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You’re going to love this. Make sure you’re sitting down and there’s no glass to break nearby.
Mr. Etsy, Rokali himself, has been so kind as to provide an update on the inner workings of Etsy in the Dorque. Ya know, Etsy is now 125 employees strong and still hiring! Amazing. All that brain power and they still act like they’re a group of 5 morons sharing a brain.
And they secured more venture capitalist funding – welcoming yet another money guy to the Etsy Board. They only spent about $1 per member (5 million they tout! 5 million!) on server and hardware upgrades this year, they’re so thrifty!
What our precious little red-headed fiend neglected to mention was that the latest round of funding was $20 million dollars. And that Etsy is now valued at $300 million because it sold more than $130 million in goods in the first 6 months of 2010.
And yet there’s no customer service department, no real new checkout that’s acceptable, no coupon codes, no sale mode, no batch edit…you know the list by now. Oh but, their largest expenditure is the equipment and their employees, and with 125 ironic apartments to furnish, well, we can’t expect them to actually have money left to spend on the site!
Etsy will make roughly $5-10 per member this year ($30-50 million total, ~$12 per shop on the site).
Rob, just between you and me - maybe you should cut back on the manpower and up the ante on brain power. Cut the fat, stop hiring until the people you already have are capable in their jobs. Your revenues will halt when sellers jump ship over the nonsense. Unless of course you’re just prepping it for an IPO.
Oh wait, you are. Yep, Etsy is planning on going public next year according to financial reports. He failed to mention that admin no longer serve the customers, they serve the investors.
Monday, August 30, 2010
What he neglects to mention
Posted by The Righteous One at 12:00 AM
Tagged: Etsy, ipo, statistics
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39 Comments:
What really pisses me off is that the great reputation Etsy is still riding on was created through all the hard work and ingenuity of honest artists, vintage and supply sellers who believed in the original "dream". These shops are the original backbone of Etsy and now they're getting crapped on and insulted as if they no longer matter. I applaud the folks who have been leaving honest comments that tell the inside story to readers of all the recent business PR articles. How I wish a brave reporter would publish a newsflash about "Etsy's dirty little secrets"!
It's high time a brave reporter from a well known zine or newspaper get's a news flash published exposing "Etsy's Dirty Little Secrets!" I never would have put my time and effort into a venue that played cute, hip AND handmade for the seller by you, had I known it was all a ploy to gain popularity for investors, while quietly pushing us out with mass produced designer crapola and outsourced goods. Rokali is a fraud.
I wonder if their new investors know that Etsy wanted to go live with a check out that doesn't take sales tax collection too serious.
A huge outcry made them decide to postpone it for a bit, but I think for a lot of their sellers this is too little too late. Etsy should have looked at this from every angle, and made sure it was absolutely ready to go.
I would not invest one penny in a company like this.
So all the employees are really working for are their Google/Microsoft dream where the day they go public their company options soar in value and make them all wealthy. Then they will all jump ship/get laid off when another company buys up majority share and takes over.
His Dorque article spouts a lot of unrelated information from what he said, it sounded like Etsy as spent 6.3 million since Etsy 2005 on servers. Does it matter?
A dollar per member? Give me a comparison, is that high or low? From the way he puts it, $1 per person sounds really stingly. About $1 per person to invest in customer service?
Dorque article is a lot of BS with pretty phrases and sayes absolutly nothing.
Etsy will make roughly $5-10 per member this year ($30-50 million total, ~$12 per shop on the site).
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Not off me, they won't. ;o) I'm quite happy with Artfire and Bonanzle.
Etsy will make roughly $5-10 per member this year ($30-50 million total, ~$12 per shop on the site).
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Not off me, they won't. ;o) I'm quite happy with Artfire and Bonanzle.
Reading between the lines again, Etsy sales are down for July. Etsy's TechCrunch release (fluff&morefluff)predicts $30 to $50 mil in revenues, hmmm, golly gee, that's quite an unpredictable spread without saying in print that SALES ARE DOWN and expected to keep falling on Etsy (right along with average selling price and below average quality).
125 paid people, at least 1/3 are purely editorial who handpick daily faves and write hundreds of dorkies and forum gossip, tweet the same faves and decorate office closets/conference rooms with tasteless trinkets ala the Etsy mundane branded look. Ya know, it's hard to make $14 and under look like much more than $14 and under.
