
Inside the Revolution at Etsy - e15ctr0n
https://www.nytimes.com/2017/11/25/business/etsy-josh-silverman.html
======
jzl
_" 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."_

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's or Joann's art supply stores, or worse. I have no intention of
shopping there again.

~~~
dailyvijeos
Yuck. :(

Sellers need a “Maker Strike” like YouTube channels to keep folks honest.
Also, raise the bar such that sellers have to put in mental, creative and time
investment and are cut out if they repeatedly sell junk. Can’t just sign up as
a seller the same day and spam stuff from AliBaba and say it’s “handmade” or
“vintage.”

Next, have a buyer to seller/creator feedback method that influences item
ranking so junk is pushed down and out.

Maybe use AI/ML/DL to spot product descriptions and images that are copied or
similar to determine if items are new, mass-manufactured products... and, sure
have an appeals process.

PS: My disabled mom makes handmade jewelry that people beg to pay money for,
but I’m hesitant to recommend Etsy considering the diluted execution of the
original business model.

~~~
wyclif
Based on my experience with Etsy, I believe you are both correct. What needs
to happen as a directive and embraced as a cultural value at Etsy is for the
people now running the company to drop a massive, crushing hammer on low-
quality, Alibaba-sourced crap. Turn the entire place upside down. I can't
predict what would happen, but it couldn't possibly be worse than what's going
on there now and it could very well get some of the consumer goodwill back.

~~~
jzl
100% agree!

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hn_throwaway_99
The change in culture was written in from the moment they took VC funding. The
_only_ thing that matters in capitalist markets is shareholder returns, and
anyone who takes outside funding should understand that.

For all the talk of "doing good" and maintaining a strong corporate culture,
if those things aren't contributing to the bottom line, they'll be axed.

~~~
Domenic_S
Seems like just a mismatch in organization type. A capital-B Business cares
deeply about the bottom line. An organization that primarily wants to "do
good" and so forth is perhaps a non-profit or charity. There's absolutely
nothing wrong with being a non-profit or a charity, but that's certainly not
what Etsy is.

I get the tension between impacting the world for the better and keeping an
ever-increasing number of lights on. It is an interesting tension.

~~~
ryanbrunner
I don't think a business is incompatible with the idea of "doing good" at all
- Etsy's problem wasn't that it's impossible to "do good" as a business, it's
that the founders no longer owned the company completely, and the new owners
were more interested in profit than doing good. If they had been a
bootstrapped marketplace that never took outside funding, they'd be perfectly
capable of continuing to put their mission at the level or even before
profits.

~~~
Domenic_S
> _I don 't think a business is incompatible with the idea of "doing good" at
> all_

I totally agree -- I work for a business like this right now, but the business
is 100% owned by the cofounders. Toms or Patagonia or any other number of
examples abound.

The difference between us and Etsy though is Etsy was losing millions of
dollars, and took on VC, and continued losing millions. I wouldn't say the
investors were "were more interested in profit than doing good," except
incidentally. They were/are interested in keeping the ship moving; no entity,
not even a charity or non-profit, can run in the red quarter after quarter and
still continue to exist. This isn't profit or no profit, this is surviving or
folding. Would it be better for the world if Etsy weren't around at all? I
don't think so, but I'm pragmatic like that.

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morgante
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.

Instead I think most of the Etsy leadership and employees forgot that they
were running a business at all. That's fine when you're riding on the back of
a great business model with solid fundamentals (see most big tech companies),
but it fails when you're running a niche business with low margins even in the
best case.

~~~
ordinaryperson
Agreed. Their business model was to sell handmade arts & crafts, but scaling
that requires mass production, which by definition is not handmade. A paradox
and, IMHO, a low ceiling on where Etsy can go.

It's hard not to sound like a handlebar mustache villain when criticizing
Etsy's original business practices, but work is work, not a therapy group. If
employees find corporate governance so horrible, hey, they're free to start
companies that align with their values.

But maybe they'll prove me wrong, who knows.

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ggg9990
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.

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rectang
The contrasting perspectives at the end of the article stand out (I'm sure
that's the intent of the reporter):

    
    
        "There's only so much wiggle room as a public company,"
        said Mr.  Stinchcomb, the early employee.  "If you
        really want to build a company that works for people and
        the planet, capitalism isn’t the solution."
    
        ...
    
        "To all the people who say taking Etsy public was a
        mistake, I say that's ridiculous," Mr. Wilson said.
        "There are some people who will say, 'Well, it’s not
        right for me. I like the old culture.' Well, I'm sorry
        about that. Going public was the best thing that ever
        happened to this company."
    

Mr. Wilson, the investor, is unwilling to accept that there may be other value
systems besides his own, and other definitions of "best".

