Case Study
Leading Etsy’s Product Revolution
By 2018, Etsy's Product Organization was primed for transformation. The previous year, Josh Silverman took over as CEO, inheriting a company in decline. Etsy's once-strong growth had faltered, raising concerns about a potential low-valuation acquisition. To course-correct, he moved swiftly—reducing headcount, restructuring teams, and installing a new executive leadership team.
Beyond financial recovery, Silverman redefined Etsy's core differentiation. He shifted the company’s value proposition from “handmade” to “special”—a distinction that resonated more deeply with buyers and set Etsy apart in a crowded e-commerce landscape dominated by Amazon and Walmart. He described this shift as Etsy’s opportunity to own a unique position in a “sea of sameness”. (See Fig. 1.)
Foster innovation by championing bold ideas and driving meaningful change. While traditional product development skills often emphasize hard skills—such as technical expertise, rapid experimentation, and data analysis—solving wicked problems requires a balance of hard and soft skills. Interpersonal communication, strategic thinking, empathy, and cross-functional alignment are just as critical for leading collaboration across squads, organizations, and leadership levels—from team leads to the CEO:
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Etsy
$214M
Incremental Revenue
Etsy
$1B
Incremental GMS
Etsy
46M
Buyers
Etsy
2.7M
Sellers
Etsy
44
Reports
Etsy
83%
Employee Engagement*
Etsy
1%
Baymard Ranking⁑
Etsy
27%
Experimentation Win Rate⁂
Heading Level 1
Etsy's Product Organization was highly skilled but lacked consistency in execution. Each team operated differently, with no shared approach to discovery, prioritization, or validation. Product managers used a mix of methodologies—some followed rigid, waterfall-style processes, while others embraced iterative workflows. The result was misalignment across teams, slow decision-making, and difficulty scaling improvements across Etsy’s marketplace.
Heading Level 2
Etsy is a two-sided marketplace connecting 91 million buyers with 6.4 million sellers worldwide. Etsy Payments facilitates 93% of the company’s GMS and contributes 27% of its total revenue, making it the backbone of Etsy’s commerce ecosystem.
Heading Level 3
Over the years, Etsy’s platform evolved to support growing buyer and seller needs, yet the checkout experience had remained largely unchanged. While teams worked to improve the browsing and discovery experience, the final and most critical step in the buyer journey—checkout—had seen little innovation. As a result, increasing mobile adoption and shifting buyer expectations exposed fundamental weaknesses in the Payments experience, signaling a need for systemic improvements.
Heading Level 4
At Etsy, this meant moving away from prescriptive product roadmaps and toward an approach where leadership set high-level objectives, and squads were trusted to determine the best solutions.
From Command-and-Control to Empowered Teams
One of the biggest changes was the move toward empowered teams. As Marty Cagan explains:
Moving Away From Roadmaps
At Etsy, this meant moving away from prescriptive product roadmaps and toward an approach where leadership set high-level objectives, and squads were trusted to determine the best solutions.
How to Lead Product Organizations
“There are essentially two main ways that you can lead a product organization. You can lead by ‘command and control,’ which means explicitly telling your people what to do, usually by assigning them a roadmap of features and projects. The alternative is empowering teams—assigning them customer problems to solve and letting the teams determine the best way to solve them.”
«Because we made the cost of failure fairly low, if a squad goes four, five, six months without success, we start to ask ourselves: Maybe this path is not that fruitful. Maybe this customer problem is not as important as another. And it’s not unusual to make pivots so squads can focus on a different problem.»
—Josh Silverman, CEO Etsy
From Command-and-Control to Empowered Teams
One of the biggest changes was the move toward empowered teams. As Marty Cagan explains:
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At Etsy, this meant moving away from prescriptive product roadmaps and toward an approach where leadership set high-level objectives, and squads were trusted to determine the best solutions.
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“There are essentially two main ways that you can lead a product organization. You can lead by ‘command and control,’ which means explicitly telling your people what to do, usually by assigning them a roadmap of features and projects. The alternative is empowering teams—assigning them customer problems to solve and letting the teams determine the best way to solve them.”
Fig. 1. The Products of Design Studio at the School of Visual Arts
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