Which is why they're too busy to pick up a customer service phone (passive aggressives don't like voice to voice). But, strangely, not too busy to post indecipherable ditties giving Etsy's "CS email address" that no one at Etsy actually reads!
"Company valuations" and "expected revenues" are just buzzwords, not the facts, Jack. Their reported numbers are based, in part, on high volume, not on integrity, stellar customer support, or anything that approximates the actual definition of HANDMADE.
So what's a girl who makes high quality perfumes supposed to do?
Suggestions? Maybe just bite the bullet and get my own website.
Jumping over to TechCrunch, in his video interview there from JKune, he say Etsy is 40% customer Service? Could have fooled me.
But with all their bragging about numbers eg $400 million dollars sold- that's not going to them. Why can't they not bottom feed off sellers and say how much etsy makes. Ooops- that would be admitting they barely making anything.
In 1998 - 1999 I worked for an internet startup in Silicon Valley that imported totally niche widgets. The founders had a great idea going, and it worked well when small.
Venture Capitalists came in and promised the two owners that they could make MILLIONS, and quickly, with a public IPO.
But, the caveat, in order to do this, they would need to appeal to a BROADER customer base, not just the niche market they had mastered and become known for.
The owners fell for it, relinquishing control to a "Michael Scott" style COO who had run two previous companies into the ground.
They received an infusion of over $18 million. They kept hiring. And hiring. And they outfitted the office with foozeball, ping pong, playstations, gourmet coffee machines. Everyone had new desks, new computers, new furniture done in trendy styles. Funky, ironic, irreverent stuff everywhere.
It was the "cool" place to work. Just like every other internet startup.
At the end--they had 210 employees. And there was a guy who had just started the day (at lunch) that the Venture Capital house pulled the plug and told us all to get out.
And, they had a much better site and a full customer service team.
These guys are spending like it's Silicon Valley, 1999.
The only thing keeping them alive are the relisting fees. The VC money will run out fast. It always does. I worked for two other startups that failed and watched a number of other sites fail with friends as employees.
You can bet Etsy is changing its focus, trying to reach a farther-reaching audience, i.e. the "global marketplace" and "fair trade co-ops" they are allowing, and which were recently featured in the Storque article.
The VCs have told them that to go public, they need to reach beyond the niche. Which is fucking stupid. The widget company I worked for would still be here, if they had stuck with ONLY their niche.
The new COO at Etsy? Far more to it behind the scenes, I'm sure.
"Serve the investors" . . . When it's about optimizing someone else's profit instead of serving the actual customers, the heart and soul of the business dies. I've been there, done that in Corporate America. It's not pretty. It's a death knell.
All those comments, and they are the most glowingly praisingly worshipful comments I believe I have ever read anywhere on Etsy ever, literally praising Rob, God, and the Lord Baby Jesus for bringing Etsy unto us.
Including a seller who claims "This article made me burst into tears with pure pride (and amazement)" and then goes on to try and rally all the sellers to run off and pay their Etsy bill early to "show the love."
What in the crap are these people smoking?
They won't be making their 5-10 bucks off me this year. I'm gone.
My level of frustration tipped out last week with the tax tool issue. If I were an investor, I would be incredibly embarrassed to have anything to do with such a wholly unprofessional cluster of fools.
I do not truly think etsy will go public. Once "real" accountants come in and see the damn mess everything is in, etsy's infrastructure will NEVER pass Sarbane-Oxley reporting requirements. Etsy only has 1 finace guy.
More likely what will happen is that Google or Amazon or some other public company will buy them and hopefully replace 124 of those current employees. There's got to be someone worth keeping, right?
Those tweeters and gossip folks can get a job with TMZ. Half of them still live with mommy anyway.
Investors see $ signs. They don't care if artists come and go. Resellers make them far more money and don't need customer service.
The funny thing is if etsy goes public most of the employees won't even be needed. Not that they do anything, anyway.
Buy, Sell, Live Handmade. Wait is that still on etsy's "about" page.
Made you look!
I predict that if/wen Etsy does go public, it'll fail and sink faster than the Titanic in under a year.
