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Pinterest Raises $225 Million at $3.8 Billion Valuation
- miguelrochefort 13y agoI smell a bubble. They're not nearly worth any of this. Their service is trivial, and can't scale. They have a great user base, but I can't imagine them moving in the right direction. At the moment, it looks like a glorified wishlist. At one point, the paradox of choice will kick in, and they'll realize that too much (without proper curation) is as bad as not enough. I hope they will do the right thing (it's quite obvious what they should do), but I predict that they won't. They'll miss the big picture, focus on scaling in quantity (not quality), and burn through their money in no time. That's what happen to startups that think they have won. But that's just my prediction. We will see what will happen.
- jmduke 13y agoPinterest engagement metrics are (at least as of six months or so ago) higher than those of Facebook, Twitter, and Tumblr, and users have much more clearly defined levels of purchase intent. In a world where Tumblr and Instagram hit star-studded exits, I would be incredibly surprised to see Pinterest fail.
- recuter 13y agoI agree, its actually the only one on that list that doesn't suffer from underwear gnome syndrome in my opinion. (Yes, I know Facebook makes money but I claim that emperor is naked and on the way out) Its probably not a coincidence that its also the only one that you can derive value from as a user without engaging in "social" mode. I bet Amazon will scoop them up like they did Goodreads - same sort of thing, much bigger niche.
- yeukhon 13y agoSo how much are they making?
- namenotrequired 13y agoThey only very recently started monetizing so that's not an accurate proxy of value at all at this point.
- samstave 13y agoI'm still interested in how much
- yeukhon 13y agoI guess it would be helpful to know the number regardless. Revenue as in gross, or at least the number of paid subscribers. But I think if they were able pull in this new round of funding, they must have some good number of sells lately. There are a lot of websites with a lot of users but they die quickly too.
- jacques_chester 13y agoZynga had amazing metrics too.
- brianchu 13y agoAt several Startup School talks, Ron Conway, probably the most successful angel investor in SV, has frequently said "you never argue with metrics." In a talk at Startup School 2012, he said that he "didn't get" Facebook, but he invested (I think it was the round after Peter Thiel's investment, so very early) after seeing the metrics, "way up and to the right." Somewhat similarly, USV has a well-known blog post detailing how they really liked the Airbnb team, but they "didn't get" the idea, missing out from investing at the seed stage in a multi-billion dollar company. There is a reason that metrics (growth) and/or a stellar team are commonly cited by investors as being more important than (getting) the idea. Notwithstanding that Pinterest is a great idea.
- 7Figures2Commas 13y agoThe only metric investors need to "get" today is the size of the Fed's balance sheet. The money coming in to Pinterest at a $3.8 billion valuation is no different than the money that flowed in to Twitter in its round G financing.
- wellboy 13y agoI don't understand why one would not invest in a startup with insane metrics? What is there to not understand? Has it ever worked out badly when an invesor invested in a startup with insane metrics?
- wikwocket 13y agoI am sure many investors look to invest in companies that they understand, so they can leverage any expertise they have to evaluate why this startup is the special snowflake that will make a gazillion dollars. If a startup has insane metrics but you don't "understand" their secret sauce, it may still be a sound investment, but I imagine you'd ask yourself if it was too good to be true, or due to temporary conditions, or rigged data, or something else, since you lack the expertise to understand why the numbers are so good.
- flavien_bessede 13y agoInsane metrics? They might have a lot of shares but only 50 millions monthly active users ...
- OnyeaboAduba 13y agoAs an infrequent Pinterest user I see the value in it. The service in my opinion has the chance to become huge in the online e-commerce referral/purchase space. I can see your train of thinking by calling it a "glorified wishlist" but I think its bigger than that Pinterest becoming the ultimate place to window shop and given human nature that will always be something valuable
- miguelrochefort 13y agoDon't get me wrong, I frequently use Pinterest. But to say that Pinterest is a novel and future-resistant shopping interface is foolish. We can do much better than this. It reeks the web 2.0, where content has no meaning. Links, captions and pictures? Come on, any 12 year old has the ability to produce a better system than that.
