How ETSY Is Changing the Way We All Do Business
Yesterday a lady stopped my wife and daughter and asked them a question:
"Where did you get that beautiful hair pin." She asked.
"ETSY" replied my wife.
"Cool." said the woman, and moved on.
This was a significant interaction. ETSY has become such a household name that, for many, it needs no introduction.
Rebuilding a Human Economy
TreeHugger has been following ETSY for years. From iPhone docs built from old cameras to nifty reusable cups made from upcycled canning jars, we've found plenty of gorgeous eco-minded products on this online marketplace. But it's the business model, as much as the products, that has gotten us excited.
By providing a trustworthy interface between individuals who make things, and individuals who buy things, ETSY has helped humanize the Global economy and advance the concept of Plenitude. More than once I have received cute thank you notes, small extra gifts, and personalized emails from artisans whose products I've bought on ETSY.
As individual events, these interactions are nice. But given that $65 million in goods sold on ETSY last month alone, it's a fair bet that thousands of people are experiencing similar connections each and every day. Each time they do, the world gets a little smaller, a little friendlier, and just a little less industrialized. And when we remind ourselves that the real economy is about people and relationships, not numbers on a spreadsheet, we open up our culture to sharing and collaboration that bodes well for fixing the challenges we face.
ETSY Becomes a BCorp
On Wednesday ETSY announced that it is formalizing its commitment to being a force for good by becoming a certified B Corporation—joining the hundreds of other businesses (including my own) which are using this third-party framework to measure and improve their environmental and social performance. Following hot on the heels of Patagonia's announcement that it would register for California's B Corporation status, this represents a huge step forward both for ETSY and the whole B Corp movement.
This is how ETSY CEO Chad Dickerson described the move in a blog post about the future of ETSY:
I think becoming a Certified B Corporation is one of the most important things Etsy has ever done. It helps us keep an eye on the “mindful, transparent, and humane” values we aspire to, and also keeps us focused on our intention to “plan and build for the long term,” not just when it comes to Etsy but for the world at large. Like other Certified B Corporations, B Lab is publishing our scores from the assessment. In being transparent, we are openly challenging ourselves to continually improve how we impact the world with our company. Like most businesses, we are imperfect, but we are publicly committing ourselves to upholding our values and grading ourselves for the long term. This is how we hope to make a better world and inspire other companies to do the same.
Set the Bar High, Then Publish the Results
One of the most powerful impacts of B Corp certification is not the "seal of approval" it provides—but the transparent and measurable scoring on each aspect of a company's performance. ETSY's opening composite B Score is 80.1 out of 200—with 80 being a passing score. My own company—a branding agency with virtual offices that only works with good-for-the-world businesses and buys green energy—received a similarly modest score. (They wouldn't give me water conservation credits for peeing in my yard!)
By setting the bar high, and by openly publishing scores and methodology, B Corp creates a powerful incentive for continued improvements—and that bar is only likely to get higher. Now that ETSY has become part of the B Corp community, we can expect its already significant environmental and social credentials continue to improve in the months and years to come.
Making Good the New Norm
Both ETSY and B Corp share something else in common too—they do not seem interested in being a niche player for the eco-minded consumer. The millions of business transactions that now run through ETSY are creating a parallel economy to the big box mega-mall hell that many of us are getting tired of. And B Corp's efforts to not just certify green businesses, but create a legally recognized corporate status, represent a revolutionary new way of looking at the role of business.
As these two forces join together, it will be fascinating to see what they achieve. If Dickerson's post is anything to go by, their ambitions are big:
With all the talk about how far we have come, it is tempting to think of Etsy as “big” now. When I look at Etsy, though, I see a tiny seedling. Last year, over $525 million (525 with 6 more zeroes) changed hands among people on Etsy, and worldwide GDP was over $60 trillion dollars (that’s 600 with eleven more zeros). The Etsy economy represents 8.75 ten-thousandths of one percent of the global economy. We have a long way to go and grow. But we don’t think of it as Etsy becoming more like the rest of the world, rather the rest of the world becoming more like Etsy.
These ambitions are not just talk. On the same day that ETSY announced its B Corp status, it also told the world that it was closing on $40 million of new funding from existing investors.
The world will be watching to see what they do with it.
Disclosure: I have previously written an article for ETSY blog on the environmental benefits of veganism.