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This is why the expectation of infinite growth is not a good thing. Lack of scalability was Etsy’s unique value proposition and competitive advantage. They gave

This is why the expectation of infinite growth is not a good thing. Lack of scalability was Etsy’s unique value proposition and competitive advantage. They gave it up in order to grow and as a result have become indistinguishable from many chain art supply stores.

ghaff 9y ago
>Lack of scalability was Etsy’s unique value proposition and competitive advantage. In the same way that many small-scale sites/stores that curate contents can be said to have unique value proposition and competitive advantage. That's not a knock on them by the way. Many are good at what they do and add value. Not everything needs to be Internet-scale but you sort of have to be one or the other.
- PakG1 9y ago
  If you IPO, you have no choice but to achieve and increase Internet scale. Your share price will suffer if you don't because when you IPO, your investors matter more than your other stakeholders. If you don't want to be a slave to an insatiable hunger for growth by investors, don't IPO. For that matter, don't get investors who expect an exit either. Yeah, you miss out on the big get rich exit, but at least you get to stay true to your original values. Be content to stay a larger than usual lifestyle business. Can't have your cake and eat it too.
shostack 9y ago
Then you have an interesting challenge. Businesses are never at equilibrium. So if you're not growing, you're shrinking. There may be lulls where things are flat, but you never want to be flat. Likewise, if you resist growing and have competition, they will see the opening you leave, continue growing, and then look to use that leverage to buy or kill your business.
- rileymat2 9y ago
  > Then you have an interesting challenge. Businesses are never at equilibrium. So if you're not growing, you're shrinking. There may be lulls where things are flat, but you never want to be flat. Is this true? I suspect that a majority of small business are at equilibrium, providing income to the owner/operator. I just don't have the data to prove it.
  - shostack 9y ago
    If you find any supporting data, I'd love to see it because I dearly hope this to be true. Unfortunately, I suspect most of these businesses are vulnerable to larger competitors, market fluctuations and other risk factors that one would want a growing business to protect against. However I'm sure many businesses have managed to keep things fairly stable with modest growth and loyal customers for the lifespan of their owners relationship with the business. I'm just not sure if that is enough to support the fact that there is in fact a state of equilibrium for a business.
- curun1r 9y ago
  > Businesses are never at equilibrium Many small businesses are. It's a key insight to serving that community as a b2b provider that growth and new business aren't the selling points they are to larger businesses. What most small businesses we talked to wanted was quality customers who will bring dependable, repeat business. They want to operate as close to capacity as possible with as little uncertainty as possible. Too much business overwhelms them. Too little starves them. Helping them keep to the sweet spot at the upper end of their capacity made them much happier than just trying to drive as much business to them as possible.

ghaff 9y ago

>Lack of scalability was Etsy’s unique value proposition and competitive advantage. In the same way that many small-scale sites/stores that curate contents can be said to have unique value proposition and competitive advantage. That's not a knock on them by the way. Many are good at what they do and add value. Not everything needs to be Internet-scale but you sort of have to be one or the other.

PakG1 9y ago
If you IPO, you have no choice but to achieve and increase Internet scale. Your share price will suffer if you don't because when you IPO, your investors matter more than your other stakeholders. If you don't want to be a slave to an insatiable hunger for growth by investors, don't IPO. For that matter, don't get investors who expect an exit either. Yeah, you miss out on the big get rich exit, but at least you get to stay true to your original values. Be content to stay a larger than usual lifestyle business. Can't have your cake and eat it too.

shostack 9y ago

Then you have an interesting challenge. Businesses are never at equilibrium. So if you're not growing, you're shrinking. There may be lulls where things are flat, but you never want to be flat. Likewise, if you resist growing and have competition, they will see the opening you leave, continue growing, and then look to use that leverage to buy or kill your business.

rileymat2 9y ago
> Then you have an interesting challenge. Businesses are never at equilibrium. So if you're not growing, you're shrinking. There may be lulls where things are flat, but you never want to be flat. Is this true? I suspect that a majority of small business are at equilibrium, providing income to the owner/operator. I just don't have the data to prove it.
- shostack 9y ago
  If you find any supporting data, I'd love to see it because I dearly hope this to be true. Unfortunately, I suspect most of these businesses are vulnerable to larger competitors, market fluctuations and other risk factors that one would want a growing business to protect against. However I'm sure many businesses have managed to keep things fairly stable with modest growth and loyal customers for the lifespan of their owners relationship with the business. I'm just not sure if that is enough to support the fact that there is in fact a state of equilibrium for a business.
curun1r 9y ago
> Businesses are never at equilibrium Many small businesses are. It's a key insight to serving that community as a b2b provider that growth and new business aren't the selling points they are to larger businesses. What most small businesses we talked to wanted was quality customers who will bring dependable, repeat business. They want to operate as close to capacity as possible with as little uncertainty as possible. Too much business overwhelms them. Too little starves them. Helping them keep to the sweet spot at the upper end of their capacity made them much happier than just trying to drive as much business to them as possible.