The following is a transcript provided by futuregen to the WhosYourDaddyshow.com interview with Christian Mayaud with 12 hours turnaround time, 98.5% accuracy and in a format suitable for blog posting.
Marc:
Welcome It’s LinkedIn Live: Who’s Your Daddy? And I am your daddy this is Marc Freedman the anti-prophet of LinkedIn and we’re happy to be back after a layoff will two weeks after the Thanksgiving holiday day.
I hope everybody had a nice little layoff there. On this show we are going to be featuring as usual the music from Michael Dawson of Dawson’s New Rage and I would thank Michael for his support; and we’ll also be playing some other music from new artists in the future shows as time permits.
In addition our special guest today is Christian Mayaud. And Christian is one of the super connectors. So we will be bringing Christian on in a few minutes. First, I just want to share with you my own struggles with LinkedIn.
I was off the grid for two weeks and boy that was kind of painful although it was a nice vacation. LinkedIn had suspended my account during this period and I wanted to open the show and share my experience with you just for just a few minutes and I’d be interested in your feedback on that as well.
My account was suspended on a Monday. I received no notice – either that the account was suspended or that it would be suspended. The next communication of some kind that I had was on Wednesday.
I received an e-mail with a cease and desist letter from your friendly corporate attorney at LinkedIn saying “stop using our logo on your website” and oh by the way that site that you have at MyLink500 encourages people to invite other LinkedIn members that they don’t know or “whores”.
So in a few hours I wrote back saying you know, help me understand your rules I want to stay in compliance with you. We certainly don’t want to mess with the LinkedIn gods now do we?
And I heard nothing back. And a week later I heard back from the attorney and over the course of the next two days or so the only thing that really would make them happy was to totally take the LinkedIn logo off all of my websites.
And so you’ll see it in none of our graphics on Dallasblue, MyLink500, Mylinkgroups and any of our websites and if you go to mylinkgroups we make it very clear that it is against the rules to use our member directories to directly invite people to join you if you don’t know them.
So after all of these it took two weeks that my account was suspended – finally got service reinstated. And it was quite a bit frustrating dealing with them. I mean all in all, suspending someone’s account should be the last thing you do – not the first thing that you do especially when you are paying business member and you are operating in good faith and I have worked with their legal people in the past and on their request so it was not as if I was being uncooperative.
Well that was my LinkedIn experience and the story for the week and hold on just a second let’s see we have a caller on the line and yes caller you are live. Who is this?
Chris:
Oh this is me, Chris.
Marc:
Well we have Christian Mayaud on the line. First before we get started with our interview with Christian, we’ll be taking a few all of your calls. If you have questions about LinkedIn, about networking, any short stories that you want to share with us you can either write them through the chat window and we’ll talk about them or you can call in.
The format of today’s show is we are going to have a short call in period for your questions and we’re going to have our interview with Chris. And then we’ll have an opportunity at the end of the show to ask more question either to myself or to Chris or our combined wisdom and 230,000 connections between us and we thank you for joining us again today at Now Live! Who’s Your Daddy?
So again our lines are opened for your calls or your chat questions and Chris how are you doing today?
Chris:
Good! Good good good good. You know I just had a little trouble dialling in today now but that’s okay.
Marc:
Alright. Well technology is a bitch isn’t it?
Chris:
Okay now? Hey, yeah can you hear me OK?
Marc:
I hear you well and I assume our audience can hear you as well. Well I don’t see any – Well it looks like we have one quick question. Let’s take this caller before we get started.
Yes good afternoon you are on LinkedIn Live.
Joel:
Hey how are you?
Marc:
Please make sure…
Marc:
Hey Joel just one thing can you turn on your audio? We are getting feedback here.
Joel:
Oh you are? Right.
Marc:
…and also …
Joel:
Is that better?
Marc:
…in your now live browser there’s in the upper right – there’s a little audio box where you can click “close audio link”. I’m sorry again who is this?
Joel:
This is Joel (Block)
Marc:
Joel hi how are you doing?
Joel:
I’m okay how are you? Hey nice to talk to you. You know…
Marc:
Well thanks so much.
Joel:
Hey you know it’s amazing all the dogma that attaches itself to LinkedIn – does anybody understand you know really what the logic is behind some of their stuff? I mean they shut you down I mean, I don’t really get it. Do you get it?
Marc:
Well I do get it. But it – you have to break under a very warped view of reality for a lot of us who are evangelists and supporters – it’s always a slap in the face when we are restricted, limited or slapped down but again you have to realize that we are the minority on LinkedIn and in a community of 15 million or who knows how many members they have now, they’re actually looking out after the average member who’s a guy with 10 or 20 connections.
And protecting that person’s privacy and in a very extreme way limiting contact from other members who don’t personally know him. So that’s a – I mean to someone who’s a professional network like myself…
Joel:
… that says a lot for me. You know like government intervention. You know I mean people who expose their e-mail addresses and who join Mylink500 and do other kinds of things – clearly want to make friends with other people and you know I mean my sense is if you only have 10 or 20 connections anyway you are not a player in LinkedIn. And it doesn’t matter to you.
But you know, when you start getting into the thousands of first-tier connections you’re probably somebody who does want to utilize the network in a serious way. So it doesn’t – it just doesn’t resonate for me. And that’s why I’m curious about that…
Marc:
Well I’m not saying it’s fair and I’m not saying it’s right I’m just explaining their myopia and I think it’s not fair you know they are mistreating their best supporters who are active networkers like to us.
No one said there had to be any logic to it. Christian what are your two cents?
Chris:
Oh you can hear me?
Marc:
Yeah yeah.
