Making Linked-In the Best Business Oriented Social Network

Or, Incentive based referral system and method for social networks.

By: Alon Cohen & Ronen Mizrahi

Linked-In is one of the earliest business social networks and as such inspired great hopes of simple access to people for the purpose of doing business. The hopes were for direct or friend-assisted access to individuals you want to do business with, which may be in your network up to a certain degree of separation.

Many of those who actually tried using the network as business tool report a complete failure. Here are some bloggers sharing their experience:

Seamus McCauley states in post at Virtual Economics: “Here’s the problem with LinkedIn - it doesn’t do anything. You sign up, you find some colleagues, you link to them and then…nothing.”

So have others Including Jeff Pulver, who completely gave up on Linked-In and moved to Facebook.

Our experience is that even using the paid version of linked-in for direct access does not help a bit. The only people you really gained access to, were the people you already knew beforehand, and all the rest of the millions on the network remained inaccessible.

One can only assume that Linked-in invested vast amounts of development time into the referral mechanisms just to discover that it doesn’t work in the real world. The network’s main value is apparently manifested as a repository of resumes and as an active update mechanism that generates notifications as friends find to new jobs.

The problem, as we identified it, was not the concept of the friendly referrals but rather the lack of incentive for people to propagate introduction requests, specifically in fear that they may not be up to par, and the lack of a method to evaluate the request and determine whether passing it on will undermine their reputation in the eyes of the receiving party or reinforce it. In other words am I doing the receiver a favor or am I wasting their time with junk. Plus what’s in it for me?

The idea is to create a clear incentive path and a tracking mechanism for deals that materialize due to referral actions taken by individuals, with the intention to make business introductions facilitated by a social network significantly more efficient when compared to pre-existing methods.

This is similar to the efficiencies social networks added to other forms of communications between friends such as selective sharing of news, photos and other personal data.

Business referrals among friends has been taking place in the world long before the Internet came along, yet it has not been made more efficient or monetized by social networks yet, like other social activities have.

The Internet and specifically social networks provide the underlying infrastructure to do just that with the potential to track the referral and its path in the network and to keep all parties updated with respect to the referral progress.

As an example if I knew that by referring a start-up to an NBC executive I will receive 1% or so of a multimillion dollar in case the deal is closed, I will probably do my best to forward the referral request, and even make an effort to find the correct next link to ensure higher success probability of the referral.

Think about helping an entrepreneur get to a VC for a few million dollar funding deal, or for that matter, any other deal that is easily quantifiable. I am sure you can think of some as you read those lines.

Obviously the network will monetize its database by taking its own 1% or so commission from those “few” multimillion dollar deals.

The provisional patent described here was filed and it is depicting a method and mechanics associated with incentivizing and monetizing the referral system in business social networks such as Facebook, MySpace, Linked In, Xing, Plaxo or Pulse and can fit other social networks used for Dating and Matching, as such it is not limited to the business domain.

Third-parties currently working on social network projects and APIs (Google, Open Social and so on) may also implement it across several social networks such that the referral path may span and can be tracked across seemingly unconnected networks.

The inventors are happy to negotiate licensing terms with interesting parties that want to own the patent and its priority date.

In a year from now (April 7th 2009), this patent will officially lose its priority date and will be available, royalty free, to all social networks. Take that as our own contribution to the social networking world, and yes, we need this to work. We are already in discussions with few parties, so if you are the CEO of a social network straggling to differentiate and compete, or a Biz-Dev guy for that matter, with those companies, don’t let this slip between your fingers, be among the first to contact us.

For more information, please contact: Alon alonc@netvision.net.il, or Ronen ronenmiz@gmail.com

Making Money out of Patents

By: Alon Cohen - See me or call me

In general I think patents are a waste of time, specifically for the inventors. A patent is merely the right to sue someone, not a cash register, in fact, until you can actually sue someone it is nothing but a drain on your resources.

Most “business” models around patents involve suing companies that infringe on the patent, or threatening them, or selling the patents to the companies that can sue the people that potentially infringe, or having some legal firm help take the legal cost of suing on some contingency base.

It is all about a long legal fight that an inventor / patent owner has to initiate in case he/she was lucky to invent something useful. It seems what is required from the inventor is to be a lawyer, or at least have some affinity for legal battles.

In my mind a complete waste of time for society, just the opposite of the original idea of patents that were design to compensate and encourage people to invent and share for the good of all mankind. It seems that since the only people enjoying that legal economy are the legal firms, maybe they should encourage people to file patents on their firm’s dime.

During the summer (as I was visiting Israel) I encountered an interesting initiative from Procter and Gamble. The company has Identified Israel as a source of innovation and decided to shorten the process from innovation to market or from innovation to inventor compensation. In fact they opened an office where they encourage people to come up with an innovation and a business model, what ever that might be, and if the concept is good and match the company’s goals, and makes sense business wise, they will pay, and potentially take it to market. This is great news for inventors and for Israeli entrepreneurs since most VCs in Israel do not touch tangible-consumer-goods startups.

I can happily attest to the P&G process. During summer 2007, I entered a P&G contest, where they were in a search of a technological solution for a specific improvement of a popular consumer product. I presented a solution and won the contest, and yes they even paid. In my case one-time fee, as was agreed as part of the contest rules. Few weeks ago, Feb 2008, they opened the model for others to come and bring them ideas. Check P&G’s Israel office, or ask me how.

In many cases, where an individual file for a patent during the course his/her job, the patent legal work is paid for by the company and the patent is assigned to the company and not to the individual. In many cases, companies that are not trigger happy will never sue others for infringement as it may be too distracting for their day to day operation, or simply bad PR.

On my record, I have at least one patent that might be “legally monetized” the patent has to do with network based time shifting of radio and television broadcasts in essence a “network based TIVO”. If you have the time on interest find it here.

As I am really fed up with the patent legal process (and find it boring), I am trying to think of new innovative ways to make money out of innovation which is interesting. In a sense I am looking for a quick way to flush the potential of a patent if such potential exists.

One such way which I am contemplating now, is submitting a provisional patent (very low cost say at LegalZoom), then publishing the patent / idea on a blog, potentially even stating a ball park price, and inviting potential companies by name, to come and read the concept.

Correct me if you think my logic is wrong here. If a company reads this blog and find some innovative idea interesting, they will want to be the first to engage and negotiate out of concern that their competitors will try and grab the patent for its priority date. Since they don’t know if others have approached me they might move even faster. Unless, say Google will cooperate with Microsoft, to NOT buy the patent, for a year, the process seems safe.

Obviously the idea has to hold some merits, if it doesn’t, nothing will happen and the patent will become public domain. The inventor invested not thousands, but rather just few hundreds of dollars; hence the value got flushed early on into the process for the innovator at very low cost. It is also good for the rest of humanity since after a year, if a real patent was not filed, the provisional patent is out there for anyone to use.

Let me know what you think, I am gearing up to try this concept myself on this blog so if the logic is wrong let me know.

As for new patent ideas, if you are Google / Microsoft, or LinkedIn / Xing, stay tuned, I have something coming up for you to fight over.

AC