Etsy, a global marketplace for handcrafted goods, had its IPO last week. On the first day of trading the company closed with a solid plus of 86%.
While I won’t get into a detailed analysis of Etsy’s business model in this article, or whether I think the company to be worth $3 billion, I will say that it is reassuring indeed to see a company that isn’t selling a digital, social service or app but handcrafted physical products, has achieved to gain traction among a global user base.
Etsy’s IPO shows that learning to program is not the only possible career option in the future, and that is really a good thing.
The other thing that excites me is how an IPO-powered Etsy will influence the rise of online education startups that cater to creators.
Back in January 2014 we wrote about Sympoz, an edtech startup that powers the crafts education site Craftsy. Another player in the space is CreativeLive. Both startups have raised around $30 million in venture capital so far, which frankly sounds a lot for video courses around crochet and knitting.
Yet, thanks to vertical marketplaces like Etsy or e-commerce SaaS platforms like Shopify, hobbyists can now turn their pastime into a part-time or even full-time business. According to Etsy, nearly 20 million members bought at least one item on the marketplace in 2014, generating a total sales volume of $195.6 million.
As we can expect that Etsy will allocate a sizeable amount of its new money towards marketing, user numbers will grow and more and more hobbyists will eventually get interested in selling their work on the marketplace. In order to stay ahead of the competition, the serious ones will invest in training, may it be in the form of brick-and-mortar based workshops offered by startups like CourseHorse or Skillshare, or video courses on Craftsy and CreativeLive.
But for Etsy one major task ahead will be balancing its social mission with its profit objectives, as the New York Times points out. Shortly before the IPO, Etsy made an adjustment to its terms, allowing its creators to grow from individual creators into small companies as long as all products are still handcrafted.
Further Reading
- With $35 million in fresh funding Sympoz is powering the Gig Economy | EDUKWEST
- Etsy I.P.O. Tests Pledge to Balance Social Mission and Profit | New York Times