And Now A Word From Our Sponsor
I’m running an advertisement here today.
I’ve been Chairman of two public companies in my career and the leaders of those two companies sat down and talked yesterday.
I enjoyed watching that very much and hope you do too.
In this nine-minute video, Jim Cramer talks to Josh Silverman, CEO of Etsy, about what makes Etsy “special” and how being special allows them to compete and win against Amazon.
Etsy CEO on Amazon Handmade: It doesn’t really threaten our business from CNBC.
Disclosure: I am the Chairman of Etsy, have been on Etsy’s board for 12 years, and my wife and I own a lot of Etsy stock.
Josh comes across well.Reminds me of Dara K.Relaxed interviewing posture. Concise strong responses. Hits key talking points.
similar age too. i think they are both 1969/70 babies.that generation, which graduated from college just as the internet was happening, often have worked their entire career in the online sector.
Babies of that time, yes, we are now awesome in our respective fields. Strike while the iron is hot.
This isn’t an ad any more than any other AVC post that mentions a USV portfolio company.
or any less
More or less, the same.
If Warren Buffett blogged, do you think he’d talk about Bank of America, Wells Fargo and Goldman Sachs? You bet he would. I see nothing wrong for an investor in a company talking about and featuring their investment. It’s part of the role. If you aren’t going to talk your book, who’s gonna talk it for you?
.Haha, WB eats cheeseburgers from DQ, drinks Coke, and steals ideas from places like Subway.He wanted to buy Subway. Couldn’t make his deal.Bought DQ.Now, he’s installing Subway’s heated sandwich menu at DQ.Warren is all about the cheddar.JLMwww.themusingsofthebigredca…
Agreed. I wasn’t complaining. Just curious that this post has the disclaimer about it be an ad. I don’t think Fred needs to say that.
ya, I should have replied somewhere else and wasn’t calling anyone out, but I think Fred and others get shit for talking their book. I think it’s okay to point out when someone is talking their book but you certainly cannot blame them for it. In many cases, they are blinded by their confirmation bias, but when it’s a good investor you’d be surprised at all the diligence they did to find holes in the business or why it won’t work.Sometimes their points are just clear eyed realities that come from a lot of thoughtful analysis. I think a lot of folks think that investors simply shoot from the hip and get lucky. Just doesn’t happen
.Why wouldn’t he talk his own book? That’s why people come here – to hear about his book.JLMwww.themusingsofthebigredca…
He doesn’t blog but he likes to talk!https://www.youtube.com/wat…
Gates – “the wind at your back”. so right.cycling teaches many things. that’s one of them.
” A seller in every county in the US.” They’ve made huge strides in the last year. Interesting stock.
internal imperialism? the ‘state’ within the state?
“We sell special” Great key phrase.Same for we grow the pie.What I am surprised is only 33% ruralI have always said when you need a particular item: iPhone cable (just for example) Amazon wins.But you want special??? Great phrase, great story about Lily. Always make it personal.Cramer says Amazon is the “Death Star” They are if you are not special. But I went to Cabella’s last night, because I want the experience. I hate shopping but I love talking to Bob about what I want to buy.They have done this for their space.
Etsy is my favorite USV investment. https://uploads.disquscdn.c…
.There is actually a very different and much better story hidden behind the packaging of this story. Etsy remade itself in May of 2017 when they re-tooled the entire management.In a very short period of time, they installed a new CEO, CTO, CFO, and a C of the B (our boy Freddie – who had been around for a decade, I think).The new CEO is a killer — founder/CEO of Evite, CEO of Skype, CEO of Shopping.com (Ebay) and Big Dog President at Amex’s Consumer Products/Services. Boardmember at Shake Shack. EIR at Graylock Partners. This is a world class entrepreneur – doer.Pretty sure he is not into cat scratchers, could be wrong. Killer.The big thing is how Etsy was able to get someone of this caliber to join their board and, then, to take the job as CEO. Whoever turned that trick, SALUTE!The guy came in – was already on the board, so he knew what the joint smelled like – and took a machete to the company conducting two old fashioned layoffs. He whacked through all the touchy feely bullshit and reduced the focus to what drives cash flow. Very interesting read to see all the bullshit KPIs they threw overboard.No more B Corp baloney.Stone cold killer.Stock price on 30 Apr 2017 $11.66/sh – day before Hurricane Silverman hit.Recent stock price 30 April 2018 $30.69/sh.Full disclosure, I took a good stake when the change was made. Did my homework, bet solely on the jockey. It was pretty clear this guy was going to jerk a knot in their ass. In fact, he did.This is a perfect example of the importance of leadership and the transformation of a gangly startup into a real company driven by demanding leadership.Etsy went public on 16 April 2015 at $16/sh, popped up to $31/sh and traded as low as $6.90 in July-ish of 2016. They got wrapped in their underwear about being “cool” and “hip” and B Corping it.This guy rocked their world and has whipped them into shape. No, I think he’s just starting.While I am a guy who likes to take a profit and tripling one’s stake is not a bad day, this is going to be a good ride for a modestly long time.And, that is how the cow ate the cabbage.All because I read AVC.com.JLMwww.themusingsofthebigredca…
How frequent is that a board member switches to CEO?
