This episode of the "Acquired" podcast delves into the history and IPO of Pinterest, a company that defied typical Silicon Valley narratives of aggressive growth and instead focused on building a solid foundation and fostering a unique relationship with its user base. Ben Gilbert and David Rosenthal trace the journey of Ben Silberman, Pinterest's co-founder, from his upbringing in Des Moines, Iowa, to his early tech experiments and eventual founding of the company.
Silberman's initial venture, a website for storing medical histories, failed to gain traction, leading him to explore the burgeoning iPhone app ecosystem. Partnering with Paul Sciarra, they formed Cold Brew Labs and developed "Tote," a mobile shopping catalog app. Despite its lack of appeal and investor interest, a feature allowing users to save items for later sparked an idea.
The pivotal moment came with the introduction of Evan Sharp, an architecture grad student, who brought the crucial design element: the fluid grid layout, now synonymous with Pinterest. The team then renamed the product to Pinterest, inspired by a Dos Equis commercial. Despite a rocky start, the platform gained traction with bloggers, specifically within the women-focused design community. This early success led to angel investments and eventually a Series A round led by Bessemer Venture Partners, with Sarah Tavel championing the deal.
The podcast highlights the unconventional decisions Pinterest made early on, choosing to invest in building infrastructure and a strong company culture, especially the commitment to diversity on its engineering team. This involved hiring key executives from Facebook and prioritizing a healthy workplace environment. The company also decided that it needed to have it's team represent it's user base, so the firm doubled down on diverse recruiting as an engineering best practice.
Pinterest did have a couple of very early leaders to thank. As Dibia had worked at Facebook's HR group, she was able to help find resources for Pinterest's management.
The podcast also recounts Pinterest's foray into monetization, initially testing affiliate links before transitioning to a more controlled approach with promoted pins. Despite initial skepticism, the platform proved its ability to drive commerce.
Moving into 2015, Pinterest was a household name, a massive jump in valuations brought the company up to 11 Billion dollars.
Looking to the future, the podcast analyzes the "bull" and "bear" cases for Pinterest. The bull case emphasizes Pinterest's faster growth compared to competitors like Twitter and Snap and its clear path to profitability. Pinterest's unique position as a "discovery engine," inspiring users to take action in the real world, sets it apart from traditional social media platforms.
The bear case, however, raises concerns about competition from Instagram, which could replicate Pinterest's features and steal its market share. Also Pinterest's market is simply smaller than a market as massive as search or general social.
The podcast concludes by discussing Pinterest's IPO, which priced above the initial range but still below the last private valuation, leading to an initial pop in the market. The discussion touches on the rationale behind Pinterest's decision to go public, contrasting it with the option of a direct offering. It analyzes the success of the initial price, and how Pinterest's story contrasts to that of Lyft. The podcast concludes with the long time analysis as to what it could take for Pinterest to have a massive impact in the future.