In late October, we reported on LinkedIn’s ProFinder, which was being exclusively piloted in the San Francisco Bay Area. ProFinder is essentially a platform-based service that matches local businesses and local professionals for engagements of a specific duration.
While at that time only a pilot in just one metropolitan area, the significance of this development was not lost on us. After some time, the 800-pound gorilla has asserted itself and squeezed its way into the full-time employee recruiting space. (Licensed recruiting solution is LinkedIn’s largest revenue category.) The appearance of ProFinder suggested the gargantuan LinkedIn professional network platform was sprouting another branch that would bring the company squarely into the contingent workforce space (or as it is called in “Cyclotron Valley,” the freelance or gig economy). However, in this case, the 800-pound gorilla was sticking its neck out beyond providing a software solution that enables recruiters to find and engage candidates in the enormous LinkedIn talent pool. ProFinder effectively performs the recruiting and vetting function, something — or a part of something — staffing firms have been wringing their hands about for several years now.
Fast-forward five months to today, and we find that ProFinder is on a roll, with the service now available in eight U.S. cities: San Francisco, New York, Dallas, Chicago, Seattle, Chicago, Los Angeles and Philadelphia. There is also reason to think that additional cities are in the offing in 2016. All of this suggests the gorilla may no longer be sitting quietly in the corner. Moving beyond San Francisco, LinkedIn has already begun to make its presence felt in the professional contingent workforce staffing segment and, more importantly, expand its addressable market to include a talent pool that seems to be growing.
While all of this was happening at the end of 2015, LinkedIn’s share price began a decline, ending in early February with a precipitous fall from $205 per share to $101 per share. Investors were responding to LinkedIn’s release of forecasts for the first quarter and all of 2016, which were well below analysts’ estimates. What was effectively a 50% decline in the company’s valuation in just a couple days is serious business.
Now we are certainly not saying that there was any direct relationship between ProFinder and the adjusted revenue forecast. On the contrary, we are really suggesting that this revelation of the core business’ slowing growth might indicate else: that the launch and expansion a ProFinder in such fertile ground might be less of an experiment and more of a deliberate strategic move.
At the moment, this may only look like gorillas in the mist, but interesting nonetheless to consider. Is ProFinder just an experiment — or more of a high stakes game?
If successful, ProFinder could be just what the doctor — or veterinarian — ordered. It certainly seems well-conceived, targeting a slice of the market not yet addressed by a combined business engagement and vast talent reservoir platform, with the exception of Upwork, which has clearly declared its focus as being online — not onsite — skilled independent professionals.
But time will tell.
Spend Matters will be keeping ProFinder developments in its sights over 2016 as potentially another stage of evolution of the work intermediation platform (WIP) population.