Significance of the number of followers an IB has on its LinkedIn page
I'm working on an AI/data analytics project this summer to predict the trajectory of different investment banks. I'm looking at many stats, such as # of years since the founding date, average transaction size, and transaction volume. One of the data points I'm considering to include in my research is the number of followers a firm has on its LinkedIn page. What do you think about this? Do you think there is any weight to the number of followers?
Seems like an interesting project. Not sure how much you can get out of Linkedin followers though. For instance, Dyal & Co, DBO Partners, and M. Klein & Company only have ~1K followers combined, but they've worked on numerous billion-dollar deals together. At the same time, there are boutiques with more followers but much less deal volume/size. Of course, at a high level, you'll probably see some correlation.
Wondering why those firms have so few followers despite their solid reputation. It almost seems difficult for them to maintain a low profile.
I think it's just a product of minimal headcount, low profile operation, and no marketing. They're efficient.
Number of followers is a reflection of many things, including how much effort the firm puts into marketing. Some firms post weekly contents or monthly reports to gain name recognitions. Others don’t because they probably don’t need to. I’m guessing you’ll get mixed results and a bunch of outliers. More followers doesn’t mean better deal flow.
look at trends
Why? The trends in this variable are equally problematic, scientifically. You can certainly imagine why. You would be correlating a popularity contest based on the demographics of LinkedIn (specifically, only those that "follow" companies and update this list actively) to future firm success. It's not at all unreasonable as well to assume that the slowest growing in # of LinkedIn followers might well be the most popular and successful firms already, and there is nothing stopping those firms from continuing to be the most successful (Amazon? GS?)
This would be like relying on historical WSO candidate interest to predict firm success (spoiler alert, it has not done very well). All kinds of problems with the population and sample.
Unless your theory is "the interest level of young, active job seekers can predict future firm success because the hype generated about these firms must be based on some level of magical inside information about their future performance."
Maybe a more useful data to pull from LinkedIn would be # of employees? You can even break it down by # of analysts, associates, VP, and so on.
Measuring LinkedIn followers seems like rather poor science, an a priori assumption based on little existing evidence driving your selection of independent variables. The problem with much of what is called today "data science" is it is in fact "data mining" and applied with all of the same care as brutish sandblasting of mountains.
Before you collect a single data point on LinkedIn followers, can you think of the many ways that this data point might be: * biased (based on general public interest in a firm and not firm success), * inaccurate (would you apply this thinking to individual LinkedIn posters with the most followers?), (what is the relationship to having a follower with firm success?) * incomplete (firm presence and posting frequency on LinkedIn), * correlated with other meaningful variables (growth of employees, revenues, margins), * correlated with misleading variables (size of firm, retail banking presence, name brand)? * prone to lending the model heteroscedasticity?
I am just a person with a lowly Economics undergraduate major. Please don't throw out human logic in favor of attractive data rather than truthful or predictive data.
Practically all of the major investment banks are publicly listed. You have a treasure trove of verifiable historical data which is beautifully organized for you.
There are also many similar problems with, for example, the # of years since founding date. What's the hypothesis you expect to find? (In fact, what do you consider a founding date of an investment bank -- be careful with firms like BAML, Barclays, JPM Chase, and others who have growth their investment banks via M&A)
I'm sincerely curious as to what "trajectory" means in your context. Do you mean predicting which banks will grow faster or slower in the future, and by which metrics?
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