who-owns-pinterest

Who Owns Pinterest?

Pinterest’s top shareholder is co-founder and executive chairman Benjamin Silbermann, followed by the other co-founders Paul Sciarra and Evan Sharp. Top institutional investors comprise The Vanguard Group and T. Rowe Price.

By 2022, Pinterest generated $2.8 billion in revenue.

pinterest-revenue
Steady revenue growth from 2017 to 2022, with an increase in total revenue each year 2017 to 2018: 60% growth, increasing from $0.472 billion to $0.755 billion 2018 to 2019: 51% growth, rising from $0.755 billion to $1.14 billion 2019 to 2020: 48% growth, expanding from $1.14 billion to $1.69 billion 2020 to 2021: 53% growth, climbing from $1.69 billion to $2.58 billion 2021 to 2022: 8.5% growth, reaching $2.8 billion in 2022, with a slower growth rate compared to previous years.

The company had 3,987 employees in 2022.

pinterest-employees
2019: 2,217 employees 2020: 2,545 employees, representing a 15% increase from 2019 2021: 3,225 employees, a 27% increase from 2020 2022: 3,987 employees, showing a 24% increase from 2021

And it reached 450 million monthly active users.

pinterest-mau

Its average revenue per user in the US (which is the most valuable geography for Pinterest) was $7.6.

pinterest-arpu

For some context, in the same period, Facebook’s ARPU in the US & Canada was over $58.

facebook-arpu
The ARPU, or average revenue per user, is a key metric to track the success of Facebook – now Meta – family of products. For instance, by the end of 2022, Meta’s ARPU worldwide was $10.86. While in US & Canada, it was $58.77; in Europe, it was $17.29; in Asia, $4.61 and in the rest of the world, it was $3.52.

Early days

Silbermann came from a family of doctors and felt destined to become one himself, but as a child, he idolized entrepreneurs such as Walt Disney and Steve Jobs. In addition to his passion for visionaries, Silbermann had also been an avid bug collector as a child and thought that “the things you collect say so much about who you are.

In early adulthood, Silbermann landed a job at Google in customer support because he was “more excited than the previous applicant” and, once there, was inspired by the company’s audacity to thinkat a really big scale.

He later worked on the design and development of Google’s display ads, but with no engineering qualifications, he was prevented from building his own products in the company’s much-vaunted “20% time”.  

After encouragement from his girlfriend, Silbermann quit Google to pursue his own interests.

Tote

Sometime in 2009, Silbermann teamed up with college friend Paul Sciarra to develop Tote. The phone-based app intended to replace paper catalogs with digital versions and enable consumers to save items, browse apparel, and receive push notifications from around 30 different retailers.

After enduring countless rejections, the pair eventually secured funding from an investor. But Tote would ultimately fail for two main reasons. The first was that the app was ahead of its time since eCommerce was not yet mainstream. The second, related reason was that the App store did not provide support for cloud-based app companies.

Despite Tote not working out, Silbermann and Sciarra observed that users browsed for products and then saved them using the app’s Favorite function. Many were also discovering new products and sending images of the products to themselves.

Based on user data from the platform, the pair started work on a new prototype. One of the core concepts was the idea of buckets, where users could organize their collection of saved images.

Pinterest is born

While Silbermann was visiting a friend in New York, he met Evan Sharp through a friend of a friend. The pair immediately bonded over their love of the internet, with Silbermann also of the opinion that Sharp was the only person who understood his vision for Pinterest.

The now trio built a rudimentary version of Pinterest in a small Manhattan apartment, with Sharp credited as inventing the platform’s grid layout while also carrying out much of the early coding and design work.

In March 2010, a prototype was sent via email to around 200 family and friends. Around 50% opened the email and started to use the app in the way its creators had hoped. 

Over time, the launch transitioned into an open beta format where others could access the platform with an invite from someone else.

Growth

When Pinterest passed 5,000 users, Silbermann made a point to personally contact each one of them. When the platform passed 10,000 members after just nine months, the company once more took the opportunity to quiz users about their overall experience. 

Silbermann’s attention to detail and obsession with every aspect of Pinterest’s design helped him navigate a difficult first year in business. Most social media users of the time were more interested in news feeds than they were grid layouts, while others did not understand the concept of pinboards in any case.

However, an inflection point was reached in mid-2010 when a user started the Pin It Forward campaign. The campaign encouraged bloggers to exchange pinboards about what home meant to them, and soon, people started using Pinterest in ways the founders had not envisioned. 

For example, one user created a board entitled “Things That Look Like the Deathstar” while another created a guide for tourists visiting London.

An iPad app and Pinterest Mobile for non-iPhone users was released in 2011, with growth thereafter seeing Pinterest enter the top 10 largest social network services with 11 million weekly visitors.

