YouSaid · the spoken record

Jeremy Levine

lines on the record: 40
first: 2021-03-24
most recent: 2021-03-24
sittings or episodes: 1
sources: podcast

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“I don't know. I'm actually sort of Basmer is still a shareholder. I'm still a meaningful shareholder and I'm still on the board. And so maybe I'll answer that question with a note of optimism, which is that I'm hopeful that the favorite story is yet to come. There have been so many of them, but I think there's still so many great things ahead for this company, and I hope to be involved with it for a while to be.”
2021-03-24 · The Twenty Minute VC · 20VC: The Pinterest Memo: Bessemer's Jeremy Levine on The Secret To Success within User Generated Content Plays, Where Most Investors Make Mistakes When Analysing Consumer Social and How The Pinterest Deal Wouldn't Have Happened without a Diverse Partners · IDENTIFIED FROM THE TRANSCRIPT · source
“And did all sorts of stuff, including, I think, her first project was to buy the Pinterest domain name in lots of foreign countries. And I remember having a brainstorming conversation like how to convince some squatter in France to give up Pinterest.fr. And then later she ended up managing product teams. So I think there's tons of them. I wouldn't say there's one particular person without whom it wouldn't have all happened.”
2021-03-24 · The Twenty Minute VC · 20VC: The Pinterest Memo: Bessemer's Jeremy Levine on The Secret To Success within User Generated Content Plays, Where Most Investors Make Mistakes When Analysing Consumer Social and How The Pinterest Deal Wouldn't Have Happened without a Diverse Partners · IDENTIFIED FROM THE TRANSCRIPT · source
“Think there are lots of unsung heroes. I mean, Pinterest had so many talented people who contributed meaningfully over years who aren't necessarily at the company anymore. Off the top of my head, I'm thinking about people like Natalie Fair, who was sort of like the first finance person at the company, or Mike Yang, who was the first general counsel at the company, or Tim Kendall. He was head of product, he was present at one point. He had so many different hats. And I think ultimately either their own personal interests ultimately took them somewhere else, or they were great for the company at a certain size and not another size. And some people like Ben scale all the way up, and he was an incredibly effective founder of a brand new company and also an incredibly effective CEO and leader of a multi-thousand person company. Most people aren't so versatile. It doesn't mean they're less talented. It just means that they figured out what really works for them. And I think there are many of those people who contributed massively to Pinterest along the way. Sarah, my former colleague who ultimately left Bessemer and joined Pinterest is yet another example. And she was at Pinterest, I think, for three or four years.”
2021-03-24 · The Twenty Minute VC · 20VC: The Pinterest Memo: Bessemer's Jeremy Levine on The Secret To Success within User Generated Content Plays, Where Most Investors Make Mistakes When Analysing Consumer Social and How The Pinterest Deal Wouldn't Have Happened without a Diverse Partners · IDENTIFIED FROM THE TRANSCRIPT · source
“And so, the more you can keep a secret, a good secret, a secret, the more advantage you have in building your own critical mass to the point where it's much harder for someone else to come copy you or knock you off.”
2021-03-24 · The Twenty Minute VC · 20VC: The Pinterest Memo: Bessemer's Jeremy Levine on The Secret To Success within User Generated Content Plays, Where Most Investors Make Mistakes When Analysing Consumer Social and How The Pinterest Deal Wouldn't Have Happened without a Diverse Partners · IDENTIFIED FROM THE TRANSCRIPT · source
“No one answer, but I think there are a whole lot of techniques and tactics. One is I probably wouldn't do something that's square in the middle of Facebook's roadmap because they almost certainly will do what you just described. Two is I think a lot of people, particularly around their early financings, like to go tell the world about it. It's validation. If nothing else, it's nice to have your mom read about you in TechCrunch. But the truth is, that does almost no value. It adds no value to your company. In fact, I'd argue it detracts substantially because you don't get tons of consumers from an article in Facebook, but you do get is lots of investors interested in what's going on, lots of entrepreneurs saying, oh, maybe I can do something like that. And the large company.”
2021-03-24 · The Twenty Minute VC · 20VC: The Pinterest Memo: Bessemer's Jeremy Levine on The Secret To Success within User Generated Content Plays, Where Most Investors Make Mistakes When Analysing Consumer Social and How The Pinterest Deal Wouldn't Have Happened without a Diverse Partners · IDENTIFIED FROM THE TRANSCRIPT · source
“The team, no doubt about it. I think they invented things that didn't exist on the internet before which have since been copied 100 times over, and they're just so few people who can create brand new ideas out of nothing. And the Pintersteam was one of them. And so that sort of problem solving mentality and innovative mentality, that carries you a really long way, because even when you hit some other brick wall, you can creatively brainstorm your way over it, through it or around it. And they did that a whole bunch of times in the life of this company.”
