Etsy: Crafting a Turnaround to Save the Business and Its Soul

Etsy, the online seller of handmade goods, was founded in 2005 on an almost utopian ideal—a responsible, caring company that offered individual crafters a place to sell their wares, a wholesome alternative to companies that sold mass-manufactured products. The company grew substantially—though unprofitably—under the freewheeling leadership of two early CEOs. In 2015, Etsy went public and was forced into a new arena, beholden to new stakeholders who demanded financial success and accountability. Unable to contain costs, the company teetered on the precipice of being bought out by private equity firms. In came a new leader—Josh Silverman—with a mission: to save the company financially and, in the process, save its soul. This case examines the strategic, financial, organizational, and purpose-driven turnaround Silverman and his team led at Etsy. The turnaround not only greatly bolstered Etsy’s finances, but also improved its social and environmental impact and helped the organization truly live up to its ideals. This case examines the circumstances that led Etsy to require a turnaround, how the turnaround was executed, and what challenges still remain.