
Pinterest Raises $225 Million at $3.8 Billion Valuation - mikegreenspan
http://allthingsd.com/20131023/pinterest-does-another-massive-funding-225-million-at-3-8-billion-valuation/
======
parfe
The 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.

~~~
brymaster
> A forum full of men not understanding how a $3.8 billion company is
> successful.

I guess that begs the question: how is a web app that reposts content that
doesn't belong to them and with zero revenue a "$3.8 billion company" again? I
won't accept any answer from an investor or web "entrepreneur" type that has
everything to gain from cashing in. The real lesson here is speculation and
shortsightedness never changes and this is 1999 all over again.

Looking forward to the coming IPOs of Pinterest, Snapchat, Rap Genius!

~~~
webwright
You should do some google digging on early Facebook, Twitter, and Amazon
commentary. Granted, Facebook and Twitter don't have Google-level revenues,
but early commentary about them was pretty much "they CAN'T make money on a
social product". Facebook made over 4 _billion_ dollars in 2011. Amazon's
first years had some great commentary as well.

It turns out that EVERY SINGLE TIME someone builds a product that zillions of
people love in an enduring way, they are able to hire world-class value-
extraction experts who can make zillions of dollars.

Pinterest has the extra advantage of intent-- shoppers pinning products that
they want/love gives Pinterest a lot more power to advertise cleverly than
Facebook/Twitter. Unsure about Snapchat and RapGenius, but the key question is
"With that audience and that growth, what could the smartest people in the
industry turn them into if they were armed with functionally infinite spending
money?"

~~~
brymaster
> "With that audience and that growth, what could the smartest people in the
> industry turn them into if they were armed with functionally infinite
> spending money?"

Ad-ridden, privacy-destroying malware I'd imagine. Since that's all the
"smartest people" in the biz are working on: getting people to click ads and
subverting the web.

The Facebook Jr's out there won't like to hear it but that's the cold truth.

~~~
webwright
"Ad-ridden, privacy-destroying malware"

I was commenting on the revenue potential, not the ethics or quality of the
product at the end of the process.

That said, I still love Google Search-- it's nigh magical how it shortens the
distance between my brain and the answers it craves at any given moment. And I
still watch youtube (yet another service that some said would never make
money), even with the ads. And I still use Facebook to stay connected with
friends while I travel the world for the next 6 months or so. I don't see any
(present or future) privacy consequences with these services, and the ads
hover right around the "tolerable" range.

~~~
brymaster
No privacy consequences with Facebook? I don't think that sounds right.
They've been hell-bent on destroying the term since conception which isn't
good for most users not mindful of that.

~~~
webwright
What are the _consequences_ , though? Yes, they have a lot of data about me.
What can they do with it that damages me? And even if we can imagine something
that benefits them at my expense, every news outlet DREAMS of publishing a
"Facebook ruins user's life with privacy invasion" story. Doesn't take many of
those for wholesale evacuation of Facebook, does it?

~~~
brymaster
> What can they do with it that damages me?

You can take your pick here and see what's most important to you:
[http://pleasedeletefacebook.com/](http://pleasedeletefacebook.com/)

The consequences range from enabling the surveillance state, data theft, NSA
slurping, job loss, employer intrusion, bullying, lowering of credit scores,
depression, stalking, jail.

These are some interesting ones to name a few:

[http://www.npr.org/blogs/alltechconsidered/2013/07/03/198129...](http://www.npr.org/blogs/alltechconsidered/2013/07/03/198129617/teen-
jailed-for-facebook-comment-reportedly-beat-up-behind-bars)

[http://money.cnn.com/2013/08/26/technology/social/facebook-c...](http://money.cnn.com/2013/08/26/technology/social/facebook-
credit-score/)

[http://www.schneier.com/blog/archives/2013/06/finding_sociop...](http://www.schneier.com/blog/archives/2013/06/finding_sociopa.html)

[http://yro.slashdot.org/story/12/07/13/1247257/facebook-
scan...](http://yro.slashdot.org/story/12/07/13/1247257/facebook-scans-chats-
and-posts-for-criminal-activity)

> Doesn't take many of those for wholesale evacuation of Facebook, does it?

Sadly, I wouldn't bet on it.

------
mbesto
In 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/Wom...](http://www.zatchels.com/press/wp-
content/uploads/2013/03/Woman-Magazine-_-Feb-28th-_-Feature-762x1024.jpg)

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
While 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
We'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.

