Over the summer I published an Oral History of The Trade Desk.
Well, for starters, what in the world is an Oral History?
I mentioned at the time that I was inspired by James Andrew Miller’s Oral Histories—excellent works on the formations of SNL, ESPN and CAA.
In these volumes, Jim Miller spends thousands of hours interviewing hundreds of people, putting together the origin stories of these institutions, as told by the players themselves.
Well, we’re back at it with our own take on the format—an Oral History of Etsy!
Today, we’re looking at how Etsy went from weird and scrappy marketplace in one corner of the internet into e-commerce juggernaut today.
First, some ground rules:
Unlike the great Jim Miller, I have done no original reporting, but rather sourced other interviews and quotes.
All comments below are made solely by the players themselves.
My job here has been merely to act as curator: to research and collect quotes, condense for brevity and continuity, and arrange the narrative to build a compelling story.
Cast of Characters (in order of appearance):
Rob Kalin—Founder/Former CEO of Etsy
Chris Maguire—Co-Founder of Etsy
Caterina Fake—Co-Founder of Flickr, Early Etsy Investor and Former Chairwoman of the Etsy Board
Fred Wilson—Parter of Union Square Ventures, Early Etsy Investor and Current Chairman of the Etsy Board
Maria Thomas—Former CEO of Etsy
Chad Dickerson—Former CTO/CEO of Etsy
Josh Silverman—Current CEO of Etsy
2004-2008: The Early Years
2008-2011: Quite a Bit of Turmoil
2015-Present: IPO to Today
🗓️ 2004 - 2008: The Early Years
[In 2004] the wife of an NYU professor named Jean Railla, said, “I need this website called GetCrafty redone, could you do it?” So, we did it. I tried to do all the programming myself but figured out I can’t program, so I did all the design and hooked up with this guy named Chris, who was kind of a legend at NYU, through their bulletin boards, for just being a hacker.
Pretty much every day Chris would come over at 10 o’clock in the morning and I would tell him what I had thought of the previous night over some drinks, looking out my window in the dark and just coming up with ideas for things we could build… And we just built it in about a month and half and then launched it.
[Then] In early April of 2005… I was back in Brooklyn after a brief residence in Paris, and I was about to sketch the initial ideas that would become Etsy. Working with three friends—Chris, Haim and Jared—Etsy went from these ideas to a site live on the Web in about two months.
That first night, while we ate sushi, two people joined. On the second day, three items were listed, and on the fourth day, the first item sold. At first [we were] just three people, then grew to four when Jared jumped on board right after we finished our dinner.
When we started Etsy, we found it incredible that e-commerce had seen so few innovations since the early ‘90s. The only real ways you could shop online had remained the same. Our aim was to shake things up and show people that there are other ways to shop online.
Chris Maguire and Haim Schoppik ended up basically moving into my apartment and we spent a solid six weeks working on it day and night. The last 10% it takes to launch something takes as much energy as the first 90%. The closer you get to it, the finish line keeps moving further and further.
We spent a lot of time thinking about what it should be named. To assist in the task, we set about writing a complicated name-generation script. It would perform the following operations:
Pull a list of all available 4-letter domain names from ICANN
Utilize a custom Bayesian-inspired algorithm to detect phonetically pronounceable words
Cross-reference the list with popular search term data from Google to identify trending suffixes
Take the 25 highest-ranking terms and present them in a survey to 1000 people via Mechanical Turk to determine which they liked the best
Unfortunately, we never got it to work. As shorthand, we had been referring to the script as “Etsy” so we just decided to apply that name to our marketplace because it seemed as good an option as any. We then made a founders pact to give a different origin story for the site’s name every time someone asked about it.
I wanted a nonsense word because I wanted to build the brand from scratch. I was watching Fellini’s 8½ and writing down what I was hearing. In Italian, you say “etsi” a lot. It means “oh, yes.” And in Latin, it means “and if.”
We want to bring back some of the artisanal quality daily objects had back before the Industrial Revolution. There’s something indescribably satisfying about knowing the person who made your T-shirt, or beaded your custom banjo strap. More people are selling the stuff they’ve made with their own hands, and we’re another step closer to granting more people the ability to quit their day jobs and do what they love.
I think Flickr really just set the bar for taking all the crap off the page that you don’t want there and showing the photos in their case, and so I sent Stewart Butterfield [Co-Founder of Flickr and later, Slack], an email just saying “hi, you built something that I think is incredible, I made this, would you please look at it?” And he replied and I think Caterina Fake [Co-Founder of Flickr] replied as well at the same time, and they’re just like “looks interesting, where in San Francisco are you?” and I’m like “I’m in Brooklyn, NY” and they’re “oh, well, come out here” so we all went and spent a month in San Francisco, living in a house in Noe Valley, and Caterina and Stewart, who had the keys to any door they wanted to open just introduced us.