~~~
mcfunley
I'm as ambivalent about capitalism as the next person. But Etsy is a lousy
counterexample to the premise of combining success in business and progressive
values. Current and former employees conflating the two is disappointing.

Etsy grew rapidly and organically for a decade, and never figured out how to
grow intentionally in an ROI-positive way. As a private company it was not
particularly concerned with revenue per employee, and headcount expanded like
a gas to fill available revenue. After going public it was way too slow to
realize that this wasn't going to fool the public market.

I feel deranged pointing this out, but hiring triple the headcount you need to
run your business is not a progressive social value. I don't know what it is.

n.b. I worked for Etsy from 2007-2014. My own values force me to own this.

~~~
tmnvix
> I feel deranged pointing this out, but hiring triple the headcount you need
> to run your business is not a progressive social value. I don't know what it
> is.

From an investor's point of view this would not be ideal. Having said that,
from a broader societal point of view, it's less clear.

Put it this way: as an investor, I am going to view a business that has 1
employee (on $100k) and $1m in profit much more favourably than a business
that has 10 employees (on $100k) and $0.1m in profit. From the broader
societal point of view though, the second arrangement could be better.

~~~
shaftoe
You're assuming that in the first example, they'd be unemployed. Instead,
they're freed up to do new initiatives that generate new wealth that would not
exist in the second scenario.

More activities across the same labor pool makes more wealth in a society than
fewer activities which consume all available resources. This is why we're much
richer now that 70% of workers aren't farmers.

~~~
ehnto
I agree, but in this context I think it's important that wealth shouldn't be
the only measure of social value. There is plenty of wealth generation going
on. Perhaps there is a greater good at one place than the other thing they may
have been doing.

All hypothetical. But the point is wealth can't be the only measure of
success.

------
corvallis
My friends and I used to frequent Etsy to find unique, handmade or
independently made accessories and home goods. We haven'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/Alibaba with mass-produced jewelry/accessories and trinkets purporting
to be handmade, as long as you don't look too closely. What is the point of
Etsy anymore? It'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/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.

------
dboreham
Curiously though, the long-term successful companies* seem to have found a
balance between naked profit seeking and "good-ness", 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.

*Successful long term because ultimately seeking profit above all leads to reputational harm and resulting a downward spiral (or if lucky an oligopoly).

~~~
WalterBright
> ultimately seeking profit above all leads to reputational harm and resulting
> a downward spiral (or if lucky an oligopoly)

Not at all. If seeking profit leads to a downward spiral, then the managers
are mistaken about how to seek profit. In particular, treating employees and
customers well is an excellent strategy for making profits.

For example, I asked a used car salesman acquaintance how to tell if a car
dealership was reputable or not. He said it's easy - have they been in
business more than 5 years? If they have, they are running on repeat business.
Bad dealerships run out of suckers before 5 years.

~~~
nitwit005
This sort of assumes that the suckers eventually realize they were suckered. I
don't have that much confidence in people's ability to do that.

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mhroth
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'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.

------
karlkatzke
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.

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dailyvijeos
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.

Maybe that’s what he’s doing: reducing liabilities (ie salaries) and making
revenue look good to spark M&A interest, while also considering survivability
without an exit.

~~~
spraak
> Otherwise, a smaller platform will likely buy it for an “undisclosed sum”
> and kill it

It seems much more likely that eBay, AliBaba or Amazon would kill it if one of
them bought it.

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greendestiny_re
Why couldn'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.

~~~
eigenstuff
I just opened an Etsy a week ago. I was so broke I had to borrow $1 from a
friend to finish paying for my listings. (I am no longer that broke, thanks
Etsy.)

Pretty sure that's a fantastic way to keep out the actual artisans/starving
artists/craftspeople and only allow in the kind of people who can gather up
the cash to stock up on tons of Alibaba garbage.

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doiwin
I didn't even know Etsy is a public traded company. What are some other
companies that are basically 'a website' that are publically traded?

~~~
astura
Plenty

Facebook/Instagram/WhatsApp, Yahoo/Flickr/Tumblr, Baidu, Twitter, Netflix,
eBay, Alibaba/AliExpress, PayPal, Rakuten,The Priceline Group (Priceline,
kayak, etc), etc.

