Our portfolio company Etsy is helping Rockford Illinois build an entrepreneurial economy in their city. Here’s a short (3 min) video that talks a bit about what they are doing and how it got started.
Why did the mayor choose Etsy and what is an Etsy economy? A craft entrepreneurship curriculum?
etsy is more than craft, but craft is a huge part of it. it is clothing, jewelry, furniture, and much more. over $2bn of goods are sold globally on etsy and most of the sellers are women working out of their homesthat’s what the mayor wanted to tap into
majority are women and at a small enough scale to be home based!guessing that this is majority of vendors not majority of revenue?remarkable stat either way.
How many Etsy sellers make more than $50k per year?
Not many. There are over 1mm active sellers and total GMS this year will be slightly north of $2bnSo the average is $2000Assume a power law and go from thereThat said $2000 in Peru is real money
Sometimes it is not about the money, it’s about starting. Entrepreneurship is like a box of chocolates, you never know what you’ll get.
Agree completely.Speaking with an inspiring entrepreneur working on a curriculum to fight poverty in Kenya. It is all about starting and thinking differently and building an ecosystem to let a new economy scale individual by individual.
That is a bold curriculum and mission.
So true. And some unique approaches driven by a inspired individual.Will share more when I can.
Please do. I can just imagine the funding pitch.
No can say at this point.
That’s no fun.ᐧ
Been starting to understand more of the start ups and funders in the wellness, non profit and ag world. Really doing some work cross these categories.
Cool. The social entrepreneurship and social enterprise founders out there are the ones I focus on talking to / meeting. They love to travel and put a heavy emphasis on giving back to the world rather than just maximizing income.ᐧ
YupNot just social though.Agfunder is doing some interesting work and I think has possibilities in the pure agricultural as an asset class space.
I just mean social as in social impact. Not social networking, social media, or anything of the sort.Anything in B Corps camp generally falls into the type of founders I gravitate toward.ᐧ
Yep things like ..value, discipline, risk, uncertainty, and self-constraint… that’s some box of ” chocolate”ingredients”, YUM.
$2B…wow. That’s a lot.
$2000 in America is also real money. Maybe not if you’re making six figures in your full time job but there are plenty of part-time workers that would probably be strongly impacted by it, and for a middle income worker that’s a vacation you could otherwise not afford.
yes, absolutely, and that drives a lot of what goes on at Etsymy point, poorly made, was not that $2000 wasn’t real money in the US but that its a lotttt of money in other parts of the world
but there are plenty of part-time workers that would probably be strongly impacted by itI think each situation is different.A high school student earning $2000 and learning some valuable skills, and not wasting time on something else, yes.Another person, spending way to much time for that $2000 and putting off doing something that would earn them a real income, no.And everything in between. There are always opportunity costs to everything.
Yep, people need to think of their time as a portfolio, get on the efficient frontier.
But not in Rockford.This reminds me a bit of Bill Ackman’s teary-eyed lament about how most Herbalife sellers don’t make much money and how America has been so good to him and his ancestors (I assume you and Ackman know each other through the New York philanthropy community). John Hempton has made a compelling case that Herbalife sellers appreciate the lifestyle aspects of the business and that they are also consumers benefiting from the company’s products and communities.I think Hempton is right and neither Etsy nor Herbalife are to blame for the winner-take-all nature of today’s economy. But I think the nature of the economy and how it’s changed since his ancestors got here is what Ackman was really lamenting.
I vouch that statement … that is Rs 10,000/- per month…lots of family live on that income in-and-around where i live….having said that I doubt whether there is anyone is ON Etsy from my place.
Also keep in mind that if a seller is making, say, $20k and even assuming they are getting a tax form from Etsy (I’m assuming they are but don’t know) they can still deduct various expenses for running a business to offset that income.So that computer becomes tax deductible as well as the trashcan and possibly even a (somewhat risky) home office deduction.For that matter they could deduct auto expenses and insurance (to a certain extent). Point being is that 20k through Etsy, if done correctly, is not the same as 20k from Walmart part time.
Yes, but their tax brackets are low and not paying into social security needs to be factored in.
Think what Amazon good *could* have done over the years with (mechanical turk) http://en.wikipedia.org/wik…A *lot* of resourceful (in many cases desperate) self-starters who work in isolation.Working in self-organising groups they constitute a sort of human http://en.wikipedia.org/wik… heuristic for market efficiency.Efficiency is enhanced by local exchange, communication, *Education* & community and could form natural entrepreneurial eco-system hubsIf Amazon grew to fear collective bargaining it would an empowerment result. Maybe the open-source community (or Etsy *hint*) could organise a mechanical turk provider “API” to diversify their individual and collective market reach.@fredwilson:disqus – I guess this could be done absent Amazon buy-in. Interesting R&D project for a social-good oriented entrepreneur-in-residence
Engaging women in economy has its own advantage … we have a small town attached to our corporation called ( http://en.wikipedia.org/wik…. Its main economy was hand-loom export to Burma and Sri-lanka …now that got closed about a decade ago as hand-loom has become economically nonviable …The entire town now survives on men working abroad OR/and women working from home for Beedi manufacturers (leaf cigarette).Edit: However, here it was not planned … nature took its own course as a survival process…
Etsy all the things.
That’s awesome. Rockford has been hurting for over two decades. They were a big manufacturing town. Local Illinois taxes, union laws hurt them. Rockford is in a good spot to be a distribution hub, and there is still some specialty manufacturing there. State Line Angels is a small angel group in Rockford-and Hyde Park Angels will invest there. Janesville, Wisconsin is sort of a sister city nearby.
thanks for the context.
