Etsy provides a fascinating look at a company who found traction among a very passionate and idealistic group of people, rode that wave to massive growth and an IPO and now must find growth through decisions often at odds with the beliefs of its earliest members. In this growth study, we look at how they did it in the early days, the decisions and dynamics of their business that allowed them to scale, and the company's efforts to keep finding the new growth lever. The challenge for Etsy, now a public company with a $2 billion valuation, is to find the growth that public markets demand while doing its best to hold on to the users who made them successful in the first place. Author's Note: A special thanks to Shana Carp for her oral history of the company's early traction in the feminist craft community. Her feedback and insights were invaluable in creating this growth study. As Etsy founder Rob Kalin explained in 2008 on the company’s blog:
“In early April of 2005, I sat in an orange chair facing an open window. It was nighttime and the lights were off. I was back in Brooklyn after a brief residence in Paris, and I was about to sketch the initial ideas that would become Etsy. Working with three friends – Chris, Haim and Jared – Etsy went from these ideas to a site live on the Web in about two months.” 
Indeed, Etsy was founded in Brooklyn in June of 2005 by Rob Kalin, Chris Maguire, Jared Tarbell, and Haim Schoppik. Twenty-five year old Kalin—who had attended five different colleges before earning his a bachelor’s degree in the classics and eventually shifting his focus to woodworking—needed a marketplace for the wood-encased computers he was building. That marketplace didn’t exist yet, so they built it. 
At least that’s one version of the story. David Lifson, who ran Etsy’s product management team in 2008, tells it a little differently, explaining on Quora that Etsy’s original founders started out doing “simple freelance website building” after college. One project they worked on was a community forum for crafters. After building the new forum, they began reading through what users were saying. The overwhelming consensus was “I wish there was a place I could sell my crafts! Ebay sucks - it's hard to use, doesn't care about us, and charges high fees."  So, Lifson says:
“the founders saw an opportunity, built Etsy, and announced it to the community. Instantly, thousands and thousands of sellers registered for the site and started selling. They also told their friends at even larger crafting community forums about Etsy, which brought even more sellers.” 
While mostly true at a 50,000 foot level, the above quote leaves out several key drivers of Etsy’s early growth, particularly the cultural and economic climate of the early 2000’s and the budding social networks that enabled new connections among offline community groups. These two factors, primarily the company’s ability to connect with, empower and ultimately leverage the feminist, anti-consumerist movement of that time, provided the early traction the company would need to grow. Just like some digging can get you past the hand waving and to the early traction story of the company, you can also get to the origins of the name itself. Until 2010, the company declined to share where the name Etsy came from. That January, Kalin explained to Reader’s Digest:
"I wanted a nonsense word because I wanted to build the brand from scratch. I was watching Fellini's 8 ½ and writing down what I was hearing. In Italian, you say 'etsi' [‘eh, si’] a lot. It means 'oh, yes.' And in Latin, it means 'and if.'” 
By January of 2008, Etsy had fifty employees, and 650,000 users—120,000 of whom were sellers—in 127 different countries.  In 2010, just five years after launch, Etsy’s community had grown to 5 million members, and the company was valued at around $100 million.  That same year, Etsy saw revenues of just over $300 million.  As of December 31, 2014, the Etsy community had grown to 54 million members, 1.4 million of whom were active sellers and 20 million of whom were active buyers. That same year, the company earned $1.93 billion in sales, amounting to almost $200 million in revenue.  Then in April of 2015, ten years after Etsy’s initial founding, the company successfully completed its IPO, raising more than $287 million and resulting in a valuation of more than $3.5 billion.  Today the company trades at a value of $2 billion on the NYSE. So how did Etsy go from idea to a $2 billion publicly traded company while growing from 5 to 54 million users in just ten years?
In this growth study, we’ll cover how Etsy found original traction by:
- Appealing to and connecting an online community and marketplace for the feminist crafter movement.
- Creating a more economically friendly opportunity than eBay that empowered sellers while riding the back of their anti-consumerist/establishment ethos.
- Leveraging organic, social and network effects powered by the feminist and alt culture crafters that drove massive word of mouth and SEO without spending money.
- Using engineering and product excellence to create a better shopping and selling experience for independent sellers and their customers.
And how they’ve continued to scale by:
- Leveraging a low customer acquisition cost and high repeat buyer rate to fund and fuel growth.
- Growing mobile and international sales to expand into new markets and leverage changing consumer behavior.
- Ramping up paid acquisition spend to supplement its organic growth engine.
- Controversially expanding the marketplace to allow for non-handmade goods.
Though two months sounds like a quick launch, Kalin explained in 2010 that the launch “actually wasn’t going quite fast enough,” so Maguire and Schoppik “ended up basically moving into my apartment and we spent a solid six weeks working on it day and night.”  In addition to getting the site up and running, Etsy faced a challenge unique to two-sided marketplaces: finding sellers and buyers. Etsy Brand and Community Hacker Danielle Maveal explains on Quora that, in the early days, Etsy “did something that works and is often overlooked. We got off the internet.”  To begin, Etsy was founded in Brooklyn, which Quora user Jennifer Johnson describes as “a design mecca” with “great artisan flea markets.”  Though the fledgling company did not have to look far to find high-quality sellers, Maveal says that Etsy had a team attending art and craft shows across the US and Canada almost every weekend. Getting offline and out into the craft fairs wasn’t an accident. You have to transport yourself back to the early 2000’s, with the fall of Lehmann Brothers, the economic meltdown and the rise of social networks and blogs, like Livejournal and Blogger, to really get a feel for the dynamics that sparked Etsy’s growth during these early days. In that cauldron of upheaval and rejection of Wall Street, feminism experienced a mainstream resurgence as an outlet and alternative to the corporate culture that pervaded at the time. That feminist movement was driving the crafting renaissance that was occurring around the country in the form of local art and craft fairs. These groups and networks, some referred to themselves as ‘Stitch ‘n Bitch’  groups, and others who sprung up around popular publications like Bust, were growing locally but were not well connected online to one another. Without getting into an anthropological study of the anti-capitalist, feminist culture—which we’re not qualified to do—the short version is that Etsy was able to tap into the feminist-driven crafting movement (including 'Stitch 'n Bitch' and others) by attending crafting fairs and convincing in high profile feminist crafters to open up stores and sell their wares on Etsy. The team would single out influential “artists, crafters and vintage collectors”  (all of whom represented potential Etsy sellers) and buy them lunch or give them “craft show kits” and promotional materials. As Maveal asserts, “we knew if they set up shop on Etsy, and were successful, others would follow.”  Grace Dobush was one such artist. She explains:
“Etsy debuted at just the right time: Indie craft shows had started popping up around the U.S. in the early 2000s, but running your own online store was a complicated task. (My “store” at the time encouraged buyers to mail me money orders.) Most of the people who joined Etsy in those first few years were like me—independent crafters who were already at least somewhat established IRL—and the quality of the goods on the site was generally high.” 
