TechCrunch Interview With Etsy Founder Robert Kalin

Summary

In this engaging interview, Robert Kalin, the founder of Etsy, discusses the platform's evolution since its launch in 2005. Etsy, an online marketplace for handmade goods and craft supplies, has grown significantly, with a market size of around a hundred billion dollars. Kalin shares insights on the platform's success, the importance of storytelling in the items sold, and the diverse range of products offered. He also touches on Etsy's revenue streams, including listing fees, sales fees, and in-house advertising, and the company's notable investors like Union Square Ventures and Accel.

Takeaways

• 📅 Etsy was launched in June 2005 by Robert Kalin.
• 🎉 The platform is an online marketplace for handmade goods and craft supplies, emphasizing the stories behind the items.
• 💰 The market for handmade goods was around a hundred billion dollars the previous year.
• 🔢 In 2008, Etsy saw sales of nearly a hundred million dollars worth of goods.
• 📈 Jewelry is the top-selling category on Etsy, reflecting the platform's predominantly female user base at 97%.
• 👕 Robert Kalin himself curates his life with handmade items, including clothing and a guitar made by a luthier on Etsy.
• 📊 Etsy has experienced record growth month after month, even during economic downturns.
• 💼 The company has three revenue streams: a 20 cent listing fee, a 3.5% sales fee, and in-house advertising.
• 🤝 Early investors in Etsy included Union Square Ventures led by Fred Wilson, and later, Jim Breyer, who is also on the board of Walmart and Facebook.
• 👥 Etsy's growth has been organic, with no employees coming from eBay, reflecting a distinct culture and management style.
• 💡 The average transaction size on Etsy is fifteen dollars, indicating that customers often purchase multiple items at a time.

Q & A

When did Etsy officially launch?

Etsy was launched in June of 2005.

What was the initial reaction to Etsy when it was first introduced?

The first person to write about Etsy was in 2005, indicating early recognition and interest in the platform.

How old was the founder of Etsy when the platform was launched?

The founder was 28 years old at the time of the launch.

What is the market size for handmade goods according to the transcript?

The market for handmade goods was about a hundred billion dollars the previous year mentioned in the transcript.

What was the volume of goods sold on Etsy in 2008?

In 2008, Etsy sold a little under a hundred million dollars worth of goods.

What are the most popular categories of items sold on Etsy?

The most popular categories on Etsy are jewelry, followed by clothing and accessories, given the platform's predominantly female user base.

What is the average transaction size on Etsy?

The average transaction size on Etsy is fifteen dollars.

What are the different revenue streams for Etsy?

Etsy has three revenue streams: a 20 cent listing fee, a 3.5% sales fee, and in-house advertising.

Who are some of the investors in Etsy mentioned in the transcript?

Some of the investors mentioned include Union Square Ventures led by Fred Wilson, and Jim Breyer, who is also on the board of Walmart and Facebook.

What is the relationship between Etsy and eBay as portrayed in the transcript?

The transcript suggests a competitive relationship, with Etsy offering an alternative to eBay, especially for sellers dissatisfied with eBay's platform.

How does the founder of Etsy describe the company's growth and success?

The founder describes Etsy's growth with record months of sales, even during economic downturns, and a focus on handmade items with stories.

Outlines

00:00

🤝 Interview with Etsy Founder

This paragraph introduces an impromptu interview with Robert Kalin, the founder of Etsy, conducted by Robert Scoble in a hallway. The discussion begins with a reflection on Etsy's history since its launch in June 2005, highlighting the platform's growth and success. Etsy is described as an online marketplace for handmade goods and craft supplies, emphasizing the stories behind the items. The market size is mentioned to be around a hundred billion dollars, with a significant increase in sales from 2008. The conversation also touches on the most popular categories on Etsy, which are jewelry and music, and the founder's personal connection to the platform, including his experience of buying a guitar made by a luthier on the site.

05:03

💰 Etsy's Business Model and Growth

In this paragraph, the focus shifts to Etsy's business model and financial aspects. It details the company's revenue streams, which include a 20-cent listing fee, a 3.5% sales fee, and in-house advertising. The conversation reveals that Etsy had a record month in terms of gross merchandise sales, indicating a robust performance even during economic downturns. The paragraph also discusses the company's funding history, including angel investments and venture capital rounds led by Union Square Ventures, with notable investors like Fred Wilson and Jim Breyer. The interview also delves into the company culture, mentioning a brief period of不适应 with an eBay employee who preferred autocratic management styles.

Keywords

💡Etsy

Etsy is an online marketplace that focuses on handmade or vintage items and craft supplies. It is central to the video's theme as it is the company being discussed. In the script, the founder of Etsy, Robert Kalin, talks about the platform's launch in 2005 and its growth over the years, highlighting its role in facilitating sales of unique, handmade goods.

