Can Rob Kalin Scale Etsy?

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Etsy had grown impressively under Thomas—gross merchandise sales doubled, and the company reached profitability in 2009—but the company had not addressed many of the persistent complaints from sellers about customer support and the performance of the site.

Kalin doubled Etsy's staff, adding more engineers and customer service reps. This year, the company will hire several dozen more reps to staff a call center in an old cannonball factory in Hudson, New York, not far from the country house in which Kalin still does much of the design work for Etsy's website. The goal is to treat Etsy sellers with the same level of attention that Zappos lavishes on shoe buyers.

Meanwhile, the site has been adding features at a furious pace. In December, Etsy unveiled social networking functions similar to those of Facebook that allow users to make friends with other Etsy members and keep track of their friends' favorite shops and purchases. There's also the new gift service, which looks at the Facebook profiles of your friends and suggests items they might like, and something called Taste Test, which asks you to rate a smattering of random items and then suggests things to buy. The results aren't perfect—on a recent visit, Etsy recommended that I buy a bizarre wooden pineapple tray for $7—but the tool is a novel way to find products that you might not otherwise see. You are invited, of course, to share the recommendations with your friends on Facebook and Twitter and with other Etsy members.

Kalin hopes that these moves will make it easier for buyers to discover new products, but he also sees the new emphasis on social networking as part of a deepening of Etsy's mission that goes beyond buying and selling. "On Facebook, you're not going to connect with people who have different religious views, different political views, different tastes," says Kalin. "Etsy adds a whole other layer on top of that: If a person who has different religious or political views is making me a custom sweater, I'm going to have this long conversation that I would have never had. To me, that's a beautiful thing."

As I was interviewing people for this article, I repeatedly heard that Kalin could be dangerous at close range. "He can be a very difficult person," says Matt Stinchcomb, the head of Etsy's European operations and a longtime friend. "I don't mean that in a negative way. He's just like a lot of really smart people who don't want to suffer the rest of us." In my own experience, I found Kalin infuriating, inscrutable, and yet impossible to hate. You can't help admiring his passion, and the way he is determined to put his customers front and center.

This is the effect that Etsy has on just about everyone. Yes, a lot of stuff on Etsy is junk; but it's strangely compelling junk. (For proof, head to the Sold section of Regretsy.com and check out the Chicken Poncho and the Goat Coat, which went for $15 and $29, respectively.) Yes, Etsy's marketing promises reek of New Age hucksterism, but then again, the company is also wonderfully new and idealistic. And huge: Etsy has five million monthly visitors; the next closest competitor, ArtFire, has 500,000, according to comScore. "They would have to do something horrible to mess it up," says Maguire. "Etsy has lived through two different management styles—and it grew all the same. The community is there. It's not going anywhere."

At the end of January, I met Eileen Tepper, an actress who has been working at a law firm and selling $22 crocheted hats on Etsy to make ends meet. Tepper, an Etsy member since 2005, told me that most of the sellers she knows are disappointed by the company's latest social networking initiatives. "A lot of users are angry," she says. "They want Etsy to be a venue to sell things; they don't want it to be Facebook."

But as we talk, it becomes clear that whatever reservations she has about Etsy, they pale in comparison to her love for what Kalin has created. The previous month, Tepper made a collection of rainbow baby blankets. She thought they would be a huge hit, but, to her dismay, she didn't sell a single one during the holiday season.

That was, she says, until today, when she got an e-mail from Etsy informing her that a customer had finally ordered a blanket. "Everything sells," she says, sounding genuinely surprised by the turn of events. "I'm so happy." Out of tens of thousands of baby blankets on the site, her baby blanket had been chosen, and would be shipped from Tepper's home in the Bronx to a military base in North Carolina.

The enormity of that small act—an individual buying something she made with her own hands—never stops being amazing, even if the financial reward is small. "My little hobby feels so big," Tepper says. "You can't get that at Walmart."

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Senior contributing writer Max Chafkin has profiled companies such as Yelp, Zappos, Twitter, Threadless, and Tesla for the magazine. He lives in Brooklyn, New York. @chafkin