Take a look at the values and purpose inside the maker-focused world of Etsy. Helen Souness, managing director for Australia and Asia, speaks to consultant Dr Dimity Podger in the first of a new series.
This article was first published in The Dialogue, the online magazine of The Plato Project. Dimity writes a monthly column, Living Values, to share insights and practical approaches from purpose-driven leaders and organisations.
Hi, my name is Dimity Podger. In this first Living Values column, we enter the world of online marketplace Etsy, a purpose- and values-driven NASDAQ-listed company and B Corporation.
I had the pleasure of interviewing Helen Souness, managing director of Australia and Asia, to learn more about how Etsy lives its purpose and values day to day.
Some facts to start: as of September 30, 2015, there were more than 1.5 million active sellers and 22.6 million active buyers using the platform in nearly every country in the world. In 2014, Etsy sellers grossed more than $1.93 billion in sales. There are 852 employees globally, 10 based in Australia, with Australia being in the top 5 markets globally.
Etsy’s purpose is to “reimagine commerce in ways that build a more fulfilling and lasting world”. From its founding by Rob Caitlin in 2008, Etsy has been a part of building the maker movement, working as craftspeople themselves to serve creative entrepreneurs.
The company does this by providing a marketplace for makers to build their own businesses and connect with buyers in a meaningful way through the medium of stories and conversation. The marketplace fosters human connection, enabling the platform to transcend the impersonal nature of typical large-scale e-commerce platforms that focus largely on products.
Picture: Courtesy of Etsy, Australia and Asia
The focus on makers is reflected in the principle of reciprocity embedded in the purpose-driven business model which is fundamentally seller-centric and based on “shared success”.
Helen describes the seller-centric model in more detail: “We only succeed if the creative entrepreneurs we serve, our sellers, are succeeding… Everything we do is putting our seller’s businesses out into the world. We work with sellers every day to understand their stories and their businesses and tell their story to the world. It is also low cost. It is free to open and keep a shop … and the seller gets around 95 per cent of the sale price of every listed item. This is fundamental to how we are set up… It is a lovely alignment with our day to day jobs,” Helen says.
It is this alignment between the purpose of the organisation, the business model and the resulting day-to-day work of Etsy that Helen says contributes to its success and performance: “Where your purpose embraces stakeholders and customers, it keeps you focused on what will make you successful. Even at a hard-headed commercial end, companies lose their way when they forget who their customers and stakeholders are and forget to manage for the long term of that, not just the short term results.”
A practice that brings this model to life, and keeps everyone across Etsy close to the makers they serve, are seller visits. Everyone in Helen’s team makes seller studio visits or invites sellers to lunch once a month at a minimum. Through this, the team learns how to serve them more effectively and can seek honest feedback.
Another factor important to the success of Etsy is the culture of the organisation, which Helen says is “kept true with purpose and values that are consistently applied”. Companies with “great cultures outperform other companies,” says Helen, who has worked in senior roles with Envato and SEEK. “For a start, if people are engaged, motivated and aligned that helps company performance.”
Research shows a connection between purpose and values-driven cultures, engagement and performance. Custom Insight (2013) , in a survey of 18,000 employees across 150 organisations, found that one of the top drivers of engagement for all employees relates to living values. It was that the actions of senior leaders supported the organisation’s mission and values. For the top 10 per cent of most engaged employees in their survey, they found that a top driver of engagement was that everybody in the organisation lives up to the organisation’s values. Research into the link between organisational performance and engagement by Engage for Success http://engageforsuccess.org/ UK (2011) found that companies in the top quartile of engagement scores experienced twice the net profit, 18 per cent higher productivity, 12.5 per cent greater customer advocacy, 40 per cent lower staff turnover rates and 37 per cent more innovation.
In her experience Helen has found that the two fundamentals to cultivating and maintaining an intentional and engaged culture are the company’s purpose, especially if it has a “business for good” core, and purpose-driven recruitment.
