Pinterest was originally billed as a visual “catalogue of ideas”, designed to allow people to discover and share what they found on the Internet. In practice, the social platform enabled us to organise and share not just ideas, but also the products that we found.
Shopping has always been a social activity. We like to have people around us to provide feedback and to help us make future purchasing decisions. That’s why it’s relatively rare to find lone shoppers wandering around the local shopping mall. Similarly, when we visit each others’ homes, we admire what they have, and use what we see as an inspiration for our own future purchases. Ben Silbermann recognised this, and combined the idea of social shopping with an increasingly consumer-friendly Internet.
Today, Silbermann has a personal net worth of over $1.5 billion, and his company, Pinterest, is valued at $12.3 billion. Pinterest has 291 million active users, and generates more than $1.5 billion dollars in revenue per year.
Silbermann attended MIT and Yale before launching his career at Google’s online advertising group. While the experience he gained there was important, he moved on relatively quickly in pursuit of his own entrepreneurial ambitions. He, along with his friend and co-founder Paul Sciarra, began developing iPhone apps. Their first attempt, Tote, failed to gain traction, leading them to design a pinboard app in 2009.
Like Tote, Pinterest also failed to catch a significant amount of user interest. However, Silbermann reportedly felt too embarrassed to admit defeat again, and decided to continue working on it. In March 2010, the site launched as a closed beta, building up a user base of just 10,000 people within the first 9 months. In hopes of improving the app, Silbermann personally got into contact with over 5,000 of these users, going so far as to share his personal phone number, and sometimes arranging personal face-to-face meetings. In the end, his efforts paid off.
In 2011, Pinterest launched for iPad and non-Apple mobile users, and began to grow in earnest. By the end of the year, it was already one of the world’s top 10 social networks, with more than 11 million visits per week. In 2012, the social network began accepting new users without an invitation, and began to grow explosively.
A social network designed to be monetised
Pinterest isn’t just a platform for sharing products, but it certainly is a platform that’s uniquely well adapted for monetisation. Users might also share DIY projects, travel aspirations, information, recipes, and other ideas with each other, but many of these are directly related to consumer products. Sponsored pins fit seamlessly into regular product content, and other advertisements can provide products that perfectly complement other content, such as DIY projects. Unlike most other businesses, Pinterest can incorporate ads in a way that doesn’t disrupt the user’s experience, but rather adds value.
Building an optimised user base
Approximately two-thirds of Pinterest’s user base is made up of women, and more than 90 per cent of all pins are made by women. It’s unclear whether this was Silbermann and his co-founders’ intention from the start, but the business has leaned into this aspect of its business since. As it turns out, a female-dominated user base is a feature, not a bug. Studies show that women make approximately 70-80 per cent of all consumer purchasing decisions. In light of this, a platform that disproportionately appeals to female users can expect significantly more referral traffic to advertisers. Combined with the presentation of those ads, it’s no surprise that Pinterest is one of the most successful advertising platforms on the web today.
What we can learn
While Silbermann and his cofounders started with a relatively simple pinboard, the product they ultimately created optimises both the experience of users, and utility for the advertisers who provide their revenues. It’s the combination of both that has made Pinterest so successful. Silbermann didn’t just blunder into a billion-dollar idea, though.
The value of persistence
The key to achieving this success was not just blind luck, but Silbermann’s relentless effort to improve the product. Instead of expecting his original idea to make him successful, Silbermann listened and incorporated the ideas of thousands of users over the course of years. Silbermann’s willingness to reexamine and improve his app, together with his unwillingness to give up, ultimately allowed him to turn it into a household name. The difference between only moderately successful startups, and fast-growing giants like Pinterest can often be traced to something as simple as a business owner’s persistence in creating something perfect.