Etsy’s IPO took Wall Street by storm last week. The conversation was peppered with questions about whether or not a company that claims to be “a mindful, transparent and humane business” could succeed on Wall Street, a space where these adjectives are rarely used.
It’s not that the first question is not interesting, but that I feel it belongs to the last decade, not to 2015. We already have many public companies with far more progressive social and environmental agendas than Etsy, like Unilever and Marks & Spencer, that are trying to show investors the business case for sustainability. So, is it really such a big deal?
It’s true that B corps are still quite rare on Wall Street, as well as companies that make sustainability their strategy, not just a department. But let’s face it: There’s a good chance Etsy will have to play by the market’s rules no matter how mindful and humane it is. This is just the nature of the beast, aka Wall Street, as we could learn this week: Although Chipotle reported great quarterly results, its share price went down by more than 5 percent because investment analysts “had been expecting stronger comparable sales.”
Therefore it’s not really about who will change – Wall Street or Etsy, but to what degree Etsy will need to adjust itself to fit the market’s standards and expectations.
This assumption brings me to the question I find more interesting (other than why Etsy actually needed to go public in the first place): Is Etsy still part of the real sharing economy?
Is a public Etsy really part of the sharing economy?
This question came to mind after reading “The sharing economy is bullsh!t. Here’s how we can take it back” on Grist, in which the author, Sam Bliss, argued that companies like Airbnb, Uber, Lyft and Taskrabbit are not really part of the sharing-economy space. Bliss suggested that these companies are involved in share-washing as they’re nothing but a rental broker, unregulated cab services, and a service that lets well-off people pay less well-off people to do their chores without providing benefits and job security.
To support his argument Bliss quoted Doug Henwood, who wrote earlier this year on The Nation: “The sharing economy is a nice way for rapacious capitalists to monetize the desperation of people in the post-crisis economy while sounding generous, and to evoke a fantasy of community in an atomized population.”
So, we have a pretty clear idea who the sharing economy phonies are. But what is actually the real sharing economy? According to Bliss, the real sharing economy allows humanity “to consume less, hopefully shrinking our economy’s voracious appetite for materials and energy.” Sharing, he added can also “help us achieve economic degrowth in consumption and production — and the wastes that come with them, like carbon emissions — while maintaining quality of life, or even improving it with more social interactions and stronger community relationships.”
Reading these definitions, I wasn’t sure if Etsy could be considered a part of the real sharing economy even before it became a public company: On one hand, it’s not reducing consumption, but on the other hand it favors unique, handmade goods over mass-produced, generic ones. In addition, Etsy supports “retailers and suppliers that have responsible and sustainable policies toward their employees, their communities and the environment” and maybe even contributes to greater social resilience.
So, which is it? And this is even before we get into the IPO – what does it mean that the company is public now? According to Bliss, “A real sharing enterprise isn’t driven by profits for shareholders.” But Etsy makes it more complex, claiming, “The success of our business model is based on the success of our sellers. That means we don’t have to make a choice between people and profit.”
The bottom line
I’m not sure what Bliss’s bottom line about Etsy is, but to me it’s pretty clear that the case of Etsy shows the ineffectiveness of using purity criteria to exclude from the sharing economy anyone showing any signs of interest in making money out of it.
It’s not that I don’t want to see more worker cooperatives and more profit-sharing in the sharing economy – as someone who experienced life in a kibbutz, I’ve learned to see the value in platforms that aspire to increase the well-being of everyone, not just the 1 percent.
However, I also want to see the sharing economy becoming a mainstream movement, as change without scale has very little chance to make any difference. Therefore I believe in the benefits of framing the sharing economy as a big tent, where you can find side-by-side nonprofits, for-profits, worker cooperatives and public companies, where all of them “create ‘markets in sharing’ by facilitating exchanges.”
It doesn’t mean, though, that we should give a free pass to anyone who wants to join this space. As I’ve written here in the past, values do matter and companies that don’t exercise basic ones like humanness should be outside of this tent, not inside.
So, what about Etsy? I believe the company has rightly earned its place in this tent as a “humane business,” and I hope that becoming a public company won’t change that.
Image credit: Scott Beale, Flickr Creative Commons