Introducing a product supply tradition at Etsy
7 min read
Etsy, an internet market for distinctive, handmade, and classic objects, has
seen excessive progress over the past 5 years. Then the pandemic dramatically
modified consumers’ habits, resulting in extra shoppers procuring 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
site visitors virtually 3X in a single day. And Etsy had signifcantly extra prospects 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 have been in a position to 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
progress. Mike has a background in scaling high-growth firms, 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 progress, it was obvious that the
prices would ramp up rapidly. It affected product groups’ agility as that they had
to plan far prematurely for capability. As well as, the information facilities have 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 crew selected the Google Cloud Platform (GCP) because the cloud accomplice 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 crew. Mike recognized the product supply course of as being one other
potential scaling bottleneck. The autonomy afforded to product groups had
precipitated a difficulty: every crew was delivering in numerous methods. Becoming a member of a crew
meant studying a brand new set of practices, which was problematic as Etsy was
hiring many new individuals. As well as, that they had seen 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
processes.
Choosing a accomplice
Etsy had by no means labored with a software program growth consultancy. To have the ability
to scale product supply and usher in some outdoors experience, they began
in search of 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
relating to fashionable software program growth.
Thoughtworks has an analogous method to Agile as Etsy – being Agile
slightly than doing Agile. Etsy’s crew was not seeking to undertake a
methodology that blindly follows strict rituals and practices, and needed
a accomplice 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 firms shared related rules
relating to worker care, range, open-source, and know-how
sustainability.
The Thoughtworks crew began by embedding into product groups, working with
each purchaser and vendor groups, on varied important initiatives comparable to cost
mannequin modifications, Search Engine Optimization (search engine marketing), and a notification platform.
This enabled Thoughtworks to grasp how Etsy labored, created a direct
impression on supply, and improved growth practices comparable to automated
testing.
For Thoughtworks, Etsy was fairly completely different from the standard consumer.
They’re a completely digital firm, and their technical course of and product
practises are very mature. In contrast to most shoppers who interact Thoughtworks,
Etsy had no massive transformation to undertake, and no ingrained habits
that wanted a significant shift. What they have been in search of was outdoors perspective
and supplementive expertise, to assist them incrementally enhance and deal with
their urgent initiatives. The tradition and rules have been already very
aligned with Thoughtworks’ personal, so the partnership grew to become extra of an
change of concepts drawn from completely different experiences.
Scaling Product Supply and Discovery
Thoughtworks and Etsy shaped a cross-functional Product Supply Tradition
(PDC) crew to investigate the present product supply course of. They appeared throughout
all the software program growth worth stream and did a root trigger evaluation
into the complaints of managers and crew members.
Thoughtworks and Etsy shaped a cross-functional Product Supply
Tradition (PDC) crew to investigate the present product supply and discovery
course of. They analyzed all the software program growth worth stream,
wanting intently on the complaints of managers and crew members. Chosen
occasions have been replayed to realize a deep understanding of “how” it occurred
rather than who?. The Thoughtworks
crew, as a result of they hadn’t lived by the issues, have been in a position to carry
an goal outsider perspective.
There have been quite a lot of 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
apply 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 tons of of occasions a day, with a 30-minute decide to manufacturing lead
time. - 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 crew additionally uncovered alternatives for enchancment:
- Every crew was doing supply in numerous methods, having disparate processes
and rituals, making onboarding new staff and altering groups troublesome. Some
groups have been utilizing a course of like Scrum, whereas others didn’t use any formal
course of. - There have been quite a lot of 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 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
choices.
Time to studying
The crew created an enchancment program, primarily based on lean pondering and the
concepts of Marty Cagan, who had just lately introduced at Etsy. The management crew was
studying his guide Impressed.
I promise you that a minimum of half the concepts
in your roadmap should not going to ship what you hope. (By the way in which, the
actually good groups assume that a minimum of three quarters of the concepts gained’t
carry out like they hope.)
After some preliminary analysis the crew got here up with a metric they referred to as Time
to Studying – the time it took for a product crew to validate an concept with a
buyer and acquire a greater understanding of its worth. That they had a baseline of
50 days that they needed to cut back.
They have been additionally taking a look at different metrics.
- Enhancing the time to market
- Enhancing the effectiveness of merchandise (e.g. income, buyer
engagement) - Worker happiness
To impression the KPIs, they got here up with quite a lot of answer 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
crew noticed is that the suggestions cycle could be fairly sluggish. 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 indicate statistical relevance. A/B exams would run for
months in lesser-used components 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, sometimes 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.
To cut back the Time to Studying metric, the PDC crew utilized a lean UX
method. First, they began by rapidly creating lo-fi prototypes and
instantly displaying them to customers. Second, the crew elevated person suggestions
periods to each two weeks and decreased the extent of ceremony. Third, they
created a dual-track system, with a design and analysis crew regularly
working forward of a supply crew. The concept was to effectively acquire confidence
in an concept earlier than it qualifies for an A/B take a look at. 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