They've built themselves on the backs of those of us who do make handmade things and have been there if not from the beginning, nearly as long, and are now being trodden into the dust of all the mass market, commercial and fraudulant sellers that are flocking in.
It's beyond ridiculous.
Ya know, after seeing all these articles about Etsy and their great free catered lunches for the staff and those cutesy ironic phone booths for taking private phone calls, I have been asking myself, "Just what the fuck do the employees of Etsy actually DO all day?" Do they sit around looking for things with mustaches and owls to put on the front page of Etsy? Do they spent their time drawing cutesy little child-like animations for the blog? Personally, I would love to get a guided tour of the inner workings of Etsy...
Etsy's story is nothing more than a fairytale for the vast majority of sellers but apparently, the investors they've been able to attract so far either don't know this or don't care because they see a quick buck to be made. Clearly Etsy's management doesn't care because their business model dictates that they suck in as many sellers and fees as possible even though doing so actually hurts their sellers, i.e. the more sellers/items there are on Etsy, the more expensive it becomes for all sellers to make sales thanks to their "most recent listing" setup.
Etsy is focused on buyers. They make their money by selling Etsy buyer traffic to Etsy sellers. As long as they continue with this model (restricting outside linking, minimizing sellers' ability to show up in Google searches, forcing buyers to register in order to buy - which, btw hijacks their sellers' customers and enables Etsy to RE-SELL that traffic BACK to their sellers!, etc.) you can rest assured that anything and everything they do will be guided by this fact.
Etsy will not put their sellers first unless or until they either (a) change their business model, or (b) have a highly visible, major-scale seller revolt.
Smart sellers will figure out how to take advantage of Etsy's internal buyer traffic WHILE AT THE SAME TIME looking out for THEIR businesses by keeping/ building their brand outside of Etsy. If you're serious about your business, it would be foolish to do otherwise.
Meanwhile, new sellers are arriving all the time because Etsy's fairytale is so compelling... and most will never learn that it's mostly BS. They'll just keep throwing fees at Etsy trying to sell their items and Etsy will get richer and fatter and tout how successful they are as a company, which will make them more successful because they'll be able to pull in more sellers and so on and so on and so on.
Etsy management are in it for the fast buck - their business model is flawed in the long-term because it de-emphasizes its paying customers and in some aspects, practically guarantees the demise of some of those customers - it appears they're either truly ignorant or just hoping investors will buy into the fairytale long enough to empty their wallets into managements' personal handmade pockets. Sadly, many will and so it goes that the undeserving will likely win again on the hard-working backs of the little folks.
Just a side note to say - this is at least their second round of financing from VCs, right? Nobody is going to get rich from an IPO of this company except the VCs. They take a HUGE percentage of a company when they finance it... Thank the high heavens my hubby's start-up has angel financing (and, hey, only 7 employees at last count, though they're valued in the $40 million range! And they create a working high-tech product, no less!). VCs take everything they can get away with and then take more. Even Rokali is diluted at this point, I'm sure.
That's why I hate reading any "article" from the Dorque..it makes me sick to my stomach, and this one was no different.
Out of all those sickeningly sweet Kiss-ASS comments, there were only 4 that addressed the REAL issues about how Fucked up Etsy STILL is.
And yeah, what WAS the deal with that long diatribe (she had to post twice!), from a delusional seller, about how sellers should run and pay their bills in full to help Etsy and if not then help fellow sellers and la, la, la, and sprinkle fairy dust and mail blank checks to Rob...meanwhile she has only sold 3 items.
..And another one saying: "I just want to thank you for all the tools you give us to run our business and every bit counts ..especially when your a one man show like myself."
WHAT??????!!!!!!!
Okay, so I didn't have the desire to read the article, but I just browsed the comments. How very saccharine. I think I need to go brush my teeth before they rot & curl out of my mouth.
Well, if their plan is to go public, then it's semi-official: it's over.
I guess, in spite of their hideous looking header (like seriously, guys, it's been 2 years) it's time to go open shop on artfire.
Actually, this latest round of funding is series E. Round 5. If you read about it (and not in those business wannabe blogs) it is to buy out the first round of angel investors, not to put in the etsy coffers.
I love your blog EB, I think the service you provide above all is to make sure artists take care of themselves. Etsy doesn't really have to change a thing, ever. They will keep making money. Resellers and newbies are always waiting in the wings 2 to 1 to take the place of any artist.
