Chad Dickerson, CEO of crafts marketplace 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 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. In 2011, when Dickerson became CEO, the commerce on its site amounted to $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.
BITS AND BYTES
Proposed U.S.-E.U. data pact likely to carry reporting requirements. Negotiators are scrambling to shape a data-sharing agreement by January that protects the privacy rights of European citizens without hurting trans-Atlantic commerce. The current draft requires American companies to disclose U.S. intelligence requests pertaining to European online users, according to a high-ranking official. The previous, 15-year-old “safe harbor” agreement was nullified last month by Europe’s top court. (Wall Street Journal).
Renowned mainframe pioneer Gene Amdahl dies. As a young engineer at International Business Machines (aka IBM), Amdahl was the design “father” of the System/360 series—IBM’s most successful mainframe ever. He later started his own company, which he sold to Fujitsu in 1997. Amdahl was 92. (New York Times)
Fidelity slashes more unicorn valuations. Along with Snapchat, which we mentioned yesterday, the influential mutual fund company has marked down the value of its investments in Dropbox and Zenefits. According to a separate WSJ report, Zenefits, which sells employee benefits to small businesses, is struggling to reach its aggressive $100 million revenue goal for this year. It is freezing expenses to compensate. (Fortune, Wall Street Journal)
Cisco blames slower China economy for lower revenue guidance. The networking equipment company expects sales growth of less than 2% for its second quarter, even it managed a 4% increase for the first one. Cisco CEO Chuck Robbins cites unfavorable exchange rates for his concern over growth in the Asia-Pacific region. Right now, China accounts for 4% of Cisco’s global business. (Fortune)
Watchmaker Fossil buys wearable technology startup. Fossil will pay $260 million for Misfit, which sells a fitness tracker that competes with products from Jawbone and Fitbit. The watchmaker plans to use the technology to create a line of smartwatches. (Fortune)
Lenovo posts first loss in six years. The PC maker, which bought IBM’s low-end server products in October 2014, lost $714 million in its second fiscal quarter largely due to restructuring costs and a smartphone inventory write-down. Its PC sales declined 17% for the quarter. (Fortune)
GoPro shares slip below IPO price. The wearable camera company is struggling to win over customers who aren’t extreme sports enthusiasts. That is depressing its stock price, which Thursday closed below $24, compared with close to $80 one year ago. GoPro’s overall sales are forecast to grow 20% this year, off from 90% in 2014. (Fortune)
Robotics startups are coming to the retail aisle
If an emerging wave of robotics companies have their way, it will soon be a common experience to walk down the aisle of a store alongside an autonomous robot.
There’s OSHbot, a human-sized robot already leading customers through select Lowe’s stores to the items they seek. There’s also Fetch, a rolling robot that can use its one arm to pluck items from a shelf and prep them for shipping.
Simbe, a San Francisco startup that emerged from secrecy this week, is the latest to join the pack. Its new robot Tally can roll through a store and log what items are out of stock or incorrectly placed before generating a report of what actions the store should take. Read Fortune’s report about retailers and robots.
MORE FORTUNE TECH COVERAGE
The next big challenge for chipmakers is AI by Stacey Higginbotham
New-age engineering school taps old-school mentors by Barb Darrow
Here’s what you need to know about YouTube Music by Victor Luckerson
Eyefluence founder sees nothing but increased productivity with virtual reality by John Gaudiosi
Why a British utility is buying a sensor startup for $60 million
by Katie Fehrenbacher
Customer service to sales: We need to talk by Heather Clancy
ONE MORE THING
Have you always coveted a jetpack? This one actually works, without burning your legs, although the training curve is pretty steep. The engineer behind JetPack Aviation’s JB-9, which took 10 years go develop, envisions practical applications for emergency responders. (Fortune)
MARK YOUR CALENDAR
AppSphere: Grow in a software-defined world. (Nov. 30 – Dec. 4; Las Vegas)
CES: The business of consumer technology. (Jan. 6 – 9, 2016; Las Vegas)
Google Ubiquitous Computing Summit: Platforms and protocols for wearables, home automation, and the Internet of things. (Jan. 11 – 12, 2016; San Francisco area)
Connect 2016: IBM’s social business and digital experience event. (Jan. 31 – Feb. 3, 2016; Orlando, Florida)
IBM InterConnect 2016: Cloud and mobile issues. (Feb. 21 – 25, 2016; Las Vegas)
Enterprise Connect: Communications and collaboration trends. (March 7 – 10, 2016; Orlando, Florida)
Microsoft Convergence 2016: Where business meets possibility. (April 4 – 7, 2016; New Orleans)
This edition of Data Sheet was curated by Heather Clancy: