Just as dating and chat sites have come into their own with Web 2.0, business-oriented networks are also offering companies matchmaking opportunities with significant advantages in recruitment, foreign expansion and global trading
Instead of hiring a headhunter to bag your company a marketing manager for Malaysia, log into one of the growing number of business networks, post a recruitment ad and search the profiles of fellow members for candidates. Before long you'll have found the ideal prospect, and at little or no cost to you or your company. That's the theory—but does it work in practice?
Business networks represent the grown-up face of Web 2.0, the nickname for the interactive, second generation internet. While home-users swap videos on YouTube and broaden their social contacts via MySpace and Facebook, professionals have their own forums: business-oriented networks such as LinkedIn, XING (formerly Open Business Club) and Viadeo on which they can post personal and professional profiles, trawl for information, exchange contact lists and set up communities with like-minded people.
The increasingly international nature of these sites is attracting more business users. For instance, LinkedIn has around 11 million members and, while its founders are US-based, it has a global membership. Rival ventures are also busily setting about internationalising their offerings. Viadeo, for example, began life as a social network for the business community in France—where it currently boasts around one million members—but is now rolling out across Europe, and has forged a partnership with China's Tianji online community. UK users currently number around 20,000.
Germany's XING offers a range of language options, including English, French, Russian, Japanese and Turkish. And, as the name implies, relative newcomer Global Millionaires—while Malaysian in origin—has been launched with the aim of facilitating contact and e-commerce on a worldwide basis.
These networks provide potential gateways into overseas markets. Peter Cunningham, UK director of Viadeo, says that business people use social networking sites either as a means to make contacts and glean intelligence from fellow members or to recruit from a pool of experienced managers and professionals. Some simply use it to ensure they remain visible to recruiters. "All of this can be done on an international basis," he says.
That's certainly the experience of Carsten Brinkschulte, CEO of Synchronica, a London-based technology company whose main products are an email system that enables mobile devices to function like a Blackberry and a mobile device management package aimed at corporate users.
"Most of our business is done outside the UK, particularly emerging markets," says Brinkschulte. As Brinkschulte sees it, there is probably more interest in mobile internet solutions in areas such as Africa, Asia and South America than in Europe and the US. Emerging countries are using mobile networks to "leapfrog into the 22nd century," he claims.
But exploiting the potential of the emerging world requires people on the ground, and, with just 55 people on its payroll, Synchronica relies on local partnerships to drive sales. In the past, the company used trade shows to meet and greet potential partners and customers, but Brinkschulte increasingly uses two professional networks—XING and LinkedIn—as a way to identify useful contacts, maintain established relationships and recruit staff.
Identifying contacts is largely a matter of searching through member profiles to find the most appropriate contacts and, happily, telecoms industry executives tend to be well networked.
For Brinkschulte, professional networks come into their own once partnerships with other companies have been forged. "When we are working with an organisation, professional networks allow us to monitor what is happening within that company," he says. "For instance, we can keep track of who is leaving or joining a particular organisation and, if we find that a primary contact is going, we can set about finding a replacement." It's a system based on pushed information; when a contact leaves, Brinkschulte—or a colleague—receives an alert, giving Synchronica something akin to a direct line into the workings of the companies with which it is working overseas.
In Nigeria, for example, Synchronica sold systems to telecoms company NTN through local distributor System Fusion. "While we don't deal directly with NTN, we use LinkedIn to manage our relationship with System Fusion," he says.
Business networks also provide a means for companies in developing countries to find buyers and partners in the UK. Wuhan Goldsense, a Chinese import and export business specialising in industrial machinery, is focused on the European and North American markets and its main challenge is identifying customers from thousands of miles away.
According to director Alex Lin, networks—Viadeo is his tool of choice—can provide a rich seam of business intelligence. "Viadeo is very useful for identifying and contacting potential clients because many purchasers and production managers are members of the network," Lin says. "I can find their profiles and know what they could be interested in. Then, if they are a purchaser of products we supply, I contact them, present our company and propose our services."
Online networking is no magic bullet. According to Lin, he generally makes his first contact by email and, often, potential buyers simply don't reply. If they do, it's just the precursor to a longer process of negotiation that may or may not lead to an order. For instance, the company was able to use the system to join the bidding for orders valued at more than €400,000 from a European buyer, but ultimately lost out to a competitor on price.
Nevertheless, such networks offer a foot in the door and Linn is enthusiastic about the potential of Viadeo, not least because by using the network and advertising to special-interest communities, Wuhan Goldsense is steadily building up its profile in the UK. "It's one way to let organisations abroad know about our company," says Lin.
Business networks are also handy in international recruitment. Perhaps the biggest risk that any business takes when it expands overseas lies in hiring managers. Drawing up a shortlist of candidates to run an office in Asia when you're leafing through CVs back in the UK is uniquely challenging. Most companies rely on local headhunters but they don't always deliver the right people.
