22 January 2022 |

The LinkedIn Mafia

By Trung Phan

PLUS: Is The Office’s Michael Scott an incredible salesman?

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Today, we’ll be talking about The LinkedIn Mafia (AKA why do so many former LinkedIn execs end up in tech C-suites?)

PLUS: Is The Office’s Michael Scott an incredible salesman?

The LinkedIn Mafia

Last week, I tried to answer the question “Why is LinkedIn so cringe?

TLDR: the platform’s business model and algorithm incentivizes cringey content (eg. humblebrags, long-form hustle porn, faux motivation, insane poll questions).

When I started writing the piece, I just wanted to have a laugh at the absurd content. Based on the feedback, many people — both on Twitter and LinkedIn itself — shared the sentiment and passed along some funny LI posts.

This cringey gem made me LOL:

I also received DMs from former LinkedIn employees that confirmed my half-baked thesis. Here’s one:

The key phrase in this response is “despite the cringe”.

No matter how a pleb like me perceives the LinkedIn newsfeed, the LinkedIn business is rock solid. Microsoft acquired the professional social network in 2016 for $26B and — as of today — the platform’s revenue has grown more than 3x to $10B.

Not only that, it’s sweet sweet diversified revenue, with ads making up only 20-30% of the social network (subscription-based HR and recruiting tools are the cash cows).

The acquisition date was about the time I stopped actively using LinkedIn. It was also the same period when I deactivated my Facebook account; since then, Zucky McHarvard has tripled the market cap of Facebook — I refuse to call it Meta — to $850b.

Lesson: My personal usage of a product has literally zero bearing on whether it succeeds as a business (I’m strongly considering buying stocks of companies that I think are cringe or that I don’t actively use…if I have any money left after the recent stock market carnage).

Another blind spot I had of LinkedIn is the calibre of its alumni. A few people messaged me to say that there are ex-LinkedIn folks in C-suites across the tech world.

To track them down, I did the following LinkedIn search:

  • Terms: “Chief” and “Officer”

  • Previous Company: LinkedIn

Searching on LinkedIn for people that used to work for LinkedIn to write an article about LinkedIn as a follow-up to another article on LinkedIn is the most meta thing I’ve ever done.

Unfortunately, my account got throttled after a few searches. So, I had to upgrade to LinkedIn Premium (no wonder the company makes $10B a year).

Sure enough, former LinkedIn talent is sprinkled across tech C-suites including Coinbase (COO Emilie Choi), Atlassian (CPO Joff Redfern), Bill.com (CMO Sarah Acton), Twitch (COO Sara Clemens), Calm (CPO Mads Johnsen), Cameo (CEO Steven Galanis, COO Brian Frank, CBO Arthur Leopold), Glassdoor (CEO Christian-Sutherland Wong), Checkout.com (CMO Leela Srinivasan), Uber (CIO Sandy Venugopal) and many more:

Apologies to all of the ex-LinkedIn employees that saw this notification:

What is in the LinkedIn water? Why are LinkedIn execs so valued by other tech companies?

There are a few potential answers:

  • A “Tour of Duty” culture

  • The “Next Play” mentality

  • A business model made for generalists

  • High ROI on human capital

PS. Thank you to an ex-LinkedIn employee who jumped on a Zoom call to drop knowledge.

PPS. I definitely cancelled my Premium “one-month free trial” immediately after making the LinkedIn employee table. Can’t risk forgetting the subscription and getting hit with the auto-renew. You’re not getting Trung today LinkedIn, not today!

A “Tour of Duty” culture

If there is one thing the business world loves, it is military metaphors: “price war”, “guerrilla marketing”, “in the trenches”, “uphill battle” etc.

LinkedIn co-founder Reid Hoffman enjoys these metaphors more than most. He’s the author of many books, including two with military-themed titles: Blitzscaling and The Alliance.

The latter book expands on another military-related concept he popularized at LinkedIn called the “tour of duty”. Here’s a brief explanation (HBR):

  • The 20th century employer-employee relationship was based on the premise of lifetime employment

  • The 21st century relationship — especially in tech — is much more fluid, with employees jumping from job-to-job

  • Temporary work relationships require a new model where both employee and employer can add value to each other over a shorter period of time (as compared to a “lifetime”)

Hoffman dubbed the new employment model a “tour of duty”, which trains an employee to do great work at LinkedIn with the full expectation that they will move on.

How does LinkedIn win? By creating an active (and loyal) alumni network of super-talented managers sprinkled across Corporate America. When they need HR/recruiting tools or want to post cringey stuff, you know what platform they will use!

Here is a glorious sentence from the HBR piece that packs in FOUR military metaphors:

“In the war for talent, such a compact can be a secret weapon that helps you fill your ranks with the creative, adaptive superstars who fuel entrepreneurial success.

Metaphors on metaphors!

As most of you probbaly know, Hoffman is part of the famed PayPal Mafia.

Former colleagues from the payments firm — which eBay acquired for $1.5B in 2002 — went on to launch Tesla/SpaceX (Elon Musk), Palantir/Founders Fund (Peter Thiel), Affirm/Slide (Max Levchin), Yelp (Jeremy Stoppelman), Yammer/Craft (David Saks), YouTube (Steve Chen, Chad Hurley, Jawed Karim) and more.

Check out the Key People table in PayPal’s 2002 pre-IPO S-1 document.

Gotta be the youngest S1 ever (h/t @kevg1412):

Obviously, I titled this article (“The LinkedIn Mafia”) as a nod to Hoffman’s roots. His belief in a “tour of duty” mindset seems justified based on what the PayPal crew went on to build.

SIDE NOTE: Microsoft-related military metaphors had a moment last week when the software giant acquired Activision Blizzard for $69B.

