Pinterest Is Not A Virtual PinboardJoe McCann
With all the hubbub around Pinterest lately, people have been chatting about many things from the sexy user experience to how Pinterest is not ready for tech brands. Yawn. The real story that people are missing is how Pinterest has unlocked the secret to get their users to create personal, profiled, curated storefronts.
Think about it. People, mainly women at the moment, are creating mood/story boards which mostly contain pictures of products. Sure there is your pic of Ryan Gosling here and there and lots of food, but sifting through the noise is not all that difficult and the number of actual products on there is staggering.
Now, Pinterest could intelligently engineer how to get lead generation commissions from all the clicks that drive traffic to the seller's site; why they are not doing that now is beyond me. But, that, is not where the true value is. Sure there would be an initial surge in top line growth, but that would most likely plateau after new users joining Pinterest begins to wane quarter over quarter.
The true, unlocked value, in my opinion, is the data underneath all those "pins".
Pinterest has (and will have) an enormous amount of raw data that can be used to build targeted "brand profiles". Brands will pay for this. With the current demise of the retail sector imminent (see Radio Shack, Sears and even Best Buy) or at least serious consolidation (Wall Street talk for mergers and acquisitions and bankruptcies), brands are actively looking for the new medium to sell their wares. And what better place to sell their wares than directly to the people who like their stuff!
Moreover, with all the data that Pinterest is storing, think of the trend forecasting and sentiment analysis they could offer up as a set of business intelligence metrics to brands or online retailers.
For example, Fab.com, another blossoming startup, sells cool, chic, hip products to their members for discounted prices. What if Fab paid for sentiment from Pinterest on what the most pinned items are in home decor? Fab could then cross reference Pinterest users, with their own userbase and actually offer them the products (in their storefront - the "new" retail) with an educated guess on how many to offer and how many would sell. This is hyper-optimized supply chain management.
And guess who wins? Pinterest, Fab.com, the users and the brands themselves. The only people who lose? The dinosaurs of the industry - brick and mortar retail.
Finally, Pinterest is also building a graph; not a social graph but an interest graph. If you take the concept of Facebook (user's social profile data + user's social graph) and compare that to Pinterest (user's interest profile + user's interest graph), the data becomes incredibly more valuable. What is the "user interest graph"? Let me explain.
When I pin something on Pinterest that pin is another attribute added to my "interest profile" (things I'm interested in), that item can then be repinned by other people (thus making connections to me via the interest itself). Commonalities surface when people very much like me ("me" being my interest profile) all "like" and "repin" things that I've pinned. Pinterest now has influential data, the thing another thriving startup, Klout, is basing their business on (who are key influencers and how do they get that way).
Pinterest also has the ability to more accurately forecast trends based on a user's interest graph coupled with their influence level. If a highly influential Pinterest user pins a new pair of shoes, Pinterest can make an educated guess on how that will impact other Pinterest users AND more importantly, how that user pinning those shoes leads to more sales for the brand.
In summary, Pinterest is not a Virtual Pinboard. It is the answer to consumers engaging with brands, something Facebook has been unable to do.