Chris:
Okay listen yeah now I think there is a couple of confusions — I mean LinkedIn has always lived in a confusion. They don’t really have a network and certainly they don’t have a community of 15 million that’s for sure.
Because a community is based on communications and they don’t have communications really. So that’s irrelevant. So I think a lot of their policy is that because they’ve always — they’ve never really been — had anything to do networking.
They are really about you know, I mean basically at the end of the day the only thing you can do really is find, be found, or you know forward request. So I mean it really doesn’t have much to do with networking actually.
It’s really about branding and promotions. So they’ve got to walk that line. I mean but to their credit when you look at the typical online communities you normally have intra-community communications. So in other words, you join a community and the you have free access to everyone.
But what they sort of look like they were originally doing and they’ve shifted away from that was to have inter-community communications. You know, in other words have lots of different communities but then control access.
They’re kind of going that way with all of these groups going all over the place. I mean they don’t really have rhyme or reason at this point and there’s a couple of reasons for that. I mean you know which we can get into.
But basically they’re venture backed and you know they are sort of rudder-less right now, they’re just trying to figure out how to exit, so…
Marc:
Well super! Well, Joel thank you for the call and that is a good introduction to getting Christian engaged in our little community here. Christian why don’t you just spend two or three minutes and tell us about yourself and what you do before we dive into the guts of LinkedIn?
Chris:
Well yeah I basically probably a classic VC except you know except I you know also served my time doing entrepreneurial things. I have an engineering degree, also have a medical degree – practiced medicine for a few years. Did a couple of start-ups while I was in graduate school.
And then probably relevant to where we’re headed here is we probably did some of the first community stuff you know pre-web 1.0.
We basically built the network that tied together all the physicians in the United States. So we have a lot of experience with a lot of stuff which is become web 1.0 and Web 2.0. We were kind of doing a pre-web so we did a lot of that a lot of stuff.
So it’s given me a certain amount of insight into how these online communities worked just because we did it way before any of this stuff started. So – I mean that’s just you know, a little background.
Marc:
And so talk about when you first joined LinkedIn and how long ago was that and you know how did — you’re one of the super networkers on LinkedIn with you know I don’t know 223,000 connections. How did you get to be so large?
Chris:
Yeah you know – I mean you know it’s — okay when I joined – I said “Joined”. I mean basically a bunch of us tested it out. If you remember this is (Reed Hofmann) and so he was playing around with something you know when he sort of let the bag out and let a bunch of his VC cronies take a look at it.
So through that grapevine I you know, logged in. And as I’ve mentioned in other interviews – I’m not really right — at least at the time I didn’t really consider myself a networker. I mean at least in the usual sense — sort of what now we call sort of promoter style. But you know I was a networker to the degree that everybody networks.
The thing that probably the reason why I became so heavily connected really was the reality is I’ve been compensating for years by maintaining really a digital database.
I mean I’ve been using a contact database way back when you know – from the Macintosh you know era. I mean the (end of) the first Macintosh later you know PCs and then Palms, then Newtons and you know today my Treo.
And so I’ve actually been collecting contact information you know just through my professions. So if you actually looked at most of the top network it’s not so much that they are top networkers, it just that they happen to be in professions where they have a lot of contacts. And they generate a lot of them.
As a VC or as an entrepreneur you can – and or recruiter or any of these other people you can generate 2000, 3000 new contacts a year. And I have been doing this stuff for many years.
And so it was easy really for me to have 60,000 to 70,000 contacts. But the interesting thing was you know, if you looked at the original group that went on it was– there were a lot of VCs that went in there.
Now we all know each other anyway but you know we don’t necessarily talk to each other all the time. We can call each other anytime. So we don’t really need an intermediary like this. But we were all testing it. So my stuff’s a little bit more digital than most. I mean most people are pretty good at memorizing these things or they have Rolodex.
I uploaded my database. It was pretty big right from the get go and since that included a lot of VCs in there and we were all testing it. We all saw the feature where “Gee whiz, he’s up so let’s link”. So you know, I oddly enough became like the number one or two for a long time just based on that.
But you know I had no reason to disconnect the people I talk to – but sort of gave the business focus oddly enough for LinkedIn because wherever the VCs go everyone assumes there’s money.
And the recruiters were there. And the recruiters and the job guys – so we actually started the ball rolling. Not just me but VCs in general and us interconnecting. Later I saw …
Marc:
I think that was an interesting aspect of LinkedIn’s early success is that it did capitalize on the VC community which at that time was a unique business service and solution to doing business in a very protective way.
So if you were a top executive you wouldn’t be necessarily sharing all of your connections and having – letting people see your contacts and they’ve really continued that model in a significant way and I find it ironic that someone like yourself who was fundamental with the success of LinkedIn from the beginning and sharing your contacts really finds an environment today, five years later which is somewhat inhospitable to yourself.
Chris:
Well yes and no I mean you know VC — you point out that that model — well actually the model has kind of changed. I think that model wasn’t particularly attractive. And so it looked like for a while, they were going to go on the right direction as you remember you were around in all of these discussions online.
They were pretty open but they just sort of clamped down. I remember why they clamped down behind the scenes. But certainly you know they were open to trying to figure out if they were into networking or not. And we’ve talked about this before.
You know the online networking community is quite pretty small and certainly doesn’t make the big numbers but a job database really does.
And so once they had a lot of profiles in there, they really re-oriented it that way. I mean I think most of the VCs like myself we can call any CEO we want without freaking LinkedIn. I mean come on we don’t need that.
So we don’t have a problem connecting to people. Most hedge fund guys they can call anybody they want. It’s not — you don’t need this intermediary. So it drifted down I think a little bit. However it does give access to us through channels or you know gives another mechanism rather than just cold calling us.