- nemothekid 13y agoAnd I'm sure any 12 year old can write twitter in a weekend.
- miguelrochefort 13y agoNo. But any decent programmer could (scaling aside of course).
- samstave 13y agoYou suffer from hubris.
- Segmentation 13y agoMy sister described pinterest as "Reddit for women". I don't expect most of us to understand its value as we're not the target demographic. Curation is done like subreddits. People have their own pinterest boards. Like Reddit, only the front page is nonsense, but if you have a specific interest, you can find a subreddit/board for it.
- triplesec 13y agoBut reddit is for women too! It's ironic that though we wish to be hte same, because of [insert favourite media / social theory here] our cultures still inherently split the sexes into two ery differently-interested genders, even though our geek-rationality-wish-world likes to wish that men women be just as broadly interested in everything. I'm curious to see how this might be different in 100 years time. I suspect we'll learn a lot about the actual factors concerning genders' similarity and differences through research through places like Pinterest. But yes, pinterest to me is so... ugh!
- w4 13y agoAnd Pinterest is for men! I say this as a guy who "gets" Pinterest, and uses it all the time. There's just so much pretty to browse... Basically I use it like NotCot on steroids.
- DigitalSea 13y ago@miguelrochefort, It's all too easy to dismiss a service of which you are obviously not the target market. How can you honestly say Pinterest aren't worth what investors think they are? Did you see those engagement metrics? Facebook which is arguably the most active social network currently in existence has nowhere near the level of engagement Pinterest does. The strong purchasing intent coupled with invaluable data that companies would be clamouring for on what consumers like and what they don't is MASSIVE. Pinterest needs to exploit and utilise their massive trove of data and continue growing it and I think they'll eventually beat out Facebook. People were once proclaiming that Twitter was a fad too, look them now...
- goronbjorn 13y ago> Their service is trivial, and can't scale. Google in 1998: "Their service is trivial, and can't scale." Linkedin in 2003: "Their service is trivial, and can't scale." Facebook in 2004: "Their service is trivial, and can't scale." Twitter in 2007: "Their service is trivial, and can't scale."
- deleted 13y ago[deleted]
- dxhdr 13y agoThis is a great example of survivor bias. Just because you can list a handful of high-profile successes by no means discounts the arguments against Pinterest. I can give you an equally invalid example of failure bias: Groupon, Friendster, Myspace, Digg, Zynga, etc
- selectstar 13y agoThey were not faliures of business per se. Friendster failed because users migrated, ditto Myspace, Bebo and whatever else. Even Diggs downfall could be partially attributed to the ready made life boat of Reddit.
- goronbjorn 13y agoIt's got nothing to do with survivor bias, it's just logic. The original commenter is effectively saying 'if A, therefore B'. I just listed several cases of 'A' where 'B' did not result. Therefore 'If A, therefore B' is not true.
- nostrademons 13y agoPinterest will be bigger than Facebook. That's my prediction. The reason is that there's a strong purchasing intent associated with Pinterest. Facebook has trouble monetizing because the intent is social; when you inject commercial posts into a social stream, people get turned off. Pinterest focuses around projects that people want to do, and it's very typical to need to purchase supplies for a crafting or home improvement project. They can monetize very easily without pissing off their userbase, and their total potential market size is huge. They may rival Google someday; much of Google's revenues comes from a very similar market.
- miguelrochefort 13y agoYou have a very naive understanding of economy and "revenue". Not all value comes from purchasing goods. In other words, Pinterest is a fad. However, "things" (which are a big part of Pinterest) will become the next big thing. The future "next big things" in tech/web is quite obvious: - Facebook for Things - Personal inventories - Decentralized "semantic" marketplace - Smart contracts - Task management everywhere (the future of operating systems) - The death of privacy - Cryptocurrencies - Personal democracy (filter bubble on steroid) - Universal "trust" score - The death of the government (at last) Of course, all of this is intuitive speculation. But I wouldn't be surprised to be right. Actually, it would be surprising if I were wrong.
- samstave 13y ago>- The death of privacy NSA has that market cornered!