2021-03-24 · The Twenty Minute VC · 20VC: The Pinterest Memo: Bessemer's Jeremy Levine on The Secret To Success within User Generated Content Plays, Where Most Investors Make Mistakes When Analysing Consumer Social and How The Pinterest Deal Wouldn't Have Happened without a Diverse Partners · IDENTIFIED FROM THE TRANSCRIPT · source
“The most challenging. There were a few. I mean, honestly, in the early days, we wrestled a little bit over to the extent that the founders and the investors disagreed who would ultimately have control. These days, it's pretty commonplace for founders to have all sorts of super control over their companies. It was much more rare a decade ago. And so there were some stressful conversations about that. That's probably the biggest thing. In the end, when everything works out, it doesn't really matter who has control. It's irrelevant. It's only if things don't work out. And so thankfully, we never had to go down that door.”
2021-03-24 · The Twenty Minute VC · 20VC: The Pinterest Memo: Bessemer's Jeremy Levine on The Secret To Success within User Generated Content Plays, Where Most Investors Make Mistakes When Analysing Consumer Social and How The Pinterest Deal Wouldn't Have Happened without a Diverse Partners · IDENTIFIED FROM THE TRANSCRIPT · source
“Many other companies that have done it, but it tends to be a pretty small group of elite companies that do that. And I think the next year after that, it was well into the nine figures. So in fact, it did work. It got to the critical mass to monetize, and then the monetization worked. But until it happens, you just don't know.”
2021-03-24 · The Twenty Minute VC · 20VC: The Pinterest Memo: Bessemer's Jeremy Levine on The Secret To Success within User Generated Content Plays, Where Most Investors Make Mistakes When Analysing Consumer Social and How The Pinterest Deal Wouldn't Have Happened without a Diverse Partners · IDENTIFIED FROM THE TRANSCRIPT · source
“That challenge is incredibly daunting. And so the first thing you have to assume is you're just not going to get there, and therefore you can't monetize, and therefore you have no revenue, and therefore you have no business. And the chance of that for any business with 100,000 users is really high. And so I don't have the memo in front of us, but you can see we have it on our website. I think bvp.com slash memos and the chance of it being a big zero for a company at that stage is at least 25 or 30 percent, which means that the chance of it working is also not going to be huge. But of course, if it does, the value more than makes up for the likelihood of it being a giant zero. And then even if you do get to five or ten million users, you then got to convince advertisers to buy. And that wasn't obvious at the time either because there's so much connection to commerce in the Pinterest platform. I thought there was a pretty good shot. But until you do it, you haven't done it. And by the way, Pinterest was at zero revenue for the first several years after we invested. I think in the first year they tried to monetize. I think they made $40 million of revenue. That was extraordinary. I'd never seen anything like that before. To go from zero to $40 million of revenue. Now, there are...”
2021-03-24 · The Twenty Minute VC · 20VC: The Pinterest Memo: Bessemer's Jeremy Levine on The Secret To Success within User Generated Content Plays, Where Most Investors Make Mistakes When Analysing Consumer Social and How The Pinterest Deal Wouldn't Have Happened without a Diverse Partners · IDENTIFIED FROM THE TRANSCRIPT · source
“So, one, it was tiny, and so with a media business, it's a little bit like a birthing process to get to the stage of monetization. And it's sort of like a venture capital cliche, which is grow, grow, grow, don't worry about making any money. And while that sounds good or scary depending on your perspective, for immediate business, it's completely out of necessity. Because if you go to an advertiser, even with a silver platter asking to take their ad dollars to advertise against your audience of 100,000 users who get laughed out of the room, no advertiser in his right mind is going to spend the time to understand your media platform to reach 100,000 users. And critical mass in the US is probably around between 5 and 10 million users. You need to get there before you can get the first dollar of advertising revenue. So the first big question mark is, can you get to five or ten million users? Well, when you're at 100,000, that means you have to grow your business 50 to 100 times before you can make the first penny of revenue. In hindsight, after you get there, it doesn't seem so bad. But looking ahead at”
2021-03-24 · The Twenty Minute VC · 20VC: The Pinterest Memo: Bessemer's Jeremy Levine on The Secret To Success within User Generated Content Plays, Where Most Investors Make Mistakes When Analysing Consumer Social and How The Pinterest Deal Wouldn't Have Happened without a Diverse Partners · IDENTIFIED FROM THE TRANSCRIPT · source
“Dollars was like impossible. Whereas these days, you can't go into a coffee shop in San Francisco without running into at least two founders who have companies valued at a billion dollars privately. And so the world has changed basically by an order of magnitude since then. And so the idea that Pinterest would ever have, I don't know what it has now, a 40 or $45 billion mark cap was completely unfathomable.”