Rob was covered in cat hair. He had no hot water in his apartment. But I totally believed him when he told me Etsy was going to be as big as eBay. There was just something about this guy that I believed was unstoppable—a special entrepreneur gene that’s rare—and I was immediately like, “How can I write a check to this guy?”
We made the rounds—and a couple VC firms pretty aggressively said they wanted to invest but there was this 20 [percent ownership] or bust mentality that they had. And that just wasn’t something I wanted to do at that point. We take what we need now. I don’t want to take $10M because we’ll need it over the next two years. I’ll take $1M now knowing that first it will encourage bootstrapping and I think staying hungry is something that’s really important for a company.
I introduced Rob to Fred Wilson [Partner, Union Square Ventures] at a dinner in NYC; he was looking for a NY lawyer, which I thought Fred could recommend—in the grand tradition of seeking advice when seeking money.
At the tail end of the round, Caterina was like go meet Fred Wilson from Union Square Ventures, and I was just like “not another VC” because I’ve met them, I know their pitch, they’re very smooth talkers, and it’s going to be the 20% of bust thing. So I think I remember meeting Fred and one of the first sentences out was “how about like 1% of the company for now, yes or no?” and Fred just immediately says “yes.”
Rob, Haim, and Chris built Etsy themselves, launched it, and were scaling the business. They had raised a little money from two local entrepreneurs but they needed more to keep Etsy growing. We participated in a $600k seed round to help them do that.
Etsy was at the forefront of the DIY, handmade movement. It was a rebellion against big-box retail and a return to the marketplace, which has always been a very person to person community-oriented place…
I’m also a woman in a male dominated industry. I’m a mom. There’re many things about me that are nontypical. And when I first saw Etsy, it was the beautiful thing, and I actually took it to Reid Hoffman [Co-Founder, Linkedin], who had invested in my first company Flickr, and a bunch of other people in the Valley, and they lifted their eyebrows and they said, “Okay, let me get this straight. This is a bunch of women, mostly, knitting sweaters and selling it to each other?” And I said, “Exactly. Don’t you see the opportunity here?”
We have not found anything in the online commerce area that has interested us until earlier this year when we met Rob Kalin and his co-founders… What we like about Etsy is its marketplace model, the vibrant community, and a truly unique shopping experience that is ideally suited to artistic goods. Etsy feels so right for the market it is serving.
Five years out I see us as a multibillion-dollar public company changing the way commerce works.
🗓️ 2008-2011: Quite a Bit of Turmoil
👋 May 2008: Maria Thomas hired from NPR as COO
What do I bring with me to Etsy? Nearly ten years of experience operating consumer-oriented Web-based businesses at Amazon.com and NPR.org. I have learned that building a great company requires more than just a great idea. It requires an organization that knows what it wants to achieve, and is staffed properly to reach those goals. It requires a relentless, detailed focus on execution informed by constantly listening to customers.
👋 July 2008: Rob steps down as CEO, Maria becomes CEO
I am happy to announce that, with high hopes and expectations, Maria is now Etsy’s CEO. My new title at Etsy is Chief Creative Officer (CCO), a nice loose moniker that will allow me to focus on what I’m best at: product work and long-term, big-picture thinking.
I’ve been filling many roles since Etsy began, all of them new to me in some way. It’s been an incredible and exhausting education, much of it public. Watching Maria, with her experience and expertise, has enabled me to make this decision. I’m excited to get back to what I enjoy most, and maybe even work less than seven days a week for the first time in a long time.
I have been working with Maria Thomas since she joined Etsy six weeks ago. We’ve been taking a clear look at what works and what doesn’t work right now, and planning what we need to move forward. Maria brings heaps of experience with her, and her arrival marks a change in how Etsy is run as a company.
A little over a month ago, after a year of watching and exploring, I joined Etsy to help lead the company. During that year I watched Etsy grow and its community evolve both as a marketplace for handmade items and as an intimate and sophisticated gathering place for people to connect, share ideas, learn, and experience joy in purposeful living.
Her arrival also marks a change in my own role at Etsy. Maria has the skills and experience required to lead Etsy through the upcoming years, and that is what she’s here to do. I’m a hands-on guy, I need to be building things to feel like I’m making a meaningful contribution.
