Why Pinterest Is Frozen Yogurt, And Not Ice Cream
"$138 million is not a lot of money." Yep, I said that. In a fit of frustration. Publicly. On video.
You see, an audience member asked a question at the tail end of our panel at last month's Social Media Insider Summit. A question that presupposed Pinterest was overvalued and overfunded at $138 million in funding.
Thus: "$138 million is not a lot of money." (Jump to the 21st minute to see my fit. I appear pretty calm, but I'm actually stewing inside. Oh, yeah, and I’m the one in the striped shirt.)
Mind you, I'd be doing an Irish jig for a week straight if I won that in the lottery. But, it's just not a lot of funding. Let's look at the numbers and check out some funding from just the last month alone.
- Quirky: Brought their funding to $91.3 million. Nearly $100 mil. You know why? They help people build and sell stuff.
- Flipkart: This month grabbed another $150 million, for a total of $180 million in funding. Guess what. They sell stuff.
- BestSecret.com: In the last 30 days, they raised $248 million. Do I even need to say it? They sell stuff.
You see, it’s a lot easier for a company to recoup money for its investors if the company can actually sell stuff. You can make more money selling stuff to consumers than you do selling advertising to marketers. Ask the newspaper and magazine industries.
So, just because WE think of Pinterest as a social media platform (which it is, since it definitely heavily employs social engineering), that doesn’t mean Pinterest’s investors and leadership base their financials on the same thing.
It’s kind of like getting my kid to eat yogurt instead of ice cream at the end of the night: We make the yogurt look like ice cream by freezing it, we call it ice cream, and he’s happy as a clam because he’s getting to eat ice cream.
Pinterest is yogurt. Everyone just looks at it like ice cream because it’s more fun that way.
The problem is, as individuals, we can't just look at these social properties as "marketers." We also have to look at them as "businesspeople." Social properties aren't just publishers for marketers to advertise on. They can be subscription opportunities (LinkedIn), ecommerce engines (Pinterest) and, yes, content publishers (Facebook and Twitter).
But once we accept that, we have to accept something even scarier: Pinterest probably doesn’t need us marketers. If it can score with ecommerce, it doesn't need advertising.
That means we have to work a lot harder to “participate” in the community, not just do marketing. And participating is a lot more difficult. It takes more thought. More planning. More dialogue. Most important, it takes being honest about who your company is. Otherwise, you are going to be called out as a sham.
Take a look at the Pinterest presence of Victoria’s Secret, Benjamin Moore Paints, Williams-Sonoma, and Tea of a Kind*-- all completely different types of businesses, but they all provide inspiration, insight and the company soul through their Pins.
And that’s because they’re embracing the yogurt and participating in the community
*Disclosure: This last company is a client, but I honestly DO love what it is doing on Pinterest. I will say that I looked at a TON of companies on Pinterest and there are very few doing a good job.