2021-03-24 · The Twenty Minute VC · 20VC: The Pinterest Memo: Bessemer's Jeremy Levine on The Secret To Success within User Generated Content Plays, Where Most Investors Make Mistakes When Analysing Consumer Social and How The Pinterest Deal Wouldn't Have Happened without a Diverse Partners · IDENTIFIED FROM THE TRANSCRIPT · source
“I mean, at that time, in 2011, LinkedIn was still a private company, and LinkedIn, when it went public, I think in late 2011, if I remember correctly, or maybe it was spring of 2011, it sort of opened the floodgates for the second generation of publicly traded internet companies. The first generation had mostly gone public 10 years before in the internet bubble. And there was a bit of an exit desert for consumer internet in between. And so from the first generation, Amazon was still around in 2010. I think it might have had like a $30 billion market cap. eBay was around and Yahoo was around. And most of the other stuff had already hit the skids, some of the online travel businesses were still in existence and doing pretty well. But to be worth a billion dollars was extraordinary. It so rarely happened. Literally just a couple months later, LinkedIn went public and I think its initial market cap was for $6 billion when it went public. But I think to dream about anything beyond a billion or maybe $2 billion.”
2021-03-24 · The Twenty Minute VC · 20VC: The Pinterest Memo: Bessemer's Jeremy Levine on The Secret To Success within User Generated Content Plays, Where Most Investors Make Mistakes When Analysing Consumer Social and How The Pinterest Deal Wouldn't Have Happened without a Diverse Partners · IDENTIFIED FROM THE TRANSCRIPT · source
“And I believe he'll continue to do that for many years to come. As the business gets larger, there's a thousand other things to worry about. And so obviously one of the critical things is then being able to recruit, attract and retain really talented people to cover those things too. And he's done that extremely well also. But yeah, he's inspiring. He's also super demanding. And I think it's made for a really nice and really talented team there.”
2021-03-24 · The Twenty Minute VC · 20VC: The Pinterest Memo: Bessemer's Jeremy Levine on The Secret To Success within User Generated Content Plays, Where Most Investors Make Mistakes When Analysing Consumer Social and How The Pinterest Deal Wouldn't Have Happened without a Diverse Partners · IDENTIFIED FROM THE TRANSCRIPT · source
“He was a really young guy when we invested in the company. I don't even think he was 40 now, so he wasn't 30 then. And so it's been amazing. He's not the first person I've seen grow from a 20-something to the CEO of a multibillion dollar company. I saw Jeremy Stopman do it at Yelp, and I saw Toby Lutke do it at Shopify. It's perhaps the coolest thing to watch. And that I think people's true personalities come through more and more as they grow in stature and confidence. And Ben continues to be himself. He's such a pleasure to work with and interact with. He remains super humble, super focused on building Pinterest to be the business that he wants it to be. And so I actually think he sort of stayed the same more than anything else now. He's had to learn to do a whole bunch of things that he didn't need to do when he was leading a six-person company in a crappy Palo Alto apartment. But I think the business wouldn't obviously be what it is without him. And I think his super strengths are his ability to innovate and come up with product that consumers love to interact with.”
2021-03-24 · The Twenty Minute VC · 20VC: The Pinterest Memo: Bessemer's Jeremy Levine on The Secret To Success within User Generated Content Plays, Where Most Investors Make Mistakes When Analysing Consumer Social and How The Pinterest Deal Wouldn't Have Happened without a Diverse Partners · IDENTIFIED FROM THE TRANSCRIPT · source
“I think you have to put your thinking cap on and be a little bit creative about it, but I think you have to decide, okay, if I'm building this service and the service is useful to a consumer three or five or seven years from now, how often does that consumer need to use the service for me to feel like it's an actual part of their life? And if you happen to be building a service that's daily use, that's amazing. And clearly as Facebook and Instagram have demonstrated or WhatsApp, a daily use case service is phenomenally valuable. But there's also enormous value in stuff that's used less frequently. And you just have to figure out what makes sense logically. And then you have to commit to that as your North Star and say, okay, we're going to drive the features in our product that will help reach that target. And if you take a product that's not inherently about social interaction and you start driving toward a DAU use case, you're going to start building in all sorts of social chat features in the product. And guess what?”
2021-03-24 · The Twenty Minute VC · 20VC: The Pinterest Memo: Bessemer's Jeremy Levine on The Secret To Success within User Generated Content Plays, Where Most Investors Make Mistakes When Analysing Consumer Social and How The Pinterest Deal Wouldn't Have Happened without a Diverse Partners · IDENTIFIED FROM THE TRANSCRIPT · source
“Any business, and it was certainly a challenge as we thought about Pinterest in the early days is what is like the ceiling on how much a product can be used? And if you compare everything against the human social interaction which happens every day, in fact, multiple times a day, there are many other products that will look much less addicting by comparison, but it doesn't mean they're any less powerful if in fact they're approaching whatever that theoretical ceiling is for their use case. And I think in the early years of Pinterest, seeing that something like 40% of the users who had ever signed up were using it month on month on month relative to most consumer services was unbelievably impressive. Relative to the social communication services like Skype in its early days, it wasn't because people do like to talk to their friends every day. But I think figuring out what the relevant benchmark is is really important and it scored really well.”
