Etsy, a web-based market for distinctive, handmade, and classic objects, has
seen excessive progress during the last 5 years. Then the pandemic dramatically
modified buyers’ habits, resulting in extra shoppers purchasing on-line. As a
end result, the Etsy market grew from 45.7 million consumers on the finish of
2019 to 90.1 million consumers (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 offer a glorious 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 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 Artwork of Scalability
and Scalability Guidelines.
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 info facilities have 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 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
brought about a problem: every workforce was delivering in several methods. Becoming a member of a workforce
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 improvement consultancy. To have the opportunity
to scale product supply and usher in some outdoors 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 an identical method to Agile as Etsy – being Agile
quite 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 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
concerning worker care, range, open-source, and know-how
sustainability.
The Thoughtworks workforce began by embedding into product groups, working with
each purchaser and vendor groups, on numerous crucial initiatives reminiscent of fee
mannequin adjustments, Search Engine Optimization (website positioning), and a notification platform.
This enabled Thoughtworks to grasp how Etsy labored, created an instantaneous
impression on supply, and improved improvement practices reminiscent of automated
testing.
For Thoughtworks, Etsy was fairly totally different from the everyday shopper.
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 giant transformation to undertake, and no ingrained habits
that wanted a serious 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 turned extra of an
change of concepts drawn from totally different experiences.
Scaling Product Supply and Discovery
Thoughtworks and Etsy shaped a cross-functional Product Supply
Tradition (PDC) workforce to investigate the present product supply and discovery
course of. They analyzed your complete software program improvement worth stream,
wanting carefully on the complaints of managers and workforce members. Chosen
occasions have been replayed to realize a deep understanding of “how” it occurred
quite than who?. The Thoughtworks
workforce, as a result of they hadn’t lived by means of the issues, have been in a position to deliver
an goal outsider perspective.
There have been plenty 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 just isn’t priceless, and successfully prices the corporate cash. Etsy
deploys a whole lot 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 adjustments. If the
function doesn’t ship sufficient worth versus its price, as evidenced by an A/B
take a look at, it isn’t rolled out, and the code is eliminated.
The workforce additionally uncovered alternatives for enchancment:
- Every workforce was doing supply in several methods, having disparate processes
and rituals, making onboarding new workers 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 plenty of 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 consumers. - Previous to 2018, Etsy had been by means of a transitional interval, with
pivots in product technique and management adjustments main some product
managers to expres a need for better possession over their product
selections.
Time to studying
The workforce created an enchancment program, based mostly on lean pondering and the
concepts of Marty Cagan, who had lately introduced at Etsy. The management workforce was
studying his e-book Impressed.
I promise you that at the least half the concepts
in your roadmap usually are not going to ship what you hope. (By the best way, 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 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. That they had a baseline of
50 days that they wished to scale 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 plenty of resolution hypotheses:
Lightweight prototypes that incorporate extra direct person analysis
Etsy has sturdy 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 might 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 indicate statistical relevance. A/B assessments 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
need to emphasize that these are experiments, sometimes run utilizing prototypes.
A prototype just isn’t 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 scale back the Time to Studying metric, the PDC workforce utilized a lean UX
method. First, they began by rapidly creating lo-fi prototypes and
instantly exhibiting them to customers. Second, the workforce 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 workforce frequently
working forward of a supply workforce. The thought 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
Blueprint for product supply
The PDC, together with product workforce leaders, got here up with a set of
product supply rules and associated supply apply adjustments. The
practices included: smaller extra targeted tales, redesigning story partitions to
higher match the workforce course of, utilizing spikes to scale back technical uncertainty, and
higher methods of managing tech debt. They didn’t need 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 smart defaults that may be tailored and improved
for every workforce’s particular context.
The PDC workforce first examined the apply adjustments on pilot product groups to
set up their effectiveness after which iterated. As soon as the apply
demonstrated an enchancment, the workforce added to a data base and supplied
mild teaching to introduce the brand new practices to all product groups throughout
Etsy.
Lean Portfolio administration
Some giant initiatives have been nonetheless being carried out, although there was
not clear proof of the initiative creating worth. That is the everyday sunk
price drawback. To unravel this, the PDC workforce
urged taking a lean method to portfolio administration.
Our runway needs to be a listing of hypotheses to check, not a listing of
necessities to construct. Once we reward our groups for his or her skill to ship
necessities, it’s straightforward to quickly bloat our merchandise with pointless
options—resulting in elevated complexity, increased upkeep prices, and
restricted skill to alter. Options delivered usually are not a measure of success,
enterprise outcomes are. Our runway is a sequence of questions that we have to
take a look at to scale back uncertainty and enhance our understanding of progress
alternatives.
As an alternative of making prolonged undertaking specs and plans, the PDC workforce
coached product groups to develop end result statements for every initiative. With
end result statements, beginning with a buyer or enterprise end result permits the
workforce to experiment with many various concepts to realize the end result by tying
them to measurable KPIs. The much less exact an end result is, together with its KPIs,
the more durable it’s to specify. When making ready for potential initiatives, every
product workforce created a two-page temporary summarizing the end result, the measurable
impression, and the preliminary funding required.
The manager workforce prioritized the end result statements, and every assertion
was seen as a “guess” amongst a portfolio. Impressed by the Lean Worth Tree
idea, the chief workforce would apply a daily 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 part of person suggestions periods. The workforce examined
engineers becoming a member of the speculation technology and validation periods and
working carefully with designers throughout design sprints. The outcomes of the take a look at
confirmed a number of advantages. 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 method and rapidly create prototypes to
exhibit concepts to customers. Cross-functional engagement allowed engineers to
contribute plenty of 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 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 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 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
improve as an alternative delivered eleven million {dollars} in incremental worth utilizing
the PDC urged enhancements. Following this pilot success, the workforce coached
your complete product improvement group on the product supply method.
Based on Mike Fisher, “It is extremely arduous 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 sort. Nonetheless, we did take 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 in the end extra advantages for the consumers and
sellers – extra options, higher search, higher processes; the entire
market turned higher for consumers and sellers and that was the purpose.”
