This Week in Startups - Scaling Creativity: Josh Silverman on Etsy's growth, AI integration, and market strategies | E1985

Episode Date: July 26, 2024

This Week in Startups is brought to you by… Coda. Coda empowers your startup by bringing words, tables, and teams together. Strategize, plan, and track goals effectively with all your valuable data in one place. Go to https://www.coda.io/twist to get started for FREE and get 6 free months of the Team plan. Intercom. Intercom’s AI-first service is the best thing to happen to your customers since you. TWIST listeners can get 90% off Intercom’s platform at https://www.intercom.com/twist Micro1. Micro1 is an AI recruitment engine to hire world class engineers fast. Visit https://www.micro1.ai/twist to open a talent search and get a 2 week free trial per hire. * Todays show: Etsy’s Josh Silverman joins Jason to discuss the marketplace business model (2:54), UX challenges (4:58), company operations during the pandemic (36:57), AI’s impact on team size (50:56), and more! * Timestamps: (0:00) Etsy’s Josh Silverman joins Jason (2:54) The marketplace business model and Etsy's growth (4:58) Maintaining Etsy's unique marketplace and UX challenges (10:34) Defining handmade and GenAI art on Etsy (11:53) Coda - Empower your startup with Coda’s Team plan for free—get 6 months at https://www.Coda.io/twist (13:18) Preventing inauthentic sellers and the seller approval process (20:14) Etsy's star seller program and the importance of artisanal items (26:26) Intercom - TWIST listeners can get 90% off Intercom’s platform at https://www.intercom.com/twist (27:55) Durable products, warranties, and customer loyalty (35:47) Micro1 - Visit https://www.micro1.ai/twist to open a talent search and get a 2 week free trial per hire. (36:57) Company operations during the pandemic and efficiency era (44:11) Global talent, remote work, and productivity at Etsy (50:56) AI's impact on team size, productivity, and customer support (55:10) SEO strategies, organic traffic, and handling IP issues * Subscribe to the TWiST500 newsletter: https://ticker.thisweekinstartups.com/ Check out the TWIST500: twist500.com * Subscribe to This Week in Startups on Apple: https://rb.gy/v19fcp * Follow Josh: X: https://x.com/jgsilverman LinkedIn: https://www.linkedin.com/in/joshuasilverman * Follow Jason: X: https://twitter.com/Jason LinkedIn: https://www.linkedin.com/in/jasoncalacanis * Thank you to our partners: (11:53) Coda - Empower your startup with Coda’s Team plan for free—get 6 months at https://www.Coda.io/twist (26:26) Intercom - TWIST listeners can get 90% off Intercom’s platform at https://www.intercom.com/twist (35:47) Micro1 - Visit https://www.micro1.ai/twist to open a talent search and get a 2 week free trial per hire. * Great TWIST interviews: Will Guidara, Eoghan McCabe, Steve Huffman, Brian Chesky, Bob Moesta, Aaron Levie, Sophia Amoruso, Reid Hoffman, Frank Slootman, Billy McFarland * Check out Jason’s suite of newsletters: https://substack.com/@calacanis * Follow TWiST: Twitter: https://twitter.com/TWiStartups YouTube: https://www.youtube.com/thisweekin Instagram: https://www.instagram.com/thisweekinstartups TikTok: https://www.tiktok.com/@thisweekinstartups Substack: https://twistartups.substack.com * Subscribe to the Founder University Podcast: https://www.youtube.com/@founderuniversity1916

Every time someone says, I bought it on Etsy, it's always the beginning of the conversation. I bought it on Etsy and we had some guests over the other night and they were admiring our plates. And I was like, oh, we bought these plates from a seller in Ukraine. And in fact, we bought them from the seller in Ukraine before the war broke out. And then, of course, once the war broke out, we went back to say, can we support you? And we bought some more. It turns out a lot more people are doing that. There's about 30,000 sellers in Ukraine selling about $200 million worth of goods to the Etsy community.

That's a lot of hard currency going into Ukraine. When the war broke out, we had all these people come to Etsy and just start searching for Ukrainian sellers because they wanted a way to connect and they wanted a way to support people. It's those kinds of stories that are happening every day on Etsy that would never happen anywhere else. This week in startups is brought to you by Coda. Coda empowers your startup by bringing words, tables, and teams together. Strategize, plan, and track goals effectively with all your valuable data in one place. Go to coda.io slash twist to get started for free and get six free months of the team plan. Intercom. Intercom's AI First Service is the best thing to happen to your customers since you.

Twist listeners can get 90% off Intercom's platform at intercom.com.com slash twist. And Micro1. Micro1 is an AI recruitment engine to hire world-class engineers fast. Visit micro1.a.i slash twist to open a talent search and get a two-week free trial per hire. All right, everybody, welcome back to this week in startups. Hey, All-Star Summer has started, and I am super excited today to talk to you about e-commerce. Now, Amazon's Prime Day just happened, and you've been hearing about, Timu and Sheen or Shine or whatever this stuff is, you know, like this fashion you can throw away, fast fashion.

Everybody's going in commerce for cheap, mass-produced, shlocky stuff. But today we get to talk to the CEO of Etsy where they're trying to do the exact opposite. Josh Silverman helped build Evite back in the day. He's on the board of Shakechak, which is in my top two burgers going back and forth between number one and number two all the time. And he became the CEO of Etsy in 2017. Spent some time at venture capital firms. And today I want to talk to Josh about being at scale. We talk a lot on this program about marketplaces, such a great business model. And you're always trying to hit scale. You're trying to get the flywheel going. Well, Etsy has had that flywheel going. And Josh, I understand

during COVID, the business doubled in size in a year or so. Is that correct? Am I, am I, Am I broad strokes correct there? Yeah, it more than doubled. In fact, it doubled in one day and then grew from there. So on April 2nd of 2020, I had to check my scorecards because everything doubled and then just kept growing from there. And we've maintained all of that growth or virtually all of that growth since the pandemic. The challenge for us now is growing over what are just truly extraordinary comps. But I'd say we've been, you know, face.

down the doubters. When I joined Etsy in 2017, Etsy was doing about $2 billion of gross merchandise sales, and sales were decelerating and growth was almost flat. And many people were saying Etsy is as big as it can be at $2 billion. And, you know, we proved the doubters wrong and grew quite a bit before the pandemic and then during the pandemic. And now, you know, the last 12 months, our sellers have sold about $12 billion. of products. So we've seen quite a lot of growth and I think we still have a lot of scale ahead of us. And to just level set with the audience, which is founders and investors and angels and on the margins, people who are obsessed with technology, the marketplace business model is you bring supply and demand

together and they transact. I've bought many things on Etsy over the years and been very delighted by it, mainly for costume parties, which is, I think, like, if you want to do a costume party and go as a, you know, one of your favorite characters or something. There's just, or, you know, some genre, samurai, I went to a samurai party. It got like a full samurai outfit. It was absolutely amazing as an experience. I was so delighted. But, you know, and you get to take a take rate. The take rate here, you guys charge, what, 10% or 15% of every transaction ballpark? What does it wind up in? It's 20 cents to list an item. And then we charge six and a half percent a commission. Got it. There's about a three percent fee for processing.

