Etsy
Leading Etsy’s Product Revolution
Transforming Etsy’s product culture to accelerate experimentation, reduce time-to-learning, and drive billions in Gross Merchandise Sales.
Tags
Product Strategy
Design Leadership
Experimentation
Learning Culture
Change Management
Collaboration
Role
Senior Director, Strategy & Operations
120%
Experiment Velocity Growth
$5B
Incremental Gross Merchandise Sales
$818M
Incremental Revenue Growth
Overview
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».
When Silverman took the helm just before the end of Q2 2017, Etsy was experiencing a multi-quarter growth decline. Wall Street analysts and internal leadership—including myself—feared the company could become an acquisition target. Silverman diagnosed the issue as «insufficient focus and insufficient execution» and took immediate action.
To create focus, he slashed over 60% of Etsy’s 800 active projects—including the recently launched Etsy Studio—forcing the company to rally around a smaller set of strategic priorities. Among them, improving search functionality and introducing site-wide sales were the most critical. These focused efforts paid off, with Gross Merchandise Sales (GMS) surging by 13% in Q3 and 18% in Q4 of 2017.
By 2018, Etsy had stabilized financially, but its approach to product development remained fragmented. While Silverman’s leadership had provided focus at the executive level, the teams responsible for building Etsy’s products lacked a unified way of working.
The Product Development Culture Challenge
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. The result was misalignment across teams, slow decision-making, and difficulty scaling improvements across Etsy’s marketplace.
This inconsistency wasn’t just a process problem—it was a strategic risk. Without a structured approach to product development, Etsy struggled to validate ideas efficiently, delaying product innovation and slowing execution at a time when speed and adaptability were critical to growth.
To address this, Etsy needed more than process improvements—it needed a fundamental shift in its product development culture.
A Fragmented Culture
When I joined Etsy in 2016, it was immediately clear that product development lacked a unified approach. Most product managers followed outdated waterfall-style processes, while a handful leaned into iterative methods. Most teams landed somewhere in between—adapting a mix of methodologies that varied widely across squads.
Before Etsy’s transformation, teams followed inconsistent product development approaches—some relied on waterfall-style Gantt charts, while others improvised their own methods. Designers often shared polished mockups in Basecamp, where feedback centered on aesthetics and surface-level design details rather than whether the work solved real customer problems. Left: A sprawling Gantt chart outlining sequential tasks. Right: A Basecamp thread with a high-fidelity UI mockup and hundreds of design critiques, absent of user insight.
This inconsistency stemmed from one of Etsy’s greatest strengths—its diverse product management talent. PMs came from different backgrounds and companies, bringing fresh perspectives but also conflicting ways of working. For designers switching teams, this often led to whiplash, requiring them to adapt to entirely new workflows with each transition. It also made cross-team collaboration difficult, as there was no standard approach to discovery, development, or iteration.
The design practice was outdated too. Instead of quickly testing low-fidelity prototypes with users, designers would:
Post highly-polished, visually sophisticated screens in Basecamp for review.
Receive hundreds of comments critiquing aesthetics rather than focusing on whether the design actually solved a customer problem.
As one of the first examples following Etsy’s product development transformation, the sequence pictured above shows the progression of a hypothesis for the Sell on Etsy app—from a sketch created during a Google-style Design Sprint, which tackled the cumbersome process Sellers faced when adding attributes to listings for search performance, to test materials used in customer research, to designs handed off to engineering, and finally to deployed code powering a winning experiment. Each stage builds on UX research and prior experimentation, demonstrating a more iterative, insight-driven approach to solving real customer problems.
From Launching Products to Delivering Outcomes
Etsy’s fragmented product development culture wasn’t just an internal challenge—it shaped the company’s approach to product strategy itself.
Between 2015 and 2017, Etsy launched two ambitious initiatives:
Etsy Manufacturing: A platform connecting sellers with manufacturers across industries (apparel, printing, jewelry, etc.).
Etsy Studio: A craft supply marketplace designed to extend Etsy’s reach.
