Introducing a product supply tradition at Etsy

Etsy, a web based market for distinctive, handmade, and classic objects, has
seen excessive development during the last 5 years. Then the pandemic dramatically
modified consumers’ habits, resulting in extra shoppers purchasing on-line. As a
consequence, the Etsy market grew from 45.7 million consumers on the finish of
2019 to 90.1 million consumers (97%) on the finish of 2021 and from 2.5 to five.3
million (112%) sellers in the identical interval.

The expansion massively elevated demand on the technical platform, scaling
visitors nearly 3X in a single day. And Etsy had signifcantly extra clients for
whom it wanted to proceed delivering nice experiences. To maintain up with
that demand, they needed to scale up infrastructure, product supply, and
expertise drastically. Whereas the expansion challenged groups, the enterprise was by no means
bottlenecked. Etsy’s groups had been capable of ship new and improved
performance, and {the marketplace} continued to supply a wonderful buyer
expertise. This text and the following kind the story of Etsy’s scaling technique.

Etsy’s foundational scaling work had began lengthy earlier than the pandemic. In
2017, Mike Fisher joined as CTO. Josh Silverman had just lately joined as Etsy’s
CEO, and was establishing institutional self-discipline to usher in a interval of
development. Mike has a background in scaling high-growth corporations, and alongside
with Martin Abbott wrote a number of books on the subject, together with The Artwork of Scalability
and Scalability Guidelines.

Etsy relied on bodily {hardware} in two knowledge facilities, presenting a number of
scaling challenges. With their anticipated development, it was obvious that the
prices would ramp up shortly. It affected product groups’ agility as that they had
to plan far prematurely for capability. As well as, the info facilities had been
based mostly in a single state, which represented an availability danger. It was clear
they wanted to maneuver onto the cloud shortly. After an evaluation, Mike and
his group selected the Google Cloud Platform (GCP) because the cloud companion and
began to plan a program to maneuver their
many techniques onto the cloud

Whereas the cloud migration was taking place, Etsy was rising its enterprise and
its group. Mike recognized the product supply course of as being one other
potential scaling bottleneck. The autonomy afforded to product groups had
brought on a problem: every group was delivering in several methods. Becoming a member of a group
meant studying a brand new set of practices, which was problematic as Etsy was
hiring many new folks. As well as, that they had observed a number of product
initiatives that didn’t repay as anticipated. These indicators led management
to re-evaluate the effectiveness of their product planning and supply

Deciding on a companion

Etsy had by no means labored with a software program growth consultancy. To have the option
to scale product supply and herald some outdoors experience, they began
in search of a vendor. After an intensive search, they chose Thoughtworks,
primarily as a result of they perceived an in depth cultural match and deep alignment
relating to trendy software program growth.

Thoughtworks has the same strategy to Agile as Etsy – being Agile
somewhat than doing Agile. Etsy’s group was not seeking to undertake a
methodology that blindly follows strict rituals and practices, and needed
a companion that bases its strategy on agile ideas and tradition.
Thoughtworks is understood for technical excellence and management in DevOps,
Steady Integration, and Steady Supply, all of which Etsy depends
on closely. As well as, the 2 corporations shared related ideas
relating to worker care, variety, open-source, and know-how

The Thoughtworks group began by embedding into product groups, working with
each purchaser and vendor groups, on numerous important initiatives resembling fee
mannequin modifications, Search Engine Optimization (web optimization), and a notification platform.
This enabled Thoughtworks to grasp how Etsy labored, created a right away
influence on supply, and improved growth practices resembling automated

For Thoughtworks, Etsy was fairly totally different from the everyday shopper.
They’re a totally digital firm, and their technical course of and product
practises are very mature. In contrast to most shoppers who have interaction Thoughtworks,
Etsy had no giant transformation to undertake, and no ingrained habits
that wanted a significant shift. What they had been in search of was outdoors perspective
and supplementive expertise, to assist them incrementally enhance and sort out
their urgent initiatives. The tradition and ideas had been already very
aligned with Thoughtworks’ personal, so the partnership turned extra of an
alternate of concepts drawn from totally different experiences.

Scaling Product Supply and Discovery

Thoughtworks and Etsy shaped a cross-functional Product Supply Tradition
(PDC) group to research the present product supply course of. They seemed throughout
all the software program growth worth stream and did a root trigger evaluation
into the complaints of managers and group members.

