Keeping Things Simple And How It Worked for LinkedIn

I’ve been thinking a lot lately about what web applications I use and why, and of course how this relates to what I’m doing at work.

Keeping things simple is considered an overused idea these days in the web application world. I’d attribute some of this to the success 37Signals has had with their applications, blogs, ebooks, and seminars that push this philosophy.

However, I still think our natural tendency is to add more features to everything we build. There is always more to do, people who would use additional features, and we just think more is better in our society.

A company I’d cite that’s done a great job of keeping things simple and staying focused on their core mission is LinkedIn. The recent news that they’re potentially raising money at a $1 billion valuation based on revenues of $100 million in 2008 is a testament to their success thus far.

Probably a year or so ago while the social networking idea may have been at it’s hottest point, there were numerous bloggers who suggested that LinkedIn should move beyond focusing on the professional market and add more social networking features and functionality to their site.

Common sense would say this is a great idea. Myspace was hot, Facebook was hot, and LinkedIn already had a strong user base so why not expand the functionality to increase usage of their site, and attract new users? I believe I even personally posted once that I wished there was more “to do” on LinkedIn besides connect with others professionally.

Boy was I wrong. I actually treasure LinkedIn now for the fact that it is so focused. The people I’m connected to there are all business contacts. I’m not getting superpoked, or landing on pages with loud music, or seeing someone’s weekend photos. Don’t get me wrong, I do use Facebook for personal reasons and to see people’s photos, but I’m in a different state of mind.

Many have said that Facebook can take LinkedIn’s market for business connections, and while I think some of that occurs on Facebook, it’s just not built in the same way or as focused in functionality as LinkedIn.

These reasons actually help LinkedIn sell advertising at a very high CPM. I think the $75 CPM being claimed is the upper limit opposed to the average, you can sure bet that LinkedIn commands a much higher CPM than Facebook. I’d guess offhand it’s somewhere between 10-20x Facebook’s average CPM. Which also means to make the same amount of revenue they can have 10-20x less traffic than Facebook.

I commend LinkedIn for staying focused as I think it’s a key to their success. I hope now and in the future I can fight the urge to build anything and everything when it comes to web applications and businesses.

(Photo by jnhkrawczyk at Flickr.)