One of the recurring themes of the consumer internet is the cycle from aggregation to disaggregation - bundling to unbundling. There is a lot of value in services that pull everything together in one place, but over time that value starts to recede, the lock-ins keeping people there weaken and the appeal of having separate, specialised products grows. And then, after a while, the appeal of aggregation starts to grow again. We saw this in the past with AOL (NYSE:AOL), and now with Facebook (NASDAQ:FB) on mobile.
A big part of the dynamic of Facebook unbundling is the different mechanics of apps versus the desktop web. Any smartphone app can use the phone book and PSTN numbering system to access a ready-made social graph, removing a lot of the friction Facebook benefits from on the web. A core Facebook use case is photo sharing, and a smartphone's built-in photo library offers much more fluid ways to share photos across multiple services. In effect, the phone book and photo library are reservoirs that any app can tap into, where on the desktop, creating that resource is a major pain and a major moat for Facebook. Meanwhile, push notifications to apps mean you don't have to check different web sites for updates. Another key issue is that pressing 'Home' and jumping to another app to share something else in another way with someone else is much easier than loading a different web page.
We can also see this unbundling happening to Craigslist, or at least that's what many people hope. Once a charming reminder of the web's uncommercial roots, Craigslist is now, to many, a fat complacent monopolist with a nasty litigious streak, whose founder claims no responsibility for the company he owns. It appears to have taken over the newspapers' business while taking on all of their attitudes. There are a swarm of services, often mobile first or mobile only, trying to peel off parts of the Craigslist offer, or do things Craigslist should have been doing. AirBnB is only the most obvious. Chris Dixon has a good note about this here, and Andrew Parker produced this great graphic back in 2010.
LinkedIn (NYSE:LNKD) is another interesting example of a product waiting to be unbundled, and it looks especially vulnerable because of the consistently poor execution of so many core features.
To give just one example of this, a few weeks ago an old colleague of mine took an important new job at Microsoft. I found out because he posted a photo of his badge to Facebook and I saw it, by chance, on my fortnightly visit. But when I went to LinkedIn I saw this, filling the top half of my news feed.
I spent 10 minutes searching without seeing his new job listed anywhere other than his profile itself, and indeed I couldn't actually find a way for LinkedIn to tell me about it - there is no view of 'job changes in my network', though that would seem like something that would have been implemented at launch. However, it's eager to tell me Deepak Chopra's ten tips for how successful people wipe their arses.
To re-iterate the point - LinkedIn has my entire career history. It knows I've spent 14 years in mobile, tech and finance. And this is the news it recommends me.
Of course, the amount of effort going into a mediocre Huffpo clone wouldn't matter if the core functionality of the site worked, but it doesn't. There's no way to see which of your contacts have changed jobs. No way to post a message to your network that your boss won't see. The entire user experience is a mess of overlapping technologies, black UX aimed at upselling paid services and outright poor work. Pretty much any basic task to do with managing or engaging with your network is harder and more painful than it should be. It's even hard for LinkedIn, it seems: it knows I don't have an MBA (I TOLD THEM!) but recommends I join an MBA alumni group because I did my BA at the same university.
But how does LinkedIn get unbundled? What's the mechanic? The dynamics of smartphones discussed above make it easier to unbundle Facebook. Craigslist's main strength is volume of traffic, and if you can gain an edge in a particular segment you can overcome that. But neither of those dynamics quite apply to LinkedIn.
The core of LinkedIn is that it's the universal CV database. You need to have your CV there for people to find it, to look you up - in some circles not being on LinkedIn is almost a professional failing. For specific verticals (programming, design) this isn't the case, but for white collar professionals it is. For some people an online presence per se (your blog, twitter etc) is a de facto CV and is how you build your reputation (and Klout is poking away at this), but most careers are not built in public, and most people cannot blog about their job, even if they had the time and inclination.
So it seems to me that the low-hanging fruit is the stuff that LinkedIn just isn't doing while it pursues the Huffpo dream. Connection and meeting management (Evernote Hello). Introductions (Emissary.io). Pre-meeting stalking (Refresh). Bit by bit a graphic just like the one for Craigslist gets built up.
The puzzle is at what point that matters to LinkedIn. The core business is about selling CVs to recruiters. So long as it remains the CV registrar, does it matter if the users only visit the site once a month, or once every six months? Indeed, if all of these apps use LinkedIn as a data source, arguably they actually reinforce its position.
Perhaps the answer is that tech history is full of dead companies that had mediocre product but great lock-ins. Eventually, the lock-in always goes away - we have BlackBerry this week to remind us of that. LinkedIn has a great lock-in and product that's mediocre for the users who enter their CVs, but pretty good for the recruiters who pay the bills. How will that play out?