Open Letter to LinkedIn

Dear LinkedIn

I am pissed off.

I spent a whole week working on the launch of a news digest, only for you not to send out the announcement.

I got buy-in from leading players, I got great contributors, I did interviews, I generated buzz. For what? 43 clicks so far- yeah great- considering my audience should have been 13,000 people.

Now here’s the problem- if I resend it today, I won’t be able to send out this week’s digest on Friday and every Friday thereafter. You haven’t responded whether we can have extra announcement credits. The longer you take to respond the less value it has.

Here’s the problem- you’re not paying attention to the 1-9-90 theory of participation inequality:

User participation often more or less follows a 90-9-1 rule:

  • 90% of users are lurkers (i.e., read or observe, but don’t contribute).
  • 9% of users contribute from time to time, but other priorities dominate their time.
  • 1% of users participate a lot and account for most contributions: it can seem as if they don’t have lives because they often post just minutes after whatever event they’re commenting on occurs.

A the moment I’m part of the 1% of people adding value to the platform and I don’t feel like you’re recognising the value we add and that we have different needs to the other 99%.

I need to know if announcements are down. I shouldn’t have to look in the group managers group to see if it’s working (because you can’t announce it there either)- the interface should have told me. At the very least email me, but don’t let me think it’s worked only for it to not to work. That’s unacceptable in SaaS.

SaaS? Yes- while we might not all pay- you’re a brilliant example of the freemium model at work with amazing network effects. But seriously, groups is really important to us- I use it more than any other LinkedIn feature- what do your stat’s say- the best online networking you’ve got to offer?

OK- it doesn’t help that I’ve been ill the last few days (more than man flu) but I’m still really pissed off and embarrassed for all the effort my contributors put in, for it not to go out.

Customer Service and Product Management #FAIL

Kind Regards,

Justin

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  • http://twitter.com/MichaelDunham MichaelDunham

    All the best in your new gig – Sounds like an exciting opportunity. Anything I can do t0 help I'm always available.

    When you up to talk about some of this on a podcast … :-)

  • http://www.justinpirie.com Justin Pirie

    Thanks mate- I was thinking about getting you on a podcast ;)

  • http://www.facebook.com/people/Sung-Jin-Kim/100000773058162 Sung-Jin Kim

    “The Moving Cloud: To surpass or To be followed?”

  • http://www.justinpirie.com Justin Pirie

    Sung-Jim: what do you mean?

  • http://www.facebook.com/samarpan Samarpan Dutta

    @justinpirie Great post! liked the way you put the #multitenancy debate to rest. See how #Cordys takes multitenacy seriously http://bit.ly/9mYXpk

  • http://www.justinpirie.com Justin Pirie
  • http://www.opteso.co.nz Pete Clouston

    Hi Justin,

    re: SaaS ROI -
    can you offer ideas as to potential methodologies for quantifying the return, objective and subjective?

    Thanks, Pete

  • http://twitter.com/janawiggins Jana Wiggins

    Priceless!

  • http://giffconstable.com giffc

    Thank you for the kind words Justin! You remind me I really need to go look at Meeker's latest deck. Hope you're having fun with the new gig

  • http://www.justinpirie.com Justin Pirie

    Hi Pete – I'll try and lay out some of the key ROI arguments out this afternoon.

    Best

    Justin

  • http://www.justinpirie.com Justin Pirie

    Thanks!

  • Aaron

    Interesting – especially the mobile SaaS predictions.

  • http://twitter.com/daveconcannon Dave Concannon

    Thanks for the mention Justin, glad you found it useful.

  • http://www.justinpirie.com Justin Pirie

    My pleasure Dave- great post- not often discussed!

  • http://www.growcomms.com/ Russell Palmer

    Justin,
    very thorough round up of the industry happenenings this week. I especially enjoyed the interview with Eric Domage on cloud security aspects. My eyes usually glaze over when the topic of security comes up because I find it very technical, but Eric put his points forward in a way that is easy to understand and make a lot of sense.

  • http://www.justinpirie.com Justin Pirie

    Eric is really good. Security for the rest of us in the real world!

  • Anonymous

    Interesting The examples show high CAC costs (referred to d.skoks) for an SaaS but what do you recommend doing if a startup’s CAC is high due to x reason a direct sales force for example? Aside from the above mentioned within the examples on how to drive CAC down or LTV upnnWhat would you or anyone following advise or strategically adjust to obtain the same objectives ( sales/rev etc) there needs to be some constructive comments around these half examples, for instance recommending not using a direct sales force is not really constructive because it might deter away from the sales/rev objectives, but a strategy, substitution to lower the CAC associated with the force could be something we could all discuss and benefit from

  • kennsaa

    Interesting The examples show high CAC costs (referred to d.skoks) for an SaaS but what do you recommend doing if a startup’s CAC is high due to x reason a direct sales force for example? Aside from the above mentioned within the examples on how to drive CAC down or LTV up

    What would you or anyone following advise or strategically adjust to obtain the same objectives ( sales/rev etc) there needs to be some constructive comments around these half examples, for instance recommending not using a direct sales force is not really constructive because it might deter away from the sales/rev objectives, but a strategy, substitution to lower the CAC associated with the force could be something we could all discuss and benefit from