payments as well. And then we have optional services you can buy like advertising and things like that. Fantastic. Now, the challenge becomes Etsy was always about the human inside the marketplace. When you hit scale, of course, people try to hack any system that hit scale. Doesn't matter if you're PayPal and my friend David Sachs, you know, and rule off when they work there, we're responsible from keeping that company from going belly up. eBay deals with a lot of shoes, Uber and Airbnb, when I had my house on Airbnb or like my old house, somebody threw a party there. You know, after 17 confirmations, they wouldn't do it.

There's always going to be bad actors in any kind of open system or platform. The vector of attack for you, I think, is people who want to hack, and you can correct me if I'm wrong here, the human crafted and human curated aspects of, you know, this beautiful marketplace, this bizarre, with schlocky garbage, you know, that they didn't actually make or source. Am I correct that that's the natural tension you've been having to deal with as a CEO of this? Yeah, Etsy's a really unique marketplace. What we say is there's a human behind every item. So you're buying from the person who made it themselves with their own two hands or who designed it themselves with their unique design and then produced it in partnership with the

production partner. So it's a very unique promise to buyers that's very different than any other marketplace and requires different kinds of technologies to monitor that and enforce that. And during the pandemic, you know, we added about 50 million items in a period of months. And there's sort of no army you could hire quick enough. So we've really had to use technology to help us to make sure that we can monitor and enforce those policies. The other piece of it is making sure that people understand our policies and understand. There's many. items that comply with our policy, the buyer doesn't always understand why and which one. So we're doing a, we're doing a lot right now to center the seller's role in making this item. So it's very clear to the buyer. Did the, did the seller make it themselves? Did they design it and use a production partner? Is it a vintage item, et cetera? And this really has to do with the UX of the website, how you present information. So how do you educate the users that this first,

like on a tactical basis, is actually the person who made it or the person who sourced it or designed it. Like, this is a very nuanced discussion. And I could tell you, I had this frustration. I was walking around my hometown and I was walking around Manhattan. And I was in Little Italy. And, you know, people are selling really schlocky stuff. And I was like, you know what? This kind of kills the vibe.

I don't want to buy socks. You know, when I'm in Little Italy, I want to buy a canoli or something more charming and targeted. So explain to us on a UX level, UI level, how you go about this, and then how do you enforce it? Because those people who are the sellers, I'm sure in their mind, they're like, I am the most unique person in the world who went on T.Mu, who bought 10,000 items and then put a tag on it that says, you know, J-Cal production. So let's take those, you take those two questions either way you want. You know, how do you manage the sellers who are, you know,

inauthentic? And then how do you communicate through U.S.? Yeah, well, let me start with, you're right, that every seller is the hero of their own story. You know, every person is the hero of their own story. And so every seller has a good reason to think that they should be on the Etsy marketplace. We need to create a promise. What sellers hire us for is they hire us to bring them buyers. So our sellers can only succeed if we have a promise to buyers that we can deliver on. Right.

And so we always work backwards from if we're delivering for our buyers, then we're delivering for our sellers. Our job is to create this brand called Etsy that means something in the minds of buyers, 92 million buyers who come and shop on Etsy and they come and shop on Etsy because they want to find something made by a real person because they want to find something that's unique because they want to find something that expresses

that buyer's own sense of self-expression. Because they're coming to Etsy for that reason, the sellers on Etsy have a chance to succeed. The people that sell on Etsy also sell an Amazon Amazon also sell an eBay. But on Amazon, all I get is a thumbnail, a few characters of text, and a price. And in a search result where, you know, 29 out of the 30 items are all mass produced overseas at super cheap prices, that handmade artisanal product almost never wins. So while our sellers market themselves on other platforms, what they tell us is the vast majority of their sales come

from Etsy. So it's really important that we stay true to that promise we're making to the buyers in order to deliver for our sellers. So we've got to do a few things. One, we've got to enforce those policies. First, we've got to describe those policies really clearly. And for Etsy, like most companies that, you know, all the founders and entrepreneurs that are listening to this podcast, you know, as you grow and scale, you will evolve things as you go. And then maybe you'll get to a point where it's hard for everyone to understand clearly

what your policies are because they're. They've evolved over a period of time. There's always new innovations in the market. So, for example, we recently have been grappling with, does Gen AI Art count as art on Etsy? Oh, my goodness. What counts as a tool? When we first started Etsy, when I wasn't there, but when Etsy first started, we had sellers who raised the sheep and shared the wool and used it to knit a sweater. And if you bought store-bought wool, you were not handmade.

their eyes. So from roughly the second or third day at C. existed, we were dealing with, you know, what does it mean to be handmade? And we decided that using tools is okay. If you're a carpenter, you can use a table saw. And so that leads to what is the definition of a tool? And that is always evolving. And a human can partner with a computer. We've decided to create art. And that will still count as art. And the corollary that was important to me was actually thinking about, music. And actually the most popular music in the world I think right now is electronic dance music, which is actually just a human partnering with a synthesizer to create. Absolutely. And clip libraries, let's be honest, like there are these huge businesses in clip libraries that help them,

you know, and they say, hey, you know, I don't want to do the drumbeat. You know, my foray is in the, you know, the hook. And so I want to work on the piano, the hook and, you know, whatever, the lyrics. And the drumbeat to me is easy. And then it might be the opposite for somebody else. So again, And you're pointing out the obvious, or I'm pointing out the obvious, it's in the eyes of the, you know, every person is the hero of their own story and they believe they are. Okay, founders, you're wondering, how am I able to do all these podcasts, run a venture capital fund, have an accelerator, found a university all at the same time? Pretty straightforward.

