Venture capital taught Etsy that making money wasn’t a skill it needed to learn early on. Go on, it said, spend the millions. And when you’ve spent those, come back and get some more. So Etsy did. They came back for a B round, then a C round, then D, E, and F rounds. Just shy of $100 million in total.
That experience deluded Etsy into thinking that they, uniquely, could ferry the scorpion across the river without getting stung. That a cool hundred million wouldn’t ever need to be paid back or corrupt its noble mission.
But the party only lasts until the music stops. And after Etsy’s VCs foisted the “growth stock” onto the public markets, those markets eventually grew tired of waiting for said growth and profits. So they demanded change, and change they got by booting the old CEO and installing a new growth-at-all-costs replacement.
When Etsy looks back at the arc of its story, it’s easy to flatter themselves into thinking that everything was honky-dory until The Evil Capitalists came for their pound of flesh. But give me a break. This story is as old as time, and the outcome perfectly predictable.
Etsy corrupted itself when it sold its destiny in endless rounds of venture capital funding. This wasn’t inevitable, it was a choice. One made by founders and executives who found it easier to ask investors for money than to develop the habits and skills to ask customers.
“If you really want to build a company that works for people and the planet, capitalism isn’t the solution”, muses one of the former Etsy employees in a NYT piece. Bollocks. Feel-good nonsense bollocks.
Etsy wasted the chance to provide a human alternative to Ebay and Amazon all by itself. Now it’s largely the same kind of strip mall hawking the same mass-produced goods. There was a laudable mission at its core, but one that was quickly spoiled by a gluttony for growth and negligent naiveté about scorpions.
In the burnt ashes of what Etsy has become, I hope a new attempt will grow. One that learns its lessons and guards its own destiny with as much zeal as the high-minded ideals.