Above all, my goal is to get things done. This ranges from improving the user experience on Etsy, to communicating more consistently, to adding more sophisticated analytical tools so that we can measure our performance… It takes time and talent to fully realize the power of a great idea. Etsy is on its way, but there’s still much to do.
👋 August 2008: Co-Founders Chris Maguire & Haim Schoppik Leave
Last week Chris and Haim announced to us that they’re moving on from Etsy. They’ll be at Etsy through the end of this month, sharing their knowledge of Etsy’s systems, network architecture, and all things technical.
We owe so much to these two guys. They have given their lives to Etsy, all the way down to their sleep cycles. It’s been an amazing three years: [we] built Etsy from an idea in Brooklyn to a global handmade marketplace.
Chris Maguire and Haim Schoppik:
The last three years have undoubtedly been the longest and most eventful of our lives. We’d like to thank each and every one of you for enabling us to build Etsy into what it is today. Through many sleepless nights your kind words and commitment to the marketplace kept us going gladly forward. With a heavy heart now we move onto other ventures. We hope to stay in touch with many of you, and we wish the best of luck to our fellow Etsy employees.
We were immensely fortunate to have had Chris and Haim present at the creation, leading the company’s technical efforts through Etsy’s first three years. Please join us here at Etsy in wishing them many more successes.
👋 September 2008: Chad Dickerson joins as CTO
I am thrilled to announce that Chad Dickerson will join Etsy in Brooklyn as Chief Technology Officer September 1, 2008. As Etsy’s CTO, Chad will be the company’s top technology executive and will join Rob, me and the Etsy team in helping to shape Etsy’s strategic direction, development, and future growth. Chad will manage our entire technical organization, including application development, network infrastructure and quality assurance.
I got a call from Caterina Fake, who had founded Flickr. We used to work together at Yahoo and at salon.com in the late ‘90s... Caterina was trying to get me to meet with Rob Kalin for weeks… I remember it took a long time to get me to come out to New York… [Once] I came out here and met the team, and I had this strong sense that I didn’t want to just give the team advice, but I actually wanted to help. Coming from Yahoo and these Hack Days, when I looked at Etsy, it looked like it was hacking the world.
👋 February 2010: Maria Thomas out as CEO, Rob back in as CEO
As 2010 begins, I will return to Etsy as CEO, and Maria will leave the company. Maria joined Etsy in the middle of 2008 and led Etsy through an important foundational phase. We are a profitable company now, and Maria helped us reach this major milestone. She worked day and night, weekday and weekend; she traveled around the globe meeting up with hundreds of Etsy folks. Her long experience and business skills were hugely helpful.
Maria took the helm at Etsy nearly two years ago and has led the company through a critical period of retrenching, rebuilding and significant growth. Beyond the financial, Maria worked tirelessly to right the ship and to focus the company on being true to its founding vision and values.
When I came to Etsy nearly two years ago, we were a young start-up with grand ambitions and great potential. Today, Etsy is a thriving, global community fueled by millions of buyers and hundreds of thousands of sellers. I am so proud of the progress we’ve made since early in 2008. We’ve overcome incredible challenges…from our honest beginnings dealing with departing colleagues, endless technical challenges, and broken elevators, we’ve persevered to welcome new members to the team, shore up the technical infrastructure, celebrate our new office space, and—most importantly—to deliver more services to our customers. I want to thank all of you for the opportunity to work together and for teaching me so many things about this extraordinary community.
I’m here to restore a sense of wonder, a sense of poetry, and a sense of foolishness to Etsy.
The message was that things were going to get messier, but that that was “OK.” It was very powerful.
👋 July 2011: Rob out as CEO, Chad in as CEO
Rob is more of an artist than an entrepreneur, but the two are similar and related. They both require risk taking and doing things differently.
I’m just really grateful for my experiences with Etsy.
Rob is so very much that founder who cares intensely. He has given so much to the company over the years and he just completed a product roadmap that provides a guidepost for what Etsy will become in the coming years. As Rob transitions out once again, I want to personally thank him for all of this and more. Etsy is his creation and will always be.
Transitions are never easy on the people involved and the company that goes through them. But they are inevitable in any company’s evolution. Some of them work out well and others not as much. But the role of the management and Board is to constantly try to have the right people in the right roles at the right time. And I think we’ve got that at Etsy now and I’m excited to see Chad step up to the top job and lead the company forward.
Because I was the Chief Technology Officer, I got to learn the entire business very intimately, from infrastructure to how we interacted with sellers and buyers.