One of the game maker’s biggest franchise is the war-themed first-person shooter Call of Duty (there’s that word again).

Many jokes were made, including this one I did “announcing” the integration of Microsoft Excel with Call of Duty.

The “Next Play” mentality

LinkedIn doesn’t just expect employees to move on, the company celebrates it.

Jeff Weiner — who was LinkedIn’s CEO from 2008 to 2020 — said in a 2012 NY Times interview that the company’s unofficial mantra was “next play”.

The phrase was borrowed from Duke University basketball coach Mike Krzyzewski (aka Coach K):

“[Coach K] yells out ‘next play,’ because he doesn’t want the team lingering too long on [basketball plays, good or bad]. You can take a moment to reflect on what just happened, and you probably should, but you shouldn’t linger too long on it, and then move on to the next play.”

Brian Rumao — a LinkedIn VP and Chief of Staff to Weiner (now LI’s Executive Chairman) — writes that “Whenever folks left LinkedIn, we rooted for their ‘Next Play’ because it meant sharing our culture and values more broadly.”

[NOTE: I added this section after reading Brian’s reply to my tweeting of this article]

A business model made for generalists

Here is how the former LinkedIn employee explained it to me:

“A large corporate customer will buy LinkedIn products across many verticals: B2B ads, learning tools, hiring, recruiting, marketing, sales and media.

Because LinkedIn’s products are so diverse, LinkedIn sales leaders are forced to do cross-functional collaboration and often interact with a company’s C-suite.”

A sales lead at LinkedIn has to be versed in all aspects of a business because that’s what they sell.

Take a comparable role at Twitter, which makes most of its money from brand advertising. A sales lead there will primarily interface with ad teams and agencies.

Weiner actually created a BizOps Team in 2009 that combined “analytical, operational and strategic expertise.”

The BizOp role included “managing the P&L, evaluating M&A, integrating acquisitions, developing strategy, providing insightful product or marketing feedback, or developing the talent on the team.”

According to the former LinkedIn employee, the jack-of-many-trades template is used for hiring across the company including sales:

“LinkedIn’s hiring strategy for sales was somewhat unique in that they focused less on previous sales experience than intellectual curiosity. They sought leaders who could do anything but chose to sell. So you end up with a lot of really, really smart people with generalist backgrounds.”

High ROI on human capital

The majority of LinkedIn’s revenue (50%+) comes from its Talents Solution division, which sells recruiting tools.

The main event is called LinkedIn Recruiter, which costs ~$9k per seat per year. Think of it like the “Bloomberg Terminal for recruiters”, which means it’s a must-have tool for the industry.

LinkedIn has a similar 5-figure tool for salespeople.

The lifetime value of securing these contracts are so high, that LinkedIn spends more than comparable tech firms on sales and marketing expense. In one of LinkedIn’s final earnings report as a public company (Q3 2016), sales and marketing accounted for 32% of revenue.

That’s a higher spend in comparison to other social networks (2020 numbers): Facebook (15%), Twitter (24%) and Pinterest (26%).

Clearly, it’s worth it for LinkedIn — in terms of time and money — to hire the best talent. They do and are apparently happy to see this talent eventually move on.

One more thing

Before anyone @s me with “You know, lots of former employees from [Meta, Amazon, Apple, Google, Microsoft] have C-suite positions”, I know.

LinkedIn is obviously smaller than these companies, though.

And it’s definitely more low-key than other more consumer-facing (and primarily ad-based) social networks like Twitter, Snap, Pinterest, TikTok etc.

So, the LinkedIn Mafia revelation was news to me!

Is Michael Scott actually a great salesman?

Below is another interesting DM I received in response to my “Why is LinkedIn so cringe?” piece:

“LinkedIn has truly world-class sales and operational talent. Only Salesforce is even remotely close as a go-to-market machine. So cringe product + elite sales/ops makes something uniquely wacky that can print money regardless of how bizarre the feed gets.”

The combination of cringe + elite sales immediately brought one person to mind: The Office’s Michael Scott.

Played to perfection by Steve Carrel, Scott is portrayed as a bumbling boss who isn’t great at managing people. While this take is probably right, a very entertaining corner of the internet loves making the case that Michael Scott is a great salesman.

One Reddit user breaks down Scott’s sales bonafides:

“We see several episodes where he shows some great work communication skills and some where he legit closes deals with people with ease (like the deal at the convention and Applebee’s).

He has index cards with his clients that have all sorts of information about them good and bad. And he knows what to and what not to say to them. So, when it comes to peer relationships, Michael is a people person. Which is why people would say he’s a bad boss or at least a weird cringy one. He gets too personal but for some salesmen it works.”

Scott is actually the perfect embodiment of the Peter Principle, which says “that a person who is competent at their job will earn a promotion to a position that requires different skills.”

He’s a fantastic salesman that is wholly unequipped to be a manager.

When NBC first brought The Office stateside from BBC, Scott’s character was actually too incompetent (mirroring Ricky Gervais’ original character David Brent).

Gervais — who co-created the UK version of The Office — told NBC to give Scott real selling skills. Here is why, according to ScreenRant:

Gervais made it clear that “in England, you can be really, really bad at your job for a long time and you never get fired.” He worried that in America if Michael was bad at his job, it would frustrate viewers. Gervais then advised that Michael “can be a buffoon, he can be silly, he can be irritating” but it was truly important that the NBC series “show glimpses of [Michael] actually being a good salesperson.”

And, people, this is why Gervais is worth $140m (he still gets 10% of syndication equity points on The Office).

Anyways, here is my favourite Michael Scott gag from the show…

…and you will def enjoy this 10-minute video of Michael Scott being a good salesman:

YouTube video

See y’all next week!