LinkedIn, Netscape, Microsoft: Hello Yesterday And Welcome Tomorrow

This entry was originally posted on Friday, May 20th, 2011 at Marc Cenedella’s blog.

Hello yesterday and welcome to tomorrow!

Today’s date is the day after August 9th, 1995 — the day after the Netscape IPO.  As my friend Paul Kedrosky wrote on Bloomberg:: “The tech/investing/IPO world just changed. Anyone who says otherwise has no idea what he’s talking about.”

– I’m not a seer, but I know the future when I see it. Yesterday was the arrival of the future — for technology, for users, for investing, for the world.  Just as the Netscape IPO heralded the arrival of a permanent shift in our understanding of what technology was and what it could do for us, LinkedIn’s IPO is the beginning of a tremendous recognition of the value created over the past decade by companies across the web.  It is an investor recognition of the power of the web age and the power of the web hierarchy of information, intentions and inferences.

– Reid Hoffman ($1.8 bn) ended the day richer in inflation-adjusted dollars than Bill Gates ($637 mm) or Jim Clark ($831 mm) did on the days of their IPOs (while owning less of the company than either of them.)  The amazing thing about technology is how each generation creates even ever more compelling opportunities for the next.

– It is explicitly a rejection of the view that the new age is somehow akin to pushing soda pop via billboards. Jeff Hammerbacher of Facebook was famously quoted in BusinessWeek saying: “The best minds of my generation are thinking about how to make people click ads. That sucks.”  The LinkedIn IPO hits the “ignore” button on people who view the digital soul as somehow being about something banal.

– Investors are finally catching up with what is happening in real operating businesses.

In some ways, I am the best positioned unbiased commentator on LinkedIn, or rather, to be precise, I’m the most likely negatively biased commentator out there.  If there was anybody who might be inclined to smashmouth LNKD, it would have to be me.  Their solution is competitive, or at the very least complementary, to what we do at TheLadders and they’ve been selling their corporate solution since Matt Cohler was the fresh young face of LinkedIn Jobs in 2004.  We at TheLadders have been selling ours since 2007, and I’ve had a front row seat to watch what is happening in the actual marketplace.

In the past two months, I’ve sat face-to-face with two dozen heads of staffing and HR at Fortune 1000 companies. When I ask them “what are you using besides TheLadders?” I consistently hear “LinkedIn and Indeed.”

This is a remarkable change for an industry that used newspapers to recruit for 150 years, and only reluctantly found itself dragged on to the Internet by companies like Monster, CareerBuilder and HotJobs (my former employer).  We did it by positioning ourselves as electronic help-wanted ads – and that appealed to our customers’ fundamental conservatism.

What we are seeing now, what we are experiencing now, what the market recognised yesterday, what the future from this point onwards is all about, is that we are in the middle of a significant revolution, not just in the HR industry, but in all industries. The appetite to try new things and new solutions is higher than it has ever been.  And it’s higher not because of some hype cycle, but because the web is more effective at helping customers achieve their goals than any other solution.

That is a real change in the real operations in the real world. The LinkedIn IPO yesterday is the first step in the investing community realising what those of us in operations have known for a number of years now.

So I am mystified by the commentators who call this a bubble.  Perhaps if they left theirs and came out on the road with me, they’d see that something is brewing out there in the heartland.  It’s a wonderful future and we are just starting to arrive…