I’m stepping into the role of CEO at Etsy, and I’m looking forward to working with all of the teams at Etsy to move faster as we scale while staying true to our values. Before we talk about the future, I wanted to say a heartfelt thanks to Rob Kalin. Rob started Etsy. It was his idea. Hiring me was his idea. We all owe him a huge debt for starting the company that we all love, and I owe him a huge personal debt for bringing me to Etsy.
As CEO, I’m going to focus the entire company on moving faster and more purposefully, learning by doing, iterating, and taking risks. That’s a long way of saying we’re going to get things done. I’m going to prioritize the needs of the Etsy community in the broadest sense—Etsy’s sellers, how we work with each other within the company, our local communities, and everyone whose lives we touch. It’s a big responsibility that I take very seriously.
🗓️ 2015 - Present: IPO to Today
👋 April 16, 2015: Etsy goes public at a valuation of $3.3B
I want to once again thank our team here at Etsy and our sellers around the world who worked so hard to make our IPO a truly profound moment for our company and our community. We received such positive feedback and we’re truly grateful for the support... Etsy continues to make progress reimagining commerce to build a more fulfilling and lasting world, connecting creative entrepreneurs with thoughtful consumers and expanding the Etsy economy.
I’m so glad I’m not the CEO of a publicly traded company.
👋 May 2, 2017: Chad out as CEO
The house was burning and nobody was paying attention. Chad got the company about as far as he was going to get it. We needed somebody to take it to the next level.
It has been an honor to lead Etsy as CEO for the past six years and the three years before that as CTO, the Board decided that it was time for new leadership to take Etsy forward and I support that decision.
The fact that I publicly said I had gotten fired versus some “decided to pursue other opportunities” corporate bullshit is largely due to the sense of truth I gained from working with Jerry Colonna [Executive Coach]. Life is full of pain—lean into it. If you got fired, speak the truth. It always catches up to you anyway.
I have the greatest degree of confidence in the long-term growth opportunities for Etsy under Josh’s leadership.
👋 May 3, 2017: Etsy Board Member Josh Silverman in as CEO
I have a deep appreciation for the mission of Etsy and the unique role that it plays in global e-commerce. Our focus will remain on delivering value to our community, including our shareholders. Having worked at other marketplaces, I recognize how difficult it is to create a differentiated value proposition for buyers that provides a unique opportunity for sellers—and Etsy has done that. In the coming weeks, I look forward to listening and learning from our employees, sellers, buyers and shareholders to help ensure we are focusing on the most value-enhancing near and long-term opportunities.
In the six months that Josh has been on our Board, we have gotten to know him well and he has gotten to know us well. That will make for an easier transition and faster execution. I am pleased to be appointed Chair of the Etsy Board and I am looking forward to working closely with Josh and the Leadership Team to help Etsy capitalize on its significant growth opportunities.
I loved the mission of Etsy. I mean, Etsy is about empowering creative entrepreneurs and in a world where automation is changing the nature of work, creativity can’t be automated. I think we provide a wonderful service. There’s no cheaper and easier way to become an entrepreneur than to start a business on Etsy. Anyone who’s creative and has 20 cents can start a business.
I came in obsessed with “what are the things that are going to grow gross merchandise sales?” Then what are the fewest number of things we need to do well in order to grow GMS.
I got off the ride not when I thought I would, but I take a very karmic view of things. If the universe gives you a hint and you don’t listen, it gives you a kick.
When we go to the future, I would say, in the near term of 2021 it’s very difficult to predict. We’re not even giving annual guidance these days. We’re only giving quarterly guidance. 2020 has been certainly the most unusual year since World War II in the western economies. And I think it’s likely that 2021 is also going to be one of the most unusual years in modern history. So trying to predict from this time to that time is very difficult.
But I would say though that every interaction we have with customers, every additional purchase we have with them, every additional visit gives us a chance to deepen our relationship with them, gives us a chance to form habits, gives us a chance to reinforce our point of difference, and all of our signs and signals suggest that customers are having a very good experience on Etsy right now.
So we think that the individualization, the personalization, and frankly the humanity of the Etsy marketplace at a time when you’re being pulled apart and distant from people, the opportunity to connect—to create meaningful connections, we think is super important now, we think it’s enduring, too. We think that kind of thing is something people are going to discover, fall in love with, and I believe continue to want for years and decades into the future.
Since the IPO more than five years ago, Etsy’s stock is up more than 500%
For the year 2020, Etsy will pass $5B in gross merchandise sales.
Through the first three quarters of 2020, Etsy has already passed $1B in revenue.
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