Rolling Up Professional Networks: Dan Serfaty, CEO of Viadeo (Part 5)

Sramana: Did you monetize any other channels besides recruiters?

Dan Serfaty: After a short while we decided to implement a membership fee. Early on I decided that I did not care if people left because we were going to charge a membership fee. To me, that meant that the service we were delivering was not very good. We are in the business field, so we are supposed to bring value to people in that field. If I connect a businessman to a customer on our website, then I should be paid for that.

We implemented it in September 2005. By 2006, we were making $70,000 a month in revenues and there were only seven of us in the company. There was no need to raise money. We charged only 5 euros a month for the service. One of our French competitors was telling journalists and blogs that they were going to kill us because they were free and we required payment. That is another lesson to learn. A free service does not always help.

We did follow a freemium model. In the beginning everything was free, with one exception. Users had to pay to see who viewed their profiles. Curiosity is an amazing thing. We did a lot of things after that, including registration to private forums. None of them was as big of a driver.

Sramana: At that time, were people using it for business development?

Dan Serfaty: Yes, primarily for sales and business development. People also used it to be smart about their professional network and the professional environment in which they operated. We geared our solutions so that we did not become just a directory. We wanted to make sure that we were a tool and a solution.

Today, when you look at our revenue it splits evenly among recruiters, user subscription fees, and advertising. Each of those areas accounts for a third of our revenue. During the crisis in 2009, recruiters went down but online subscriptions went up. People needed to network more. In 2010, recruiters exploded. It is a diversified portfolio.

Sramana: What has been the ramp of subscribers and revenue since 2006?

Dan Serfaty: In 2006, we ended up with $2.6 million in revenue. We had 600,000 subscribers. At the beginning, only 2% were paid subscribers. In 2007, we doubled those revenues to $5 million and over a million users. We have essentially doubled every year since then. We should have $65 million in revenue this year. We have 35 million global users.

Today we have two strategies, one for Europe and one for emerging countries. In emerging countries everything is free. In Europe it is a subscription model. Today we have close to 8% of our users paying. When you look at LinkedIn, their conversion rate is less than 1%. It is very low. I have never met anyone other than recruiters who pay.

Zing in Germany is very good with their conversion rate, close to 15%. Our growth strategy is to be like them in every country. If you want people to pay for the service, you have to offer something for every level. That means you need to be very vertical, deep, and local. We are the leader in China, and we acquired the number one provider in India. We are number one in Brazil and Mexico as well.

This segment is part 5 in the series : Rolling Up Professional Networks: Dan Serfaty, CEO of Viadeo
1 2 3 4 5 6 7