How the LinkedIn Acquisition Will Likely Impact Startups

mergers-and-acquisitions

Tomasz Tunguz, a VC from Redpoint wrote a great article about the impact that Microsoft’s acquisition of LinkedIn is likely to have on startups. He highlights three main implications:

  1. Informs new M&A multiples
  2. Potentially transform the CRM landscape
  3. Remove LinkedIn as a buyer of other companies

I think that points #1 and #3 are almost absolute certainties, #2 is a bit more complex. The big question is, do CRM companies need to add intelligence and data vs. being a standard system of record as they have been in the past. Ten years ago the data you entered into a CRM was data you collected yourself and spent time manually inputting and making your own. Fast-forward to 2016 and that data is all out there somewhere, those that can connect it have the potential to save their clients a lot of time.

“With the acquisition of LinkedIn’s data set, Microsoft will have an opportunity to both continue to grow the existing business by selling it through its channels, differentiate its CRM product, Dynamics, and offer a sales productivity tool in Sales Navigator.” (Source – tomtunguz.com)

It’s easy to see the network effect of this transaction in an image like this one:

microsoft-linkedin-graph

(Image Source – The Verge)

Combining these graphs will without a doubt allow Microsoft to compete in a way that many companies won’t be able to. Couple this with the fact that the Microsoft-LinkedIn deal is the largest software acquisition ever and it’s safe to say we likely can’t yet understand the magnitude of what is going to happen.

Of course this all relies on Microsoft not f&*%ing everything up, and that’s also something we’ll have to wait to see. What do you think – is Microsoft going to unlock the true power of everything LinkedIn has been building? Comment and let your voice be heard!

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