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Etsy is under pressure to start acting more like a conventional company

241 points by marvinpinto 9y ago

FussyZeus 9y ago
> A similar model had worked spectacularly well for EBay Inc., which had made money for 21 straight years...How, Wunder asked, was Etsy not making more money? Because EBAY was already in that market! It's really no wonder Etsy has tanked as a community, sellers fleeing in droves, as the company works hard to destroy what it was, something unique, successful (even if it wasn't eating the world) and highly responsive to user's needs, into YET ANOTHER EBAY CLONE full of sweatshop manufactured crap. Hooray for Capitalism! Race to the bottom! /rant
- zzleeper 9y ago
  At the same time, > Sellers who developed successful products were prohibited by Etsy policy from hiring employees to help them expand Isn't that cruel? Your XYZ craft is amazing and people love it, but you can hire someone to help you make more. Then, the demand is just absorbed by copycats.
  - FussyZeus 9y ago
    I know someone in Tennessee who has started listing on Amazon Homemade or whatever it's called, she says they're LESS demanding than Etsy and that's just psychotically sad.
  - lmm 9y ago
    > Isn't that cruel? Your XYZ craft is amazing and people love it, but you can hire someone to help you make more. Not at all, that's inherent to the whole idea of handmade. Your product probably won't be the same if you get someone helping you with it; certainly the handmadiness that people are paying you for won't be there any more. If your product is good enough to stand on its own merits then you can sell it conventionally. > Then, the demand is just absorbed by copycats. Any copycat presumably has to stand on their own and earn their own reputation. If you've got positive reviews for the product you handmade, that shouldn't transfer over to someone else making it, even if that someone else is employed by you.
    - DamnYuppie 9y ago
      I don't consider being handmade to mean being personally created by the inventory only. If you hire others who are skilled in the crafts required to create your product then I have no qualms still considering the item to be hand crafted. Many of the outdoor items I purchase are hand made by small companies, I am not sure it matters who in the company makes it as long as the quality and service remain high.
    - Retric 9y ago
      Traditional crafts often had apprentices/journeyman doing the bulk of the work with a master doing the critical portions. So, a policy that says the seller must do something to each piece could be reasonable, but essentially saying you can buy components from someone else, but you can't have assistants is silly.
- H1Supreme 9y ago
  I couldn't agree more. I've never been a customer, but my girlfriend won't even go to the site anymore. Perfect example of a company that should have stayed private, and been happy with what they had.
- xforteversilov 9y ago
  Like the other commenter says, maybe they should have stayed private if remaining committed to their ideals was such a high priority.
  - FussyZeus 9y ago
    Agree completely. That was the beginning of the end, as it is for most innovative companies.
- deleted 9y ago
  [deleted]
- valuearb 9y ago
  If you want your company to be a special snowflake, don't get greedy, don't sell a bunch of stock to outside investors and don't go public. The CEO betrayed his entire vision when he did that, you can't siphon off profits to give to other stakeholders (such as for egregious employee benefits) when you don't own and control the business. And for all the good those excess benefits did in attracting top talent, why is Etsy's software so crappy?
bognition 9y ago
I can't help but think that the buyer appeal just isn't there. Looking back at the last couple of years I've bought a handful of items off of etsy. Come to think of it I probably buy more from EBay that from etsy, which is totally weird because I hate buying things on ebay.
- Zazezizozuzy 9y ago
  My wife sells through Etsy and has been for a while. The biggest transition she has seen is buyers moving from purchasing items, to making items themselves. While the larger, successful shops are declining, there has been a steady increase in small, beginner shops. Based on that, she moved to selling more patterns and teaching craft workshops. In my opinion, Etsy should harness that. If they provided a way for crafters to showcase how they make their products, they could start selling that. It would have several benefits. It fits a simple subscription/learning model which is very popular right now. It also encourages the handmade community that they are trying to support.
SomeStupidPoint 9y ago
The focus on eternally positive second derivatives is the cancer of American capitalism.
- binarymax 9y ago
  I'm not agreeing or disagreeing, since you have an interesting opinion, but in this case Etsy decided to play the game. They could have stayed private and done whatever they wanted without worrying about 'shareholder value'. They chose to IPO, they are now owned by the market. If you can't play the shareholder game then don't go public.
  - kgwgk 9y ago
    Who is "they"? At the time of the IPO, more than half of the shares were held by external investors.
    - valuearb 9y ago
      Didn't have to be. They didn't have to sell stock privately either.
      - kgwgk 9y ago
        They had to if they wanted to spend someone else's money...
        valuearb 9y ago
        This party wasn't going to pay for itself!
        adrr 9y ago
        There's always loans. You don't have to take VC money.
    - binarymax 9y ago
      Whenever founders sell part of the business to other parties - either through VC investment or IPO, they (the founders) are now bound to the agreement of returning on that investment and providing value as a (the) core focus of doing business. If you don't want to be beholden to third parties, then don't sell part of your business.
dominotw 9y ago
Why is ETSY stock soaring? I don't get it. Are they doing something to get rid of crap on their site? Edit: sorry, I meant soaring this week.
- goseeastarwar 9y ago
  Soaring is charitable, because it's still under the IPO price, but Wall St is happy the board fired the founding CEO and CTO.
  - pcsanwald 9y ago
    sorry to be pedantic, but Rob Kalin founded Etsy. pretty sure the departing CEO and CTO weren't founders.
- valuearb 9y ago
  it's down over 50% since the IPO.
  - sushid 9y ago
    Not actually? It's trading at $12.97 at the time of this writing. Its IPO price was $16.
    - valuearb 9y ago
      You are right, I was referring to it's peak price on IPO day. It did sell it's shares for $16 in the IPO. But either way it's performance has been horrid, 3 years of a -20% is bad enough but it actually slipped to $7 at one point and has only recovered to $12.97 because the CEO got canned and a private equity firm is trying to restructure the entire business.
- 6stringmerc 9y ago
  TPG invested in a pretty significant stake. They are "change-oriented" management / investors. Active. If there's money to be made in the model, they're pretty well established as experts finding it. I heard the investment news via David Johnson on KRLD, he's worth following.
cowpewter 9y ago
Etsy first started losing their appeal when they gave up even pretending to not allow Alibaba resellers, and lost the "hand-made" distinction that made their site unique. Currently they're going through a round of "let's alienate all the small unique sellers that are still using our service" by changing their payment policies. Sellers are being required to accept Etsy's payment processing, where before accepting Paypal was sufficient. Signing up for Etsy's payment processing requires giving Etsy a whole bunch of private information that a lot of sellers (at least in the internet circles I run in) are not comfortable giving out to Etsy, especially sellers that do not live in the US. Etsy is quickly losing the sellers that make their site worth visiting to Storenvy.
- chiph 9y ago
  I had a look at Storenvy's store owner's agreement. There's several exclusions in there that would be problematic, such as: > Any product containing any hazardous or dangerous material including mercury or any product whose use is regulated by any law in any jurisdiction. I get what they're trying to do, but that's pretty broad https://support.storenvy.com/customer/portal/articles/93987-store-owner-s-agreement https://support.storenvy.com/customer/portal/articles/93987-...
