Recently, professional networking website LinkedIn announced that it had reached 5 million users in India. That’s a substantial increase of 1.6 million, which it had disclosed when Hari V Krishnan was appointed Country Manager (India) in November last year. The company also recently announced the availability of its Blackberry application. We spoke with Krishnan about what is driving LinkedIn’s growth in India, how it makes money, how it approaches sales and product development, how it approaches advertising, and how its Indian operations operate in collaboration with its International operations. Part 1 of the interview:

Do you have 5 million registered users in India, or active users? In November 2009 when you came on board at LinkedIn, it was 3.4 million, and you’ve added 1.6 million in these five months. What has driven that growth?

We have 5 million registered users on LinkedIn in India out of the total base of about 60 million. If you look at it on a global basis India is the fastest growing region for LinkedIn, particularly in the last 6-12 months. The engagement level has also increased, for not just looking for jobs or finding candidates, but also, in India, for professional insight, through joining LinkedIn groups, putting questions on LinkedIn answers. The fact that everything is transparent. For example, when I put out a question on LinkedIn answers and get a response, you know who that person is and the relevance.

We have spent a lot of time, even prior to my joining, in understanding some of our more engaged bases and how they are using the product. A lot of emphasis is put on the un-sexy part of the product, which is product marketing, communicating the features to the relevant bases, sort of pushing things out, hoping relevant people see it. Many of the product innovations that you have seen last few months, like improved search functionality, for refining your search, the user experience of our recruitment solutions product, as well as the launch of the Blackberry app, all of these have come out with conversation with users.

But that would be more at the global level right? Do you have the freedom to change things specifically for India, or does it primarily work as a top down model?

Not to abuse a cliché but it’s think global act local. You are right in the sense that we won’t be sitting and doing feature enhancement for specifically one country. What is unique at a country level is what needs to be communicated, finding a lot about what users are doing, what is working and what is not working in LinkedIn, and factoring that into how our product revvs in the coming month. But you are right, in terms of product development being very focussed on a global level.

In my opinion we have three kinds of customers: the end consumer, the advertisers and recruiters. We have been spending time reaching out to all these three categories of customers in India to understand what is working and what is not. In some cases it was just a matter of awareness, they ask for a particular feature, and once we understood what they were trying to achieve, it could have very well been that we have packaged the product in a different way and communicating how to use it. In some cases they have given us ideas for things which you will see coming in the month ahead.

What kind of increase have you seen in terms of the active users, since 5 million is the registered base, not the active user base?

In terms of the active user base, we don’t specifically discuss or share the internal numbers. I think Comcast numbers for February put us at 2.6 million active users, and that gives you an indication of where things are. There is plenty of scope for improvement, but I think it is still an encouraging number. Some of the other activities, for example the Blackberry application that we have announced, fundamentally changes the way in which LinkedIn works for a professional in India. You can find information on people you are going to meet, but what is more interesting, is that it’s embedded into the calendar, the address book and the message box. I think the calendar in particular has become a part of how I do my day to day work now. On the Blackberry calendar I see we have this meeting right now, and I want to do a quick catch up on what Nikhil Pahwa has done, just to give a littler more context I can view your LinkedIn profile, with your photo, your current designation, which company you are working for, it all percolates into my Blackberry address book. I have been spending much more time on the App time than the website itself.

I’m curious about how many of your users in India have you been able to move to the premium model? Have you been able to upsell?

I think the premium platform is meant for specific user groups and specific user functions. Anyone off the street will probably not see the value in an in-mail or a profile organiser. We don’t ask everyone to upgrade, but it’s a small percentage of people in India and globally who are on that product and the ones who are there tend to remain at that level, using it as a day to day tool. User groups like business development professionals, sales professionals, recruiters, and especially in India, the financial services industry and journalists are very advanced users, wanting to reach out to that third degree network.

The up-selling has been localised to groups that we believe will actually use this product, so we have pushed it out to people who have business development as a part of their job function, and financial services industry, in market research and market analysis, even Private Equity and Industry Analysts, because they spend a lot of time understanding people movement and how people are engaging, and they want to be able to reach out to some of the stakeholders who are interesting.

How does your sales effort work in India? I know you have outsourced the advertising sales to NetworkPlay?

Essentially, in terms of sales, there are two sales products which our sales team is pushing. One is advertising, and you are right, Network Play represents us and is doing extremely well. The other side is the recruitment solutions, and I’ll answer that in two ways: right now we are supported by LinkedIn in the UK, where they have been selling into India by servicing enterprising customers who reached out to someone at LinkedIn. Since I have joined, I have spent time meeting these clients, and essentially assisting with the sales. But the most important part of this is that we are in the process of closing out a Director for that business and once that person is onboard, Indian recruiters can look forward to dealing with someone sitting in Mumbai who will be able to support them.

Will you be creating a separate sales team for recruiting business like Naukri and Monster have in India?

I think the nature the size the way we actually sell it, will not necessarily be influenced by the way job boards do it. They have a different business model, but yes, we will have our own in house sales team that will support it. Beyond that, we are open to looking at other partnerships which will help us scale faster.

How do you view the recruitment from the LinkedIn perspective? The way I see it is that you really are not built for speedy mass hiring, but individual hiring: an Infosys cannot hire 600 IT professionals in one shot using LinkedIn. In that case, is the scale of the recruitment business for you limited by singular hires, as compared to a job board model?

There are two levels to that. If you look at any IT services majors, and they are looking to hire thousands of people this year, the challenge for them is always that there are a certain number of active candidates that they can reach out to using a job board, LinkedIn, or agencies. Beyond that they actually need passive candidates, because of the sheer volume and at the speed at which they need to hire. There are two metrics which are key here: one is the time to hire and second is the cost of hire. I think the key technicality is that once you reach a certain critical mass, once we crossed 4 million, we already had a lot of things for some of the hiring companies.

This will only improve as we get bigger. They are actually using us to search passive candidates, and also to look at people with slightly more years of experience, like 3-5 years. What works is the standardised nature of the LinkedIn profile and the transparency that networking aspect of it brings: checks and balances with colleagues and bosses there.There are mass hiring companies paying us for using our recruitment solutions product, but unfortunately I can’t name them. Agencies use us for improving their efficiency, build a pipeline, swiftly do some reference checks etc all online, to improve their cost of servicing. The revenues have already been booked in 2009 and we continue to see a good Q1, and this is without a sales team. In 2010, the sales process will be a learning for us. I don’t claim to know all the answers yet, but we have a lot of pent up demand.

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