"You couldn't run Etsy without AI," Josh Silverman said on the sidelines of the Web Summit tech event in Lisbon.

Etsy was formed almost 20 years ago and is best known for its soft furnishings and often knitted knick-knacks, but it has grown into a multi-billion-dollar e-commerce giant with seven million sellers and more than 90 million buyers.

Back in the 2000s, eBay was probably its main competitor. Nowadays, Silverman points out that competition comes from all angles.

E-commerce giants like Amazon, Temu or Shein are the obvious ones, but high street furniture stores are also in the mix.

On this kind of scale, Silverman said, AI is indispensable for anything from policing the products being offered for sale, to making sure the best matches are shown in searches.

"The classic search engine can't tell the difference between a wedding dress and a wedding dress hanger," he said.

"AI can actually understand the difference... and show you only wedding dresses."

He said it needed an "almost human level" understanding of language to achieve, which is why AI was being deployed.

But a good portion of Etsy's sellers are not always appreciative of the moves the firm takes to make it more competitive.

- 'They're artists' -

Two years ago, Etsy raised its commission from five percent to 6.5 percent -- still an "excellent deal", Silverman says -- and sparked a protest that saw thousands of sellers down tools.

They put themselves on "vacation mode" and stopped activities to remind the management that they were the lifeblood of the platform.

"On most other platforms, the sellers are business people just looking for something to sell and they'll change from selling X to selling Y in a heartbeat," he said.

"Our sellers are artists, creators. Most of them are not passionate to be business people, they're passionate to be artists."

Silverman stresses Etsy regularly reaches out to its sellers and points out that 99.5 percent of sellers did not go on strike.

Etsy was founded in 2005 as a platform exclusively for handmade goods -- though that claim has long been scrutinised.

After it listed on the stock exchange in 2015, a group of investors sued, arguing that five percent of the goods on offer were fake or infringed copyright.

Part of the anger in 2022 was directed at what some sellers felt was the creeping acceptance of mass-produced goods.

More recently, the firm has had problems with AI-generated products and listings, responding to that challenge with new guidelines for sellers.

AI-generated art and other products were not banned, which Silverman acknowledged was a decision that came after a "robust" internal debate.

- 'Bigger pie' -

Silverman, who took over as CEO in 2017 after boardroom unrest and the fallout from the IPO, speaks softly and sometimes poetically about his business.

Buying for other people is a "gifting experience" that "brings delight", Etsy sellers are like "blades of grass in a thunderstorm".

But the 55-year-old is no bleeding heart.

He has a long background as a tech executive and venture capitalist, as CEO of Skype and holding senior posts in other firms.

And his poetic turns of phrase do not always mix well with CEO duties.

He was criticised last year when he deployed an extended sea-based metaphor -- "the waters may be rough right now, but there's no other ship I'd rather be on" -- while announcing he was cutting 11 percent of Etsy's workforce.

Overall, though, he is adamant that the interests of the company and its sellers are the same.

"Our sellers have hired us to help them sell more things and that is what we focus on doing," he said.

"We make the pie bigger for everyone."

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