Obsessive Collector Pre-Med Student... 53 Trillion Won 'Jackpot' After 11 Years of Startup [News Inside]

Ben Silbermann, Co-Founder and CEO of Pinterest

▲Ben Silbermann, Co-founder and CEO of Pinterest

[Asia Economy Reporter Kwon Jaehee] A collector and a prospective medical student. A quirky genius who hit a jackpot worth 53 trillion won after 11 years of entrepreneurship.

This is the story of Ben Silbermann, co-founder and CEO of the image-based social media (SNS) platform Pinterest.

Unlike many CEOs of Silicon Valley IT companies, Ben Silbermann was a typical "bookworm" preparing to enter medical school. Both of his parents were ophthalmologists, and following family tradition, he enrolled at Yale University to prepare for pre-med studies. However, after graduating in 2003 and working as a consultant in Washington DC, he frequently came across articles on the IT-focused website TechCrunch, which led him to choose to move to Silicon Valley. His intuition that "something is happening in Silicon Valley" guided him there.

In 2006, he started his career by joining Google, a leading IT company in Silicon Valley, working in the online advertising team. But after just two years, he abruptly left his dream job at Google and began brainstorming various ideas with his college friend and future Pinterest co-founder Paul Sciarra. They launched an iPhone shopping catalog app called "Tote," but it ended in failure.

Like many Silicon Valley IT entrepreneurs, Silbermann did not get discouraged by failure and continued to pursue new challenges. He drew inspiration for his second startup from his childhood experiences. As a child, he was an avid collector of stamps, insects, and other items of interest. This led to the creation of Pinterest.

Pinterest is a compound word combining "Pin," used to attach items, and "Interest," meaning areas of interest. As the name suggests, Pinterest is an SNS where users share their interests through photos.

Silbermann said, "Not everyone has witty stories to tell on Twitter, nor interesting news to share like on Facebook. But everyone has something they want to collect."

When his friend Evan Sharp, an architecture student and design expert, joined the team, Silbermann, Paul Sciarra, and Evan Sharp founded Pinterest in March 2010.

In the early days, Silbermann focused solely on design. He believed that the image layout had to be beautiful for users to want to collect and organize images. This was also why he brought Evan Sharp onto the team last.

"Who would want to collect their favorite things in an ugly scrapbook?" was Silbermann's thought.

However, the start was not good. For nine months after launching the service, the number of users was only 5,000, a modest result. Meanwhile, Instagram, which launched around the same time, reached 1 million accounts in just two months and was soaring.

▲Ben Silbermann, CEO of Pinterest

He did not rush and maintained an invitation-only sign-up policy for two years. Pinterest provided each member with a few invitation codes, and only those who received them could join Pinterest. The invitation read, "Please pin photos carefully. Your pins determine the character of the community."

Unlike other companies eager to achieve quick success, Pinterest took steady and honest steps one at a time. Because of this, revenue was nearly zero for the first four years after founding.

Silbermann had a management philosophy of going slowly but surely. In the early days, he sent thank-you emails with his personal phone number to customers, requesting feedback. He also organized offline user meetings to listen carefully to each user's opinion and reflect them.

As the saying goes, "Sincerity moves heaven." Users gradually became captivated by the image-centered SNS Pinterest due to Silbermann's honest efforts. By January 2012, about two years after founding, the number of unique visitors reached 11.7 million, making it the fastest SNS to surpass 10 million visitors among major SNS platforms.

Currently, Pinterest's corporate value approaches $45 billion (approximately 52.9 trillion won). It is reported that the American payment service company PayPal is close to acquiring Pinterest. The acquisition price is around $70 per share, which is about a 26% premium over Pinterest's closing stock price of $55.58 on the 19th (local time). At $70 per share, Pinterest's corporate value totals $45 billion, making it the largest deal in PayPal's history.

PayPal is willing to pay this "record-breaking" amount to acquire Pinterest because it is far superior to other SNS platforms in terms of actual advertising effectiveness and revenue growth. According to a survey by a fashion-specialized website (Bottica.com), customers referred through Pinterest spent an average of $180 on the site, while those from Facebook spent only $85. Although Facebook and Twitter have many more users, Pinterest delivers higher actual advertising effectiveness. Forbes magazine also analyzed, "Pinterest's monthly active users are fewer than Twitter's 330 million, but Pinterest users are much more engaged," adding, "This is a key factor that can drive Pinterest's corporate value and revenue growth in the future."

This evaluation is attributed to Silbermann's management philosophy of honest management, deliberately not making money early on despite having the opportunity.

▲Evan Sharp (left) and Ben Silbermann (right), co-founders of Pinterest

Silbermann has repeatedly emphasized, "Successful companies have found the intersection between what users do and what advertisers want to do, and the process was transparent. Our revenue model will unfold over the long term."

Pinterest is an honest company not only to users but also to employees. Every year, it sets diversity goals such as for women and minorities and publishes reports on their progress. When hiring engineers, moral character is prioritized over skills.

The New York Times (NYT) described Pinterest as "the last bastion of innocence."

Could Pinterest be the paradise created by Silbermann, who values direction over speed and process over destination?