We use an incredible tool called Coda, C-O-D-A. It's a collaborative workspace that combines the best of documents and spreadsheets as well as apps and databases. It's super easy to learn. And you know what? It's a lot of fun to think about your workflow and processes and then make them faster and better using Coda without having to hire engineers, without having to have product managers. No, just teach your team how to use Coda. They've got great online resources. And, you know, we run all of Founder University on this. Plus, our new Twist 500 project is also built on Coda. We go to twist 500.com. We've got our team handing all those new private companies, including Coda, into that data.

database so you can sort it and keep track of what we think are the top 500 private companies in the world. It can handle data. It handles notes. It can handle your OKRs. And there are templates for everything. So here's your call to action. Coda empowers your startup to strategize plan and track goals effectively. So take advantage of this limited time offer just for startups. Go to coda.com. dot i.o slash twist today and get six months free of the team plan that's coda.orgia.coma.com slash twist to get started for free and get six free months of the team plan coda.orgia slash twist. Now what about somebody who just slaps a tag on something that they buy? How do you police that? That seems incredibly difficult. So that shouldn't count, right? And so anything that's mass produced

shouldn't be sold on Etsy with the exception of craft supplies, which we've always allowed craft supplies and party supplies to be sold on Etsy, even though they're mass-produced. But if you take just, let's say, a mass-produced mask, and then you slap a decal on it, that shouldn't count. And so we've created what we call our creativity standards for what is and is not allowed on Etsy, and they lay out very clearly our policy. Everything needs to be made by the seller, sourced by the seller, designed by the seller, or handpicked by the seller. We'll talk a little bit more about each of those four if we want. And then with each of those, we've given. And then with each of those, given an example of what counts and what doesn't count, but just simply buying a mass-produced

item and altering it in a way that's not important to the buyer does not count on Etsy. Now, there are ways you can buy three or four mass-produced items and assemble them into something totally unique that's actually really compelling. Yeah. For people. Yeah. And you were whole would agree. Exactly.

You know, actually much of our art is built that way. And so that's where, you know, we use definitions like it needs to be meaningfully altered in a way that's important to the buyer and requires craftsmanship. And just look at the tomato soup cans that Andy Warhol did or Merrill Monroe is at some source material, but really did make it unique in the composure, the coloring, and the medium. Exactly. And so we've laid out these policies in a way that I think is very easy now for people to understand. And then the next step is enforcement, your next question. And artificial intelligence is helping us a lot there. But we use the term superhuman inside Etsy, which means the partnership between AI and humans. It's still really important for most of the work that we do that there's a human in the loop.

So we can use some automated monitoring that's pretty effective. For example, if we see an item on Etsy that the exact same item is listed on Alibaba or Shian or Tibu, we automatically remove it. We assume that's a mass-produced light. crazy, yeah. You just, people are going to take this mask, the door, this hat and just, you know, AI is perfectly suited to at least highlight that and allow you to, I wonder if you do this, but to just fire off an email to the seller, is this where you sourced it? And they could just say yes or no, and you could just give them the explanation. Do people have to apply to BAM a seller? Is it an application

process? Or can I just put stuff up live? And this speaks to this natural tension in a growing business of, you know, you want to grow, and so you remove friction. Like part of the genius of Zuckerberg or Uber was removing friction at every step of the way to sharing content or getting a ride. But if you remove too much friction, well, then somebody could write a script that just pops up 100 stores. So what's the approval process like to become a seller? So we recently added a, to your point, we recently added a $15 fee to become a new seller

on Etsy. And that was really designed to stop very low effort shops, bots or just people who don't really have the skill or the will to contribute to our marketplace in a meaningful way. If you're not willing to spend $15 to open a shop, you probably lack either the skill or the will to participate in the marketplace. And I'm not trying to disparage people for whom they have very little means. In fact, a lot of people who start their shop on Etsy do so as a result of economic hardship. Maybe they've been laid off. and Etsy is often the very first place that people go to sell things and they, you know, their own, their own artwork. And then they go on to create offline stores and other things. We're very proud of being a really low barrier on ramp for people to become artists. But we did feel like $15 was manageable enough that if you have any real serious intent, even someone who's pretty financially stressed could find a way to afford that. And it's kept- $15 is going and doing one door dash run.

Right. So let's be honest here. And, you know, I always find that's so insincere when people are like, but what about poor people? And I'm just like, okay, let's be honest here. You know, and we've had this with startups we fund and it. Oh, my God, we need to fly somebody to California to take a meeting with us and like, what if they can't afford a flight? I'm like, you know what? If you can't, if you don't have the desire and the hootspah and the resiliency to figure out how to get a $299 ticket.

ticket to whatever city to go to some founder event, which equals 20 hours of driving Uber, lift, or DoorDash, then you're not ready. You're just not ready. Let's be honest. Yeah, and times are hard for a lot of people out there, and I want to acknowledge that, but we do feel like we provide a lot of value, and we think it's worth it for $15. And to the point you started with having some friction, we think is actually helpful to make sure that the marketplace is really clean and well-lighted. But other than that, that there isn't an application process, we really rely on our search algorithms to identify the best of Betsy and elevate the best of Etsy. So we use a bunch of ever more sophisticated

machine learning to identify things that look like they might be inauthentic or at least not unique. And we also have the benefit of a community of tens of millions of people who are flagging items for us. Buyers flag items and sellers flag items. And as you can imagine, And sellers are quite diligent about policing their own categories. So when they see items. Oh, that makes total sense because they're competing. And if somebody does, you know, I don't know, a handcrafted diaper bag and it's not handcrafted.

And they're charging $150 bucks with a gorgeous handcrafted diaper bag. And then they got to compete with somebody making a $15 one that they didn't make. That's infuriating. So that's great that they police their own block. It's like a local business policing, you know, somebody putting the socks out in the middle of, you know, little Italy. and ruining the experience. And you can imagine that some people flag all their competitors.

So now you've got to deal with that too. So it's the combination of humans and algorithms that work together to create a trusted marketplace. And the vast majority of items on Etsy comply with our policy and the vast majority of buyers on Etsy are really happy with the products that they buy. And that's what's fueled our success. We have 92 million active buyers now. And although tens of millions of them came to us during the pandemic because they had really no other choice, they've stuck with us now years later because they love what they're actually buying. And that's what's so important is that when you come and visit Etsy, we really deliver on the promise that you're going to actually be interacting with the person who made or designed the item themselves.

And you're going to have a real human connection with that person. Do you have like a designation like super hosts or Uber's been doing some very subtle things around the number. of rides a driver has done. And then we have this Uber one. I say we, like I'm working at the company. This what happens when you're, that they're investor.

You, we have Uber one, which has millions of members now. And you know, you basically, whoever's done the most rides, you know, you get paired with the Uber one

and it kind of makes your experience even better. So, and then you obviously have Airbnb super hosts who hit certain notes. And Brian is, you know, really sort of diligent about that what's the equivalent on Etsy? Do you have ways of saying we're going to create unique photos, videos, or the reviews hitting some mark that equal transcendence and, you know,

the top 1% of the sellers or something? We have something called the Star Seller on Etsy. And the way you earn Star Seller status is you sell a certain amount every quarter. And we don't make that number too high because we're not trying to be about mass produced items. But you sell enough quantity that we actually can measure your service quality over time and you respond to customer conversations quickly. You reliably ship on time and you always get five star or, you know, virtually always get five star reviews, meaning you do what you say really consistently. We are actually working on another update that's going to be even more transparent about what quality signals we look for from a seller that allow them to rank high in search.