And that’s probably useful. It probably has opened up a few more VCs that normally would have taken referrals you know only from each other.
You know they probably looked at that stuff once in a while. You know something screened through there, so I think it’s probably — the issue is we would probably gotten that that deal flow anyway..
Marc:
Right
Chris:
But now comes (unintelligible) . Okay go ahead
Marc:
Well Chris in addition to being one of the super networkers, I’ve always admired the extent to which you give back to the community and some of the articles that you’ve written. And in one of the earlier ones which I think was quite insightful was your discussion about networkers and your cheaters’ guide and your discussion of your currently active network –your formerly active network and so on — talk a little bit about that.
Chris:
Yeah there was – I probably should –you know I’d been meaning to incorporate those and you know certainly the LinkedIn LIONS should you know – I’m going to incorporate some of that.
But basically when we were – actually it was kind of odd because at the time — you know but when the VCs looked at LinkedIn, we were also looking at things like Spoke. You know and Visible Path and other things. And nobody thought much of LinkedIn. None of us. We thought Spoke was really cool.
Because it really went to the heart of what we understood as actual networking. But again that’s because we network. So we didn’t see it. And as typically we get lost. I mean remember we live five years from now. We don’t really live in the present so to some degree it wasn’t very interesting. And so it grew on its own.
But we weren’t that interested in it.
So part of the problem was that I think most of the VCs had a more sophisticated view about how networking worked. And so – and I had actually from pre-internet days, we had already organized the way to understand online networking.
Because really networking is about communications management. I mean that’s really all it is. So if you really looked at what networking is all about- a person is really kind of an intersect of all the community affiliations they have.
So in other words, a doctor is you know a doctor but he also practices at the local hospital. He’s also maybe at the PTA. He also has a family. He also is a fly fisherman. He also have – all those are actual communities that he’s part of.
So he is actually – has the network. Nobody else has the network. I mean LinkedIn doesn’t have a network. I mean that’s not it. He is the one that has the network. He manages communications with these different members.
So when you looked at each of the communities, his affiliations really come down to three components. And that’s the PAN, FAN, CAN thing.
A PAN is potential active network. That’s basically- for example I’m a physician. There’s you know potentially 800,000 physicians in the United States. Now, I can call any of them. I just don’t.
I don’t have any particular reason to do business with them because we are all on the same community. So we’re all potentially active.
Then- but my Currently Active Network, I mean you know all the stuff you hear about what do they call those numbers? Dunbar numbers and things like that are absolutely true.
In other words, your Currently Active Network is very very very difficult to manage more than a couple of hundred in it. You know a 100-150, 200 that’s your Currently Active.
That means those are the people that you deliver value to. Because you just don’t have enough time in a day. But it depends on how you deliver value too. Your currently active might be very small. If you’re delivering value requires you to be there constantly, you know with just a handful of people.
But in other words, if you deliver value in parallel with multiple people, you could probably you know deliver value to 200-300 people, maybe. But then the thing is for most people or in certain profession like VCs and you know somebody will call me while I have a long in-depth conversation at that moment, they are part of my Currently Active Network.
But then when they don’t call, they now fall into a category which I call Formerly Active. And the reason we separate that one out is we have had a relationship but you know it’s over. But I mean it’s not over OVER. I mean we can always reactivate it. It’s just not – we’re not in each other’s currently active network.
In other words, you know when you’re in somebody’s currently active network, you’re in theirs too. But they’ve got a 150- they’ve got an inventory problem too. So you drop out. But then later on, you know suddenly they have a new deal or somebody comes up, it’s certainly much easier to activate a formerly active network member.
So over time what you see is that as people grow up and this is the thing the LinkedIn guys didn’t understand because they were young guys. You know if you looked at your network over time your FANs – your formerly active networks is huge!
I mean to be huge in certain professions that’s why you – you know that’s why we for example super-connectors have a huge FAN. Our formerly active networks are huge.
I mean they are just huge! But that’s subject to the profession of what we do. And they didn’t understand that because these guys are young. They have relatively small FANs. So they don’t get it.
They don’t understand how someone can have more than 5000 people in their you know contact database. You know they are young guys – or 30s something or in college.
Marc:
Or 3000.
Chris:
Well yeah. I mean no…
Marc:
Or 3000 as the case maybe. Well Chris, let me ask what – you know you talk about managing your contacts and clearly LinkedIn is not the platform to do that.
The best that you can hope for is to be able to export your connections and use them in other products to, you know, whether they’re CRM, your address books and so on, share with us the Christian Mayaud tool kit and what products, software and platforms that you use to manage and stay in touch with your 19,000 connections which put you about 9th in the world in the entire LinkedIn network.
Chris:
Yeah some of you bastards have been actually working at it. I just invited people who just – you know I just accept invites and I invited people who happen to be in my database.
But it always looked like spam to the LinkedIn guys for some reason. But anyway, yeah, I mean the reason VCs talked about PANs, CANs and FANs. A it’s useful, but B you can categorize these companies based on which piece you can manage. Right?
So like for example FANs. I mean a lot of people play with formerly active network stuff like classmates and all those other stuff. But really if you think about it, that’s really an adjustment over time. In other words a lot of us have lost touch with those people.
But in the online world in the future, you’ll have connections to them anyway. So that – it’s not really a management tool. Right now you just sort of finding them. You know LinkedIn does it a little bit.
But that’s because LinkedIn isn’t really a tool for managing either FANs , PANs, or CANs. If you think about CANs , they’re typically – you know FAN its probably the best FAN management thing is really has to do with you know keeping up to date and not losing track of people. And the best tool out there is clearly PLAXO.
