Pinterest CEO Ben Silbermann shocked technology entrepreneurs when he revealed the startup, valued at $2.5 billion, does not make profits despite its huge popularity.
When asked about Pinterest's business model at the AllThingsD conference in L.A., the CEO and co-founder had an unexpected reply. "Right now, we don't make money," Silbermann said, offering little more information on how the startup achieved such success. The Pinterest CEO did provide an explanation on the lack of revenue, explaining "we don't want to commodify someone's passions."
Pinterest went live in 2010 and quickly took off, with users unable to resist the simple interfacing and easy organization that Pinterest "boards" provide. Although the startup has not made any profits thus far, it has garnered substantial funding from venture capital financiers, which totaled at $200 million this year.
The CEO, who is known for his reclusive demeanor, explained that Pinterest is concerned with reinventing the way Internet users search for information. "The problem of how you discover things is a really tough one. Problems like, 'What should my living room look like?' That's at the heart of our interests right now," Silbermann said, implying that Pinterest's goal is to offer an alternative to traditionally straight-forward Google searches.
"When we think about this mission - we think there's a direct link between what people buy and what they want to purchase in the future. When we do announce our monetization plans, we want to make it easier for people to discover things they love - we want to help people take the next step," Silbermann said, implying that plans to include a purchasing option for pins are being explored.
"We've been trying to give [partners] better tools; we haven't announced the specific way we're doing it. We have a lot of plans that we're experimenting with," Silbermann said. The CEO did go into details about certain plans concerning mobile activity, while explaining that a presence on all platforms is crucial to businesses in startup arena.
"The average consumer will soon expect that every service is available on every platform. More and more, that's a phone or a tablet or a phablet," Silbermann said. The CEO said that when Pinterest initially launched its mobile apps, the results far exceeded their expectations.
"When we released our mobile apps, we were taking bets on how long it'd take for those to surpass our web traffic. I figured it'd take a few weeks. It was literally the day it was released [that the traffic was passed]. I think it's because phones and tablets are largely always around you, whereas you're not always around a computer," Silbermann explained.
As for the future of Pinterest, it is unclear whether the successful startup will follow in the footsteps of Tumblr, who was recently bought by Yahoo for $1.1 million dollars. The CEO said that he intends to put Pinterest user's interests at the forefront when making these decisions, a lesson he learned during his time at Google.
"One of the things I've learned is to be receptive of feedback," Silbermann said.