Not only did these influential artisans have established, substantial followings, but, as Lifson and Dobush point out, many of them had little to no e-commerce presence prior to Etsy and were thus highly motivated to send buyers to the site.   However, it would be a mistake to count all of Etsy’s growth to minor celebrities. Powerful word of mouth sharing came from feminist bloggers who used crafting as a form of expression and rejection of mass produced culture. In 2003, the book “Stitch 'n Bitch: The Knitters Handbook” was published, which chronicled and codified many of the diverse, local organic communities into a national and connected culture. Etsy facilitated—through hosted online message boards—and benefited from this movement as a way for these crafters to connect with one another and create new economic value for them at the same time. In two-sided marketplaces, it’s always a challenge to find both sellers and buyers, especially in the early days, but by courting established crafters and leveraging word of mouth through the ‘Stitch ‘n Bitch’ movement, Etsy found their supply-side solution. In 2010, Steven Carpenter pointed to Etsy’s ability to attract handmade sellers in his TC Teardown of the company. He noted that while Etsy’s 6.7 million products looked insignificant in comparison to eBay’s 117 million total listings, “Etsy’s 6.7 million products are more than double eBay’s 3.2 million listings for similar handmade goods.”  Carpenter went on to assert:
“In a little over four years, Etsy has firmly established itself as the place to buy and sell items such as art, glass, jewelry and art supplies, among others. This suggests further that eBay continues to be vulnerable across other categories where 1) community is a core part of the selling-buying experience, and 2) the company has been unable to attract higher-end sellers.” 
In contrast to eBay, building a community and attracting high-quality sellers is something Etsy tapped into early on. Connecting to this community led to what is perhaps the most significant factor in Etsy’s early growth.
Idea to test from this growth study (saving idea will set you up with free access to GrowthHackers Projects)
Organic Marketing / Network Effects
In his 2010 TC Teardown of Etsy, Carpenter pointed out that the company was spending “next to nothing” on customer acquisition, as shown in the chart below:
Image via TechCrunch 
This trend remained fairly consistent as the company continued to grow, as revealed in their recent S-1. Since 2011, organic channels have represented 87–91% of Etsy’s traffic, while paid ads are have been responsible for between just 2 to 7% of traffic:
Image via Etsy S-1 
As Paul Bennetts explains:
“To think of this another way, for every $100 of sales that occurred on Etsy’s platform, Etsy spent $1-2 on marketing. Some may say that this is still somewhat high given Etsy’s take rate is only approx. 10%, but if you think of Etsy’s GMS (gross market sales) as equivalent to e-commerce revenue it is very low.”
Furthermore, it’s no secret that direct/organic traffic is typically of much higher quality than paid traffic, and not only because it’s free. So what did Etsy do to drive such a high percentage of organic traffic?
We already discussed how Etsy’s early support of feminist crafters at craft fairs helped bring buyers and sellers to the fledgling marketplace. As the company grew, it continued to provide support for sellers, who marketed their wares and, in turn, marketed the Etsy platform. In fact, in 2013 CEO Chad Dickerson (who took over after Kalin stepped down in 2011) attributed Etsy’s remarkable user growth, in part, to sellers promoting their own shops on social media.  As Medium’s Nicolo Ungari explains:
“In reality, what Etsy did so well was enabling individuals to be entrepreneurial with their hobbies. They created a virtuous cycle through several touchpoints, all directed towards helping the seller first: the “Seller Handbook” (Etsy’s Blog), internal management tools to better process their orders and staying in touch with their customers, deep social media integrations...and sponsoring a great amount of third party apps to better manage your Etsy store and increase your revenues.” 
Etsy has fostered an entire ecosystem of more than 150 third-party apps and tools to empower and support sellers. In the early days, Ety’s community forums not only acted as a place for sellers to get tips on how to improve sales, they acted as recruiting boards for new sellers and hubs of discourse around the feminist crafting ideals. As Ungari puts it, “Etsy’s incredible organic channel is the entrepreneurial drive of its sellers.”  In truth, it may be more accurate to say that Ety’s incredible organic channels is the anti-capitalist drive of its sellers—at least very early on.
Image via TechCrunch  As Ezra Galston explains in more general terms, “power sellers will be the primary drivers of scale on your platform. While the long-tail of one-off sellers does provide product breadth and liquidity, power sellers will drive both volume and organic referrals to their own native product stores.”  Speaking more specifically to Etsy’s circumstances, Galston goes on to point out that:
“although only 32.3 percent of sellers who had sold an item in 2011 were still actively selling in 2014, those who remained on the platform had developed into serious power sellers – on average $13K per active seller from that cohort. And as power sellers become smarter and empowered by better tools, I expect their average earnings to continue increasing. This is one of the most fundamental signs of Etsy’s strength – the ability for its sellers to earn a living.” 
Along with engaged, empowered sellers come valuable repeat buyers—the other side of Etsy’s “loyal customers” coin. Before we get to the repeat buyers however, it’s worth pointing out another important network effect. Etsy not only became the de facto destination for crafters to sell their goods online, it also became the place to buy hard-to-procure supplies for their original goods. Etsy acted as a marketplace for factory alternative goods such as rare zippers, embellishments, fabrics, and more. These suppliers could list and sell on Etsy outside of the factory-made goods exclusion (more on that later) and dramatically increased the amount and selection of craft-ready items that could be turned into finished goods by Etsy sellers. So, while many focus on the simple buyer/seller dynamic, the critical seller/supplier relationship further fueled growth and commerce on Etsy.
Image via Etsy S-1 
In 2014, 78% of Etsy purchases came from repeat customers. As Ungari explains, “The underlying strength of this organic channel is evidenced by Etsy’s repeat purchase rate. That is, the majority of Etsy’s GMS is generated from repeat purchases.” 
