EcommerceBytes-NewsFlash, Number 2187 - December 23, 2009     1 of 2

Etsy Is Not about Retail, Returning Founder Says

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A day after announcing he would return as CEO, Etsy's founder Rob Kalin said he would alter the company's focus away from retail and more on "social commerce" when he replaces outgoing CEO Maria Thomas. He will close down the site's gift guides in early January, stating the guides are "a retail-oriented way of merchandising, and this isn't what Etsy is about."

"In social commerce, our focus is on people, not products," he said, adding that the gift guides don't reflect the values of the Etsy community.

Etsy revealed through a blog post on Monday that Mr. Kalin would be returning as CEO. Ms. Thomas had joined the company last year and began addressing scalability issues for the small P2P website that focuses on handmade items.

The announcement that Thomas would step down came as a surprise to people outside the company and revealed nothing about what the CEO would do after she leaves. Monday's announcement was made days after the New York Times published an article about the business aspect of selling on Etsy.

Mr. Kalin's remarks, posted on Tuesday, reveal a difference in strategic vision between himself and Ms. Thomas; he said he would revisit her project list outlining the company's priorities.

He explained that Etsy's Board of Directors hires the CEO - the board consists of himself, Caterina Fake, Fred Wilson and Jim Breyer. "As a board, we believe that focusing on revenue is not what will make Etsy continue to grow. We are focused on our service: building the best tools and supporting this community. If we do this well, revenue will follow. Now that we are profitable, we can redouble our efforts here, and I'm really excited about this. Our success as a company follows your success as members."

When asked about the structure Ms. Thomas had imposed on Etsy, he wrote that the internal structure would always be changing a bit, adding, "One person cannot force a structure on an entire company, either. That's just cruel."

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Ina Steiner is co-founder and Editor of EcommerceBytes and has been reporting on ecommerce since 1999. She's a widely cited authority on marketplace selling and is author of "Turn eBay Data Into Dollars" (McGraw-Hill 2006). Her blog was featured in the book, "Blogging Heroes" (Wiley 2008). Follow her on Twitter at @ecommercebytes and send news tips to

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