Amenhotep IV
I think I lived your story as well.
About the exact same time I worked for a very fantastic, and BUSY little design firm in downtown Cincinnati. There were in total six of us. Two owners (who did everything from design, to code to accounts), Three designers and an accounts rep.
I did work for many P&G brands, mercedes, formica - BIG names. We added another couple people, but just a couple.
Then an offer came from this place out of Indianapolis. They wanted to buy us out! Merge us into theirs, and start this this 22 branch mega design conglomerate in all the "second cities" like Cleveland, Indy, Minneapolis, Chicago, Dallas, Phoenix... they immediately bought a programming firm in town and merged us into one office under the new name. We went from 10 to 80 nearly overnight. IPO was talked about for the coming year. We were going to be given stock options and all that as well.
I was excited, but when they trucked us to the big office in Indy I was soon wary. The place was filled with then new and trendy Herman Miller Aeron chairs. Those things, depending on the model/features run $800 to $1700 EACH. Every desk had one, and most offices also had one in a "visitor" model without rolling castors. There were 220 people at this place in Indy, I reckoned there were at LEAST 350 Aeron chairs, average price $1000 each... $350,000 in CHAIRS! JUST office chairs! That's not counting the at least 7K in furniture in the lobby or other places.
My brain began to spin. This wasn't sustainable. These guys were spending money like nuts.
The conferenece room was filled with them, training classrooms to that no one but employees would see. They had pinball machines, cool open kitchen in this big open hallway where most of the offices were. The lobby was all designer too with some famous names as well. being in Indianpolis they had a race theme through the place, and a I kid you not, a Indy RACE CAR hanging from the ceiling near the entrance painted with the company logo. Even without any mechanics inside chassis and shell alone are not cheap at all.
The more I saw the more I knew this was unstable. When an unexpected job offer came in from some place I had interviewed a year before came in - I jumped ship.
I loved my old job, and everything about it. I did my best work there, and I hated the new place that I eventually quit for being awful - so it might sound like a bad move.
Except - 6 months after leaving my old firm, it was out of business. Not just my branch, all of it. Poof. They grew too big too fast and like most dot.coms, and most of the cincinnati design firms, the bubble burst with a resounding BOOM!
I think Etsy is already on the edge. Growing too big, too fast, investing in office oohs and aahs that have no effect but waste money. (phone rooms and dj booths = 350 aeron chairs)
Etsy has doubled in size in a year. They have catered lunches, plush phone boxes that look twee on press tours, a conference room that looks like a kids bedroom made into a spacestation on some home makevoer show.
They get more and more money every few months now, they are going through it like water.
Get yourselves into another venue. Get your self into two or even three places, as well as your own site. And get your own domain name! The key to success, as any financial guy will tell you, is diversification.
Even I (who works for AF) am in three venues and have my own site. With handmade venues being so cheap, if not free, it's dumb not to, esp being most of them are free, if you find the time to do it.
You have nothing to lose but that icky feeling you get when you rely on Etsy. I've been out a year now after they shut me down, and I don't miss it at all.
CrazyinNY said...
Ya know, after seeing all these articles about Etsy and their great free catered lunches for the staff and those cutesy ironic phone booths for taking private phone calls, I have been asking myself, "Just what the fuck do the employees of Etsy actually DO all day?" . . . Personally, I would love to get a guided tour of the inner workings of Etsy...
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I too would love to know. I keep hoping someone on their staff will write a tell-all book.
It would be very, very boring to read.
Interesting...
I left a comment on the Dorque article encouraging people to
1) learn the difference between "positive and supportive" and "blind to all faults" and
2) look at the old bugs/ideas forums (back to 2005) and see how many from then are still problems now
It was up, but now it's been removed (with no note that admin removed it as is good blog practice).
I guess it was just a little too "negative and unsupportive"
I just paid my last bill as a seller. Unless the new COO starts kicking ass and taking names, nothing will change. I'll bet that he will be castrated after about two weeks when he steps on the toes of an IFOR (incompetent friend of Rokali.)
You know, I would LOVE to get Maria's story. I think she was also castrated.