  - cowpewter 9y ago
    By "internet circles I run in" I'm talking about the ball-jointed doll hobby, so probably 90% of the products we're talking about are handmade doll clothes and wigs. The dolls themselves are usually made of polyurethane resin, which I don't think could be considered harmful once it's cured. Most of the other hand-crafted things I would consider checking Etsy for first are things like jewelry and pottery. Unless you're using lead-based glazes, I think those sellers are all pretty safe going to Storenvy. I just know that a large percentage of the makers I follow on social media have been complaining about these new payment policies in the past few weeks, and many of them have already opened Storenvy shops.
    - RugnirViking 9y ago
      > any product whose use is regulated by any law in any jurisdiction. That doesn't mean say product which is banned in your jurisdiction. It means any product that is regulated (as in, there is any law at all governing its use) in any jurisdiction. Like for example plastic is normally pretty harmless, but maybe theres a law in Portugal saying there can't be a certain amount of plastic in soft drinks and now its restricted IANAL but I thought this wording was interesting and took it to its logical extremes.
Exuma 9y ago
The entitled employee comments at the bottom made me literally groan. Everyone bemoaning facts of life, it's not like what they did was a surprise or unjust. If your job title is "Senior internal paper waste management analysis director" then you shouldn't be surprised when you get canned.
- donkeyd 9y ago
  I used to have this title at one of my first jobs. It meant that I emptied the paper bins on Friday afternoon.
- lightedman 9y ago
  "The entitled employee comments at the bottom made me literally groan." What comments? All I see is an eternally-extending page, typical of news sites that tack every story on to the end of the prior one. In fact, when I scroll to the bottom of the story, the URL itself in my URL/search bar changes to match the title of the story.
  - Exuma 9y ago
    Sorry, I just now realized that. I thought that was the end of the article because I was distracted and saw the big image.
- vosper 9y ago
  The only comments I saw were one from an unnamed staffer, at the end, and two from software engineers. What about these comments (from people who've just lost their jobs, bear in mind) seems entitled to you? I just see people who agreed with the principles and ideology of the company they worked for. > Jason Wong, a former engineer, urged his ex-colleagues to “fight” for “all the sellers who rely on you, for the values that Etsy stands for, for all the things you love about working there.” > “I’m not crying,” wrote Katherine Daniels, a senior engineer. “I’m just allergic to capitalism.”
  - Exuma 9y ago
    Well for one, the part about "fighting" anything... just appreciate your job experience the company gave you and move on. "For all the things you love about working there"... so basically fight for your overly cushy job where you were overpaid to organize paperclips, because of untracked spending. I'm being somewhat facetious but you get the point. I also have no problems with cushy or overly cushy, more power to you if you find something like that, it's awesome... just don't be an entitled goomba when things end. "Allergic to capitalism". This is just stupid. You're allergic for a company to cut their spending to not-insane levels?
wgyn 9y ago
> “There is one and only one social responsibility of business,” the economist Milton Friedman famously wrote in 1962. And that is “to use its resources and engage in activities designed to increase its profits.” It's strange to me that Friedman is viewed (at least by economists and "business" folk) as a paragon of logical reasoning and empiricism, all the while his views reek so strongly of ideology. There are tons of reasons why the quoted statement might be false whether you're a policy maker (negative externalities) or even the most cold-hearted capitalist (short-term incentives). Perhaps relatedly, it's actually not true that corporate responsibility to profit is codified in the law. See e.g. https://en.wikipedia.org/wiki/Shlensky_v._Wrigley https://en.wikipedia.org/wiki/Shlensky_v._Wrigley (discussed further in https://www.amazon.co.uk/Shareholder-Value-Myth-Shareholders-Corporations/dp/1605098132 https://www.amazon.co.uk/Shareholder-Value-Myth-Shareholders...)
- pjc50 9y ago
  > paragon of logical reasoning and empiricism, all the while his views reek so strongly of ideology Motivated reasoning is a very powerful force. Of course people with the same ideology are going to hold up someone who supports them as a paragon of reason, and use him as protective camoflage for policies harmful to the rest of us.
- clavalle 9y ago
  It is a beautiful example of dogma. It has some meaning but can be bent and molded to fit almost any argument. The obvious argument, especially in Etsy's case is 'well, this works for the short term but can mean no profits in the long term as you commoditize your business and what makes a company like Etsy, Etsy fades into market oblivion.' To which the next statement is 'Oh. Well, Friedman meant all expected profits even into the long term.' which may even be true, but the statement is used to justify all sorts of business behavior that is not in keeping with that idea.
  - valuearb 9y ago
    Yea, if you twist Friedmans meaning you can make all sorts of nonsensical arguments. Value is profits extending into the long run forever, he spoke and wrote clearly enough that he doesn't have to spell that out for you. In Etsy's case, paying above market wages and benefits does nothing for the company and it's shareholders, it's just a gift from the CEO to workers, paid for out of shareholder accounts. Etsy didn't get the best web site or software out from it, they got rampant entitlement and sub-par work.
MichaelGG 9y ago
Bizarre. I've only tried to use Etsy once, figuring it'd be a great place to get some sort of unique jewellery as a gift. It's filled with junk, both of the super-manufactured kind and of the "modern art" kind (someone glues 2 pieces of crap together and wants $500.) I haven't gone back, though I did enjoy the Regretsy blog while it was up. >Etsy’s insistence on running its own servers rather than using cloud-based services and software offered by companies such as Google and Amazon—an emphasis that was known, under Dickerson, as “code as craft” That reminds me of the silly StackOverflow "if you are a real <hacker/programmer/developer/whatever> you must setup your own servers". There are certain benefits of cloud or not, but this kind of thinking confuses me. Why stop there? Do they build their own Ethernet cables? Racks? Make their own distros, compilers, etc.? Build their own network -- after all, your network is critical in delivering pages to your users, why outsource this to XO and Cogent and so on? Edit: Yes, I understand the pricing differences of cloud. So just say "it's cheaper to run our own stuff", don't pretend its due to some desire for "craft". >food scraps were packed onto a Dutch cargo bike, which an “office ecologist” would pedal several miles to a Brooklyn farm It's like they want to parody themselves? >Senior Engineer..."I’m just allergic to capitalism" But presumably not allergic to using capitalists money to hire people to bike your leftovers around town.
- ballenf 9y ago
  The cure when I start getting tempted to "roll my own" is watching that Ted talk about the guy who tried (failed) to build a toaster from raw materials to match the 5 quid discount store equivalent.
  - olewhalehunter 9y ago
    That failure wasn't due to skill, it was due to demand. That discount store has a high volume low skill patronage that needs toasters, if 100 engineers collectively wanted to make 100 of their own toasters for less than 5 dollars a unit, they could probably do that, or other things, much better.
  - moreoutput 9y ago
    Reminds one of Friedman's pencil.
jly 9y ago
They made a deal with the devil (went public) that made many of the employees and shareholders wealthy, and now the price is being paid. The rules have changed and the primary goal now is maximum profit above everything else, no matter how many speeches about "social responsibility" they may deliver internally or externally. The opening quote by Friedman tells you everything you need to know.