So that’s really a tool that’s dead center. Dead heat in FAN. It’s probably the closest thing to a you know – they’re positioned the best to actually capitalize on all this stuff because they actually have access to the actual contacts.
What they don’t have access to is the actual level of communications. That was a Spoke innovations and LinkedIn has been trying to do that with their toolbar which is sort of buggy. But you know in other words, not looking at just whether you do or don’t you know opt in. But whether you actually have a relationship strength with these people.
And that actually makes more sense. I mean if you remember how Spoke was set up. You didn’t have this opting in. I mean the opting in is ridiculous because I mean I remember Constantine back in the old days, he wouldn’t LinkedIn to me but we talked with each other all the time via email.
Now does that make any sense? I mean it makes no sense.
Marc:
Hahaha.
Chris:
You know I said it doesn’t matter and on Spoke I can you know – it doesn’t matter whether – you see the beauty – a beautiful thing about true networking is that it has nothing to do with this opt in stuff. It has to do with who you connect to.
And email is the center of activity. Not only does it have the connections, but it knows the relationship strength. So everybody’s been – now years later everybody’s targeting that, but we thought Spoke was just way too early.
Because people didn’t understand networking at all and I don’t think LinkedIn has helped much. But some people have gotten it. And right now what you really need is a mining tool for your email.
So there’s a couple of tools out there which can be very useful. Again, because there’s not a lot of us, people haven’t done it. But for example, there’s something called Snarf – S-N-A-R-F – this was actually a skunk works project at Microsoft.
They actually hired some people to actually do stuff around there. And of course they let these guys go free. And of course being real programmers they didn’t like Outlook in the way it operated.
So what they did was to (build) a plug-in. No they built a plug-in which was actually fascinating. And in a way it was a rip off of another product that you and I have talked about that I use which is called NEO Pro. I’ll talk about that in a second.
But what they did was – it’s a plug-in there and it allows you to do practical relationship strength. In other words, it’s a sort of a programmer tool because you have to play with it.
But for example if you get your inbox – something comes in your inbox, well there’s different relationship strengths you have and for example it goes in, indexing itself so that have you ever received any email from this person?
Do you receive a lot of mail from this person? Is this a newsletter and that kind of thing. It will figure that out for you so that you can have different views. For example you might consider it important for somebody you used to talked to a lot but I haven’t talked to in a long time. If he sends you an email, that’s a high priority email.
And so you actually set it up. You actually have to play with it a little bit. But then you end up with an alert box so you can pretty much keep your email out of sight. And pretty much take care of everything. That’s one tool.
And it’s part of – but it’s a little bit of a poor man’s rip off of really the vast social networking tool out there which is oddly enough this thing called “NEO Pro”. It’s a company out of Canada. They’re in Vancouver called Caelo Software – anyway I think it’s called email organizer. It was originally positioned as – for the email overload guys.
Now as you can imagine since networking equals communications, but they didn’t have that term. They targeted this just for people who had you know, get like a lot of email. And so what they did was they changed the whole metaphor of how you do email.
Now it was originally supposed to be a cross platform play.
But they got a lot of enterprise clients like you know HP and others who bought in – so they got it to work with Exchange really well. But it works with regular Outlook as well.
Essentially the key to understanding the change in metaphor has to do with understanding that the email right now – and we think in terms of email, which is wrong. We should think in terms of people.
The way I used to explain this was – think about how a doctor handles like lab results coming to him. He doesn’t look at them. Because an isolated lab result means nothing. You don’t have a context.
So what he has is a waiting room and then when you go in there, he looks at all the stuff collected together. That’s actually what NEO Pro does. Basically you can regular inbox if you like doing it that way. But you can also just have another view which is just what they call a correspondent view.
But really it’s just – it’s the list of people. And so if you have no mail from anybody. There’s no people come up. But if you do then you could see the people. So you can in other words be people-oriented.
The other tool out there that’s similar and can be configured similarly which is also pretty reasonable is ClearContext. And that’s a similar thing. It basically handles your inbox and its got a number of tools. But again it’s very dicey out there. It’s very poor. NEO Pro is still the best thing out there and it’s you know but again it’s only high volume – it’s funny though, everyone should use a tool like that.
So we kind of know what the future looks like. We just don’t know who the players are going to be. So I mean those are the ones you can use to manage your CAN, FAN and PAN. And I can’t think of any other tools out there.
I mean other than the tools that we use to you know sort of glue or you know high volume correspondence together.
But I think those are the major tools that really you know embed the right paradigm on to the networking process. Anyway, go ahead.
Marc:
Well Christian with 19,000 connections, I mean do you have a database that you use to manage those connections? Have you ever sent out …?
Chris:
No because I don’t consider those connections worth anything. I mean you remember, a connection on LinkedIn is really just a contract to screen for spam. I mean my – at the end of the day, MY database is MY outlook contacts. That’s my network.
And so if I looked at the number of – I mean in the old days it was about 5%. Five percent of my contacts were LinkedIn users. But because it’s a closed database, it can never work for a networker, right?
I mean it’s pointless to synch with LinkedIn and it doesn’t matter. It’s irrelevant. Because once I have a correspondence with them, they are in my network which is at this point Outlook NEO Pro combination. So I don’t need to use LinkedIn for anything.
I mean you know and I’m really annoyed that they are trying now after all these years to sort of thread in this messaging- which is real nonsense. I’ve always hated that.
I mean one of the good things in the early days, pre-LinkedIn was – you know at least at eAcademy for example, you didn’t have to use their email system. You could actually have it forwarded to your regular email. Because it’s really obnoxious to have to go to a website constantly.
You should be able to handle this through your inbox.