“Stating your purpose and knowing what you are truly there for – something bigger than the day to day work of your business, wanting to make a difference in the world and in people’s lives – is the most fundamental thing. If you can align around that and your decisions are made around that, then that is how your values will be maintained… Our five values have been guiding posts for us: are we keeping it real, or are we valuing craft in that or is it a quick and dirty and then we shouldn’t touch it. Those are great articulations to make your values live every day practically,” she says.
With recruitment, Helen shared her experience that people need to be motivated by the purpose of the company, otherwise it is very difficult to manage. For her there is no more important question when she is interviewing than “Why Etsy?”.
“If interviewees are not thinking about our sellers and how they live and our ability to reach customers all over the world and what that does for our sellers, if there is not empathy there, or motivation toward that, then they are not right for Etsy,” she says.
The five core Etsy values are:
1. We are a mindful, transparent, and humane business
2. We plan and build for the long term
3. We value craftsmanship in all we make
4. We believe fun should be part of everything we do
5. We keep it real, always
So how does Etsy practise its values on a daily basis?
There are many ways Etsy consistently applies its purpose and values. There are four examples of practices that came up in my interview with Helen that you may adapt, adopt or already be doing in your business:
Pictured: Eatsy in Brooklyn, NYC, USA. Image courtesy of Etsy Australia
Sharing food and conversation together across the company every week.
An example that reflects the purpose and values of Etsy is its company-wide lunchtime program, Eatsy. It is a demonstration of taking the time to build lasting and fulfilling social connections through sitting down and eating together, as well as bringing fun and enjoyment into the workplace. The program also takes seriously its impact on the environment and local businesses, by selecting seasonal and local food options that are high in nutrients.
“It is an example of believing in each other and wanting to enjoy each other as people,” Helen says. “It is not just being about work; it’s about sharing other parts of our lives. It is a social occasion, hearing about where people are up to, where is everyone is at. We sit down for an hour and half and actually talk.”
Mindful examination of the impact of all decisions and keeping sellers in mind.
Helen and her team bring Etsy’s purpose and values together when making decisions about product changes or campaigns by asking: How does this decision or campaign grow the seller’s businesses? How does this impact the people who see it? How does this reflect the maker’s story as well as the beautiful products they have created?
Helen emphasises the difference with traditional retailing: “Whereas a lot of retailers talk about the product, we are much more about the humanity behind that product and its provenance. This is how it ends up in a much more humane business out in the world, in how we operate and in how we present ourselves.”
Constant sharing of knowledge as craftspeople, contributing to the broader maker community.
As makers themselves, Etsy employees live by the words “we value craftsmanship in all we make”. Back in 2008, the current CEO, Chad Dickerson, joined as CTO and created the company’s foundational engineering culture, treating “code as craft”, which is the name of Etsy’s blog run by its software engineers.
Helen sees the design blog and the engineering blog as prime examples of these values, and the culture of mastery and striving that this engenders.
“The engineers,” she says, “pride themselves on crafting cutting-edge technology and constantly sharing their knowledge on the blog, in the same way that craftsmen’s guilds have forever shared knowledge about mistakes and successes…When I was at Envato, the engineers saw it as professional development to read the Code as Craft blog…”
Fitting out its offices, planning and building for the long term.
Reflective of their B Corporation status, when fitting out its offices, Etsy researches the supply chains of the furniture to determine if items are sustainably produced. They also choose decorations, wall dividers, etc, so that they can be moved or transported to another location as the company grows, avoiding consumables. On the seller side they use the office fit out as an opportunity to buy from and grow Etsy seller businesses.
Etsy grew rapidly from inception. It didn’t market in the first five years, but experienced exponential growth. For Helen, “This speaks to the power of word of mouth and doing the right thing by your community – doing a great job, admitting when you’re wrong, being transparent and values-driven as well as, ultimately, having a great product.”
Helen knows this better than most.
“There is example after example,” she points out, “where, if you consistently live your values and it is truly in your DNA and not just your words, if it is demonstrated in your actions, you will create advocates and you will succeed.”