- jartelt 9y ago
  They agreed to pursue profits back in 2006 when they raised a Series A and then affirmed this when they raised Series B, C, D, E, and F rounds. It's unfair to pin this on going public. Profit and growth has been the name of the game since they first raised outside capital from VCs. If employees didn't want to be part of capitalism, they probably should have picked a non-profit or a private company that didn't raise >$100M in VC funding.
shawnbaden 9y ago
This applies to any job: work where what you do is the core discipline. At a law firm, be a lawyer. At a medical practice, be a doctor. As a software engineer, work at a company where software is the product. Don’t write software at an insurance company and expect job satisfaction. At such companies software engineers are seen as replaceable. Another option: work where what you do is largely represented by upper management. They make the decisions and if they worked in your discipline they will empathize with you, defend you, and promote you.
- valuearb 9y ago
  I up-voted you because there is a lot of truth to what you wrote. But you also have to realize that today many businesses that don't understand how to develop software but still need to have effective software development processes. That's a huge personal opportunity if you are an effective communicator who can emphasize with managers from disparate backgrounds. They need someone who not only can implement and manage a successful software development process, but communicate to them what is possible, what is risky, and what the best trade-offs there are to develop software to meet the company's goals.
  - tonyedgecombe 9y ago
    That's very true but it's not much fun.
    - gedrap 9y ago
      Define fun. If rewarded, taking a team with shitty development processes, poor software, etc and taking it to the next level can be a great fun. But only if it is reward, i.e. is considered valuable.
- davewasthere 9y ago
  Actually, I quite like writing software in companies where software isn't the core discipline. But I'm writing it in support of the core discipline. Admittedly I consult/freelance now, but writing software to support FMCGs, Loss Adjusters, Hospitality, Airlines, etc.... it's all cool stuff and really enjoyable.
etsythrowaway 9y ago
As someone who has been here for >= 6 months, I welcome this change. There's an incredible amount of bloat here, including the datacenter we run to the managers we have. I'm hoping these top level changes can help bring a more accountable culture. Btw, people make fun of #blameless internally now because it literally means you can be sloppy and get away with it.
wslh 9y ago
I am wondering if, indeed, there are only a few real unicorns: Google, Microsoft, Amazon, and Facebook. Other companies are having a hard time: Twitter, Zynga (remember it?), Etsy, etc.
skizm 9y ago
Opportunities created by Etsy's shortcomings: 1) Create an Etsy review site/blog/mailing list that points to the "good" merchants. 2) IndieHackers for Etsy. Do some interviews with legit Etsy owners who sell quality stuff and make a living on Etsy. 3) Independent review company that rates etsy sellers. 4) Hard mode: compete directly with Etsy and have some sort of verification process that you're not drop-shipping crap from China.
- sbov 9y ago
  All but number 4 is completely reliant upon Etsy not getting their act together. I would say the safest is actually #4 without taking VC or going public. Etsy already validated the hand crafted market, but imho it isn't a devour the world market. The desire for ever expanding growth has increasingly forced Etsy to effectively abandon this market, leaving a hole for you to step into.
  - skizm 9y ago
    I did say opportunity not viable long term businesses :)
dkarapetyan 9y ago
I've lost count now of how many companies have started unconventional and then migrated to just being another regular old corporation with all the usual corporate problems. Investors are regular people and like regular people they like being around the devil they know vs the one they don't.
- dd36 9y ago
  It's called going public. Never go public unless you're exiting.
- valuearb 9y ago
  A business is always a business. The profits from it are owed to the owners, not the suppliers, nor the employees. If you want to do something different with those profits, then you should not invite other investors in as partners, then use some of their share of the profits to fund your own CEO cult.
  - ferentchak 9y ago
    It gets fuzzy when it comes to B-Corps. "In the United States, a benefit corporation is a type of for-profit corporate entity, authorized by 30 U.S. states and the District of Columbia[1] that includes positive impact on society, workers, the community and the environment in addition to profit as its legally defined goals. Benefit corporations differ from traditional C corporations in purpose, accountability, and transparency, but not in taxation. " When investors put their money into a B-Corp they have decided to invest in a company that has declared that profit is not their only motive. I was working for the first B-Corp to become publicly traded. At that point the leadership was forced to test their idealist goals vs the pressures of forecastable quarter after quarter growth. https://en.wikipedia.org/wiki/Benefit_corporation https://en.wikipedia.org/wiki/Benefit_corporation
  - dkarapetyan 9y ago
    I'm not disagreeing. My point is that I've seen this pattern enough times now to know you can't escape it. It will happen whether you like it or not.
sciurus 9y ago
Black-and-white Capital's press releasing calling for changes at Etsy is at http://www.businesswire.com/news/home/20170502005999/en/black-and-white-Capital-Calls-Change-Etsy http://www.businesswire.com/news/home/20170502005999/en/blac... To me it's fascinating how deep in the technical weeds it is. For example, suggesting changes to their search ranking algorithms. Some of it strikes me as likely inaccurate. E.G. "It is black-and-white’s understanding that more than 50% of the approximately 450 people on the R&D team focus on maintaining the Company’s costly internal infrastructure. A shift to the public cloud would provide long-term cost savings while also establishing a more flexible infrastructure to support future growth." I doubt that Etsy can significantly reduce headcount by moving their servers from on-prem to public cloud.
- macNchz 9y ago
  This is kind of interesting: >It is black-and-white’s understanding that Etsy’s current search algorithm is scored to favor new sellers and other factors instead of trying to deliver the listings that are most likely to convert, leaving its marketplace drastically under-monetized. This is in stark contrast to other comparable online marketplace practices. There's a delicate balance to be struck on a platform like Etsy between highlighting new sellers and concentrating sales into a smaller number of high volume sellers. Etsy surely has a very long tail of inexperienced new sellers. Some will blossom into successful online businesses and some will falter and drop off, but the first step of that process is to get them hooked on the platform. An early sale goes a long way towards encouraging new people to keep working on their products. Rejiggering their search algorithm to bury new sellers underneath all the existing, high-converting popular products feels like something that will slowly have negative long term effects on the breadth of their seller base and the kinds of products that you might find.
  - GCA10 9y ago
    Excellent point. In fact, that's the sort of short-term thinking that would elicit a scolding from Milton Friedman's ghost.
ClearAsMud 9y ago
To bad they don't sell hand made, home grown artist stuff anymore. The Chinese knock-off Gucci "authentic" syndication machine took over under many names / masks / illusions. It's more the Walmart Hobby Lobby .. where it all looks good on the way or on your back (shirt/whatever) .. it's still most likely made in China. #fact. The revenue is more about the fees and clear profit machine that is required to run a profitable business on their side. The problem? The sellers - the "real" ones like myself and my wife. We sell authenticate stuff with pottery and photography made locally here in Buffalo. However, I find more and more #buffalo search related material are major hub outlets of people I don't know. I've been doing this for almost 7 years now - I know people here and the artists specifically OF Buffalo. It's the trend that then started to go up in margin % and no return. Only recently have I seen an overhaul to the interface for the Store, but it runs like a sweatshop with minimal tools that any of us were accustomed to online. I wish it was better, but we are leaving and concentrating on real world sales.