So if you go and you Google like, how can I be successful at Etsy, you'll see thousands of YouTube videos and blogs that all talk about basically SEOing Etsy. How can I keyword stuff the titles that I rank higher? That serves no one, right? It doesn't make the buying experience any better. It's a waste of time for the seller. We want the way to rank higher in Etsy to be consistently ship on time, consistently get five-star reviews, to light the buy.

buyer and earn your way to the top through delivering really a great experience shipping, really unique items. And we think that that, you know, that incentive of that's how you, that's how you get higher in search is very motivating for sellers, but it also gives a real sense of agency. Sellers wake up every day wanting to know, what can I do to be the captain of my own destiny? And the more we can give them very clear feedback around here's the two or three things you can improve that will help improve your ranking in search. the more I think they'll feel in charge.

One of the, I mean, every marketplace has its own eccentricities, and Etsy certainly no different. We don't necessarily want to exclusively reward scale. I can see why for Uber and Airbnb, scale would make a lot of sense. But actually, to some extent, scale can be counter to uniqueness on Etsy. Absolutely.

That's the paradox of Etsy. You know, if you were doing this hand, You know, I'm going to bring up the backpack again, the diaper bag, whatever your jam is. You know, the handcrafted laptop bag. You want it to be one of X, one of 1,000, one of 500. You're on Etsy because you want to not have the bag when you show up at your event, whatever it is. You're in business class or you're, you know, at the park with the other moms and dads. You want yours to be the one that people say, oh, wow, where'd you get it?

How did you get it? Oh, it's handcrafted. I got it from an artisan. You know, and the world wants more. traditional items and they want to know the story behind them. That's my belief now that everything is mass produced. Everything has become so cheap that people are now looking for the opposite. Am I correct in what elite buyers want? I think you really understand us and I really appreciate that. And I hope it's not just elite buyers. I hope it's everyone. Look, we all need cheap junk sometimes.

I buy toilet paper, I buy socks, and I just want it to arrive fast and be affordable. But many things I buy, I want to have some sense of meaning. I want to express my uniqueness. And so I think, look, there's always going to be a role for Timo or Amazon or Walmart. Let those people have their race to the bottom. And who can sell, they're all selling the exact same product. Who can sell it two cents cheaper or ship it two hours faster? They will fight it out on that.

The more they succeed, the more I think people will. will desperately crave an alternative to that. And I think there's no one better position than Etsy to be that alternative. And just as you said, I want to walk into the party saying, you know, I'm the only one where my friends walk up to me and say, I love that. You know, and you know, you're the only one who's wearing it or they walk into your apartment. What a great throw pillow. And you say, oh, I bought this from the cellar in Turkey. And her family's been making it for three generations. And let me tell me about the, let me tell you about the fabric. The story is so import, doesn't it? I find that every time someone says, I bought it on Etsy, it's always the

beginning of the conversation. I bought it on Etsy and. Whereas anything else, I bought it on Amazon. I bought it on Timu. That's always the end of the story. There's no and, you know, in fact, we had some guests over the other night and they were admiring our plates. And I was like, oh, we bought these plates from a seller in Ukraine. And in fact, we bought them from seller in Ukraine before the war broke out. And then, of course, once the war broke out, we went back to say, can we support you and we bought some more? It turns out a lot more people are doing that. There's about 30,000 sellers in Ukraine selling about $200 million worth of goods to the Etsy community. That's a lot of hard currency going into Ukraine. And when the war broke out, we had all these people

come to Etsy and just start searching for Ukrainian sellers because they wanted a way to to connect and they wanted a way to support people. It's those kinds of stories that are happening every day on Etsy that would never happen anywhere else. Hey, startups, you've probably heard the saying better, faster, cheaper, pick any too. Well, AI has changed that equation. And Intercom is all in on AI. Intercom built its first AI customer service platform so that no company has to compromise when it comes to caring for their customers or saving money and controlling costs. These things are important. Intercom's AI tools are so smart that 50% of their customers have their issues resolved in just seconds. That's thanks to Finn, an AI co-pilot. Yes, Intercom has an AI co-pilot.

It's called Finn. Think of it as a personal AI assistant for each of your customer support agents, so they get really, really good at their jobs. It makes them so much more effective. Finn is a big deal. It's going to boost your agent efficiency by 31% or more. And managers of customer support teams that use Finn are reporting happier customers and very, very productive teams, all while staying on budget. That means when it comes to faster, cheaper, and better customer support, you can pick all three. No sacrifices. And that's all thanks to Intercom's AI First software. So, if you're an early stage startup, if you're a high growth startup, you're going to get access to Intercom at a massive 90% discount.

That's right, 90% off because Intercom and the team over there love startups and individuals. as much as we do. So go to intercom.com slash twist to apply. Or if you prefer, you can just do an email at startups at intercom. dot I. One thing I have gotten into later in life is the opposite of disposable, which is things I could give to my kids someday, or that will last me more than 10 years.

I always give the example here of my boots. I love this brand called Daner Boots. And then I have another brand I like Crocket and Jones. These are the shoes that James Bond wears, or at least Daniel Craig's James Bond. They're over a hundred-year-old seller. Wow. They're,

both of these brands are a little more expensive. You know, my, my boots are 600 bucks and these shoes, you know, probably a thousand, right? So, you know, they are triple probably what you could buy,

a reasonable comparable. The main difference is, I've now had these shoes for a decade. They look as sharp and as, perfect as they did 10 years ago with a good shine. And both of these brands are very unique. They have warranties and they stand behind these products with this concept of just send it to us. We will either do it for free or we will charge you the minimum amount possible to refurbish your shoes.

And I'm curious if warranty and standing behind product, I notice that's not part of your criteria. So, you know, I love to do jam sessions here with founders or, you know, CEOs. Yeah. I'm wondering why you don't give credit for warranty. Why you don't give that extra credit for, hey, we'll stand by this when that pillow or this plate breaks or whatever it is, if it chips, we got this warranty for you. Here's the replacement cost. Here's how we'll refurbish it. Talk me about that. Great point. And I love the jam session idea. So each seller has allowed her own refund policy for her shops. But we have done a lot. lot to standardize, there's really only a few things you can do. It's either I take refunds and I pay for shipping, I take refunds and you pay for shipping or I don't take refunds. And in search, when we talk about being more transparent about how we determine a seller's service quality, rewarding sellers who do take refunds is something that, you know, we think is appropriate many

times, but not all of the time. And the exclusion I'll point out here is things that are personalized and customized. It is often the case that a seller, many things on Etsy, they made to your specifications to they personalized and they can't resell. And that's where, again, Etsy's a little,

you know, it's its own unique place. And we're sympathetic to the idea then that in that case, a seller might say all sales are final. But we want that seller to consistently be getting five-star reviews. I think you got to double-click on this warranty concept.

