People Are The Product...Until They’re Not

People Are The Product...Until They’re Not

You’ve heard of the “freemium model,” right? It’s where companies offer a free version of their app or software, and then offer a premium version that has more features and capabilities.

LinkedIn has a new strategy. I’m calling it the Pay-Me-Um model. That’s where you lure customers in with the promise of a set of free features, then slowly over time, and with little warning, make them billable.

Want some examples? A while back, I went to search my connections and saw that I could no longer see second and third level connections. Why? That was no longer free. If I wanted access I’d have to become a Pay-Me-Um, sorry, Premium member. But hey, it was only $7.99 per month. No biggie, right?

Earlier this week, again I went to search my connections and found that I had reached LinkedIn’s Commercial Use Limit on Search.

“Wow, that’s new,” I thought, and went to check it out. Turns out LinkedIn had instituted a new policy. On my current plan, LinkedIn would now only allow me to conduct a certain number of searches per month, but If I were willing to upgrade to a plan costing $47.99 per month, I could continue to conduct unlimited searches.

Also over the past couple days, LinkedIn instituted a new policy which prevents me from exporting my connections. Instead I can use the new Request Your Data Archive feature.

Supposedly, within 72 hours, LinkedIn will send me data (via email) that includes a list of my first degree connections. I should know exactly what that means sometime in the next 71 hours.

Clearly this is another nudge at moving me towards the Pay-Me-Um plan. They’ve taken my ability to search online, and now they’ve severely delayed my ability to download and search. I’ll have to upgrade, right? Wrong.

Look, I get the business problem. Investors want returns and there is tremendous pressure to monetize. But, LinkedIn made an inherent promise to me that if I supplied my data, and helped them build their network, I would get benefits in return. “People are the product” is the whole concept behind social media. Facebook, Twitter, Google, and countless other social networks all understand that.

LinkedIn has poorly communicated their intent to break that promise. I’m no longer the product - they are - and if I want access I have to pay. That creates a problem for me and an opportunity for someone else.

Think about it for a moment. LinkedIn really doesn’t have any meaningful competition in the business space. I’ve been following the “mullet strategy” for years. You know, business up front, party in back? The demeanor and content of my posts is business related on LinkedIn and far more casual on Facebook and other networks.

But if there was ever a time for someone to challenge LinkedIn, now is it. One of the oldest adages in sales is that “pigs get fat and hogs get slaughtered.” Greed has made LinkedIn vulnerable.

Just yesterday I was watching an Inc.com video where Gary Vaynerchuk, among other topics, tells Ashton Kutcher which social networks he thinks will be extinct by 2020.

His answers - Tumblr and Google+. I think he could be wrong about G+ and here’s why:

Google could very easily reposition Plus as a social network for business. Most of the tools are in-place. The platform allows for way easier connection than LinkedIn (no first, second, and third degree bullshit). It also allows for groups and company pages. Most importantly for me, like LinkedIn’s Pulse, it allows me to create rich blog-like posts and share them with people outside the network. And oh-by-the-way, the mobile experience is a night-and-day improvement compared to LinkedIn.

Yes, they’d have some work to do around the jobs and recruiting features, where LinkedIn is strongest. But, LinkedIn has also created some vulnerability there. Asking out of work people to pay for your service is ridiculous. And, it’s not like Google doesn’t have a significant presence in the enterprise, with employers.

The key point here is that no one understands the importance of free and “people as the product” better than Google. Sure, that comes with some downside for all of us users, but it’s a way better proposition than spending $47.99 per month on social media.

Good luck with that strategy Linkedin.

Money via Jonathan Rolande Copyright 2015

John Hauer

3D Printing Industry Consultant / Gonzo Technology Journalist

8y

The mobile app (for Android at least) is even worse. I can't even type this comment without it trying to tag someone and in the process capitalize every other letter. Garbage.

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Ann Hawkins FRSA

Small business advisor and thinking partner. I help you create strategies that work for you and stay on track to achieve your goals. Working to make the world a better place for all of us through creative collaborations

8y

I agree with your analysis John - the thing that intrigues me is how inept LinkedIn is at making the user experience better. Their software is a miserable, clunky mess. Everytime I complain I'm told its because I use Chrome and need to go back to a previous version or use a different browser. That's not what will attract me to pay for anything.

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John Hauer

3D Printing Industry Consultant / Gonzo Technology Journalist

8y

Thanks Subir, Dinah and Patti for your comments!

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Patti Wilson

Former career coach to Silicon Valley overachievers; current artist, author, and networker

8y

John, Linkedin has always been this way. When they had less than 1 million members you could see out to 4 degrees completely as that was the value proposition to people onboard. There were no groups. When they hit 100M+ they cut off 3rd degree. Initially Linkedin was created as a "farm" for recruiters and business developers/sales folks to graze. They continue to make the access to and cost of grazing more expensive. You are complaining about the high cost of pay to graze. Secondly, virtually nobody is unemployed compared to 2009-2011. Regardless, people look for job postings for FREE on Linkedin and that will always be a freemium as it is a cross selling feature/benefit to the recruiters and companies. Finally the long best kept secret of Linkedin is that having 1000's of connections is all that matters and connections are free to get ...though Linkedin adds more and more obstacles. LinkedIn's dilemma is that they want us all to be active on the site by getting more connections, joining more groups, following more companies, doing more updates, and posting more long posts. Why? Because it is data...BIG DATA...and they can crunch it, slice it, dice it, and sell it. You know, data analytics, right?. Searching is the one thing they can easily make you pay for and they do. But if you have 10,000+ connections you find that you don't need to pay to search as you can get access to a huge number of people. If you read this and agree with me, please send me an invite to connect. I gratefully accept any and all invites!

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Dinah Bird, Ph.D., CFP(R), CIMA

President at Estate Planning Council Northern Kentucky

8y

As always, John, you nailed it, "I’m no longer the product - they are - and if I want access I have to pay." I appreciate your insights and agree with you. Thanks for taking time to share your thought provoking ideas.

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