Posts from LinkedIn

As the world moves from web to mobile (our theme this summer), the idea of one click to do something becomes more powerful.

Did you know you can apply for a job with one click?

There are two services that make such a thing possible, LinkedIn Apply and Indeed Apply. In the spirit of full disclosure, Indeed is a USV portfolio company.

If you have your resume on LinkedIn or Indeed and you come across a job posting where the service has implemented the LinkedIn Apply and Indeed Apply buttons (think tweet and like buttons), then you can apply for the job with one click.

It turns out this is pretty popular. ZipRecruiter, a site that lets you easily post your job broadly across the web, put Linked and Indeed Apply buttons on their service and saw an almost 22% increase in job applications as a result. It makes sense, people will do more of something they can do easily.

So what does this mean for the job seeker? It means you should get your resume on LinkedIn and Indeed. What does it mean for the employer? It means you should put these one-click apply buttons on your job postings.

Some other interesting things came out of that ZipRecruiter blog post:

1) they get 3x the one click applications from Indeed vs LinkedIn

2) Indeed's resume database is growing at over 1mm resumes a month

3) Indeed is better for most job types other than management and executive

The world of recruiting has changed a lot in the past ten years and companies like LinkedIn and Indeed are driving much of that change. One click job applications is yet another example of this.

We have an IPO market for web companies again. I don't have all the names in front of me, but this year has brought IPOs for Pandora, LinkedIn, Groupon, Zynga, and TripAdvisor. These five companies are all trading for north of $1bn market cap. Pandora is at ~$1.5bn. LinkedIn is at ~$6bn. Groupon is at ~$15bn, Zynga is at ~$7bn, and TripAdvisor is at ~$3.5bn.

We can (and surely will in the comments) argue about these valuations. Some will say they are too high. Some will say they are too low. That's what makes a market. But in the aggregate, these valuations do not seem ridiculous to me. The public market investors are valuing these companies at prices that have some rationality to them.

What is possibly more interesting is that the public markets are valuing these companies at less than the late stage private market might value them at. Again, I don't have the data in front of me (I'm on vacation), but I believe that some of these companies had private financings at our above these current market caps.

The past decade (post Internet bubble, post Sarbox) brought a new normal to the late stage venture capital market. Companies are staying private longer. They are doing multiple rounds of growth financing privately. And they are doing multiple rounds of secondary liquidity for the founders, angels, and early investors. Mike Moritz calls these financings the "new IPOs".

This "new normal" is allowing these companies to stay private and develop into real businesses. With a lot of revenue. The five companies I mentioned at the top of this post will have close to $5bn in revenue this year. The company with the least amount of revenue is Pandora which, as of its last quarterly report, is operating at a $300mm annual revenue run rate.

These companies also have built sophisticated management teams that are highly capable of managing a business to meet the expectations of public market investors. They have strong operating executives, strong financial executives, and strong product and engineering leadership. They should be well run public companies.

The five companies I mentioned at the top of this post are carrying a combined market cap of $33bn. So they trade at an average of 6.6x revenues. And that is not including the cash they have on their balance sheets. I am not going to do the math, but I would bet if you back out the excess cash, you might see revenue multiples of less than 6x for this cohort. These are full valuations in a historical context, but these are not crazy valuations. If these companies can continue to grow at the rates they are currently growing, and if they can generate significant cash flow from their businesses (some of these companies already are doing that), then they should be more valuable in the next couple years, generating gains for the public market investors who hold the stock.

When Zynga was pricing its offering last week and getting ready to start trading its stock, I got a note from a friend who said "let's hope for a '99 style first day pop." I responded that was the last thing I wanted to see. And thankfully we did not get that.

It is not healthy for companies to trade at prices well beyond what they are worth. It puts incredible pressure on the team to deliver results that can't be delivered. And when the stock inevitably comes back to reality, the team feels like they somehow failed. Morale is impacted. The whole things is madness. And who benefits from that first day pop? Only the best customers of the banks who led the offerings. Why should they get a windfall when they did nothing to build the company and when they will be out of the stock so fast it will make your head spin?

The IPO market for web companies we have right now is rationale. We can argue whether it is pricing thse offerings correctly. But it feels about right to me. I believe we will see a bunch of IPOs next year, led by Facebook, which is the poster child of this whole "stay private longer" movement. If we as an industry can be patient, keep our companies private longer until they are truly IPO ready, then we should have a sustainable IPO market. That's where we seem to be headed. Let's not get greedy and screw it up.

Disclosure: USV has a significant holding in Zynga therefore I am long that stock through my interest in USV.

Related articles

• Tech IPOs Just Ain't What They Used To Be (techcrunch.com)
• Zynga, Groupon, Pandora and LinkedIn Worked For This Investor (blogs.wsj.com)
• Later-stage rounds and "setting the bar too high" (cdixon.org)
• The TripAdvisor IPO (cdixon.org)

Last month, I participated in a PII event and sat on a panel (a format I dislike and try to avoid) moderated by Kara Swisher. Kara posted a video of the panel on ATD a few days later.

Sometimes when you are in a public setting you say things that have been coming together in your mind but you have never articulated before. That happened that day. I said the following about 40 minutes into the panel:

Twitter is default public and everyone knows that's what it is. Your Twitter identity is the lightest weight, most public, and therefore the best identity on the web.

Many other online identites we are all developing are heavier weight. They have more private information about us in them. When the companies that operate those identity services share our information with others we get nervous, upset, and anxious.

Twitter and other default public identities (like my daughter Emily's "Things I Like" tumblog) contain only the information we are willing to have the whole world know about us. And therefore they are better identities. They can be portable without our permission. They are crafted by us with the full knowledge that they will be seen by others, potentially many others.

We just completed a long and taxing hiring process. We had over 250 applicants to our analyst position. We asked each and every applicant to share their online profiles with us. Most shared default public profiles like blogs, twitters, tumblrs, etc. We learned so much about each of the applicants through reviewing those public identities. Default public online identities are very powerful and very revealing about people, maybe more so than default private identities. They can be used for almost anything that default private identities can be used for. But they can be used without asking for permission from the owner of the profile because the information is public already.

This is counter intuitive for many. But I'm pretty sure that default public identities are the future for most things (maybe not healthcare and personal finance and the like) and that they are the best form of online identity.

I was at breakfast with a friend yesterday who told me about a project he did with some Twitter data around weather. He said as he was pouring through the data, he saw that there were bursts of tweets at certain times. He dug into the data and saw that it was weather vanes and thermometers that were tweeting out their data.

It got me thinking about things that tweet (like weather vanes, refridgerators, traffic lights, etc) and their role in the land of social media. I believe that devices and sensors that broadcast their data via social media channels are an important source of social data and engagement. And for some reason, they are way more common on Twitter than any other social platform.

Have you ever seen a weather vane on Facebook? I have not. If they exist I'd love to know about them. I want to understand the Internet of Things and its role in social media. I suspect that the symmetric friending model and the use of real names/real people in the Facebook system is a hindrance to devices updating Facebook pages, but I could be wrong.

Services that are too determinent in their use case are ultimately limiting in their extensability to important new uses. Machines are reliable sources of information and the social services that are friendly to them have a number of interesting opportunities in front of them.