2021-03-24 · The Twenty Minute VC · 20VC: The Pinterest Memo: Bessemer's Jeremy Levine on The Secret To Success within User Generated Content Plays, Where Most Investors Make Mistakes When Analysing Consumer Social and How The Pinterest Deal Wouldn't Have Happened without a Diverse Partners · IDENTIFIED FROM THE TRANSCRIPT · source
“And Facebook had this incredibly impressive metric, which was it was like 50% of them. 50% of the people were using it on a daily basis. And if you think about the core of what Facebook is, it's fundamentally about keeping in touch with your friends. And humans are inherently social, and we like to talk to our friends, and it's an activity we do every single day. Not necessarily the same friend or friends every day, but we all talk to some friend or friends every day. And so it's not surprising that a service designed to help us keep in touch with our friends was being used every day. Pinterest is not that. Pinterest is not an inherently social service. There's social elements to Pinterest for sure, but Pinterest is a place that you go to get inspired, often to do things that are not online, they're offline. And that is not inherently a human activity that we do every day. Thinking about where we might want to go, what we might want to cook, a gift we might want to buy, even planning our wedding, whatever it is, that's an activity that we might do once or twice a week, but not every day. And so I think one of the challenges in evaluation.”
2021-03-24 · The Twenty Minute VC · 20VC: The Pinterest Memo: Bessemer's Jeremy Levine on The Secret To Success within User Generated Content Plays, Where Most Investors Make Mistakes When Analysing Consumer Social and How The Pinterest Deal Wouldn't Have Happened without a Diverse Partners · IDENTIFIED FROM THE TRANSCRIPT · source
“I mean, the numbers were small, but you could see it in the numbers. The consumers just love the service and kept coming back. I think there was a chart in the initial pitch deck they shared, which was it was a distribution. So this is before the days of people being obsessively smart about cohorts and how to think about cohorts, but they showed a chart that showed the number of users who've visited once in a month, the number of users who visited twice in a month, three times a month, and so forth. And it was a series of bars. And then there was one on the far right, which was like 20 plus times a month. And the 20 plus times a month bar I think was as high as any of the others would show that like some people just love this product and kept coming back to it. And I think the other mistake I think people make in evaluating internet products is that everyone thinks of Facebook these days as the gold standard and Facebook or Instagram from its pretty early on in its inception would start broadcasting a particular metric which was DAU divided by MAUs. And so the number of users in a month who are active on a daily basis.”
2021-03-24 · The Twenty Minute VC · 20VC: The Pinterest Memo: Bessemer's Jeremy Levine on The Secret To Success within User Generated Content Plays, Where Most Investors Make Mistakes When Analysing Consumer Social and How The Pinterest Deal Wouldn't Have Happened without a Diverse Partners · IDENTIFIED FROM THE TRANSCRIPT · source
“Little things that each improved the numbers by 0.1% or 0.2%. But when you have this culture of constant narration and experimentation, those little 0.1 and 0.2%, they add up. And next thing you know, you're back to driving really consistent growth again.”
2021-03-24 · The Twenty Minute VC · 20VC: The Pinterest Memo: Bessemer's Jeremy Levine on The Secret To Success within User Generated Content Plays, Where Most Investors Make Mistakes When Analysing Consumer Social and How The Pinterest Deal Wouldn't Have Happened without a Diverse Partners · IDENTIFIED FROM THE TRANSCRIPT · source
“Talking to the wrong VCs. Tell them to come talk to me. Now, that said, if you're growing at 7% per month, particularly off of very small base, it is hard to get a lot of excitement for what you're doing unless you can articulate how and why you can sustain it. And so you have to be able to understand what exactly is causing that growth and why is it such a deep well or why is there such a deep well of future users that you should be able to continue to grow at that rate for a very long time to come? By the way, even Pinterest, which obviously has grown to be massive and has hundreds of millions of monthly active users today, it hit a few speed bumps along the way. Like while the first year or so after we invested, it did grow really, really fast. There were moments where it hit air pockets and the growth paused. And I say the other thing that's really remarkable about the team was that that didn't cause them to throw their hands up in the air and say, oh, well, it was a good run. We got this far. Too bad. They went and solved the problem. And in many cases, it wasn't one silver bullet that suddenly unlocked another horizon of growth. It was dozens of loops.”