- dimaggiosghost 9y ago
  Personally, if the goods quality is high, I don't think the designers or Brandee's ought to capture the majority of the value. The "credit" (my money) goes to the people that made and got the product to me. I think the appropriate level of discussion is "at what level is art conodditised" to which I would say "I have no idea, but somewhere before it's printed on clothing and sold to me". Other people who value different aspects of fashion are likely to disagree, but in general I don't highly value the creativity in clothing
ClearAsMud 9y ago
Second constructive comment I hope - but welcome to the online Strip Mall 2.0
socrates1998 9y ago
I thought Etsy already sold out? Everything I hear from people who sell on there is that it is loaded with Chinese mass produced crap? I am not sure if people see the contradiction of the platform, create a massive global online market place for handmade, unique expensive items. I mean, how could those two things every come into conflict with each other?
- HeyLaughingBoy 9y ago
  It's entirely possible, but I don't think it can be done in a "sell premade goods" way. The seller needs to show that their items are unique by making them to order at a customer's spec. Keep prices down by not starting each item from scratch, but customizing a base product. You make rings? Have a bunch of nice rings that you resell. Maybe even import them from China and sell on your store. But build your reputation by providing customized versions of those rings. Not by simply printing the buyer's name on them, but changing the type or number of stones, the metal, thickness, how the wiring is knotted, etc. Those are all ways to stand out from the high-volume crap and still keep the price reasonable.
jorblumesea 9y ago
Completely anecdotal, but I worked for a company that was a vendor to Etsy and working with them was really difficult due to internal organizational problems. The teams I interacted with were somewhat dysfunctional, with lots competing interests and directions. Definitely got the vibe that they didn't have a good sense of company direction. My guess is Etsy hit it big on the niche craft market but didn't know where to go from there.
tehabe 9y ago
If you go public, you have to obey to the rules of the market you join. That why I don't get why some companies even go public.
- loceng 9y ago
  Because they took money from VCs who want an exit.
  - tehabe 9y ago
    Well, VC have already the word "capitalists" in their name. They don't care for anything but the ROI. While a company has to care about its customers too.
    - loceng 9y ago
      Indeed, the catch-22 is surviving and moving forward as a company when there are potentially little sources of revenue; will the service or product exist at all without VC funding? I don't personally love the idea of feeding into the VC ecosystem either, it all depends on your position and ability to leverage though as to whether it will be a more positive situation or not.
zaptheimpaler 9y ago
Fascinating - why does a strongly worded letter from a 2% shareholder prompt layoffs and major changes within hours? Like if the board believes they are doing OK, or that perhaps it will take a longer time for their current plan to payoff and reflect in revenues, can they not communicate that and continue? 2% isn't enough to force any decision.
oihpojef0jeoih 9y ago
I'd like to pre-order "Don't' Quit Your Day Job, the Rise & Fall of Etsy" if someone with inside knowledge is ready to write it. I'm not an insider by any means but I've heard some fascinating stories over the years about how the company has coped (and failed to cope) with the trappings of success.
gotthemwmds 9y ago
Etsy anecdote from someone generally outside of their main market: I have ordered something off of Etsy 3 times. 2 of those times, there was a minor "customer service" level issue. Once, I accidentally put in the wrong zip code and, after the package was returned to the seller, I was refused any refund (it was "my fault" -- too bad). Another time, I was shipped the wrong item and the back-and-forth between the seller to replace the item ended up taking more time than I was willing to spend on said $15 item and I gave up. In the first case, I did reach out to Etsy, and was told to resolve the issue with the seller. After much back-and-forth, with the seller insisting it was my fault for typoing the zip code and there was nothing they could do short of re-ordering (and re-paying) entirely, I ended up convincing them to let me directly Paypal them shipping costs for the second attempt at shipping, which went fine. This process took entirely too much time (especially when one thinks of experiences with Amazon -- where they resend stuff in orders-gone-awry right away, without any question, or significant delay). My main impression of Etsy is: there are some cool items in its unique/niche marketplace and I would like to buy stuff off of Etsy more often in general, but the site is largely irrelevant to me as a "place to shop" because of the lack of an empowered Etsy customer service level between the buyer and seller -- protecting and advocating for both parties. Of course, not all sellers are at fault here, and I'm sure many Etsy sellers (probably the majority?) facilitate minor order issues brilliantly. This is just my personal experience. I would feel a lot better about Etsy if I knew I had someone with the power (at Etsy) to help when something unexpectedly went wrong with an order, regardless of where the fault lies. I kind of felt like it was a cop-out by Etsy to place all customer service expectations on the buyer and seller directly. Anyway, I like the concept of Etsy a lot (I helped my 67 year old mother open an account to sell her embroidery!), but I can't spend 10+ emails worth of time over 2 weeks trying to fix minor order issues, which, in my personal anecdotal experience, has been the case exactly 66.6% of the time. If Etsy promoted a strong customer-positive service vibe -- as the empowered middle-person between the seller/maker and buyer -- I'd feel a lot better about trying again to buy stuff via it. And this isn't an entirely buyer-sided argument. I would hope that Etsy sees customer service as a boon to both seller and buyer, and would make life easy on the seller as well as the buyer when these small "consumer snafus" show up. For example, not wasting the sellers time, or charging them fees, or being stingy about refunding fees, when minor things like this happen. It seems self-evident that a protected seller -- one who doesn't have to worry about Etsy putting them through the ringer over a minor order mistake -- would make a happier seller. Which seems like it would naturally trickle down to happier buyers as well.
Akarnani 9y ago
There is no logic that justifies attempting to be "not another public company" if you are a public company. Laws. Culture. Press. These things stand in the way of trying to be public while saying you won't act like a public company (by being a b-corp for example). Public companies have functionally modular governance, which means if I don't like you (manager) and your ideas, my friends and I can buy enough governance units until you have to listen to us. It's not quite that straightforward but it's pretty much how it works. In a way, it's similar to venture—you can try to escape the gravity of venture norms but to do that you need viral + network effect growth. In the Market, you can try to escape the gravity of public company norms but to do that you need Amazon level revenue growth and the temerity of Jeff Bezos. Even then its an outside bet. Rabois says startups should go public and I suspect his approach to the problem is he believes (im armchairing here) that the problem of founders hiding mistakes / making intellectually lazy decisions / not serving the financial goals / creating weird preference structures trying to raise money at scale from funds >> public market shareholders killing a geese for next quarters egg.
emmalovskhy 9y ago
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241 points by marvinpinto 9y ago