I'll give you another brand that does this, that I am super loyal to Briggs and Riley. is a luggage brand. Sure. It costs, you've heard of it. Oh, yeah.

Have you ever bought one or ever? Yeah. Have you ever sent one back? No. Okay, my wife and I are obsessed. I think we own eight of these things. Oh,

wow. And we have had handles come off. I travel a lot, you know, and I travel commercial. Yeah. Because my PJs, I'm getting the rug redone

for the last eight years, so it's not a service. But when I am flying commercial, I fly commercial. You know, they destroyed these things. They throw them, whatever. Things break. I've had maybe three things break in maybe 15 years of being in love with this product.

And when we go to send it back, they have this like work with the warranty where they're just like, okay, it's, you know, we'll fix it. We'll send the shipping, whatever. Or, by the way, and that thing's like 14 years old. It's a little ratty. Here's a 35% discount. Here's a 40% discount on a new one that has the full wheels. and you got the tool when you got to tilt you. And I'm like, I love you guys.

And this brand loyalty that comes from what I'm going to call the work with you warranty, will work with you warranty, all Ws. This concept is so amazing to me where it's like we're working together to preserve the life of this and our relationship. You know, bad things happen, but we'll just work together on it. Yeah. That to me is so beautiful. and I'm just obsessed with brands like this.

La Cusee who makes those slow cookers? The cookware. Now, a La Crucée, what is the large Oval one that everybody uses to make stuff? Got the name of it. But you know the one I'm talking about. It's iconic. Like every French person cooks everything. I make Mules Friots.

My wife makes the vodka sauce from what's the favorite place in New York. Anyway, they make that amazing vodka panet, whatever. And this thing gets ratty and whatever. But if the enamel comes off, you can bring it to them and they'll redo the enamel. So you don't have to throw it in the garbage. I think this is so appealing to modern consumers. Anyway, that's my jam session. Your point about branding return policy like that is a great one.

And, you know, we're working and getting more standardized. But, you know, the nice thing about Etsy is you're always buying from a real human, a real seller. You've got our email address. And what we find is our sellers bend over backwards to have people be delighted, even years later, the fact that it's a real human relationship, I mean, you're trading dog photos, you know, like, and our sellers care so much. They're entrepreneurs, they're scrappy. They're not faceless companies. And so they care so much about the fact that you're happy. We find they'll

typically bend over backwards. And I mean, the other thing is they're selling their own art, you know, whether they made their own shoes or suitcases or plates or whatever. Like, they view this as their art. And the fact that someone else is willing to pay money to buy it from that means a lot to them. It's very personal. So we know that the vast majority of the time, people have great experiences on Etsy. Of course, something goes wrong every now and then,

and we're there to step in and help and make sure that everyone, both the seller and buyer, feel supported. But that's really the magic of Etsy. The other things, we've been talking about a lot of very high-end products here. But, you know, where things that are mass-produced are made in lots of 100,000 and that has economies of scale, obviously. There's also multiple markups between the factory and you. On Etsy, the person makes it and ships directly to you with no markup.

And so it's not necessarily the case that things are more expensive on Etsy, depending on what you're comparing it to and what product it is, they may or may not be. But, for example, I bought some glass-blown straws. I like to have an iced coffee every morning. Oh, that cold brew is so good. buying these plastic straws. Yeah, like, I don't eat all the plastic. But also, like, there's this glass blower in Wisconsin who blows these beautiful

straws. It's the most random thing. The only reason I'm pointing it out is I think it was $8 for a set of three. They've lasted me now three or four years, much cheaper than if I'd been buying plastic. But how does it make you feel? I love it. I think about the person who blew those glass every day. And there's something nice about having something that's not.

not a commodity and being thoughtful about the details. As Steve Jobs, you know, talked about painting the inside of the Apple tour, the backside of the fence, like as important as anything else. And, you know, that's what gets me, you know, super excited about your business. Carbone, by the way, is the restaurant I'm thinking about Carbone. Yes, Carbone's famous vacasas. I'm one of the millions who've never succeeded in getting a reservation. Very simple.

You want to get a reservation, Carbone? Go to Vegas. And you will get a reservation. If you happen to play in, you know, some higher stakes table, they will pay for everything, which some of my friends do. So we get reservations in 15 minutes magically. There you go. Everybody's talking about how hard it is to find great developers. And, you know, listen, you want to hire the best, but you got to find them. You got to vet them, interviews, onboarding. It takes forever. And hey, maybe you find somebody great. And then, I don't know, they retire.

They find a new opportunity. They start their own company. Well, Micro One has solved the problem. And that's why I invested in the company. Micro One built an AI engine that interviews 20,000 engineers every single month. Think about that. Then they handpicked the top 1%. Once they found the best, they help you hire them. And Micro One handles all the legal and compliance work. This means startups like yours can hire top talent very easily without spending all your time on recruiting or hiring recruiters.

You don't want to build a giant HR team, have them complaining to you, asking for raises, asking for more reasons. resources, no, Micro 1 will do it all for you. So they're going to help you find and hire that top talent in 48 hours. Sometimes they do it in less. So visit micro1.aI-I-S-Twist to instantly connect with top engineers and you'll get a two-week free trial per hire. Once again, Micro the number 1.aI-I-S-T to instantly connect with top engineers. You know what I wanted to talk to you about as well is running a company in through this incredible, you know, pullback we had during the pandemic, which you were one of the few companies

that got a pandemic push like Peloton. But then there's also this age of efficiency. And, you know, what Elon did at Twitter going down 80, 85% in the staff size, what Zuckerberg did, getting rid of, you know, 20,000 product managers, mid-level people, even some high-end people who maybe weren't, we're slowing things down.

Uber has the same number of employees, yet they grow 30% year over a year, or 20% year over a year, every quarter, same number of people. This is a very strange concept for you and I, executives of a certain age, the idea was revenue

went up, headcount one. You've been focused on revenue per employee. Talk to me about how you manage talent in today's global environment and with a different expectation from public markets about efficiency and running, as my friend Brad Gersoner says, a fit company. Yeah. Well, first, you know, the sort of cultures are built on formative moments. And my entry into Etsy was a pretty formative moment. In 2017, it felt quite existential.

