
Leaked Pinterest Documents Show Revenue, Growth Forecasts - prostoalex
http://techcrunch.com/2015/10/16/leaked-pinterest-documents-show-revenue-growth-forecasts/
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jedberg
It's unfortunate that potential LPs can't be trusted to keep these kinds of
things secret, because it makes it harder for founders to trust them in the
future.

As an occasional LP myself, I always consider financial documents like this
just as secret as my own bank statements and health records.

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idlewords
The clear solution is to give each LP different revenue numbers. That will
make it trivial to identify the leaker.

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jedberg
Not a bad idea, except that it's illegal. If they invest on your phony numbers
then they can sue you later for lying to them.

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brianwawok
Even if only a few cents?

What if you give everyone the same numbers in a different order? Or one
spelling mistake in each release?

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jedberg
Those other options would probably be more legal but less likely to
"propagate" to the leak.

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orthoganol
$90 million revenue run rate this year and an $11 billion valuation...

Are VCs trying to rush everything onto the public while they can, or what?
Slightly disconcerting when people say VCs aren't trying to do things like
they did in the last boom.

Yes, I really don't think you can justify a valuation like that. It all
depends on Pinterest having the popularity of Facebook in a few years, which
is an incredible lie.

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gdilla
It's all based on growth. You can't value it like an established company.

"When Twitter went public in 2013, it was valued at $24B — 12 times higher
than Times market cap. Twitter was losing money while the Times earned $133M
the same year. Why do startups have such big valuations? The answer is: cash
flow. It is different between high-growth startups and low-growth businesses.
Startups would usually be profitable in the future. Startup’s main metric is
growth."[1]

[1] [https://medium.com/@paulmillr/zero-to-one-
summary-8dbda22e15...](https://medium.com/@paulmillr/zero-to-one-
summary-8dbda22e1559)

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lmm
How're people who valued Twitter at $24B feeling about that number now?

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jgalt212
> TechCrunch has obtained documents that show Pinterest has been forecasting
> $169 million in revenue this year and $2.8 billion in annual revenue by
> 2018.

So in three years, they'll have to grow revenues by 16.5X. These sort of
outlandish growth assumptions necessary to substantiate their valuation is
exhibit A as to why the a16z valuation is extremely suspect.

Of course, 16.5X growth is doable when you are starting from a low number, but
$169MM ain't spit.

And all the being said, $169MM for 2015 is just a forecast, so if they miss on
Q4 numbers, the 16.5X assumption can easily be 20-25X.

On the plus side, their revenues per active user target of $9.34 is relatively
modest, and I think doable as FB does $4.18 per user per quarter in revenue.

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petercooper
Just some more data to support your point. Some research by Institutional
Venture Partners in 2013 showed that in companies over $150M in revenue,
around 30% revenue growth per year was the median, so 155% per year (16.5x
growth over 3 years) is _incredibly_ keen.

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gitah
The 2018 projection of $2.8 billion revenue with 329 MAU for Pinterest is
roughly what Twitter will achieve in 2016.

Twitter has a market cap of 20B vs 11B for Pinterest, so there is plenty of
upside if Pinterest hits 2018 numbers and goes public. That is assuming
Twitter's current valuation is reasonable which is debatable.

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arjunnarayan
It's not clear at all that 1 Twitter MAU = 1 Pinterest MAU. The really
hardcore Twitter users spend all day on Twitter (@pmarca comes to mind, it
seems Twitter is his full time job). I'm not sure the same is the case for
Pinterest (although this might just be my ignorance of Pinterest speaking). So
maybe Twitter gets more money out of each MAU because the users spend more
time on the site. But maybe a Pinterest MAU is worth more - I don't know.
Intuitively it feels more susceptible to "native" advertising - my little
impression of Pinterest is that it consists of lots of curated glossy photos
scrolling by of aspirational consumerist things. Seems very monetizable.

In any case, in order to apply your logic, the epistemic burden is on you to
show that a Pinterest MAU should be financially treated the same as a Twitter
MAU. I don't see that as being straightforward at all.

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pdq
Both Pinterest and Twitter are getting hammered by Instagram in popularity
over the past 2 years.

Have a look at Google Trends [1].

[1]
[https://www.google.com/trends/explore#q=instagram%2C%20twitt...](https://www.google.com/trends/explore#q=instagram%2C%20twitter%2C%20pinterest&cmpt=q&tz=Etc%2FGMT%2B5)

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onion2k
If those are navigational searches then it might indicate people don't have
the service's app installed. That's fine for Twitter and Pinterest as they're
accessible from the web, but it'd be bad for Instagram as a web search isn't
an entry point to their service.

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djcapelis
Anyone know if there's data on their expenses or is it all just a report on
one side of the profit curve?

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rwmj
What stops Pinterest being sued by the magazines/photographers whose photos
are being ripped off?

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maxerickson
The DMCA.

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free2rhyme214
Who knows what revenue numbers Pinterest will hit. Lucky for them their
competition is nil.

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eva1984
Instagram is pretty close to be their competitor.

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free2rhyme214
True but the ability to buy stuff on Pinterest is pretty cool.

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hayksaakian
Promoted Pins

anybody who's ever tried them knows that pinterest is doing very well

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pftom
Considering this revenue number, it really can't be valued at 10Billion
dollars.