Image via TechCrunch 
This is the power of organic growth. If the bulk of Etsy’s traffic were the result of paid ads, then we’d likely see the opposite—lots of first-time purchases and fewer repeat purchases. Yet by using the unique motivations and networks of sellers to their advantage, Etsy has been able to encourage sustainable, organic growth. As Galston points out, despite the fact that Etsy’s active sellers increased by 63% over the past two years, GMS per seller increased by 32% in that same period. He asserts, “This is in contradistinction to a normal supply/demand curve – and is additional proof that Etsy’s buyers and sellers are among the most loyal and committed.”  He goes on to compare Etsy’s active sellers to Shutterstock’s active contributors. Though that number also grew by 63% in the same time period, earning per seller only increased by 19%. Galston points out that, while still impressive, this only amounts to half of Etsy’s growth. 
It’s hard to discuss Etsy’s use of social media without also mentioning the feminist crafting movement of the early 2000s and the forums and blogs run by crafters, feminist-culture publications and others. As free, popular blog platforms began to pop up, private forum conversations began to spill over to more open forums like Blogger and Live Journal. The most outspoken and persuasive voices grew large followings and leveraged social media to grow their audience and further their beliefs. These networks, which overlapped with tech, social media, the ‘Stich ‘n Bitch’ movement, drove not only a great deal of word of mouth sharing for Etsy around their crafts, but also a ton of SEO value through repeated linking to stores, items and more. This early sharing created massive traction for the platform and showed Etsy just how powerful these online networks of users can be. With that institutional DNA, it’s no wonder that Etsy remained focused on leveraging social media with their motivated power-sellers. And while blogs are more passe today, new social networks like Pinterest have continued to send low-cost, high-value traffic to Esty. In March of 2012, Etsy added the “Pin It” button on product listings, right beside the Tweet and Like buttons.  The Pinterest for Business blog explains that, “Upon observing that their customers were pinning Etsy items onto Pinterest, the Etsy team added the Pin It button on each item listing page on Etsy.com.”  Etsy also launched a Guest Pinner program in which pinners—including Etsy Sellers, popular bloggers, and brands like Martha Stewart Weddings Magazine—pin to Etsy group boards. As Editor-in-Chief Alison Feldmann explains: “Our goal is inspiration—not just sales. We showcase Etsy’s values to drive loyalty and engagement, and we post things that resonate with our community. We maintain a careful balance of Etsy items and other content pinned to maintain authenticity with our audience.”  Etsy seller Rachel Ball—whose shop Elephantine sells modern, minimalist jewelry—pins her new products as soon as they’re listed for sale. She pays close attention to Pinterest engagement metrics in order to determine which pieces best resonate with her customers. According to Ball, since she began using Pinterest to promote her Etsy shop, average views per week have increased by 22%, while sales per week have risen by 20%.  Ball is a classic example of a seller who helped drive early growth with Etsy through backlinks from her blog and has continued to evolve her use of the platform as social media channels have changed.
Though powerful network effects are the primary driver of Etsy’s growth, the company did recently ramp up marketing spend. According to Etsy’s S-1: Marketing expenses increased $21.8 million, or 122.2%, to $39.7 million in 2014 compared to 2013, primarily as a result of an increase in search engine marketing from Google product listing ads and, to a lesser extent, from an increase in employee-related costs resulting from increased headcount in our marketing team, which includes our public relations and communications teams.  It’s important to note that Etsy doesn’t differentiate between buyers and sellers. This makes it hard to say where this increased marketing spend has been directed.
Engineering Excellence & Optimization
Another critical component of Etsy’s success has been their culture of continuous experimentation, deployment, and optimization. While acting as the company’s CTO, Chad Dickerson (now the CEO) explained in early 2011:
“We onboard engineers quickly and their first goal is simple: deploy on your first day. The goal here is to constantly emphasize shipping, and get over any deployment fears early. Engineers get productive very quickly.” 
According to Dickerson, in 2010 Etsy grew its engineering team from 20 to around 70. This was at a time when the rest of the company was also growing quite rapidly, and Dickerson explained, “overall speed has been really important to us, and we’ve continually tuned our processes, tools, and culture to support that.”  Dickerson said Etsy divided developers up into teams of 3-7 engineers, with each team paired with a product manager and a designer. Furthermore, he noted that all of Etsy’s designers code, and product managers code at various levels as well. He explained, “though we’re not officially using capital-A Agile,” Etsy teams planned in 60 day chunks, dividing the deliverables up into two-week periods. These 60-day plans would then go through a review process involving CEO Rob Kalin, who kept in close contact with the product and engineering teams through the entire process. Nevertheless, Dickerson explained that the teams had a lot of autonomy to work within a set of general architectural principles. “Specs are typically very light,” said Dickerson, “and the focus is on building working features.” He went on to explain that Etsy’s engineers “are treated as creative collaborators in the overall process with design and product, and products are worked out and iterated on with engineers instead of simply being handed to them for implementation.”  Noting that Etsy’s Kellan Elliott-McCrea was architect at Flickr and VP of Ops John Allspaw had previously run Ops at Flickr, Dickerson also asserted that the company had quite a bit of Flickr DNA, including “config flags” and code for features that runs “dark” for days or weeks before being switched on. Furthermore, key system and business metrics like checkout, listing, registration, and sign-in rates are projected onto screens in the Etsy office. The engineering team has a number of internal dashboards for tracking them, as well as switches and knobs for rolling out new features in percentages of users.  As Etsy continued its impressive growth, the company has remained dedicated to creating a culture of experimentation and optimization. As iOS Software Engineer Lacy Rhoades explained in 2014:
“Experimentation at Etsy comes from a desire to make informed decisions, and ensure that when we launch features for our millions of members, they work. Too often, we had features that took a lot of time and had to be maintained without any proof of their success or any popularity among users.” 
