Investors Love Etsy’s CEO. The Artists Aren’t So Sure
Josh Silverman has brought the kind of relentless focus on customer experience perfected by the e-commerce giant, at the expense of the site’s merchants, some say.
Illustration: Oscar Bolton Green for Bloomberg Businessweek
A year ago, Etsy Inc. was in trouble. Sales growth was slowing, expenses were climbing, and its stock had slumped 65 percent since a 2015 public offering. Activist investors were clamoring for change, and in May 2017 they got it: The board fired longtime Chief Executive Officer Chad Dickerson and replaced him with Josh Silverman, a former EBay Inc. and American Express Co. executive. Silverman, 49, is worlds away from Etsy co-founder Rob Kalin, who started the marketplace as a kinder, more equitable way for artisans to sell their work online. Kalin later decamped for New York’s Catskill Mountains to establish a community for artists in a reclaimed mill. While Kalin was building Etsy in the mid-2000s, Silverman was at EBay earning a reputation as a sharp-penciled turnaround specialist whose signature achievement was fixing the Skype division for an eventual lucrative sale to Microsoft Corp.
Silverman has brought to Etsy the kind of relentless focus on customer experience perfected by Amazon.com Inc. It’s a cultural revolution for Etsy, which analysts say had previously neglected the core marketplace by putting merchants first. Some sellers are deeply unhappy, not the least with Silverman’s decision to jack up the company’s share of each transaction. But the changes play well with investors, who’ve pushed shares up 200 percent, to more than $40, besting the $30 a share activist investors were predicting if Silverman followed their suggestions. “Any good retailer, traditional or e-commerce, puts the consumer first, and everything flows from that,” says Edward Yruma, an analyst with KeyBanc Capital Markets Inc. “Etsy never really did that until Josh showed up.”