Pinterest: Building the taste graph

If you ask people to categorize these four companies: Facebook/Meta, Twitter, Snapchat, and Pinterest in a single industry, many may be tempted to say these are all social media companies. However, Pinterest claims itself to be an “anti-social media” platform. Early users of Pinterest used to describe it this way: “With social networks, it’s them-time. With Pinterest it’s me-time.”

This 2016 piece perhaps summed up the divergence between Pinterest and the rest of social media companies perfectly: “Pinterest is not as shouty as Twitter, as instant as Instagram or as sexy as Snapchat, but acts like a glossy magazine with childcare advice and lovely helpful people in it.”

This “glossy magazine”, filled with your visual taste graph, is less about wasting time scrolling mindlessly, and aims to be a productivity tool for planning your dreams. Ben Silbermann, CEO and the only founder (of the three co-founders) still at the company, likes to remind the saying “a picture is worth thousand words”, and highlights his height of ambition: “what Google really did is make information retrieval incredibly fast, easy and universal. We want to do for discovery what they want to do for search.”

While Pinterest use cases may be very different from social media companies’, they all do have one thing in common: they all mostly make money by selling ads. Silbermann also has a catchy line in this regard; unlike other social media companies, he thinks “people go to Pinterest to look for ads.”

Here’s the outline for this month’s deep dive:

Section 1 The Pinterest Story: Thanks to Acquired and 20 VC podcasts, I summarized the journey of Pinterest from its very early days to IPO.

Section 2 Understanding the Product Given ~80-90% MBI Deep Dives’ subscribers are men and supermajority of PINS users are women, I showed you the ins and outs of the product, shared my experience as a re-activated user, and helped you familiarize with PINS’ advertising platform.

Section 3 Sizing the potential Monthly Active Users (MAUs): I dug into PINS’ potential MAU by geography and what it means for the runway of the PINS’ user base in the next 5-10 years.

Section 4 Monetization/ARPU potential of PINS: A potentially long growth trajectory for ARPU potential is the bedrock of the bull thesis. I point out the challenges in the bull thesis in this section.

Section 5 Valuation and model assumptions: Model/implied expectations are discussed here.

Section 6 Management and culture: I briefly discussed Pinterest’s management and their culture.

Section 7 Final Words: Concluding remarks on Pinterest, and disclosure of my overall portfolio.