As someone who lives about an hour north of Rockford, I’m fascinated by the idea that the economy could be helped by an Etsy community. I went in and found the Wisconsin community. https://www.etsy.com/teams/… I really like the idea of forum members discussing things like tax laws and permits together. I’ve often thought that the reaction to losing jobs to automation and improvements in manufacturing would be more artisanal products. It didn’t click for me until watching this video that Etsy could be a major driver of the shift.
$0.20 listing fee3.5% transaction feeadvertising fees ($ unspecified)$100 Wholesale platform joining feeis etsy an ebay niche?
If its a niche its a huge one
planetary.where’s the competition?
there are “etsy clones” all over the worldthe biggest is Dwanda in Germany which is well north of $100mm of GMS annuallyEtsy bought the one in France earlier this year https://blog.etsy.com/news/…
What’s “eBay niche”?
only in the sense that it’s a platform on which people have hitherto been marketing their home made wares.
Oh. That. Got it.
Paypal is ebay’s bitch.
Is that their tag line?
On PayPal’s about page it says this as the first sentence:At PayPal, we put people at the center of everything we do.So the only question is are the people facing front or facing back when they are in the center of the bogu?(I’d rate that at 6/10th of a Hirschfeld.)The hirschfeld scale is to comedy, what the Rockwell scale is to materials (and male indenters)The Rockwell test determines the hardness by measuring the depth of penetration of an indenter under a large load compared to the penetration made by a preloadhttp://en.wikipedia.org/wik…
Oiy. No comment, other than this: that’s not the correct spelling. Spelling hirshfield is hard.
You mean oy. I don’t recognize bastard words born on the net unless they are my inventions. Or I really like them.Could have been “feld” when family got off the boat though. They messed up my family name left out a letter.http://www.ancestry.com/nam…I’d rate the Rockwell bit at 8/10ths of a HirshField btw.
Great initiative. Maybe this could become a role model partnership that other communities can emulate. I’m sure there are many other cities like Rockford.
that’s already happening. there’s a significant effort internally to roll this out to additional cities that need it.
So I clicked through to check out the Wisconsin one. This is Etsy’s version of Meetup, right?
Kind of. Its a bit different
A really super idea. I would imagine there are ways to monetize the entire ecosystem that will surround this (products and services that these sellers need) – make a $ off of that as well. (Boxes, shipping services, insurance, discounts at preferred vendors, professional services just off the top).They could even get into providing some capital that these businesses need, or feed leads to investors interested in this area. Like Whole Foods does.Whole Foods has their “Local Producer Loan Program”  which I see as essentially WF’s way of keeping all these small companies that provide product for their shelves floating at very low risk. It’s a totally smart business idea cloaked in “doing good”. http://www.wholefoodsmarket…
One of your portfolio companies, Etsy, has immediately jumped on board when being asked to help; and this has occurred through another one of your investments, Twitter. A month or so ago, the Gotham Gal was brainstorming on her own blog about ways to help Detroit…and I could go on and on.Even though we have never met, it is clear to me that the social impact you are having as well as the personal success you are both experiencing on many levels, are interconnected — it’s in the mindset.Helping is clearly on your mutual horizon and you don’t pay lip service to social good issues.I’m going to stop here, as otherwise it’s going to start sounding as though I’m trying to “butter” you up :-)Take care.
it does sound that way, but i appreciate the comment nonethelessthank you
It’s extremely hard to not come across that way and yet be genuinely impressed.I’ve tried. I edited several times before posting but I still failed to come across properly; and it will still most likely sound off this time.The feeling is heartfelt, trust me, and it’s a build up over the last several months.Keep in mind, you don’t know the individual readers of your blog — if they’re not already a friend or an acquaintance — but we know a lot about you, so it can create an imbalance of affinity.The way you talk about your philosophy, the way you talk about Joanne, the way she talks about how you’ve raised your children together, what she did for you on Father’s Day, Jessica’s endeavors with her website, the way you and Brad Feld (the only other individual whose blog I read daily) interact on each other’s blogs, and more, all add up to form a picture.I think of you guys as role models, on many levels, and I was just acknowledging that.Who knows, maybe I would meet you in person and have a completely different opinion, but I don’t think so.Anyways, no more compliments for at least two years now 😉
where we’re teaching people via etsy how to become entrepreneurs and sell their goods onlineTo me this is really what it’s all about. Not the money that they may or may not make but how they learn to make something and sell it to others and deal with people and transacting business. Not something by the way they even get close to doing at Wharton in the Entrepreneurship program (at least in the past not sure of what happens now..)
That was my favorite line as well. Its great to see the local officials understanding the problem and solving it without any agenda, ie. getting re-elected.This is the real skills training that will save the economy, giving people the means to make a living through crafts and trades learned through an accelerate education.
Meetups.com types of platforms this type of movement. I like whAt they are doing and see other applicationsapplications for the Etsy model becoming a norm.
I lived in Rockford, Il, when I was 17, coming up from Dixon, Il, Reagan’s hometown, and worked for Fireman Fund Insurance as a tab operator- FF was one of the main employers at that time.I also worked at manufacturing plants, where Rockford, Il, at this time, was the second place metal producing town in the world. Economies change, and all the industry moved out, leaving a ghost town of not used factories, etc.I’m happy to hear about Etsy helping Rockford, maybe Loves Park, Il, will catch the Etsy bug to.Good luck to everyone in Rockford..