- encoderer 13y agoI will let the "market" judge me by modding this up or down, but I for one think your opinion of your own powers of prognostication to be overrated. You make no case except "listen and behold my awesomeness."
- nostrademons 13y agoI think you're a little too taken with fads and don't pay enough attention to trends. Your list of "next big things" reads like the pop science articles on Wired and doesn't have any data from the real world to support it.
- yeukhon 13y agoFor pinterest user, why do you use it? I tried it once and thought it wasn't so helpful to me. I am always skeptical about the outlook of Pinterest but it seems like it's pretty strong with funding.
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- gdilla 13y agoI never used it until someone who I asked to decorate my apartment got me on it, and we would start pinning things we liked or find tasteful and comment on them. Then it was really handy. You could have boards for the kitchen, bedroom, artwork, etc. Really useful, especially to keep a record of things you need to buy eventually too (this is what it looks like, and heres the link). I think it's likely a great professional tool for interior decorators, designers, contractors, etc.
- rokhayakebe 13y agoWhen I am about to pay for shoes or anything clothing, or when I just want ideas for what to buy I search to find if someone has pinned or fancied them.
- bdegman 13y agoI'm a UI and motion designer. I use it for curating different types of art that I see around the internet. If I need inspiration for a project its helpful to look through some of my boards for ideas. Sometimes I'll make one-off boards for individual projects also. I've found it can be helpful for research too as just an organizational tool. For example I'm building an LED display so I've been collecting useful links or cool applications of LEDs on a board. Here's my pinterest if you're interested: https://www.pinterest.com/briandegman/ https://www.pinterest.com/briandegman/
- moneyrich4 13y agothats an absurd amount of money to host a website. give me that much $ and ill build you every website on the internet
- brianbreslin 13y agoHow has Pinterest user growth been? Engagement? My sister loves it, I however could never get into it.
- mikegreenspan 13y ago"International expansion that builds on 125% international growth since the beginning of the year" "Investment in the core Pinterest service, especially mobile which has grown 50% since the beginning of the year to become more than three-fourths of all usage" from: http://allthingsd.com/20131023/explaining-what-its-going-to-do-with-all-that-dough-pinterest-unveils-stats-on-strong-mobile-and-international-usage/?mod=atd_homepage_carousel http://allthingsd.com/20131023/explaining-what-its-going-to-...
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- acchow 13y agoStunning. Supposedly they only have 150 employees. Probably all celebrating their millions! Curious that they're raising so much after having just raised $200 million in February. What are they planning to do with all of this capital?
- mikegreenspan 13y agoI'm sure their burn rate is pretty high. Also, you always raise more than you need to when cash is cheap so you can sit pretty.
- encoderer 13y agoPerhaps just extending their runway while they see cheap capital.
- wting 13y agoI think many HN readers have a hard time relating to Pinterest because we aren't the target demographic, but from what I can find they have great metrics. The question is whether they can monetize despite lack of purchasing intent (as compared to Google, Amazon, Yelp, etc). However from some anecdotal evidence[0], it appears that growing revenue may not be as difficult for Pinterest as it is for Facebook or Twitter. I'm pretty bullish on Pinterest, and a $3.8B valuation doesn't seem out of line compared to Twitter ($20B) and Facebook (~$80B pre-IPO), Instagram ($500M). [0]: http://mashable.com/2012/03/28/pinterest-amazon-spam/ http://mashable.com/2012/03/28/pinterest-amazon-spam/
- AJ007 13y agoArguably there is a lot of purchasing intent if users are pinning things they wished they owned.
- gdilla 13y agoThe data alone must be valuable. If you were a brand and you got an idea of who pins your wares, and what else they pin, and their demo, you could really sharpen your marketing messages. You could also uncover affinities you didn't know about.
- britta 13y agoHeh, careful with that "we" - don't leave out those of us who are in the target demographic of both Hacker News and Pinterest. :) I have less purchasing intent while browsing Pinterest than I do while looking at Yelp or Amazon (or Etsy), but I spend more time on Pinterest than on shopping sites. I've bought several things I had originally pinned just because they were interesting and then later realized would make a good gift for somebody.
