Viadeo's demise: Chronicle of a death foretold

LONDON

In a  recent op-ed on the current French president's disastrous term and abysmal approval ratings (4%, if you can believe it), the New York Times refers to the hapless François Hollande as the living dead: who continues to be politically alive although he has actually died. The same can be said of another French institution, this time in the technology space: business social media Viadeo which had aimed at revolutionizing many aspects of HR.

For most global users of professional social media, there seems to be only one name: LinkedIn (although Facebook is bound to become a formidable competitor as it announced this week it was entering the job postings business.) But in many countries there are local players that cater to the requirements of a niche market. Xing is popular in German-speaking countries, Weibo in China and, for a while, French-based Viadeo looked promising. Unfortunately for  the latter, who was created in 2005, the same year as Workday, its trajectory has been the exact opposite of the HR-cum-finance SaaS vendor: whereas the Pleasanton-based company has gone from strength to strength,  the Paris-based company has seen its prospects get dimmer and dimmer, especially in the past few years to the point that last week it requested to be de-listed in an attempt to stop its stock price's free fall.

Sad as it may be, this has come to no surprise to me. For quite a while now I have been advising investors to stay clear of this stock. Several of those who followed my advice sent me last week email messages telling me my advisory fee was money well spent, while others may rue the day they decided to take the risk.

So, what went wrong with Viadeo? Why couldn't it follow in the footsteps of highly successful French unicorns such as Criteo (Disclosure: a former HRIS client) and Blablacar? The reason can be found in several mistakes Viadeo made.

First, it never managed to provide the depth of functionality that LinkedIn does. Viadeo was for a while not more than an online Rolodex  with basic messaging and job features. And it had the gall to try and charge you when LinkedIn would get you like-for-like features for free.

Second and worse, although the two  companies were established within a couple of years from each other, Viadeo thought LinkedIn would remain US-centric and that Viadeo could be its European version and even compete globally. Unfortunately most initial Viadeo users, including yours truly, quickly realized that the same people who were on Viadeo were also on LinkedIn. So why duplicate the effort?  A choice had to be made. If you work in international settings many of your contacts will be  on LinkedIn only, That simple observation signed the death knell for Viadeo in my opinion. I left it and never looked back.

The giant and the dwarf

Early this year I conducted a workshop for the localization of a global HRIS with a client based in France and when discussing employee records and associated data, somebody mentioned Viadeo as a social media that maybe should be tracked because many employees are typically French and use it to the exclusion of others. However, they couldn't give me an exact figure on how many users were exclusive Viadeo users. Knowing that most global HRIS vendors wouldn't have Viadeo as part of their standard offering I was reluctant to include it. But, at the same time, I didn't want to ignore what could be a legitimate request. So, I took a quick poll around the room. The 35 people in the workshop were all French, based in France, belonged to the various group entities. "How many have a Viadeo account?", I asked. Only two raised their hands,and one then added, 'But I haven't updated mine in years." "How many have a LinkedIn account?" All raised their hands. That sealed the fate of having Viadeo in the French localization of the global HRIS project.

Third, LinkedIn became global so much faster and signed up so many users that Viadeo soon faced the network issue that any competitor of a social media is well aware of: if everybody is on LinkedIn, why bother  about Viadeo?

Tongue tied

Viadeo could then have positioned itself with brilliant functionality (which it doesn't have - I did an in-depth analysis for my investor clients: it can at best be described as adequate). And God knows that the heavy user of LinkedIn I am (especially in the HR Technology Group discussions) can point to many shortcomings of LinkedIn that Viadeo could have capitalized on by bringing better features. But it seems that Viadeo has no sense of what competitive intelligence is.

Viadeo could then have tried to expand in some large markets outside the US to become a credible alternative to LinkedIn. Here again, total failure. To mention just two BRICS countries, it had to pull out of China ignominiously and, as for Brazil, its branding was a total disaster. Couldn't all the money they raised from investors be used on some marketing studies that would have told them that Viadeo sounds in Brazilian Portuguese like the  local word for "faggot" and that few, if any, Brazilian professionals would boast of being on "Viado"?

The business model between the various professional social media is also revealing: LinkedIn relies more on advertising, whereas Viadeo has a complex subscription model. Now, who in their right mind would pay, even if a few dollars, for what can be found largely for free and better somewhere else?

In 2013, less than a decade after it was established, Viadeo was surpassed on its own turf by LinkedIn. Instead of being a wake-up call to its management, they continued with their usual mix of hubris, delusion and denial, dreaming that Viadeo could oppose the laws of gravity until Doomsday. Well, Doomsday has arrived.

