Is LinkedIn really worth $1 billion or is that number far too low? Evidence from the Holocaust
Bain Capital Ventures just invested $53 million in LinkedIn, thereby assigning a billion dollar value for the social network that surprised some analysts in this down market. No matter, because it was the daughter of Holocaust survivors that told me its true value. If her story has any meaning, it presents testimony to social networking’s power to bond us and our society ever more closely together.
This woman, the daughter of two Holocaust survivors has become her family’s genealogist. She believes it’s her mission to reconstruct her family tree for her children, nieces and nephews before all knowledge of her heritage is lost forever.
A few years ago, she visited Yad Vashem, the Israeli memorial to Holocaust victims. She accessed its database (now also available on the Web), hoping to find names of long-lost relatives. In the process, she discovered a cousin still alive and living in Israel. She then contacted him. He welcomed her, a new-found relative into his home, and thanked her for completing another piece of his missing puzzle. He also told her that after he was released from the displaced persons’ camps in the late 1940s he published notices in local newspapers in order to find missing relatives. No one responded. As evidence of his efforts, he showed her his half-century collection of old, faded, brittle clippings.
The Yad Vashem database is a LinkedIn of sorts (albeit a highly specialized one). Imagine if this online database had existed in 1947. Imagine the relatives he might have found.
Ask this survivor the value of that database; he would tell you it’s priceless.
Remember when your father, your mother, or uncle wagged a finger at you years ago telling you it’s not what you know but whom you know. That’s the power of a LinkedIn. It helps find the “who,” the expert you can’t find on your own. It helps you connect to a wide world. Underscoring this same point, Malcolm Gladwell in his best-selling The Tipping Point, underscores how valuable people known as Connectors are to our society. They build people networks in their community, their profession, and around the world.
In competitive intelligence, LinkedIn’s value is its ability to save you time finding the right individual who has the answer. It’s all about helping you corral bits and pieces of valuable data as quickly as possible. The more complete and timely your data set, the better your analysis will be in the end. The faster your can assess your prospects or those of your competition, the more certain your decisions makers will feel about the direction they wish to take the company. LinkedIn and similar social networks have definitely short-circuited the exclusive Old Boy Network of yore and democratized its power at the same time. For those seeking competitive intelligence, LinkedIn could not have come soon enough.
Again, I ask you, is LinkedIn worth a billion dollars? I suspect you may now say that Bain’s sizeable investment will prove prescient; a shrewd move in coming years. I doubt Bain Capital Ventures will suffer Buyer’s Remorse anytime soon.
