David Rosenthal: belief

Transcript context

…It’s a great elaboration there. Another point that I wanted to—I think this is more of a point of discussion. David, we talked on the LP show about the downsides of being a tools business rather than a platform or a network or a marketplace. Pinterest is kind of a tools business in that it’s much more about me and maybe a handful of other people I’m sharing a board with and it’s much less about communicating with other, seeing what other people are up to. It has, I think, less significant network effects. How do you juxtapose it sort of being a tools business but competing for the very same advertisers that these strong network effect businesses are competing for? Yes. Great. This is one of my entries in the playbook here. You can debate on the network effects aspect and certainly, social network effects in the way that Facebook, Instagram, etc., have them, Pinterest does not. But I think they do have a very strong flywheel. We should do a whole LP episode. We’ve talked about this where we just nerd out on what we think the differences are between network effects and flywheels and what not. But the flywheel is users add content and pins to the site. The more pins there are in the site, the more things there are that new users and existing users can get inspired by and then re-pin. There’s a super strong flywheel whereas people come on and they add content, that content drives more engagement from users who add more content which drives more users within the segment of people who find this whole thing attractive. Even if it’s not a super strong network effect, you can still have a super strong flywheel.…

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