Kristina Salen, chief financial officer of Etsy Inc., center left, and Chad Dickerson, chief executive officer of Etsy, center right, applaud as they open the Nasdaq MarketSite ahead of Etsy's initial public offering (IPO) in New York, U.S., on Thursday, April 16, 2015.
Photograph by Getty Images
By Adam Lashinsky
November 13, 2015

Chad Dickerson, CEO of crafts marketplace Etsy (ETSY), has every reason to be down. Shares in his decade-old company trade for about $9, down from their post-IPO high of nearly $36. What’s more, e-commerce monster Amazon (AMZN) is coming after tiny Etsy with its Handmade at Amazon offering. (Etsy’s market value is $1 billion; Amazon’s is more than 300 times that.)

Yet Dickerson is downright chipper. He takes heart that shares of Netflix and Facebook fared poorly after their IPOs. (Reed Hastings, CEO of Netflix, recently told him to buck up.) As for Amazon, Dickerson faces the retail giant with a sense of humor, first feigning ignorance of its initiative and then falling back on the defense of niche players everywhere. “We’ve been doing this for 10 years,” he says. “We know our sellers well. It’s not a side project for us. It’s not a test.”

Dickerson visited me in San Francisco Thursday to share the latest about his plucky company. It’s a delightful example not so much of disruption—the artisan market carries on one Christmas ornament at a time—as of innovation. Etsy’s market by all rights should be eBay’s. Yet the Brooklyn, N.Y., outfit found a niche the company didn’t serve well and made the most of it. “In 2005, you could sell on eBay, but it was a hostile environment,” Dickerson says. Skilled craftspeople weren’t enthusiastic about their wares being posted between a used Dell computer and a new Honda Civic.

Today, Etsy is a startlingly big business. Dickerson became CEO in 2011, and the year before commerce on Etsy’s site amounted to about $300 million. That figure grew to $1.9 billion last year, translating into Etsy revenues of $196 million. (Etsy charges its 1.6 million active sellers a 3.5% transaction fee and a 20-cent listing fee. It gets half of its revenues from services like payment processing and reselling shipping labels. The site has 23 million buyers.)

Etsy is a B Corp, meaning it is certifiably trying to do good as it aims to do well. (An example: Its B Lab audit led Etsy to hire workers who are mentally disabled; one employee brought on to make coffee has graduated to helping set up computers.) It also believes that unique products shouldn’t necessarily sell quickly—or cheaply. “Things on Etsy take longer, and we think that’s an advantage,” Dickerson says. “We encourage our sellers to keep their prices high.”

Win or lose, Etsy earns points for moxie.

This article first appeared in the daily Fortune newsletter Data Sheet. Subscribe here for a daily dose of analysis from Adam Lashinsky and a curation of the day’s technology news from Heather Clancy.

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