Case Pinterest: Revolutionizing The Web-Again

21 Jul Case Pinterest: Revolutionizing The Web-Again

Company Case Pinterest: Revolutionizing the Web—Again

Ben Silbermann runs ragged. And it isn’t because the 31-yearold

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+, You-

Tube, 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 freeassociative

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 predominate 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, Pinterest gives the feel of a collection designed by an individual

to reflect 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 everchanging

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, Nestle, 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.

Questions for Discussion

17-18 Analyze the forces in the marketing environment that have contributed to Pinterest’s explosion in popularity.

17-19 Why has Pinterest demonstrated such a high influence on consumers’ decisions to purchase products?

17-20 Discuss ways that companies can use Pinterest to build their own brands and generate sales.

17-21 What threats does Pinterest face in the future? Give recommendations for dealing with those threats.