Etsy, a web based market for distinctive, handmade, and classic objects, has
seen excessive development over the past 5 years. Then the pandemic dramatically
modified consumers’ habits, resulting in extra customers purchasing on-line. As a
outcome, 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 have been in a position to ship new and improved
performance, and {the marketplace} continued to supply a wonderful buyer
expertise. This text and the following 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 Artwork of Scalability
and Scalability Guidelines.
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 that they had
to plan far prematurely for capability. As well as, the information facilities have been
based mostly 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 associate and
began to plan a program to maneuver their
many methods onto the cloud.
Whereas the cloud migration was occurring, 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
triggered 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 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 associate
Etsy had by no means labored with a software program growth consultancy. To have the ability
to scale product supply and herald some exterior experience, they began
in search of a vendor. After an in depth search, they chose Thoughtworks,
primarily as a result of they perceived a detailed cultural match and deep alignment
relating to trendy software program growth.
Thoughtworks has the same strategy to Agile as Etsy – being Agile
moderately than doing Agile. Etsy’s crew was not trying to undertake a
methodology that blindly follows strict rituals and practices, and wished
a associate that bases its strategy on agile rules 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 comparable rules
relating to worker care, range, open-source, and expertise
sustainability.
The Thoughtworks crew began by embedding into product groups, working with
each purchaser and vendor groups, on numerous important initiatives akin 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 akin to automated
testing.
For Thoughtworks, Etsy was fairly completely different from the everyday consumer.
They’re a totally digital firm, and their technical course of and product
practises are very mature. Not like 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 looking for was exterior 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 fashioned a cross-functional Product Supply
Tradition (PDC) crew to investigate the present product supply and discovery
course of. They analyzed the whole software program growth worth stream,
trying carefully on the complaints of managers and crew members. Chosen
occasions have been replayed to achieve a deep understanding of “how” it occurred
moderately than who?. The Thoughtworks
crew, as a result of they hadn’t lived via the issues, have been in a position to deliver
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
apply of their strategy. A code change sitting in a repository and never
deployed to customers will not be helpful, and successfully prices the corporate cash. Etsy
deploys tons of of instances 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
function doesn’t ship sufficient worth versus its value, as evidenced by an A/B
take a look at, it isn’t 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 tough. Some
groups have 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 patrons. - Previous to 2018, Etsy had been via 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, based mostly on lean pondering and the
concepts of Marty Cagan, who had just lately offered at Etsy. The management crew was
studying his guide 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 received’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. They’d a baseline of
50 days that they wished to cut back.
They have been additionally 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 numerous answer hypotheses:
Lightweight prototypes that incorporate extra direct person analysis
Etsy has robust experimentation infrastructure and analytics capabilities.
They run many concurrent A/B checks 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 checks 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 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.
To cut back the Time to Studying metric, the PDC crew utilized a lean UX
strategy. First, they began by rapidly creating lo-fi prototypes and
instantly exhibiting them to customers. Second, the crew elevated person suggestions
classes to each two weeks and decreased the extent of ceremony. Third, they
created a dual-track system, with a design and analysis crew frequently
working forward of a supply crew. The thought 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 enhance 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 crew leaders, got here up with a set of
product supply rules and associated supply apply modifications. The
practices included: smaller extra centered tales, redesigning story partitions to
higher match the crew 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 crew’s particular context.
The PDC crew first examined the apply modifications on pilot product groups to
set up their effectiveness after which iterated. As soon as the apply
demonstrated an enchancment, the crew added to a information base and supplied
mild teaching to introduce the brand new practices to all product groups throughout
Etsy.
Lean Portfolio administration
Some massive initiatives have been nonetheless being carried out, despite the fact that there was
not clear proof of the initiative creating worth. That is the everyday sunk
value downside. To unravel this, the PDC crew
instructed taking a lean strategy to portfolio administration.
Our runway needs to be a listing of hypotheses to check, not a listing of
necessities to construct. After we reward our groups for his or her potential to ship
necessities, it’s simple to quickly bloat our merchandise with pointless
options—resulting in elevated complexity, greater upkeep prices, and
restricted potential to vary. Options delivered aren’t a measure of success,
enterprise outcomes are. Our runway is a sequence of questions that we have to
take a look at to cut back uncertainty and enhance our understanding of development
alternatives.
As a substitute of making prolonged challenge specs and plans, the PDC crew
coached product groups to develop final result statements for every initiative. With
final result statements, beginning with a buyer or enterprise final result permits the
crew to experiment with many alternative concepts to attain the end result by tying
them to measurable KPIs. The much less exact an final result is, together with its KPIs,
the more durable it’s to specify. When making ready for potential initiatives, every
product crew created a two-page transient summarizing the end result, the measurable
impression, and the preliminary funding required.
The manager crew prioritized the end result statements, and every assertion
was seen as a “guess” amongst a portfolio. Impressed by the Lean Worth Tree
idea, the manager crew would apply 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 classes. The crew examined
engineers becoming a member of the speculation technology and validation classes and
working carefully 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 numerous nice concepts that made it to the product.
After the preliminary PDC initiative Etsy continued to strengthen the
collaboration between teams. At each stage of the group, product and
engineering are companions, which suggests they’re in a position to have wholesome trade-off
discussions. The platform group expanded using 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 impression of product supply tradition?
Testing with pilot groups indicated that the Time to Studying went from 50
days to five days. Through the pilot, one product supervisor stated, “What I really like about
the [direct user research sessions] pilot is that it lets us take a look at our concepts
quicker, it was very nice to not spend as a lot time diving deep into
one thing that we didn’t even know we have been going to make use of.” An initiative on
stock high quality that was predicted to ship a seven million greenback income
enhance as an alternative delivered eleven million {dollars} in incremental worth utilizing
the PDC instructed enhancements. Following this pilot success, the crew coached
the whole product growth group on the product supply strategy.
Based on Mike Fisher, “It is extremely onerous to isolate the advantages of a
course of change on a corporation of a number of hundred engineers since we don’t
run A/B experiments of this kind. Nevertheless, we did have a look at excessive stage
productiveness metrics after having PDC applied for over 2 years, and all of
our metrics have been very optimistic. We had improved our velocity by doing this
work, and we have been in a position to 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 purpose.”
