In my confession and apology for ignoring LinkedIn for over a year, I repeatedly alluded to an exchange of value.  This is an important concept in considering applications, social networks, even games.  The concept was drummed into me by some very smart management consulting partners, as we used it as a mechanism to improve the relationship between a product or brand, and a consumer.  This is why I was so hungry for a user-reported value proposition.

Face it, LinkedIn, Facebook, whatever, take time, effort and attention.  Like nature’s demand that matter and energy be conserved, any hopes of getting something out of LinkedIn requires you put effort in.

So how much time and attention should we put in?  Getting to an answer requires some value-based framework to evaluate the exchange.  This is to ask ‘What is the coin of the realm?,’ the realm being LinkedIn here.

My inner engineer is pleased with the time-utility model that my networked friend, Steve, illuminated in the last post.  Having one’s contacts maintain their contact data saves time.  You don’t have to do the upkeep, and chasing current information for a lost contact can cost loads of time.  I can write an equation for that:

Contentment happens when [Potential Time Lost to Maintenance and Data Recovery] >> [Time Invested in LinkedIn].

Of course, I don’t think this is why we do it – I just like it because it is elegant and probably sufficient if we ran our personal economics rationally.

More importantly, we humans invest in our social networks because that is a successful behavior for us.  We like being in groups, especially groups which we have been invited to join and accepted.  You may ascribe the behavior as having been taught, as in the Golden Rule, ‘Do unto others …’, or the Norm of Reciprocity.  Or you might have learned it from direct experience as a member of family, team, church, and so on.

I happen to think investing in social networds is encoded deeply in our DNA.  Why you ask?  Years ago I visited the Denver Museum of Nature and Science where in the center of the entrance hall stood the fossilized skeleton of a mastodon (or perhaps a mammoth – help me out here if any of you saw it), with a stone spear point embedded in its side.  The bone had grown around the spear point, so the animal survived the assault.  Standing next what was surely a massive animal, I trembled slightly to stand in the position that the man or woman who drove that spear stood, and to imagine the potential stomping of the spear’s former owner that might have followed knowing the animal lived to heal.  Until that moment, I did not know man and mastodon lived at the same place and time.  My DNA, however, somehow knew to tremble.  And I am sure the hunter who threw that spear valued a robust social network.  Think about it: he or she didn’t have to be faster than the mastodon, just faster than the slowest social network member present when the spear made it mad.

Fear I suspect plays a contemporary role too, as in ‘I have never used LinkedIn to get that next opportunity, project or job, but I might and I don’t want to miss out,’ or something like that.

We meter the energy spent on the likes of LinkedIn according to social norms.  I know it seems obvious as we refer to them as social networks after all, but few of us find time to ponder the obvious as we process the invitations in our inbox.   Still it makes sense to understand our behaviors, especially when we have technology that amplifies them.  Dan Ariely wrote a fascinating and enjoyable book, Predictably Irrational, that explores our irrational behavior and decisions, and the pattern nature of us that gives rise to being predictable.  He vividly describes the vast difference in value we assign to social transactions versus economic transactions.  This social value exchange is the ‘coin of the realm’ point I am raising for these social networks.  Read this brief but powerful excerpt to get a good sense of it.

With regard to LinkedIn, or Facebook or MySpace for that matter, a tradeoff between social and economic norms does not traditionally come to mind – at least not yet.  The relationship I have with my network members and my relationship with LinkedIn are completely different.  It is as if they exist in completely different, non-intersecting planes.  In fact, I am not sure I even have a relationship with LinkedIn.  I sent them a question recently, and to my knowledge they never replied.  No surprise here, because having a human-enabled relationship is costly, for customers and non-customers.  I am a not a customer for LinkedIn.

My network member and former colleague in Europe, Joost, points out LinkedIn’s valuation on a June, 2008, investment round just over $1 billion, and their then 23 million users (see CNET), and resulting market value per user at just over $43.

So you and I may be worth $43 or so to LinkedIn.  Not sure how I feel about that, for this post anyway.  How about you?  – db

Update:  Nice discussion on the law or norm of reciprocity in the context of Twitter by Kris Colvin on March 14, 2009.