> A similar model had worked spectacularly well for EBay Inc., which had made money for 21 straight years...How, Wunder asked, was Etsy not making more money? Because EBAY was already in that market! It's really no wonder Etsy has tanked as a community, sellers fleeing in droves, as the company works hard to destroy what it was, something unique, successful (even if it wasn't eating the world) and highly responsive to user's needs, into YET ANOTHER EBAY CLONE full of sweatshop manufactured crap. Hooray for Capitalism! Race to the bottom! /rant

zzleeper 9y ago
At the same time, > Sellers who developed successful products were prohibited by Etsy policy from hiring employees to help them expand Isn't that cruel? Your XYZ craft is amazing and people love it, but you can hire someone to help you make more. Then, the demand is just absorbed by copycats.
- FussyZeus 9y ago
  I know someone in Tennessee who has started listing on Amazon Homemade or whatever it's called, she says they're LESS demanding than Etsy and that's just psychotically sad.
- lmm 9y ago
  > Isn't that cruel? Your XYZ craft is amazing and people love it, but you can hire someone to help you make more. Not at all, that's inherent to the whole idea of handmade. Your product probably won't be the same if you get someone helping you with it; certainly the handmadiness that people are paying you for won't be there any more. If your product is good enough to stand on its own merits then you can sell it conventionally. > Then, the demand is just absorbed by copycats. Any copycat presumably has to stand on their own and earn their own reputation. If you've got positive reviews for the product you handmade, that shouldn't transfer over to someone else making it, even if that someone else is employed by you.
  - DamnYuppie 9y ago
    I don't consider being handmade to mean being personally created by the inventory only. If you hire others who are skilled in the crafts required to create your product then I have no qualms still considering the item to be hand crafted. Many of the outdoor items I purchase are hand made by small companies, I am not sure it matters who in the company makes it as long as the quality and service remain high.
  - Retric 9y ago
    Traditional crafts often had apprentices/journeyman doing the bulk of the work with a master doing the critical portions. So, a policy that says the seller must do something to each piece could be reasonable, but essentially saying you can buy components from someone else, but you can't have assistants is silly.
H1Supreme 9y ago
I couldn't agree more. I've never been a customer, but my girlfriend won't even go to the site anymore. Perfect example of a company that should have stayed private, and been happy with what they had.
xforteversilov 9y ago
Like the other commenter says, maybe they should have stayed private if remaining committed to their ideals was such a high priority.
- FussyZeus 9y ago
  Agree completely. That was the beginning of the end, as it is for most innovative companies.
deleted 9y ago
[deleted]
valuearb 9y ago
If you want your company to be a special snowflake, don't get greedy, don't sell a bunch of stock to outside investors and don't go public. The CEO betrayed his entire vision when he did that, you can't siphon off profits to give to other stakeholders (such as for egregious employee benefits) when you don't own and control the business. And for all the good those excess benefits did in attracting top talent, why is Etsy's software so crappy?

bognition 9y ago

I can't help but think that the buyer appeal just isn't there. Looking back at the last couple of years I've bought a handful of items off of etsy. Come to think of it I probably buy more from EBay that from etsy, which is totally weird because I hate buying things on ebay.

Zazezizozuzy 9y ago
My wife sells through Etsy and has been for a while. The biggest transition she has seen is buyers moving from purchasing items, to making items themselves. While the larger, successful shops are declining, there has been a steady increase in small, beginner shops. Based on that, she moved to selling more patterns and teaching craft workshops. In my opinion, Etsy should harness that. If they provided a way for crafters to showcase how they make their products, they could start selling that. It would have several benefits. It fits a simple subscription/learning model which is very popular right now. It also encourages the handmade community that they are trying to support.

SomeStupidPoint 9y ago

The focus on eternally positive second derivatives is the cancer of American capitalism.

binarymax 9y ago
I'm not agreeing or disagreeing, since you have an interesting opinion, but in this case Etsy decided to play the game. They could have stayed private and done whatever they wanted without worrying about 'shareholder value'. They chose to IPO, they are now owned by the market. If you can't play the shareholder game then don't go public.
- kgwgk 9y ago
  Who is "they"? At the time of the IPO, more than half of the shares were held by external investors.
  - valuearb 9y ago
    Didn't have to be. They didn't have to sell stock privately either.
    - kgwgk 9y ago
      They had to if they wanted to spend someone else's money...
      - valuearb 9y ago
        This party wasn't going to pay for itself!
      - adrr 9y ago
        There's always loans. You don't have to take VC money.
  - binarymax 9y ago
    Whenever founders sell part of the business to other parties - either through VC investment or IPO, they (the founders) are now bound to the agreement of returning on that investment and providing value as a (the) core focus of doing business. If you don't want to be beholden to third parties, then don't sell part of your business.

dominotw 9y ago

Why is ETSY stock soaring? I don't get it. Are they doing something to get rid of crap on their site? Edit: sorry, I meant soaring this week.

goseeastarwar 9y ago
Soaring is charitable, because it's still under the IPO price, but Wall St is happy the board fired the founding CEO and CTO.
- pcsanwald 9y ago
  sorry to be pedantic, but Rob Kalin founded Etsy. pretty sure the departing CEO and CTO weren't founders.
valuearb 9y ago
it's down over 50% since the IPO.
- sushid 9y ago
  Not actually? It's trading at $12.97 at the time of this writing. Its IPO price was $16.
  - valuearb 9y ago
    You are right, I was referring to it's peak price on IPO day. It did sell it's shares for $16 in the IPO. But either way it's performance has been horrid, 3 years of a -20% is bad enough but it actually slipped to $7 at one point and has only recovered to $12.97 because the CEO got canned and a private equity firm is trying to restructure the entire business.
6stringmerc 9y ago
TPG invested in a pretty significant stake. They are "change-oriented" management / investors. Active. If there's money to be made in the model, they're pretty well established as experts finding it. I heard the investment news via David Johnson on KRLD, he's worth following.

cowpewter 9y ago

Etsy first started losing their appeal when they gave up even pretending to not allow Alibaba resellers, and lost the "hand-made" distinction that made their site unique. Currently they're going through a round of "let's alienate all the small unique sellers that are still using our service" by changing their payment policies. Sellers are being required to accept Etsy's payment processing, where before accepting Paypal was sufficient. Signing up for Etsy's payment processing requires giving Etsy a whole bunch of private information that a lot of sellers (at least in the internet circles I run in) are not comfortable giving out to Etsy, especially sellers that do not live in the US. Etsy is quickly losing the sellers that make their site worth visiting to Storenvy.

