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Ask HN: Lets talk about Etsy

• petervandijck 16y ago
  Can someone describe the basic business model of etsy, and how they manage to make $ (and how much) first? traffic, ...
  • deleted 16y ago
    [deleted]
• s_mennen 16y ago
  Etsy has three revenue sources: a 20 cent listing fee, a 3.5% sales fee, and an in-site ad system named Showcase. Their board is Jim Breyer, Fred Wilson, Caterina Fake and Rob Kalin (founder, CEO). They are profitable as of earlier this year, founded in 2005, based in Brooklyn, and put on a good show fo' sho'.
  • petervandijck 16y ago
    So it took them 5 years to be profitable? Does that mean they've made back the investment, or just that they make more money than they spend?
• chrismunns 16y ago
  I heard they have a pretty kickass tech blog though! http://codeascraft.etsy.com/ http://codeascraft.etsy.com/
  • julio_the_squid 16y ago
    > Chris Munns, Etsy Sys-Ops Team. Wow, where'd you hear that? :)
    • joshwa 16y ago
      That kind of self-linking would get you banned at MetaFilter ;) But tell Gerry I said to pop on over here and chime in.
      • gmack 16y ago
        Hey Joshwa, thanks for the tweet-vite, I'm glad to share. Etsy is successful, ultimately, not because of some putative secret sauce (though we do have very powerful and unique behind-the-scenes tech). We are successful, ultimately, because we are providing tools that support and enable the livelihoods of hundreds of thousands of people, help their artistic and creative achievements be seen and recognized around the world, and subvert the common shopping experience people have to add a personal connection to the creators of the goods they buy. If anyone were to identify a similarly unmet need, another ignored and under-served community, and created a place online that had a positive impact on the lives, they would also succeed. What "business model", which metrics or revenue streams make sense, depends on that community's characteristics, and it doesn't have to be complicated or some sort of trick. That all said, it's of course crucial to have reliable, flexible, scalable, rapidly evolving technology behind you. I have been working here relentlessly to get our team to the point where we are free to innovate as much as we can. To be honest, there is already abundant information on the web and elsewhere about what works, and what doesn't; it's not really a mystery. But you need the resoluteness to actually execute on these best practices, and the courage to innovate even in the face of occasional mistakes.
  • weaksauce 16y ago
    Sounds like a fun dev team to work on when they name the staging area princess.
  • moxiemk1 16y ago
    And some pretty hardcore engineers...
• natgordon 16y ago
  Etsy does really creative product search - it might be the best site out there. http://www.etsy.com/buy.php http://www.etsy.com/buy.php. It's a really fun site to navigate. They probably get less attention in the tech space because their user base is mostly women.
  • julio_the_squid 16y ago
    Are you sure? The general consensus among sellers is that the search tools are lacking. They are great at finding fairly random collections of items, and some of the tools are fun toys, but it's not the best if you're actually looking for something specific. About half of the sections on the page are fairly useless for serious shopping. The number of items on Etsy has increased by 100 times in the past few years, but the lens through which you can see the items has stayed the same size - search pages of 20-30 items. Few people are going to page through more than 20 pages of results. Basic search has improved significantly since Chad Dickerson came on board, but I think even the tech staff acknowledges that there's a long way to go. One major problem is the tagging system, and the lack of true categories. It used to be that your first tag functioned as the 'top level category', but they didn't make this clear in the listing creation step. You could (can?) also choose contradictory tags/categories with no problems. The top level categories are rather disparate conceptually, and aren't particularly well chosen (i.e., 'Quilts', with 24k items, has it's own top level entry, same as 'Jewelry' with 1.4 million, and art, with 500k). Also, the tags and titles are completely in the hands of sellers, some of whom mis-label items inadvertently or intentionally. It's a bit of a tricky deal.
    • natgordon 16y ago
      I meant "really creative browse". :)
    • petervandijck 16y ago
      I remember they got some good buzz going with the information architects and UX people with their browsing tools early on.
      • 16y ago
• minouye 16y ago
  Etsy tapped into one of the most passionate communities out there, which happened to be on eBay not by choice, but by necessity. If you want to find opportunities, I'd say look at who is using eBay, Amazon, etc. (as a platform) out of necessity due to a lack of alternatives. Once you find those niches, you've already established that there is a market, and if you design a product for that community, customer acquisition should be directly related to the quality of your product.