I mean, we'd gone public. It was going very badly. Growth was. Tell me the worst of it. Yeah. We were a break-even company doing about 200, 200, well, we're doing two billion of GMS and I think maybe 200 million of revenue with growth decelerating. We were one quarter away from having no growth. We had activists. We had takeover offers that were going to buy the company for pennies

on the dollar. And it looked like the company was going to get sold for next to nothing. And it would have been an indictment on the company and I think a lot of people would have thought that the company was getting bought for pennies on the dollar because it tried

to be a good citizen in addition. to being a business. And that wasn't it, we just were executing very badly. You know, I laid off a lot of people and pulled out a clean sheet of paper and drew an org chart from scratch.

And very focused on what are the fewest things we need to do to succeed. And what is the leanest team that can accomplish each of those goals? And this is referred to as zero-based budgeting, I think, in some quarters. And it's reminiscent of what Steve Jobs did

when he came back to Apple the second time and just said, business, personal, portable, you know, desktop and just said, four boxes, one in each please. Exactly. Obviously, I mean, legendary. What he was able to accomplish there, I'm not going to try to compare us to that, but we did see a lot of success from that. Not only did headcount go down by about 25%, but actually, we started shipping four times as much every month. What do you attribute that to? Because this is non-obvious, and it's important, I think, for founders to just really take this to heart. So why can you get four times as much done with 25% less? What's the secret? What's the magic? Mission, clarity, and empowerment.

Every squad is the unit of work at Etsy is a squad. A squad's eight or ten people. And it's going to be six or so, six to seven engineers, a product manager, a designer, and an analyst or part of an analyst. And that squad is given one customer problem to fix, one KPI to measure success by, and a timeline. Usually, you've got one year. So you've got one year to cut shipping times by one day in a way that unlocks an extra $25 million of GMS or $50 million GMS. Would be a very typical example of what we would assign a squad. And that squad has the power to go anywhere they want in the Etsy customer experience. They can change something on the seller side.

They can change something on the buyer side. They can work in any part of the code they want. and they're singularly focused on fixing one customer problem in a way that delivers a real outcome that's measurable to make the business bigger. So there's nothing performative, there's nothing to please the CEO or management or whatever. It's just these are the most acute problems. Fix them. Yes.

This is the outcome we're looking for. And that makes your job as CEO so much easier, right? because either the squad does it or if they don't. And they're not asking for permission, and there aren't a lot of layers of management that they have to go through that are kind of second-guessing or hand-wringing. So the job then of leadership is,

have we clearly defined what success looks like, and if we clearly defined what constraints are, and do we make sure we've got the right people in the right place? If you do those three things, and the first two I borrow from Ken Chen Hidal, who I work for at American Express, the job of a leader is to define success and define constraints.

I will add then make sure you've got the right people in the right roles. You do those things, which says easy does hard. It actually takes, I think, a fair amount of contemplation and then conviction to really crisply articulate what that looks like. But I think if you do that well, you can have a team that's highly empowered to go figure out, you guys tell me what's the best solution to do that. You're going to know it better than I will. And don't ask for permission.

Just go do it and tell me how it worked. The other thing it does is it allows us. to really measure productivity and really know that our teams were highly productive during the pandemic. We know that we're seeing a lot of effort that's making the pie bigger for everyone, and that's really what matters. When our business exploded during the pandemic, we grew our headcount, but at nothing like the rate of revenue growth. It was never our thought that just because revenue is growing, we're going to grow headcount to your point. We really looked at what are the fewest things we need to do and what headcount is required to do those things. So every year has

been a year of efficiency. I have to admit, I find it a little weird, the sort of year of efficiency. Like, when is it ever not supposed to be a year of efficiency or a quarter? That doesn't make any sense to me. I don't find that adding a lot of resource necessarily makes things go better. I mean, if you look at Mark's journey at Oculus, giving them a limitless budget was probably not helpful. Yeah, how that work out? Yeah, not helpful. I've never seen that be helpful. I think, Constraints are a beautiful thing for a team. So, you know, look, there's a certain amount of keep the lights on activity that's always necessary to run a platform. And as the platform gets bigger, there's more payments to process.

There's more customer support queries that come in. There's more data to process. Those sort of KTLO activities get bigger. But we have for Etsy, which has 7 million sellers, 92 million buyers, $12 billion of commerce. And the core Etsy business is 1,800 people. who worked there. We're just a little leaner than Twitter after the 80% reduction. And, you know, in terms of revenue per headcount, we're much leaner than anyone of our size and scale. And we're, we're proud of that. Minimizing waste.

You track that. Revenue per headcount. We do. We do. We do. And, you know, minimizing waste, we think is always, it's one of our core values. We think it's super important. Let me ask you about running a company at scale and globalization and all this talent around the world. And then frankly here in the U.S., in a developed market or in a developed region, you know, certain parts of Europe and the EU, you know, people have become incredibly successful. Maybe the work ethic is slightly different than in emerging or frontier markets, as they're referred to today, previously third world, second world, frontier and emerging in the proper terms for those people listening who want to be politically correct. I've found now that talent, and you know this because you have plates from Ukraine and straws from the middle of America, is talent everywhere. Yeah. So talk to me about this new playbook that companies are doing where it's like, you know what, if we have too many entitled people in the U.S.

Or it's hard to get people to come to an office in this country or, you know, there's other regions where people are thrilled to be part of an American leading company. and be part of that excitement and you can skim the cream in Portugal or San Paolo or Manila, where are you finding centers of excellence and how do you think about the global workforce? Well, first, our U.S. workforce, I think, is amazing and super passionate. And I do think the opportunity to work for a company that you think is bigger than yourself is really important. There's, as I said, less than 2,000 people who work for Etsy and there's seven million sellers who wake up every day hoping that the Etsy team is bringing

their A game, I think we feel a lot of responsibility. Everyone at Etsy feels a lot of responsibility. We don't have enough people to have any hobby projects. Like, nobody works on stuff that's not central to the mission of helping our sellers, sell more stuff, and support their families. So I think everyone wakes up with a strong sense of urgency around that. We also are pretty focused on measuring. What are the outcomes we are achieving? We're not measuring hours. We're not measuring keystrokes. We're measuring every squad. What have they accomplished that's made our customers better in a way that's made the marketplace bigger. And I think that's been very helpful and very focusing for people.

