Can Rob Kalin Scale Etsy?

In a hip loft, in the hippest borough of the hippest city in America, a hundred or so energetic young people wearing vintage dresses, modded Nikes, and skinny jeans turn to face a makeshift stage. This is Greenpoint, Brooklyn, where a selection of creative types have congregated on a Friday night in January to enjoy free beer and celebrate the opening of the neighborhood’s newest clothing store, Ruffeo Hearts Lil Snotty.

As its outré name would suggest, the store aims for a stratospheric level of cool. There are spandex body suits with wild color blocking, quadruple-extra-large hoodies, and a line of men’s underwear called “manties”—all handmade in Brooklyn, partly with recycled materials. The announcer quiets the crowd with a barrage of obscenities before introducing the founders, Sarah Jones and Mackswell Sherman.

Sherman emerges, beer in hand, wearing a baseball hat cocked sideways, a sport coat, and a pair of silver superhero tights. Jones, clad in an orange cardigan and a studded green shirt, looks almost square by comparison. They grab a pair of shears and snap a ribbon. Balloons drop from the ceiling, the band gets going, and models show off the new line while sipping on cans of Bud. Yes, the models are drinking, too.

Four years ago, Jones and Sherman were Dumpster-diving college students at Evergreen State, a bastion of hippie higher learning in Olympia, Washington. They foraged for fabrics outside clothing factories and hawked T-shirts on the streets of Seattle. Today, they are comers on New York’s indie fashion scene. Their clothing has appeared in several fashion magazines and blogs, on the person of the pop star Kelis, and on CBS Sunday Morning. Jones and Sherman are still small scale—most months they have just a few hundred dollars left after paying their business expenses and their rent—but their work is in a growing collection of independent boutiques, and they no longer have to sew in their bedrooms. “We’re hungry but happy,” says Sherman, bobbing his head to the music.

As I watched it all unfold, I wondered how a breakthrough like this was possible. A few days later, after the beer cans had been cleaned up and the partners were back at their sewing machines, I came back to the store and asked them.

The answer was simple: Etsy, the massive online marketplace for handmade and vintage goods. In the fall of 2007, some hoodies and other items made by Jones and Sherman landed on Etsy’s homepage; their clothing now generates sales of $1,000 to $2,000 a month. That may not sound like much, but the income allowed the partners, neither of whom has formal training, to bootstrap their business as they taught themselves how to design, sew, and sell.

Being on Etsy also exposed their work to independent retailers and fashion writers, who regularly turn to the site to suss out new styles. And it was Etsy’s mercurial founder, Rob Kalin, who contacted the pair out of the blue, inviting them to leave Seattle and come to New York, where he would give them a free workspace. “We probably wouldn’t be here without Etsy,” Sherman says. “That rocketed us.”

Kalin, 30, is determined that Etsy vendors such as Jones and Sherman become more rule than exception. “We want to allow the makers of the world to claim authorship for what they’re making,” he says. “This is what Etsy stands for: The little guy being able to organize a better marketplace.” Kalin, who is prone to such pronouncements, is talking about the small-time artisans who peddle their wares on Etsy. But he just as easily could be describing himself. After all, in 2005, when he founded the site with two college friends in a rundown loft in Brooklyn, Kalin was a marginally employed 24-year-old classics major with no money, no connections, and no knowledge of computer programming. Etsy was as much a DIY affair as Ruffeo Hearts Lil Snotty.

Today, Kalin is socially awkward, reticent, and given to eccentricities that can seem downright crazy. “I speak to people in the business world and the technology world, but I don’t admire them,” he says, pointing an 8-inch combat knife at me for emphasis. “I admire the makers of the world.” This is not empty rhetoric: Kalin makes his own furniture and his own underwear. He also thinks that trying to maximize shareholder value is “ridiculous,” adding, “I couldn’t run a company where you had to use that as an excuse for why it was doing things.”

And yet somehow this same Rob Kalin sits atop a fast-growing company that is the toast of the business elite he purports to despise. Etsy has 165 employees and revenue of roughly $40 million. It has raised $50 million from some of the tech world’s most prominent venture capitalists and is thought by many to be a prime candidate for an IPO. Kalin has poached executives from the likes of Yahoo, Google, and eBay, and he has been honored as a “Technology Pioneer” by the grandees at the World Economic Forum’s annual meeting in Davos. “Rob is an accidental businessperson,” says Fred Wilson, the first VC who invested in Twitter and an early investor in Etsy. “He’s actually a pretty good businessperson, but he thinks of himself as an artist.”

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