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Thu July 21 2011 21:25:56

Etsy Founder Rob Kalin Is Out as CEO

By: Ina Steiner

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Etsy founder Rob Kalin is out as CEO and will transition out of the day-to-day management of the company. Over the past year or so, Etsy managed to become as controversial an online marketplace as eBay, and its founder did nothing to help the company's public relations. He was unapologetic for removing features from the site that were popular with users and replacing them with "social" features that raised privacy concerns among buyers and sellers.

Just a few days ago the company made the decision to eliminate Chat Rooms, which caused participants to leave for other community forums on sites such as Zibbet.

I recently contemplated whether Kalin was suited to manage a maturing company and said time would tell whether Etsy's Board was correct in bringing back the founder in 2009.

Boards can indulge eccentric founders if the company is performing, but as I pointed out in April, Etsy's growth rate has been slowing despite international expansion. The board may have been concerned after an April Inc Magazine profile showing Kalin as beyond quirky, but it took them only 2 weeks to make its move once Wall Street weighed in:

On July 8, I reported on findings by Wall Street firm GreenCrest Capital:

GreenCrest Capital said its survey of over two dozen prolific Etsy sellers showed storefront concerns were reaching a crescendo. Over 80% of respondents had concerns about their Etsy experience. The most frequently cited irritants were regarding the effort required to maintain a sufficiently active storefront, financial considerations, competition with other sellers, privacy concerns, and Etsy's lack of technological capabilities, particularly product search.

While there's no acknowledgment the board ousted Kalin, VC investor and Board member Fred Wilson's blog post hints at the difficult decision it was forced to make, writing, "Transitions are never easy on the people involved and the company that goes through them. But they are inevitable in any company's evolution. Some of them work out well and others not as much. But the role of the management and Board is to constantly try to have the right people in the right roles at the right time."

Kalin's replacement is Etsy Chief Technology Officer Chad Dickerson, who joined the company in September 1, 2008, from Yahoo. He is experienced managing developers - not an easy crowd to please - so it will be interesting to see how he manages the diverse Etsy base of buyers and sellers.

What do you think Dickerson's challenges will be at Etsy in the short-term? And how can the company get back on track?




Comments (29) | Permalink

Readers Comments

Etsy Founder Rob Kalin Is Out as CEO   Etsy Founder Rob Kalin Is Out as CEO

by: anyone out there

Thu Jul 21 21:32:32 2011

Unlike Fleecebay when Etsy does something stupid and a few people leave for other pastures it is noticed.

It will take thousands of people to leave fleecebay before there is even a ripple in the waters.

Sometimes it is nice to be tiny.

Etsy Founder Rob Kalin Is Out as CEO   Etsy Founder Rob Kalin Is Out as CEO

by: Mitzi
Web Site

Thu Jul 21 22:56:55 2011

There is a blog article on the Wall Street Journal about this, here is a quote:

"The change came swiftly. As recently as a week ago, some of Etsy’s management was not aware of the shakeup, said one person familiar with the matter. In an email, Wilson, a company director, said that “the Board of Directors put this transition into place in a very short space of time.”

That doesn't really sound like Kalin left voluntarily to me... I am interested to see if anything improves under new management, time will tell I guess! :)

Etsy Founder Rob Kalin Is Out as CEO   Etsy Founder Rob Kalin Is Out as CEO

This user has validated their user name. by: Nan
Web Site

Thu Jul 21 23:24:07 2011

Wow.  I would have loved to be a fly on the wall during _that_ powerplay.

Etsy Founder Rob Kalin Is Out as CEO   Etsy Founder Rob Kalin Is Out as CEO

This user has validated their user name. by: Philip Cohen
Web Site

Fri Jul 22 03:17:48 2011

Gee, how long are we going to have to wait before eBay's board of directors finally comes to the same decision with the "eBafia Don"?

Enron / eBay / PayPal / Donahoe: Dead Men Walking.

Etsy Founder Rob Kalin Is Out as CEO   Etsy Founder Rob Kalin Is Out as CEO

by: summer in the city

Fri Jul 22 04:36:46 2011

@ Philip Cohen

Don't hold your breath.

''...80% of respondents had concerns about their Etsy experience. The most frequently cited irritants were regarding the effort required to maintain a sufficiently active storefront, financial considerations, competition with other sellers, privacy concerns, and Etsy's lack of technological capabilities, particularly product search.''

That describes business as usual at Ebay, going on for years now.




Etsy Founder Rob Kalin Is Out as CEO   Etsy Founder Rob Kalin Is Out as CEO

by: stillunaware

Fri Jul 22 09:16:47 2011

I would think Etsy would want to search for a new CEO... nothing against Chief Technology Officer Chad Dickerson but not sure if he would be the one I would choose as a permanent CEO.... I would hope that he is a interim CEO and that the board is searching for someone with long term business vision and experience (Bain & Company alumni need not apply).