Marc:
Well I totally agree. I mean the messaging seems to me a lame attempt to try to simulate email in a way that just – it doesn’t work. It …
Chris:
Now look (Unintelligible) there’s a bunch of (Unintelligible). No but in other words, they are sort of saying that they heard us. You know I as a VC have been criticising them for years and then they throw that thing in and say “See we have communications”.
Yeah but you’re missing the point. I mean it’s like “Yeah you threw that in. No shit we got prior personal messaging on the LIONS forum”. I mean you know what did that take? It took you know half an hour to put on.
I mean that’s not the issue here. You know its not a question of features. It’s how you are going to fit into the workflow. You know I mean why are you alienating your top users?
I mean what’s the point of that? You know so, yeah. I don’t know. I mean it’s …
Marc:
Well let the ….
Chris:
I mean let’s step back for a second. There is sort of place where they could have gone which is where I thought they were going to go. Because remember the old days? It looked like they were going to go granular. You know what I mean?
In other words, they had a directory structure in the old days where yeah, maybe I was number one on LinkedIn, but that – so who cares? I mean so what? I mean in other words it was more important to be number one in your directory structure.
See I think they missed the boat and I think that this is something that we need to clarify in the LIONS for example is the – is there a rational way to use 3000 connections on this thing? I mean you use 1000 for breadth. And breadth connections are something that LinkedIn can give you.
And that basically means you’re linking to guys you wouldn’t normally link to which is exactly the opposite of what they think. But that’s exactly what happened originally like for example all the VCs went in here, we’re interconnected. But we’re already in the same network so it doesn’t do anything for us.
What was interesting is then when the second wave came in, you had other equally accomplished guys in these new professions so you have like really accomplished recruiters and we wouldn’t normally even deal with these guys.
But then we interconnected. So, what was happening was all the top connected guys interconnected. That wouldn’t have happened before. So, to some degree, there’s – you know, the super connectors really don’t have a community and that’s sort of was the (fake) out. We did sort of for survival purposes originally because LinkedIn was sitting on us to process all these you know, referrals.
And it didn’t make sense. So, it made more sense for us to load balance. And so most of us stay connected.
So all the tops connected but at the end of the day, I kept looking at it and I said, “Well, you know, the way to go here is obviously go granular.” I mean in other words, everyone should be number one in their network.
No, but that’s the right way to think about it.
And because, in other words you have an – each person is a unique intersect of communities. And so when you’re running a database – where you’re trying to find the right person – that means there’s a right community, you know, you have both breadth, meaning I can go to another network but they can come to me or you can have depth within your network.
The part that you and I always thought was crazy is well, if I only can connect the people I know and they’re already in my field of interest, you know, what do I need LinkedIn for? And that’s absolutely true.
Yo! We’re certainly – and networkers know – we already know those people. But the part that they could have capitalized on is this directory structure to allow us access to other communities or better yet, think about it. There’s a lot of – it has to do with long tail management. I mean I’m high in my – and the head of my tail.
I mean you know, I’m not in the tail but tail basically means I’m like a peripheral player in these other areas so I could refer something through. So it looked very sophisticated but I think we over thought it and we just assumed that they understood what they were doing and they didn’t. You know.
Marc:
Well, I think there – yeah, there are absolutely some terrific things you’re bringing up there. I mean, clearly…
Chris:
We’re saying as you remember some of us – they were saying about long tail for example – Constantine was saying, “Oh, well we have to worry about the long tail so we’re going to cut off the head.”
And I kept saying but everyone knows that the long tail is dead. I mean you can’t build the business going to the long tail. The only reason the long tail existed is because markets are different sizes. So, if you normalized it, there’s no such thing as a tail. A tail is dead.
Basically what a tail is, is a product you don’t do a very good job with. You know, I mean it’s basically people who are substituting you for something else. So, and he wants to cut off the – you know, these top users to get these (odd) networkers on.
But it made sense, I mean, everybody needs a job and so why not. I mean it’s fine. And it’s unloaded. They just their opportunity to sell it to you know, Yahoo, HotJobs you know two years ago and that’s when they went crazy because they knew they were f*cked. Because they …
Marc:
Well, let’s talk about that in a little more detail since the acquisition rumors are heating up again. You say that they were in discussions with Yahoo to be acquired. Do you know what the approximate acquisition price is? And what do you know about the rumor that today?
Chris:
Who knows? Well, you don’t have to know these things. You just have to – if you’re VC, you understand how this works. You don’t even have to have access. I mean, remember, VCs aren’t investors. They’re basically – they – it’s like they run a vegetable stand.
I mean basically we sell things just like any other business. You know, what do sell? We sell companies and we sell them to the highest bidder. So, that’s – you know, so we call it – so what we did – just like doctors. We change the names so no one understands what the hell we’re talking about.
So, we say “we exit”. No we’re not we are selling companies. We just set (our inventory) – And then what’s a portfolio? I mean that’s our inventory. And what are the investments we do? That’s how we buy our inventory.
So, the point is this – the way to understand VCs is to understand NOT what they’re investing in but understand what they’ve sold – who they’ve sold to. Because the thing that every VC has to remember or eventually learn the hard way is that you never put a dime in a company that you don’t already have the phone number of the guy who’s going to buy it.
I mean you don’t put it in and say, “Oh, maybe somebody will buy this.” I mean, that’s what the entrepreneur says but we can’t. We’re running professional money. We got to know who’s going to buy it.
I mean, and so typically it’s people we’ve already sold companies to. So, somebody looking for capital, if it’s a venture capital deal in the sense that you’re going to exit, you don’t want to look at the VCs in terms of what they said they are investing in or what stage. They don’t care what stage it’s in if they know someone’s going to buy it.