  • http://www.justinpirie.com Justin Pirie

    Have you checked out TWIS#26?nn http://www.justinpirie.com/2010/05/twis26-this-could-change-your-life-understanding-sales-complexity-in-saas/ nnThe first question to ask- is there enough pain (value) to justify the high selling point of a direct sales force?nnIf there’s not- then you might need to reconsider… I’ve had this question posed so many times over the years- so I don’t wish to take assumptions based on your email- but they hint at the same underlying issues.nnSaaS is really an upside down business, distribution and user experience are much more important than the software. If you can’t nail those two- then you’re going to struggle to acquire customers…nnMarketing and Sales is almost more important than anything else

  • http://www.justinpirie.com Justin Pirie

    Have you checked out TWIS#26?

    http://www.justinpirie.com/2010/05/twis26-this-could-change-your-life-understanding-sales-complexity-in-saas/

    The first question to ask- is there enough pain (value) to justify the high selling point of a direct sales force?

    If there’s not- then you might need to reconsider… I’ve had this question posed so many times over the years- so I don’t wish to take assumptions based on your email- but they hint at the same underlying issues.

    SaaS is really an upside down business, distribution and user experience are much more important than the software. If you can’t nail those two- then you’re going to struggle to acquire customers…

    Marketing and Sales is almost more important than anything else

  • DCowan

    Excellent blog Justin, very insightful. I think your 10 point plan is exactly what Partners should be doing. The GB Olympic committee did something similar about 6 years ago, taking someone else’s model (business plan/services/product – it applies across the board I think), in this case Australia’s, and put their own spin on it to offer their athletes (customers) a better chance of succeeding, fast forward 4 years to Beijing 2008 and GB surged past Australia in the Gold Medals department and now they look to GB as a model to follow despite it being an upgraded version of their own idea!nPartners can certainly retain their clients with a smart implementation of some or all of your points……. as you say, it’s not all doom and gloom!

  • DCowan

    Excellent blog Justin, very insightful. I think your 10 point plan is exactly what Partners should be doing. The GB Olympic committee did something similar about 6 years ago, taking someone else’s model (business plan/services/product – it applies across the board I think), in this case Australia’s, and put their own spin on it to offer their athletes (customers) a better chance of succeeding, fast forward 4 years to Beijing 2008 and GB surged past Australia in the Gold Medals department and now they look to GB as a model to follow despite it being an upgraded version of their own idea!
    Partners can certainly retain their clients with a smart implementation of some or all of your points……. as you say, it’s not all doom and gloom!

  • http://www.justinpirie.com Justin Pirie

    That’s a really interesting perspective. I didn’t know about that parallel.

  • http://www.justinpirie.com Justin Pirie

    That’s a really interesting perspective. I didn’t know about that parallel.

  • http://www.commensus.com/Cloud-Services/Hosting-and-Virtualisation/Cloud-Hosting-Virtual-Server-Hosting Virtual Server Hosting

    They also need to marketing Cloud as an aid for business strategy rather than the strength of their services which are too difficult for a financial director to comprehend

  • http://www.commensus.com/Cloud-Services/Hosting-and-Virtualisation/Cloud-Hosting-Virtual-Server-Hosting Virtual Server Hosting

    They also need to marketing Cloud as an aid for business strategy rather than the strength of their services which are too difficult for a financial director to comprehend

  • http://www.justinpirie.com Justin Pirie

    Can you expand on that? What do you mean by “business strategy”?

  • http://www.justinpirie.com Justin Pirie

    Can you expand on that? What do you mean by “business strategy”?

  • http://bit.ly/1Gu8Ha Firas Raouf

    Justin, I think you’re on the right track… I recently wrote about this topic on my blog http://bit.ly/fAkVpf, Here’s the intro to that post:nnThe reseller channel generally does not work for SaaS companies, especially at the early stages (sub-$20M in revenue). This is driven by two things: n1. SaaS solutions generally don’t require an intermediary. They are easy to find (online), easy to deploy (nothing to deploy), and easy to use. This is obviously not the case with SaaS solutions that require a significant process change on the customer’s side, but more on that below.n2. SaaS license revenue stream in the first year (where the reseller needs to make the most of his money) is a fraction of what perpetual license products receive. So the reseller either has to settle for a fraction of the revenue he expects from his perpetual license vendors, or he needs to get a cut of subsequent year subscriptions (which would be a waste of your money).nnThe only way to engage an indirect channel in an SaaS delivery model is around the professional services that need to encompass your solution. In effect, the only indirect channel I’ve seen work for SaaS companies is the value-added service provider partner. This is where a partner delivers the business process re-engineering required to successfully implement your solution at a customer site. In that case, the service provider derives his revenue from the services billed directly to the customer… while deriving less revenue from the SaaS license margin you would provide on top of that.nn

  • http://bit.ly/1Gu8Ha Firas Raouf

    Justin, I think you’re on the right track… I recently wrote about this topic on my blog http://bit.ly/fAkVpf, Here’s the intro to that post:

    The reseller channel generally does not work for SaaS companies, especially at the early stages (sub-$20M in revenue). This is driven by two things:
    1. SaaS solutions generally don’t require an intermediary. They are easy to find (online), easy to deploy (nothing to deploy), and easy to use. This is obviously not the case with SaaS solutions that require a significant process change on the customer’s side, but more on that below.
    2. SaaS license revenue stream in the first year (where the reseller needs to make the most of his money) is a fraction of what perpetual license products receive. So the reseller either has to settle for a fraction of the revenue he expects from his perpetual license vendors, or he needs to get a cut of subsequent year subscriptions (which would be a waste of your money).