Despite strong internal support, both efforts failed to gain traction. Leadership assumed Etsy’s marketplace success could be replicated through execution alone, leveraging the company's deep bench of engineering, branding, and marketing talent. But as every product leader eventually learns, success isn’t about launching products—it’s about delivering compelling value that customers willingly exchange their time, money, or attention for.
Etsy Manufacturing and Etsy Studio never achieved the network effects needed to sustain themselves, and both were eventually sunset. Silverman understood that Etsy’s competitive advantage lay in strengthening its core marketplace rather than pursuing new verticals with uncertain demand.
Building for Speed and Impact: The SWAT Team
Recognizing the need for a fundamental shift, Silverman and his executive team focused on transforming Etsy’s product development culture—introducing a hybrid of Lean (continuous improvement, eliminating process waste) and Agile (iterative development, feedback loops, and rapid adaptation).
While serving as a senior member of the Product Design organization, I was recruited by COO Raina Moskowitz to form Etsy’s first Strategy & Operations team: a 3-person, senior, cross-functional group tasked with tackling the company’s most complex challenges. Internally, we operated as what CEO Josh Silverman called Etsy’s «SWAT team»—a small, high-trust group designed for speed, impact, and direct executive support. Our operating model was defined by three principles:
Minimal Bureaucracy: Allowing us to move quickly.
Diverse Expertise: Bringing together leaders from across Etsy.
Direct Executive Sponsorship: Ensuring rapid execution.
Our mission was clear: redefine how Etsy built products, aligning teams around a disciplined, customer-centric, and outcome-driven approach. We weren’t just updating processes—we were redefining how Etsy created and delivered value.
This is where the transformation of Etsy’s product development culture began. One of the first challenges the team tackled was Etsy’s reliance on rigid, sequential workflows that slowed iteration and delayed learning.
The Consequences of a Waterfall Mindset
I first joined Etsy as a founding member of the UX Research team, where I saw firsthand how the absence of structured discovery and validation slowed product teams down. My first major project, Shop Manager, aimed to streamline how sellers managed their businesses. Yet, despite its ambition, the project followed a rigid waterfall approach:
Work was divided into dozens of parallel workstreams, each with strict sequential phases.
A massive Gantt chart outlined fixed deliverables, with locked-in requirements upfront.
Each phase had to be fully completed before the next could begin, limiting adaptability.
While this structure made sense for projects with static requirements, it was ill-suited for a product that needed continuous iteration based on evolving buyer and seller needs.
One of my first contributions was advocating for UX research to be integrated into the roadmap, ensuring we tested design provocations with real users rather than relying on assumptions. At the time, research was seen as a potential slowdown rather than an accelerant to smarter decision-making. By shifting the team’s mindset toward evidence-based development, we reduced reliance on assumptions and helped steer the project toward actual user needs.
From Isolated Fixes to Systemic Change
The challenges with Shop Manager were not unique—they reflected a broader misalignment in Etsy’s product development culture. Across teams, processes varied widely, and without a shared framework for product discovery, teams often optimized in isolation rather than working toward cohesive, strategic goals.
Addressing these issues required more than individual fixes; it demanded a company-wide transformation. Etsy needed a shift in leadership focus, cultural mindset, and execution strategy to move from assumption-driven development to a scalable, outcome-focused product organization.
Transforming Etsy’s Product Development Culture: Leadership, Culture, and Execution
Culture can be hard to define, but in the context of Etsy’s product development culture, it represents the collective values, mindset, and working practices that shape how the Product Organization builds and delivers products.
Many companies adopt Lean and Agile as a set of processes—sprints, stand-ups, Jira boards—without fully embracing them as a cultural shift. But true agility isn’t just about workflow adjustments—it requires leadership-driven transformation across three fundamental dimensions:
Values: What teams prioritize and how success is measured.
Mindset: The collective attitude toward problem-solving, risk-taking, and adaptability.
Working Practices: How teams collaborate and execute on ideas.
