Late last week, Pinterest completed a massive, half of a billion dollar round of funding that values the social media site at a $11 billion. The late stage funding will help the company continue to grow its user base and expand a now-established advertising product into one of its biggest potential markets: small business.
Small local businesses already account for a large portion of the businesses on the site, Joel Meek, the head of the company’s small business effort, said this week an interview with Street Fight. He said the site has “hundreds of thousands” of small businesses” already using the site, with content from businesses accounting for two-thirds of all content on Pinterest. What’s more, two-thirds of these business have a physical storefront.
Meek, who will be a speaker at Street Fight Summit West in San Francisco June 2nd, talked with us about how Pinterest is connecting consumer behavior form online to offline, whether self-service is viable for small businesses and why he thinks ecommerce is the next big growth area for small businesses on social media.
How is Pinterest thinking about connecting online discovery to offline purchases?
One of the beauties of Pinterest as a business is that you can find people across the entire purchase funnel ranging from users just browsing collections to those looking for something specific. That means as a marketer you can push them down that funnel on one platform — I think it’s a very unique opportunity about our platform. We’ve got hundreds of thousands of businesses using the service and we’re seeing really good local representation as well: half of those business consider their business local, and two-thirds have some sort of physical storefront.
We know from our market data that consumers are moving from online to offline to buy things, so the question we need to answer is how can we accelerate that behavior. We ran a pilot with Nordstrom last year where they actually used their analytics from Pinterest to figure out their merchandising strategy in store. We’ve also done some pilots helping retailers create end-caps in stores based on the online behavior of brand’s pinterest audience.
Small businesses have generally had a mixed relationship with the technology industry — and more recently, the tension between small businesses and social media companies such as a Facebook and Yelp has become more acute. In building Pinterest’s small businesses platform, how do you think about improving that relationship?
Without businesses there would be no Pinterest. A little over two-thirds of the organic content that users are discovering on the site originates from businesses. We believe that’s an important part of not only our business strategy, but user strategy as well. That symbiotic relationships is something we think is unique to Pinterest vis-a-vis the other social media services out there.
Within the small business technology community, there’s an ongoing debate over whether self-service is a viable approach to the market. Are you more or less confident about self-service since you joined Pinterest a few years ago?
There are roughly 100 million small business in the world and we think we can get to a good chunk of them by going directly. But we’re also going to need to work with other partners to both connect with these business as well as to add value. We hired a head of online partnerships last year, and we’re hoping to see some proof of our channel strategy later this year.
Self-service is just an easy way for us to reduce the friction. SMBs really know what they need to do and how to do it, and giving them the tools to do so makes it easier for everyone. Also, it makes the manual tasks like billing a lot easier. At the same time, they still want to have someone to talk to whether that’s talking directly to people here at Pinterest or working with our partner ecosystem. That’s going to be a critical part of our strategy going forward.
Between Instagram, Facebook, Twitter and now Pinterest, small businesses have to create a lot of content these days. How do you think about solving that content creation problem for small businesses?
One of the advantages for us is that life of a pin on Pinterest is a much larger of content on other sites. You can spread the initial cost of the content creation over a much longer time and eventually get a bigger return on your dollar. In terms of using content from other sites, it’s not something that we discourage. We just want to make sure that what you do pin something from another network the content to fits to our best practices.
You’ve worked in the small business tech community for some time now. What do you see as the biggest challenges facing the industry?
I don’t see many problems — many more opportunities,. What we’re trying to do at Pinterest is to educate small businesses as much a possible about why being online can help grow their businesses. That education bit is the most important thing for Pinterest and the technology community at large, because I think the opportunity is huge.
One of the big opportunities we see is for small businesses to use the web, and social media in particular, to expand their market beyond their local contexts. We see a lot of business on Pinterest have an interesting mix of local and non-local ecommerce sales. We see a good amount of our local businesses finding customers outside of their local region. That’s the biggest opportunity for us.
Steven Jacobs is Street Fight’s deputy editor.
Pinterest’s Joel Meek will be a featured speaker at Street Fight Summit West in San Francisco on June 2nd. More info, agenda, and tickets here.