Networking in Surrey

ShrinkedIn - the slow demise of our favourite networking platform...

I'm defnitely not applauding the way things are heading down at LinkedIn, as the basic functionality of the platform is being incrementally moved behind the Paywall in a (doomed) attempt to persuade free account holders to upgrade to a Premium Account

I lamented this at some length this week on Nick Blanchard's Facebook Live with NiS Member and fellow LinkedIn afficionado Gareth Wax. And by a curious coincidence, my fave blogger Seth Godin's most recent offering summed this phenomenon up rather well - here's an extract:

"The first thing to understand about free software is that the marginal cost of one more email, one more download, one more bit is vanishingly low, close to zero.

Given the low incremental cost of another user, it’s likely that if that were the only factor, most software wouldn’t be a very good business, because it costs a lot to develop but market forces would keep pushing the price low.

The second factor is lock-in. Unlike coffee, software rewards users who stick with it. Over time, the software you use becomes more familiar, it opens the files you created yesterday and it becomes harder and harder to switch. As a result, companies that make software work to create the conditions where people are encouraged to start right now, and only later discover that it’s difficult to switch.

But the real miracle of modern software is the network effect. Simply put: the software works better for each user when other people use it too. The network effect dramatically rewards head starts. You want to use the same word processor as your peers, because opening their files is part of your job. You want to be on the same phone system, the same social network, the same protocols.

Some companies then choose to treat these new users not as customers, but as the product.

Lock-in makes it hard for them to leave, the network effect keeps the system growing and now you can make money from other means. In particular, you make money by serving someone other than your free users. As you get bigger and bigger, you make the product just a little bit worse, rewarding your sponsors or your agenda as you go. (Important exception: when your nearly free users pay enough, in enough numbers, that you can happily offer them the support and service they need...this takes relentless focus and care.)"

LinkedIn, take note!

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