  • parkern 16y ago
    Do you think when they made those initials pitches investors had a hard time seeing the market potential for hand made items?
    • joshu 16y ago
      It seemed really obvious at the time. It was one of the clearest good ideas I've seen.
  • acgourley 16y ago
    What is funny is that as Etsy grew a lot of sellers got dissatisfied and left to 1000markets. The sellers that all left were able to organize this because of the strong community communication tools provided by Etsy.
    • julio_the_squid 16y ago
      What strong community communication tools are you referring to? As far as I can see, actually cultivating community has been a big shortcoming for Etsy. The 'teams' section of the site is very underdeveloped (it's been the same for years and isn't tied into the rest of the site very well). The forums are frequented by the a small group of focused people, mainly all sellers, and the tone on there has been very negative for years. The in-house messaging system ('conversations') is extremely lacking, with no serious organization tools for your messages. The shop/item favoriting system doesn't function as a social networking 'friends' system, it's geared only towards shopping. Etsy sellers tend to network through their own blogs (mainly on blogger), independent craft blogs, and use Twitter for communication.
• chrismunns 16y ago
  Also heard they are hiring like crazy! http://www.etsy.com/jobs/ http://www.etsy.com/jobs/
• deleted 16y ago
  [deleted]
  • subpixel 16y ago
    You might say getcrafty.com was a golden egg that Etsy was smart enough to pick up and run with. In 2004 getcrafty was already drawing _many thousands_ of passionate (mainly female) crafters from all over the world, the smartest of whom were already experimenting with online sales. From a 2007 NYTimes story: "Getcrafty was filled with project ideas and how-tos as well as discussion forums, which played a crucial role in building the craft-as-community idea that Etsy would later tap into. “Knitting is part of the same do-it-yourself ethos that spawned zines and mixtapes,” Debbie Stoller, editor of Bust, a pop-culture-meets-feminism magazine, declared. Stoller wrote a series of “Stitch N Bitch” books, which became part of a trend toward the formation of social-crafting groups across the country. More Web gathering points emerged, like Craftster and SuperNaturale. Offline, a communal make-stuff group called Church of Craft formed chapters in several cities. Crafting had attained a subculture status by 2004, when Railla hired a New York University student named Robert Kalin and some friends to redesign Getcrafty. Kalin had been studying philosophy and classics, but, he told me, he was pessimistic about the job-market value of his degree and was looking for something more entrepreneurial. While he had a bit of woodworking experience, he and his friend Chris Maguire were basically techie types; they hadn’t known much about the handcrafting movement that was bringing so many young women to Getcrafty. “We were the only guys around,” Kalin recalls. Soon he had an idea for a different kind of site that this burgeoning craft community might find useful: an online marketplace. By that time, plenty of crafters were not simply doing it themselves — they were selling what they had done. There’s nothing surprising about people who enjoy doing something (playing guitar, writing poetry, knitting a bikini) wondering if maybe there isn’t a way to make a living at it. But the scene that Kalin stumbled upon turned out to be brimming with entrepreneurial spirit."
• callmeed 16y ago
  Over 90% of Etsy users are women. Their market isn't underserved by just eBay–but rather the entire web. My wife loves Etsy. She's tech-savvy, loves to craft, loves fashion, and loves to shop. My guess is they overcame the chicken/egg problem because a lot of their sellers are also buyers–which allowed rapid initial growth. Mix in some good PR, people complaining on Ebay forums, VC connections, and there you go.
  • ctingom 16y ago
    What is your source?
    • callmeed 16y ago
      http://techcrunch.com/2009/02/01/davos-interviews-etsy-founder-robert-kalin/ http://techcrunch.com/2009/02/01/davos-interviews-etsy-found... (97%) http://www.doublex.com/section/work/etsycom-peddles-false-feminist-fantasy http://www.doublex.com/section/work/etsycom-peddles-false-fe... ("There are virtually no male sellers on Etsy")
    • parkern 16y ago
      How does Etsy determine what people can sell and can't sell on the site? I know its all hand made, but how do they draw the line?
