting on the cusp of a potential job market turn-around, which plays nicely into the business model as corporations search, source, and pay for access to ideal, high quality candidates for employment. Yes the valuation is nuts, but it will be interesting to see how this one will play out. Disclaimer: I’m no analyst.
If you’re a financial advisor who provides advice and guidance to your clients, I’m wondering how it felt for many of you to watch this historic event unfold for a social network that you really can’t fully experience due to the current regulatory environment? Isn’t it a bit ironic? Certainly there are thousands of financial advisors who have profiles on LinkedIn, but most of them are ghost towns right now.
Fear not, I have no doubt that the day will come when you will be able to gain full participation access to LinkedIn and other social networks. It’s coming. LinkedIn, however, will most likely be a different network by that time. Why? As a publicly traded company, they’ve got to continue to grow revenues. (earnings? who cares about earnings!)
What this means for you is that social networking in all its glory will no longer be FREE. This idea that social networking is FREE and EASY prospecting and marketing is a myth even today. Your time is not free, and your reputation is priceless. You can waste a lot of time on social networks (without a strategy), and you can damage your reputation in one tweet. (I’ve seen plenty of tweets go out from financial advisors that wreak of used car salesman tactics)
The price to be paid for a ticket into social networking sites will be in subscriptions fees and probably increased advertising views. Bottom line, you’ll have to pay to play, but it will be worth it just to gain access alone. Currently with LinkedIn, a free membership doesn’t allow you to go very deep. It’s the premium memberships that really provide you with intelligence and tools to make your time spent on the network more worthwhile, so it may be wise to go ahead and upgrade if you’re able to participate fully. (10 reasons you should upgrade your LinkedIn account). For the record, I have the $99/month executive level account and have found it to be extremely valuable.
Now you don’t have to go out and invest in LNKD stock, but…you may need to start changing your thinking about this social networking stuff and realize that an investment in social network memberships, as well as in partners, coaching, tools, strategies, support, and implementation services are going to be a must in order to capitalize on opportunities to differentiate yourself and strategically grow your business in a wired world. Trust me, you don’t have the time to eat, sleep, and breathe social media while running an effective practice, just as your clients don’t have time (and hire you) to keep tabs on their portfolios and manage their financial lives. Throwing up a few free social media profiles in hopes that your phone will ring just won’t cut it. You’re going to need a structure, a strategy, and a system for success.