Etsy just had its first-ever billion-dollar quarter, a major milestone for the handmade, artisanal, vintage marketplace that’s been around for 13 years.
Since taking the helm in May, Etsy’s Chief Executive Josh Silverman has been laser-focused on gross merchandise sales (GMS) growth, which he views as the metric to define Etsy’s success.
“We see ourselves as the voice of the new Main Street, the digital main street, as small sellers and entrepreneurs are trying to build businesses for themselves,” Silverman said during an interview for Yahoo Finance’s Breakout Breakfast series on Tuesday.
Etsy’s (ETSY) 1.9 million sellers represent 99% of all voting districts in the U.S., and Silverman is focused on galvanizing the community of sellers and creators.
“In the recent tax reform, we made some concrete proposals on how it can help small entrepreneurs. It was something all of our community of sellers — Republicans, Democrats, Independents — could get excited about,” he said. “We’ve also been outspoken on net neutrality, which we think is important to allowing equal access to allow small sellers to compete on a level playing field with the big folks.”
Etsy 2.0
Though Silverman is attempting to maintain Etsy’s culture of collaboration and community, the transition hasn’t been easy. The same day that Silverman replaced the company’s beloved CEO Chad Dickerson, who held the post for six years, Etsy announced layoffs. A few weeks later, Silverman let go of another 20% of the workforce. Last month, Silverman decided to shut down Etsy Studio, a site where crafters could buy raw materials like beads and tools. Etsy Studio launched five days before Silverman became CEO and by the end of his first week, he had redirected nearly everyone off the project and subsequently decided to scrap the idea entirely.
Silverman addressed the widely-reported culture shift that the company has been experiencing.
“We had a large number of people work for over a year to build [this] new business. Since many of the suppliers and buyers are already on Etsy, why don’t we launch a new business entirely focused on that?,” he said, adding that shutting it down “was a very painful decision, and very painful for all the people who worked for it. It wasn’t a bad idea, but it wasn’t one of the few most important ideas to accelerate growth in the business.”
While acknowledging the difficulty in making these hard decisions, Silverman said he has to streamline the business to accelerate growth. And, for now, it seems to be paying off. Etsy’s stock has experienced a 150% surge during Silverman’s tenure thus far.
Etsy is laser-focused on providing its community with the tools to succeed as entrepreneurs. Since May, Etsy sellers are shipping 2 ½ times as quickly and conducted 350 product and marketing releases.
The Silverman effect
Prior to joining Etsy, Silverman, 49, served as executive-in-residence at Silicon Valley venture capital firm Greylock Partners. Previously, he held executive roles at American Express and eBay (EBAY), also serving as CEO of the latter’s subsidiary, shopping.com.
He was also CEO of Skype until its sale to Microsoft in 2011 and was co-founder and CEO of Evite prior to its acquisition by IAC in 2001 (which was later sold to Liberty Media). Silverman said Etsy was the natural next challenge for him to take on.
“Having [experienced] the earliest days of a startup and scaling it, it’s helped me to have some empathy for what it takes to get something off the ground, and to have the privilege to have it then be scaled. The rest of my career has really been about taking a business that’s had a very successful first act and helping it to have a really successful second act,” he said.
For now, Silverman is focused on delivering upbeat results to shareholders and ensuring Etsy remains the go-to platform for anything special. Despite increasing competition from Amazon Handmade (AMZN) and eBay, he believes consumers are hungry for the uniqueness that Etsy offers.
“The world is becoming ever more commoditized. I want us to stand out as an island in the sea of sameness that you go for refuge when you want something to feel special,” Silverman said. “That will be measured in our GMS growing much faster than e-commerce over time, which is another way of saying making our community of sellers more successful.”
Melody Hahm is a senior writer at Yahoo Finance, covering entrepreneurship, technology and real estate. Follow her on Twitter @melodyhahm. She hosts Breakout Breakfast, a monthly interview series for Yahoo Finance featuring up-close and intimate conversations with today’s stand-out stars in the business world.