Put all of this together and you quickly realize that investing funds in Viadeo was throwing good money after bad, and for a company or a professional user, a complete waste of time. One more technology company to go join My Space, Netscape, Orkut* and soon Yahoo in the cemetery of deluded, badly managed, acquired or failed software/internet companies.

Sic transit gloria mundi

*Just a few years ago, Orkut was all the rage in Brazil before everybody migrated to Facebook. Many people don't even remember it once existed

NOTE: Although the analysis in this post shares some of the findings presented to investor clients, it remains the intellectual property of Ahmed Limam and as such cannot be reproduced in any form without  his written permission)

(The blogger/consultant/advisor is currently attending Cornerstone Convergence 2016 in London)

Are Social Networks The Next Big Thing in HR? Or just another tech bubble in the making?

MADRID
It seems that unless you tweet and have followers or fans or friends in  MySpace, Orkut, LinkedIn, Viadeo etc. you just don't exist. Really? Or is this just the latest fad not worth wasting much time on? To answer these questions, it's worth remembering that many technologies originated in the consumer world before being ado(a)pted in the business arena. Just think of the internet itself  or smart phones  where the initial enthusiasm by consumers were met by frosty skepticism from the business world which then went on to become avid users of the same tools. Will the same happen with social networks such as Facebook, or microblogs such as Twitter that are all the rage outside the business world -but often during business hours to the chagrin of many HR heads? Or will they just peter off  like the unlamented Second Life? (Anybody remember those corporate avatars that were supposed to revolutionize everything from performance evaluation to training to recruiting?)

Based on what I hear and see from many customers, even here in Spain (not the most forward-thinking place you might think, but remember that it's here that one of the most innovative HR products, Meta4, was born) it seems that the question should be asked in the present tense: social networks (SN's) are already part and parcel of the business world, with HR applications found and evolving on a daily basis. Just to take one example, I know many people that spend more time communicating through SN's than good old email. LinkedIn (claiming over 50 million users), of which so many of us professionals make a copious use of to share information in a push fashion, is a much more efficient way to update your network on, say, a project you are working on than through a traditional email blitz, if only because you'll never have 50 million contacts in your email address book.

One concern that I hear from CIO's and heads of HR is that social nEtworking will lead to nOtworking with employees spending much of their working time updating their personal profiles and chatting with their friends. This is exactly the same argument I heard at the turn of the millennium when the new generation of HR systems came onto the market and could be accessed by a browser, especially the self-service components. Allowing employees access to the internet in order to access these applications meant they could also surf the internet and spend their time on personal email, when not on porn sites. The horror, heads of HR used to cry, refusing any internet access. To which I countered, "well, if you're afraid that your employees may use any opportunity not to do any work, you might as well get rid of the water cooler where they could hang around and chat, and you should also board up all windows lest your employees waste time looking at the traffic outside instead of working." Needless to say that I won the argument over the reluctant companies and the same argument can be used today. I would even go further and say that that famous expression of "empowering the employee" so much touted and so little used in practice, could actually be made more meaningful. Just as with your children, trust your employee to be responsible and they might behave responsibly.

So, what are some of the benefits that SN's can bring to business, in particular the HR world?

Branding: just as the first companies that adopted websites (yes, there was a time not so long ago when some  well-known corporate entities didn't have an internet presence) benefited from an aura of tech-savvy modernity which made them popular with young graduates, the same holds true with employers who use Facebook or Twitter. It gives them a street credibility that traditional media cannot easily provide. Photos, videos, forums, all contribute to creating a feel for what it is like working for a particular company.

Recruiting: again, just as the internet thoroughly revolutionized the recruitment process with most ads migrating from print media to corporate career websites and the likes of Monster, corporate Facebook accounts help companies reach millions of "fans" with job ads as well as tap into an ever-larger pool of passive applicants (Facebook claims over half a billion visitors, equivalent to being the 3rd largest country on earth) It is estimated that by next year at least one out of 10 jobs will come from SN's and already in the US close to half of proespective employers look for detailed information about their candidates on SN's.  Every day thousands of ads are posted on LinkedIn in forums which allow fine-grain targeting almost impossible to dream of in any other media, nor even online job boards: since people visit SN's more frequently than their disparate profiles on several job boards (when they have them there), their SN profiles are updated more frequently. Also, because SN's, especially the professional ones, are richer in features, recruiters can get a good idea about a candidate without having to examine thir résumé in detail. Twitter and its real-time nature can make posting job vacancies and applying to them literally a matter of a few seconds. A recruiter at Yahoo (who has a presence on Facebook "Yahoo-Europe-Jobs" for instance) told me the other day how they posted a position on Twitter and one of their 400 followers replied and it was a perfect fit. Once the sourcing is done via these 2.0 tools the more traditional process can resume. Never has the recruiting cycle been shortened so fast to reach so many. I believe that as far as recuiting is concerned, we have reached "the end of history" to use Fukuyama's famous phrase since it is hard to envisage any other technology that would shorten the process further. Finally,  by cutting the middlemen, employers can reduce the cost of recruiting by cutting on headhunters' fees: an increasing number of  jobs are actually never advertised anywhere else but on SN's,

