tv Bloombergs Studio 1.0 Bloomberg April 30, 2016 10:30am-11:01am EDT
change the way you experience tv with xfinity x1. ♪ emily: he says he never aspired to be ceo. he now finds himself leading a public company, determined to prove wall street wrong. jeff weiner rose through the ranks of warner bros. and yahoo! before linkedin cofounder reid hoffman made him a proposition to help run the professional social network he started. it was a match made in silicon valley heaven. weiner became the ceo he never expected to be and hoffman stayed on as chairman. linkedin now has over 400 million members in 200 countries but faces its biggest challenge yet. so big, jeff weiner donated his
own $14 million stock bonus to his employees. joining me today on "studio 1.0," linkedin ceo jeff weiner. thank you so much for being here. it is great to have you. we will start with the elephant in the room. after the first quarter earnings report, stocks plummeted 40+%. it still has not recovered. is the magnitude of that market reaction fair? jeff: you know, who's to say whether or not it is fair. that's a market. that's what markets do. they determine the day-to-day price. we threw our execution will determine long-term value. i think it was a surprise. we were not expecting that kind of response. when you look at the core elements of our business, they remain healthy. if you look at north american field sales for our flagship recruiter product, growth there has remained consistent. sponsor updates which is the core of our marketing solutions
businesswise, still the fastest , growing business we have at scale. and post- the launch of our reimagined flagship application on mobile, you have seen an acceleration in engagement on both mobile and desktop. the core elements remain healthy. emily: analysts went so far as to say "we are sorry, we got it wrong." is there something they did not get? jeff: i think it's expectations. companies that experience hypergrowth for sustained periods of time, there is a natural inclination at times to extrapolate growth rates over long periods of time. in the history of every hypergrowth company, literally, there comes an inflection point where the expectation of analysts and investors outstrip the fundamentals of the business. the question is not whether or not that will happen, it's how companies execute through that. emily: the analyst concerned is that they were very confused about what linkedin is.
they thought you were a fast growth company, but you are a more slow growth company like a software as a service company. what is right? jeff: i think it is relative, growing 30% and in the 20's is still healthy by virtually any standard. emily: you gave a rousing speech to employees at an all hands meeting and you said, "linkedin is the same company it was before this happened. you are the same team. i am the same ceo." how does jeff weiner, the person, feel about this? not the ceo but you. like -- does it sting a little? jeff: i'm not sure i would say it stings. there was some surprise. you want to make sure you're there for the people that matter most. first and foremost, are we still able to create value for members and customers? nothing whatsoever has changed in that regard. you want to make sure our employees are ok, especially those that have not experienced things like this. there are members of the leadership team that have worked with companies that have gone through similar periods. some of the most valuable companies in the world have gone through significant corrections.
a few of those companies have gone through multiple corrections. they never lose sight of their long-term sense of purpose or vision. it's about continuing to execute. that's where we want to remain focused. emily: techcrunch published a post that linkedin's problems run deeper than valuation, it is at best a business card holder and at worst a delivery service for spam. how do you respond to that? jeff: everyone has their own opinions and it will not defocus us. it's also interesting to see those comments. the company is the exact same it was the day before earnings. i think our core product offering has never been stronger. we have the best roadmap in the seven years i've been at the company. we continue to see gains in engagement. that's what it's about. creating value for members and customers. emily: can you accelerate growth? jeff: that's certainly the
objective over time. as we continue to execute, you want to build into what remains: a large, addressable opportunity. emily: has this impacted morale? jeff: if anything, it brings people closer together. the more you go through these kinds of challenges, you meet these challenges head-on and you are successful in recognizing that nothing fundamental has changed. i think the stronger the team becomes, the stronger we become as a company. emily: you've written and spoken extensively about compassionate management. give me an example of where you have applied it at linkedin. jeff: i try to apply it in every interaction. compassionate management is putting yourself in the other person's shoes and understanding their perspective. classically defined, you do that for the sake of alleviating somebody's suffering. but more broadly, within a work environment, it does not need to be limited to alleviating suffering. it can be whenever you're in a position that i can help. when we are working together, all too often you probably experience it like everyone else experiences it. you will be in discussions through the day with your coworkers and colleagues and people outside the company.