      • cyen 16y ago
        AFAICT, there's not much line-drawing happening. In terms of handmade vs retail, I've seen people essentially buy retail items, paint a little something on it, then sell the "customized" items... but it doesn't seem like it hurts Etsy much for people to do that. And in terms of controlling quality, there definitely isn't much... :) http://www.regretsy.com/ http://www.regretsy.com/
        • jacquesm 16y ago
          hehe: http://images.regretsy.com/mswood.jpg http://images.regretsy.com/mswood.jpg That one is quite funny.
• acgourley 16y ago
  My 2c on Etsy. My mother is a freelance artist by trade and I witnssed a radical change in her web savvy and understanding in her first 6 months on Etsy. The reason was that she was participating in the Etsy community forums which provide a lot of technical direction. Generating facebook leads, optimal posting strategies, how to make white backgrounds on photos of inventory, etc. In short, they have a passionate self-training community that increases seller efficiency rather than just punishing the inefficient. One odd side effect of this passion and sense of community is that sellers see selling on Etsy as a hobby rather than a profession, and their effective compensation reflects this.
• natgordon 16y ago
  They also completely bypass the chicken/egg problem. The site can work with a small number of sellers. If I'm an artist I can set up a store on etsy and use it as my professional website. I then give out the etsy link to people I meet in the "real world" to buy my work online.
• parkern 16y ago
  I think these guys have also done a great job in showing how to chip away at eBay. Do you see any potential markets/customers/products that could also benefit from a dedicated site?
• joshu 16y ago
  Hey, some of the investors are here on HN. At least, I am, anyway.
  • akkartik 16y ago
    What did you like about the way they built the site and community? What don't you like, if anything? Is there one lesson in particular people can take away from Etsy?
    • joshu 16y ago
      It was more the novel marketplace I think.
      • parkern 16y ago
        Hey Josh, I have kinda asked this to the group, but thought I would direct it at you. Do you think other sub-markets of eBay could flourish as a separate entity? Or was Etsy just able to find a really good balance of a good market with a good audience?
        • joshu 16y ago
          I don't think Etsy was really a sub-market of eBay. This didn't occur to me at the time, anyway. I just thought that "handmade goods" are probably an aggregate multibillion dollar business. I actually invested in another company that directly targets another eBay segment. So yes, I strongly believe that other sub-markets of eBay are interesting to compete with.
        • jasonlbaptiste 16y ago
          I have this gut feeling that local furniture could be a huge market. Almost all my friends (even the ones with lots of money) got a large portion of their furniture from craigslist and other people.
          • joshu 16y ago
• marilyn 16y ago
  One interesting tidbit about Etsy is that the most successful sellers are the ones selling supplies to the crafters. As an aside, if you are in the market for an external hard drive, this is the most beautiful one I have ever seen: http://www.etsy.com/listing/47397822/walnut-and-maple-wood-external-500gb http://www.etsy.com/listing/47397822/walnut-and-maple-wood-e... (I'm not affiliated with that seller in anyway, I just dig his product).
• bdickason 16y ago
  I would argue that Etsy didn't identify an underserved market inside of eBay but rather intelligently saw a need to service the 'flea market' circuit. Based out of Brooklyn, there's no doubt that Etsy's founders frequent places like the Brooklyn Flea and other places where jewelers, knitters, and other small time crafters hock their goods on weekends to escape their day jobs. This, to me, was the win, not going after a piece of eBay's pie. Rather than asking "Other markets that could flourish by being spun out of ebay," I would search for more organizations helping 'micro-entrepreneurs' (i.e. from the bedroom to a small booth rental) make their living.
• jesson 16y ago
  Long time HN reader, but this is my first comment. My wife and I have been planning our son's 5th bday and have used etsy for the first time for party favors, labels, etc.. My experience with etsy sellers is A+. We searched ebay, craigslist, and amazon before deciding to make our purchases on etsy. Maybe, evite should team up with etsy, so I can buy my crafts for the carnival party, while I send out the evite. Hmm...maybe I just found an idea for a side-project.
• patricia 16y ago
  They just tapped into an area -- crafting, artisan designers, etc. -- that was underserved by the market. eBay's client won't recognize these types of vendors as much as they seek out stuff like major commercial brands so the selling capacity was likely limited. I don't care for etsy as a customer but it's a great company from a business standpoint.
• Chirael 16y ago
  My girlfriend used to like Etsy, but she was burned by several sellers there and now actively avoids it unless she personally knows the seller offline. It seems that their mechanisms from protecting buyers from sellers who don't perform aren't really that good.