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Churchill Model
Stages of business growth
The Churchill model: Pinterest
One of the most recent successful internet companies of note is Pinterest. The company began two years ago. However, it spent a relatively brief time period in the 'existence' stage in which it was struggling to stay alive. The new website "recently laid claim to being the fastest Web site in history to break the 10-million-visitors-a-month threshold" and has attained a kind of relevance that other content-sharing models such as Reddit lack (Pogue 2012). Additionally, Pinterest's business model is relatively low-risk, in terms of operational costs. It is a purely virtual business, which might make some shy away from it, given the notoriously poor showing of so many Internet companies during the dot.com bubble. Yet unlike these organizations, Pinterest has a comprehensible function: "Pinterest is a pinboard for online photos. Multiple pinboards, actually, each an individual page in your Pinterest account" (Pogue 2012). It is an online version of what many people used to do in real life, pre-Internet -- clipping articles of interest.
The 'survival' sage is when the...
On the surface, Pinterest seems to have a bright future, based upon impressive traffic. However, many failed Internet companies have generated a great deal of buzz but failed to realize their promise. It is not enough to be interesting; one's business model must be profitable. Some say that Pinterest's profitability remains in doubt. Some have found a way. "The company doesn't say it's still figuring out ways to make money from this thing...[but] when one of your Pinterest photos links to a product for sale online, Pinterest quietly modifies the link to insert its own affiliate code, so that Pinterest gets the referral fee" (Pogue 2012). Some bloggers who had posted their own blog links as 'pins' for users to click were upset by this, given that it meant that they lost the referral fees they would have garnered, had the original link stayed the same. However, while "the revelation did raise some eyebrows...you can change the link back, if you want" (Pogue 2012). Internet companies like Pinterest to some degree question the validity of the Churchill model of small business…
References
Churchill, Neil C. & Virginia L. Lewis. (1983). The five stages of small business growth.
The Harvard Business Review, 3-11/
Kelly, Tara. (2012). Pinterest popularity explained. Huffington Post. Retrieved:
http://www.huffingtonpost.com/2012/03/21/pinterest-popularity-explained-infographic_n_1370238.html?ncid=edlinkusaolp
Retrieved: http://www.nytimes.com/2012/02/16/technology/personaltech/reviewing-pinterest-the-newest-social-media-site.html?pagewanted=all
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