By contrast, Rhoades claims that A/B testing allows Etsy “to tinker with small pieces and measure if those pieces are moving in the right direction,” helping them to quickly determine whether a new feature is worth working on. Rhoades says that tests usually result from ideas for improving existing products—for example, the addition of a feature. First, they break the new idea into small, testable components, then implement or research each component to determine whether it has a net-positive or net-neutral effect on factors like engagement and conversion.  Rhoades explains that Etsy’s teams are divided such that they usually only cover one product or user experience. This vertically-integrated separation makes for easier experiments. Still, because users are likely to encounter multiple features in a single visit, when new experiments are being designed various teams do meet to discuss the liability or influence that different experiments could have on one another—in particular, whether one experiment might muddy the results of another.  Rhoades says that Etsy’s engineers work to be selective, patient, discreet, and reasonable when designing and running tests. “An experiment isn’t something you can tack on at the end of designing a product feature,” he explains. “It has to be baked in from the onset. Once the experiment is in place, chances are it’s going to take some time before you can statistically prove anything.” The Etsy team knows that breakaway success is highly unlikely. Instead, Rhoades says that when experiments go well, “often times they will result in incremental changes to your product. This is what you want. Making small changes reduces risk, and ensures that you’re headed in the right direction with your development work.”  It isn’t just Etsy’s engineers who value testing and optimization. Etsy’s product managers and designers also work to incorporate experiments into their plans, with product ideas and designs relying “heavily, from day one, on being able to test and run experiments.”  As Rhoades explains:
Designers love to be able to quantify that good design really does make things better. Product managers often want to have graphs to prove the success or impact of changes over time. Without experiments, we would be stuck overhauling an entire product, and then doing our best to look back and make a side-by-side comparison of metrics where one can’t really be made. 
Combined with Etsy’s strong craft ethos, this agile and experimental approach to the Etsy product itself has helped the company to evolve and change right alongside its rapidly expanding user base.
By January of 2008, Kalin announced via the company’s blog that Etsy was “almost break-even, meaning our revenue pays all our bills, including the salaries and benefits of our fifty employees.”  According to Etsy’s recent S-1, the company generates revenue in six different ways:
- the $0.20 listing fee charged for each item
- point of sale payments (Etsy’s version of Square Reader, launched in October of 2014). 
- shipping labels
- direct checkout
- promoted listings
- a 3.5% commission on every sale
Yet there are two factors in particular that have been instrumental in Etsy’s remarkable growth: a small take rate coupled with non-transactional revenue.
Small Take Rate
It’s noteworthy that Etsy’s revenue as a percent of GMS is low relative to other marketplaces. While the standard take rate is between 20-30%, Etsy’s has been between 8.3-10.1% since 2012. As Paul Bennetts explains, “This lower take rate from the beginning suggests that there is less risk of margin compression making Etsy’s revenue line of higher quality.”
Another factor that has made Etsy’s relatively small take rate sustainable is their non-transactional revenue. Growing this has been one of the company’s biggest drivers of overall growth. Sellers can pay extra for shipping labels, direct checkout, and promoted listings.  Galston points out that revenue from these so-called Seller Services:
“has nearly doubled from 25 percent to 45 percent of total revenues in the last two years and now includes a full 450bps [basis points] of Etsy’s gross sales income. Vitally, the hyper growth in these new categories is offsetting a tangible decrease in Etsy’s core marketplace gross margin – down 8 percent over the past two years – most likely from discounting to new customers which has a contra-revenue (and thereby margin-contracting) effect.” 
Revenue generated by seller services helps to offset the cost of credit card processing fees from marketplace transactions. Yet as Galston points out, though revenue grew by 57% in 2014, Etsy’s overall expenses grew by 68% (though, without marketing costs, that number is actually 51%). 
Etsy headquarters are located in DUMBO, Brooklyn. This is where the company’s technology, customer support, marketing, business, and communications teams are located. The space also hosts Etsy Labs—craft events open to the community. There’s an additional Etsy office located in Berlin.  In addition to the company’s impressive ability to motivate and empower sellers to do their marketing for them, a huge component of Etsy’s success has been that people feel good about shopping there. From the very beginning, Etsy has positioned itself as the antithesis of corporate monoculture. It’s anti-traditional capitalist roots are still a huge part of the mystique and DNA of Etsy—even as the company has grown—it continues to espouse the anti-consumerist, anti-mass production ideal.
An Appeal to the Feminist, Anti-Capitalist, Anti-Consumerist
While Etsy grasped the power of the grassroots feminist craft culture almost immediately, it was in early 2008, that Kalin asserted, “we believe that the world cannot keep consuming the way it does now, and that buying handmade is part of the solution.” After reading (via video) a passage from Leo Leonni’s Swimmy—in which a school of small fish team up, swimming in the pattern of a larger fish with Swimmy as the eye, to protect them from giant fish that would eat them—Kalin explained:
“Our vision is to be the eye — to be a kind of organizing principle. We do not want Etsy itself to be a big tuna fish. Those tuna are the big companies that all us small businesses are teaming up against.” 
He went on to assert, “Those big companies are holdovers from the days before the Web existed,” explaining that “any company that is being run the same way now as it was before the Web came about is due for some massive restructuring or deflation.”  Unlike those big, holdover companies, Kalin asserted that Etsy was, literally, a company born on the web. “I see the company itself,” he explained, “as a handmade project, and we’ll continue to build it this way.”  Throughout his time as CEO, Kalin stayed true to these little-fish ideals. As Max Chafkin explained in 2011: “‘I speak to people in the business world and the technology world, but I don't admire them,’ [Kalin] says, pointing an 8-inch combat knife at me for emphasis. ‘I admire the makers of the world.’ This is not empty rhetoric: Kalin makes his own furniture and his own underwear. He also thinks that trying to maximize shareholder value is ‘ridiculous,’ adding, ‘I couldn't run a company where you had to use that as an excuse for why it was doing things.’"  As we’ve already touched on, much of Etsy’s early success was rooted in the handmade, anti-consumerist, anti-mass-production aesthetic. But it wasn’t just a marketing channel or gimmick. In early 2008, Etsy posted a Call for Feminist Crafters on behalf of Etsy user pinupchick, who said:
“Not only am I an avid Etsy fan and buyer, I’m also a graduate student at the University of Western Ontario. I’m currently pursuing my Master’s degree in Media Studies, and my thesis is on crafting as a mechanism of resistance against corporate-fueled capitalism, focusing specifically on feminist crafters.” 
In that post, the company explained:
“Etsy’s core mission is to help artists and crafters make a living from what they make. This may seem like an innocuous enough statement, but truth be told, the socio-political-cultural-economic state in which we live makes this a rather bold rallying cry. We want to make history’s "way of doing things" undergo a change and Rob aka Rokali’s recent announcement about Etsy’s future explains how we seek to grow the company in contrast to many corporations. Etsy is part of a larger movement and we at Etsy want to learn more about the consciousness of feminist crafters in our midst.” 
As Etsy took off among the ‘Stitch ‘n Bitch’ crowd, Etsy built stronger ties into the core cultural hubs of the moment. One important relationship was with Bust Magazine. Bust’s West Coast editor Lisa Butterworth has been an Etsy member since 2007 as well as a long-time contributor to the Etsy blog. Even through tumultuous at times, Etsy has tried to maintain this connection through successive growth spurts. After taking over for Kalin, Dickerson worked to uphold those ideals, as in 2012 when Etsy announced they’d be providing 10 $5,000 “Hacker School” grants in an effort to decrease the gender gap in engineering. 
