LinkedIn Has Been in China for Only a Year. Why Isn't "Lingying" Enough, and Why Add "Chitu"?

"I see the risk of doing this, but I also see the risk of not doing it," LinkedIn's CEO said when he approved Chitu.

Last Thursday, when a QDaily reporter walked into LinkedIn's China office off Beijing's East Third Ring Road, its head, Shen Boyang, and several people from the technology and marketing teams were holding an emergency meeting in a glass-walled office.

It was the third day since registration opened for Chitu, LinkedIn's new app. But the cloud computing platform hosting Chitu's servers had run into technical problems two days in a row, and users could not refresh content on Chitu.

Meanwhile, day-to-day work at Lingying (the Chinese version of LinkedIn) carried on as normal. Eighteen months after LinkedIn entered the Chinese market, Lingying's servers are still in the United States; a caching service only speeds up access in China. Chitu, by contrast, runs on a cloud platform popular with Chinese startups.

"A cloud service that's just blazing fast isn't enough. Stability matters more," Shen told QDaily after the meeting. By then LinkedIn had already decided internally to move the servers, only two hours after the outage began. Once service was restored, Shen announced the decision on Chitu itself.

Those few hours of trouble, and the speed of the response, show how differently Chitu and Lingying, two products from the same company, operate.

The Birth of Chitu

"We're just a startup." A year and a half ago, Shen Boyang, newly appointed president of LinkedIn China, liked to describe the China team he was building this way.

In January 2014, Shen, a former Google and Yahoo China executive who went on to found the group-buying site Nuomi, joined LinkedIn China as its first employee. In a burst of interviews after he joined, what Shen talked about most was the independence and autonomy he enjoyed: bringing in venture capital to offer equity incentives, the reporting lines of his team, his weekly calls with the CEO.

But after only a year, Shen felt that this independence was no longer enough. On March 17 this year, he went to LinkedIn's headquarters in Mountain View, in Silicon Valley, opened a PowerPoint deck, and proposed to management that they build a new social network in China.

As Shen recalls it, the first slide showed what LinkedIn had achieved in China over the past year or so; the second showed the problems it had found there. More than a year after Lingying launched, most of its earlier users still kept English-language profiles, which meant the localized Lingying had not won over a broad enough mainstream audience.

Shen blamed the bottleneck on the product itself: users could not register with a mobile phone number, could not share via QR code, could not find other people at the same offline event... Many things Chinese users took for granted simply could not be done on LinkedIn. In the end, Shen persuaded headquarters to build a new, mobile-first professional social network in China from scratch.

Even as Shen was presenting the plan, Wang Di, Lingying's vice president of technology in China, had already begun recruiting a technical team in Beijing.

Wang Di, vice president of technology at Lingying China

Wang, who had previously run the China R&D center of an overseas technology company, joined LinkedIn on February 2 this year.

"I use LinkedIn myself. One day an email suddenly showed up in my inbox from a LinkedIn employee, recommending a job at LinkedIn," Wang told QDaily. By March, a team of eight engineers had already started building the back end of the new service. By around the Qingming Festival in early April, Wang's core R&D team was largely in place and product development began.

At the Influence Conference on April 20, Shen announced publicly that Lingying would launch a local app, designed and developed for Chinese users, by the end of June. LinkedIn co-founder Reid Hoffman also came to China to meet the local R&D team and saw the first demo of Chitu.

"There was no beta then, just a PowerPoint with a few drawings to show roughly what it would look like. We were nowhere near designing the user interface or the interaction," Wang said. The Chitu that Hoffman saw that day was extremely crude; even a very rough demo needed a computer alongside it. The slides showed only a few simple Chinese-language screens, and the developers had to explain the product to Hoffman sentence by sentence.

To launch on time, Wang took 19 engineers, two product managers, three designers and a handful of interns to a hotel in Huairou, on the outskirts of Beijing, on May 17 to develop the app behind closed doors. For a month and a half, everyone did nothing each day but build Chitu and sleep. When Shen had no outside engagements, he was at the hotel too, talking through the product with them.

Although the work had been discussed during recruiting, a month and a half of lockdown development still put people under heavy pressure. One former Yahoo engineer left after two days. On his way out he told Wang: "You didn't lie to me, but this (intensity) really isn't what I imagined."

On June 23, Chitu launched, with registration by invitation code.

"We had to make decisions almost every day. You had to make trade-offs: do we want this, do we want that? If we want this, how many people, how many resources, and so on and so on," Wang said of those closed-door days. Over four months, the Chitu team was hiring, setting product requirements, designing and building the back end, all at once.

In his last two years at his previous company, FreeWheel, Wang's job was to bring its video ad measurement service to China. But in the very week the first four customers were about to sign, FreeWheel was acquired by the US cable and internet provider Comcast. The China business was dropped; only the R&D staff were kept.

"When the product isn't in your own hands, a project can disappear just like that," Wang said, with some regret.

Why Chitu Had to Be Built

What Wang felt about FreeWheel is much like the problem Shen Boyang ran into at LinkedIn.

Shen says that among the first product requests he made after arriving at LinkedIn was registration by mobile phone number, because many Chinese users rarely use email. Yet 18 months later, open the Lingying app this year and you can still register only with an email address.

LinkedIn was born in the era of PCs and email, and everything from registration to user recommendations depends on email addresses; even its messaging service between users is called InMail. Letting users give only a phone number would affect too many features.

At Lingying's offline events, people now and then ask why they cannot scan a QR code to add someone. These are habits WeChat has trained into users, and LinkedIn could meet none of them.

At the same time, foreign companies are losing their appeal for young Chinese. A survey of more than 55,000 students by the research firm Universum found that only 25% of graduates want to work for multinationals. In 2015, the top three employers of choice among Chinese university graduates were Alibaba, Bank of China and Huawei.

The rapid growth of Chinese internet companies has given employees well-paid options beyond foreign firms. Alibaba listed on Nasdaq in the US last year and reached a market value of US$231.4 billion on its first day, beating the US$104 billion record Facebook set when it listed in 2012.

Over the past five years, not counting A-share listings, 38 Chinese companies have listed in the US alone. Many early employees at the internet companies among them received some equity. For young Chinese, domestic companies now offer far more attractive pay than they did ten years ago.

"LinkedIn can only attract people who speak English, have overseas backgrounds, or have multinational backgrounds," Shen told QDaily, explaining Lingying's limits. "But ask young Chinese today and they'll tell you studying abroad isn't necessarily the best choice. Many are happy to stay in China."

To reach this group, Shen began in the second half of last year to consider building a new product, independent of LinkedIn.

Two Brands

Speaking to QDaily, Shen repeatedly compared the relationship between Chitu and LinkedIn to that between WeChat and QQ. He believes a lighter, more mobile-focused product can not only help LinkedIn reach a different group of people but also extend the brand's reach.

"Back then, people like us who had come back from overseas didn't use QQ. We were all on MSN. But the first people on WeChat turned out to be exactly those who didn't use QQ, and that solved Tencent's brand problem," Shen said.

Just as WeChat in its early days let people log in with a QQ account, Chitu lets people log in with a Lingying account and import their contacts and profiles.

To keep the environment purely Chinese, Chitu imports only contacts in China, that is, your friends in China, and machine-translates every profile into Chinese.

The Chitu app interface

Discovery, communication, and linking online with offline are Chitu's three main functions.

Besides including every contact feature WeChat has, Chitu adds features built for professional networking: offline events, contact recommendations and topic circles. They are meant to serve what young people today want: to change jobs often, to succeed and start companies, and to keep their personal and work lives apart.

Chitu groups offer new features such as administrator approval and a mute mode

Although Chitu is independent of LinkedIn, it runs partly on LinkedIn technology. The most important thing Wang Di got from LinkedIn in the US was its connection recommendation algorithm. LinkedIn had never opened that algorithm to outsiders, so Wang could not simply copy the code. "All I could do was find the engineers at LinkedIn who work on it and ask: what's the design thinking behind this? What factors did you consider? Why did you do it this way?" he said.

In the end Wang added some factors specific to China on top of LinkedIn's algorithm. Chitu's recommendations, for example, take the user's current location into account. And where LinkedIn's algorithm gives more weight to email contacts, Chitu gives more weight to the phone's address book. After walking through the differences, Wang said: "My recommendations today will fit what Chinese people need better."

Brands also gave Chitu its first push. On July 21, Chitu announced partnerships with five brands: Evernote, Meizu, Tesla, HP and Misfit. Users who had not managed to get an invitation code could register directly just by entering one of the five brand names, Chitu's first step toward opening registration to the public at large.

Last Saturday, Chitu held its first offline event. Twenty users from different industries came to Lingying's China office to hear Wang Di tell the story of how Chitu came about and to offer their own suggestions on the product.

The "Discover Baby Chitu" event

When it was time to share, nearly everyone mentioned some tie to LinkedIn: some had found their first job through Lingying; for others, their first job had been an internship at LinkedIn itself.

In a sense, these users became Chitu's first users because they looked up to LinkedIn.

But the overlap largely stops there: a Chitu account cannot log in to Lingying. The two social products overlap in business, but their social graphs are kept apart, which Shen says is deliberate: "If I'm tangled up with Lingying in countless ways, I can't move fast. Why would I depend on it?"

Compared with a local startup starting from zero, Chitu's advantages are obvious. But advantages in money, technology and brand do not guarantee success for a social network startup.

Over the past decade, on average a new social network startup has appeared every day, yet you can probably name no more than 20 of them today.

Even Facebook, with more than a billion users and its legendary founder Mark Zuckerberg at the helm, has seen almost all of its new social network products fail, such as the anonymous chat app Rooms and the photo-and-video sharing app Slingshot. The one exception is Facebook Messenger, and it probably succeeded only because it is the sole tool Facebook users have for messaging each other privately.

Building a new social network is enormously hard. A whole batch of professional networking apps from a couple of years ago, such as Xinghui and Youlianxi, have already folded. Maimai, built around professional networking, raised a US$20 million Series B last year, but set aside the content it imports from Weibo, and its real user activity looks open to doubt.

In the interview, Shen did not deny that Chitu, as a startup project, might fail. But he believes that if LinkedIn cannot reach a younger, more local group of Chinese professionals, the whole of LinkedIn will face the risk of being disrupted within a few years.

As he put it, quoting LinkedIn CEO Jeff Weiner: "I see the risk of doing this, but I also see the risk of not doing it."