Etsy, an internet market for distinctive, handmade, and classic objects, has
seen excessive development during the last 5 years. Then the pandemic dramatically
modified buyers’ habits, resulting in extra shoppers buying on-line. As a
consequence, 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
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 capable of 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 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 Artwork of Scalability
and Scalability Guidelines.

Etsy relied on bodily {hardware} in two knowledge facilities, presenting a number of
scaling challenges. With their anticipated development, it was obvious that the
prices would ramp up shortly. It affected product groups’ agility as that they had
to plan far upfront for capability. As well as, the info facilities have been
primarily based in a single state, which represented an availability threat. It was clear
they wanted to maneuver onto the cloud shortly. After an evaluation, Mike and
his crew selected the Google Cloud Platform (GCP) because the cloud companion 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
brought on a problem: every crew was delivering in several methods. Becoming a member of a crew
meant studying a brand new set of practices, which was problematic as Etsy was
hiring many new folks. 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

Choosing a companion

Etsy had by no means labored with a software program growth consultancy. To find a way
to scale product supply and usher in 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 an in depth cultural match and deep alignment
concerning fashionable software program growth.

Thoughtworks has an identical method to Agile as Etsy – being Agile
somewhat than doing Agile. Etsy’s crew was not seeking to undertake a
methodology that blindly follows strict rituals and practices, and wished
a companion that bases its method 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
concerning worker care, variety, open-source, and expertise

The Thoughtworks crew began by embedding into product groups, working with
each purchaser and vendor groups, on varied vital initiatives corresponding to fee
mannequin adjustments, Search Engine Optimization (web optimization), and a notification platform.
This enabled Thoughtworks to grasp how Etsy labored, created a direct
affect on supply, and improved growth practices corresponding to automated

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. In contrast to most shoppers who interact Thoughtworks,
Etsy had no massive transformation to undertake, and no ingrained habits
that wanted a serious 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 shaped a cross-functional Product Supply Tradition
(PDC) crew to investigate the present product supply course of. They appeared throughout
your entire 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 your entire software program growth worth stream,
trying carefully on the complaints of managers and crew members. Chosen
occasions have been replayed to realize a deep understanding of “how” it occurred
somewhat than who?. The Thoughtworks
crew, as a result of they hadn’t lived by means of the issues, have been capable of deliver
an goal outsider perspective.

There have been quite a few 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 is just not precious, and successfully prices the corporate cash. Etsy
    deploys tons of of instances a day, with a 30-minute decide to manufacturing lead
  • Options are prioritized utilizing knowledge: Product managers and knowledge 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
    check, it isn’t rolled out, and the code is eliminated.

The crew additionally uncovered alternatives for enchancment:

  • Every crew 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 quite a few 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 want for better possession over their product

Time to studying

The crew 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 crew was
studying his e-book 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, Impressed (p19)

After some preliminary analysis the crew got here up with a metric they known 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 wished to scale 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
  • Worker happiness

To affect the KPIs, they got here up with quite a few 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
crew noticed is that the suggestions cycle could be fairly sluggish. For an concept to be
prepared for an A/B check it needed to be close to production-level high quality. It additionally had
to have sufficient knowledge to indicate statistical relevance. A/B assessments would run for
months in lesser-used elements of {the marketplace}.

To set your expectations, robust groups usually
check 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 is just not 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.

Marty Cagan, Impressed (p27)

To cut back the Time to Studying metric, the PDC crew utilized a lean UX
method. First, they began by shortly 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 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 check. By lowering the price of
experimentation, they might improve the range 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 position of lean portfolio administration, stronger product and
engineering collaboration, and assess the affect of a product supply tradition.

To seek out out once we publish the following installment subscribe to the
RSS feed, Martin’s
twitter stream, or
Martin’s Mastodon feed.

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