Ingo Chu on the future of professional social networks | WHU Inside Business
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Ingo Chu on the future of professional social networks | WHU Inside Business

welcome to WHU Inside Business Inside I am Christian Schlereth and i’m here with Ingo Chu CFO and current interim
CEO of the online business network Xing Ingo
thank you very much for taking your time thanks for having me about seven years
ago you started as CFO chief financial officer at Xing how would you describe
the business model back at that time and how would you describe it now
well a lot of things have changed in the past seven years which is why it’s so
great to work here if you look at Xing then basically it was a professional
network and if you look at Xing now the vision is for a better working life so
what we want to do is we want to help white-collor professionals in their
working life we do that by focusing on three things one is people so we bring
people together that’s the classical networking part the second thing is jobs
so we want to provide our users access to the relevant job markets who can help
them find the job of their lives and number three is a professional content
we want to become the most relevant source for professional content and help
our users become more successful in their working lifes now if you look at at the
details and the company to get more deeper than what you see that we’ve
moved from a one product company to a multiple product company we have moved
from a functional organization to a business unit organization if you look
at the numbers we’ve gone from about little over 40 million in revenues to about
115 million in revenues with the EBITDA and cash flows following suit if you
look at market cap we have gone from a little under 200 million in euro and
market cap to about a billion in euro market cap so in a nut shell basically
we’ve gone from you know a pure network and a small company to a mentor focusing
on helping white-collor professionals in a working life and a bigger company for
me Xing is stunning because of the root element of Xing is probably still the
business network but it succeeded on the German speaking local
market and defended off any global competitors what are the key element for
this success and what actually do you recommend the companies in a rather
similar situations it might sound simple but it’s exactly that its focus
on your customer and do what you’re really good at and if you look at the
business we are in it just means being local right if you look at what we do
when we talked about that we’re doing people were doing jobs we do news and
professional content these are segments were local and
national is just more important right it’s the relevant scope over eighty
percent of the german-speaking white-collor professionals network only
nationally there are no international networking effects if you look at the
labor market, labor market are national and even foreign companies in a
german-speaking region basically hire for their German subsidiaries Germans who
work in Germany and speak german language right and the same goes for
professional content you know that not many people read harvard business review
but they read “Lebensmittelzeitung” and “Wirtschaftswoche” so in our case local is just
better with the subsidiary kununu a rating portal for employees Xing entered
the US market but that this also mean that Xing is heading for a global
internationalisation strategy with the own core product? No that’s
completely separate and it’s more like an experiment I mean in 2009 we
deliberately focused on the DACH region strategically and the situation was we
were very strong at the DACH region there was lots of room for growth and we were
a small company so from the strategic point of view it was sensible to focus our
resources on the DACH region now if you look at the situation now we are still the clear
market leader in a german-speaking region there’s also still lots of room
for growth in the german-speaking region however the company is much bigger and so
there is capacity for a few selected international initiatives and kununu US is
one of those initiatives. So with Kununu in a german-speaking region we are the
clear market leader in employer transparency and we’ve built a employer
branding business on top of that so we help companies present them selves as
attractive employers and in times where the labor market is very tight and where
employers have to invest in the employer brand that’s a very good business right
there are other markets where that is the case and the U.S. is one of those
markets and so together with a strong local partner Monster
we’re trying to build this US joint venture in employer branding and
employer rating and so far the results are good and we’re confident that that’s
an opportunity for us but Xing itself like the network part and the jobs part
and the professional content part we remain DACH focused because local is just
better despite the obvious global players in business networks do you see
potential threats through new competitors entering the field for example Facebook
I mean Facebook is a very admirable company right but they are clearly private so
they focus on the private lives of their users Xing focuses clearly on the
professional lifes of their users I mean we are the clear market leader in
the german-speaking region with more than 11 million members for
professionals right we have the most activity and professional social
networking in a german-speaking region we have the best professional profiles and
I think that’s the way the user wants it right i mean users separate between their
professional life and their private life we have this saying which is “Dienst ist Dienst and
Schnapps is Schnapps” and I belief as long as the user works and and has a professional
life and as long as this attitude with “Dienst ist Dienst and Schnapps us Schnapps” is valid we will be successful attracting students at the end of their
studies must be one of the key elements of Xings strategy because they are the
future employees for many companies and of great interest could you name reasons
why students should already engage in business network during their studies so
before they start entering their career path
I think it comes back to the 3 elements of Xing and our vision
people jobs and news i mean i think building your network early on is never
wrong right you can use your network for whatever problem you have to solve even
as a student whether you’re looking for an internship whether you’re looking for
a mentor whether you’re looking for somebody who’s helping you with a
particular problem and that could be other students as well as professionals
already second thing is jobs we have probably
the largest offer of student jobs and internships in german-speaking region on
our platform and I know from my own studies that it can be challenging
finding something which is really attractive and the third of cause is
professional content so we are deliberately scanning the web for
relevant content which we then play out to our users and of course that can be
interesting to students as well Ingo thank you very much for joining us
thank you very much Christian

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