LinkedIn is one of the largest professional networking platforms in the world, with over 740 million members as of October 2022. But who originally created this massively popular site for connecting professionals?
The Founding of LinkedIn
LinkedIn was founded in December 2002 by Reid Hoffman, Allen Blue, Konstantin Guericke, Eric Ly, and Jean-Luc Vaillant. The five founders had a vision for creating a site that would connect professionals from around the world and help them network for job opportunities, find business contacts, and more.
Reid Hoffman came up with the initial idea for LinkedIn and is considered the driving force behind its creation. At the time, Hoffman was an executive vice president at PayPal. He had previously worked at companies like Fujitsu and Apple Computer. Hoffman brought on Blue, Guericke, Ly, and Vaillant to help develop LinkedIn and build out the initial product.
Reid Hoffman’s Role
As the founder and visionary behind LinkedIn, Reid Hoffman had several key responsibilities:
- Came up with the initial concept for a professional networking site
- Recruited Allen Blue, Konstantin Guericke, Eric Ly, and Jean-Luc Vaillant as co-founders
- Led the product development strategy in LinkedIn’s early days
- Raised venture capital funding for LinkedIn
- Served as LinkedIn’s founding CEO from 2003-2007
- Remained as Chairman of the Board after stepping down as CEO
- Currently serves as a board member and owns a minority stake in the company
Hoffman’s vision for LinkedIn revolved around leveraging the internet and personal networks to connect professionals. He believed that having a database of professional profiles could dramatically change the way people searched for jobs, recruited talent, and developed business relationships.
The Other Founders’ Roles
While Reid Hoffman spearheaded the creation of LinkedIn, the other four co-founders also played instrumental roles:
- Allen Blue: Was in charge of product strategy. He now serves as a board member.
- Konstantin Guericke: Led the technical development as CTO. He eventually became VP of Corporate Development.
- Eric Ly: Served as the founding CTO after Guericke. He oversaw engineering and product development.
- Jean-Luc Vaillant: Handled the financing and revenue side. He was the founding CFO.
This talented team worked in synergy to turn Hoffman’s vision into a real product. Their varied backgrounds in technology, business, and engineering were instrumental in building the initial platform.
LinkedIn’s Funding and Growth
After coming together in late 2002, the LinkedIn founding team focused on developing the site and raising venture capital funding. Here is an overview of their early financing and growth:
- March 2003 – Received $4.7 million in Series A funding from Greylock Partners and Sequoia Capital.
- June 2004 – Membership reached 1 million users.
- November 2004 – Received $10 million in Series B funding led by Greylock.
- July 2006 – Membership reached 10 million users.
- August 2006 – Received $12 million in Series C funding from Greylock, Sequoia, etc.
- April 2007 – Membership reached 20 million users.
This injection of venture capital allowed LinkedIn to quickly scale up its platform and member base in the early years. The company’s founders pitched it as the emerging leader in professional networking and leveraged investor interest in the growing social media space.
Notable Funding Rounds
Date | Funding Type | Amount Raised | Lead Investors |
---|---|---|---|
March 2003 | Series A | $4.7 million | Greylock Partners, Sequoia Capital |
November 2004 | Series B | $10 million | Greylock |
August 2006 | Series C | $12 million | Greylock, Sequoia, etc. |
This venture capital funding allowed LinkedIn to invest in technology, hire employees, market to new users, and begin generating revenue through paid subscriptions and services.
Transition From Startup to Public Company
Within its first few years, LinkedIn quickly emerged as the world’s premier professional networking platform. It fended off competition from sites like XING to become the go-to career and networking site for white collar professionals worldwide. Here are some key milestones as LinkedIn transitioned from scrappy startup to global public company:
- May 2007 – LinkedIn membership reaches 10 million users.
- June 2008 – Company launches its first mobile app.
- 2010 – Revenue exceeds $100 million.
- October 2010 – Membership reaches 85 million.
