"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.
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.
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.
> 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.
Wut. You think it's a good thing to cut her off from the best venue on the web for her work because of an altered business model?
Yeah, this is a real problem. My wife sells via Etsy (leather handbags, all handmade), and this is something we've seen happen. But it's disheartening to hear from potential customers that they won't shop on the site because of this reputation. Unfortunately, this is not new, and not the first time this has been discussed. This has been going on for years now. And frankly, Etsy is still the best place for this sort of thing.
So my wife sticks to marketing and directing people directly to her Etsy store.
Just a question: would you not buy something via Etsy (as in, found something you liked some other method but had to buy it through Etsy), or just not shop using Etsy?
I would definitely buy there if I found myself there directly from an artist/crafter, like if I first saw something in person at a fair. I have nothing against the site. But most mass produced items I would rather just get from Amazon or go to a brick and mortar to see in person, if possible. When I said "I have no intention of shopping there again," I guess I really meant "I have no intent to go browsing for items there again, like I used to."
It's hard to see how you scale what Etsy was originally. See also eBay's transformation away from "the world's biggest flea market." Given globalization and cheap Asian manufacturing, the only way to keep things relatively "pure" is human curation--and even that will be gamed and doesn't scale anyway.
Of course, there's a lot of mass produced knicknacks even among "crafts" sold at fairs and stores. But it tends to not be quite so much mass-produced and crappy.
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.
>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.
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.
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.
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.
> 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.
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.
It still works depending on what kind of item you’re looking for. Specific tea blends, cold process soaps, incense dipped to order, and specific kinda of pottery have all been successful in my getting handmade stuff I want. What kind of stuff are you looking for?
I was gift shopping, and was just browsing topic by topic. In the past I had done so and stumbled across all sorts of amazing handmade items without much digging at all.
To my eye, most of the items on that page look pretty mass-produced or mass-produced + a personalization step. There's nothing wrong with that. I sometimes buy mass-produced "craftwork." Just because a wind chime (or whatever) is produced in a factory at some scale doesn't suddenly make it ugly. And it's not like the average thing being sold at a genuine craft fair is attractive.
That said, I have too much stuff and I just tend to be uninterested in buying more even if there's nothing wrong per se with individual pieces.
I hear this every time Etsy comes up, and I’ll admit the attitude confuses me.
1) without etsy, you really would be stuck with Michaels quality crafts. I’m pretty sure I can’t buy a solid oak spice rack from michaels of any decent quality. Or a retro pipe box, or a certain type of mens jewelry... you get the picture.
2. Nobody else is trying to corner the market Etsy originally carved out for itself. Amazon, Jet, Ebay, and Alibaba all are terrible for showing craftwork rather than a mass produced consumer piece with significant stock. If amazon had an etsy clone that improved on it at all, I would totally split my patronage, but there’s realistically no competitor online.
3. You can actually buy locally and keep your money mostly local. Places like amazon make this extremely difficult to figure out and prioritize.
4. Many etsy shop owners use etsy as a shop front, not as a sales driver. Assuming the main point of etsy is to buy a great product directly from the buyer will probably lead to shitty experiences. This is much more like a flea market, complete with regret purchases. It is not a convenient online shop for avoiding regret.
Am I asking you to excuse etsy’s issues? Hell no. But you’re also not addressing massive parts about how the site functions for both its sellers and consumers.
Everything you just said is exactly what I used to love about Etsy. And I'm sure that there is still some amount of love to be had for it, for those reasons. But finding the kinds of items you just described is exactly the problem. Sure, if there is something really specific I want, I would consider checking Etsy first and if I found a locally crafted item, I'd be a happy camper. But I used to love browsing it, and the browsing experience is ruined or at least heavily degraded (depending on the category) thanks to all the mass produced items.
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.
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.
My point is that if you are a capital-B business, but you also have majority control and do not need additional funding, you can make tradeoffs against your bottom line if it fits your values.
Outside funders may give lip service to it, but they don't care shit about your values, and honestly I think it would be better if all sides acknowledged this instead of pretending this wasn't the case.
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.
> 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.
Honestly, that's the same kind of issue that Duolingo is running into. They're talking about offering the languages for free, but they're trying to run as a Business and make profit. Now it's led to a marked decrease in quality (which wasn't all that great to begin with) as they rush courses and throw in adds to compete with free competitors.
I don't think it's a good thing businesses are pushed towards being either "maximize profits" or "not allowed to make profits at all" (i.e. not actually a business in the usual sense). Like, businesses should be able to "profit-satisfice" if that's what the owners want. Some do; Craigslist basically still does this last I heard. But it sure seems like businesses get pushed away from that, doesn't it? I guess a lot of that is what hn_throwaway_99 said -- don't take VC funding if you want to be able to do that! Or more generally, as little outside funding as you can get away with. Just have to keep it as yours as possible...
Edit: See also sibling comment, hn_throwaway_99 also said it well.
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.
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.
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'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".
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.
>>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.
To me it feels like a byproduct of an overemphasis on a certain kind of inclusiveness, in which people are elevated based on how long they’ve been around and how much buyin there is into the mission. Everyone’s opinion is valued, everyone wants resources, everyone wants to be promoted. If there’s not money constraints or a sense of practicality driving decisions, everyone gets headcount and promotions, driving bloat.
My last job was with a very mission driven startup. We were short on money so headcount wasn’t bloated, but we were plagued by “managers” with no one under them who’d been around since the beginning and didn’t contribute much. The product drifted, and we wasted a lot of time.
