In a beige-walled Harlem computer lab, 14 women sit at long, open tables. One has a fringe-draped leather bag that she designed. Another is wearing a handmade light-blue knit hat. Others carry their crafts in shopping bags that they leave by their feet. Brandi Harper, a peppy instructor, clicks through slides on a power presentation. She's already been over what to include in business expenses, how to calculate overhead costs, and a formula for factoring profit into pricing. Now it’s time to check out the competition.
This isn't just another entrepreneurial boot-camp--it's a craft entrepreneurship program class focused on teaching people with low incomes how to sell their crafts on Etsy. And classes like this one are expanding--on Thursday, at Fast Company’s Innovation Uncensored conference, Etsy CEO Chad Dickerson will announce plans for classes in three more locations: Santa Cruz County, Dallas, and Newark. The goal is to double the number of places hosting the pilot classes, bringing them to 10 cities by the end of the year, while creating an open-source curriculum that can be used by any other city to run its own classes.
Harper, the Harlem instructor, has been knitting since she was a child, and she uses her own Etsy shop as an example with her class. She searches for knit hats. “There are a lot of people who aren’t running businesses, they’re running hobbies,” she says, scrolling through pages of hats priced as low as $10.
“We’re going to find someone who is making real money, because that’s what you want to do.”
The class breaks for 10 minutes so that the students can calculate prices for their own items. One woman is shocked to discover she’s severely underpricing her handmade stuffed animals. She raises a bear in the air. “$280,” she says, as though it were ridiculous. Harper doesn’t think so. “The people who are looking for $250 bears are looking for $250 bears,” she says.
The idea that Etsy can help people by teaching them to use Etsy wasn’t cooked up in a PR think tank. Last March, Rockford, Illinois, Mayor Larry Morrissey tweeted to Dickerson suggesting that Etsy might help his city. “Since we need an ‘Etsy Economy,’” the Tweet said, “has Etsy begun any partnerships with high schools or job training?” Dickerson responded, and emails led to meetings that led to a partnership with Rockford’s Housing Authority and the first pilot of the Etsy Craft Entrepreneurship program. By the time that launched, New York City had committed to running its own pilot, and shortly after that pilot started, funding from Citi had sparked plans to take the New York City classes to all five boroughs and to translate it into four languages.
Etsy’s partner organizations--including the Brick City Development Corporation in Newark-- market the classes through their networks and host them in their spaces. Etsy provides the curriculum, which covers topics like marketing, photography, pricing, and growth strategies, and helps finds successful Etsy sellers to be teachers. Only students with existing craft skills can enroll.
Unlike most economic development plans, what appeals to cities about Etsy’s craft entrepreneurship program is not that it creates full-time jobs. Etsy sellers are unlikely to start businesses that employee other people. In fact, they’re unlikely in the short term to even make enough money to fully support themselves. “We’re not telling that story,” says Dana Mauriello, who oversaw development of the Craft Entrepreneurship program for Etsy. “Because we don’t think that’s a practical goal in the short term. We want to start with what we know is realistic in the short term, which is, if you can sell an item this week, that’s great. And if that goes toward your savings, that goes toward paying your utility bill, that’s amazing.”
Craft Entrepreneurship provides, in other words, something that many economic development plans ignore: supplemental income. “Why you don’t hear a lot of cities talking about [supplemental income] is because no matter what you do, the numbers are going to be pretty small,” says Lisa Servon, a professor of urban policy at the New School. “If I were the mayor of a city, I’d want to say that we got Dell computers to locate here, and it’s 10,000 jobs, without talking about all the tax breaks that were necessary to get them there and all the deals that get made.”
Etsy's partner cities face a wide range of employment challenges. Rockford is suffering from a decline in manufacturing jobs. About 15% of New York City residents are willing and able to work, but unable to find full-time jobs. In Santa Cruz County, where advances in farming have led to a longer growing season, there is a new population of permanent residents who were once seasonal workers. According to Economic Development Coordinator Barbara Mason, unemployment rises up to 6% in some areas during the four-month off season. In comparison to these problems, the supplemental income Etsy provides can seem small. But it’s a good step, argues George Haynes, a professor at Montana State University who has studied the value of home-based businesses. “They certainly contribute in bringing more resources into the household,” he says, “and that’s what you want to accomplish.”
In an Etsy-commissioned survey of the craft site's sellers, only 18% said they thought of their shops as full-time jobs. But 36% said they used the money to cover household expenses and 20% said they used it to contribute to savings.
Back in the '90s, Servon wrote a book about microenterprise programs that helped individuals start very small businesses. At the time, she criticized the strategy as a way to create full-time jobs because it can be difficult to make a good hourly wage by starting a business. But as supplemental income, she agrees that helping people start small Etsy shops could be meaningful. “It often provides a way for a household to boost itself over the poverty line,” she says of supplemental income. “[And] sometimes starting a small business gives them the set of skills that allows them to transition into the workforce.”
Even so, it can be difficult to quantify success of Craft Entrepreneurship. So far about 55 students in Rockford and New York City have gone through the class. They’ve opened 33 shops and together sold about 100 items. That’s not much--at least compared to how cities usually frame economic development.
But for Etsy, those aren’t the right terms. “A lot of it was just the psychological well-being of the people in the housing authority,” Mauriello says about the Rockford program. “How can you create a sense of hope for people who have been long-term unemployed or long-term on benefits to feel valuable and feel like members of communities?”
Back in the Harlem computer lab, the woman who makes stuffed animals by hand isn’t convinced she can charge $250, which factors in $10 an hour for her 20 hours of labor. Harper offers some suggestions for justifying the price, like using better materials, and notes that she could also create smaller items to sell in her shop at a higher profit margin. The crafter still looks uneasy as she types the new price into her Etsy profile.
“Don’t feel uncomfortable,” Harper tells her. “Feel happy. Feel proud.”