- 2011 – Opens its HQ in Mountain View, California.
- May 2011 – LinkedIn files for IPO, has around $15 million in net income for 2010.
LinkedIn held its high-profile initial public offering (IPO) on May 19, 2011. Shares were priced at $45 and closed their first day of trading at $94.25. This valued the company at around $9 billion and made instant millionaires of the founders and early employees.
Going public provided LinkedIn with an influx of capital to continue its rapid growth and expansion worldwide. The company was generating net income from services like job ads, premium subscriptions, and recruiting tools. But the IPO also shifted LinkedIn’s focus toward quarterly earnings and shareholder value vs. purely growth.
Post-IPO Performance
Year | Members | Revenue | Net Income |
---|---|---|---|
2011 | 127 million | $522 million | $15 million |
2012 | 187 million | $972 million | $2 million |
2014 | 300 million | $2.2 billion | $15 million |
2016 | 450 million | $3.8 billion | $166 million |
As a public company, LinkedIn experienced surging growth in members, revenue, and profitability. It successfully monetized its platform and became a “must have” tool for professionals worldwide. LinkedIn traded on the NYSE under the ticker symbol LNKD.
LinkedIn’s Changing Leadership
LinkedIn’s founder Reid Hoffman led the company as CEO from its launch through the initial public offering in 2011. Here is an overview of LinkedIn’s changing executive leadership over the years:
- 2003 to 2007 – Reid Hoffman serves as LinkedIn’s founding CEO.
- 2007 – Dan Nye replaces Hoffman as CEO. Hoffman becomes Chairman.
- 2008 to 2009 – Hoffman returns as interim CEO after Nye’s departure.
- 2009 – Jeff Weiner joins LinkedIn as CEO, allowing Hoffman to focus on his Chairman role.
- 2016 – Weiner joins Microsoft’s board after Microsoft’s acquisition of LinkedIn.
- 2021 – Ryan Roslansky becomes CEO as Weiner transitions to Executive Chairman.
After taking LinkedIn public, Hoffman knew he wanted to bring in a new long-term CEO with public company experience. He recruited former Yahoo! executive Jeff Weiner, who led the company through a period of rapid revenue growth and expansion in members worldwide. Weiner navigated LinkedIn’s $26 billion acquisition by Microsoft in 2016. LinkedIn remains independently operated under Weiner and CEO Ryan Roslansky.
Founder Reid Hoffman
Throughout leadership changes, LinkedIn’s founder Reid Hoffman remained deeply involved as Chairman and board member. He helped guide LinkedIn’s vision and strategy in the years after stepping back as CEO. Hoffman leveraged his board role to advocate for cultivating LinkedIn’s culture and core values during periods of rapid growth. He worked closely with Weiner and others to provide oversight and direction.
In addition to LinkedIn, Hoffman has invested extensively in other Silicon Valley startups. He is a renowned tech entrepreneur, investor, and thought leader. Hoffman’s net worth today is estimated at over $2 billion, thanks largely to his stake in LinkedIn.
LinkedIn’s Acquisition by Microsoft
In June 2016, Microsoft announced its acquisition of LinkedIn for a staggering $26.2 billion. At the time, this was Microsoft’s largest acquisition ever. Here are some key points about this transformative deal:
- Valued LinkedIn at $26.2 billion, or $196 per share – a 50% premium to market price.
- Funded with cash – Microsoft had over $100 billion in cash reserves.
- Closed the deal in December 2016 after receiving regulatory approval.
- Kept LinkedIn as an independent subsidiary, with Jeff Weiner remaining CEO.
- Gave Microsoft access to LinkedIn’s 433 million members for synergies with products like Office 365.
- Expanded Microsoft’s presence in social media, professional networking, and recruiting.
Microsoft gained LinkedIn’s arsenal of professional data, content, and job listings. It hoped to leverage this to strengthen its other enterprise offerings. The deal also helped Microsoft renew its reputation as an innovator after largely missing the social media wave.