The Handmade Ethos
When asked by WSJ’s Teri Evans in 2010, “‘Keep it human’ is one of your rallying cries, what does it mean?” Kalin explained:
“It means growing big, while staying small. Etsy itself is hundreds of thousands of very small businesses and I want to be able to keep that intimacy within our own company, even as we grow and the number of people we need to support grows. It means always keeping a human face on what we're doing. I don't want to hide behind a corporate firewall and start speaking with some third-person voice. I want to always speak with a human voice.” 
Kalin went on to explain that his vision for Etsy was, “Instead of having an economy dictate the behavior of communities, to empower communities to influence the behavior of economies.” Kalin asserted:
“I've spoken at many universities, and there's this huge entrepreneurial spirit in students in school now. In my mind, Etsy's ecosystem is about empowering and supporting these very small businesses. That goes well beyond just a marketplace.” 
These handmade, small business notions have also remained integral to the company’s image and growth. In August of 2013, Dickerson described Etsy as, “a platform that provides meaning to people, and an opportunity to validate their art, their craft.” He went on to assert, “all commerce is about real human interaction … At the end of every [Etsy] transaction, you get something real from a real person. There is an existential satisfaction to that."  He reiterated these concepts on CBS This Morning in August of 2014, “The beauty of Etsy is that you can get something that no one else has … It feels really good to support an artisan.” 
Certified B Corporation
Another contributor to Etsy’s feel-good ethos is the company’s designation of B Corporation, a sustainability certification based on high standards of social and environmental performance, accountability, and transparency.  According to Andrew Kassoy, co-founder of the nonprofit B Lab, which certifies B Corporations, Etsy “barely passed” B Corporation certification when they filed in 2012, but the company has made impressive strides over the past three years.  While B Corporation guidelines certainly limit how much Etsy can cut spending (employee benefits and sustainability measures aren’t cheap), the company makes it clear that Certified B Corporation status is not a liability but an integral part of Etsy’s identity. As their S-1 explains:
"Our reputation could be harmed if we lose our status as a Certified B Corporation, whether by our choice or by our failure to meet B Lab’s certification requirements, if that change in status were to create a perception that we are more focused on financial performance and are no longer as committed to the values shared by Certified B Corporations." 
Thus far, Etsy is the largest B Corporation to go public in the United States.  One way in which Etsy lives up to B Corporation status is through “Craft Entrepreneurship,” an effort that began in August of 2012 when Larry Morrissey, Mayor of Rockford, Illinois, reached out to Dickerson via Twitter. Morrissey asked, "Since we need an 'Etsy Economy' has Etsy begun any partnerships with high schools or job training? We'd love to explore."  The following year, Etsy’s Craft Entrepreneurship programs launched in Rockford and New York City. They’ve since expanded to a total of 10 cities, including St. Petersburg, Florida and Watsonville, California. 
Values and Impact
Around the time that, as Kassoy explained above, Etsy had “barely passed” B Corporation certification, a Berlin-based employee named Matthew Stinchcomb was running global marketing for Etsy, and he was miserable. As Fast Company explained in September of 2013, Stinchcomb “hated marketing, he hated that he wasn't doing anything creative, and he didn't much like working out of a satellite office detached from the Etsy mothership, either.”  He returned to Brooklyn and proposed a new team aimed at improving workplace happiness, and he suggested himself as the head. Perhaps because of their lackluster B Corporation review, the company was more than amenable to Stinchcomb’s suggestion. Etsy did create a new team, called Values and Impact, and they made Stinchcomb the head. As his first act, Stinchcomb brought in the consulting firm Imperative to survey Etsy’s 419 employees and generate a baseline measure of employee happiness, represented by a Gross Happiness Index. The Gross Happiness Index is based on five key contributors to human happiness: positive emotion, engagement, positive relationships, meaning, and accomplishment (PERMA).  As it turned out, the Values and Impact team became yet another important component of Etsy’s B Corporation status. According to the Company’s 2013 Values and Impact Annual Report, Etsy meets these guidelines in a number of ways, including giving every employee 40 hours of paid volunteer time a year, paying more than 40% above the local living wage, and covering 80% of health insurance premiums.  As Stinchcomb explains:
"There is a tendency at technology companies to think that quantitative data is all that matters and that anything qualitative is soft and should be ignored.That creates tension in this organization because half of us are doing quantitative work and half are doing qualitative work, and the 'soft' teams often feel they need to be more quantitative to be valuable to the company.” 
“But the real strategic advantage Etsy has is its people,” he goes on to assert. “And they can't be completely reduced to data." 
In 2014, 36.1% of Etsy’s $1.93 billion in GMS came from mobile devices.  In mid-November of 2011, Etsy released their iPhone app. As product marketing manager Laura Hood explains:
“Early on at Etsy, we saw our number of visitors from mobile devices growing, so we began optimizing our pages to make them faster, easier, and prettier from any phone. Our community was into it, as evidenced by one member in particular: ‘Awesome Awesomeness.'” 
Less than four months later, the app had surpassed 1 million downloads. In that time, Etsy also saw a 25-60% growth in visits month over month, with an average of 30 pageviews per visit.  One year after the launch of their iPhone app, Etsy’s iPad app launched in November of 2012,  followed by an Android app in December of 2012.  As of December of 2012, around 25% of traffic was coming from mobile devices. From Black Friday to Cyber Monday those numbers rose to 1 in 3 visits from mobile.  In January of 2013, Etsy claimed that mobile visits had grown 244% over the previous year. That same month, as a means of improving their mobile strategy, Etsy acquired the team behind the iOS photo collage app called Mixel. 
Of Etsy’s international presence, Steven Carpenter asserted in 2010:
“For a company of its age, Etsy has gone international exceptionally fast. It has sellers in over 150 countries and supports 23 currencies. It is rare for a startup to have garnered international demand so quickly and it is operationally very difficult to support. This is a huge competitive advantage.” 
As Etsy continued to grow, international expansion remained a high priority.In May of 2012 Etsy raised $40 million in Series F funding. The round was led by Index Ventures with participation by Burda, Union Square Ventures, and Accel Partners. Dickerson announced that the money would go toward, among other things, expanding Etsy’s international reach. He explained:
“Reaching international markets is a priority, we’ve been investing in Western European nations like France and Germany, and we’re taking a fresh look at English-speaking markets like Australia and Canada which have grown organically for us. Asia’s a little bit into the future.” 