2021-03-24 · The Twenty Minute VC · 20VC: The Pinterest Memo: Bessemer's Jeremy Levine on The Secret To Success within User Generated Content Plays, Where Most Investors Make Mistakes When Analysing Consumer Social and How The Pinterest Deal Wouldn't Have Happened without a Diverse Partners · IDENTIFIED FROM THE TRANSCRIPT · source
“Course, I'll take the million dollars, but in fact, if you do the math out, if you take a penny and you double it for 30 days, you get two to the 30th, which is well beyond the billions. I think it's into the trillions. And even when you divide that by 100 because you want to go from pennies to dollars, it's still a much, much bigger number. And so I think the same thing happens with a lot of companies. It's not about growing really fast, really quickly. It's about building an engine that will compound over time and sustain. And so if you can grow at 5 or 6% a month, but for 10 years, you're going to be massive. But you're never going to go from small to big overnight. It's going to be a very gradual process. It's like watching a child grow up. If you see the kid every day, you don't notice it. But if you leave for a year and come back, you're like, oh my God, that kid is unrecognizable.”
2021-03-24 · The Twenty Minute VC · 20VC: The Pinterest Memo: Bessemer's Jeremy Levine on The Secret To Success within User Generated Content Plays, Where Most Investors Make Mistakes When Analysing Consumer Social and How The Pinterest Deal Wouldn't Have Happened without a Diverse Partners · IDENTIFIED FROM THE TRANSCRIPT · source
“I don't know that there was one particular moment. I think in that first year or so after we invested, the business was growing like fifty or seventy percent in a month. It was just extraordinary. But when you're at $100,000 users wherever they were in the earliest days of our involvement and you go to hundred fifty thousand users, it just doesn't feel that big. But it turns out that if you compound at 50 or 70% a month for 12 months, it makes a big difference. And so I always like to joke that the Wikipedia is the biggest overnight success story that took 15 years to achieve. And I think in Wikipedia's case, it grew like 6% a month, but over literally a decade. And the law of compounding is if you can grow at 6% over a decade, it's like that old elementary school brain puzzle where, you know, what would you rather have a million dollars or a penny today, two pennies tomorrow, four pennies the next day, eight pennies the next day? And it keeps doubling for a whole month. And because those numbers start so small, a lot of people's intuition says like, oh,”
2021-03-24 · The Twenty Minute VC · 20VC: The Pinterest Memo: Bessemer's Jeremy Levine on The Secret To Success within User Generated Content Plays, Where Most Investors Make Mistakes When Analysing Consumer Social and How The Pinterest Deal Wouldn't Have Happened without a Diverse Partners · IDENTIFIED FROM THE TRANSCRIPT · source
“They could be a little lazier, but they could certainly rely on the early users to help evangelize the product because of that velvet rope.”
2021-03-24 · The Twenty Minute VC · 20VC: The Pinterest Memo: Bessemer's Jeremy Levine on The Secret To Success within User Generated Content Plays, Where Most Investors Make Mistakes When Analysing Consumer Social and How The Pinterest Deal Wouldn't Have Happened without a Diverse Partners · IDENTIFIED FROM THE TRANSCRIPT · source
“In its very early days, launched university by university, which had the same benefit. They could control the pace at which new users flooded the system. So it wasn't entirely innovative, but it was super effective. And then it had this other side benefit, which is in addition to slowing the onslaught of traffic that would have otherwise come, it also essentially forced each user to hear about the product from a friend, and the friends would often explain how they used it and why they used it. And so it allowed Pinterest to take advantage of its user base in educating its future new users on what it meant to pin something. Eventually, once they took the velvet rope down and anyone could just sign up for the service, honestly, I think the newer users started to understand the product much less well than the first iteration of users. And so eventually Pinterest even had to change some of the lingo because like what does it mean to pin something if your friend explains that to you, you'll get it, but they changed the adventure to just save, which obviously is a much more intuitive verb for what you're doing. And so I think they, I don't want to say.”
2021-03-24 · The Twenty Minute VC · 20VC: The Pinterest Memo: Bessemer's Jeremy Levine on The Secret To Success within User Generated Content Plays, Where Most Investors Make Mistakes When Analysing Consumer Social and How The Pinterest Deal Wouldn't Have Happened without a Diverse Partners · IDENTIFIED FROM THE TRANSCRIPT · source
“But it was compelling. And so the fact is, like, they managed to get it built. And so the belt was, wow, they got this far. The strength of the idea and the product, they'll find a way to recruit other talented engineers and technical people to complement the team they have. And sure enough, they did. And of course, as the company grew and became more well-known, it just got easier and easier to attract some of that technical talents. And eventually the problems didn't get solved. They also had one other clever thing, which was part, I think, accident and part genius. And that was in the early days of the product, they put up a velvet rope in front of the sign inflow. So it wasn't open to the public for anyone to sign up in order to use the product. You needed to be invited by another Pinterest user. And I think honestly, the main reason that they did that was because if they let anyone sign up, the thing would have fallen over and it would have gotten crushed by the onslaught of traffic. And by forcing people to get invited by someone who's already in the service, it just allowed them to control the pace at which it grew. Other companies have done something similar like Facebook when it was grown.”
