Ask HN: Lets talk about Etsy

https://news.ycombinator.com/item?id=1365606

by parkern • 16 years ago

51 45 16 years ago

news.ycombinator.com

I feel a business that doesn't get mentioned that often around here is Etsy. While the money raises and investors behind it can be read about on Tech Crunch, not much is mentioned about the business.

Thought I would get some discussion going on it: -How do you feel Etsy was able to overcome the Chicken and the egg problem? -Were they able to just find a great market that was being underserved by eBay? -Do you see other markets that could flourish by being "spun" out of eBay? -How were they able to market themselves to not only shopkeepers but consumers as well?

I am sure there are other good questions as well..

petervandijck3• 16 years ago

Can someone describe the basic business model of etsy, and how they manage to make $ (and how much) first? traffic, ...

s_mennen• 16 years 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'.

petervandijck3• 16 years 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?

chrismunns2• 16 years ago

I heard they have a pretty kickass tech blog though! http://codeascraft.etsy.com/

julio_the_squid4• 16 years ago

> Chris Munns, Etsy Sys-Ops Team.

Wow, where'd you hear that? :)

joshwa• 16 years 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.

weaksauce• 16 years ago

Sounds like a fun dev team to work on when they name the staging area princess.

moxiemk1• 16 years ago

And some pretty hardcore engineers...

natgordon3• 16 years ago

Etsy does really creative product search - it might be the best site out there. 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_squid4• 16 years 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.

natgordon3• 16 years ago

I meant "really creative browse". :)

petervandijck3• 16 years ago

I remember they got some good buzz going with the information architects and UX people with their browsing tools early on.

minouye• 16 years 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.

parkern4• 16 years ago

Do you think when they made those initials pitches investors had a hard time seeing the market potential for hand made items?

joshu5• 16 years ago

It seemed really obvious at the time. It was one of the clearest good ideas I've seen.

acgourley2• 16 years 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_squid4• 16 years 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.

bdickason2• 16 years ago

Precisely. A good example of this is vintage furniture sellers and refurbishes. They don't really fit well on eBay because of high shipping costs and difficulty to identify pieces and Craigslist is very hard to crack due to regionalization. For example, Hudson, NY has tons of stuff on Craigslist but New York, NY is hugely lacking in antique furniture.

Anyone that is caught in limbo between eBay and Craigslist and thus resorts to flea markets or other 'in-person' gatherings for sales are good targets.

chrismunns2• 16 years ago

Also heard they are hiring like crazy! http://www.etsy.com/jobs/

callmeed2• 16 years 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• 16 years ago

What is your source?

callmeed2• 16 years ago

http://techcrunch.com/2009/02/01/davos-interviews-etsy-found... (97%)

http://www.doublex.com/section/work/etsycom-peddles-false-fe... ("There are virtually no male sellers on Etsy")

parkern4• 16 years 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?

acgourley2• 16 years 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.

natgordon3• 16 years 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.

parkern4• 16 years 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?

joshu5• 16 years ago

Hey, some of the investors are here on HN. At least, I am, anyway.

akkartik• 16 years 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?

joshu5• 16 years ago

It was more the novel marketplace I think.

marilyn• 16 years 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-e... (I'm not affiliated with that seller in anyway, I just dig his product).

bdickason2• 16 years 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• 16 years 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• 16 years 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• 16 years 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.

Ask HN: Lets talk about Etsy

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