Interview with Lars Hinrichs, CEO of Xing

Xing is a leading social network for business professionals.

We are the leading professional social network in Europe. The system is already in a number of languages, and we are very well positioned in America and the Chinese market.

Professional networking is not limited to one country or another. It truly is global, so a businessperson in Germany will need to connect with their counterpart in the United States or China. Contacts are getting more and more important. Fifty years back, you didn’t need a network because you spent your whole life in a certain area.

However, in the last ten years business relationships have expanded well past the local area or even national borders. It is this level of connectivity and relationship building that Xing facilitates for businesses.

I think it is much easier for European companies to develop a European strategy than for U.S. companies because the local markets are very different and you really have to localize the product. We have to adapt to a local languages, customs and traditions. You have to specialize the product.

So far I would say it’s pretty low. Most of the business is local, I would say more than 80%. Only very few industries, such as financing are international. People just prefer to network in their own language and their own country because they feel more secure.

We’re targeting professionals with a premium membership. We have over 300,000 paying customers. This makes us a clear leader when it comes to subscription business models.

It’s different because the American market, when it comes to Internet and payment, is much more feasible for systems like ours when it comes to lower monthly payments.

In the U.S., more than 70% have the Internet. In Europe it’s an average of about 40%. So the growth opportunity in Europe is definitely bigger. So why are still considering going to the American market? We see that there are strong relationships between America and Europe from a transatlantic and commercial point of view. And many people are actually looking for business partners here in Europe.

I think we’ve reached the point where I’m really envious about the American situation. Entrepreneurs are highly regarded in society. It’s truly about looking up and saying, “Hey, this is a cool role model.” And in Europe, that’s changing. Entrepreneurship wasn’t really cool in the past, but that is changing and more and more people are actually starting Internet companies.

Yes. I think it’s getting much easier to start a company. If you want to start a German company, it takes an average of six days. The E.U. average is around 11 days.

When I started my first company in 1998 it took me over two weeks, and we are already down to six days, which is a great success.

Our goal is to continue to expand Xing and leverage the power of the network both regionally as well as globally. We see tremendous growth opportunities within the professional business networking market.