- dangoldin 13y agoDid you end up going back to Pinterest to find them or did you just have it in your head after pinning it? The entire attribution of a pin to a purchase in a store is tough if there's no obvious path from Pinterest to the retailer.
- mbesto 13y agoIn case anyone wants an easy way of understanding what Pinterest is and why it's so popular with women, I urge you to find one of those cheesy women's magazines (Cosmo will do) and flip through it. You will most certainly find a page that looks like this: http://www.zatchels.com/press/wp-content/uploads/2013/03/Woman-Magazine-_-Feb-28th-_-Feature-762x1024.jpg http://www.zatchels.com/press/wp-content/uploads/2013/03/Wom... Pinterest is a digital representation of exactly that page, but now anyone can be the curator (not just Cosmo) and more importantly, it has the ability to make the buying process more frictionless. You want the hat, sunglasses, and skirt? Great, just click the button and buy.
- patio11 13y agoWhile that's part of the attraction, I think to really understand Pinterest you should probably understand three use cases: why you'd curate, why you'd care about what an actual friend curated, and why you'd care about what a stranger curated. It's the interaction between these three which causes Pinterest to spread like wildfire. A bridal magazine curated by your bff is not just a bridal magazine.
- tptacek 13y agoWe're tearing our kitchen down to the studs and building a ridiculous new one. Erin's been pasting details up on Pinterest, and sharing them with some of our friends who are also interested in stuff like this; just that casual sharing has generated purchases. I think people really underestimate the impact of purchase intent, and overestimate the impact of value propositions that work with women.
- mbesto 13y agoAnd to go along with patio's thesis, would it be fair to say Erin (I assume your wife?) enjoys being the one giving the "editor tips"?
- tptacek 13y agoNo; she's not curating for friends, she's just using it as a pasteboard to collect ideas. But even without the intent to curate a collection for others to view, the purchase influence was there, and strong.
- aresant 13y agoPinterest is the fastest growing source of social referrals on the web, 3x as many as twitter.(1) Price seems high, but they are only 2nd to Facebook on one of the holy grails of marketing - social referrals - (1) https://blog.shareaholic.com/social-media-traffic-trends-10-2013/ https://blog.shareaholic.com/social-media-traffic-trends-10-...
- cylinder 13y agoHow do you make money with social referrals?
- gojomo 13y agoAdvertising: accept payments for interleaved inserts or higher-prominence of 'native' material. Works for Google, Facebook, Twitter!
- samstave 13y agoWell, they "made" $225 million with them so far ;)
- acchow 13y agoPinterest hasn't really tried to monetize at all, yet... Wher is this $225 million figure from?
- picklepete 13y agoSee the title of this post, the $225 million they raised.
- stevesearer 13y agoI'd wager that social referrals refer to affiliate fees gained through their users buying products shared on the site.
- raverbashing 13y agoYes, but really, 3.8Bi is too much 1Bi for Instagram seems excessive as well, but well, looks saner now.
- beedogs 13y agoDo investors let their teenage daughters decide where funding goes or something?
- kyro 13y agoWoah, that's big. This is Pinterest trying to dominate the market, to be the online curated catalog for women. This space has seen a lot of new players, like Fab and Wanelo. And the nature of the product lends itself to network effects that aren't nearly as sticky as FB's and Twitter's, so while they've seen incredibly massive growth, they can't rely on user lock-in to maintain it longterm. But the traction is there, the intent is there, so now they need to rev their engine to red line to dominate. Fitbit's recent round of funding comes to mind.
- null_ptr 13y agoI'm not surprised, Pinterest is the ultimate consumerist social network and thus worth a lot of money. The method of self-expression is obsessively arranging and curating shopping lists of colorful items, and sharing them with like-minded people. It doesn't take long to realize how much money there is to be made off this.