chiph 9y ago
I had a look at Storenvy's store owner's agreement. There's several exclusions in there that would be problematic, such as: > Any product containing any hazardous or dangerous material including mercury or any product whose use is regulated by any law in any jurisdiction. I get what they're trying to do, but that's pretty broad https://support.storenvy.com/customer/portal/articles/93987-store-owner-s-agreement https://support.storenvy.com/customer/portal/articles/93987-...
- cowpewter 9y ago
  By "internet circles I run in" I'm talking about the ball-jointed doll hobby, so probably 90% of the products we're talking about are handmade doll clothes and wigs. The dolls themselves are usually made of polyurethane resin, which I don't think could be considered harmful once it's cured. Most of the other hand-crafted things I would consider checking Etsy for first are things like jewelry and pottery. Unless you're using lead-based glazes, I think those sellers are all pretty safe going to Storenvy. I just know that a large percentage of the makers I follow on social media have been complaining about these new payment policies in the past few weeks, and many of them have already opened Storenvy shops.
  - RugnirViking 9y ago
    > any product whose use is regulated by any law in any jurisdiction. That doesn't mean say product which is banned in your jurisdiction. It means any product that is regulated (as in, there is any law at all governing its use) in any jurisdiction. Like for example plastic is normally pretty harmless, but maybe theres a law in Portugal saying there can't be a certain amount of plastic in soft drinks and now its restricted IANAL but I thought this wording was interesting and took it to its logical extremes.

Exuma 9y ago

The entitled employee comments at the bottom made me literally groan. Everyone bemoaning facts of life, it's not like what they did was a surprise or unjust. If your job title is "Senior internal paper waste management analysis director" then you shouldn't be surprised when you get canned.

donkeyd 9y ago
I used to have this title at one of my first jobs. It meant that I emptied the paper bins on Friday afternoon.
lightedman 9y ago
"The entitled employee comments at the bottom made me literally groan." What comments? All I see is an eternally-extending page, typical of news sites that tack every story on to the end of the prior one. In fact, when I scroll to the bottom of the story, the URL itself in my URL/search bar changes to match the title of the story.
- Exuma 9y ago
  Sorry, I just now realized that. I thought that was the end of the article because I was distracted and saw the big image.
vosper 9y ago
The only comments I saw were one from an unnamed staffer, at the end, and two from software engineers. What about these comments (from people who've just lost their jobs, bear in mind) seems entitled to you? I just see people who agreed with the principles and ideology of the company they worked for. > Jason Wong, a former engineer, urged his ex-colleagues to “fight” for “all the sellers who rely on you, for the values that Etsy stands for, for all the things you love about working there.” > “I’m not crying,” wrote Katherine Daniels, a senior engineer. “I’m just allergic to capitalism.”
- Exuma 9y ago
  Well for one, the part about "fighting" anything... just appreciate your job experience the company gave you and move on. "For all the things you love about working there"... so basically fight for your overly cushy job where you were overpaid to organize paperclips, because of untracked spending. I'm being somewhat facetious but you get the point. I also have no problems with cushy or overly cushy, more power to you if you find something like that, it's awesome... just don't be an entitled goomba when things end. "Allergic to capitalism". This is just stupid. You're allergic for a company to cut their spending to not-insane levels?

wgyn 9y ago

> “There is one and only one social responsibility of business,” the economist Milton Friedman famously wrote in 1962. And that is “to use its resources and engage in activities designed to increase its profits.” It's strange to me that Friedman is viewed (at least by economists and "business" folk) as a paragon of logical reasoning and empiricism, all the while his views reek so strongly of ideology. There are tons of reasons why the quoted statement might be false whether you're a policy maker (negative externalities) or even the most cold-hearted capitalist (short-term incentives). Perhaps relatedly, it's actually not true that corporate responsibility to profit is codified in the law. See e.g. https://en.wikipedia.org/wiki/Shlensky_v._Wrigley https://en.wikipedia.org/wiki/Shlensky_v._Wrigley (discussed further in https://www.amazon.co.uk/Shareholder-Value-Myth-Shareholders-Corporations/dp/1605098132 https://www.amazon.co.uk/Shareholder-Value-Myth-Shareholders...)

pjc50 9y ago
> paragon of logical reasoning and empiricism, all the while his views reek so strongly of ideology Motivated reasoning is a very powerful force. Of course people with the same ideology are going to hold up someone who supports them as a paragon of reason, and use him as protective camoflage for policies harmful to the rest of us.
clavalle 9y ago
It is a beautiful example of dogma. It has some meaning but can be bent and molded to fit almost any argument. The obvious argument, especially in Etsy's case is 'well, this works for the short term but can mean no profits in the long term as you commoditize your business and what makes a company like Etsy, Etsy fades into market oblivion.' To which the next statement is 'Oh. Well, Friedman meant all expected profits even into the long term.' which may even be true, but the statement is used to justify all sorts of business behavior that is not in keeping with that idea.
- valuearb 9y ago
  Yea, if you twist Friedmans meaning you can make all sorts of nonsensical arguments. Value is profits extending into the long run forever, he spoke and wrote clearly enough that he doesn't have to spell that out for you. In Etsy's case, paying above market wages and benefits does nothing for the company and it's shareholders, it's just a gift from the CEO to workers, paid for out of shareholder accounts. Etsy didn't get the best web site or software out from it, they got rampant entitlement and sub-par work.

MichaelGG 9y ago

Bizarre. I've only tried to use Etsy once, figuring it'd be a great place to get some sort of unique jewellery as a gift. It's filled with junk, both of the super-manufactured kind and of the "modern art" kind (someone glues 2 pieces of crap together and wants $500.) I haven't gone back, though I did enjoy the Regretsy blog while it was up. >Etsy’s insistence on running its own servers rather than using cloud-based services and software offered by companies such as Google and Amazon—an emphasis that was known, under Dickerson, as “code as craft” That reminds me of the silly StackOverflow "if you are a real <hacker/programmer/developer/whatever> you must setup your own servers". There are certain benefits of cloud or not, but this kind of thinking confuses me. Why stop there? Do they build their own Ethernet cables? Racks? Make their own distros, compilers, etc.? Build their own network -- after all, your network is critical in delivering pages to your users, why outsource this to XO and Cogent and so on? Edit: Yes, I understand the pricing differences of cloud. So just say "it's cheaper to run our own stuff", don't pretend its due to some desire for "craft". >food scraps were packed onto a Dutch cargo bike, which an “office ecologist” would pedal several miles to a Brooklyn farm It's like they want to parody themselves? >Senior Engineer..."I’m just allergic to capitalism" But presumably not allergic to using capitalists money to hire people to bike your leftovers around town.

ballenf 9y ago
The cure when I start getting tempted to "roll my own" is watching that Ted talk about the guy who tried (failed) to build a toaster from raw materials to match the 5 quid discount store equivalent.
- olewhalehunter 9y ago
  That failure wasn't due to skill, it was due to demand. That discount store has a high volume low skill patronage that needs toasters, if 100 engineers collectively wanted to make 100 of their own toasters for less than 5 dollars a unit, they could probably do that, or other things, much better.
- moreoutput 9y ago
  Reminds one of Friedman's pencil.

