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Why Etsy investors should double down on the company’s purpose

The barbarians are at Etsy’s responsibly-sourced gates.

After ousting CEO Chad Dickerson for slow growth at the online craft marketplace, investors are pressuring the firm to act more like a conventional, shareholder-value-only company.

Not so fast, warns Ted Rheingold, who advises not just for-profit but for-large-profit-from-purpose companies. For companies like Etsy, Rheingold writes in FastCompany, purpose drives profit and their ability to beat competitors in the marketplace.

“Competitors can’t simply knock them off by matching product, price, and convenience,” he says. “They have to also match brand message, good governance, customer experience and satisfaction, supply-chain excellence, and company values.”

Impact investors get this; more traditional investors are beginning to. Bain Capital bought half of TOMS Shoes. Campbell Soup Co. acquired Plum Organics. “A customer would never know there was any leadership change,” says Rheingold.

He adds, “purpose businesses aren’t here to stay, they’re here to win.”

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