I mean everything they say is in a sense a lie because they don’t care about the stage. If they have – somebody’s going to buy that company five years from now and they’ve sold to them before and they see something that’s worth buying, they don’t care what stage it’s at, you know.
So, the constructive way to use VCs for example is if you know what the exit is, you go to somebody who has already sold to them and you’re not going there to raise money. You’re going there to make them a partner so that you can – so that they can sell your company. I mean that’s the right attitude to have. They’re there to sell your company. They’re not there as a source of capital to grow a real business. I mean, those days went years ago.
I mean, I say that and then of course there’s you know, there are old fashioned VCs and that’s a nice business in their segments but that’s basically largely what goes on here. So, when you look at something like LinkedIn, you know, and you look at the players there, you know the VCs, you know, who they’ve sold before so you know where they’re headed.
So, and you know that some of these and then the other thing to really understand is and this is the gambler’s paradox – to understand venture capitalists. The right way is to take an exit and you know, take what you can get and leave.
But some VCs have had a history of – sorry, there’s a (Unintelligible) from (gardening) guys making noise. Some VCs for example have made billions of dollars on a deal, right? Now, if you’re – if you think about basic psychology, intermittent reinforcement is the hardest behaviour to extinguish, right? If you put the same seed every time when the light is green, if the light isn’t green, they stop pecking immediately. But if every once in a while, you put a seed there, they peck like crazy.
I mean that’s why gamblers go to Vegas and all that kind of stuff. Same thing with VC exit styles. If they’ve made a billion dollars once, there’s a tendency for them to push their portfolio companies really hard and walk away from the table because every once in a while it works.
And no businessman in their right mind would treat these companies that way because basically you’re destroying them if you don’t make it. Because these companies are totally tweaked for acquisition and that’s what they did. They basically got too greedy, you know, Yahoo’s a smart company, they (Unintelligible) overpay and you know, they walked so suddenly they’re (f*cked) because now they have no exit.
You know so I’ll tell they just recently had a round but I guarantee you that Bessemer is not a dumb company. It’s going to be easily half a billion dollars. I mean I haven’t seen the term sheet but it’s easy half a billion dollars that they get first before any of the other (series) gets a dime and (comet) is washed. I mean it’s basically – I mean if you really want to understand, that’s probably why Constantine left. I mean his stock is worthless at this point.
Marc:
Well, that’s…
Chris:
(It called) venture capital.
Marc:
Yeah.
That’s very interesting for our listeners who may not be experienced in the VC market. They see a successful company like LinkedIn with 15 million members and number one in their market and you know, they’re going to be sold for hundreds of mil LIONS of dollars and they realize that the founders who have the common stock are getting zipped.
Chris:
Well, see first of all it’s not a company. It’s not a balanced company. It’s a venture backed company. And that’s a big distinction. In other words it’s not designed to be an operating entity that stands on its own two feet. It’s designed to be sold to somebody. And so that means that decision making and plan do not lead to viability.
One of the big myths is that venture backed companies are more viable. I mean that’s not true. The fail rates of venture backed companies are much higher than you know, than regular entrepreneurs without investor backing.
But, so for example if they had grown this properly, you know, they would have been listening, you know, because they would have needed revenue, right? They would have listened to us more carefully. They would have you know, done things a lot differently but that wasn’t it.
They looked at it this as “Well, let’s just get big numbers and go for it.” Why? Because you have examples of big number plays. And if you’re the first with big numbers, you can do that. The problem is in venture capital, it’s not like there’s a linear thing. Yeah you sold a Myspace for a billion dollars but you know what? For a billion dollars, but it doesn’t matter. You got to have a customer. There aren’t that many customers.
The trick in venture capital is to sell quick. You’ve got to be the first one. Think about a fruit stand. I mean, we want to sell the fruits – the first fruits of the season when there’s a premium for it. We’re not selling stuff in the fall when there’s a bumper crop of tomatoes. You know, that’s a sucker’s game. You know, we sell the first two or three and we’re out of there.
In other words, the big players can play, they get satisfied and that’s it. It’s over. Just like the web 2 stuff. It’s like – it’s gone. I mean, you know, real VCs aren’t putting money into “Web 2.0” because no one’s going to buy it. Why would they do that? Everybody’s already bought.
Or they’re lying duck, you know, their previous portfolios. We have to think five years from now. We have to sell – who’s going to have money to pay them? What are they going to be looking for five years from now? Not today. You know, right now, we’re in the middle …
Marc:
Christian…
Chris:
() to say that. That’s…
Marc:
Christian, that is a – thank you, that’s a fascinating perspective. We just have a few minutes here. I’m – in a final note, spend a few minutes and tell us a little bit about the Lion’s group. You founded LinkedIn Open Networkers. The LIONS have become a catchy name and the standard bearer for the open networker community.
You now have the Yahoo Group and the Metanetworkers’ Lair which is a private community and you know tell us about that effort in where it’s heading.
Chris:
Well, it’s the LinkedIn Open Networking Community and it’s basically centers at the metanetwork. The reason we don’t use the LinkedIn is because as you know, as you’ve already explained, and I suspect it, most of these companies get very (litiginous) particularly when they are on exit because they have lawyers trying to clean up their IP. So, I was very careful not to use the word LinkedIn.
So, – but also the concept is metanetwork too. I mean, you and I talked about this years ago and we – and really it all started because of the supernetwork issue. They were very open with us originally as you remember and there was an interview that I did back at the end of – what year was that? Where was it? Was it 2005? Was that the year because – it was 2006? Yeah.