Defining Success: From Outputs to Outcomes
One of the most significant shifts at Etsy under Josh Silverman’s leadership was the move from an output-driven mindset (projects completed, features shipped) to an outcome-driven approach (business and customer impact).
Silverman and the Executive Team reinforced this shift through Etsy’s Guiding Principles, designed not as aspirational statements but as behavioral guardrails for decision-making. One principle, «We minimize waste,» was directly inspired by Lean methodology and the Toyota Production System (TPS)—which focuses on eliminating inefficiencies and maximizing value.
This principle encouraged teams to:
Move away from fully-built products based on assumptions
Move toward iterative development, where small, measurable improvements are continuously informed by real-world feedback
Under Josh Silverman's leadership: Etsy shifted from an output-driven mindset—measuring success by features shipped—to an outcome-driven approach focused on business impact and customer value. The change encouraged teams to prioritize what truly mattered: results, not just delivery.
A Forcing Function for Cultural Change: The $10B GMS Goal
To drive focus and alignment across teams, Silverman set a bold, company-wide goal in 2018: reaching $10 billion in Gross Merchandise Sales (GMS) by 2023.
This wasn’t just a financial target—it was a forcing function that transformed decision-making. The Strategy & Operations team had to quantify:
What are the key levers to achieve $10B in GMS?
What do we have to believe for this to happen?
What is the highest-confidence path to this goal?
To achieve this target, we hypothesized that growth could be driven by three core growth levers:
Increase buyer acquisition: Add more buyers
Increase purchase frequency: Grow repeat engagement
Increase cart size: Drive higher-value purchases per order
Starting with these levers, our analysts built several models to test potential growth paths. The most reliable model showed that reaching $10B GMS would require:
Doubling site visits from 4.2B → 8.3B
Growing «Power Buyers» from 600K → 1.3M
By embedding Lean and Agile principles into Etsy’s core values, leadership changed how success was measured. Instead of tracking progress by features shipped, the Product Organization now focused on driving measurable business outcomes, ensuring that every initiative contributed to Etsy’s long-term growth model.
Cultural Change: Empowered Squads, Experimentation, and Learning from Failure
Shifting from a waterfall-driven organization to an Agile one required a profound mindset shift. This transition wasn’t just about new processes—it demanded a fundamental rethinking of how teams worked, how decisions were made, and how leadership engaged with squads.
Embedding Experimentation & Redefining Failure
Before Etsy could shift toward truly empowered squads, teams first needed confidence in taking risks, failing, and iterating quickly. This shift started with embedding experimentation into everyday decision-making.
Silverman and the Executive Team signaled this shift by reframing failure as a learning mechanism, making it safe for teams to experiment and pivot. As he put it:
«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, Etsy
By reinforcing the idea that failure wasn’t just tolerated but expected as part of learning, leadership normalized experimentation and encouraged teams to take calculated risks.
From Command-and-Control to Empowered Teams
One of the biggest changes was the move toward empowered teams. As Marty Cagan explains:
«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.»
—Marty Cagan, Silicon Valley Product Group
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.
For example:
Instead of dictating specific features, Etsy structured initiatives around levers identified in the growth path model.
Acquisition- and frequency-focused squads explored ways to increase site visits (e.g., improving SEO, refining marketing landing pages, enhancing personalized recommendations).
Conversion-focused squads worked on optimizing checkout flows, reducing friction, and testing new payment methods.
By aligning squads to problems rather than predefined solutions, Etsy fostered a culture of autonomy, innovation, and outcome-driven decision-making.
Operationalizing the Change
While mindset shifts were essential, they weren’t enough on their own. To fully realize this transformation, Etsy needed to redesign its product development process and tooling.
This is where new working practices came into play.
Working Practices: How We Discover and Deliver Value
At Etsy, product development is centered on value creation—ensuring that every initiative aligns with customer needs and business goals.