And we do have a development center in Mexico and we have a development center in Ireland. And they've been great. And they have helped us to bring more talent onto Etsy at a time when hiring was tough and talent is scarce. And there is a lot of talent in the world and we want diverse perspectives. We want to be able to follow the sun. And, you know, Ireland's been very helpful for us as, you know, we have sellers in many different markets, for example. And obviously, it's 24-7. And very thoughtful people, as an Irishman myself. The middle name is McCabe, people don't know that. But you're talking about people who actually have great pride and are very thoughtful and also great storytellers. I know this sounds, you know, silly in some ways. But, you know, having people who really care, you know, your Irish grandmother is, like, that's a theme for a reason. Like, they're going to make sure that your breakfast is proper and that you are happy with.

your breakfast. Do you believe in remote work? And, you know, we talked about this arbitrage globally. I'm sure the folks in, you know, Mexico and in Ireland are a good deal compared to people in Silicon Valley or New York. It might get two for one, three for one in terms of headcount. And it gives you the, you know, the sun never sets on the Etsy Empire concept. But let's talk about remote work.

You, all of us were forced to be remote. Where do you stand now with hybrid, return to office? do you believe that great work can be done or the most elite level of work can be done with remote teams or do you think you need to have some FaceTime and collisions? Before the pandemic happened, about 20% of Etsy's engineering workforce was permanently work from home. They were located, you know, not near an office.

And when I first joined Etsy, I asked for research on that. Tell me how that's gone. And what we found was it was not great for early career people in their first two or three years of work in engineering was not great. And it was not great for managers who'd never worked at headquarters. But for engineers later in their career, not even that late in their career, but engineers who've spent at least three years. They got 10 years under their belt, something like that, right?

Younger even than that, I would say. Engineers who've had, you know, let's say at least four or five years of real writing production code in a high-quality environment where they know how to. and managers who either worked at headquarters and then moved or managers who were later in their career, actually we saw really good productivity. We were measuring productivity. We were measuring performance reviews. We were measuring promotion. Engagement scores attrition. It was pretty good. During the pandemic, two things happened. One, we had a tremendous need to hire a lot of people quickly because we were scaling at such an extraordinary rate. And two, coming out of the pandemic, we closed some of our remote offices because attendance was low. And as a result, we find ourselves now with about 50%

of our employees don't work within 100 miles of an office. So I couldn't ask everyone to come back to the office even if I wanted to. We... That is a conundrum, yeah. And so we are leaning into, how do we make sure that we get the best out of remote work? And for people who live within a 60-minute commute of one of our offices, which is about half of our staff, we asked them to come in two days a week. And I'll be the first to say, for some of those people, you can argue that the two hours you lose on the commute is not worth it for your productivity and you're very productive at home. And I stipulate, fine. But our benefit as a community to be together is, I think, important and I think worth it. And so I'm not going to argue that you're not productive at home.

I'm going to say that we benefit to have a vibrant community, particularly for people that are earlier in their careers. I know I've got a 19-year-old daughter, and I'm recommending to her that when she graduates from college, she should go work for someplace where they're in the office at least a few days a week, and she can get mentorship. It's going to be very important. We need to be that kind of place as well. So we're using a lot of technology and tooling that makes our remote workforce. I don't just think, I know, very productive. We're seeing that they are shipping great product, coming up with great product. Engagement scores are good. So we know that we can have a very successful remote workforce, but I also think it's important that we create an office culture

in some of our hub locations. And I think doing both, hybrid is the future, and we're going to be great at it. Rather than sort of being nostalgic for the past when everyone came into an office, we're really leading into being great at leveraging technologies to be able to be great at hybrid. Let me just wrap here with this concept of the static team size. Are you seeing with AI the increased efficiency of each individual then makes it not necessary to add more headcount. I am seeing in many of our early stage startups, individuals, I would say, getting 10% more efficient per month or quarter. Now, you put that into the rule of 72. That means people are twice as efficient every year or so. Certainly every two years, it feels like people are getting

twice as efficient every two years. If you just put that there, it's kind of like your 1800-person team in two years would be the equivalent of having a 36-person team. So are we going to live in a permanent static, heck-count situation? What does your gut tell you, having been at this for a couple of decades? Well, one, I certainly hope we're going to keep seeing the productivity gains that we all think we are. And I think we're experimenting with it in every part of our business. I'm sure all of your startups are. And not just in our engineering teams. where it's helping with not just writing code, but QAing code and commenting code and all the areas.

Is that where the gains are the best or customer support? Early, early gains. Well, customer support is an area where we're starting to see gains. We're piloting some new AI tools that can be tuned specifically to our customer support use cases that I think is going to be better. That frankly, the very generic Gen. Gen.A.Tools we use that were not tuned to our use cases, weren't big productivity improvements.

You're building those in-house or you've got a partner? We're partnering. We're partnering, but partnering with some folks who can tune it specifically to our content. I'm very optimistic. It's going to be very helpful. We realize that our engineers spend only part of their day writing code. They have to spend part of their day understanding how the code they write is going to affect other parts of the code. Actually, Jenny is really helping you to understand what the downstream effects of code you write and commenting code and test.

So it's going to add a lot of productivity in a lot of areas without geeking out too much on it. It's touching every part of our business. And yes, I think that it is going to make us. much more productive. I also think it's going to allow us to do things we just couldn't do before. And that's what I'm even more excited about. So, for example, we have well over 100 million things for sale on Etsy and everyone is a snowflake. Everyone is different. Understanding what is this thing on Etsy and what else is it related to and how should I organize it in a way that humans can understand is a really hard task for Etsy. And it's something Gen. I is really great at

I need to buy a gift for my mother. Give me 10 ideas. Jenny, I would be really good at, tell me a little bit more about your mother. And I'll give you 10 ideas. And then, oh, for this idea, here's the five best products on it. For that idea, we're going to have 50,000. Yeah, like that. So we just launched something called Gift Mode.

We're really leaning into that. And that idea, this is where not only is it going to make our existing team more productive, which I'm super excited about, but it's going to allow us to do stuff we couldn't do before. I think that's a more than others. You know, when you have a great idea, it just makes my neurons fire. This is such a good idea, this gift mode. What if I could give you the social media accounts of the target? So I take their Instagram, they take their Twitter, I take their LinkedIn,

they take their blog, whatever it is, their YouTube channel, I put them in. And I say, hey, what do you think this person in life? And they're like, no, they're buying a lot of hats. They wear a lot of trucker hats. They wear a lot of, like, logo hats. I noticed that they cook and they take pictures of a lot of sushi. Here's a hat with like, I dream of Giro on it. And hey, that tickles both of those like themes on their Instagram.

This would be like gifts by Graham, like gifts by social. I love it. And we've looked at that. And, you know, the what we're going to make sure we navigate carefully is the privacy implications of. It's public data. Everyone. But to the extent that they've made their accounts public. Yeah.