Chris Klopper, founder of marketing and PR company Mulberry Marketing Communications, decided to recruit through a professional network rather than a recruitment firm when he needed someone to head up an office in Singapore. Established four years ago in London, Mulberry has expanded rapidly, opening offices in Melbourne, Chicago and Seattle in just four years. With the opening of a Singapore office imminent, Klopper sought to avoid the cost and uncertainty of hiring through a headhunting firm. And online networking sites offer a rich source of "passive" job applicants, people who are not actively on the job market but may be open to the right offer. "I'm not convinced that they do anything more than harvest CVs and send them on," he says.
So Klopper placed an ad on LinkedIn for less than £100. Aside from the financial saving, he was able to get a much clearer picture of the candidates. "Most people on LinkedIn post a profile," he says. "Quite a few of those profiles contain a lot more information than you would get on a CV, so you get to know more about them."
The ad generated 18 responses, which were whittled down to a shortlist of five, before Klopper flew out to Singapore to conduct interviews. "It's the first time I've ever conducted an interview and not been unpleasantly surprised," he says. "Any one of the five would have been capable of running the Singapore office."
Klopper uses LinkedIn for high-level appointments, but he is increasingly turning to Facebook—generally thought of as a recreational rather than professional space—as a source of more junior employees. The reason? Facebook has become a forum for young, ambitious professionals, not just to socialise but to do their career networking.
And just as social networks each have their own demographic in terms of the age, status and intention of their users, business networks also tend to have a geographical bias, typically towards the countries in which they were founded. XING is at its strongest in Germany, Viadeo has its largest membership in France and Tianji is the network of choice for China's business elite.
That can be a benefit for overseas users looking to target a particular network in accordance with their recruitment or partnership needs. Robert Braverman, vice-president of microprocessor supply consultancy ISuppli, found himself responsible for hiring sales staff across Europe, with an appointment in France a priority. "It was clear I was going to have to recruit someone there pretty soon," he recalls. A London-based American, Braverman opted to advertise on Viadeo on the grounds that it was geographically biased to France. "We had a good response, " he says. "And I'll be meeting five candidates next week."
Braverman claims to have little interest in social networking per se; he was simply using Viadeo as a means to an end and has not really explored the potential of the service. If nothing else, this illustrates how far into the business mainstream these networks have penetrated.
The level of commitment can vary. If you are in the business of expanding and maintaining a contact list, a certain amount of commitment is required. Klopper and Brinkschulte both set aside time in their working day to update their contact lists and stay in touch with existing online associates. But, as Cunningham says: "You can be a passive user. For instance, if all you do is post a profile, useful contacts may find you."
But for many entrepreneurs the lines between social and business are blurred: Maï Pham Ngoc, founder and director of artist's agency Mayobee, recently moved to London from Singapore. She has been using A Small World, an exclusive invitation-only network, and Viadeo-both to find friends and make business contact in the UK and Europe. She wanted to find a Web designer in the UK and to locate galleries for her artists in France. "I also wanted to build relationships within the creative industry," she says. "Using the internet I have been able to source partners and suppliers, but I have also met a lot of people who are now friends."
Online networks may never replace the trade show, nor traditional networking events, but they do provide a first step into unfamiliar markets. There are some obstacles, not least the national bias of some of the sites. Nevertheless, professional networking has the power to put you in touch with previously out-of-reach contacts, many of whom will be as hungry to do business as you.
The network leaders
Viadeo
www.viadeo.com
Conceived as a social network for the French business community, Viadeo is now rolling out in Europe and has also allied with Chinese Web community Tianji. Its best feature, by the site's own admission, is the quality of its members as anonymity is not an option.
Tianji
www.tianji.com
Tianji is Derek Ling's second start-up, after Qzone.com which became the largest youth entertainment community in China within six months. With Tianji, Ling has moved away from youth: "the site does not have cute girls or cool dudes flashing in your face; it is only for career people" he says. If you understand written Mandarin, give it a go.
A Small World
www.asmallworld.net
Founded in 2004, A Small World is effectively a private club accessible by invitation only. "Trusted members who have existing social networks of quality in the real world extend the invitations," runs the blurb.
LinkedIn
www.linkedin.com
The world's largest professional network, has more than 10 million users, with 14 new members joining each minute. Over 150 industries are represented so it has the critical mass to be useful to almost everyone.
XING
www.xing.com
Formerly the Open Business Club, Germany's Xing went public in January and is now in global expansion and acquisition mode. It has around three million members.
Global Millionaires
www.globalmillionaires.com
Claims to be very specifically geared to developing e-commerce for "both personal and business ventures".
Facebook
www.facebook.com
Prematurely written off thanks to a combination of snobbery and privacy issues, this daddy of Web dialogue remains indispensable for background on colleagues and potential contacts alike.
Guy Kawasaki's blog offers novice 10 ways to make the most of LinkedIn. Check out: http://blog.guykawasaki.com/2007/01/ten_ways_to_use.html