Defining Value in Product Development
At its core, Etsy’s product development culture is focused on creating products, services, and experiences so compelling that buyers and sellers willingly exchange something of equal value—whether time, attention, or money—that drive meaningful business outcomes.
This definition, rooted in Lean principles, reflects Marty Cagan’s core question: Does this solve a customer problem?
When teams solve meaningful problems, customers engage, purchase, and return—reinforcing Etsy’s discovery and delivery approach. This definition also underscores a key challenge: how do product teams identify the right problems to solve? Tom Erickson, a founding member of Apple’s Human Interface Group, called this «problem setting»:
«Before designers can solve a problem, they must first define what it is. How do designers of new technologies begin when they are unsure of what they are making, what it should do, or who will use it?»
—Tom Erickson, Apple
Donald Schön studied this challenge, noting that design is more art than science, often requiring teams to navigate messy, ambiguous problems rather than clear-cut tasks. Schön’s work originally focused on master-apprentice relationships, where designers refined their craft under an expert—think magazine layouts or animated film titles. Erickson, however, argued that emerging digital technologies required a different approach:
Cross-functional Collaboration: Where designers, engineers, and product managers solve complex problems together.
Agile Methodologies: Which emphasize iteration and learning rather than rigid execution.
His insights foreshadowed cross-functional product squads, later popularized by Spotify’s Scaling Agile white paper. This shift—from individual expertise to collective problem-solving—became central to how Etsy’s Product Organization approached discovery and delivery.
The Discovery-Delivery Lifecycle: A Systematic Approach to Value Creation
With problem setting as the starting point, Etsy’s product teams followed a structured approach to ensure they:
Identified the right problems
Tested and validated ideas early
Focused on measurable business impact, not just feature completion
At the highest level, all product initiatives move through two iterative loops, inspired by Eric Ries’ Build-Measure-Learn cycle:
Discovery Loop: Teams validate ideas through research, prototyping, and testing before investing engineering effort.
Delivery Loop: Validated concepts are built, deployed at scale, and refined based on real-world feedback.
By treating product development as a continuous lifecycle, teams validate ideas early, reduce risk, and refine solutions before full-scale implementation. While both discovery and delivery are cyclical, they serve distinct purposes and require different expertise. For example, in addition to assembling squads of product managers, designers, and engineers, UX researchers generate new insights into customer needs and behaviors, while data analysts collaborate with engineers to evaluate experiments and refine product decisions.
This Discovery-Delivery model ensured that Etsy teams weren’t just building efficiently—they were building the right things and building things right.
Etsy’s Discovery–Delivery Lifecycle is a structured, iterative approach to product development that balances insight and execution. The Discovery loop validates ideas early through testing hypotheses, while the Delivery loop brings validated concepts to life through focused execution and continuous refinement. This model helped teams reduce risk, align around impact, and ensure they were building the right things—and building them right.
Prioritizing Learning Over Execution
For the remainder of this case study, I’ll focus on the know-how and tools we introduced to enable discovery—the foundation of Etsy’s product development culture transformation.
While I’m passionate about the entire product lifecycle, including delivery, I’m intentionally focusing on discovery because, as a design leader, my role was to shape how teams identified and validated customer problems before investing engineering effort.
By strengthening discovery, we ensured that teams were solving the right problems, setting the stage for more effective execution in delivery.
This focus on learning before building was critical. As Etsy’s former CTO, Mike Fisher, put it:
«It takes maybe days to weeks to get experiments ready, develop, set them up, run them, and then certainly it can take weeks depending on your traffic volumes to get really good quality experiments. That’s an expensive way to learn. So I would actually say the ideal measurement is more about learning velocity. How fast am I learning? Because if you learn early enough in the pipeline, you might not even do the experiment.»
—Mike Fisher, CTO Etsy
Fisher’s insight reinforces a key principle of effective discovery: The earlier teams learn, the less time and effort is wasted on non-starters.
If teams can validate (or invalidate) assumptions before committing engineering resources, they can bypass costly experiments and focus on solutions far more likely to succeed.
