Company Case: Pinterest Revolutionizing The Web Again

Company Case Pinterest Revolutionizing The Webagainben Silbermann Ru

Company Case Pinterest: Revolutionizing The Web—Again Ben Silbermann runs ragged. And it isn’t because the 31-year-old husband is up before dawn every morning with his infant son. It has a lot more to do with the fact that he is the founder and CEO of Pinterest, the latest “hottest Web site on the planet.” In less than two years, Pinterest reached the milestone of 10 million unique monthly visitors—faster than any other online site in history. At that time, it was driving more traffic than Google+, YouTube, and LinkedIn combined. A year later, it reached 50 million unique monthly visitors.

So far, 70 million members have created 750 million Pinterest boards and have pinned 30 billion items. Pinterest is growing so fast that trying to quantify its success with such numbers seems pointless. Rather, the impact of this brash young start-up can be observed in more substantial ways. In fact, Pinterest seems to have accomplished the unlikely achievement of revolutionizing the Web—something that seems to happen only every few years. Like Amazon, Google, Facebook, and others before it, Pinterest has put businesses and other online sites everywhere on notice that they’d better orient themselves around its platform or be left behind.

And like other Internet revolutionists before it, Pinterest’s impact has caused even the online giants to stop and take notice. Indeed, Pinterest is changing Web design. It is also changing e-commerce. And it looks as though Pinterest has solved one of the Internet’s biggest problems—discovery. The Discovery Problem At first blush, Pinterest may seem like any other social media site, full of people sharing images and commenting on them.

Silbermann’s big idea for Pinterest came as he and college buddy Paul Sciarra struggled to make a business out of their first product, a shopping app called Tote. Although Tote failed to take off, it revealed a pent-up need among Internet users. Tote users didn’t buy things (kind of a necessity for a shopping app). But they did e-mail themselves pictures of products to view later. Silbermann—a lifetime collector of “stuff”—could identify with that.

As a boy, he had a particular fascination with collecting bugs. “I really liked insects,” he says. “All kinds: flies, grasshoppers, weevils.” He spent his youth collecting, pinning, drying, tagging—creating his own private museum of natural history. So when Silbermann and Sciarra met Pinterest’s third co-founder, Evan Sharp, the idea of digital collections—of books, clothes, or even insects—as a powerful medium for self-expression began to take shape. As the three began working on developing Pinterest, something about all-things-Internet bothered Silbermann.

Despite the seemingly infinite possibilities for exploration, expression, and creation, he felt that the Internet was organized in a way that boxed people in. For starters, the nature of “search” in any online context may seem to promote discovery, but it actually stunts it. For example, Google depends on finely tuned queries in order to yield useful results. Try to find something when you’re not quite sure what you want—say, “nice Father’s Day gift” or even “very special Father’s Day gift”—and Google isn’t really much help. The bottom line is, if you try talking to Google as you would talk to a friend or a department store clerk, it won’t know where to begin.

The belief that discovery is a problem on the Internet isn’t original to Silbermann. In fact, it’s an issue that many digital designers have struggled with since the launch of the Web but no one has been able to solve fully. Take Amazon, for example. As successful as Amazon is, its entire structure mirrors every other e-commerce site—a detailed system of menus and categories. To browse for something, users must work within this structure while at the same time being pulled in dozens of different directions by suggested items and competing products.

“You spend three hours buying a $20 toaster,” says Barry Schwartz, psychology professor and author of The Paradox of Choice. “Amazon and Google pretty much stink at browsing,” echoes Leland Rechis, director of product experience at Etsy. But Amazon and Google are not alone. The entire Internet is structured as a series of ever-more-specific menus, inconsistent with how the human mind works. Such structure inhibits the types of free-associative leaps that happen naturally as people walk through shopping malls, meander through a museum, or even drive down the street.

As Silbermann and his co-founders worked to sketch out Pinterest, the three were also intent on eliminating another limiting characteristic of online design. Other social networks are organized around “feeds”—lines of text or images organized by time. This setup lets users browse multiple images at once. The Pinterest team wanted to change this. “We were really excited about bringing something that wasn’t immediate and real time, something that wasn’t a chronological feed,” says Sharp.

They pictured a grid of images, rather than the directories, time stamps, and pagination commonly imposed by the Web. The goal for Pinterest was to create an interface that would feel more like visiting a store or a museum. As Pinterest took shape, its creators never questioned that it was to be a social network at its core. What set Pinterest apart in yet another way was Silbermann’s ability to look outside the tunnel-vision of other social media entrepreneurship. Although the current social Web is frequented by millions, most users are observers, not creators.

Thus, they take part on only one level. Not everyone is a photographer, a filmmaker, or a broadcaster. “Most people don’t have anything witty to say on Twitter or anything gripping to put on Facebook, but a lot of them are really interesting people,” Silbermann says. “They have awesome taste in books or furniture or design, but there was no way to share that.” Something Completely Different The Pinterest team’s focus on solving some of the most limiting characteristics of the Internet bore fruit. When Pinterest launched in March 2010, it was widely hailed as one of the most visually stunning online sites ever.

