Rolling Up Professional Networks: Dan Serfaty, CEO of Viadeo (Part 6)

Sramana: What is the size of your user base today?

Dan Serfaty: Globally, we have 35 million members. We need to distinguish between emerging countries and other countries because that affects revenue generation. We did not start reaching out into the international community until 2007.

Sramana: What portion of your 35 million users are in France and Europe?

Dan Serfaty: We have 3.5 million users in France and 1 million members in the rest of Europe. The biggest country for membership is China, which has 7 million members. We acquired a company there several years ago. They were at 1.5 million members when we acquired them.

China, like Latin America, was acquired with shares. We are a private company acquiring a private company. I would not have accepted any deal requiring me to give cash to local entrepreneurs. We need them. If I purchased the company in China and the entrepreneurs left, I would not have any way to run the company.

Today we are [working] with a Russian company. On the first call we had I told them that if they wanted money, they should try somebody else. My goal is to help them become the clear leader in Russia, and I offer them shares. One of the big reasons you go public in Europe is to be able to have liquidity to make acquisitions.

Sramana: What you are doing is a private roll-up, and that is extremely difficult to do in the United States.

Dan Serfaty: That is what I have heard. We did it as a French company with India, China, Brazil, and other countries.

Sramana: What is going on with the ApnaCircle? I know Sabeer Bhatia very well.

Dan Serfaty: He owned 25% of the company, and 50% was in the hands of his partner. The final 25% was in the hands of the owner of the Times of India. I had to convince them to switch to Viadeo shares. In that case it was challenging. The quality my investors most appreciate in me are my negotiating skills. It is hard for them to sell a private company and for me to tell them that they have to negotiate with me for the price of both companies. In order to convince them, you have to convince them of your future. The challenge of course is that they are no longer the CEO, which means that in any deal like this I must convince them of my ability to drive the group as the CEO.

Sramana: It is like raising venture capital.

Dan Serfaty: Yes, but they are all entrepreneurs. In China, we acquired a company with a good member base that had good management. In India, they had a low base of 150,000 members. Their positioning was not done right.

Sramana: One of the problems with India is that people there do use LinkedIn.

Dan Serfaty: That is true, especially in the business world. Of all of the emerging countries that we are operating in, India is the most difficult for us. This is where the local approach does not make as much sense.

This segment is part 6 in the series : Rolling Up Professional Networks: Dan Serfaty, CEO of Viadeo
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