I switched to a new, more unapologetically capitalist company, and my team has been subject to some absolutely cold blooded re-orgs. It’s a much less friendly place, but much, much better run in terms of getting stuff done.
Not sure what the moral is. I made some great friends at the first company, not so much at the second. But the new place is in many ways a much less frustrating place to work.
> 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.
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.
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.
Actually, what I had in mind when I wrote that was a situation where total economic activity was sufficient to meet everyone's needs (as I believe it currently is) and each employee was working 1/10th of the total time expected of the single employee. An extreme example, I'll admit, but one that demonstrates that people might be in a better situation if they have a lot more time and sufficient resources rather than an over abundance of time and no resources or an over abundance of resources and no time.
Expenses rising to meet revenue is a pretty common pattern everywhere. (Except for many VC-backed companies where they rise to exceed revenue in the name of growth.) It's a pretty natural tendency because there are always people you want to hire, amenities that seem eminently reasonable, investments you think will pay off, and gear/services that will make work easier/faster.
Additionally, profits are taxed / expenses aren't, so it makes sense for a business to spend money in an effort to grow, or just generally flail about.
> 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.
Wouldn't it have been fine to not go public?
That is, it sounds like, regardless of whether Etsy was profitable (in the sense of producing dividends), it was at least breaking even: it was hiring as many people as it could support on revenue, but not more, and certainly not as many people as it could support on venture capital raised in exchange for equity (or worse, debt). Is that correct?
If so, why should a company like Etsy even bother to go public? What did it gain that was worth being subject to the judgment of people whose value system is that breaking even isn't a good goal?
(I got an Etsy job offer days before the layoffs. It basically sounded like the Etsy I wanted to join died that day, and I still haven't understood why the "old Etsy," pre-IPO, couldn't have lived.)
>If so, why should a company like Etsy even bother to go public?
Etsy took $85m in VC funding. Those VCs want an exit. So, in my mind, they made the decision to eventually go public at the same time they made the decision to take that funding.
I do agree with your broader point "Wouldn't it have been fine to not go public?" but I think if you want to plan to not go public, you probably should bootstrap your company instead of taking VC funding.
> 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.
There was zero reason for Etsy not to be profitable. It over-hired and over-spent.
> 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.
I think the implication here is that hiring huge amounts will ultimately lead to needing the giant reorganizations that leave a bunch of people suddenly jobless.
>> 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.
There's a certain bay area company that has a large developer office here in my rural state. They've been hiring as fast as they can for the past few years. From all my friends who work there, I get the impression that there are way more people now than there is actual work to do. And yet they continue to hire because I assume head count alone is primary metric.
I would argue that Twitter and Facebook have more that triple the headcount that they need to run their business. That headcount is in sales and marketing and is acquired in order to "monetize" latent value in the customer base. The actual product (that attracted the customer bases) could (and was) be sustained by a far smaller head count focused on the technology and minimal revenue development operations. Essentially .coms are utilities and have developed into rent seeking utilities.
I would not want Fred Wilson within 100 miles of the board of any company I cared about. There are many reasons Twitter is a mess as a public company today and Fred Wilson as a disastrous early board member is one of them.
People learn from their mistakes, but apparently Fred has not.
"I have heard from quite a few founders that they read the book Hatching Twitter and came away thinking that they would not want to work with me. That sucks for me but I don’t regret anything I did or said in the events that were described in that book." [0]
This is a good lesson on perspectives. I've had a few encounters that have brought it home to me. Here's a list of experiences...
- A hated executive team that wreaked absolute havoc in the lives of thousands of people for the sake of a thought experiment which failed, which had failed elsewhere, and could have been implemented in a sensitive and non damaging way anyway. I met a member of this cabal socially years later, and because of personal connections and the need for social smoothness (I have a family and a mortgage so I can't just flounce about) I was compelled to play nice and chat. Over the course of the conversation I realised that this team believed that they had been on a mission to save the company and that they had succeeded, that they were loved by the people they had maimed (many of whom would have had to be restrained had they been in earshot of the conversation) and that they had been removed and denied the credit by "dark forces"!
- Employees who when asked opinions about strategic decisions articulate positions that are the polar opposite of the agreed corporate position and sound lunatic (initially) but on reflection, well it turns out that these positions are absolutely as consistent and coherent as the product of 100 slide decks.
- Retired colleagues who ask about some initiative or team that is now entirely forgotten in the corporate body, but when it is mentioned I suddenly realise that it was hugely important and significant, but like Stalin's victims, it's been airbrushed out of history!
- Execs who's focus is on trivial aspects of the business and / or who openly articulate conspiracy theories about grass root business units "I bet they're itching to..."
From Wilson's point of view the pressures and outcomes that he observes are likely significantly resolved and mitigated by the IPO that they did. He probably reflects over a view that moved from immanent displacement and forced illiquidity (due to investors refusing to wave conditions and covenants in agreements that would then mean that no new cash could be generated) to a sunlit upland of board freedom (now threatened by asset strippers). This is not a perspective shared by the founders or employees or even customers, but Wilson almost certainly hasn't spent the considerable cognition required to get that idea.
And this is the problem, even relatively little companies like Etsy are staggeringly complex, there's just too much to consider for a human to fit the required views in. To get the view you have to constantly review and consider and check.. leaving no time to do, and do is needed!
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.
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).
> 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.
All those companies still recognize that they are businesses. They just recognize that having a positive image and treating employees well can be good business.
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.
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.
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.
Amazon already does something like this for Handmade items. It's not exactly great. I know, because they reached out to my wife to get her to move stuff from Etsy to Amazon.
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.
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.
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.