Etsy Founder Rob Kalin Is Out as CEO   Etsy Founder Rob Kalin Is Out as CEO

by: Kal

Fri Jul 22 13:59:53 2011

''GreenCrest Capital said its survey of over two dozen prolific Etsy sellers showed storefront concerns were reaching a crescendo. Over 80% of respondents had concerns about their Etsy experience. The most frequently cited irritants were regarding the effort required to maintain a sufficiently active storefront, financial considerations, competition with other sellers, privacy concerns, and Etsy's lack of technological capabilities, particularly product search.''

How funny. replace the word ETSY with EBAY and you have the same issues. Yet eBay's board refuses to do anything about it. Anyone who doubts that it's ''all about the money'' need look no further.

Etsy Founder Rob Kalin Is Out as CEO   Etsy Founder Rob Kalin Is Out as CEO

This user has validated their user name. by: Ming the Merciless

Fri Jul 22 14:18:48 2011

Random thoughts while contemplating how far down Wall Street would have to drill to get the truth about ebay's reported 2Q numbers. Not very far down, I suspect.

Why is that BoDs can't manage to do the right thing or the smart thing BEFORE Wall Street comments?

Wall Street is about as shallow in its analysis as a flash flood river bed in winter.

What is it about brandishing a knife under a reporter's nose that the Etsy Board didn't get? Why did it take an article in the WSJ stating the perfectly obvious before they took long overdue and appropriate action?

What dynamic is at work on the Etsy Board that is absent from the ebay Board?

I hope Chad Dickerson isn't related to "Lawrence A. Dickerson."

Kalin and Patrick Byrne should form a new company and market psychiatric services.

How many failures and careers have to be sacrificed before greedy online sales venues understand that a manipulated search creates far more problems than it solves?

Companies like ebay and the elephant in the room get back on track by

(1) listening to their customers' wishes, and their customers are SELLERS
(2) eliminating criminal sellers and buyers from their venues
(3) Setting the standard for integrity and transparency rather than the Do as I say, not as I do sociopathic philosophy that ebay has.

Remember, the quality of bankster investment advice is what we see in analysts' comments and ratings.

Are these same criminals the ones you want managing your retirement funds?

I expect Etsy will reinstate the popular features Kalin removed and perhaps even create some more. If they don't, they're toast.

Etsy Founder Rob Kalin Is Out as CEO   Etsy Founder Rob Kalin Is Out as CEO

by: JimJuris

Fri Jul 22 17:25:46 2011

Etsy has had a problem listening to their sellers for quite some time.

Etsy has butchered their forums.  Forum threads get shut down often.

Artfire is a much better venue for selling handmade, supplies and vintage.

Etsy Founder Rob Kalin Is Out as CEO   Etsy Founder Rob Kalin Is Out as CEO

This user has validated their user name. by: Tula

Fri Jul 22 19:39:23 2011

Given that Etsy has a host of technical issues, perhaps the CTO is the right choice as replacement, at least in the near term. Developers aren't necessarily hard to please. It's just that they tend to be smart, focused, and less tolerant of BS than the MBAs (pointy-haired bosses) who typically manage them. Read some Dilbert and you'll get the idea :-)

Etsy Founder Rob Kalin Is Out as CEO   Etsy Founder Rob Kalin Is Out as CEO

This user has validated their user name. by: Anonymous Annie

Fri Jul 22 21:45:22 2011

Are there any *current* photos of Rob Kalin? The only one I ever see appears to be from 20 years ago... I presume when he was in high school or college. :-)

Etsy Founder Rob Kalin Is Out as CEO   Etsy Founder Rob Kalin Is Out as CEO

by: another side of the coin

Fri Jul 22 22:02:13 2011

aka Alfred E. Neuman :-)

Etsy Founder Rob Kalin Is Out as CEO   Etsy Founder Rob Kalin Is Out as CEO

by: Watching the Wheels

Sat Jul 23 08:04:59 2011

@Ming et al,

The board was made aware of Esty's failings in 2009. That's how Maria was moved on and Kalin brought back.

I know; I sent the letter.

It was never personally acknowledged by its recipiant, but Maria wrote to me and referenced it.

Personally, I feel that Chad's promotion is merely another shot at window dressing, and as long as he is capable of doing a ''very fine line dance between keeping the sellers appeased, and following the boards directives and making it sound good, he'll have a job. :) AND with Kalin out, they've bought themselves additional BS time. The lot of them can now utilise Kalin as ''THE fall guy for awhile, and be able to stall out on real seller based improvements by letting a now abscent kalin take the hits.

You have to keep in mind that 3 of the board members are also or have been VERY heavily involved with the introduction of the plether of social sites:

Frakes - Flickr, Hunch
Wilson - Twitter
Breyer - Facebook

I personally feel that the board has had ample opportunity to address the concerns of Etsy's seller base. They have chosen NOT TO.

Whose to say, maybe they adhere to the addage of ''If you CAN'T dazzle them with brilliance, baffle them with B*ll Sh*t.'', and resort to the never ending BS, 'cause that's all they've got.

One of the reasons why the forums were decimated is because of me. In order to send a concise rundown of the problems plagueing the site, I gathered a collection of 2009's Etsy scandals via forum thread links.

The board, in my oppinion is content to operate within the ''entitlement mindset'' that has the global economy teetering upon a truly dangerous position.