.In public companies of a bit of age, very rare. In newly public companies infrequent, but it happens. This guy is an extraordinary guy and they must have caught him perfect.That is why it caught my eye. They were adrift and this guy put them on a straight azimuth.Well played.JLMwww.themusingsofthebigredca…
Amazon can’t own everything. They are a fearsome competitor. How many credit card companies are there? How many oil companies? Retailing is undergoing a sea change which makes Amazon look fierce and unbeatable. I suppose mom and pop’s thought the same about Sears back in the day.
.I am a huge admirer of the leadership and management rigor of Amazon.Their order entry, fulfillment, shipping, and return policies are the world’s best. Period.There is almost nothing they don’t sell.They are cross operational. They are making Whole Foods sit up and beg — in a week after their acquisition.They are smart — looked at prescription drug business, threw some money at it, passed on the idea (which could be a head fake).No, if you are going toe to toe with Amazon, you better be wearing steel capped boots.The big fight is going to be Amazon v Walmart.JLMwww.themusingsofthebigredca…
Remember this…..less than 10% of retail is online. Walmart alone sells three times more than Amazon. In no way, no way am I denigrating Amazon. Packages arrive at our office every day. They can put them in the trunk of my Volvo, and they do.If you want to buy something Amazon wins. With diapers.com and whole foods they are trying to go into the supplying business.But you can carve out a niche, but it can’t be on buying stuff wholesale and selling it retail. It has to be providing the consumer an experience.I would love to see a show of hands on this board of who went into Cabella’s in the last month? (mine is up three times)
I went in 2015, to the one in front of Christianna mall, I wrote about this before.I was so amazed that I stayed for almost two hours. Got a grasp of the true meaning of the second amendment. Brought the most appreciated souvenirs from there.My best user experience is still B&H in downtown New York. The boxes travelling through the air up in the roof, the vintage POS terminals, the hack attempts to my phone. Absolutely fun.The consumer experience!
.The vast majority of rural America doesn’t have any idea what the Second Amendment is or what it is amending. For them, owning a pistol or a rifle is like owning a hammer or a screwdriver — a utilitarian tool which could be used any day of the week with a noble purpose like killing snakes or coyotes.It is a paen to the intellectual sanctity of our Constitution that people are unwilling to further amend it. The Constitution has a normal provision to amend it and it has been amended more than 30 times.It is the ratification of amendments which is the difficulty.Absent the presence of the Second Amendment, I doubt many folks would be able to articulate a convincing argument why gun ownership should not be constrained.JLMwww.themusingsofthebigredca…
“If guns are outlawed, then only outlaws will have guns.”Outlawing guns disarms the honest citizens but not the criminals.There are ~300 million guns in the US; only a tiny fraction get involved in crime.When tyrants come to power, they rush to get rid of the newsies, the lawyers, and the guns. Net, our 300 million guns are a significant barrier against would be tyrants.Fundamentally, so far, even in the best areas of the US, life is not the calm that we can see. Instead, the calm is just opposing forces in rough balance. In particular, lots of people are plenty ready, willing, and able to rush way off into nasty land but so far are constrained by balancing forces. Remove some of the balancing forces, and too many people will convert the US into a war zone. Those 300 million guns are one of the balancing forces.Even if we managed to take the guns from the criminals, they would still find ways to execute violent crimes — clubs, knives, cars, bombs, home made guns, etc.Home security is important: If a criminal breaks into the house of your family, then you will want a means of self defense. If the criminals know that the 300 million guns are gone, then they will be more likely to break in.In rural areas, guns have been and still are important tools.Guns can be dangerous. So can knives, gasoline, cars, motorcycles, dogs, horses, matches, …. The way to safety is a cautious mind, not no possibly dangerous tools.Some people, charlatans, don’t have much to do so build careers out of stirring up issues, feeding sensationalist copy to the newies, raising donations, getting power.Our media has little else but copy from people seeking power from nonsense issues and/or arguments. E.g., steamy, shocky, smoky, sexy, stormy. E.g., Trump is morally, ethically, culturally, socially, psychologically, mentally incapable of being POTUS, unstable, unpredictable, dangerous, so sayeth Mika, etc.Guns are one of those issues. If guns are outlawed, then the charlatans will go after everything from shoe laces to tooth brushes.The solution is just to ignore nonsense from charlatans.Sadly, apparently the more wealth a society has, the more opportunities there are for charlatans to exploit some of that wealth to get people to waste time, money, and energy on nonsense.
