Startups Get an Unusual Message: Go Slow, Think Small

Etsy-backed business-education program counsels founders to focus on sustainability before growth.

By LINDSAY GELLMAN

June 1, 2016 1:55 p.m. ET

Startup founders often feel pressure to chase rapid growth at any cost. So it is notable that one new program urges them to think small.

In an era of startup accelerators, the Good Work Institute, a free business-education program for entrepreneurs with modest-sized firms, might best be called a decelerator. Run by Etsy.org, the philanthropic offshoot of online craft marketplace Etsy Inc., the program counsels founders to focus on virtues like sustainability rather than new storefronts and staff. It also cautions them against “just growing to grow,” in the words of Matthew Stinchcomb,Etsy.org’s executive director and the company’s former sustainability chief.

The philosophy is diametrically opposed to that of most current programs for entrepreneurs, who typically come in seeking help on growing their ventures.

“Even the most well-intentioned business education is just teaching people to do work that’s less bad” for the community and the environment, said Mr. Stinchcomb.

While many business-school deans would dispute that characterization, it is fair to say that few M.B.A. programs involve team-building exercises at the Brooklyn Botanic Garden, in which participants instruct partners to close their eyes, then guide them on a walk to strengthen communication skills and appreciation for their surroundings. Other Good Work Institute sessions cover investing in environmental initiatives, fair wages for staff and community involvement.

The ethos reflects Etsy’s main mission of boosting small, online merchants as it works to limit the presence of mass-produced items on the site. The online crafts bazaar, born in a Brooklyn apartment in 2005, went public in April last year to the tune of a $1.8 billion valuation. The company said it “democratizes access to entrepreneurship” by offering low-risk opportunities to start small businesses.

Entrepreneurs in the Etsy.org program don’t necessarily sell their wares on the company marketplace.

Etsy issued 188,235 shares of its common stock and gave $300,000 from its initial public offering to fund the independent nonprofit. Twenty-two entrepreneurs took part in the organization’s inaugural program, which took place on weekends over a six-month period in New York City last year. The course included instruction in bookkeeping basics, talks by local business owners and group discussions.

This year’s program, which begins in June, will be based at sites throughout New York’s Hudson Valley. From a pool of about 80 applicants, Etsy.org chose about 30 founders based on the strength of their business ideas and the element of diversity they brought to the group.

The program isn’t for founders dreaming of building the next Uber Technologies Inc. or Chipotle Mexican Grill Inc., said Mr. Stinchcomb, adding that he hopes to add a unit to the program for founders to “learn how to slow down.”

Etsy.org’s gospel of small, slow expansion is jolting for some founders, who are typically encouraged to think big.

“We’re told it’s all about growth, scaling, getting bigger and bigger,” said Jeffrey Monteiro, a participant in the first class and principal of J.M. Generals, a maker of home goods like blankets and cushions. Mr. Monteiro said he learned to strive for thoughtful growth. For J.M. Generals, that meant re-evaluating the company’s shipping and fulfillment and switching to more environmentally friendly packaging. Since the program ended, he has been delivering more items via bike messengers and the U.S. Postal Service, rather than large commercial shippers.