Pitched Unfairly

Linkedin

Find the people you need through the people you already trust.

Series B · August 2004

  1. You You
  2. Someone you trust
  3. Who knows
  4. The person you need

Investment thesis

People search is going 2.0, and we lead it.

  1. 01
    The market

    A high-margin, billion-dollar opportunity.

  2. 02
    The position

    The clear leader in a defensible space.

  3. 03
    The proof

    Strong execution on less than $4M spent.

Business model

One free network, three ways to get paid.

The LinkedIn network Free for every professional, already live. The members are the asset.

Professional people search 1.0

There's no trusted way to find a professional online.

  • Pick a service provider from the yellow pages

    Everyone listed wants to be found. Nobody says if they are good.

    Fails

  • Hire an employee from a resume database

    The best professionals never post a resume.

    Fails

  • Reach a professional through a directory

    Only worth joining if the good people already did.

    Fails

Internet 2.0

Every 2.0 winner reads the network, not the claim.

Market1.0 judges each one alone2.0 reads the network of
Goods listings Online classifieds eBaytransactions between users
Online payments Citibank PayPaltransactions between users
Search AltaVista Googlelinks between pages
Professional people search Monster, LexisNexis LinkedInrelationships between users

The network · an illustrative sketch

Your network is bigger than you think.

  1. 1st degreePeople you know 5
  2. 2nd degreeWho they know 20
  3. 3rd degreeOne more hop 60
  4. 4th degreeWith Network Plus 0180

Network first

Network first. Then revenue.

PayPal waited for 4 million users before it charged anyone.

Waited until

4M

registered users before charging
Revenue by 2004

$400M+

from the same network

Series A, nine months later

What we promised, and what we delivered.

  • Network growth We said

    A growth curve to about 400K members by August 2004.

    Network growth

    930K+

    registered professionals, more than double the curve

    Delivered
  • Capital We said

    Raise a $4.7M Series A and spend it on the network.

    Capital

    <$4M

    spent to get here, with money still in the bank

    Delivered
  • Usage We said

    Build the network first. Make it useful before charging.

    Usage

    1M+

    member searches a month, 20M+ page views

    Delivered
  • Quality We said

    A network for serious professionals, not friends.

    Quality

    22%

    of members are CxOs or senior execs, in 130+ industries

    Delivered

Market leadership

We have more than half the market.

Registered users of online professional network tools, Feb 2004

54%

LinkedIn
  • Ryze 32%
  • OpenBC 6%
  • Spoke 5%
  • All others 3%
  • ZeroDegrees 1%

Business model

The Series B gets us to profit in 2005.

Members bring members and the goods are digital, so margins run high.

Team and backers

People who've scaled networks before, backed by Sequoia.

  • RH
    Reid HoffmanCEOFounding board member and EVP, PayPal
  • SI
    Sarah ImbachChief of Staff and VPSVP Operations, PayPal
  • AB
    Allen BlueVP ProductProduct design, SocialNet
  • JV
    Jean-Luc VaillantVP EngineeringEngineering, Logitech and Spotlife
  • KG
    Konstantin GuerickeVP MarketingVP Marketing, Presenter
  • EL
    Eric LyCTOFounder and CTO, Netmosphere
  • MC
    Matt CohlerCorporate DevelopmentMcKinsey
  • Series A · Nov 2003 Sequoia Capital, $4.7M Angels: Peter Thiel, Marc Andreessen, Joe Kraus, Andrew Anker, Gil Penchina

The ask

$10M to turn the network into revenue.

  1. Series A $4.7M Build the network 930K+ professionals on under $4M
  2. Series B $10M Build the revenue Ads, listings, subscriptions. Profit in 2005.

Linkedin

Find the people you need through the people you already trust.