LinkedIn Learning NANYANG. To the Board of LinkedIn From Nanyang Consulting

Transcription

1 LinkedIn Learning To the Board of LinkedIn From Nanyang Consulting Nanyang Business School Deeksha Bajaj Bohao Zou Zeeshan Ashraf Wendell Shirley

2 Agenda Problem Statement Analysis Recommendations Evaluation of Alternatives Implementation for o Build LinkedIn Community o Launch LinkedIn Development o Adopt flexible pricing strategy Balanced Scorecard Financial Management Implementation Timeline Risk Mitigation Key Takeaways 2

3 Problem Statement Related to integration of Lynda Intense market competition (e.g. Khan academy) Process to monetize Linkedin Learning Integration with the Linkedin platform Internal issues Net losses in 2015 High interest expenses 60% of the members are passive job seekers How will LinkedIn disrupt the professional training market? How to promote, integrate and monetize Lynda (now LinkedIn Learning)? 3

4 Analysis Competitive Landscape High Quality Lynda KHAN Academy Coursera MOOCs Low Value High Value Youtube Online search portals Low Quality Product differentiation required to expand the reach of LinkedIn Learning/ Lynda 4

5 Analysis Existing Customer Base LinkedIn PRODUCT PORTFOLIO TALENT SOLUTIONS (e.g. LinkedIn corporate and LinkedIn job postings) MARKETING SOLUTIONS (e.g. Display advertisements) PREMIUM SUBSCRIPTIONS (e.g. sales navigator and individual subscriptions) 64% 19% 17% LinkedIn has relationships with companies using its network to find potential employees 5

6 Recommendations 1 Build LinkedIn Community 2 Launch LinkedIn Development for corporate learning 3 Adopt flexible pricing strategy 6

7 Evaluation of Alternatives Market Potential Costs Existing Infrastructure Overall Build LinkedIn Community Offering license renewal programs for professionals Adopt flexible pricing strategy Offering free courses to all LinkedIn members Provide professional certifications such as Oracle Disinvestment in Lynda - - Launch LinkedIn Development for corporate learning Favorable Unfavorable 7

8 Build LinkedIn Community 8

9 Build LinkedIn Community Recruiting & Professional Network GAP Self e-learning Platform Mentorship & Community Mentors Experienced industry experts (reduce potential conflicts of interest) Mentorship Weekly 20-minute virtual meetings (using Skype) Community Group by industry or by mentor (30 mentee maximum) Build a mentorship platform to engage LinkedIn members 9

10 Build LinkedIn Community Target University students at $19.90/month Professionals at $39.90/month *price examples Location US, UK, Canada, Singapore Supergroup of shared language users India, China Largest potential learning members Marketing 1. LinkedIn and LinkedIn Learning website 2. Skype advertising 3. LinkedIn Members who are using other mentoring websites Technology Leverage Skype Translation technology to expand global reach Target a berth of member segments across the globe 10

11 Build LinkedIn Community Benefits 1 Create a professional learning community which fills the gap between LinkedIn and LinkedIn Learning 2 Increase the usage time and loyalty of LinkedIn members 3 Generate new revenue streams for unengaged members Capitalize on the synergies between disparate businesses and benefit current members 11

12 Launch LinkedIn Development for Corporate Learning 12

13 Launch LinkedIn Development OBJECTIVE Provide personalized learning development program for MNCs Example - Deloitte PRODUCT Employee profile Job demand Data Analytics Select the experts to design courses Personalized learning development Improve corporate personal learning development experience 13

14 Launch LinkedIn Development TARGET MNCs HR and Learning and Development teams LOCATION Pilot in US, UK and Canada MARKETING Targeted promotion to LinkedIn Talent Solution members Key account managers in developing countries Target HR and Learning and Development teams in headquarters of MNCs 14

15 Launch LinkedIn Development BENEFITS 1 Leverage and enhance existing data analytics capacity 2 First mover in the new market 3 Sustainable revenue source Disrupt corporate learning development market 15

16 Adopt Flexible Pricing Strategy 16

17 Adopt Flexible Pricing Strategy LinkedIn Learn Recruiters Members Challenges No formal accreditation Poor completion rates Unclear real value Introduce ala carte deals with value-based pricing and accreditation 17

18 Adopt Flexible Pricing Strategy PRICE Bundled Unbundled Bundled PRODUCT Unbundled Target new customer segments using new pricing strategy 18

19 Adopt Flexible Pricing Strategy LAUNCH PLAN Implement ala carte deals for all members Use a multi-tier pricing strategy for the courses based on demand, course topic and geographies starting USD 9.9 per course Get certificates accredited from universities such as Pearson Effectively use data analytics to suggest courses for the job Zeeshan Consultant, Nanyang Consulting Skills Excel, Communication, Leadership Trainings Required Digital Advertising Fintech USD 10 USD 15 Integrate LinkedIn application with Lynda to personalize training suggestions 19

20 Balanced Scorecard 20

21 Balanced Scorecard Learning & Development Time required to train key account managers Investment required existing IT infrastructure Internal Time required to set up mentorship and community management teams Time required data analytics capacity for personalized courses Customer Financial Enrollment in courses Active time of customers Retention rate of LinkedIn Learning Profitability of new offers Return on investment 21

22 Financials, Implementation, Risk Mitigation 22

23 Financial Management Assumptions Revenue CAGR 48% WACC 10% Enterprise Value Multiplier 25 Net Investment 5% Debt/Equity Ratio 0.11 Price/Share $100 LinkedIn has high operational costs that are leaving it at a net loss 23

24 Financial Management (USD, Millions) Net Revenue Cost of Revenue Gross Revenue Sales and Marketing Product Development General and Administrative Depreciation and Amoritization Other Income Operating Income Taxes Net Income Net Investment Change in Working Capital Free Cash Flow Terminal FCF $30M Equity $760M Market Capitalization $76B Through new product development and market penetration triple current market cap in 5 years 24

25 Implementation Timeline Q Q Q Q Q Q Q Q Cost (USD) LinkedIn Community Website Development $20M Advertising to acquire mentors $100M LinkedIn Development Build out Demand Data Analytics $50M Contract expert course designers $120M Port of Lynda Technology Platform $80M Sales Consultant Training $200M Launch Flexible Pricing Strategy Marketing of a-la-carte pricing $150M Secure course accredidation $90M $810M $810M cost is the NPV of costs expensed over a 2 year implementation period 25

26 Risk Mitigation Identified Risk Proposed Mitigation Cannibalization of existing subscription pricing by a-la-carte deals Target passive customers for a-la-carte deals Short lifecycle of mentor relationships Continuous feedback loop from members through customer service teams Potential economic downturn may affect memberships Make LinkedIn Learning an integrated part of the job-seeking platform 26

27 Key Takeaways How can LinkedIn create synergies between LinkedIn and Lynda (now LinkedIn learning)? How to promote, integrate and monetize Lynda? Build LinkedIn Community Launch LinkedIn Development for corporate learning Adopt flexible pricing strategy 27

28 Questions? 28