My reply got too lengthy, so I sent it to you by email.
Here is the thing. I understand that as a non U.S. citizen or a U.S. urban citizen going to Cabella’s must seem out of a different world because of the guns. But understand, since my primary residence is not in DE I cannot buy a gun there. Why would I go?Cabella’s stands for the outdoor lifestyle. It is about fishing, hiking, camping, working outside, and yes hunting. I would venture the vast majority of people that go there do not own a gun.Other super successful examples:Tractor Supply: They are about the farm lifestyle. They have everything you need for a farm, but have all sorts of supplies. I know most people that go there do not own a farm. Most people do not buy the live chickens or ducks that they sell, but they stock them to show they are “for real”Duluth Trading: Working “man” lifestyle. Shirts long enough to cover your “plumbers butt” pants made out of fire hose material.They like Cabella’s and Tractor Supply quickly figured out the key was to figure out how to make it comfortable and happy for women who do shop. Men tend to just buy. Women like shopping (gross stereotype but I have the numbers to back that up)Loews figured it out first. My wife loves Loews doesn’t like Home Depot. Yes you are selling which generally is considered a male dominated product, but you turn it on it’s ear. You not only welcome women but you bend over backwards to make them comfortable. I know for a fact each of these stores trains and hires (half women) their associates to make sure of this.
I enjoyed every department. My thing is tools and equipment. I recall that time I gave my son a remote shopping experience looking for an ultralight hammock which we eventually find at the store. The diversity of products was what amazed me, not only the firearms.I agree with you. To defy Amazon and survive, the classic shopping mall and department store experience needs an upgrade. I think this upgrade should be focused on super-niches and user experience.
That mall has added two million square feet of shopping since you were there. Adding another million this year. You better be ready to walk if you go there today (Saturday), because the parking lot is jammed.It is an experience. I agree completely. People go to restaurants for the experience, not because the food is cheaper.But if there is no experience then you get shopped on price (which actually is an experience to see what the best price is) and then if you are not Walmart or Amazon……watch out.
Amazon the public utility protocol, and less than ten years from now?
Two people are with nothing to do. They both need A and B. One can make A but not B, and the other can make B but not A. So, they need to swap. Suddenly, presto, bingo, both people now have something to do.So, both people specialize. Specialization has been much of the key to the rise of civilization.Now, instead of two people, really it’s at least 2 billion, and instead of A and B it’s at A … Z.But somehow the people need to communicate and exchange, and there’s overhead for that. So, use the Internet to reduce the overhead.Gee, Mary wants to get married. She and her bride’s maids have an outline of what they want for their dresses. They can have a little tape measure party, coffee and otherwise low calories, and take their measurements as needed by a dress maker. Then, on-line they find a good dress maker who can do the work. Bet that happens now, maybe on Etsy! Some such dress makers stand to grow, in reputation, brand, volume, … and become a big thing or maybe even outgrow Etsy. Same for some cases of furniture, …?So, with ShopShops and Etsy, USV is using the power of the Internet and Web to connect mostly women sellers with mostly women buyers. Hmm …! And USV believes that for such seller-buyer interactions crypto could be a means of making the contracts and the payments?
Kudos for the full disclosure Fred!
CONTRIBUTORS:Funny line Amazon doesn’t threaten our business.No competitor threatens your business until they threaten your business then it is too late.Captain Obvious!#UNEQUIVOCALLYUNAPOLOGETICALLYINDEPENDENT
While stock prices may be going up, what you may not realize is that Josh is alienating Etsy sellers day by day. In this video at the 2:56 mark you’ll hear him say, ““Our sellers want to spend their time making and serving customers. They don’t want to spend their time being business people.”In my experience, Etsy sellers care very deeply about being business people. To imply that we are very happy to depend on Etsy for all of our business needs and that we don’t realize the vulnerability in that decision is condescension at its utmost. I can’t help but wonder if Etsy sellers were 87% male, rather than 87% female, whether he’d dare to belittle us the same way.There was a time, not too long ago, when Etsy cared about helping sellers to develop business skills. That was a part of Etsy’s mission, part of its drive. It wasn’t just about growing Gross Marketplace Sales and increasing the amount of money made from Seller Services. It was also about creating a new economy by helping makers develop the skills they needed to grow their businesses. In comparison what I hear now sounds terribly hollow.Josh, in year two I hope you will get out more, visit studios and come to a better understanding of who you’re serving. Although shareholders may be the ultimate master now, it’s the sellers that are out here furiously producing all that “special” and I don’t think you understand us very well.