The plan, Dickerson said, was “to grow Etsy into an economic force all around the world.”  Then in June of 2014, Etsy acquired the French handmade marketplace A Little Market, announcing:
“As we’ve focused on international growth, capitalizing on the strongest economies in the world has been a top priority. France is the fifth largest economy and seventh largest e-commerce market globally, and it is Etsy’s strongest non-English market.” 
Etsy also noted that at the time more than 25% of their orders were shipped internationally.
To date, Etsy has acquired six companies, beginning with New York-based advertising startup Adtuitive, which was acquired in December of 2009 for an undisclosed amount. The Etsy blog explained that, as part of the acquisition, Etsy gained five coders with “deep technical expertise in algorithmic search, machine learning and data interpretation, and advertising infrastructure,” and that these coders would be working on improving Etsy’s search algorithm and expanding the Showcase advertising system.  In 2011 the company bought Etsy Lovers, the deal was never really made public. A spokesperson explained to Ingrid Lunden, both Adtuitive and Etsy lovers “were talent acquisitions at heart.”  Both acquisitions helped fix pain points among the Etsy faithful. Adtuitive’s team shored up a search experience that was becoming unusable under the weight of a growing product catalogue. Etsy Lovers brought mobile expertise in-house as mobile traffic and commerce began to play an increasingly important role in the company’s success. Etsy’s second official acquisition was of Trunkt in May of 2012. Again, the price and terms are unknown. Trunkt specialized in wholesale artisanal goods. As Etsy’s head of PR Adam Brown noted in a comment on the Pando Daily blog, the acquisition was effectively “an investment in a really talented person who has a deep understanding of an area of business that impacts a number of our sellers.”  At the time of the acquisition, Etsy was already using Trunkt as a platform for sellers offering wholesale products. Etsy’s official statement on the acquisition reads:
“Our acquisition of Trunkt is about exploring how we can better support the thousands of Etsy sellers (and buyers) already doing wholesale business on Etsy — and enabling many more who aspire to it. We’re really excited to start to deliver on a long-time request from our community. Wholesale does not presuppose mass production. Take a look at our Quit Your Day Job series or the sellers currently on the Trunkt platform, and you’ll see it that these are independent, creative artisans. It’s our mission to support those businesses and empower them to change the economy. Trunkt is built off our API and 95% of its sellers are on Etsy already, so it’s a logical fit. Dev Tandon [founder] has a really deep knowledge base and can start to lay out a roadmap for us. We’re really happy that he’s here for his first day at Etsy today, and we’ll be communicating more about it to our sellers soon.” 
Then, in what turned out to be yet another acqui-hire, Etsy acquired Lascaux Co., the team behind an iOS photo collage app called Mixel, in January of 2013. Etsy explained that the four-person team—CEO and co-founder Khoi Vinh, co-founder Scott Ostler, Akiva Leffert and Roy Stanfield—will “turn their focus to Etsy’s mobile future.”  Esty’s next acquisition was of the “Etsy for electronics” Grand St. in April of 2014, again for price and terms unknown. The Grand St. founders explained in the blog post announcing the acquisition:
“Simply put: the rise of the individual, small-batch maker is changing product development, production and commerce. The process of making physical goods is shifting as consumers are more interested in unique and personalized products. This leads to a greater variety of products, and a fulfilling path to growth for creators. Etsy knows this and everything they do is designed to welcome this shift and embrace it. We are very excited to be part of a company with such overlapping values, where we’ll have a chance to accelerate our mission of helping independent makers grow and scale. Thank you for your continued support, we really appreciate it.” 
Just two months later, Etsy announced that they had acquired the Paris-based handmade marketplace A Little Market, calling it their “sixth and largest acquisition to date.” 
As Kalin explained in 2010:
“Etsy's first investors were two local real estate developers that I had done some carpentry work for, and a restaurateur who I had set up an Internet café for. I had the first $50,000 check before I even launched anything and another $100,000 within six months after the launch. I gained their trust by building things for them. Building up your personal relationships, especially in the beginning, is hugely important. In my experience, in the seed and angel round, people are going to invest in people and products, not the business plan. [Entrepreneurs] focus on the plan first, and they have it backwards in my opinion.” 
The company would go on to raise a total of $57.3 million in 8 funding rounds, the most recent of which was in May of 2014 and resulted in $5.6 million in private equity. Etsy’s investors have included Index Ventures, Union Square Ventures, Accel Partners, Glynn Capital Management, Acton Capital Partners, Hubert Burda Media, Manatt Venture Fund, Caterina Fake, Stewart Butterfield, Joshua Schachter, Albert Wenger, Spencer Ain, Judson Ain, and Sean Meenan.  Current & Future Growth
Initial Public Offering
As Kevin Kelleher explained shortly after Etsy announced their IPO:
“While Etsy is one of the more successful communities to have emerged on the Internet in the past decade, it’s not exactly counted among the so-called “unicorns”, the rare and wildly popular startups, like Uber or Airbnb, that can raise megaround after megaround of private financing, skirting the need for an IPO and all the regulation and scrutiny that come with a publicly traded stock.” 
It seems an IPO has always been in Etsy’s plans, as Kalin explained via the company blog in 2008, “Our goal is for Etsy to be an independent, publicly traded company, focused on all things handmade.”  In March of 2010, Kalin claimed that Etsy was profitable and had “plans to go public, though not until at least next year.”  It would be another five years, however, until Etsy announced on March 3, 2015, that they had filed for a $100 million IPO. 
Going forward, Etsy will continue to rely on non-transactional revenue and leverage power-sellers to reach new users and keeping current ones loyal. The company will likely continue to expand their Seller Services, as with the April 2014 launch of Etsy Wholesale (in beta since April 2013) and the October 2014 release of Etsy’s card reader. Etsy’s card reader works in conjunction with the Sell on Etsy app (available on Android and iOS) by posting funds directly to sellers’ shop payment accounts, syncing with online inventory in real time, and emailing receipts that link back to the seller’s Etsy shop for feedback. The Etsy card reader also enables “Quick Sales” for times when sellers might want to offer bundles or custom listings, like at craft fairs. Though the company is currently out of card readers, they were initially offered to any seller using Direct Checkout—a payment method that allows buyers to accept credit, debit, and Etsy gift cards, and receive funds from these sales directly to their bank accounts in their own currencies. For payments received through the Etsy Card reader, the typical 3.5% transaction fee is waived. Instead, Etsy charges 2.75%, which is also what Square charges. Despite the similarity to Square, as Sarah Perez reports:
“Etsy stresses that the card reader and app isn’t a ‘commodity point-of-sale’ system, but one that’s been designed with the needs of its own sellers in mind, to help them grow their businesses, increase sales, boost their reputation, and better manage their businesses as a whole.” 