    The only way to engage an indirect channel in an SaaS delivery model is around the professional services that need to encompass your solution. In effect, the only indirect channel I’ve seen work for SaaS companies is the value-added service provider partner. This is where a partner delivers the business process re-engineering required to successfully implement your solution at a customer site. In that case, the service provider derives his revenue from the services billed directly to the customer… while deriving less revenue from the SaaS license margin you would provide on top of that.

  • http://www.justinpirie.com Justin Pirie

    Great post Firas! I really like your thinking on channels.nnAs a counterpoint to your blog post, I would argue there are some cases where building a channel early can benefit, where I work we have a very successful channel model that started way before your suggested revenue target- but then the channel wanted to sell our type of solution. So the only exception to your rule is if the channel are actively seeking that product to sell, then I think it would be foolish to turn them away.nnHowever, I don’t think that’s a normal use case… The majority of SaaS apps are disruptive and are taking complexity away from the end user, an as such don’t need as many services to install and maintain. Being disruptive isn’t always a good thing if you want to build a channel…nnBut in essence you’re right, if you want a channel, you need to create what I call “channel pull”. Essentially you have to create direct demand in the marketplace before channel will start selling. If you don’t do that, the channel won’t sell anything…nnAnd your remarks on what it takes to make a successful channel work are absolutely spot on. We have a dedicated channel team supporting them.nnIn essence- from a SaaS vendor perspective, building a channel is not something that should be taken lightly. For me- “we’ll create a channel” should go in the same bucket as “it’ll go viral”…

  • http://www.justinpirie.com Justin Pirie

    Great post Firas! I really like your thinking on channels.

    As a counterpoint to your blog post, I would argue there are some cases where building a channel early can benefit, where I work we have a very successful channel model that started way before your suggested revenue target- but then the channel wanted to sell our type of solution. So the only exception to your rule is if the channel are actively seeking that product to sell, then I think it would be foolish to turn them away.

    However, I don’t think that’s a normal use case… The majority of SaaS apps are disruptive and are taking complexity away from the end user, an as such don’t need as many services to install and maintain. Being disruptive isn’t always a good thing if you want to build a channel…

    But in essence you’re right, if you want a channel, you need to create what I call “channel pull”. Essentially you have to create direct demand in the marketplace before channel will start selling. If you don’t do that, the channel won’t sell anything…

    And your remarks on what it takes to make a successful channel work are absolutely spot on. We have a dedicated channel team supporting them.

    In essence- from a SaaS vendor perspective, building a channel is not something that should be taken lightly. For me- “we’ll create a channel” should go in the same bucket as “it’ll go viral”…

  • http://bit.ly/1Gu8Ha Firas Raouf

    Justin, I think you and I are on the exact same page. I would love to bring our combined thoughts together into an article that we can post on our community site http://www.OpenViewLabs.com We’re always looking for SaaS thought leaders to contribute.

  • http://bit.ly/1Gu8Ha Firas Raouf

    Justin, I think you and I are on the exact same page. I would love to bring our combined thoughts together into an article that we can post on our community site http://www.OpenViewLabs.com We’re always looking for SaaS thought leaders to contribute.

  • http://www.justinpirie.com Justin Pirie

    Thanks- that sounds great! I’ve got a call with Corey today- so I’ll mention it to her ;)nnJustin

  • http://www.justinpirie.com Justin Pirie

    Thanks- that sounds great! I’ve got a call with Corey today- so I’ll mention it to her ;)

    Justin

  • http://twitter.com/ITLab_JasonC Jason Currill

    Distribution is dead – data residency makes it breath again! discuss?

  • http://twitter.com/ITLab_JasonC Jason Currill

    Distribution is dead – data residency makes it breath again! discuss?

  • Robert

    Any update on this? u00a0Have OneLogin fixed your issues? u00a0

  • Robert

    Any update on this?  Have OneLogin fixed your issues?  

  • http://www.justinpirie.com Justin Pirie

    Hi RobertnnWhat issues are you referring to- the ones in the review?nnJP

  • http://www.justinpirie.com Justin Pirie

    Hi Robert

    What issues are you referring to- the ones in the review?

    JP

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  • msurkan

    I completely agree with Justin’s comment that “The good times, as we knew it in the IT channel are gone.” In fact, I would go so far as to say that the entire “channel” itself is in the process of becoming extinct. Most resellers were little more than order takers in the first place and in the world of SaaS there is little for them to do. The channel is just the latest link in the chain to be eliminated by the disintermediation of the Internet.