2021-03-24 · The Twenty Minute VC · 20VC: The Pinterest Memo: Bessemer's Jeremy Levine on The Secret To Success within User Generated Content Plays, Where Most Investors Make Mistakes When Analysing Consumer Social and How The Pinterest Deal Wouldn't Have Happened without a Diverse Partners · IDENTIFIED FROM THE TRANSCRIPT · source
“I mean, ultimately, the proof is in the pudding. And so while none of the early Pinterest team was obsessively experienced in building a tech product, they just had really interesting insight into product and design. And Evan, who I think was largely responsible for collaborating with Ben on the whole what now is like a very common sort of grid ever-flowing format that you see on products all over the place, like he's an architect by training. I think he was studying to be an architect at Columbia before moving out to the Bay Area and he worked at Facebook before Pinterest. And so in my mind, it was like the product vision was there and that, yes, they were going to encounter tons of technical challenges, particularly on the scaling side the world had watched Twitter go through so many fails and keeping its product up all the time. And I expected they might run into some of the same problems. But the product itself, like it worked. It wasn't completely flawless by any stretch of the imagination.”
2021-03-24 · The Twenty Minute VC · 20VC: The Pinterest Memo: Bessemer's Jeremy Levine on The Secret To Success within User Generated Content Plays, Where Most Investors Make Mistakes When Analysing Consumer Social and How The Pinterest Deal Wouldn't Have Happened without a Diverse Partners · IDENTIFIED FROM THE TRANSCRIPT · source
“On a gender basis, a diverse duo of people looking at the investment, I think we would have missed it too. Thankfully, we didn't, but somehow I think virtually every other firm on Sandhill Road did.”
2021-03-24 · The Twenty Minute VC · 20VC: The Pinterest Memo: Bessemer's Jeremy Levine on The Secret To Success within User Generated Content Plays, Where Most Investors Make Mistakes When Analysing Consumer Social and How The Pinterest Deal Wouldn't Have Happened without a Diverse Partners · IDENTIFIED FROM THE TRANSCRIPT · source
“Used by women than men, but it's much more balanced. At the time, it was extraordinarily imbalanced. And so in 2011, if you looked up and down Sandhill Road, it would be very difficult to find a woman. And yet I had been working at Bessemer for about five years at that point every day with Sarah Tavel. Sarah's now at another venture capital firm, but she got her start at Bessemer and we work super closely together. And so, you know, it's sort of a theme du jour in the venture and tech industry to talk about diversity. But I have to say, I don't think I would have met the Pinterest team had not been for Sarah because she herself was a user. And most other VCs, they just didn't get it because they weren't in the core demographic of the user base. And so it was a combination of Sarah's interest in the product as a user and my experience with other user-generated content businesses from five or six years before that allowed us to sort of put the peanut butter insight together with the chocolate insight and say, oh, wow, this is something really special and magical. And so when people talk today about like the power of diversity, in my mind, that is a perfect example. Had we not had...”
2021-03-24 · The Twenty Minute VC · 20VC: The Pinterest Memo: Bessemer's Jeremy Levine on The Secret To Success within User Generated Content Plays, Where Most Investors Make Mistakes When Analysing Consumer Social and How The Pinterest Deal Wouldn't Have Happened without a Diverse Partners · IDENTIFIED FROM THE TRANSCRIPT · source
“Yeah, so when we invested, it was controversial for a few reasons. One is the sort of flavor du jour for young internet founding teams included a highly technical founder. And Pinterest had no technical founder. And so I think when a lot of VCs met them, they're like, wait a minute, like, who's building the product here? And the answer was it was like a hodgepodge outsourced group of people. There was a part-time engineer. Like there literally was no technical leadership in the company. Obviously, they managed to build something really compelling, but it wasn't because they had a young Mark Zuckerberg as a founder coding away. They had to sort of beg and scratch and find talent wherever they could to actually build the product that was in their heads. So that was a hugely unusual and somewhat controversial move. And then I think the other element of the story that's really important to share is that the product was used at that time probably by women in 90% of all cases. The male user base was tiny. Even to this day, I think Pinterest is still more often”
2021-03-24 · The Twenty Minute VC · 20VC: The Pinterest Memo: Bessemer's Jeremy Levine on The Secret To Success within User Generated Content Plays, Where Most Investors Make Mistakes When Analysing Consumer Social and How The Pinterest Deal Wouldn't Have Happened without a Diverse Partners · IDENTIFIED FROM THE TRANSCRIPT · source
“To make what could be just a good user experience into a phenomenal user experience. And hats off to the Bintere team. They just got that right with obsessive focus on making sure those details really worked for consumers.”