💡Handmade Goods

Handmade goods refer to items that are crafted by hand rather than mass-produced. They are a key part of Etsy's business model, as the platform provides a space for artisans to sell their creations. The script mentions that Etsy is an online marketplace for handmade goods, emphasizing the personal and unique nature of the items sold.

💡P2P Marketplace

A P2P, or peer-to-peer, marketplace is a platform that facilitates direct transactions between individuals. In the context of the video, Etsy operates as a P2P marketplace for handmade goods, allowing sellers to connect with buyers in a direct and personal way, as mentioned when describing Etsy's business model.

💡Gross Merchandise Sales (GMS)

Gross Merchandise Sales refer to the total dollar volume of sales made through a marketplace. In the script, it is mentioned that Etsy had record months of GMS, indicating the platform's growth and success in facilitating sales of handmade goods.

💡Listing Fee

A listing fee is a charge made by a marketplace for the privilege of listing an item for sale. The script specifies that Etsy has a 20 cent listing fee, which is part of the revenue stream for the platform.

💡Sales Fee

A sales fee is a percentage of the sale price that is charged by a marketplace to sellers for transactions that occur through the platform. The video mentions a 3.5% sales fee as part of Etsy's revenue model.

💡Advertising

Advertising is a form of communication intended to persuade an audience to take some action. In the script, it is mentioned that Etsy runs its own in-house advertising, which is another source of revenue for the company.

💡Investors

Investors are individuals or entities that provide capital for a business, expecting to earn profits. The script discusses various investors in Etsy, including angel investors and venture capital firms like Union Square Ventures, highlighting the financial support that helped Etsy grow.

💡E-commerce

E-commerce refers to the buying and selling of goods or services using the internet, as well as the transfer of money and data to execute these transactions. The entire discussion in the script revolves around Etsy, which is an e-commerce platform specializing in handmade goods.

💡Artisan

An artisan is a skilled craftsperson who makes goods by hand. The script implies the importance of artisans as the creators of the handmade goods sold on Etsy, emphasizing the platform's support for individual craftsmanship.

💡User Base

The user base refers to the total number of users of a system or service. The script mentions that 97% of Etsy's user base is female, indicating the demographic that the platform primarily serves and caters to.

Highlights

Robert Kalin, the founder of Etsy, discusses the company's beginnings and its growth since 2005.

Etsy is described as an online marketplace for handmade goods and craft supplies, emphasizing the stories behind the items sold.

The market size for handmade goods was estimated to be around a hundred billion dollars in the previous year.

Etsy's growth is highlighted by the sale of a hundred million dollars worth of goods in 2008.

Jewelry is identified as the top-selling category on Etsy, reflecting the platform's predominantly female user base.

The term 'handmade' is discussed, with a distinction made between high-quality craftsmanship and mass-produced items labeled as handmade.

Robert Kalin shares his personal experience of buying a handmade guitar from a luthier on Etsy.

Etsy's revenue model includes a listing fee, sales fee, and in-house advertising, contributing to its total revenue stream.

The company has received angel investment from notable figures and venture capital led by Union Square Ventures.

Jim Breyer, known for his involvement with Facebook and Walmart, is also on Etsy's board of directors.

Etsy's culture is contrasted with eBay's, with a focus on a more democratic and less autocratic management style.

The average transaction size on Etsy is revealed to be around fifteen dollars, with customers often purchasing multiple items.

The interview discusses Etsy's competitive advantage over eBay, especially in the handmade jewelry market.

The founder's personal values are shared, emphasizing the importance of friendship and community within the Etsy platform.

Etsy's growth is attributed to its ability to capture the spirit of handmade goods in a digital marketplace.

The interview concludes with a humorous moment where the founder is mistaken for another tech executive.

The transcript ends with a light-hearted note on the founder's personal shopping habits and preferences.

