(A) research group went around neighborhoods in California and put one of four signs on people’s doors. Each sign encouraged the homeowner to conserve energy, and gave a reason to do so. The four reasons were: 1) to help the next generation, 2) to save money on your electricity bill, 3) to save the planet, and 4) because your neighbors are already doing it. After some time passed, the group went back to the houses and measured the electricity usage against the reading they took before putting up the signs.
Can you guess which sign had the most impact? In fact, the only sign that had ANY impact at all? It was the one that said their neighbors were already conserving electricity and encouraged them to do the same. Link
Social Pressure and Social Networks
Now, when considering the meaning of this story, it makes the following all that much more interesting.
- LinkedIn users spend an average of 18 minutes a month on the site. Facebook users spend 6.4 hours a month.
- But LinkedIn gets $1.30 in revenue for every hour those users spend on site. Facebook: 6.2 cents.
- Anders describes LinkedIn’s most expensive product offering, LinkedIn Recruiter, as a “Bloomberg terminal” for talent scouts. It costs up to $8,200 a year per “seat,” or user license.
- Adobe, a big LinkedIn customer, has 70 seats. At list prices, that’s about half a million in revenue a year from a single client.
- LinkedIn’s top salespeople make as much as $400,000 a year selling Recruiter.
- LinkedIn spends 33 percent of revenue on sales and marketing.
- LinkedIn’s profits are expected to double this year to $70 million.
Social Pressure in Investing
The dichotomy is astounding. When LinkedIn first announced their IPO last year, I chuckled and figured they were just trying to upstage the rumored Facebook IPO at the time. Little did I know they were actually an up and coming money machine.
So, the point? Social pressure is real. But, social pressure is not the end-all be-all of our society. While Facebook users are playing games and posting baby pics, real networking is taking place in the much smaller start-up down the road. To what end? Yeah, rediscovering old acquaintances is nice and fun and may make you feel tingly all over, but it does nothing for your bottom line.
Facebook is big. And yes, Facebook is profitable (at pennies per head). But I’m beginning to question the staying power of Facebook over the long-haul. Once the fun and games get old, what’s next? Remember MySpace?
Meanwhile, the trappings of the social network phenomena are being supplanted by a more serious form of the same – a form that actually can add something to a member’s bottom line. I’m looking forward to watching the LinkedIn story unfold, and how social pressure affects it (and vice-versa).
- Social Media Pressure (2)(art-is-jokken.blogspot.com)
- Twitter & LinkedIn Break Up, Disabling Automatic Posting of Tweets(hubspot.com)
- As Facebook falls flat, LinkedIn adds friends(theglobeandmail.com)
Read how I succumbed to social pressure and pimped my Linked In profile.