Effective discovery enables faster learning and smarter investment. By validating assumptions early—before committing engineering resources—Etsy teams reduced risk, avoided costly missteps, and focused on solving the right problems. As CTO Mike Fisher emphasized, the true measure of success is learning velocity: how quickly teams generate insights to guide better decisions.
Next: Building Etsy’s Discovery Toolkit
With this foundation in place, the next challenge was designing a systematic, knowledge-driven discovery process—one that ensured product teams weren’t just learning quickly, but learning the right things.
To achieve this, we needed a structured toolkit that provided teams with the right tools for:
Learning: Gathering deep customer insights.
Thinking: Synthesizing insights into actionable strategies.
Making: Rapidly prototyping and testing ideas.
This approach gave teams confidence to navigate ambiguity and identify the highest-value opportunities.
Etsy’s Product Discovery Toolkit
Discovery leads to the unexpected. To uncover real value, we must set aside assumptions—about our customers, their problems, and their needs.
I first learned this lesson early in my career at IDEO, when a design lead shared a modern-day parable about human-centered design—one that forever shaped my approach to product discovery.
IDEO’s Lesson: The Power of Discovery
IDEO was working with a pharmaceutical company to improve medication adherence. As part of their ethnographic research, they visited patients’ homes to observe how they remembered to take their medication.
They expected to find makeshift reminder systems—sticky notes, alarms, pill organizers. Instead, they found something unexpected.
A widowed woman, whose late husband had been a butcher, struggled with arthritis. Instead of twisting open pill bottles, she repurposed her husband’s deli slicer to shear off the tops. The problem wasn’t remembering to take her medication—it was physically opening the bottle.
Years later, this insight led to the redesign of medication packaging—introducing presorted, personalized packets that were far easier to open.
The lesson is clear: Discovery requires curiosity, observation, and a willingness to be surprised.
Why Discovery Needs Structure
But observation alone isn’t enough—discovery also requires structure and the right tools.
Human-centered design has a rich toolkit, shaped by fields like science, psychology, and strategy. At IDEO, I learned that observation was just one tool for human-centered design. Another was facilitating ideation sessions using the «IDEO way,» created by its founder David Kelley:
One conversation at a time
Stay focused
Encourage wild ideas
Defer judgment
Build on the ideas of others
Kelley’s approach to structured facilitation wasn’t just about generating ideas—it was about guiding teams through uncertainty and ensuring that creative collaboration led to meaningful outcomes. This influence can be seen in Google’s Design Sprint methodology, which formalized many of these same principles into a repeatable framework for product teams. Like IDEO’s method, the Design Sprint emphasized rapid ideation, structured decision-making, and iterative prototyping to reduce risk and validate ideas early.
Applying These Lessons at Etsy
When designing Etsy’s product discovery toolkit, I drew on these early lessons—eventually incorporating observation and facilitation techniques into Etsy’s product development culture. Much like Google’s Design Sprint built on IDEO’s principles to create a structured approach to problem-solving, Etsy needed a discovery process that was both systematic and flexible.
Product discovery is a collaborative process—but not in the shallow sense. True breakthroughs happen when designers, product managers, and engineers come together to exchange ideas, challenge assumptions, and spark creative collisions. As much as executives, marketers, or designers might believe they’re the source of the best ideas, Marty Cagan reminds us: «Some of the best product ideas come from the engineers.» D.I.W.O. (Do It With Others) is a mindset I’ve practiced throughout my career—from co-designing with engineers to facilitating workshops with executives. When we create space for creative collisions, we unlock solutions no one could reach alone.
To go beyond traditional design methods, we built a structured approach, integrating strategy, innovation, and experimentation:
Prototyping: Adapted from Google Ventures’ Design Sprint methodology.
Customer research: Built on Christian Rohrer’s Landscape of Research Methods framework (2018).
Hypothesis-driven testing: Embedded Lean and Agile methodologies for systematic validation.