I finally got terminally tired, tired, tired of all the garbage, just garbage piled upon garbage. The stonewalling when our sales stopped cold. The onslaught of resellers. The idiots in customer service. (June and HeyMichelle lead the pack of howling morons.) The office decor, the phone booths, the free lunches. The constant dishonesty.
The sales tax debacle and the broken shopping cart link with PayPal finally did me in. I wonder how many times people tried to buy and just gave up. My views were fine, but no sales. For a month. Except for one non paying buyer.
And thank you all, fellow bitches and snarky commenters, for keeping me sane. Libby at PickleValentine
@SoapBubble: one day someone will be kicked out for being not into cowls or cupcakes and they will spill the beans. Can't wait.
@Jen (verybigjen)
I forgot about the Aeron chairs! All of the upper management, department heads, and any of the CEO's darlings had them.
As for the "dot com" thing, this whole Etsy fiasco is de ja vu. I would have hoped internet companies would have grown up by now...
Guess not.
p.s. I was wondering whatever happened to you! I hadn't seen you around on Etsy anymore.
I agree there is a significant danger that Etsy will selfdestruct. However, their reputation and the resulting traffic which is still far greater than any other site won't dissappear overnight. I also think that it is at least a possibility they could correct their course.
The good news is that when Etsy begins to lose buyers those buyers aren't going to back to buying at Walmart.com They will have an appetite for handmade items sold by the makers. Most of them will look for a new venue to buy from. That is good news because if Etsy ever messes up bad enough to scare the buyers away we can just follow them to where ever they go. (if we didn't beat them there and lead them ourselves)
The competitors like Artfire are already waiting in the wings to scoop up the traffic. Even now you can duplicate your entire shop to Artfire in one click.
To summarize, I think Etsy will remain the best place (highest traffic) to be for a while. In my opinion at least a year perhaps a lot more. But if it dies the void it leaves will create it's own replacement. The sellers and buyers alike that leave Etsy will bring the needed traffic to at least one of the competitors to replace it. What ever venue has positioned and marketed themselves correctly will gain big-time.
In contemporary business speak. "The cheese will move but it will not cease to exist."
Etsy has become the very thing they were trying to fight - big business. I'm all for making a profit but they have sold out.
What were the principles Etsy was supposedly built on? What standard do they supposedly hold sellers to? Apparently, they don't care to lead by example.
As my hubby would say, it's a load of bollox.
Etsy is very unstable now. If they had run the place with half a brain, they wouldn't have needed venture capital. It's not manna from heaven: they're buying you, body and soul. That's why they call it "vulture capital."
If you make money, it's their business.
If you lose money, it's your business.
They have served only the investors for years now. What they don't get is that serving the customers (shop owners and shoppers alike) is the best way to do that.
Yeah, they hire and hire and hire but they weren't able to manage the employees they had before. What a shitty place to work that must be. Your top boss is this egotistical idiot who should be working at a record store, but conned and lucked his way into this position. Then the rest of your coworkers are essentially, fairly mediocre and don't understand Etsy's mission or how it works. It's dazzlingly clear that Etsy is short on talent and especially management talent. They're long on ego and self importance.
Etsy was never trying to fight big business , Foxglove - that was just a marketing con from the head liar, Rob Kalin. He's never REALLY envisioned this as anything other than his ticket to a yacht and caviar.
I did 8900.00 in sales last month and I can not get one fucking email back from admin about a simple issue? and i am a 100% handmade shop- they are about to loose me for good. jackasses.
$5 to $10 per shop? i sold 8900.00 in items all 100% handmade in my shop just last month alone... those bastards should be running to answer my emails when i have a question or a need- I can't get one fucking reply from anyone.
Shitty feedback changes, enough said.
I actually don't have a problem with the statement that "admin no longer serve the customers, they serve the investors."
Since when have etsy admin ever served the customers with even marginal effectiveness?
Admin have been rude, mocking, self-serving, playing favorites, and ignoring resellers & the TOU from Day 1, with no consequence.
I say, bring on the investors and the "real" business people. There may be a different sort of bureaucracy introduced, but the upside is that investors and experienced executives won't put up with the fuckery that these kids are playing at.
Bring on the real business managers, and enforced professionalism. Maybe then we'll all be able to make some money here, instead of just plugging our quarters into this broken machine.
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