💣 Etsy and the prisoner's dilemma
Launched in 2005, Etsy is one of the less-known U.S. platforms. With an initial goal of connecting individuals selling hand-made products and vintage finds to the global consumer market. Etsy carved its own nice between eBay and Amazon as a lifestyle business supporter, bringing side revenues to more than 2 million sellers offering +60 million products to +90 million buyers and generating +$10 billion in sales.
And as with any two-sided business model, Etsy has two customers: the ones buying on the platform and the ones offering on the platform. The latter, paying a 5% fee on each of their sales, is the system's active fuel.
In February, Etsy CEO Josh Silverman, among all the good news he had to share with investors (Etsy did well with the pandemic and people stuck at home trying to generate some extra income, while others were trying to pimp their lockdown apartment), also announced that the sellers' fee would be bumped to 6.5% within a few weeks.
Rage ensued, and a grassroots sellers' strike started overnight.
Let's be clear, this is not going to go very far, and Etsy will probably find a swift common ground to get back the few thousands of protesters in their warm embrace.
This also tells a story of activism.
In the past, minor shareholders could start to grow their position to a critical mass and become activists trying to push an executive committee to change a strategic course. Nowadays, for platforms, the power is also spread to both sides: the sellers and the buyers. Whether you are Airbnb, Uber, or Apple with your App Store, the only hold you really have on both sides of the platform is they are not unionized or even organized. As the platform, you're the jailer in a large-scale prisoner's dilemma.
There's a cautionary tale in the making, though.
This summer, the Gamestop meme stock craze, where thousands of consumers pumped a low-value stock despite all financial logic, showed the world that new forms of volatility appeared in the markets. We are children of the social web. We understand it or not, but we use it. We've integrated its worst and (sometimes) best logic.
This might be a new weakness that giant tech platforms will have to deal with. As both consumers and producers, more weak signals accumulate on our pro-pension to not be disconnected and insulated from each other anymore.
We might start talking and weigh our collective weight.