jly 9y ago

They made a deal with the devil (went public) that made many of the employees and shareholders wealthy, and now the price is being paid. The rules have changed and the primary goal now is maximum profit above everything else, no matter how many speeches about "social responsibility" they may deliver internally or externally. The opening quote by Friedman tells you everything you need to know.

jartelt 9y ago
They agreed to pursue profits back in 2006 when they raised a Series A and then affirmed this when they raised Series B, C, D, E, and F rounds. It's unfair to pin this on going public. Profit and growth has been the name of the game since they first raised outside capital from VCs. If employees didn't want to be part of capitalism, they probably should have picked a non-profit or a private company that didn't raise >$100M in VC funding.

shawnbaden 9y ago

This applies to any job: work where what you do is the core discipline. At a law firm, be a lawyer. At a medical practice, be a doctor. As a software engineer, work at a company where software is the product. Don’t write software at an insurance company and expect job satisfaction. At such companies software engineers are seen as replaceable. Another option: work where what you do is largely represented by upper management. They make the decisions and if they worked in your discipline they will empathize with you, defend you, and promote you.

valuearb 9y ago
I up-voted you because there is a lot of truth to what you wrote. But you also have to realize that today many businesses that don't understand how to develop software but still need to have effective software development processes. That's a huge personal opportunity if you are an effective communicator who can emphasize with managers from disparate backgrounds. They need someone who not only can implement and manage a successful software development process, but communicate to them what is possible, what is risky, and what the best trade-offs there are to develop software to meet the company's goals.
- tonyedgecombe 9y ago
  That's very true but it's not much fun.
  - gedrap 9y ago
    Define fun. If rewarded, taking a team with shitty development processes, poor software, etc and taking it to the next level can be a great fun. But only if it is reward, i.e. is considered valuable.
davewasthere 9y ago
Actually, I quite like writing software in companies where software isn't the core discipline. But I'm writing it in support of the core discipline. Admittedly I consult/freelance now, but writing software to support FMCGs, Loss Adjusters, Hospitality, Airlines, etc.... it's all cool stuff and really enjoyable.

etsythrowaway 9y ago

As someone who has been here for >= 6 months, I welcome this change. There's an incredible amount of bloat here, including the datacenter we run to the managers we have. I'm hoping these top level changes can help bring a more accountable culture. Btw, people make fun of #blameless internally now because it literally means you can be sloppy and get away with it.

wslh 9y ago

I am wondering if, indeed, there are only a few real unicorns: Google, Microsoft, Amazon, and Facebook. Other companies are having a hard time: Twitter, Zynga (remember it?), Etsy, etc.

skizm 9y ago

Opportunities created by Etsy's shortcomings: 1) Create an Etsy review site/blog/mailing list that points to the "good" merchants. 2) IndieHackers for Etsy. Do some interviews with legit Etsy owners who sell quality stuff and make a living on Etsy. 3) Independent review company that rates etsy sellers. 4) Hard mode: compete directly with Etsy and have some sort of verification process that you're not drop-shipping crap from China.

sbov 9y ago
All but number 4 is completely reliant upon Etsy not getting their act together. I would say the safest is actually #4 without taking VC or going public. Etsy already validated the hand crafted market, but imho it isn't a devour the world market. The desire for ever expanding growth has increasingly forced Etsy to effectively abandon this market, leaving a hole for you to step into.
- skizm 9y ago
  I did say opportunity not viable long term businesses :)

dkarapetyan 9y ago

I've lost count now of how many companies have started unconventional and then migrated to just being another regular old corporation with all the usual corporate problems. Investors are regular people and like regular people they like being around the devil they know vs the one they don't.

dd36 9y ago
It's called going public. Never go public unless you're exiting.
valuearb 9y ago
A business is always a business. The profits from it are owed to the owners, not the suppliers, nor the employees. If you want to do something different with those profits, then you should not invite other investors in as partners, then use some of their share of the profits to fund your own CEO cult.
- ferentchak 9y ago
  It gets fuzzy when it comes to B-Corps. "In the United States, a benefit corporation is a type of for-profit corporate entity, authorized by 30 U.S. states and the District of Columbia[1] that includes positive impact on society, workers, the community and the environment in addition to profit as its legally defined goals. Benefit corporations differ from traditional C corporations in purpose, accountability, and transparency, but not in taxation. " When investors put their money into a B-Corp they have decided to invest in a company that has declared that profit is not their only motive. I was working for the first B-Corp to become publicly traded. At that point the leadership was forced to test their idealist goals vs the pressures of forecastable quarter after quarter growth. https://en.wikipedia.org/wiki/Benefit_corporation https://en.wikipedia.org/wiki/Benefit_corporation
- dkarapetyan 9y ago
  I'm not disagreeing. My point is that I've seen this pattern enough times now to know you can't escape it. It will happen whether you like it or not.

sciurus 9y ago

Black-and-white Capital's press releasing calling for changes at Etsy is at http://www.businesswire.com/news/home/20170502005999/en/black-and-white-Capital-Calls-Change-Etsy http://www.businesswire.com/news/home/20170502005999/en/blac... To me it's fascinating how deep in the technical weeds it is. For example, suggesting changes to their search ranking algorithms. Some of it strikes me as likely inaccurate. E.G. "It is black-and-white’s understanding that more than 50% of the approximately 450 people on the R&D team focus on maintaining the Company’s costly internal infrastructure. A shift to the public cloud would provide long-term cost savings while also establishing a more flexible infrastructure to support future growth." I doubt that Etsy can significantly reduce headcount by moving their servers from on-prem to public cloud.

macNchz 9y ago
This is kind of interesting: >It is black-and-white’s understanding that Etsy’s current search algorithm is scored to favor new sellers and other factors instead of trying to deliver the listings that are most likely to convert, leaving its marketplace drastically under-monetized. This is in stark contrast to other comparable online marketplace practices. There's a delicate balance to be struck on a platform like Etsy between highlighting new sellers and concentrating sales into a smaller number of high volume sellers. Etsy surely has a very long tail of inexperienced new sellers. Some will blossom into successful online businesses and some will falter and drop off, but the first step of that process is to get them hooked on the platform. An early sale goes a long way towards encouraging new people to keep working on their products. Rejiggering their search algorithm to bury new sellers underneath all the existing, high-converting popular products feels like something that will slowly have negative long term effects on the breadth of their seller base and the kinds of products that you might find.
- GCA10 9y ago
  Excellent point. In fact, that's the sort of short-term thinking that would elicit a scolding from Milton Friedman's ghost.