2021-03-24 · The Twenty Minute VC · 20VC: The Pinterest Memo: Bessemer's Jeremy Levine on The Secret To Success within User Generated Content Plays, Where Most Investors Make Mistakes When Analysing Consumer Social and How The Pinterest Deal Wouldn't Have Happened without a Diverse Partners · IDENTIFIED FROM THE TRANSCRIPT · source
“Yeah, so we'll touch on the competitive landscape, and then there's one other really important topic I want to come to, which is just sort of the team and their backgrounds relative to what was happening back in 2011. But on the competitive landscape, there were two other companies that we spent a lot of time looking at. One was called Supply, and it was spelled SVPLY, and the other one was called the Fancy. And they had similar concepts. The idea that you could catalog a bunch of stuff that you saw online by saving it to a board of some sort or another. And when we first invested, we end the founders tracked Pinterest progress against those two other companies. But I think it within eight or nine months, they just stopped tracking those companies. Pinterest had grown so much more quickly and had far surpassed those other offerings. And when you ask why, I think so much of it is super subtle. The difference is if you look at the three companies from 50,000 feet aren't that significant, the concepts were really similar, but it goes to show the importance of extraordinary attention to detail on all subtleties.”
2021-03-24 · The Twenty Minute VC · 20VC: The Pinterest Memo: Bessemer's Jeremy Levine on The Secret To Success within User Generated Content Plays, Where Most Investors Make Mistakes When Analysing Consumer Social and How The Pinterest Deal Wouldn't Have Happened without a Diverse Partners · IDENTIFIED FROM THE TRANSCRIPT · source
“I think the biggest thing we got wrong was just how big it could be and also how global it could be. We really weren't thinking about that at all. I expected more.”
2021-03-24 · The Twenty Minute VC · 20VC: The Pinterest Memo: Bessemer's Jeremy Levine on The Secret To Success within User Generated Content Plays, Where Most Investors Make Mistakes When Analysing Consumer Social and How The Pinterest Deal Wouldn't Have Happened without a Diverse Partners · IDENTIFIED FROM THE TRANSCRIPT · source
“They were sort of desperate for money while trying to make this pivot, and they agreed to lower their salaries. I think their salaries were like $65,000. And they said, we'll lower them to $40,000, but please give us a little bit more money some more time. So when we came along and were investing at a $50 million valuation, which was, I think, 10 times more than what some of those seed investors had paid a year or two before, a bunch of them wanted to sell. And so we did a second financing within just a few weeks of the first, where we put a little bit more money into the company, and then the company actually bought back some of the stock from those very early investors. It wasn't a large amount, but it might have been another million dollars. And so it was probably the best use of capital the company ever could have come up with, given what that stock ended up being worth not that many years later. But look, sometimes when you're up 10x, it's hard not to take something off the table. So I can't really criticize any of those seed investors who did it. And most of them kept meaningful chunks of their positions too. So they did just fine in the end.”
2021-03-24 · The Twenty Minute VC · 20VC: The Pinterest Memo: Bessemer's Jeremy Levine on The Secret To Success within User Generated Content Plays, Where Most Investors Make Mistakes When Analysing Consumer Social and How The Pinterest Deal Wouldn't Have Happened without a Diverse Partners · IDENTIFIED FROM THE TRANSCRIPT · source
“It actually came in two steps, if I remember correctly, and this is 10 years ago now, but the first step was a simple $10 million investment. It was a $40 million pre-money valuation, $50 million post-money valuation. I think Bassmer was $8.5 or $9 million of the 10. The existing investors put up the balance. And then there was a second component to it whereby a bunch of the early seed investors, they'd invested in something else. It was actually originally called tote. And so before I even came across Pinterest, the founders had launched this product called TOET, and it was not a success, but there was one particular feature inside of Toat that the consumers really liked, which was essentially the idea of pinning or saving something. And so much to their credit, the founder sort of did a, I wouldn't say a sharp pivot, but changed the business around that feature and launch Pinterest. had been in it for a while. I think their initial investment was at like two pre or three pre. And I think at one point the founders actually”
2021-03-24 · The Twenty Minute VC · 20VC: The Pinterest Memo: Bessemer's Jeremy Levine on The Secret To Success within User Generated Content Plays, Where Most Investors Make Mistakes When Analysing Consumer Social and How The Pinterest Deal Wouldn't Have Happened without a Diverse Partners · IDENTIFIED FROM THE TRANSCRIPT · source
“As far as I know, I'm not being remunerated in any way, shape, or form for this podcast. And so that is an expensive insight that you have to pay top dollar for.”
2021-03-24 · The Twenty Minute VC · 20VC: The Pinterest Memo: Bessemer's Jeremy Levine on The Secret To Success within User Generated Content Plays, Where Most Investors Make Mistakes When Analysing Consumer Social and How The Pinterest Deal Wouldn't Have Happened without a Diverse Partners · IDENTIFIED FROM THE TRANSCRIPT · source
“Other venture capital firms out there isn't that hard, but when there's 250 other venture capital firms out there, chances are someone else is thinking about the same idea. And so competition is tough. It motivates all of us, but it's the most destructive force in capitalism, no doubt about it.”