- DigitalSea 13y agoI used to think that Pinterest was a fad but that's because I had little understanding of its appeal and obviously I am not the target market but over the last few months for an article I've been writing about Pinterest being a silently growing dark horse in the social category I've come to realise it appeals to a lot of people. Amongst the fashion, make-up and hair niches Pinterest is pretty darn popular. Fashion stylists use it to create inspiration collections, make-up artists use it for helping create new looks and hairdressers especially love creating hair collections for inspiration as well. There is also another segment that Pinterest appeals to and it's massive: women. Pinterest is used by a lot of women to create wishlists and curate their own look collections. My girlfriend has an avid interest in vintage clothing & decor and the TV show Mad Men and she uses Pinterest to create outfits that match those of the TV show. But not only that, she uses it as a shopping basket/wishlist of sorts and that kind of data is surely valuable. I know for a fact she has made purchases as a result of collections she has created on Pinterest, more times than I can count and I assume many other people have as well. Many might not see the appeal in what appears to be from the outside an over-glorified image collecting service, but it's obvious it's a lot easier for Pinterest to make money in comparison to the likes of Facebook which currently struggle with monetisation. Don't underestimate Pinterest.
- ye 13y agoI've tried using Pinterest, picked the sections I was interested in, like photography. It really failed on all levels for me. It's just boring. The content is sooo mediocre.
- DigitalSea 13y agoThen you are obviously not the target market for such a site either. The fact they have the kind of engagement metrics other sites would literally kill for says something about how good their product is.
- brianstorms 13y agoThis won't go over well with the YC crowd given the forgiveness-is-better-than-permission indoctrination, but I find the scale of Pinterest's copyright infringements (users or Pinterest copying images from blogs and other sites and republishing them on Pinterest pages) to be really mind-boggling. I guess as long as it's not music or movies, both with powerful lobbies and lawyers behind them protecting their interests, still images are fair game (forget fair use) and rights-holders, often individual bloggers who took a nice photo, are at the mercy of DMCA. So Pinterest just pisses me off.
- parfe 13y agoThe number of "I don't get it." comments on this thread should be a lesson for everyone. THIS is the reason diversity in your company and social circle is important. A forum full of men not understanding how a $3.8 billion company is successful.
- bedhead 13y agoOr, no discernible repeatable method for generating income to ever justify a given valuation. Either one though...
- dangero 13y agoThis is exactly the rebuttal that was given for Facebook 2 years ago. Facebook has been hitting or besting their numbers since IPO. Yes, creating a valuation for a company that doesn't make money is going to be somewhat inaccurate, but companies that solve the chicken egg problem and gather mass have great value in the digital age. Even if you take an example of a website that failed like Myspace, they made enough revenue off ads to justify their valuation before they tanked.
- bedhead 13y agoFacebook clearly had something two years ago. In 2011 they managed to generate almost $1 billion in free cash flow on almost $4b billion in revenue...obviously there is a business model in there somewhere, even if its valuation is debatable (when isn't it?). Pinterest however, as I understand it, doesn't generate any revenue let alone any profits. It's the whole minor formality of zero freakin revenue that's the tip-off that something is hugely amiss with Pinterest as a capitalistic enterprise.
- r0h1n 13y agoThat is a great piece of advice. I'm increasingly confused about how best to understand & keep on top of what's happening in the world of social media because I personally don't use Facebook, Pinterest, Whatsapp, Snapchat, Google+ etc. At what point will my personal decision to opt out off the leading social networks (Twitter, and LinkedIn to a lesser extent, are exceptions) start affecting my professional insight into where the Internet and the bulk of its users are headed? I frankly don't know.
- Mikeb85 13y agoDunno, given how much my wife is on Pinterest checking things out, including intentionally looking for various products she may want to buy, I think Pinterest has a very bright future....
- yannisp 13y agoSo my guess is they want to do something similar to fancy.com but probably on a more massive scale? What do you spend $200M on in less than 10 months with max 150 employees?
- interstitial 13y agoPerhaps I'm the only one that finds it odd that Pintrest, Imgur, and even Facebook are filled with photos of text, or text is the dominant theme, rather than images? A meme is really the utter destruction and decent of a meaningful image into a text-based cliche. The designers of the internet have created a world so poorly usable by the average joe that billionaires are made fixing and herding stupid.