Silbermann, Sciarra, and Sharp worked through 50 versions of the site, painstakingly tweaking and perfecting column widths, layouts, and ways of presenting pictures. “From the beginning, we were aware that if we were going to get somebody to spend all this time putting together a collection, at the very least, the collection had to be beautiful,” Silbermann says. Pinterest’s grid is a key element of its design—interlocking images of fixed width and varying heights that rearrange every time a new image is pinned, meaning users rarely see the same home page twice. Pinterest also bucked conventional online design in other ways. At a time when “gamification” was hot, Pinterest displayed no elements of competition.

There is no leader board or any other means of identifying the most popular pinners. Pinterest also did away with page views—the predominant metric for illustrating growth and momentum. Rather, Pinterest’s “infinite scroll” automatically loads more images as the user expands the browser or scrolls downward. With almost no time spent clicking or waiting for pages to load, this feature has proven addictive for many. “When you open up Pinterest,” Silbermann says, “you should feel like you’ve walked into a building full of stuff that only you are interested in. Everything should feel handpicked for you.” Silbermann and his cohorts have obviously succeeded. Page after page reflects her or his needs, ambitions, and desires. It’s as if each person is saying, “Here are the beautiful things that make me who I am—or who I want to be.” There is no single theme to a pinboard. Pinterest is a place where young women plan their weddings, individuals create the ultimate wish list of food dishes, and couples assemble furniture sets for their new homes. Unlike other social networks, every Pinterest home page is an ever-changing collage that reflects the sum of each user’s choices.

Because Pinterest’s design has departed from Internet convention in so many ways, it’s only natural that its growth dynamics would also break from previous trends. Most successful social services spread through early adopters on the nation’s coasts, then break through to the masses. But Pinterest’s growth has been scattered throughout the heartland, driven by such unlikely cohorts as the “bloggernacle” of tech-savvy young Mormons. Additionally, nearly 83 percent of Pinterest’s users are women, most between the ages of 25 and 54—another demographic not normally associated with fast-growing social media sites. Hope for Monetization But perhaps the biggest splash that Pinterest has made in the online pool is its huge influence on consumer purchasing.

Although many dot-coms have made profits by online sales, the digital world in general still struggles with turning eyeballs into dollars. Even Facebook, although it turns a profit, prompts relatively few of its one-billion-plus members to open their wallets. But something about the combination of Pinterest’s elegant design and smart social dynamics has users shopping like mad. A Pinterest user following an image back to its source and then buying an item spends an average of $180. For Facebook users, it’s only $80. And for Twitter, it’s only $70. But Pinterest is having a much greater impact than those numbers indicate. Although Pinterest is still far from the top in terms of members and unique visits, when it comes to e-commerce referrals, Pinterest is the market leader, driving 40 percent of traffic and edging out social media dominator Facebook by 1 percent. Even more impressive, Pinterest traffic converts to a sale 22 percent more often than Facebook traffic. Companies are jumping on this opportunity.

Initially, brands could drive traffic to their own Pinterest or external sites by paying opinion leaders to pin images of their products. For example, companies pay 31-year-old Satsuki Shibuya, a designer with more than a million followers, between $150 and $1,200 per image. This method works well because, with Pinterest’s authentic feel, it’s almost impossible to tell the difference between paid pins and unpaid pins—something that can’t be said of other online sites. But recently, Pinterest has entered the world of advertising with promoted pins and is poised to make a big online advertising push. More than a dozen marketers have signed up with a $1 million to $2 million commitment, including Kraft, General Mills, Nestlé, Gap, and Expedia.

“Our target is 25- to 54-year-old women, and Pinterest is a perfect fit,” says Deanie Elsner, chief marketing officer for Kraft Foods. For Kraft, Pinterest has already been an effective way to connect with the younger half of that demographic that is typically harder to reach. “It lets them be the hero,” she said, referring to Kraft’s practice of publishing recipes on its Pinterest site. It’s little wonder then that so many other social media sites have taken note of Pinterest. Numerous copycat sites (such as Fancy and Polyvore) have mimicked Pinterest’s look and feel, right down to the font selections.

The influence of Pinterest’s design is also notable on sites such as Lady Gaga’s social network LittleMonsters.com and the question-and-answer site Quora. Even Facebook’s move to its current Timeline format is notably Pinterest-like. Despite all the ways that Pinterest has departed from the typical path of social media development, it has largely stayed the course in terms of making money. That is, it spent the first few years building its network and honing its site. This year, the company will begin generating revenue.

Silbermann and friends are still tossing other ideas around. In addition to advertising, Pinterest could also adopt a referral fee model, retaining a percentage of the sale of every item sold as the result of a pin. Pinterest has been valued at $5 billion and has had no trouble raising all the venture capital that it needs, despite having yet to earn any money. “There was never a doubt in our minds that we could make a s**tload of money,” says a former Pinterest employee. Apparently, investors feel the same way.