The result was a structured, repeatable process, ensuring Etsy’s teams built not just efficiently, but effectively—with solutions shaped by real customer needs, not assumptions.
Three Categories of Tools for Discovery
To make discovery repeatable and scalable, we organized Etsy’s toolkit into three essential categories, aligning with Eric Ries’ Build-Measure-Learn cycle:
Learning Tools (Measure → Learn): Methods for gathering deep insights into customer needs and behaviors. These tools ensure that teams start with a clear understanding of the problem space before jumping to solutions. Examples: usability studies, data analysis
Strategy Tools (Learn → Build): Frameworks for structuring insights, identifying patterns, and making strategic decisions. These tools help teams synthesize research findings into actionable problem definitions, ensuring product efforts are strategically sound and aligned with business goals. Examples: SWOT analysis, Jobs to Be Done
Making Tools (Build → Measure): Prototyping methods that bring ideas to life, allowing teams to test and refine solutions before committing engineering resources. By building lightweight prototypes first, teams validate ideas rapidly, minimizing waste and prioritizing high-impact initiatives. Examples: MVPs, Google Design Sprint
By structuring discovery around learning, strategy, and making, we ensured that teams systematically reduced risk, tested assumptions, and refined ideas before committing engineering resources.
This approach accelerated learning velocity, aligning with Lean principles: instead of waiting until a fully developed product reached users to gather feedback, teams could validate hypotheses upfront—ensuring that only high-confidence ideas moved into the delivery phase, where engineering effort would have the greatest impact.
To make discovery repeatable and scalable, we organized Etsy’s toolkit into three categories—Learning, Strategy, and Making—aligned with the Build-Measure-Learn cycle. This structure helped teams gather insights, shape strategy, and prototype early, reducing risk and accelerating learning before investing engineering effort. By validating ideas upfront, only high-confidence solutions moved into delivery.
Making It Stick: Embedding Lasting Change in Etsy’s Product Culture
Transforming Etsy’s product development culture required more than process updates—it demanded a fundamental shift in values, mindset, and working practices across thousands of engineers, product managers, designers, and researchers.
Change at this scale is difficult. Without a deliberate strategy, efforts could fail to take root. Some teams embraced the transformation, while others struggled, experiencing a drop in velocity as they adapted. I called this risk «organ rejection»—when teams saw empowerment as foreign and resisted the cultural shift.
To drive change, we worked with Etsy’s Executive Team to actively reinforce it, aligning with John Kotter’s eight-step framework:
Creating a sense of urgency
Building a powerful coalition
Crafting a vision and strategy
Communicating the vision clearly and repeatedly
Removing barriers and obstacles
Achieving short-term wins
Building on the change
Ensuring the change lasts
Driving Adoption: The Inventory Quality Pilot
Achieving short-term wins was critical for momentum. We piloted changes with targeted initiatives to demonstrate impact before rolling them out broadly.
One such pilot, «Inventory Quality,» (IQ) aimed to improve how sellers created and edited listings by ensuring high-quality product attributes. The hypothesis: better listing data would improve search results, making it easier for buyers to find unique, high-intent products.
However, discovery revealed a greater opportunity—not in attributes, but in optimizing Context-Specific Ranking (CSR), a machine learning algorithm that dynamically re-ranks search results based on buyer context.
For example, if a repeat buyer had purchased a boho-style rug, CSR could prioritize similar items that matched their style. In other words: use what we know about buyers to serve them the best of Etsy.
The pilot squad was initially given a $7M incremental GMS goal, but by leveraging CSR optimizations, they ultimately delivered $11M—overdelivering by 57%.
Within a year, Etsy’s GMS per active buyer rose 2.2% to $103.50 (Q4 2019), contributing to:
$5.0B in incremental GMS (+26.5% YoY)
$818M in revenue (+35.6% YoY)
Overcoming Resistance: Avoiding «Organ Rejection»
Despite early wins, some teams struggled with adapting to autonomy. Teams used to prescriptive roadmaps now had to define and own outcomes—a shift that initially caused friction.
