Haven’t heard as much about Pinterest lately? There’s a reason for that.
Cofounded by Ben Silbermann, Evan Sharp and Paul Sciarra as a visual way for users to search and bookmark items and ideas people like on the web, Pinterest became a pop culture phenomenon in 2012. Celebrities including Ryan Seacrest, Yoko Ono, top designer Michael Kors and Marie Claire creative director Nina Garcia swore by it, and many new users flocked to Pinterest, “pinning” items to virtual collections as a way to help visualize their ideal wardrobe, home or wedding. Indeed, Pinterest’s simple site aesthetic, where items filled the browser in a beautiful, minimalistic grid, became the inspiration for countless web sites, including the now-defunct e-commerce startup Fab.com.
The media pegged Pinterest then as being in a three-way race for users with Facebook (FB) and Twitter (TWTR). But while Facebook and Twitter continually made (and make) news — the former for forward-thinking products, the latter for management shake-ups and acquisition rumors — Pinterest over the last two years lay low in comparison, despite recent news that Pinterest hit 150 million monthly users and brought onboard former Twitter vice president of finance Todd Morgenfeld to serve as its chief financial officer.
Chalk that up at least in part to Pinterest’s co-founders, who have been frequently described by the press in different ways as quiet introverts who prefer being “heads-down” on products, as Silicon Valley folks like say, rather than making splashy headlines.
“The cofounders are Type B personalities,” explained Omar Akhtar, managing editor and analyst for the San Francisco-based research firm Altimeter Group. “Look at Facebook and Twitter. They’re led by very ferocious go-getter types. So I think leadership style might well play a part into it.”
Indeed, you can probably trace Pinterest’s heads-down philosophy to 2014, when the company became more serious about revenues. The startup had raised well over $700 million in venture-backed capital and shifted its focus to making money.
It introduced a slew of new features over the next 18 months focused on attracting brands, including Buyable Pins, which lets users buy items from retailers such as Macy’s, Neiman Marcus and Nordstrom (JWN) right off Pinterest’s site or app, as well as paid video ads called Cinematic Pins from businesses including The Gap (GPS), L’Oreal, Target (TGT), Visa (V) and Wendy’s.
Crediting unnamed sources, The Wall Street Journal reported this month Pinterest generated $100 million in revenues in 2015 and expects to triple revenues in 2016. While that falls short of the company’s earlier internal projections, based on leaked documents TechCrunch obtained in October 2015, it points to significant progress.
The same can be said of user growth. According to comScore, a third-party media measurement and analytics service, Pinterest saw its user base rise 25% to 98 million monthly users from August 2015 to August 2016 in the US alone. Pinterest reports it is also seeing healthy growth among male users — 40% of all new users are men — and 80 million Pinterest users now are based abroad.
Part of Pinterest’s transition to become a bonafide business involved shedding the public’s perception of it being a social network.
“When we talk to people about Pinterest, we often describe it as not a social network,” Silbermann told The Guardian this January.
Silbermann has a point, agrees Aktar.
“If you look at Pinterest, it was never a peer-to-peer conversation platform the way Facebook and Twitter are,” Aktar told Yahoo Finance. “It was always about the commercial aspect.”
Indeed, users don’t use Pinterest primarily to communicate with others. They use Pinterest primarily to generate ideas for themselves, whether it’s a virtual collection of what they want in their winter wardrobe or their ideal dream cars.
If Pinterest can successfully capitalize on users’ materialistic dreams and ambitions — the driving force behind hiring Morgenfeld as CFO recently — it may yet justify its $11 billion valuation and set itself up well for the ultimate goal every startup strives for: the long-anticipated IPO.
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