Of course, Etsy has its detractors too. When the site began to take off, "we were in over our heads," Kalin says. Some Etsy merchants and shoppers complained about buggy technology, poor customer service, and unreasonable treatment of sellers. Rival sites with names like iCraft and ArtFire have sprung up to pick off the disgruntled. Last year, Kalin hired help: Maria Thomas, former head of digital media at National Public Radio, as chief executive officer along with Chad Dickerson, a former Yahoo! executive, as chief technology officer. Kalin recently stepped away from the day-to-day operation of Etsy. He is still a major shareholder and is chairman of the board.

Now it's on to the next project for the peripatetic Kalin. His new venture is a business incubator called Parachutes. It's a 9,000-square-foot warehouse space where Kalin has gathered nine of his favorite Etsy sellers to help them grow their tiny crafts operations into bona fide small businesses.

In his own corner of the warehouse, Kalin is turning IKEA kitchen countertops into stereo speakers and reclaimed wood into desks.

He has also started sewing some of his own clothes. "I have to make something physical at least once a month," says the cyberspace entrepreneur, "or I go crazy."

Getting Ahead with Rob Kalin

What's the origin of the name?
I wanted a nonsense word because I wanted to build the brand from scratch. I was watching Fellini's 8½ and writing down what I was hearing. In Italian, you say etsi a lot. It means "oh, yes." And in Latin, it means "and if."

What's the best piece of business advice you've ever gotten?
If you're headed down the wrong road, turn around. It was from Caterina Fake [the cofounder of Flickr]. Early on, we were looking to hire a CEO and had made an informal commitment to someone, but it didn't feel right to me. Caterina said, "If you don't feel that it's right, be honest. Don't do it and then tell yourself it will be better in six months." There's a lot that goes into making a successful business that you can't quantify, like your gut and your hunches. I didn't hire the person.

What's the mission behind your new venture?
The focus is education and community. When you're one independent craftsperson working alone, making $15,000 to $20,000 a year, there's a glass ceiling. You're always reinventing the wheel with all this stuff like accounting, taxes, shipping, and insurance. What if an accountant comes in and teaches them all about bookkeeping, or we help find apprentices for them, or arrange for a textiles factory to bring their end bolts here? You need centralization to make that work. We're building a system to teach people how to start a really small business. There is a lightness in starting something new.