For LinkedIn, the acquisition provided a lucrative exit for longtime shareholders and eliminated the pressures of Wall Street expectations. LinkedIn retained its branding and product focus with Microsoft’s support.
Microsoft-LinkedIn Synergies
Following the acquisition, Microsoft looked for ways to integrate LinkedIn across its family of products. Some examples include:
- Adding LinkedIn profile data to Outlook contacts.
- Displaying personalized news feeds and job recommendations in Office 365.
- Enabling LinkedIn lookup from inside Word, PowerPoint, etc.
- Offering discounted Office 365 subscriptions to LinkedIn premium members.
- Leveraging LinkedIn’s marketing tools with Dynamics 365.
The vision was to embed LinkedIn’s professional network throughout Microsoft’s ecosystem for business and productivity tools. This could increase engagement across both platforms.
LinkedIn Today and Beyond
Today, LinkedIn remains the world’s largest professional networking platform, with over 740 million members in more than 200 countries as of October 2022. It has evolved far beyond a place to post your resume. Here’s a snapshot of LinkedIn today:
- Daily active user base of 20+ million professionals.
- Millions of jobs listed.
- 10+ million active job listings
- Database of over 55 million companies.
- Popular platform for thought leadership content.
- Hub for online professional development courses.
- Platform for targeted marketing and advertising.
While owned by Microsoft, LinkedIn operates independently under CEO Ryan Roslansky. Its mission is to “create economic opportunity for every member of the global workforce.” LinkedIn aims to continue growing its community of professionals and making it easier to network, search for jobs, publish content, and develop skills.
Some emerging initiatives at LinkedIn include:
- LinkedIn Learning expanding its professional development content.
- LinkedIn Jobs evolving its AI-powered job recommendation engine.
- Strengthening integration with Microsoft’s enterprise software.
- Focus on serving as a diverse professional community.
- Continued localization of LinkedIn’s platform globally.
As the professional landscape continues evolving in the digital age, LinkedIn is positioned to remain professionals’ go-to destination for furthering their careers and livelihoods.
The Lasting Impact of LinkedIn’s Founders
While Reid Hoffman dreamt up the initial idea for LinkedIn, it was the collaboration of the founding team that made it a reality. Each founder brought their own strengths:
- Reid Hoffman: Vision and product strategy.
- Allen Blue: Product development.
- Konstantin Guericke: Technical architect.
- Eric Ly: Engineering and operations.
- Jean-Luc Vaillant: Financing and revenue generation.
Together, they created a platform that has connected millions of professionals worldwide. LinkedIn pioneered the notion of an online resume and identity. It tapped into the spread of high speed internet and the power of social networking.
The founders’ vision evolved LinkedIn from a simple networking tool into a versatile platform enabling users to:
- Build an online professional profile.
- Establish a professional identity.
- Network with colleagues and clients.
- Share content and thought leadership.
- Develop skills through online learning.
- Search for and promote career opportunities.
- Participate in industry groups and discussions.
LinkedIn harnessed technology to make professional networking more efficient, global, and transparent. It supplanted old-fashioned networking models by allowing anyone to establish a powerful personal brand and network online.
Conclusion
LinkedIn’s founding team seized upon the opportunity the internet provided to transform professional networking and career development. Since its launch in 2003, LinkedIn has grown into the world’s definitive social network for professionals.
While Reid Hoffman conceived LinkedIn’s initial concept, it required the right team to execute on that vision. Allen Blue, Konstantin Guericke, Eric Ly, and Jean-Luc Vaillant all played crucial roles in getting LinkedIn off the ground before it was embraced globally.
Today, LinkedIn boasts over 740 million users. It has evolved far beyond a digital resume into a versatile platform enabling professionals to network, search for jobs, publish content, take online courses, and more. LinkedIn’s founders paved the way for professionals everywhere to manage their careers and personal brands digitally.