You know, absolutely. So all of that, I think, is a huge opportunity for us to do a better job. Finding gifts for other people is hard. And I think Etsy is uniquely well positioned to help. All right. Final question here. This is an end of SEO theme that's going on in the world, you know, with chat GPT, kind of taking some searches away from Google or Google's own search results that are generated,

or answers generated by it. You've done pretty well on organic. you get a lot of your traffic from organic. What are the strategies? And I don't know if there's an easy answer or any hacks here other than having a really unique product in the world. But you get a lot of organic direct traffic. What's the secret? Well, I would start with we do have a lot of content on Etsy.

There's well over 100 million listings on Etsy. Each of those listings is unique and different in some special way. We partner a lot with Google to help them index that. And because the content is generated by a real person and has a lot of metadata around it, they've put up a unique photo, they've put up a lot of their own content about it. That's very helpful for indexing. But on the organic side, you do so well, yeah. Yeah, but I agree that over time, we should expect. Look, Google is pushing organic search lower and lower on the page.

Forget below the fold. It's like below the fold now. You can't find an organic search result on Google without, right, you've got to scroll through multiple pages. And even the paid stuff now, you know, Gen A.I is taking pride of place in that. So we're very focused on being a destination that's not downstream of anyone. So we've been investing in brand marketing, investing in building traffic to our app. You know, I think that ultimately there's only a few brands that can really survive and thrive in e-commerce because the human brain can only remember a few brands. you can't remember.

Yeah, right, seven, right? And everything else you're going to need to go to Google or Facebook or you're going to need to be downstream of someone and whoever you're downstream of, they take all the economics. You never want to be beholden to anyone. If you've got room for seven brands in your brain, every one of those brands needs to do something really different and really important that you need a lot. And I think one or two of those brands are going to be, where do I go for the cheapest version? And I think people are going to crave the alternative. And I think Etsy is super well positioned to be one of those seven brands. I think that's an incredibly valuable place to be.

All right. Listen, Josh Silverman, CEO of Etsy, everybody go to Etsy and buy your next Christmas presents, birthday presents, and report back how you did. It is the greatest place to get something unique and not give people a gift card or something thoughtless. Support artisanal artists around the world. Go to Etsy.com. It is such a beautiful, amazing gift to the world. I, you know, my wife and I are both such super fans of the site. You know, for me, she does a lot of gifting on it. I do a lot of costume stuff on it. And it's just wonderful.

How do you deal with people? This IP issue comes up a bit, I think. How do you police that? Like, if I wanted a Jedi robe, you know, I can't buy a Luke Skywalker robe, but I could buy a Jedi robe. How does that work? Like, how does Disney look at you? Do they look at you as like a potential partner?

do they look at you and do they call you and say like, hey, this person's selling a Jedi robe and they got a picture of Anakin, that's no Bueno, but you could do like a Jedi night robe. It's cool. Yeah, because I'm just picking the person.

We have a good relationship with rights holders. We invest a lot in it. So we have a special portal for all the big rights holders, like the ones you name, where they can go and just list anything that they see that's violating. We immediately take it down.

And then we also have flagging so any other customer can take it down. We also build our own automated tools where we proactively look and take down things that we think are highly likely to be violating. The proactive one's tricky because it's hard for us to know. For example, it might be an original, you know, piece sold by the original rights holder, which is now vintage. Right. So. I'm a big kind of Blade Runner.

I found some Blade Runner. And then some people make Deckard's jacket from Blade Runner, my favorite film. And so, yeah, it's a very unique thing. Like, a cyberpunk is not owned by Blade Runner. So a cyberpunk jacket, like, really, Scott got that from other people. So, like, the origin of it. So I guess if people are making, you know, there's Indiana Jones, but then there's also, you know, somebody who is an adventurer. Like, you don't get to own the adventurer hat.

So how do you deal with the, that little area? Actually, cyberpunk is really popular. Steampunk also very popular on Etsy. We've got so much cool stuff in that. So that's where we partner with rights holders. And that's where there needs, I know there's a lot of conversation on Section 230. And there needs to be a lot of conversations around Section 230. But I will say it is critical that we have a true partnership with rights holders.

We care a lot about only allowing things on Etsy that are allowed to be sold, you know, where the rights are okay. But we couldn't possibly arbitrary what is and isn't biolts. without a strong partnership with the rights holder. Yeah. I think, you know, YouTube does such a good job of just saying, like, hey, this, if you feel this is yours, here are your four choices. You can slam the person and, you know, take it down and they get to claim it's fair use and you go through that process.

Or you can just take the revenue and if that person's cool with it, there's that option. Did they ever come up with like a, hey, these artisanal people can make their own versions and pay a percentage? Did you ever try that with somebody like JK Rowling? of like, this artist wants to make wizard outfits and you don't own wizards and Gandalf existed before you're a wizard and there were a thousand wizards in public domain, you know, stories. So you don't get to own wizard, but do you think you want to like anoint this person to make wands? We've actually had rights holders approach us and say, look, we have licensed gear in the following

four categories. And here's 50 categories where we don't have any licensed gear. and we'd love to open that up to all your sellers. And we just haven't, it sounds great. And then you get into the legal complexities of who police is and how you do. And, you know, one of the things about every year being a year of efficiency and a very lean team is we're always looking at what are the fewest things we need to do to succeed this year. And we are blessed to have a lot of great ideas that we call them the worthwhile many, not the vital few. Yeah. The worthwhile many, but not the vital few is just, the founder once told me, like,

this is such a great idea, Jake Al. Let's put it on the not right now list. And I was like, so it's not that good of an idea. It's like, no, this idea is so unique that we're going to put it on this list that we don't forget it. It's a good idea. You know, we talk a lot. A good idea is table stakes. And of those, we're going to take the top 5%.

Yes. So what are the three or four, maybe five things we have capacity to do this year and acknowledge the fact that there's a very long list of ideas that are strategically aligned. You'd be proud to talk to your board about it has a positive MPV, and you're not going to do it. I mean, meeting those tests is just tables. It would be so interesting, though, for a podcast like All In, that's very popular to say something to the effect of, hey, we're going to do this merch drop, right? And just bring us your top 100 people who opt in from Etsy, give us 10% of whatever sold.

And we're just doing it as a marketing thing. and we're going to do it just in January drop, make whatever you want, sell whatever you want. You know, just here's the brand guidelines. Don't say anything about this, this, and this topic, whatever the brand guidelines are. And yeah, just go for it. Like a very interesting marketing concept, like the one,

I don't know if you saw what Brian did with Airbnb and they built the X-Men house or, you know, they had these beams houses. Yeah. It was a very, very cool concept. And so all my daughters can talk about is going to the X-Men house now. So it's really interesting, this IP thing. but yeah we'll put it on the not right now list uh amazing guest uh would you come back in a year

can we do this like every year because i just love talking to you is it possible sounds great i'll look forward to it all right we'll see you all next time on this week and starroops bye bye