and you're going to disagree. more often than not, when people find themselves in this situation, they assume nefarious intentions. "are they being political?" "it's a zero-sum game." that may be the furthest thing from the person's mind. they may be having a bad day. you may have triggered something in them that happened long before they met you. you may be talking about something they are not as knowledgeable about. they don't want to show that kind of vulnerability. there's a whole host of reasons there may be tension. emily: some of the most "successful" ceos have been pretty ruthless. like steve jobs or elon musk. they are known for being completely uncompassionate. why is that the best way? jeff: i think different styles work for different people and companies and situations. i think the worst thing somebody could do is try to emulate what somebody else does because that person has had success. you have to understand what works for you, and it starts with being authentic with
yourself. and what works for steve jobs or what works for elon, and people like that, may not work and more often than not does not work for other people who try to employ that style and people just don't follow. i think it depends. for me, personally, i find that taking the time to understand what it is you're trying to accomplish and how i can help you works better than projecting my own worldview onto you. i think that's a mistake a lot of younger, less experienced executives make. that was certainly a mistake i made. i expected my team, 10, 12, 14 years ago at yahoo!, i expected my team for the most part to do things the way i did them. that's going to lead to nothing but frustration. emily: your relationship with reid hoffman, the founder of linkedin, has been called one of the happiest partnerships in business history. jeff: superlatives, yeah. emily: what is it that works so well between the two of you? ♪
respect. we were friends before this happened. reid will tell you this if you ask him this question, it turns out he will tell you the story almost verbatim. there's probably something to that in and of itself that we see the relationship so similarly. one of the most frequently asked questions i got was what my relationship was like with reid. i think that was code for what kind of drama is there. in the transition from the founder and former ceo to the newly hired professional, there was no drama. what people didn't realize was i didn't join linkedin in spite of reid. i joined linkedin in large part because of reid and because of the opportunity to work together. he's one of the most thoughtful people i've ever had the chance to work with. emily: what happens when you disagree? jeff: we almost never do. we've disagreed on a couple of occasions, and they are always
related to personnel. it's never related to objective things about the business. emily: so what happened? jeff: there was interesting learning that will remain between the two of us, but i think there was interesting learning. emily: it's interesting you said you never aspired to become ceo. how do you become ceo if you don't aspire to it? jeff: i didn't aspire to it because of what i had seen in terms of ceos in publicly traded companies. that can be a rough ride. for me it was never about the title. it was about a sense of purpose. emily: you've given a lot of thought to the future of the workforce and how it's changing. i would love it if you could paint the picture for us. jeff: youth-based unemployment has become a serious issue. in some european countries, you have unemployment hovering around 50%. that's the thing that tears apart society if it's allowed to be sustained for too long where people don't feel like they have access to opportunity and become
disenfranchised. they don't feel like they have a voice, and that's when bad stuff starts to happen. you have got the increasing fragmentation of work by virtue of the shared economy and new marketplace environments where people can start to set their own hours. emily: let's talk about that. how does linkedin plan to account for the 1099 economy, freelancers, delivery people, people who are freelancing or have multiple jobs? jeff: a lot of people have their profiles on linkedin because that's how they represent their professional identity to the world. that's how opportunity accrues to them. emily: do you think it's a dangerous trend? this move toward freelancing? do you think companies like uber should be thinking hard about making workers full-time or giving benefits? jeff: i don't think it's dangerous per se, but clearly, things are changing. we will have to revisit this as a society the laws and regulations that govern the way
companies used to operate. when you are working, there should be benefits that are afforded to individuals, the extent to which that's mandated and the company has to offer that in a formal basis or the extent to which there are third-party platforms that facilitate the way in which individuals are able to generate those benefits. i think this is going to continue to evolve. what's clear is if we continue to think we can apply the legacy way of doing things in a new environment and a new economy, i think that's going to lead to pretty significant unintended consequences that will do some damage. emily: you said creating economic opportunity is the greatest issue of our time. women are still incredibly underrepresented in technology. why is that? jeff: you have a pipeline issue where you may have had historically fewer graduates with specific degrees in engineering, per se. as that now starts to improve, which is wonderful, hopefully we
will see the gaps start to close. it is incumbent upon all of us in the tech industry to make sure we are casting as wide a net as possible looking for the best talent. with regard to what happens once the career has started, i think it's important to recognize unconscious bias. and where people are making choices in terms of promotions in terms of pay that are not , explicitly being driven by any kind of objective, in terms of treating people unfairly but by virtue of relating to people like a decision-maker. that creates unconscious biases and the more cognizant we become , that we have a tendency to gravitate toward people like ourselves and the unintended consequences of that, i think the faster we can solve those issues. emily: women represent 20% of technical roles at linkedin and 30% of leadership. are you happy with that? jeff: no. am i happy with it? no. is it moving in the right direction? yes.
we want as diverse and representative and inclusive a base of leadership and employees as we have for our membership. that is the goal. emily: would you advocate affirmative action or hiring women just to see what happens? jeff: i don't think we should be hiring people to see what happens. i don't think we should hire people in a way that reduces the bar. i think we should be hiring the best possible person for the role. one of the things we can all do to improve diversity is employ techniques like the rooney rule which the nfl has used to great effect. they are not necessarily mandating you have to hire these kinds of people, whether that is gender-based or ethnic-based. what they are mandating is you need to interview people that is representative of being more inclusive of the population you are drawing from. they have had amazing success with regard to improvements in diversity and inclusion as a result of that.