~~~
larrys
"...to the studs"

Even though I would have wanted a new kitchen as well I would have negotiated
with my wife to allow me to spend some of the money from selling my company
(you know what I'm referring to) on a fast car or other similar toy while she
was distracted with the joy of the new kitchen. And before the bathroom is
torn up down to the studs.

~~~
tptacek
We both enjoy cooking more than we enjoy fast cars. Also, I did the fast car
thing after the last sale I was a part of; never again.

~~~
larrys
I had a fast car sold it and bought another when they re-did the model.

That said it provides no where near the enjoyment that playing with computers
does or negotiation (which is fun and a game for me). Both I never get tired
of. Had a boat for years but I would get bored if I used it more than every
week or two. (Sold that). I'm renting out a vacation place since I only used
it twice over the summer. Same thing tired of it at this point.

I get more thrill out of writing a shell script that automates something than
from driving the car.

But people who see the car (especially younger guys on the way up) think it's
the greatest thing in the world.

The best I can do with it on the local road is say hang at 15mph and take it
to 75 which gives perhaps 2 to 2.5 seconds of thrill. (Not going to go from a
dead start and burn the clutch or wear tires or anything). Once at 75 you are
done. I could take it to a track but that is miles away and well I don't want
to put to many miles on the car.

Come to think of it cooking is more fun as well.

~~~
tptacek
I enjoyed the hell out my car the year I bought it, but then every other year,
all I could think about was how much better successive years models were; it
was unhealthy.

~~~
encoderer
Reminds me of a convo with one of my very best friends..

Him: "You live in San Francisco. What do you need a car for?"

Me: "Loving, mostly."

I get more enjoyment out of having and caring for and loving the car than
driving it. But that sort of love does diminish when I start to covet other
models or newer model years.

------
brianstorms
This 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.

------
wting
I 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/)

~~~
britta
Heh, 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
Did 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.

~~~
britta
I usually go back to Pinterest to find the specific thing, and sometimes I'm
directly browsing through my pins while trying to think of a gift. But it's a
leaky system of course; for example, sometimes I've pinned a Flickr photo of
the thing instead of an image linked to a website that sells the thing.

------
aresant
Pinterest 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-...](https://blog.shareaholic.com/social-media-traffic-
trends-10-2013/)

~~~
cylinder
How do you make money with social referrals?

~~~
samstave
Well, they "made" $225 million with them so far ;)

~~~
acchow
Pinterest hasn't really tried to monetize at all, yet... Wher is this $225
million figure from?

~~~
picklepete
See the title of this post, the $225 million they raised.

------
DigitalSea
I 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
I'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
Then 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.

------
null_ptr
I'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.

------
miguelrochefort
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
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.

~~~
jacques_chester
Zynga had amazing metrics too.

~~~
samstave
People tire of games, people do not tire of spending on desires.

~~~
Mikeb85
Especially of the poor rip offs and time sinks that Zynga produced...

------
yeukhon
For 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.

~~~
bdegman
I'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/)

------
interstitial
Perhaps 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.

------
brianbreslin
How has Pinterest user growth been? Engagement?

My sister loves it, I however could never get into it.

~~~
mikegreenspan
"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-...](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)

------
acchow
Stunning. 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
I'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.

------
kyro
Woah, 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.

------
beedogs
Do investors let their teenage daughters decide where funding goes or
something?

------
Mikeb85
Dunno, 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
So 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?

