Introducing a product supply tradition at Etsy

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Etsy, an internet 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 buying on-line. As a
consequence, 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
site 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 in a position to ship new and improved
performance, and {the marketplace} continued to offer a wonderful buyer
expertise. This text and the subsequent 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 not too long ago 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 rapidly. It affected product groups’ agility as they’d
to plan far upfront for capability. As well as, the information facilities had been
primarily based in a single state, which represented an availability threat. It was clear
they wanted to maneuver onto the cloud rapidly. After an evaluation, Mike and
his group selected the Google Cloud Platform (GCP) because the cloud associate and
began to plan a program to move their
many systems onto the cloud

Whereas the cloud migration was occurring, 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 about a difficulty: every group was delivering in numerous 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, 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

Choosing a associate

Etsy had by no means labored with a software program improvement consultancy. To find a way
to scale product supply and usher in some exterior experience, they began
searching for a vendor. After an intensive search, they chose Thoughtworks,
primarily as a result of they perceived an in depth cultural match and deep alignment
concerning fashionable software program improvement.

Thoughtworks has the same method 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 wished
a associate that bases its method 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 comparable rules
concerning worker care, range, open-source, and know-how

The Thoughtworks group began by embedding into product groups, working with
each purchaser and vendor groups, on varied vital initiatives akin to cost
mannequin modifications, Search Engine Optimization (web optimization), and a notification platform.
This enabled Thoughtworks to know how Etsy labored, created a right away
influence on supply, and improved improvement practices akin to automated

For Thoughtworks, Etsy was fairly completely different from the standard consumer.
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 massive transformation to undertake, and no ingrained habits
that wanted a significant shift. What they had been looking for was exterior perspective
and supplementive expertise, 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 grew to become 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) group to research the present product supply course of. They appeared throughout
the complete software program improvement 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 the complete software program improvement worth stream,
trying carefully on the complaints of managers and group members. Chosen
occasions had been replayed to realize a deep understanding of “how” it occurred
rather than who?. The Thoughtworks
group, as a result of they hadn’t lived by way of the issues, had been in a position to carry
an goal outsider perspective.

There have been numerous 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
    observe of their method. A code change sitting in a repository and never
    deployed to customers will not be priceless, and successfully prices the corporate cash. Etsy
    deploys a whole bunch 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
    take a look at, it’s not rolled out, and the code is eliminated.

The group additionally uncovered alternatives for enchancment:

  • Every group was doing supply in numerous methods, having disparate processes
    and rituals, making onboarding new staff and altering groups tough. 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 characteristic that had
    decrease than anticipated adoption charges by sellers and patrons.
  • 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 higher possession over their product

Time to studying

The group created an enchancment program, primarily based on lean considering and the
concepts of Marty Cagan, who had not too long ago offered at Etsy. The management group was
studying his ebook Impressed.

I promise you that no less than half the concepts
in your roadmap will not be going to ship what you hope. (By the best way, the
actually good groups assume that no less than three quarters of the concepts received’t
carry out like they hope.)

Marty Cagan, Inspired (p19)

After some preliminary analysis the group got here up with a metric they referred to as Time
to Studying – the time it took for a product group 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 scale back.

They had been additionally taking a look at different metrics.

  • Bettering the time to market
  • Bettering 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 consumer analysis

Etsy has sturdy experimentation infrastructure and analytics capabilities.
They run many concurrent A/B checks on {the marketplace}. The issue the PDC
group noticed is that the suggestions cycle may be fairly gradual. For an concept to be
prepared for an A/B take a look at it needed to be close to production-level high quality. It additionally had
to have sufficient information to point out statistical relevance. A/B checks would run for
months in lesser-used elements of {the marketplace}.

To set your expectations, sturdy groups usually
take a look at many product concepts every week—on the order of 10 to twenty or extra per week. I
wish to emphasize that these are experiments, usually run utilizing prototypes.
A prototype will not be one thing that’s prepared for prime time and positively 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 cut back the Time to Studying metric, the PDC group utilized a lean UX
method. First, they began by rapidly creating lo-fi prototypes and
instantly exhibiting them to customers. Second, the group elevated consumer suggestions
classes 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 concept was to effectively acquire confidence
in an concept earlier than it qualifies for an A/B take a look at. By lowering the price of
experimentation, they might enhance 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 function 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 subsequent installment subscribe to the
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