most difficult thing you can do in business. full stop. i think trying to change the culture of an organization is almost prohibitively difficult. marissa walked into a situation that she must've known was going to be challenging to the point where there was probably not a huge probability of being able to turn it around. and credit to her for still taking on the role. i think she was able to make some changes there in terms of the culture and development and transition to mobile. but that is a really challenging situation in terms of not just the culture, but in terms of the legacy assets and value proposition. the way people use yahoo, the world has evolved so dramatically from those days of the consumer web. and so, trying to navigate that, it's tough and really hard. in terms of where they are now, it sounds like they are very
seriously evaluating to sell the company. emily: is that the right call? jeff: i'm not in marissa's shoes. i can't see the leading indicators. i don't know what they're -- their future roadmap looks like, and that may be one of the reasons she has been reluctant to sell the company historically. because she may have been excited or confident in the plan, they have to continue to turn things around and create value. there is a host of variables where it is easier when you are on the outside looking in to think you know best. you have to put yourself in her shoes to understand what's going on. emily: what do you think is the best and worst case scenario? jeff: it needs to be in the hands of someone that recognizes it's being used by hundreds of millions of people on a global basis. if it is sold, it will be sold to an acquirer who recognizes the value not only yahoo! creates in the world today but that it can continue going -- to create going forward. that is really how marissa is assessing her options, trying to do what's best in terms of
maximizing that kind of value. emily: how do you make sure linkedin is not the next yahoo? do you worry about the company being disrupted? jeff: if i didn't, i wouldn't be doing my job. only the paranoid survive. for us, it's about the right level of focus in terms of the broader landscape and never losing sight of the game that we are defining for ourselves. to the extent that we start to expand to quickly from that core, we leave that core vulnerable to disruptors. to the extent we are drawing resources from the core to fuel potential growth in the future, that is when you become vulnerable. to the extent you start to drink your own kool-aid and you believe that you are mozart, impenetrable, that is when you are going to invite significant disruptions. we want to remain focused on playing our own game and at the same time, paying close attention to the way technology continues to evolve in the competitive landscape and how it evolves. you never want to lose sight of playing your own game. emily: facebook seems to be
chewing up all media ad dollars. can linkedin drive significant ad revenue? jeff: absolutely. within our context, it's a large opportunity. there's tens of billions of dollars being spent on b2b within an online capacity. it's highly fragmented. it can be highly inefficient and we are in a position by virtue of our audience and to help our marketing partners to target the right decision-makers. we will continue to focus very aggressively on building up that part of our business. emily: one thing you have on facebook is china. you guys have found a way to penetrate china. how would you rate your progress in china? do you feel like you've cracked the code, do you feel like there's a lot more work to be done there? jeff: i would hardly suggest we've cracked the code. china is a challenging market.
it's a highly competitive landscape. it certainly expanded our expectations. we were up to 18 million members roughly a yeared ago, we had amassed roughly 4 million members in english over 10 years. we have seen that substantially grow by virtue of localizing our core offering. in terms of our core businesses, talents, solutions, etc., there is a lot of room for growth as well. it is still in the very early days. we have been focusing on getting the membership experience right. we are pleased where we are but there's still a lot of work to be done. emily: you've mentioned you had to make compromises in china and you had to ask users to censor themselves based on what the chinese government wants to see or hear. how do you actually navigate that? how often has that happened? jeff: it happens very seldom, thankfully. we started to navigate that process before we launched. we spent the better part of 18 months understanding who we were as a company, our culture, our values. what operating in china would
mean in terms of compliance. despite all those discussions, the first time you're asked to censor a member or take down a profile, it's gutwrenching. those members and creating value for those members is why we do what we do. at the same time, we recognize that china plays an enormous role in the global economy and by virtue of our presence in china, we can not only help connect our chinese members to opportunity and enable them to live the kind of life they want to live, but we can connect them with opportunities outside of china and other connect -- better connect companies within china to the global economy. that will create more value for everybody. emily: do you think facebook and twitter have a chance in china or are they so different there's , no way they will be able to make it work? jeff: the fundamental difference is that we are a platform about creating economic opportunity. the chinese are very focused on expanding the ranks of their middle-class.
on twitter and facebook, you have platforms that are more oriented towards communication s and facilitating the way in which people communicate with one another. it's different. it doesn't necessarily mean it's not possible, but it's different. emily: what does linkedin look like five years from now? jeff: five years from now, you are going to continue to see us focus on these core pillars in terms of value propositions. one of the things we are tapping into is anticipatory computing. i'm on my way to a meeting. i can't tell you the number of times i wish i had done some homework in terms of the person i'm going to be meeting with to make that meeting more effective. if i'm walking into the meeting, we have the ability to suggest how you know this person. things you have in common. you can start to apply that across a whole host of ways in which people are working today. people increasingly use linkedin as their corporate directory. because that is where the most relevant up-to-date information is about the individual. and so, how we can look leverage
♪ emily: i am emily chang. this is "best of bloomberg west." we bring together the top interviews from the week in tech. all about earnings and apple posted its first sales in 2003. shares have taken a serious hit. is it a new area for apple? a tale of two tech companies as facebook hits the sweet spot. mark zuckerberg says more big bucks to come. in