Collaboration and virtual teams: as the world economy becomes more integrated, the risk is all too real of global corporate behemoths turning into clusters of regional or even local work groups where information is hoarded and efforts are endlessly duplicated. SN's allow such employees to collaborate in ways that email and static document-sharing tools (such as SharePoint) could never do. When a particular product or service wins kudos in, say Latin America, but managers in Europe or Asia aren't aware of it, they tend to try several times expending valuable resources, time and energy before duplicating it with resulting profit losses. Also, and probably as important, is the ability to make faceless corporations appear more human and, among other consequence, encourage inter-group mobility. An employee in the US would be encouraged to apply for a job in, say, Brazil if they already know their future manager and have collaborated with them on some projects.

Career management: one of the major failings of HR systems is that creating a career path to be offered to an employee was always prospective: "based on your experience, skills and wishes you could move from position X to Y to Z in so many years."  As we know, the future has the unpleasant habit of never happening the way it was planned and many of those career plans built at great pains remain largely theoretical. A tool like LinkedIn or Viadeo which holds data on millions of professionals can aggregate data it holds to show the actual paths offered to certain professions. For example, in order to become a senior product manager with a software vendor, you need to be a consultant for a couple of years, then a presales person or marketing manager before reaching your goal. Since this is based on reality, it is a much more useful tool to employees and employers on whom it serves as a healthy sanity check, than any of the other prospective career paths.

Like all new technologies, SN's have their detractors who tend to over-emphasize the following issues:

- What about privacy issues and confidential data? Actually these are two separate issues as privacy deals more with the employee and confidentiality with the employer. Most SN's, especially the private ones such as Facebook, allow privacy settings that can restrict the amount of information to be shared. Of course, users have to be aware that the default settings are usually the least restrictive ones. And the more garrulous they are, the more informed corporate recruiters will be. As in many other instances of life, somebody's poison is someone else's food.  Concerning the confidentiality of corporate data, there is little doubt that the more opportunities there are to share info the more risks there are for some undesirable leaks to happen. But here again, nothing that good discipline, clear messages and responsible employees cannot fix. And of course, if you're worried that some unethical behavior will out, well, just make sure that unethical behavior doesn't happen in the first place before shooting the messenger.  The best way to avoid that the world hears about your shenanigans is simply not to have any.

- Private or public SN's? Some of the confidentiality issues can also be fixed by having an SN within the corporate firewall, just the way intranets came about. Actually the better tools you offer your employees, the less likely they are to go outside. This being said, a mix of the two is possible with private SN's used for certain functions (e.g., recruiting) while career paths and collaboration will be mainly carried out through corporate SN.

- Another IT project to embark on? No, thanks. And anyway, why should HR own this? One answer for both: most of the data for SN's is already available in corporate IT systems, mainly from HR systems (members' names, careers, roles etc.) thus reducing the need for a costly implementation.

In summary, my feeling is that there are undeniably hurdles to be overcome, but they seem to me more like growing pains than serious reservations. One challenge, though, that would have to be fixed and which would  could tilt the success-or-failure balance one way or the other is the existence of tangible benefits that SN's bring. I've seen some SN's, especially private ones (that is, within the corporate firewall) where the communities of members are no more than glorified email-based distribution lists or document-sharing tools. In that case one could just rely on the older technology and save one's time, energy and resources in the implementation of the newer system whose return on investment is so limited. So far, I'd say that the jury's still out but the outlook is promising. Who knows? SN's could be the last opportunity for HR to show a lasting relevance before it slides into irreversible oblivion replaced by other business function and outsourcing outfits.

(I prefer the term Social Networks to Social Media, as the former emphasizes the holy grail of effective collaboration, sought for so long and rarely attained, whereas the latter seems to suggest a one-way communication tool)