2021-03-24 · The Twenty Minute VC · 20VC: The Pinterest Memo: Bessemer's Jeremy Levine on The Secret To Success within User Generated Content Plays, Where Most Investors Make Mistakes When Analysing Consumer Social and How The Pinterest Deal Wouldn't Have Happened without a Diverse Partners · IDENTIFIED FROM THE TRANSCRIPT · source
“Yeah, it makes the beauty contest even harder because it used to be they could be multi-week beauty contests and you at least had an opportunity to let your real personality, your real strengths, and weaknesses shine through to determine compatibility with an entrepreneur when the beauty contests are compressed to literally two days. It's more like a shotgun wedding and no one really knows what they're getting into. And so it's a little scary, I think, for all parties. And so it's a fact of life. Many of the best companies have many options for where to get capital. So we compete and I think we do pretty well, but it's so much more fun when you think you've sort of found an undiscovered gem that other people are just not interested in. And so when you're willing to go off the beaten path, and historically that's been both in terms of areas, but also in terms of geographies, it's just easier. It's a more pleasant process. You can actually date someone for a while before you have to get married. And I think that suits both parties really well. And those are the circumstances I really enjoy. They're hard to find, and they're increasingly hard to find because to have an idea that other people don't share when there's 25”
2021-03-24 · The Twenty Minute VC · 20VC: The Pinterest Memo: Bessemer's Jeremy Levine on The Secret To Success within User Generated Content Plays, Where Most Investors Make Mistakes When Analysing Consumer Social and How The Pinterest Deal Wouldn't Have Happened without a Diverse Partners · IDENTIFIED FROM THE TRANSCRIPT · source
“Like that's when you make phenomenally great investments. It's just really hard. It's easy to be contrarian, but it's easy to be contrarian and wrong. Like there's a reason why lots of other smart people are thinking the same thing. And if you have a different thought, you better be damn well sure you're right, otherwise you're just going to look silly when it's all sudden done.”
2021-03-24 · The Twenty Minute VC · 20VC: The Pinterest Memo: Bessemer's Jeremy Levine on The Secret To Success within User Generated Content Plays, Where Most Investors Make Mistakes When Analysing Consumer Social and How The Pinterest Deal Wouldn't Have Happened without a Diverse Partners · IDENTIFIED FROM THE TRANSCRIPT · source
“It can be clearly hugely profitable to invest in Uber trends that everyone agrees in. And there's a reason why everyone agrees in these trends because it's happening. It's clearly happening and these things are taking a bigger and bigger hold on the economy and the tech world in particular. What I like to do is I like to try to find trends that people kind of are ignoring or don't believe in because then when I find a company that's pursuing something consistent with that trend, there aren't 65 other VCs lined up at the door of that company. And it's just much more interesting. It becomes, like I said, an analytic exercise and it becomes hugely rewarding if a year or two or three after we invest, then everyone becomes enamored with the trend because not only does it mean that we can invest in great companies at reasonable prices, but then it also means a short time thereafter, everyone is excited about the trend. And so those same companies can then get access to much cheaper capital on really great terms, which benefits not only the company and the entrepreneur, but us as existing stakeholders. So it comes down to this idea of like, if you can be contrarian and correct,”
2021-03-24 · The Twenty Minute VC · 20VC: The Pinterest Memo: Bessemer's Jeremy Levine on The Secret To Success within User Generated Content Plays, Where Most Investors Make Mistakes When Analysing Consumer Social and How The Pinterest Deal Wouldn't Have Happened without a Diverse Partners · IDENTIFIED FROM THE TRANSCRIPT · source
“So, there's lots of styles that can be successful for investors, and you kind of have to know yourself. I talk about this with some of my partners at Bessemer all the time, but some of us, especially like the former athletes among us, are super competitive. And when we see a contest, I disparagingly call them beauty contests. But when we see a sort of a scrum around an investment opportunity where there are three or four or 19 firms who all want to make an investment, some of my partners derive energy from that process. And they're like, oh, it's a competition. I want to win the competition. I want to become the investor. And when I see that, I just get deflated. I'm like, ugh, but I really love to do is analyze the business and think about the possibilities. I don't like to perform. I don't like to sell. And so the exercise when it's highly competitive for an investor becomes a sales exercise, not an analytics exercise. And to me, that's much less rewarding. And so, like I said, I disparagingly call these things beauty contests. Like I'm not interested in entering beauty contests. I don't find them fun and they sort of suck my energy away as opposed to produce energy. And so while”
2021-03-24 · The Twenty Minute VC · 20VC: The Pinterest Memo: Bessemer's Jeremy Levine on The Secret To Success within User Generated Content Plays, Where Most Investors Make Mistakes When Analysing Consumer Social and How The Pinterest Deal Wouldn't Have Happened without a Diverse Partners · IDENTIFIED FROM THE TRANSCRIPT · source