Maybe, had any of them had the wisdom or the foresite to just roll up their shirt sleeves and opened a phantom shop, in order to see first hand what all the hullaballoo was all about, Etsy would have a better reputation, today.

Try not to forget that it took the airing of the ''Date Rape Cards'' via a CNN newscast before ANYTHING was done.

It took the very public and viral airing of a personal purchase PRIOR to the poorly implementation of some level of privacy concerns to be addressed.

It's a tragic thing, but I do not foresee any measurable or ethical improvments to be realised within the site.

The entire lot of them are just a little too fond of utilising subterfuge and secrecy in order to get their collective way.

More's the pity. It would have been easier to just correct their collective mistakes. I personally believe that the VC's were willin g to pump money into what was seen as a venue opportunity that had FINALLY differentiated itself enough from Ebay and Amazon, to present a viable means of fulfilling collective visions of ''Meg and Pierre'' that danced in their heads.

@JimJuris, I wouldn't be so quick to boast about Artfire's superiority, just yet. The Mavens and thir continual sychophantic admiration of Tony has begun to leak out, also.

AND isn't the true measure of ethical behavior amount to what one is willing to do when no one is looking?

I was a maven during my very short tenure with Artfire. I've seen them in action.

The only discrnable differences that I can detect when comparing Etsy and Artfire is their individual combat styles which in reality only really amounts to being opposite sides of a very tarnished coin. :) OR at the extreme ends of a psychological bell curve.

Etsy Founder Rob Kalin Is Out as CEO   Etsy Founder Rob Kalin Is Out as CEO

by: craftsheaven

Sat Jul 23 15:10:18 2011

While the idea of a Bd. member who still has some actual credibility (ha!)setting up a phantom store to see what the real deal is sounds like a great idea, it's 7 yrs too late for that.  Egos have inflated beyond fixing.  Etsy's bad attitudes are embedded in the people Kalin hired and act like a gang of thugs picking their personal favorite sellers and products while intimidating everyone else.  Send them out the door after Kalin and there might be a faint glimmer of hope, but I doubt it.  Etsy doesn't like its sellers and it shows every time they add a feature sellers don't like and every time make one more arrogant announcement about how right they are!  Clean house and drop the bad attitude, it's not working!

Etsy Founder Rob Kalin Is Out as CEO   Etsy Founder Rob Kalin Is Out as CEO

by: violetsnewvintage
Web Site

Sat Jul 23 16:35:48 2011

The announcement did not give out very much info. I wonder,what plans Kalin is making now that his CEO job is gone? I left Etsy as a seller this year and went to Artfire. Artfire is growing and is a stable selling venue with great seller tools and  an administration that listens to its sellers.

Etsy Founder Rob Kalin Is Out as CEO   Etsy Founder Rob Kalin Is Out as CEO

by: MR ME

Sat Jul 23 19:52:07 2011

Hopefully ETSY becomes the place for unusual / interesting items. Please expand categories to "tools of the trade".. cameras, music instrument, craft tools .... and importantly.......NO NEW CHINESE CARP....

Etsy Founder Rob Kalin Is Out as CEO   Etsy Founder Rob Kalin Is Out as CEO

by: Handmade Artists Shop
Web Site

Sat Jul 23 20:12:03 2011

I think it is a too little to late in my opinion. Until etsy cleans out the resellers and mass produced items handmade doesn't stand a chance. That is why on the Handmade Artists' Shop we have devoted the venue to handmade only. No mass produced items, no unaltered vintage and no resellers allowed. That way handmade has a chance.
Andrew

Etsy Founder Rob Kalin Is Out as CEO   Etsy Founder Rob Kalin Is Out as CEO

by: atching the Wheels

Sat Jul 23 20:42:12 2011

Thank you, again, Ina for presenting this information in your site's blog format.

I also think that you might have inadvertantly stumbled upon the crux of Etsy's problem.

''While there's no acknowledgment the board ousted Kalin, VC investor and Board member Fred Wilson's blog post hints at the difficult decision it was forced to make, writing, ''Transitions are never easy on the people involved and the company that goes through them. But they are inevitable in any company's evolution. Some of them work out well and others not as much. But the role of the management and Board is to constantly try to have the right people in the right roles at the right time.''

:) Therein lies the rub.

Instead of making sure that the right people are in the right places, at the right times, ''They'' have only found it necessary to try. I see no mention of getting it right.

Etsy Founder Rob Kalin Is Out as CEO   Etsy Founder Rob Kalin Is Out as CEO

by: blueditty
Web Site

Sun Jul 24 03:38:40 2011

Maybe the threat of competition is more damaging to Etsy than it ever was to Ebay.

Etsy Founder Rob Kalin Is Out as CEO   Etsy Founder Rob Kalin Is Out as CEO

by: Watching the Wheels

Sun Jul 24 04:51:46 2011

@blueditty,

Ebay does all sort of self-protective things; they are though at least run by people with real business training and experiance.

Part of the "problem" within this relatively risk free, cost free business model is maintaining the legal fine line in order to keep "venue" status.

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