John Gerzema: 2011: The Year Of The Artisan

Today Etsy has 300,000 artisans and is now valued at nearly $300 million. Although Etsy is based on the Internet, founder Rob Kalin argues that his success is based on the oldest form of communication—storytelling

Up a few flights from a business service shop called Copy Rite, Mr. Grit dominates Etsy’s reception area: a ten-foot-tall sculpture made of cardboard layers like shingles. Blessed with wide eyes, an orange nose that looks like a carrot, and tiny arms with claw-like hands, the thing resembles a Tyrannosaurus with an owl’s face. Beyond Mr. Grit staffers manage the sprawling Etsy Web site and artisans practice their craft in work spaces cluttered with handmade items. Presiding over all of this is Rob Kalin, a boyish redhead wearing jeans, a cardigan, and a blue silk scarf made by a friend. Kalin got the idea for Etsy when he worked for an arts and crafts Internet site that offered advice and community support for people who made things by hand but did not provide them with a way to sell their work. (A craftsman who works with wood, he was also struggling to find people who might be interested in buying his own creations).

Today Etsy has 300,000 artisans and is now valued at nearly $300 million, adding nearly $200 million in equity value in two years.  Although Etsy is based on the Internet, Kalin argues that his success is based on the oldest form of communication—storytelling. “It’s part of human nature to want to know where you buy from, what you are buying,” says Kalin as he snacks on granola and milk at a big table in the Etsy break room. “I don’t think this is a trend, or a movement. This has always existed.” The only difference here is that stories are told via Internet-based tools that create and activate a connection between the creator and the customer. Outside, a Q train rumbles by on its way across the Manhattan Bridge. Kalin raises his voice a bit to be heard over the noise, talking about the sense of satisfaction that comes from working with your hands—”In my mind everyone should be making stuff—and competing with ideas about what defines value in commerce”.

“Large faceless corporations want consumers to believe that value is just price and convenience,” he says. “That’s bullshit in my mind. Value to me is what something means to your life, and then there’s value to the planet and the environment, too.” Food is the perfect example of a product that has been sold on price and convenience, he says. Thanks to chemicals and carbon producing transportation networks, food prices have been pushed steadily downward. However, when personal, social, and political concerns are brought to bear, people often make the choice to pay a bit more for something locally produced. The key to moving a customer is a good story. “I’m not going to say, “Hey, you have to care about our values. I’m going to tell compelling stories in as compelling way to as many people as possible.” Before the Industrial Age made it possible to manufacture goods and ship them great distances, people generally knew the story behind the table or teapot they bought because they knew the craftsmen who produced all the goods sold in local markets. These relationships established bonds between buyers and sellers, which gave everyone incentive to deal fairly.

The stories that Etsy tells in an effort to reestablish the values of the old marketplace may be contained in the description of a piece of jewelry and the woman who made it. Others are told in little films called “video portraits” that the company produces to highlight certain vendors. Whatever the format, they depend on the basic human hunger for narratives and the accessibility of the Internet to establish relationships. “This is the beautiful subversive power of the Web,” adds Kalin, pointing out that you can get straight to the person who is producing the item you want to buy. The next step for Etsy will take the company into cities, towns, and villages to help people meet together in the old-fashioned way: face to face. “We help them find people in their area who care about making things. Some rent commercial space to sell together. Others have craft fairs and meet-ups”—creating places where they can get to know each other. The point is to use the tools of the Web to benefit people, communities, and the environment on many levels.

Where does Brooklyn fit into the paradigm that powers Etsy? Kalin notes that everyone who works at the company lives in the borough and that because it is “dirtier, noisier, grittier, and every day is a bit of a fight” they are accustomed to setbacks and even a little “a little bit of destruction” every day. The combination of daily gains and losses contributes to the creative process. But in the end, he says, the Brooklyn spirit, which values what’s on the inside of a person or a business, can be seen almost anywhere in the world. His favorite example is an Etsy guitar vendor. Handcrafted out of wood, Armor Guitars are made by musicians who welcome contact with people all over the world who share their passion for music and instruments. Thanks to Etsy, James Peters and his entire family make a living by crafting everything from banjos to a large guitar they call the Jumbo. They accomplish all of this from a little red barn and wood shop in Springfield, Tennessee, a town of seventeen thousand that’s a lot more like Brooklyn than you might imagine. But then again, thanks to Etsy, so is the rest of the world.

Etsy is one of fifty companies interviewed for the Wall Street Journal best-seller: Spend Shift: How the Post-Crisis Values Revolution is Changing the Way We Buy, Sell and Live.

John Gerzema (@johngerzema/twitter) is president of Brandasset Consulting and Young & Rubicam’s Brandasset Valuator, the world’s largest database of consumer behavior, attitudes and values. Michael d’antonio is a Pulitzer-Prize winning journalist, author and reporter

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