At the end of 2005, it was clear that they had to make a business decision because earlier that summer, you know, Yahoo blew them off and they were getting nasty. They didn’t know what to do. So, you know, they ran out of money, they don’t have cash. None of their investors wanted to put money in. You know, what are they going to do?
So, that’s when they got really sort of antsy and meanwhile they’re looking at the growth of you know, the supernetworkers. And so, you know, they don’t know what to do. I just assumed they would continue you know, doing fine because none of us really, you know, it didn’t matter. We were processing, if you remember like 60 or 70% – yeah, the top 500.
Remember, at the end of 2005, only 500 out of the – whatever it was, 4 million at the time LinkedIn members had 500 connections or over. And you know, so actually the numbers they chose in January to limit were really designed to hit us.
And so what happened is much as people you know were concerned about this open networking thing, and we had been talking for you know, ages that it didn’t make sense this – to only connect to people you know. And we had evidence which showed that that’s not true which is another issue we should talk about sometime – the light study – the LinkedIn connection efficacy study that we’re going to make formalized.
But basically we discovered it’s actually better to connect to strangers.
Marc:
Sure.
Chris:
And not people you know. And, but we can talk about that some other time. Well, I’ll be announcing a more formal qualification but that’s what we discovered. You actually are found and you can be found by people you don’t know.
But I mean they weren’t evidence based. You’re not talking evidence based here. They’re just – it’s like a religion. It’s like creationism or something and we had – (sitting here) looking at data and they’re looking at belief. Okay, fine.
But anyway, so we know that’s an issue because they had to figure out what they were going to do for a living. I just had no clue that they were going to do what they did two weeks later after that interview which was basically slammed ahead. And that was a complete ignorance of what the long tail was all about obviously.
So, they wanted to slam all the networkers and that’s what they did. They slammed all of us. So, remember we originally – you and I talked about it and then we started, we figured what’s a quick fix in 24 hours? So we said okay, why don’t we start – you can send me LinkedIn invites on a Yahoo Group and then we’ll do that.
But what was interesting is within 24 hours, we had 800 members. We had first of all everybody – all the top network people. And we never had anything in common with each other because we’re top in our little niches.
But now we suddenly were bonded in a bizarre way by a direction that LinkedIn was exerting against the networkers. So, that was when people said, “Well, you know, there’s more to this than just, you know, sending invites obviously.”
So, that’s when we reframed it. Almost two days later I think into the LinkedIn open networkers. And it stayed in the Yahoo Group for a while and then we clearly needed more community features and that’s when we built later in six, you know, that summer we built an on-line network – I mean we built an on-line web site.
I didn’t launch it yet. Now we have a Joomla site. And now, all of our, you know, invite lists and everything else are automatically generated. And we have a framework now for forums and directories and all that stuff.
I’m just – you know, I just – it’s a question of time on my part to turn the light stuff on. But for now, it’s growing pretty well. We’re growing about 600 a month now, , which it makes a big issue because now you have to worry about things like governance and stuff like that.
But, you know, we can talk about that some other time. But anyway, right now, it’s the way to be super connected I mean that’s for sure.
Marc:
Well, super for our listeners and our chatters, that web site is www.themetanetwork.com and it’s the new home of the LinkedIn LIONS and open networkers which has really superseded the – the Yahoo! Group. And –
Chris:
Well, what is – Well, I’m going to explain real quickly and it’s something I have to explain again. You know, I’ve done a poor job documenting this. But right now, if you think about what a Metanetwork is, that’s our home, that’s where our community is registered. We know who the members are.
But what Yahoo groups are is really like a satellite, like a colony. So we have our satellites now on LinkedIn itself, you know, we have the group there. We have satellites on Plaxo. We have satellites on – on , you know, Via Da – I mean Via Dia – all, basically all of them.
And part of this is because we know that LinkedIn’s going to be bought by FaceBook. So the point is and it will change things. We just want to make sure we can preserve our networks and our relationships.
So when we – any time we move to another network, we’re moving with a block of people so we’re number one on whatever network that is. So that the real advantage of this we really are network independent now as a community.
We can go to you know – you know like , you know, Pulse from , you know, Plaxo. And we’ve got – we’re already top I mean we can preserve our community just by moving in en masse and , then that’s good for us. So to some degree from a business point of view, it’s – it’s more reliable to do that and we can preserve those relationships regardless of what LinkedIn or any of these other guys do.
So that’s really what’s happening right now. You know, we’re set to organize people but I tell you every time we move to another network, you know, we invite to them, we’re number one on that network.
Marc:
Well, that’s terrific. We just have a few minutes left on the show. I want to thank our callers and listeners and chatters at LinkedIn Live: Who’s Your Daddy.
Our guest is Christian Mayaud. Number nine in the world on LinkedIn. The founder and the genius behind the LinkedIn Lion – the LinkedIn Networkers.
He’s also a serial entrepreneur. He’s an investor. And, Christian, I want to thank you. Before we go, we’ll be opened for just for a few more minutes. If you have any final questions, feel free to submit them through the Now Live chat or we invite your call — click the call of the show button at the top of the screen and it will take you through the procedures to call in to the show via phone.
And so we’ll leave the lines open for a few more minutes in case any one has any questions for Christian or myself. And Christian, it’s been a pleasure to have you with us today. You know it’s interesting to hear you talk about the LIONS being network independent.
Do you foresee significant changes to LinkedIn in the future where, you know, maybe the network is deconstructed or changed in a significant way and – and the features and the database, the people have been used to would be gone or significantly altered?
Chris:
Yes, I mean but it – but it’s not because of their fault really. It has to do with the trend we’re seeing and the economy as a whole, I mean. We call – internally, we use the word “nanofication”.
