Letting go of your business: Etsy founder steps back

Posted by: John Tozzi on July 29, 2008

Rob Kalin
Etsy founder Rob Kalin is climbing out of the CEO’s chair. The online craft market has grown from four to 63 employees in three years, raised some $31 million from investors, and built an online community 1 million users strong. How to manage rapid growth is a great problem for a start-up to have, but it’s still a problem. Kalin described it on Etsy’s blog a few weeks ago:

When you have teams inside a company, you have to be careful that silos don't develop. People tend to work heads down on what their immediate tasks are. When you have team leads, you need to setup a reporting structure. As new employees come on, they are oriented inside the company. This may all sound obvious, but when you're in the trenches at a startup, without someone who has done this before, you learn as you go. We have certainly done a fair share of what Oscar Wilde would call "conducting our education in public.”

Managing the issues Kalin describes above requires different skills than the creativity and hands-on technical knowledge that founders often bring to the table. Some founders make that transition. If they don’t, investors may decide to replace them.

Etsy promoted recently hired COO Maria Thomas to lead the company. Kalin will step back into a new role called chief creative officer, and work on a nonprofit branch to help educate craftmakers on "how to make a living making things." The company is also adding a CTO to the top management team.

For a founder, stepping back can’t be easy. I imagine it’s like sending your first child to college. It’s probably even harder at Etsy, which has a deeply engaged community – the team isn’t anonymous. But it could be the best thing for the business.

Reader Comments

Jim

August 3, 2008 11:18 AM

His 'silo' talk sounds liek it came straight from some cheesy book. And well, Etsy has done an awful job of building a real company structure: hence, Kalin is replacing himself with someone competent at management.

Also, Etsy might have had a million accounts created, but they have like 250k active users at most.

Michelle

August 9, 2008 12:19 AM

So Jim. What is your point? Imagine creating a community of "crafters" and making it insanely profitable at the same time! I wish I had half that many active users on my blog and a fraction of the Etsy millions!

JerBear

August 15, 2008 03:32 PM

I stumbled across Etsy a few months ago and love it. Having a site dedicated to helping creative individuals sell their creations is a great idea. The pricing structure is fantastic! Spend some time searching on Etsy, there are lots of great ideas for gifts (guys and gals). Go Etsy!

Today

August 20, 2008 09:26 PM

Michelle, I'm not sure Etsy is profitable yet. Last time I checked (which was a while back) they were close. I think you are referring to the $31M investment made in the company when you say "Etsy millions", unfortunately for them it is not profit.

John Jacobs

August 23, 2008 02:06 PM

We are watching, we understand business, we are comming...

Rob Halting

April 25, 2009 04:11 AM

Rob Kalin obviously had the passion and creative drive to conceive this, that is what he should continue to do. Letting some suit take care of the non creative structuring is what is the right thing to do if they want to continue.
Jim, you sound like sour grapes!....

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What's it like to run your own company today? Entrepreneurs face multiple hurdles new and old, from raising capital and managing employees to keeping up with technology and competing in a global marketplace. In this blog, the Small Business channel's John Tozzi and Nick Leiber discuss the news, trends, and ideas that matter to small business owners. Follow them on Twitter @newentrepreneur.

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