Thoughtworks and Etsy shaped a cross-functional Product Supply
Tradition (PDC) group to research the present product supply and discovery
course of. They analyzed all the software program growth worth stream,
trying intently on the complaints of managers and group members. Chosen
occasions had been replayed to achieve a deep understanding of “how” it occurred
somewhat than who?. The Thoughtworks
group, as a result of they hadn’t lived by way of the issues, had been capable of convey
an goal outsider perspective.

There have been numerous issues Etsy was doing rather well:

  • Cross-functional groups: They structured their groups round “4 desk legs”:
    Product, Design, Engineering, and Analytics. All planning and supply practices
    occur with collaboration among the many teams.
  • Incremental supply of worth to customers: Steady supply is the core
    observe of their strategy. A code change sitting in a repository and never
    deployed to customers will not be worthwhile, and successfully prices the corporate cash. Etsy
    deploys lots of of occasions a day, with a 30-minute decide to manufacturing lead
  • Options are prioritized utilizing knowledge: Product managers and knowledge analysts
    collaborate to find out an anticipated worth, measured by KPI modifications. If the
    function doesn’t ship sufficient worth versus its value, as evidenced by an A/B
    check, it isn’t rolled out, and the code is eliminated.

The group additionally uncovered alternatives for enchancment:

  • Every group was doing supply in several methods, having disparate processes
    and rituals, making onboarding new workers and altering groups troublesome. Some
    groups had been utilizing a course of like Scrum, whereas others didn’t use any formal
    course of.
  • There have been numerous initiatives that had not created worth as
    they anticipated. For instance, Etsy tried a present wrap function that had
    decrease than anticipated adoption charges by sellers and consumers.
  • Previous to 2018, Etsy had been by way of a transitional interval, with
    pivots in product technique and management modifications main some product
    managers to expres a need for larger possession over their product

Time to studying

The group created an enchancment program, based mostly on lean pondering and the
concepts of Marty Cagan, who had just lately introduced at Etsy. The management group was
studying his ebook Impressed.

I promise you that not less than half the concepts
in your roadmap will not be going to ship what you hope. (By the way in which, the
actually good groups assume that not less than three quarters of the concepts received’t
carry out like they hope.)

Marty Cagan, Impressed (p19)

After some preliminary analysis the group got here up with a metric they known as Time
to Studying – the time it took for a product group to validate an thought with a
buyer and achieve a greater understanding of its worth. That they had a baseline of
50 days that they needed to scale back.

They had been additionally different metrics.

  • Enhancing the time to market
  • Enhancing the effectiveness of merchandise (e.g. income, buyer
  • Worker happiness

To influence the KPIs, they got here up with numerous resolution hypotheses:

Lightweight prototypes that incorporate extra direct person analysis

Etsy has sturdy experimentation infrastructure and analytics capabilities.
They run many concurrent A/B exams on {the marketplace}. The issue the PDC
group noticed is that the suggestions cycle could be fairly gradual. For an thought to be
prepared for an A/B check it needed to be close to production-level high quality. It additionally had
to have sufficient knowledge to indicate statistical relevance. A/B exams would run for
months in lesser-used components of {the marketplace}.

To set your expectations, sturdy groups usually
check many product concepts every week—on the order of 10 to twenty or extra per week. I
need to emphasize that these are experiments, sometimes run utilizing prototypes.
A prototype will not be one thing that’s prepared for prime time and definitely not
one thing your organization would attempt to promote and stand behind. However they’re
immensely helpful, as they’re all about studying quick and low-cost.

Marty Cagan, Impressed (p27)

To cut back the Time to Studying metric, the PDC group utilized a lean UX
strategy. First, they began by shortly creating lo-fi prototypes and
instantly exhibiting them to customers. Second, the group elevated person suggestions
periods to each two weeks and diminished the extent of ceremony. Third, they
created a dual-track system, with a design and analysis group frequently
working forward of a supply group. The thought was to effectively achieve confidence
in an thought earlier than it qualifies for an A/B check. By decreasing the price of
experimentation, they might improve the variability and amount of experiments,
discovering concepts that confirmed extra worth.

Determine 1: Experiment validation course of

We’re releasing this text in two installments. The second installment
will talk about the position of lean portfolio administration, stronger product and
engineering collaboration, and assess the influence of a product supply tradition.

To search out out once we publish the following installment subscribe to the
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