But basically, what we’re seeing – see, the thing about venture capital, we have to sell companies in consolidating markets. Meaning – you know, if there’s a big player, it actually makes sense to buy another company because you can actually deliver product cheaper than they can.
There’s a competitive advantage in being big. But that’s actually looks like that that’s changing. I mean rather radically. And quite frankly, due to a lot of the technologies we’ve seen. I mean most of us always thought that innovation means bigger.
And unfortunately, well, I don’t know if it’s unfortunate, but that’s changed. Innovation actually is starting to look like it means smaller. And if you look at the changes that for example, the Internet has done or a lot of the communications technology has done, of which this is right in the center of, you’re really talking about the emergence of teeny little markets where little companies are much better served staying at that size.
That’s a problem for investors because they can’t sell those companies. But on the other hand, it’s great for entrepreneurs because you’re seeing, you know, these markets emerging globally, which are 10 million maybe annually.
But, you know, like half a dozen people control these markets with, you know, these teeny little companies so these are cash flowing companies and they’re never going to go public but they’re really happy about it.
Same thing’s happened in softwares, same things happening in drug development, same things happening in, you know, media, same things-I mean all these classic areas, we’ve invested.
So this is a real problem for VCs because we can invest in stuff but you’re talking about companies that can never go public so, where’s the exit? On the other hand, they – you don’t need a lot of capital.
So what’s happened is a complete collapse of – of cost – start-up cost and maintenance cost. So, for example, if you look at LIONS – I mean it’s basically built on a Joomla platform which, if you’ve actually devoted some time to it, you can replicate all of LinkedIn in a week!
So, you know, you don’t need mil LIONS of dollars but that’s not what – you know, you can do the same thing for Amazon. But the point is there’s these other things than the technology to keep them a player.
But the thing is because it’s so cheap, what you’re having is fragmentation. See, I thought LinkedIn would hold on to this stuff long-term because they have a directory that people could go to, but they sort of missed the boat on the directory piece.
So what can happen now is you can maintain these little communities and real on-line communities are pretty easy to maintain. You know, you could set up everything you need. I mean you see that people are already hosting the stuff all over the place.
So there’ll be a wash-out at some point but people will have these, you know, networks can-can’t move around. Now what the driver here of course in these networks isn’t that there’s any money in it.
What it is – is that there’s communities in it and the community itself is where the money is. But these are really infrastructure. We predicted this way back at the Internet days where we said the Internet doesn’t really exist.
The issue is there’s these networks that exist and it’s the cross linking to these networks. So it’s really transactions moving but the network itself doesn’t really exist what you’re having is the reorganization of how you move the communications.
So, when you’re looking at this now, you’re seeing small companies much more competitive against big companies. And so we’re seeing you know, a bunch of private companies, you know, moving forward and doing very well and not raising a dime of venture capital. And then that’s a huge opportunity for everybody and – and traditional VC is not a – venture capital is not structured to benefit from that. So we’re building actually a new fund that might take advantage of that. But that’s a separate topic.
But, anyway, LinkedIn – so the issue with LinkedIn is it’s trying to be this big thing but they haven’t even made steps to do that. If you look at what FaceBook has done, they don’t even use the word networking.
If you talk to anyone at senior management but they never use the word ‘social’, they never use the word ‘networking’. They say the word ‘technology company’. So they look at their thing as “we’re going to be this platform upon which my space could live or any of these communities could live”.
That’s the right attitude. The only reason they have that attitude, though, is because no one would buy them at billions of dollars. So they couldn’t sell without changing their approach because the Myspace deal has already been done and everybody else had their fill.
So they’re kind of stuck, they got to figure out what they’re going to do. I mean the Microsoft money came in just in time. So you know, they still got to figure out what the hell they’re going to do. But I think they’re positioning themselves as this platform upon which communities can play. And it will be interesting to see if that works for them, ultimately.
Marc:
Well, super. Those are a lot of fascinating insight. I want to thank you for sharing that, Christian with me and our audience at LinkedIn Live.
I totally agree as a fellow entrepreneur, you know, it’s interesting that we really don’t need investors especially traditional investors anymore we just need a few partners who are going to help us with the technical development and deployment of products and services because the platform’s already out there to support much of that.
And so that is terrific stuff.
Chris:
And we see is with globalization, what you’re going to have is the reason these globalized small markets are going to all be held together by basically what looks like these social networks.
That’s the glue. In other words, if I’m working on some of the – you know, on aerospace medicine, and there’s 200 doctors worldwide in that community, we’re all going to be on a social network and the commerce related to that is all going to interconnect. That’s the original content model of Web 1.0 actually.
You know, Web 2.0 is you know, sort of a loss leader. The issue is it’s always been these communities and the communications and so it’s sort of like having the stock exchange. I mean, yes, you can make it an independent business but you don’t have that market without it.
A social network is at the center of ultimately every market that matters. And right now it’s so efficient to do that. I mean the move in technology is we can manage smaller and smaller pockets of money economically. That’s why you have IRAs. That’s why you’re going to have HSAs.
And that’s why you’re going to have these little networks. And you’re going to be able to affiliate with them for professional reasons. And this whole idea of you know, I link or you link is stupid. It’s – it has to do with PANs, FANs and CANs, period, end of story.
Marc:
And that’s the end of our show. Well thank you Christian, Mr. Fan, Can, Pan Man and Mr. LION. I thank our listeners and next week we’re going to have Jason Alba, founder and CEO of Jibber Jabbar and who has also written a book – an e-book on LinkedIn.
So thank you again, Christian and we’ll look forward to seeing the rest of our audience back here next week.
Chris:
Take care buddy. Are we still on? Do you want me to hang up?
Marc:
Yes!