Business and craft have always been awkward bedfellows, with cottage industries being renowned for poor quality marketing and a parochial feel, whilst manufacturers mass-produce lesser quality copies of handcrafted items.
Etsy, the online marketplace for handcrafted and vintage goods, offers a professional sales platform with fees that are less than the traditional gallery commission. This is an attractive route to market for creative practitioners.
Etsy has filed to go public, floating the the company on the NASDAQ stock exchange, banking on the continued appetite for Internet-based stocks.
Etsy is taking a calculated risk to invest in its infrastructure, hoping to raise over $100 million during the IPO.
“Reports speculated that the company could be valued in the public markets $2 billion. It said in a regulatory filing Wednesday that it hopes to raise $100 million in the offering, although that amount is likely a placeholder.
Last year, Etsy took in $195 million in revenue, with just over half coming from transaction fees. The rest came from services the sites offers to sellers like promoted listings, payment processing and shipping labels.”
Etsy getting bigger means it will be walking a fine line between serving its shareholders and serving its conscience. Going public will not only bring investment but also pressure from investors who prioritize profitability. The question hanging in the air is: will this new pressure force Etsy from its core values? Etsy CEO Chad Dickerson had this to say.
“For decades now, the conventional and dominant retail model has relentlessly focused on delivering goods at the lowest price, valuing products and profit over community. I do not believe that this race to the bottom is a sustainable, successful model.
If we succeed, then other companies might replicate our model. We think the world will be a better place for it.”
The prosperity of Etsy is linked to the success of its members and the success of its members is linked to the prosperity of Etsy, creating a cyclical or looped business model. This symbiotic business relationship means the best interest of the creative practitioner sits at the heart of the Etsy business model.
The proliferation of sustainable business models is gathering momentum, powered by crowdsourcing platforms like Kickstarter, Crowdfunder, and Indiegogo, which take a niche offering to a potential mass market, proving the business case.
The IPO of Etsy will be watched closely by traditional investors as a potential case study for future investment into companies that build their business on a sustainable model.
[Credit: Photograph / Handout / Getty Images]