Inside the Revolution at Etsy

<i>&quot;With sales up, Etsy is highlighting successful sellers with a series of videos. But not all users are happy. For years, sellers and buyers have complained that as Etsy has grown more popular, mass-produced goods have flooded the site, making it harder to find handmade items, and harder for sellers to make a living.&quot;</i><p>This. I went on Etsy recently for the first time in a few years looking for a few different handmade items. They were nearly impossible to find amid a flood of mass-produced commercial items. Etsy is nearly indistinguishable from Michael&#x27;s or Joann&#x27;s art supply stores, or worse. I have no intention of shopping there again.

The change in culture was written in from the moment they took VC funding. The <i>only</i> thing that matters in capitalist markets is shareholder returns, and anyone who takes outside funding should understand that.<p>For all the talk of &quot;doing good&quot; and maintaining a strong corporate culture, if those things aren&#x27;t contributing to the bottom line, they&#x27;ll be axed.

This has been a long time coming. Etsy always struck me as a company which was fundamentally a small business. They were never going to be an e-commerce giant and should have focused on keeping headcount manageable from the start.<p>Instead I think most of the Etsy leadership and employees forgot that they were running a business at all. That&#x27;s fine when you&#x27;re riding on the back of a great business model with solid fundamentals (see most big tech companies), but it fails when you&#x27;re running a niche business with low margins even in the best case.

Etsy did things way too well. An online crafts market should not have a well-known engineering team and blog -- they should be running a patchwork of shitty technology that crashes every month because they only hired one guy to run the website and they hired one too cheap. They simply way overshot the MVP for no business value. Then they had to scale up the business into factory-made crap to pay for the hugely scalable platform they had built.

The contrasting perspectives at the end of the article stand out (I&#x27;m sure that&#x27;s the intent of the reporter):<p><pre><code> &quot;There&#x27;s only so much wiggle room as a public company,&quot; said Mr. Stinchcomb, the early employee. &quot;If you really want to build a company that works for people and the planet, capitalism isn’t the solution.&quot; ... &quot;To all the people who say taking Etsy public was a mistake, I say that&#x27;s ridiculous,&quot; Mr. Wilson said. &quot;There are some people who will say, &#x27;Well, it’s not right for me. I like the old culture.&#x27; Well, I&#x27;m sorry about that. Going public was the best thing that ever happened to this company.&quot; </code></pre> Mr. Wilson, the investor, is unwilling to accept that there may be other value systems besides his own, and other definitions of &quot;best&quot;.

My friends and I used to frequent Etsy to find unique, handmade or independently made accessories and home goods. We haven&#x27;t been customers for a few years now. The most obvious and notable reason is that the site is full of stuff that does not meet the above criteria. It mostly has garbage from China&#x2F;Alibaba with mass-produced jewelry&#x2F;accessories and trinkets purporting to be handmade, as long as you don&#x27;t look too closely. What is the point of Etsy anymore? It&#x27;s become a small, pathetic clone of Ebay, Amazon, etc. I hope someone can start another company like what Etsy used to be - a marketplace for indie designers and craftspeople to sell a small volume of unique goods to people who are interested in supporting them and their work. No need to go public or raise massive capital. It can function perfectly well with a small crew to run the site and a tight marketing&#x2F;publicity team. It would be nice if companies were okay with staying small, private, and making a modest profit consistently instead of getting into the growth rat race.

Curiously though, the long-term successful companies* seem to have found a balance between naked profit seeking and &quot;good-ness&quot;, usually through either not being publicly traded at all, or by having a single very forceful leader e.g. In-n-out Burger, Costco, Starbucks, Apple.<p>*Successful long term because ultimately seeking profit above all leads to reputational harm and resulting a downward spiral (or if lucky an oligopoly).

Sadly, I feel that the real issue here is that few people are willing to pay the real cost of individually produced, handmade products, enough to pay the person making them a honest living. We&#x27;ve all become so accustomed to economies of scale that few understand the amount of work required to actually build any trivial artifact of modern society.

tl;dr: You can run a socially responsible, human, ethical company in the current climate in the US, but it is nearly impossible to run one with outside investors who are not invested strongly in the company’s mission or who are not willing to settle for organic growth.

I wish eBay, AliBaba or Amazon would buy Etsy and integrate the site well while keeping management and the right amount of operations independent. Etsy is, right now, a dingy in the storm of a double-ended marketplace without the reach of the 800 million pound cargo-ship empire gorilla. Otherwise, a smaller platform will likely buy it for an “undisclosed sum” and kill it, or investors will throw in the towel.<p>Maybe that’s what he’s doing: reducing liabilities (ie salaries) and making revenue look good to spark M&amp;A interest, while also considering survivability without an exit.

Why couldn&#x27;t Etsy limit the number of seller slots on the website and sell them to the highest bidding persons? Both increases the quality and provides the funding.

I didn&#x27;t even know Etsy is a public traded company. What are some other companies that are basically &#x27;a website&#x27; that are publically traded?