Etsy Lost Its Soul, But That Doesn’t Matter to Its IPO

Etsy will soon be a ticker symbol on the NASDAQ stock exchange.

On Wednesday, ten years after launching a website for buying and selling all sorts of handmade goods, Etsy filed for its initial public offering. With its filing, the Brooklyn, New York-based company revealed that’s its ticker symbol is identical to its name. The symbol isn’t ETY or ESY or ES or ET. It’s ETSY.

And it’s a symbol in more ways than one. A name that once stood for crafts handmade by real, live, individual people is now a way of, well, making lots and lots of money. This was the case well before the company filed to go public. But its IPO casts this reality in stark relief. While some people are very upset that Etsy has sold its artisanal soul, their sorrow doesn’t really make a difference to its capitalistic goals.

In the end, the sellers stayed for the money, and Etsy reaped the benefits.

In the fall of 2013, you see, Etsy changed its terms of service, letting people sell stuff made not by hands but by massive manufacturing operations. Many of the site’s earliest users, including Grace Dobush, were not pleased. “They fundamentally changed the purpose of Etsy,” Dobush says. “To stay true to my handmade ethos, I had to move my business elsewhere.”

Some like Dobush quit the site. But that hasn’t really mattered to Etsy. In the end, the change increased the number of people using the site and increased revenues—as it was designed to do. According to the company’s IPO filing, revenues reached $74.6 million in 2012 and $125 million in 2013. Last year, after the change in policy, they topped $195 million.

That kind of financial muscle even gave Dobush pause—she needed an extra year to quit. “It took me a while to actually go through with it,” says Dobush. “They have huge customer base. So, even when sellers are dissatisfied with Etsy or have ethical problems with the site, sellers have problems leaving—because you can make really good money.”

In the end, the sellers stayed for the money, and Etsy reaped the benefits. This is often the case with internet businesses, whether they’re pushing handmade rugs or 140 characters. They’re founded on certain principles. They’re helped along by a small and passionate group of early adopters. They grow to a certain size. And then they change their principles, alienating those early adopters but capturing the mainstream—all with an eye towards the big IPO. It’s what happened with Facebook. And Twitter.

Such corporate-minded compromises can backfire if a company makes them too early. But if you want the big bucks, the alienation is inevitable. When you become a public company, shareholders come first. That’s what mainstream means. That’s why ETSY traded its original ideals for a ticker symbol.