As already discussed, the notion of empowering sellers—not only to drive user growth and sales, but also to grow revenue through seller services—has been an important growth lever for Etsy. As the company continues to seek user and revenue growth, especially considering the unsustainability of paid ads, these channels will only become more important.
For all the company’s success, Etsy encountered plenty of bumps, particularly in the early days. As Inc’s Max Chafin reported in 2011:
“By 2008, Etsy had grown so large that Kalin's creativity was straining his relationship with the rest of the company. As Maguire and Schoppik worked day and night trying to keep the website from crashing, Kalin was spending his time dreaming up new features. One day, Maguire recalls, Kalin proposed creating a system whereby sellers could broadcast live video feeds from their workshops. Another day, he was pitching his co-founders on creating a modern-day version of guilds.” 
According to Schoppik, working at Etsy “was like being in an abusive relationship,” and by the end of 2008 both he and Maguire had left the company,  while Tarbell stayed on until 2011.  It was also in 2008 that Maria Thomas took over as CEO, running the company until it reached profitability in late 2009. Kalin, who had served as Etsy’s Chief Creative Officer in the interim, took over again in early 2010. Then in the summer of 2011, Kalin again stepped down, and Chad Dickerson—who had served as Etsy’s CTO for three years prior—took over. Dickerson is still Etsy’s CEO today. Still, since Dickerson has taken the reigns those concerns seem to have stabilized, and according to Kevin Kelleher, Etsy’s biggest challenge going forward will be “extending the growth in its core market to a broader range of consumers.” 
One way in which Etsy has attempted to do that has been changing their policies to allow factory-made goods, which, as Cade Metz points out, worked: “According to the company’s IPO filing, revenues reached $74.6 million in 2012 and $125 million in 2013. Last year, after the change in policy, they topped $195 million.”  Nevertheless, not all Etsy sellers are happy about this change. In Motherboard’s cleverly-named article “From Etsy to Sweatsy,” April Winchell explains that the Etsy aesthetic “massaged the same pleasure centers as Martha Stewart and Restoration Hardware, evoking the joy of beautiful, easy living.” She goes on to point out, however, that “unlike those mammoth corporations, Etsy was able to assert a subtle moral authority, positioning handmade as the ethical choice.”  Indeed, it’s this “subtle moral authority,” which we’ve already touched on, that has been integral to Etsy’s growth—from Kalin’s early “little fish” blog post to the company’s current B Corporation certification. Yet, as Winchell explains:
“For all its chest thumping about conscious consumerism and the handmade ethos, Etsy had to face the fact that it was never going to be a billion dollar company selling potholders and bedazzled tampon cozies. Especially since most of its ‘sellers’ were not, in fact, selling. All they were contributing to Etsy’s coffers were 20¢ listing fees. That’s not going to take you from Williamsburg to Wall Street.” 
Though it’s still a sore spot for many Etsy buyers and sellers alike, it is unlikely that Etsy would’ve grown to the extent that it has without allowing cheaper, faster-to-produce factory-made goods. As Winchell explains, Etsy initially denied that mass-produced merchandise was being allowed in, “even as the site was being flooded with it,” and despite an “Integrity Team” that encouraged users to “report suspicious items.”  Of particular significance is the Ecologica scandal, when in April of 2012 the Etsy blog featured a seller called EcologicaMalibu. It didn’t take long for users to figure out that Ecologica was a distributor for an Indonesian manufacturer. As Winchell explains, “Within hours, pictures surfaced of laborers building the very furniture Etsy claimed she made herself. When sellers overwhelmed the site with complaints, Etsy hastily rebranded her ‘a collective,’ and closed the comments.”  All of this took place a full year and a half before Dickerson publicly announced, in October of 2013, that Etsy would be dealing in factory-made goods.  Nevertheless, as Winchell points out, many Etsy buyers still “believe everything sold there is original, special, and crafted by someone personally invested.”  Furthermore, sellers are forced to price their items lower and lower to compete with cheaper factory-made goods.
Successful Sellers Leaving Etsy
In fact, sellers like Grace Dobush—who had been on the platform since 2006—are shutting down their Etsy shops and building standalone sites or moving to competitors like Big Cartel or Shopify. Dobush acknowledges that Etsy played an instrumental role in making modern craft as popular as it is today. However, she likens the relationship between crafters and Etsy to that of authors and Amazon, explaining that “crafters who hate Etsy find it hard to leave because of the site’s immense traffic and generally positive public reputation.”  Dobush echoes Winchell’s assertion that new sellers are forced to list their products “so low as to make real profit an impossible dream,” and—using a metaphor that’s uncannily similar to Kalin’s big fish/little fish from 2008—argues that David has become Goliath:
“At its outset, Etsy was a powerful tool for makers, by makers. We were a bunch of Davids, fighting back against the big-box Goliaths with artisanal slingshots. Founder Rob Kalin came up through the same online craft forums that me and my crafty cohorts did, and we were making a revolution. …In the past few years it’s become apparent that Etsy is the Goliath. Indie craft’s whole purpose from the outset was to meet your makers and consume conscientiously. Now, when you ask your friend where they got that cool ‘Weekend at Bernies’ cross stitch sampler, they’ll tell you, ‘I bought it from Etsy’—the maker’s identity is secondary, if noted at all.” 
