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I 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

I 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 ago
Pinterest 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 ago
  I 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 ago
  So how much are they making?
  - namenotrequired 13y ago
    They only very recently started monetizing so that's not an accurate proxy of value at all at this point.
    - samstave 13y ago
      I'm still interested in how much
    - yeukhon 13y ago
      I 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 ago
  Zynga had amazing metrics too.
  - samstave 13y ago
    People tire of games, people do not tire of spending on desires.
    - Mikeb85 13y ago
      Especially of the poor rip offs and time sinks that Zynga produced...
brianchu 13y ago
At 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 ago
  The 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 ago
  I 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 ago
    I 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 ago
    Insane metrics? They might have a lot of shares but only 50 millions monthly active users ...
OnyeaboAduba 13y ago
As 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 ago
  Don'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 ago
    And I'm sure any 12 year old can write twitter in a weekend.
    - miguelrochefort 13y ago
      No. But any decent programmer could (scaling aside of course).
  - samstave 13y ago
    You suffer from hubris.
Segmentation 13y ago
My 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 ago
  But 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 ago
    And 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 ago
  This 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 ago
    They 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 ago
    It'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 ago
Pinterest 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 ago
  You 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 ago
    I 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 ago
    I 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.

jmduke 13y ago

Pinterest 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 ago
I 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 ago
So how much are they making?
- namenotrequired 13y ago
  They only very recently started monetizing so that's not an accurate proxy of value at all at this point.
  - samstave 13y ago
    I'm still interested in how much
  - yeukhon 13y ago
    I 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 ago
Zynga had amazing metrics too.
- samstave 13y ago
  People tire of games, people do not tire of spending on desires.
  - Mikeb85 13y ago
    Especially of the poor rip offs and time sinks that Zynga produced...

brianchu 13y ago

At 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 ago
The 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 ago
I 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 ago
  I 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 ago
  Insane metrics? They might have a lot of shares but only 50 millions monthly active users ...

OnyeaboAduba 13y ago

As 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 ago
Don'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 ago
  And I'm sure any 12 year old can write twitter in a weekend.
  - miguelrochefort 13y ago
    No. But any decent programmer could (scaling aside of course).
- samstave 13y ago
  You suffer from hubris.

Segmentation 13y ago

My 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 ago
But 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 ago
  And 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 ago
This 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 ago
  They 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 ago
  It'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 ago

Pinterest 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 ago
You 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 ago
  I 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 ago
  I 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.