tv Bloombergs Studio 1.0 Bloomberg September 4, 2016 1:30pm-2:01pm EDT
you don't see that every day. introducing wifi pro, wifi that helps grow your business. comcast business. built for business. emily: he says he never aspired to be ceo, yet 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. jeff, thank you so much for being here. jeff: thanks for having me. emily: great to have you. we are going to 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. it's a market. that's what markets do. they determine the day-to-day price. we through everyday execution will determine the long-term value. i think it was a surprise. we were not expecting that kind of response. and, you know, when you look at the core elements of our business, they remain healthy. if you look at north american field sales for our flagship for quarter product, same stores sales growth has remained
consistent over the last few years. 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. so the core elements of the business remain healthy. emily: analysts went so far as to say "we're sorry, we got it wrong." i mean, is there something they did not get? jeff: i think it's expectations. companies that experience hypergrowth for sustained periods of time, i think there is a natural inclination at times to extrapolate growth rates over long periods of time. and in the history of every hypergrowth company -- literally, every hypergrowth company -- 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's concern is they are 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 all relative. growing at 30% and at the mid-20's is still healthy by virtually any standard, any measure. 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: you know, 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. you know, first and foremost, are we still able to create value for our members and customers? nothing whatsoever has changed in that regard. we need to make sure our employees are ok, especially those that have not experienced something like this before. you know, there are a number of us, especially on 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. and they never lose sight of their long-term sense of purpose or long-term mission or long-term vision. it's about continuing to execute. and so that's where we want to remain focused. emily: techcrunch published a post titled "linkedin's problems run deeper than valuation. linkedin is at best a business card holder and at worst a delivery service for spam." how do you respond to that? jeff: i think everyone has their opinions and it will not defocus us in any way. it's also interesting to see those comments now, but the company is the exact same it was the day before earnings. i think our core product offering has never been stronger. i think we have got 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 all about -- creating value for members and customers. emily: do you think you can re-accelerate growth? jeff: that is certainly the objective over time, is, as we continue to execute, you want to build into what remains: a
large, addressable opportunity. emily: this latest situation, 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 nothing fundamental has changed. i think the stronger the team becomes, i think 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 that at linkedin. jeff: i have applied it -- i try to apply it in every interaction. compassionate management is putting yourself in the other person's shoes and understanding there perspective. classically defined, you do that for the sake of alleviating somebody's suffering. but more broadly defined, 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 throughout the day with your coworkers and colleagues and people outside the company.
and you're going to disagree. and more often than not, when people find themselves in this situation, they assume nefarious intentions. "are they being political?" are they trying to get one over on you? "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 that 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 in the room. emily: some of the most "successful" ceos have been pretty ruthless. like steve jobs or elon musk. they are actually known for being completely uncompassionate. why is that the best way? jeff: i think different styles work for different people and work for different companies and work for different 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 to yourself. and what works for steve -- or
what worked for steve -- and 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. and 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 when i was at yahoo!, i expected my team for the most part to do things the way i did them. and 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: i haev heard that superlative, yeah. emily: what is it that works so well between the two of you? ♪
respect between reid and i. we were friends before this happened. reid will tell you this if you ask him a question, it turns out he will tell you the story almost verbatim. there's probably something to that 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 guys disagree? jeff: we almost never disagree. we've disagreed on a couple of occasions and they are always
related to personnel. and it's never related to the objective things about the business. our strategy. 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 be a ceo because of what i had seen in terms of ceos, particularly 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 that picture for us. jeff: youth-based unemployment has become an increasingly significant 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 some of these 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, the uber drivers, the 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. and that's how opportunity accrues to them. emily: 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 them benefits? jeff: i don't know that i would say it's dangerous per se, but clearly, things are changing. we will have to revisit as as a society the laws and regulations that govern the way companies used operate. when you are working, there
should be certain 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. i think what is very 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 are going to do some damage. emily: you said creating economic opportunity is the greatest issue of our time. women are still incredibly underrepresented in technology. why do you think that is? 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 are going to 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 if we are looking for the best talent. with regard to what happens once the career has started, i think it's really 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. and 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 some of those issues. emily: women represent 20% of technical roles at linkedin and 30% of leadership roles. 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. and that is certainly 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 be hiring people in a way that reduces the bar. i think we should be hiring the best possible person for the role. and 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. so 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 that you need to interview people that is representative of and more inclusive of the population you are drawing from. they have had amazing success with regard to improvements in
the most difficult thing you can do in business. full stop. i think trying to change the culture of an organization is almost prohibitively difficult. i think 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 the legacy 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 their future roadmap looks like, and that may be one of the reasons marissa 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's a host of values 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 is still being used by hundreds of millions on a global basis. hopefully 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 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 worry, i wouldn't be doing my job. right? 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 too quickly from that core, we leave that core vulnerable to those 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, you know, 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. but 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: yes, yes, absolutely. within our context, b2b remains 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 -- 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 very challenging
market. a highly competitive landscape. and it certainly exceeded our expectations. we were up to 18 million members we started roughly a year ago. we had amassed roughly 4 million members in english over 10 years. so we have seen that substantially grow by virtue of localizing our core offering. in terms of our core businesses, talent solutions, marketing, 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 process? 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. and despite all those discussions, you know, the first time you're asked to censor a member or take down a profile, it's gutwrenching. you know, that's -- 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. we can 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 just 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. and the chinese are very focused on expanding the ranks of their middle-class.
in twitter and facebook, you have platforms that are far more oriented towards communication and facilitating the way in which people communicate with one another. and so 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: so five years from now, i think you are going to continue to see us focus on these core pillars in terms of value propositions. one of the things we are just starting to tap 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 that you have in common. you can start to apply that across the 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.