As often I remind entrepreneurs, business owners, VCs and mergers & acquisitions consultants, LinkedIn was created by (Silicon) Valley entrepreneurs to shrink the business cycle—it facilitates deals by enabling parties with highly specific criteria to find each other at a lower transaction cost. I was particularly glad to hear about this story in which The Weather Channel, a top ten U.S. Web property, scored two acquisitions through LinkedIn.
How It Happened
Weather Channel Interactive’s Steve Hassett, Vice President of International & Emerging Businesses, was contacted by the CEO of LakeRentals.com and CoastRentals.com via an InMail (paid invitation). They were not in each other’s network, so the CEO used LinkedIn as the intermediary. Because Steve’s LinkedIn profile included information about what his role and focus were, where he had worked before and other details, the CEO understood that he was the right person to approach and gave him some clear ideas of how to position the deal so that Steve would see it to be relevant. He succeeded in getting Steve’s interest, and the deal was done three months later.
Steve went on record with saying that, had the CEO not used the LinkedIn approach, it would have been unlikely that they would have connected via a more standard approach (another paper on the desk). He has significantly expanded his LinkedIn profile to be even more detailed so that other prospects can find him more easily.
Observations
- LinkedIn provides significant social context around people by the information their profiles provide. Knowing where a person has worked, what roles s/he’s had, where s/he’s gone to school, what his/her professional interests are and other professional information makes the person far more approachable.
- Relevant conversation benefits everyone, and people who know how to use LinkedIn increase their relevance and hit rates.
- LinkedIn is a secure environment. For example, if the CEO had sent the InMail to Steve, and he had not been on-point, Steve could have simply refused the contact. In this way, LinkedIn is less intrusive than many other environments. In other words, putting the information out there doesn’t easily open Steve up to undesired contacts.
- To do deals most efficiently, the business’s representative needs to be aware of the value proposition to specific types of buyers; s/he will not maximize value and price unless the value prop matches. This is a niche activity. People who know how to use LinkedIn understand this and put specific information on their profiles to attract the kind of attention they want. This is very powerful due to the digital (searchable) element of social networks.
- Read more and see the short video here.
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