Transcripts

I

okay so we have we've cornered Robert

kalyan the founder of Etsy and Robert

Scoble just won't stop by without us and

we are officially in the hallway which

means we can be on record yeah which is

great so I wanted to talk to you a

little bit about etsy because I've been

actually writing with a company since I

think 2005 yep you're very but we never

met and you've had a lot of success

since then yeah you're the very first

person to write about it when was that

when did you launch I launched in june

of two thousand five how old were you

guys so Eckstein 2020 action I age into

your increment a portrait in the Attic

that ages for me so you're 20 years old

no no now is 25 i launched in some 28

now okay and and what's happened what is

what is etsy etsy the standard pitched

online marketplace for handmade goods

there's also interested supplies so it's

just basically a p2p marketplace that's

really about the stories that the items

tell that you buy so that's a penalty

good how big is the market for handmade

good I was about a hundred billion bucks

last year but how much about you but you

Tom oh no I mean that's just uh Nancy so

many goods period if you think back you

know a hundred million dollars worth of

goods were sold on etsy in 2008 a little

bit less than that but yep okay so

that's the general sighs what if we can

a lot of people or thing that gets

bought my favorite categories are our

music but the most popular stuff on the

site because it's ninety seven percent

women with user base so jewelry is the

number one selling category and behind

that there's also really vibrant

beautiful really crappy here made truly

oh come on crappy and handmade are in my

mind oxymoronic because in any class of

goods the most expensive stuff some

money I'm learning a great interviewing

technique here just slam the interviewee

is all happy right like suits what are

the most expensive suits handmade see so

just because of handmade jewelry it it's

nice now anyone I can't make your shadow

it is slice across them i created speeds

and like is it silver editors you know

very very fancy metalsmithing going on

have you ever bought anything on the

site

have I ever bought anything on the safe

you've never bought anything on it so

you have you I bought most of what I own

you know I'm actually trying to curate

my entire life pretty much just handmade

stuff no i just bought really one of the

things i was waiting there's everything

you're wearing bought on it to to it

anything you learn a lot of it is I mean

the shirt the shirt the stuff you can't

see any good jacket uh first store okay

yeah similar steady now when i started i

see i was waiting for luthier to show up

because i want to buy a guitar on it and

so lo and behold about a year after

started the site Adam armor guitars

James in Springfield an hour above

Nashville and Tennessee and actually

have a feature called alchemy where you

can just make the request people to make

things for you so requested that he make

me a guitar I went down visited him

while I was making the guitar but you

know this really scope of what is

handmade is huge I think and especially

in times like this we just had record

month after a record fond after record

month even when the economy see what are

you doing now a million a month you said

in gross merchandise I know GMS per

month now I'm sorry million month

different fees for over right total

revenue because we have three different

revenue sources okay we don't explodes

the exact amount but yes what are those

repetitions there's a 20 cent listing

fee three-point-five percent sales feet

and then we run our own and house

advertising we're able to showcase polka

so those two things constitute total

revenue stream and you praised you said

35 million dollars yeah we had angel

money from Katerina and Stewart

nationally Joshua chapter and our

abductors it's kind of right after they

had sold their companies which really

unfelt to me invested in NC and the

first vc round after that is led by

union square ventures with fred wilson

joining the board and then once you know

i always want to do things in these

stages so in solid business off that

went to kind of view the standard sand

hill road

show out there and ended up Excel which

I might actually work yeah so jim breyer

is also the board of what's on Marvel

Walmart Walmart and facebook facebook so

that's your a good company there yeah I

mean it's interesting as he speaks in

though the we as so many different

companies does he ever mistakenly call

you Marc there is a resemblance yeah I

had to look over disabled toys I think I

think he's he's a little bit more of a

keen observer than that said I he's

never never gotten us confused as for

sure so what does he may think about

this whole thing we have pretty friendly

relations with him you know even early

on been asking them for advice and some

of the people say that a lot of the

spirit even had early on they see you

really evident and what else he's doing

now how many of your 60 employees used

to work at eBay I don't think anything

no let me see her kind of benefit of

being a East Coast up against were hired

to these different talent yeah we

actually did we had one a guy who came

in as vp of engineering and he lasted

three months students said he was going

back to work typically because I'm a

ride I think companies don't think

you're autocratic management sorry I

couldn't take the non autocratic style

gets done I guess that's been a jersey

we see how the culture ship since you

grow for people as well but what's the

average transaction size of a fight

fifteen dollars people buy two things

yeah they buy two crappy pieces of

jewelry at one time oh come on mr.

Arrington no I honestly having been on

the site since I wrote about it the last

time and I'm gonna go on wed open what

would you what do you like to buy what

do you value in life fine cheeses fine

suits fine wines cars I'm not that much

I member Lee material guy I value

friendship met by friendship on the site

yes that's a big part of shopping was

alike haha oh how much of the 15 bucks

how much do you get to keep there's a

three and a half percent as many sales

fee is on that side so our goal there

was to prohibit flow especially below in

Vegas when you're watching you're

competing with them and resell them in a

crazy way but if you search for jewelry

on etsy now there's about ten times as

much jewelry on etsy so by using my

ex-wife is my ebay powerseller and she

hates ebay and she's murdered jewelry

store actually she sold your hamstring

destroyed she's moved it off of my ebay

so there's a whole trash out there in

your favor hey um hi hey this is my

interview why because I have the camera

hope that doesn't matter very much your

time I appreciate it except for that one

thing that will cut out and people won't

have any idea what I was just talking

about