ClearAsMud 9y ago

To bad they don't sell hand made, home grown artist stuff anymore. The Chinese knock-off Gucci "authentic" syndication machine took over under many names / masks / illusions. It's more the Walmart Hobby Lobby .. where it all looks good on the way or on your back (shirt/whatever) .. it's still most likely made in China. #fact. The revenue is more about the fees and clear profit machine that is required to run a profitable business on their side. The problem? The sellers - the "real" ones like myself and my wife. We sell authenticate stuff with pottery and photography made locally here in Buffalo. However, I find more and more #buffalo search related material are major hub outlets of people I don't know. I've been doing this for almost 7 years now - I know people here and the artists specifically OF Buffalo. It's the trend that then started to go up in margin % and no return. Only recently have I seen an overhaul to the interface for the Store, but it runs like a sweatshop with minimal tools that any of us were accustomed to online. I wish it was better, but we are leaving and concentrating on real world sales.

dimaggiosghost 9y ago
Personally, if the goods quality is high, I don't think the designers or Brandee's ought to capture the majority of the value. The "credit" (my money) goes to the people that made and got the product to me. I think the appropriate level of discussion is "at what level is art conodditised" to which I would say "I have no idea, but somewhere before it's printed on clothing and sold to me". Other people who value different aspects of fashion are likely to disagree, but in general I don't highly value the creativity in clothing

ClearAsMud 9y ago

Second constructive comment I hope - but welcome to the online Strip Mall 2.0

socrates1998 9y ago

I thought Etsy already sold out? Everything I hear from people who sell on there is that it is loaded with Chinese mass produced crap? I am not sure if people see the contradiction of the platform, create a massive global online market place for handmade, unique expensive items. I mean, how could those two things every come into conflict with each other?

HeyLaughingBoy 9y ago
It's entirely possible, but I don't think it can be done in a "sell premade goods" way. The seller needs to show that their items are unique by making them to order at a customer's spec. Keep prices down by not starting each item from scratch, but customizing a base product. You make rings? Have a bunch of nice rings that you resell. Maybe even import them from China and sell on your store. But build your reputation by providing customized versions of those rings. Not by simply printing the buyer's name on them, but changing the type or number of stones, the metal, thickness, how the wiring is knotted, etc. Those are all ways to stand out from the high-volume crap and still keep the price reasonable.

jorblumesea 9y ago

Completely anecdotal, but I worked for a company that was a vendor to Etsy and working with them was really difficult due to internal organizational problems. The teams I interacted with were somewhat dysfunctional, with lots competing interests and directions. Definitely got the vibe that they didn't have a good sense of company direction. My guess is Etsy hit it big on the niche craft market but didn't know where to go from there.

tehabe 9y ago

If you go public, you have to obey to the rules of the market you join. That why I don't get why some companies even go public.

loceng 9y ago
Because they took money from VCs who want an exit.
- tehabe 9y ago
  Well, VC have already the word "capitalists" in their name. They don't care for anything but the ROI. While a company has to care about its customers too.
  - loceng 9y ago
    Indeed, the catch-22 is surviving and moving forward as a company when there are potentially little sources of revenue; will the service or product exist at all without VC funding? I don't personally love the idea of feeding into the VC ecosystem either, it all depends on your position and ability to leverage though as to whether it will be a more positive situation or not.

zaptheimpaler 9y ago

Fascinating - why does a strongly worded letter from a 2% shareholder prompt layoffs and major changes within hours? Like if the board believes they are doing OK, or that perhaps it will take a longer time for their current plan to payoff and reflect in revenues, can they not communicate that and continue? 2% isn't enough to force any decision.

oihpojef0jeoih 9y ago

I'd like to pre-order "Don't' Quit Your Day Job, the Rise & Fall of Etsy" if someone with inside knowledge is ready to write it. I'm not an insider by any means but I've heard some fascinating stories over the years about how the company has coped (and failed to cope) with the trappings of success.

gotthemwmds 9y ago

Etsy anecdote from someone generally outside of their main market: I have ordered something off of Etsy 3 times. 2 of those times, there was a minor "customer service" level issue. Once, I accidentally put in the wrong zip code and, after the package was returned to the seller, I was refused any refund (it was "my fault" -- too bad). Another time, I was shipped the wrong item and the back-and-forth between the seller to replace the item ended up taking more time than I was willing to spend on said $15 item and I gave up. In the first case, I did reach out to Etsy, and was told to resolve the issue with the seller. After much back-and-forth, with the seller insisting it was my fault for typoing the zip code and there was nothing they could do short of re-ordering (and re-paying) entirely, I ended up convincing them to let me directly Paypal them shipping costs for the second attempt at shipping, which went fine. This process took entirely too much time (especially when one thinks of experiences with Amazon -- where they resend stuff in orders-gone-awry right away, without any question, or significant delay). My main impression of Etsy is: there are some cool items in its unique/niche marketplace and I would like to buy stuff off of Etsy more often in general, but the site is largely irrelevant to me as a "place to shop" because of the lack of an empowered Etsy customer service level between the buyer and seller -- protecting and advocating for both parties. Of course, not all sellers are at fault here, and I'm sure many Etsy sellers (probably the majority?) facilitate minor order issues brilliantly. This is just my personal experience. I would feel a lot better about Etsy if I knew I had someone with the power (at Etsy) to help when something unexpectedly went wrong with an order, regardless of where the fault lies. I kind of felt like it was a cop-out by Etsy to place all customer service expectations on the buyer and seller directly. Anyway, I like the concept of Etsy a lot (I helped my 67 year old mother open an account to sell her embroidery!), but I can't spend 10+ emails worth of time over 2 weeks trying to fix minor order issues, which, in my personal anecdotal experience, has been the case exactly 66.6% of the time. If Etsy promoted a strong customer-positive service vibe -- as the empowered middle-person between the seller/maker and buyer -- I'd feel a lot better about trying again to buy stuff via it. And this isn't an entirely buyer-sided argument. I would hope that Etsy sees customer service as a boon to both seller and buyer, and would make life easy on the seller as well as the buyer when these small "consumer snafus" show up. For example, not wasting the sellers time, or charging them fees, or being stingy about refunding fees, when minor things like this happen. It seems self-evident that a protected seller -- one who doesn't have to worry about Etsy putting them through the ringer over a minor order mistake -- would make a happier seller. Which seems like it would naturally trickle down to happier buyers as well.

Akarnani 9y ago

There is no logic that justifies attempting to be "not another public company" if you are a public company. Laws. Culture. Press. These things stand in the way of trying to be public while saying you won't act like a public company (by being a b-corp for example). Public companies have functionally modular governance, which means if I don't like you (manager) and your ideas, my friends and I can buy enough governance units until you have to listen to us. It's not quite that straightforward but it's pretty much how it works. In a way, it's similar to venture—you can try to escape the gravity of venture norms but to do that you need viral + network effect growth. In the Market, you can try to escape the gravity of public company norms but to do that you need Amazon level revenue growth and the temerity of Jeff Bezos. Even then its an outside bet. Rabois says startups should go public and I suspect his approach to the problem is he believes (im armchairing here) that the problem of founders hiding mistakes / making intellectually lazy decisions / not serving the financial goals / creating weird preference structures trying to raise money at scale from funds >> public market shareholders killing a geese for next quarters egg.

emmalovskhy 9y ago

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