Introducing a product supply tradition at Etsy

Etsy, an internet market for distinctive, handmade, and classic gadgets, has
seen excessive development over the past 5 years. Then the pandemic dramatically
modified buyers’ habits, resulting in extra customers purchasing on-line. As a
end result, the Etsy market grew from 45.7 million patrons on the finish of
2019 to 90.1 million patrons (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 virtually 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 offer a glorious buyer
expertise. This text and the subsequent type 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 Art of Scalability
and Scalability Rules.

Etsy relied on bodily {hardware} in two information 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 they’d
to plan far prematurely for capability. As well as, the info facilities had been
based mostly in a single state, which represented an availability threat. It was clear
they wanted to maneuver onto the cloud shortly. After an evaluation, Mike and
his workforce selected the Google Cloud Platform (GCP) because the cloud accomplice and
began to plan a program to maneuver their
many methods onto the cloud.

Whereas the cloud migration was taking place, Etsy was rising its enterprise and
its workforce. Mike recognized the product supply course of as being one other
potential scaling bottleneck. The autonomy afforded to product groups had
triggered a difficulty: every workforce was delivering in numerous methods. Becoming a member of a workforce
meant studying a brand new set of practices, which was problematic as Etsy was
hiring many new individuals. As well as, they’d 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 accomplice

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

Thoughtworks has an analogous strategy to Agile as Etsy – being Agile
relatively than doing Agile. Etsy’s workforce was not seeking to undertake a
methodology that blindly follows strict rituals and practices, and wished
a accomplice that bases its strategy on agile rules and tradition.
Thoughtworks is thought 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 rules
concerning worker care, range, open-source, and know-how

The Thoughtworks workforce began by embedding into product groups, working with
each purchaser and vendor groups, on varied vital initiatives corresponding to fee
mannequin modifications, Search Engine Optimization (search engine marketing), and a notification platform.
This enabled Thoughtworks to know how Etsy labored, created a direct
impression on supply, and improved growth practices corresponding to automated

For Thoughtworks, Etsy was fairly completely different from the everyday consumer.
They’re a completely 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 massive transformation to undertake, and no ingrained habits
that wanted a serious shift. What they had been in search of was outdoors perspective
and supplementive abilities, to assist them incrementally enhance and sort out
their urgent initiatives. The tradition and rules had been already very
aligned with Thoughtworks’ personal, so the partnership turned extra of an
trade of concepts drawn from completely different experiences.

Scaling Product Supply and Discovery

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

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

There have been various issues Etsy was doing very 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
    apply of their strategy. A code change sitting in a repository and never
    deployed to customers will not be useful, and successfully prices the corporate cash. Etsy
    deploys lots of of instances a day, with a 30-minute decide to manufacturing lead
  • Options are prioritized utilizing information: Product managers and information analysts
    collaborate to find out an anticipated worth, measured by KPI modifications. If the
    characteristic doesn’t ship sufficient worth versus its value, as evidenced by an A/B
    check, it’s not rolled out, and the code is eliminated.

The workforce additionally uncovered alternatives for enchancment:

  • Every workforce was doing supply in numerous 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 various initiatives that had not created worth as
    they anticipated. For instance, Etsy tried a present wrap characteristic that had
    decrease than anticipated adoption charges by sellers and patrons.
  • Previous to 2018, Etsy had been by means of a transitional interval, with
    pivots in product technique and management modifications main some product
    managers to expres a want for higher possession over their product

Time to studying

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

I promise you that at the very least half the concepts
in your roadmap aren’t going to ship what you hope. (By the best way, the
actually good groups assume that at the very least three quarters of the concepts received’t
carry out like they hope.)

Marty Cagan, Inspired (p19)

After some preliminary analysis the workforce got here up with a metric they referred to as Time
to Studying – the time it took for a product workforce to validate an concept with a
buyer and acquire a greater understanding of its worth. They’d a baseline of
50 days that they wished to cut back.

They had been additionally different metrics.

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

To impression the KPIs, they got here up with various resolution hypotheses:

Lightweight prototypes that incorporate extra direct person analysis

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

To set your expectations, robust groups usually
check many product concepts every week—on the order of 10 to twenty or extra per week. I
wish 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, Inspired (p27)

To scale back the Time to Studying metric, the PDC workforce utilized a lean UX
strategy. First, they began by shortly creating lo-fi prototypes and
instantly exhibiting them to customers. Second, the workforce elevated person suggestions
classes to each two weeks and diminished the extent of ceremony. Third, they
created a dual-track system, with a design and analysis workforce regularly
working forward of a supply workforce. The thought was to effectively acquire confidence
in an concept earlier than it qualifies for an A/B check. By lowering 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 focus on the position of lean portfolio administration, stronger product and
engineering collaboration, and assess the impression of a product supply tradition.

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