When Etsy launched in 2005, its founders set out to build a different kind of online marketplace. They wanted to give artisans a place to sell handmade goods directly to buyers: an alternative to eBay, which Etsy founder Rob Kalin saw as a “faceless corporation” that crowded out small makers. “The industrial revolution and consolidation of corporations are making it hard for independent artisans to distribute their goods,” Kalin said at the time. “We want to change this.” The company paid employees fair wages and a share of the company’s profits, built a community workshop in its Brooklyn headquarters where local crafters could learn and create, and cultivated a seller community that grew to more than 1.4 million active sellers by 2014. In the process, Etsy demonstrated that e-commerce could be done differently.
As the company grew, it became a certified B Corp, a designation recognizing its commitment to balancing profit with social purpose. In 2015, Etsy went public. But going public handed power over the company’s direction to shareholders. When Etsy’s stock dropped sharply in its first year of trading, activist investors started to push the company to grow its profitability and new leadership was brought in, focused on conventional growth metrics. In 2017, Etsy dropped its B Corp certification. The marketplace built to serve independent makers began optimizing for search algorithms, advertising revenue, and seller fees, and allowed the sale of mass-produced goods that undercut the artisans the platform was created to support.
What changed at Etsy was not its core business. What changed was the set of forces shaping what decisions the company could make: who owned it and what those owners expected. After its IPO, the company did not have the room to prioritize its founding mission over short-term financial performance. Etsy is just one example of many, where good intentions are eroded, and where the original intent fades away as the company prioritizes financial metrics above all else. In short, Etsy is an example of a company that stopped being able to make values-led decisions.