First revenue and IPO

Pinterest generated its first revenue in 2014 after it launched a system where businesses could advertise their products to users. By 2016, there were 150 million monthly active users with 80 million of those outside the United States. 

The company confidentially lodged the paperwork for an IPO in February 2019, with its stock market debut coming on April 18. Pinterest was soon valued at almost $14 billion, which made Silbermann a billionaire and many others very wealthy. 

Key takeaways:

  • Pinterest is a social media service that enables users to save and discover information from the internet. The company was founded in December 2009 by former Facebook product designer Evan Sharp together with Paul Sciarra and Ben Silbermann.
  • Silbermann was born into a family of doctors but always had a passion for collecting and the internet. He started the failure venture Tote with friend Paul Sciarra before the pair were joined by Evan Sharp. 
  • The now trio built a rudimentary version of Pinterest in a small Manhattan apartment, with a closed beta launch to 200 friends and family mildly successful. Once in the public domain, however, Pinterest grew rapidly as users adapted the platform for their own purposes.

Connected Business Models

Pinterest Business Model

pinterest-business-model
Pinterest makes money by selling advertising for marketers and companies that can gain visibility for their brands and more sales for their shops. In 2022, Pinterest generated $2.8 billion in advertising revenue, with 450 million monthly active users and a net loss of $96 million.  

Instagram Business Model

instagram-business-model
Instagram makes money via visual advertising. Acquired by Facebook for a billion-dollar in 2012, today, Instagram is integrated into the overall Facebook (now rebranded as Meta) business strategy. In 2018, Instagram founders Kevin Systrom and Mike Krieger left the company as Facebook pushed toward tighter integration of the two platforms. In 2022, Instagram is the most successful product still, in Meta’s portfolio.

TikTok Business Model

tiktok-business-model
TikTok makes money through advertising. It is estimated that ByteDance, its owner, made $51 billion in 2021 in revenues. TikTok instead generated $11 billion in advertising in 2022, 3.3 billion downloads, and 1.2 billion monthly active users in 2021. TikTok, therefore, is a multi-billion company worth anywhere between $100 and-150 billion and among the most valuable social media platforms on earth.

Spotify Business Model

spotify-business-model
Spotify is a two-sided marketplace where artists and music fans engage. Spotify has a free ad-supported service and a paid membership. Founded in 2008 with the belief that music should be universally accessible, it generated €11.7 billion in 2022. Of these revenues, 87.4% or €10.25 billion came from premium memberships, while over 12.6% or €1.47 billion came from ad-supported members. By 2022, Spotify had 489 million users, of which 205 million premium members and 295 million ad-supported users.

WhatsApp Business Model

how-does-whatsapp-make-money
Founded in 2009 by Brian Acton, Jan Koum WhatsApp is a messaging app acquired by Facebook in 2014 for $19B. In 2018 WhatsApp rolled out customers’ interaction services, starting to make money on slow responses from companies. And Facebook also announced conversations on WhatsApp prompted by Facebook Ads.

Reddit Business Model

how-does-reddit-make-money
Reddit is a social news and discussion website that also rates web content. The platform was created in 2005 after founders Alexis Ohanian and Steve Huffman met venture capitalist Paul Graham and pitched the company as the “front page of the internet.” Reddit makes money primarily via advertising. It also offers premium membership plans.

Twitter Business Model

how-does-twitter-make-money
Twitter makes money in two ways: advertising and data licensing. In 2021, Twitter generated $4.5 billion from advertising and $570 million from data licensing. While Twitter generated $5 billion in total revenues, it lost 221 million.

Telegram Business Model

telegram-business-model
Telegram is a messaging app emphasizing privacy and encryption, launched in 2013. It doesn’t make money yet, while it raised over $1.7 billion in Initial Coin Offerings throughout 2018, halted by the SEC in 2019. Telegram wants to keep the app 100% free while trying to sustain its growth.

Snapchat Business Model

snapchat-business-model
Snapchat is a camera company which business model moves across three industries: social media, content marketing, and AR. Snapchat generates most of its revenue from several ad formats (AR Ads, Snap Ads, Sponsored Geolifters, and Sponsored Lenses). The company also produces Spectacles, a set of AR glasses enabling content creators to produce interactive experiences through Snapchat. 

Facebook Business Model

facebook-business-model
Facebook, the main product of Meta is an attention merchant. As such, its algorithms condense the attention of over 2.91 billion monthly active users as of June 2021. Meta generated $117.9 billion in revenues, in 2021, of which $114.9 billion from advertising (97.4% of the total revenues) and over $2.2 billion from Reality Labs (the augmented and virtual reality products arm). 

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