According to TechCrunch, online marketplace Etsy announced on Wednesday that CEO Josh Silverman will step down by year’s end after eight years leading the company. Kruti Patel Goyal, Etsy’s president and chief growth officer who previously served as CEO of Depop after Etsy acquired the platform four years ago, will become the new chief executive. The transition comes amid significant challenges for Etsy, including a 5% decline in active buyers to 86.6 million and a 10.9% drop in sellers to 5.5 million in the third quarter, along with a user boycott in July over controversial merchandise. Meanwhile, Depop under Goyal’s leadership showed strong growth with active sellers rising 40% to 3 million and gross merchandise sales jumping 39.4% to $292.1 million. This leadership change signals Etsy’s urgent need for growth revival.
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Table of Contents
The Depop Playbook
Etsy’s decision to promote Goyal represents a clear strategic bet on applying the Depop growth model to the broader marketplace. Depop’s success has been built on several key factors that Etsy desperately needs: younger demographics, social commerce integration, and mobile-first engagement. While Etsy has traditionally focused on handmade and vintage goods for a somewhat older demographic, Depop captured the Gen Z and millennial resale market through Instagram-like discovery features and community-driven selling. The 39.4% GMS growth at Depop compared to Etsy’s 2.4% decline suggests Goyal understands how to build momentum in today’s competitive resale and creative commerce landscape. However, scaling Depop’s approach to Etsy’s much larger platform presents significant integration challenges.
Silverman’s Mixed Legacy
Josh Silverman’s eight-year tenure as CEO represents a period of both dramatic growth and recent stagnation. Under his leadership, Etsy evolved from a niche handmade marketplace to a publicly-traded company with global reach, particularly benefiting from the pandemic-era e-commerce boom. However, the recent challenges—declining active users, seller dissatisfaction, and controversial content moderation decisions—highlight how the platform struggled to maintain its unique identity while pursuing scale. The transition to executive chairman suggests the board wants to retain Silverman’s institutional knowledge while bringing fresh energy to the growth challenges. This leadership transition follows a pattern we’ve seen at other maturing tech companies where founders or long-time CEOs move to board roles during periods of strategic repositioning.
The Core Growth Problem
Etsy’s fundamental challenge lies in what I call the “marketplace maturity paradox”—the tension between maintaining platform quality and pursuing aggressive growth. The third-quarter results reveal deeper structural issues than typical seasonal fluctuations. A 10.9% decline in sellers is particularly alarming because it threatens the network effects that make marketplace businesses valuable. Seller dissatisfaction has been building around fee increases, increased competition from mass-produced items, and algorithm changes that favor certain types of listings. Meanwhile, the 5% buyer decline suggests Etsy is losing its differentiation in an increasingly crowded e-commerce landscape. The July boycott over “Alligator Alcatraz” merchandise was merely a symptom of broader content moderation and brand identity challenges.
Evolving Competitive Threats
The competitive environment for Etsy has dramatically shifted since Silverman took leadership. While Amazon Handmade represented the obvious threat, the real competition now comes from multiple directions: social commerce platforms like Pinterest and Instagram Shops, specialized resale marketplaces like Poshmark and StockX, and the creator economy tools that enable direct-to-consumer sales. Etsy’s historical advantage—being the go-to platform for handmade and unique goods—has been eroded by platforms that offer better discovery, lower fees, or more specialized communities. Goyal’s experience at Depop, which successfully navigated this fragmented landscape, will be crucial for redefining Etsy’s competitive positioning beyond being merely “the anti-Amazon” for creative commerce.
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The Road Ahead
Goyal’s immediate challenges will involve balancing several competing priorities: revitalizing seller growth while maintaining revenue, improving discovery algorithms without alienating the core community, and integrating Depop’s social commerce strengths without diluting Etsy’s brand identity. The nearly 9% stock drop following the announcement suggests investor skepticism about whether leadership change alone can solve Etsy’s deeper structural issues. Success will require more than applying the Depop playbook—it will demand a fundamental rethinking of what makes Etsy distinctive in 2025 and beyond. The coming quarters will reveal whether this CEO transition marks the beginning of Etsy’s resurgence or simply rearranges leadership during a prolonged decline.
