Etsy has been a haven for the creative entrepreneur for a decade. Its emphasis lies on handmade or handcrafted items that are sold on the website for a small commission. Etsy announced recently that the IPO or Initial Public Offering wants to create $300 million in stock revenue. If the forecast is correct, then Etsy would be New York’s highest sold technology-based IPO since 1999 or since the dot-com boom. Does this mean the fiery destruction of this crafty bastion on the altar of Capitalism?
The Twitter Twinge
Investors bought up Twitter stock faster than a 140-character, starlet tirade about a $100 lipstick being too cheap and accessible to ‘gross, normal people.” Unfortunately, the results of the Twitter IPO were even less positive than the backlash said starlet would receive. The stock closed lower than it was initially sold at opening, something that seldom happens. Well, it’s pretty rare since the dot-com bubble in the late 90s and early 2000s, when it happened almost every day. At the same time, this is a great example how a well-established, widely recognized franchise can actually fail its first day out. Especially if it is something untested, new or assesses a niche market.
Loss of control
When a company goes public, the initial shareholder’s stocks increase but it also puts the company under constant scrutiny. A public firm must report to a federal watchdog agency, and have multiple tiers and filters in place to deter from the misappropriation of funds. The company must now work within full disclosure and clarity as they create reports that the shareholders are going to be very, very interested in.
After being a boss, you’ll have a boss
The shareholders want profit. That’s it; they have no other invest in the company other than financial. And as the saying goes, manure rolls downhill. This means added pressure on the highest tiers of the company and, as we know, some people crumble under pressure; not every piece of coal can become a diamond after all. This results in focus on short-term effects, rash decision-making and questionable methods to increase profits.
Artsy-Fartsy Crafty people don’t mesh with Corporatey Suity Money Grabby folk
Creative folk are the backbone of Etsy’s business model; the company going public might mean these people will be forced to work within an ecosystem that is heavily corporate. And that doesn’t work so great. Here’s a fun experiment you can do to prove this at home. First, set up a camera in your living room so you can see the results of your experiment. Then invite over a friend that is in investment banking, stock brokerage or generally the financial sector. Then invite an artistic friend over, such as a painter, a sculptor or a dancer. Make sure that they are of the same sexual preference and sex so there are no unseen variables (see unseen hookups). Put them in a room and then come up with an excuse to leave. Go watch your results. Congratulations, you have successfully created the circumstances for the most awkward social interaction possible between two living human beings. This is what Etsy will become; a really awkward beaker where the oil of corporate attempts to mix with the water of crafts.
How do you think the Etsy IPO will go? Do you expect growth and prosperity to come from this strategic decision, or will it flop like the little blue bird?