Why we won’t invest in Pinterest clones

In the past few months, we’ve been approached by almost 10 companies who want to be the Pinterest for some foreign country. As you well know, we like investing in copies of established ideas and taking them to the rest of the world, however, there are some ideas that are riper for cloning than others.

Let’s set aside whether Pinterest is a proven enough model to warrant cloning and let’s assume it is for the purpose of this blog post. The issue is that we like to invest in ideas that are hard to execute internationally and need to be heavily localized. In ecommerce for instance you need local sourcing, local merchandising, local logistics and payments, and have to respect a slew of local regulations which makes ecommerce sites much harder to globalize and more capital intensive.

Some ideas are easy to globalize. You essentially need to translate the site and its innate virality does the rest – not to mention the PR advantage of being the leading US site in the category. That’s why Facebook is much more global than Amazon.

In general user generated content sites are easy to globalize: Facebook, Wikipedia, Linkedin, Tripadvisor, etc. The core of each of these sites is the content generated by users, which is the same across the globe, just in a different language. You essentially translate the site and let the community do the work. Note that not all user generated content sites are easy to globalize. OLX, in contrast, was extraordinarily difficult to globalize. It was easy to internationalize the site, but the hard part was getting a critical mass of buyers and sellers on a country by country basis. We ended up having to focus on a few countries given the winner-take-all dynamics of the classifieds business which are driven by its national network effects.

I suspect Pinterest falls in the “easy to globalize user generated content” category. The site is simple to translate and is extraordinarily viral. Given its position in the US it will get tons of free PR all around the world. Moreover, given the amount of capital it has been able to raise its scale and the resources at its disposal should give it the ability to out-execute its rivals both in terms of product and business model innovation.

At first many of the Facebook clones internationally had fantastic traction with sites that had many of the same functionality as Facebook. Over the years Facebook’s greater resources allowed it to build a fundamentally better site and to essentially displace all its competitors.

What is interesting is that many of the Pinterest competitors look like they have some traction. Weheartit’s traffic graph looks very good and with 170 million page views per month according to Google Adplanner it’s also pretty big.

The issue is that once you compare its traffic to that of Pinterest, the performance is a lot less impressive.

In other words the Pinterest of the rest of the world is going to be Pinterest – especially since Pinterest is thinking about the opportunity seriously and just hired a talented individual to go after the opportunity.

  1. May 22nd, 2012 | 10:21 am

    I was waiting for you to talk about this! :)

  2. May 22nd, 2012 | 10:30 am

    Can’t agree more with you, specially about how ecommerce should be run online.

    It is really hard to do ecommerce without someone on the ground and taking a close look at how people interact with the website. So culture and language are some things that must be taken as important as technology.

    We are running a re-commerce website for concerts and sports tickets, and we were able to attract the sellers to add their tickets to our website. But it has not been easy to get attention from buyers and convince the public that chances to get into a fraud are low and it is safe, most of the times, to trade tickets with strangers.

    Now we have competitors coming after us, copying our model, our website layout and even the way we interact with users on social networks like Twitter and Facebook. Clones that are like Weheartit compared to Pinterest, but still, local.

    Anyway, your blog post is really interesting for us because we are in that point of wether we should go global (or at least, “Latin Americal”) with our platform.

    Thanks Fabrice for your great thoughts.

    Bruno Borges
    co-founder of Comprei e Não Vou

  3. May 22nd, 2012 | 10:31 am

    Very insightful piece on what to clone and what not. Thanks Fabrice.

  4. May 22nd, 2012 | 11:35 am

    Well articulated thesis. Issue at hand is the recent slowdown of growth at pinterest – because it requires more work than say a facebook does it devolve to smaller subset of users – more like Zynga whales than facebook ubiquity?

  5. May 22nd, 2012 | 11:50 am

    I have not come to an opinion on that just yet. I need to play with the product more and interview more users.

  6. Charles
    May 26th, 2012 | 6:13 pm

    What I find outrageous in this article as in any other dealing with pinterest is that nobody bothers to point out that pinterest has nothing invented !!!

    Weheartit, kweeper.com, visualise.us and Many others was funded in 2008/2009 before pinterest

    pinterest benefited from a financial and media coverage without any comparution with these sites.
    the fight is totally overused and even if investors are cynical, it would be good to specify who is the true clone: ??one who enjoys the power of Silicon Valley or other sites?

  7. May 26th, 2012 | 6:42 pm

    Chales: I never said that Pinterest was the first online pinboard, just that given their traction, virality and how easy it is for them to expand internationally I would invest in their competitors.

    Innovation is a funny thing. Most of the leaders in their categories were not the first to develop the category: Google was not the first search engine, Facebook was not the first social network…

  8. May 26th, 2012 | 7:24 pm

    Innovation is a funny thing, but money and relations rules. :-)

    if those who win are all from Silicon Valley, we must seriously ask ourselves about the Internet and the meaning of Innovation.

    when I created Kweeper in 2008/2009 in Lyon (France), I had a terrible time finding an investor

    I know this is not your case and I respect you for that, but if the money, the media and commentators are all focused on a single eco-system, the competition is biased

  9. May 29th, 2012 | 11:02 am

    I am actually going to write a blog post on the value of ecosystems.

  10. N
    July 3rd, 2012 | 5:24 pm

    bonsoir

    En parlant de “niche en voici une promise à un bel avenir pour faciliter les déplacements des businessmen et éviter les embouteillages (sur des distances moyennes, car l’autonomie n’est pas immense).

    l’hélicoptère -ulm + petit qu’un hélicoptère et plus maniable. Maxi 2 personnes + un sac en soute.

    http://www.kompress.fr/fr/helicos/ch77ranabot.html