|Wed Apr 6 2011 18:08:05|
Can Etsy Founder Manage a Maturing Company?
By: Ina Steiner
Inc Magazine wrote an article about Etsy that raises an old question about whether founders are suited to run their companies beyond the start-up stage. Founders' eccentricities are often indulged, but Kalin's image took a step over "quirky" this week, as noted in the Inc piece:
"Today, Kalin is socially awkward, reticent, and given to eccentricities that can seem downright crazy. "I speak to people in the business world and the technology world, but I don't admire them," he says, pointing an 8-inch combat knife at me for emphasis."
Kalin was not pleased with Inc Magazine's portrayal, posting on Twitter, "A good lesson from that Inc. piece. Mediocre journalism makes for sensationalist cringe-worthy copy, a handful of misquotes, and no wisdom." He later deleted the tweet.
Pascal-Emmanuel Gobry called the Inc Magazine article "brutal" and wrote a summary of some troubling points that came out in the article in this Business Insider post. Among them: Kalin said the idea of creating shareholder value was ridiculous, his cofounders did not have kind things to say; and after Kalin started a non-profit called Parachute to help Etsy sellers run their businesses better, only one business stayed with the program.
To compound the image problem of its founder, Etsy's growth rate is slowing despite its international expansion efforts, as documented on the chart in this AuctionBytes article.
Etsy's management history is a typical story. Just as eBay founder Pierre Omidyar handed the reigns to Meg Whitman, and Larry Page and Sergey Brin handed Google's reigns to Eric Schmidt, Etsy founder Rob Kalin handed the reigns of the company to Maria Thomas in 2008, and she brought the company to profitability.
But unlike those Silicon Valley success stories, New York-based Etsy is different - Kalin ousted Thomas in late 2009 and took back control of the company.
When Thomas stepped down in late 2009, no reason was given. But according to the Inc story, Kalin urged the board to dismiss Thomas and reinstate him as CEO. "He argued that Etsy had strayed from its core values in pursuit of growth and that it needed to focus more on the success of its sellers."
It's hard to imagine Whitman or Schmidt pointing a knife in an interview (or responding to a critical article with a tweet), but if Etsy's users were united behind Kalin, his quirky behavior probably wouldn't matter. But since his return as CEO, Kalin has launched a number of missteps, from the way the company handled the rape card controversy to changes that raised concerns about privacy.
Being a successful founder/CEO is not unheard of. Jeff Bezos survived much early criticism in his direction of the company, yet has guided Amazon.com to the top of ecommerce and continues to grow the company ahead of ecommerce growth rates. Apple's co-founder Steve Jobs had tumultuous relationship with the company's board of directors in the early 1980s, ultimately resigning, then returning in 1996, becoming CEO and putting a new polish on Apple. Eric Schmidt recently stepped down as CEO of Google and co-founder Larry Page has stepped into his shoes.
Time will tell whether Etsy's Board was correct in bringing back the founder, and whether Kalin will be able to pull a "Steve Jobs" in running Etsy.