Etsy, the neo-whimsical online marketplace known for handmade and vintage goods, is having a bit of an identity crisis, according to a recent story from the Wall Street Journal. And as a result, they’re “under pressure [from investors] to stop spending like a tech startup and start acting like a retailer.”
“We’re trying to find the right balance between a tech company and an e-commerce company,” Fred Wilson, a venture capitalist and chairman of Etsy’s board, told the WSJ in an interview. “Engineering is still critically important, but we don’t need to build technology for technology’s sake.”
Which is what it seems like they’ve been doing, and to mixed results. While the company earned $365 million in revenue in 2016 — a 33 percent increase — they booked a $30 million loss for the year as “operating expenses rose 36 percent from a year ago, twice as fast as revenue.”
The startup’s meteoric rise peaked two years ago with an IPO and the opening of a 200,000 square foot Brooklyn headquarters, but now, “sales are slowing and investors are frustrated,” according to the story, causing the company to announce layoffs impacting nearly 20 percent of its staff.
And while newly installed CEO Josh Silverman has vowed to cut spending and refocus energy on the core marketplace — hoping to revitalize the business by doing the things they do best — he didn’t categorically rule out a scenario that would ultimately result in the sale of the company.
“Asked if the company was for sale, Mr. Silverman said he would have to consider any offers that may surface but he is focused on revamping the business. “Step one is to have a plan and confidence in the plan and only then could we weigh any offers.”
You can read more about it at The Wall Street Journal.