Etsy, a web-based market for distinctive, handmade, and classic gadgets, has
seen excessive progress over the past 5 years. Then the pandemic dramatically
modified customers’ habits, resulting in extra customers 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
visitors nearly 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 had been capable of 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 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 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 progress, it was obvious that the
prices would ramp up rapidly. It affected product groups’ agility as that they had
to plan far upfront 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 rapidly. After an evaluation, Mike and
his group 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 group. 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 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, 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
processes.
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 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 the same strategy to Agile as Etsy – being Agile
slightly than doing Agile. Etsy’s group was not trying to undertake a
methodology that blindly follows strict rituals and practices, and wished
a accomplice that bases its strategy on agile ideas 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 ideas
relating to worker care, variety, open-source, and expertise
sustainability.
The Thoughtworks group began by embedding into product groups, working with
each purchaser and vendor groups, on varied vital initiatives similar to cost
mannequin adjustments, Search Engine Optimization (search engine marketing), and a notification platform.
This enabled Thoughtworks to grasp how Etsy labored, created an instantaneous
influence on supply, and improved growth practices similar to automated
testing.
For Thoughtworks, Etsy was fairly totally different from the standard consumer.
They’re a completely digital firm, and their technical course of and product
practises are very mature. Not like most purchasers who interact Thoughtworks,
Etsy had no giant 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 deal with
their urgent initiatives. The tradition and ideas had been already very
aligned with Thoughtworks’ personal, so the partnership grew to become extra of an
trade 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 investigate the present product supply and discovery
course of. They analyzed the whole 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
slightly than who?. The Thoughtworks
group, as a result of they hadn’t lived by the issues, had been capable of carry
an goal outsider perspective.
There have been a lot of 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
follow of their strategy. A code change sitting in a repository and never
deployed to customers is just not useful, and successfully prices the corporate cash. Etsy
deploys a whole bunch of instances a day, with a 30-minute decide to manufacturing lead
time. - Options are prioritized utilizing knowledge: Product managers and knowledge analysts
collaborate to find out an anticipated worth, measured by KPI adjustments. If the
characteristic doesn’t ship sufficient worth versus its price, 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 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 adjustments main some product
managers to expres a need for larger possession over their product
choices.
Time to studying
The group created an enchancment program, based mostly on lean considering and the
concepts of Marty Cagan, who had just lately offered at Etsy. The management group was
studying his e-book Impressed.
I promise you that at the least half the concepts
in your roadmap aren’t going to ship what you hope. (By the way in which, the
actually good groups assume that at the least three quarters of the concepts gained’t
carry out like they hope.)
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 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.
- Bettering the time to market
- Bettering the effectiveness of merchandise (e.g. income, buyer
engagement) - Worker happiness
To influence the KPIs, they got here up with a lot of 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
group noticed is that the suggestions cycle could 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 knowledge to point out statistical relevance. A/B assessments would run for
months in lesser-used components of {the marketplace}.
To set your expectations, robust 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 is just not 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 scale back the Time to Studying metric, the PDC group utilized a lean UX
strategy. First, they began by rapidly 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 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 may improve the range and amount of experiments,
discovering concepts that confirmed extra worth.
Determine 1: Experiment validation course of
Blueprint for product supply
The PDC, at the side of product group leaders, got here up with a set of
product supply ideas and associated supply follow adjustments. The
practices included: smaller extra targeted tales, redesigning story partitions to
higher match the group course of, utilizing spikes to cut back technical uncertainty, and
higher methods of managing tech debt. They didn’t wish to take away the autonomy of
groups. Steady enchancment is an enormous a part of Etsy tradition. These practices
are supposed to be handled as wise defaults that may be tailored and improved
for every group’s particular context.
The PDC group first examined the follow adjustments on pilot product groups to
set up their effectiveness after which iterated. As soon as the follow
demonstrated an enchancment, the group added to a data base and supplied
gentle teaching to introduce the brand new practices to all product groups throughout
Etsy.
Lean Portfolio administration
Some giant initiatives had been nonetheless being carried out, although there was
not clear proof of the initiative creating worth. That is the standard sunk
price downside. To unravel this, the PDC group
steered taking a lean strategy to portfolio administration.
Our runway must be an inventory of hypotheses to check, not an inventory of
necessities to construct. After we reward our groups for his or her capacity to ship
necessities, it’s straightforward to quickly bloat our merchandise with pointless
options—resulting in elevated complexity, increased upkeep prices, and
restricted capacity to vary. Options delivered aren’t a measure of success,
enterprise outcomes are. Our runway is a collection of questions that we have to
take a look at to cut back uncertainty and enhance our understanding of progress
alternatives.
As a substitute of making prolonged undertaking specs and plans, the PDC group
coached product groups to develop consequence statements for every initiative. With
consequence statements, beginning with a buyer or enterprise consequence permits the
group to experiment with many alternative concepts to realize the result by tying
them to measurable KPIs. The much less exact an consequence is, together with its KPIs,
the tougher it’s to specify. When getting ready for attainable initiatives, every
product group created a two-page temporary summarizing the result, the measurable
influence, and the preliminary funding required.
The chief group prioritized the result statements, and every assertion
was seen as a “guess” amongst a portfolio. Impressed by the Lean Worth Tree
idea, the manager group would follow an everyday cadence to find out if a
guess was paying off, giving them the chance to pivot early.
Determine 2: An instance initiative assertion
Stronger product & engineering collaboration
One other enchancment was to incorporate engineers early within the product ideation
course of and to have them be a part of person suggestions periods. The group examined
engineers becoming a member of the speculation technology and validation periods and
working intently with designers throughout design sprints. The outcomes of the take a look at
confirmed an a variety of benefits. Engineers improved their understanding of the
buyer, constructing empathy for his or her wants. They may present on-the-spot
suggestions on the feasibility of an strategy and rapidly create prototypes to
exhibit concepts to customers. Cross-functional engagement allowed engineers to
contribute a lot of nice concepts that made it to the product.
After the preliminary PDC initiative Etsy continued to strengthen the
collaboration between teams. At each degree of the group, product and
engineering are companions, which implies they’re capable of have wholesome trade-off
discussions. The platform group expanded the usage of product managers for
infrastructure and developer tooling groups – encouraging groups to consider
technical capabilities as merchandise and end-users being Etsy engineers. The
technical product managers do analysis and prioritization actions, simply as
they’d for a buyer product.
What was the influence of product supply tradition?
Testing with pilot groups indicated that the Time to Studying went from 50
days to five days. In the course of the pilot, one product supervisor mentioned, “What I really like about
the [direct user research sessions] pilot is that it lets us take a look at our concepts
sooner, it was very nice to not spend as a lot time diving deep into
one thing that we didn’t even know we had been going to make use of.” An initiative on
stock high quality that was predicted to ship a seven million greenback income
improve as an alternative delivered eleven million {dollars} in incremental worth utilizing
the PDC steered enhancements. Following this pilot success, the group coached
the whole product growth group on the product supply strategy.
In line with Mike Fisher, “It is vitally arduous to isolate the advantages of a
course of change on a company of a number of hundred engineers since we don’t
run A/B experiments of this sort. Nevertheless, we did have a look at excessive degree
productiveness metrics after having PDC applied for over 2 years, and all of
our metrics had been very constructive. We had improved our velocity by doing this
work, and we had been capable of produce finally extra advantages for the patrons and
sellers – extra options, higher search, higher processes; the entire
market grew to become higher for patrons and sellers and that was the aim.”
