3 lessons to learn from LinkedIn’s recent 1.5 Billion USD acquisition

LinkedIn, a social networking site that aims to connect professionals, recently bought Lynda.com for a whopping $1.5 billion. Lynda.com started as a series of books by Lynda Weinman on the topic of web design. However, in 2002 Lynda.com was established as website resource. Today it serves as an educational site that helps people learn new skills by producing video lectures in collaboration with experienced teachers.

So what does Lynda.com offer LinkedIn that they would spend $1.5 billion on it? According to LinkedIn, this acquisition is about “connecting people with opportunity”. In addition to this, it also strengthen’s their position as a data arsenal, a smart move in today’s data driven economy. Talking about smart moves, LinkedIn under the leadership of their current CEO Jeff Weiner, has gained a reputation of strategic acquisitions; most prominently SlideShare, Pulse and Bizo.

Here’s a breakdown of their recent purchase and what lessons you should learn from it. Budding entrepreneurs, take notes!

1. Set your goals and follow them

LinkedIn did not gain their 350 million followers, or their $7.5 billion net worth for that matter, overnight. The company has been around since 2003, and their success is a result of years of hard work and commitment. The early years of a start-up are the most crucial. You and your team need to realize your aim. Remember that if your trajectory is off by inches at launch, you can be off by miles out in the orbit. Set a base and establish your start-up with a clear and specific focus. There may occur several ideas to you along the way that will seem appealing, but before you pursue them strengthen your foundation and achieve the goals you initially set.

2. Realize when and in which direction to expand

Once your start-up is steady and is raking in enough money, you can think about expanding. When you’re running a business, it is essential to diversify your capabilities because you don’t want to remain in the same spot you were 5 years ago. I’ll admit that companies change their goals all the time, but the long term goals always remain the same. The direction in which you expand must be in alignment with your initial goals. Another important factor to remember is when to expand. You may get a great idea, but if you don’t execute it at the right time another person may come along and do it better that you.

3. Know when and where to spend money

This is fairly similar to the second point. If your firm is ready to make an acquisition, then it must follow your initial goals. Imagine if LinkedIn had bought Snapchat, we all would’ve been wondering what they plan to do with it! Despite the fact that both promote socializing, their goals are vastly different. With Lynda.com, LinkedIn can provide a better experience to their users. For example, if someone found the right job but lacked a skill required for it, LinkedIn would now be able to direct their users to exactly what they need. This should teach you that if your firm is ever ready to buy something, remember what good it will do to you in the long run.