Cade Metz echoes that sentiment. He explains “A name that once stood for crafts handmade by real, live, individual people is now a way of, well, making lots and lots of money,” yet goes on to point out that “While some people are very upset that Etsy has sold its artisanal soul, their sorrow doesn’t really make a difference to its capitalistic goals.”  Nevertheless, Dobush argues that to achieve those capitalistic goals, Etsy needs artists—along with their $0.20 listing fees, their 3.5% transaction fees, and other seller services revenue. As Galston asserts, “compared to its peers, Etsy is the cheapest of transactional marketplaces for both buyers and sellers. But that comes at a cost: Etsy only works at scale – and its profitability is thereby dependent on non-transactional revenue.”  Similarly, TechCrunch’s Alex Moazed points out that sellers are mentioned 474 times in Etsy’s SEC1 filing, as compared to only 202 times for buyers.  The problem, however, as Dobush points out, is that those Etsy sellers who have all the components of success—“good product, a good marketing plan, a pricing structure that compensates everyone in their supply chain fairly” are quick to outgrow Etsy’s marketplace entirely.  While Etsy has made policy changes to keep high-volume sellers—for example, the allowance of factory-made goods and the introduction of Etsy wholesale—more often than not, successful sellers tend to outgrow the site and move their operations to paid platforms like Big Cartel or Shopify (whose GMV (gross merchandize volume) of $1.6 billion matched Etsy’s $1.6 billion in 2013),  where they often end up paying less. Only time will tell if this trend hurts Etsy’s bottom line. If Etsy wants to continue growing revenue and keep sellers happy, Alex Moazed recommends the company “develop a more complete suite of business management tools … including CRM, shipping, marketing, production, pricing, inventory management, customer service, accounting and analytics services” as well as a “white label/microsite option” similar to Shopify.  This would only add to the already impressive revenue generated by seller services, while perhaps providing an incentive for high-volume sellers to stay with Etsy. Yet keeping sellers happy might not be Etsy’s only challenge. The addition of factory-made goods introduces another, perhaps more serious, concern—the working conditions of factories themselves. On this note, Winchell asserts:
“Selling factory-made goods isn’t a movement. It doesn’t ‘reimagine commerce’ or ‘unite the global marketplace’ or do any of the other things Etsy likes to hear itself talking about. Mass-production is the dreary cornerstone of every big box retailer, and it doesn’t turn into mason jars full of daisies when Etsy does it. Etsy is not magic. Etsy is Walmart with better fonts.” 
Cade Metz compares Etsy not to Walmart, but to Facebook and Twitter. “This is often the case with internet businesses, whether they’re pushing handmade rugs or 140 characters,” Metz explains. “They’re founded on certain principles. They’re helped along by a small and passionate group of early adopters. They grow to a certain size. And then they change their principles, alienating those early adopters but capturing the mainstream—all with an eye towards the big IPO. It’s what happened with Facebook. And Twitter.”  Though there’s no denying that selling factory-made goods has allowed Etsy to “capture the mainstream” by tapping into more scalable, sustainable growth. But it has done so while alienating many buyers and sellers and potentially putting the company’s B Corporation certification at risk.
Is Crafting too Trendy?
As Time’s Kevin Kelleher points out:
“Airbnb is reportedly near a $20 billion valuation, while Uber is valued at twice that amount. Etsy didn’t indicate what the company may be worth after its IPO, but it’s hoping to raise $100 million, and given that many Internet IPOs float only 5% or 10% of their outstanding shares, that could lead to an IPO that values the company between $1 billion and $2 billion.” 
In essence, we have the flipside of the anti-factory coin. In contrast to Dobush, Winchell, and others’ claims that Etsy isn’t much better than Amazon or Walmart, there is an almost opposite argument, as articulated by Galston:
“While, in principle, the market for jewelry, home goods and craft goods is outright massive, Etsy’s strict guidelines around hand-crafted, artisanal products is certainly limiting. This concern that led to its major revision of seller guidelines 16 months ago as well as its launch of Etsy Wholesale just 9 months ago. Even so, the success of outsourced vendors has yet to be validated – and casts real concern around their total addressable market.” 
Similarly, Bloomberg’s Alex Barinka questions whether investors will “embrace a company that wants to do good while it does well.”  According to Barinka, Etsy “is asking future stockholders to be OK with a management team that refuses to squeeze every penny of profit out of its 1.4 million active sellers or sacrifices community benefits to slash costs”—two things Wall Street isn’t used to.  It’s these very things that have been critical to success thus far, and Etsy lists the inability to maintain B Corporation status as a potential risk factor for the business. Yet Barinka notes that Etsy’s certification will eventually run out, at which point the company has two options:
“It can let it expire, or it would have to change to what's considered a legally recognized public benefit corporation—a move that would codify its responsibility to ‘stakeholders’ (employees, community members, and other noninvestors) alongside its fiduciary responsibility to shareholders.” 
In this respect, Etsy would be entering uncharted territory, as no publicly traded company has ever done this. It would require board approval along with a 90% approval among shareholders. Indeed, as William Clark, a lawyer who helped write the legislation authorizing the use of benefit corporations, points out, “The Etsy IPO is forcing people to think about this whole question between the financial profitability of the business for its owners and everything else that makes the business possible.” B Lab co-founder Andrew Kassoy agrees, claiming that Etsy might just attract investors who value transparency and other standards that come along with B certification. He asserts, “There is an increasing recognition that businesses can do more than create value for shareholders. The whole value of the company is the trust that their stakeholders put in them.”  We’ll have to wait and see whether this turns out to be the case. Is it possible that Etsy is in an odd, in-between place: too niche and do-goody for Wall Street but too mainstream and capitalist for crafters?
Too Reliant on Paid Acquisition?
One of the most important components of Etsy’s early growth was the powerful organic, word of mouth channels. Yet besides loosening company policies on what can be sold on the marketplace, in 2014 Etsy increased marketing spend by 122% in an effort to ramp up growth. This caused the formerly profitable company—with an operating profit of $733,000 in 2013—to end 2014 with a $6.3 million operating loss.  Despite the above losses, Etsy still generated $12 million in operating cash flows. Cash on hand increased to $70 million at the end of 2014 (up from $37 million the year before)—both of which Kelleher points to as “indications of healthy business operations.”  Furthermore, as Miriam Gottfried points out, “Other costs haven’t grown as much, suggesting Etsy is seeing some benefits of scale. Just how much though will depend on how effective, and costly, its promotional strategy proves. That is a big unknown.”  Nevertheless, Etsy was able to generate a 112.9% increase in active buyers (compared to an 89% increase the year before) through a quintupling of spending on search engine marketing as it pushed into the United Kingdom. The company says they plan to apply those growth lessons more broadly in the future. Yet, as Gottfried points out, the U.K. is just one market. She goes on to argue that, “It doesn’t prove the benefits of marketing can outweigh costs. If Etsy can’t show its marketing efforts are paying off, investors swept up in the offering’s excitement may end up wishing it had stuck to its knitting.”  Kelleher believes that Etsy “is likely to receive a warm welcome on Wall Street,” since “Internet IPOs with brand names familiar to consumers are a rare item these days, unlike the legion of obscure if promising drug startups.”