
Etsy I.P.O. Tests a Corporate Commitment to Social Issues - digital55
http://www.nytimes.com/2015/04/17/business/dealbook/etsy-ipo-tests-pledge-to-emphasize-social-mission-over-profit.html?hp&action=click&pgtype=Homepage&module=second-column-region&region=top-news&WT.nav=top-news&_r=0
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xienze
Sometimes I don't understand this world.

"Though Etsy has become a significant business, with sales jumping 56 percent
last year from the previous year to $195.6 million, it still booked a loss of
$15 million."

How in the hell do you spend $210 million dollars running a marketplace
website?

"Etsy shares opened Thursday morning at $31 a share, almost twice their
initial public offering price"

Why in the hell are people snapping up these shares when the company admitted
they may NEVER make a profit? What is going on with the tech industry?

~~~
jsnathan
There's a breakdown of their spending in their S-1 filing [1], under
Consolidated Statements of Operations.

According to this, they could be profitable if they wanted to be, but they are
using their profits and re-investing in growth.

E.g. they more than doubled their spending on marketing from $17.8m to $39.6m
from 2013 to 2014.

[1]:
[http://www.sec.gov/Archives/edgar/data/1370637/0001193125150...](http://www.sec.gov/Archives/edgar/data/1370637/000119312515077045/d806992ds1.htm#toc)

~~~
mason55
> _According to this, they could be profitable if they wanted to be, but they
> are using their profits and re-investing in growth_

Which is one of the things that differentiates a startup from a lifestyle
business. It's the whole point of taking funding and trying to accelerate
growth.

~~~
aries1980
For Lifestyle businesses growth is also a priority. But margins like
-715.90%(!!!) (Hortonworks) or -54.87% (New Relic) shows massive immaturity as
a business. Post-IPO businesses in such early-stage has a big threat to the
tech industry. If they fail (there is a big chance to bankrupt within a year
without funding, according to their financial metrics), they make more hard to
float for other companies later.

------
hellskitchendev
If anyone is interested in the funding history/investor returns in Etsy, we
made a cool infographic about it: [https://equityzen.com/blog/etsy-path-to-
ipo/](https://equityzen.com/blog/etsy-path-to-ipo/)

------
carapace
Hey. I was the fifth employee at Etsy. It was the three co-founders, a guy in
Arizona (or was it New Mexico) doing Flash, then me. It was pretty a weird and
wild ride.

I was hired to write the Etsy Middle Layer "Emid" server. They told me at one
point that they were arguing about being able to find python developers and
one of them went on Craigslist to settle it and mine was the first resume they
saw. (That was personally kind of a let down. I just got lucky.) We had a
phone interview. I mentioned that I used Dvorak and that clinched it. I worked
from home for months before ever meeting the others.

The "emid" server was pointless: nearly three hundred api calls and fully 80%
of them were bodyless wrappers. Just a decorator that did the real work, the
function def, and a docstring to please the syntax (could have used a pass
statement.) All the real "business logic" was in stored procedures in the DB.
Yes, the DB was constantly on fire as we scaled up (our numbers were mind-
blowing the whole time I was there. Up, up, up, and accelerating.) The idea
was that emid would sit between the web servers and the db and provide some
caching and other scaling support, but we never effectively used it. We
actually did not turn on the caching until the investors forced an outside
tech consultant on us to try to get some management of the horrible scaling
fires that were constantly happening. So emid just sat there consuming
resources. It had one good use though: when the system messed up (because the
DB was almost-literally on fire) the ops/dba dude could complain to the CEO
about "the emid problem" and pass the buck.

There's a lot of stories I could tell, but I don't want to "talk trash".
Overall the users LOVED us and that's what really counts, eh?

Also, for what it's worth, the whole "Etsy was born in 2005 in a Brooklyn loft
as a way for one of its co-founders to sell his handmade wooden goods." story,
although it sounds great, is B.S. as far as I know. The original three were
pretty close with the info (I do NOT know what "Etsy" stands for or means,
don't ask) but they did let it drop that they had picked up the site from
someone else who had originally made it but didn't want to do anything with
it. Certainly the original three are responsible for it taking off like it
did, them and dumb luck.

One highlight was that I got to work with Glyph (of Twisted networking engine
fame, now at Apple I believe.) He was a class act and I learned a lot from
him. I got to watch over his shoulder as he implemented a Twisted client for
memcache. Woo!

Final take away: you can get away with ALL KINDS of crazy B.S. when you're
sitting in a fire-hydrant of money.

(And how much would anyone reading this like to bet me that I'll never see a
penny from the IPO? Please? It's the only way I'll make anything from being
involved in this weird and wonderful enterprise)

~~~
loceng
How long did you work at Etsy?

~~~
carapace
I think about a year and a half or so.

------
misiti3780
"Etsy shares opened Thursday morning at $31 a share, almost twice their
initial public offering price"

WOW - sounds like the banks really mis-priced this IPO

~~~
eru
Pricing IPOs is weird. You'd think they should go for an auction and just
capture all the value. But for various silly reasons, IPOs are usually priced
to `pop'. (It took me a while to work out why, and I'm still not convinced.)

~~~
gtremper
Didn't Google use some sort of auction at their IPO? They're the only company
I've heard doing something like that.

~~~
adventured
They used a modified dutch auction:

[http://www.forbes.com/2004/05/10/cx_aw_0510mondaymatchup.htm...](http://www.forbes.com/2004/05/10/cx_aw_0510mondaymatchup.html)