Early success stories like IQ weren’t enough; ongoing reinforcement was necessary to embed change at every level.
One solution was introducing a shared language. We standardized hypothesis-driven experimentation with a structured, mad libs-style format, ensuring ideas were consistently framed, tested, and communicated across teams.
Leadership’s Role in Reinforcing the Change
A turning point came when Josh Silverman fully embedded these principles into leadership rituals.
During monthly «Metrics Meetings,» where initiative leads presented progress to the Executive Team, Silverman required teams to use the hypothesis format when sharing their ideas.
This was pivotal—by adopting the same language and frameworks, he signaled what good work should look like and reinforced the importance of structured experimentation and learning velocity.
Silverman’s leadership cemented the transformation, providing a clear, unified vision while empowering teams with both autonomy and structure. This alignment ensured that Etsy’s product development culture didn’t just evolve—it became the foundation of how the company operates today.
Impact
To measure the success of Etsy’s product development culture transformation, the Strategy & Operations (S&O) team originally proposed three key performance indicators (KPIs) beyond pure financial performance:
Time-to-Market: Reducing the time required to launch new products and features
Effectiveness of Products: Measuring revenue and customer engagement driven by product improvements
Employee Happiness: Ensuring teams felt empowered and aligned with new ways of working
However, the Executive Team prioritized two key metrics: Experiment Velocity and Time-to-Learning—the time it took teams to validate an idea with a customer. Analysts set a 50-day baseline, which leadership aimed to cut significantly. This urgency reflected Etsy’s shift from slow, waterfall-driven marketplace launches to an Agile, outcome-driven model.
Financial Results of the Transformation
Over the next two years—excluding the pandemic tailwind that began in 2020—Etsy saw:
37% year-over-year revenue growth in 2018 ($604M) and 36% in 2019 ($818M)
21% GMS growth ($3.9B) in 2018 and 27% GMS growth ($5.0B) in 2019
These results underscored how faster experimentation, leaner product development, and an outcome-driven mindset drove measurable business success.
Accelerating Learning: From 50 Days to 5 Days
Through pilot testing, Time to Learning dropped from 50 days to just 5 days. One product manager reflected:
«What I love about the pilot is that it lets us test our ideas faster. It was really nice to not spend as much time diving deep into something that we didn’t even know we were going to use.»
Between 2018 and 2019, Etsy’s experiment velocity increased by 120% year-over-year. As teams became more proficient with an Agile, hypothesis-driven approach, squads moved from discovery to delivery in days or weeks instead of months.
As Silverman observed:
«At Etsy, we do have a very Agile software development system where, in general, we can go from conception to live in a couple of weeks, then we test in 50% of the population where 50% sees the new version, 50% sees the old version and if doesn’t work we roll it back. So the opportunity cost of failure is quite low.»
—Josh Silverman, Etsy
Making Agile & Lean Second Nature
Years after Etsy’s Agile and Lean transformation, employees rarely reference «Agile» or «Lean» explicitly—not because the principles are irrelevant, but because they’ve become deeply embedded in how Etsy operates. What once required intentional adoption—rapid experimentation, customer validation, iterative development—has become second nature.
This mirrors the evolution of surgical safety checklists in modern medicine. Before Atul Gawande and the World Health Organization (WHO) introduced standardized checklists, preventable surgical errors—operating on the wrong limb, leaving instruments inside patients—were common. The checklist wasn’t just a task list; it fundamentally changed surgical practice. Today, no surgeon stops to reflect on its origins—they just use it.
The same holds true at Etsy. What began as a company-wide transformation—introducing new ways of working, reinforcing discovery, and shifting teams toward hypothesis-driven experimentation—has become the default.
This, ultimately, is the true sign of a cultural shift. Etsy’s success wasn’t about adopting Agile or Lean as frameworks—it was about embedding a new way of working so deeply that it became second nature, enabling teams to solve complex problems for customers and Etsy.
Key Learnings: How Etsy’s Transformation Endured
The success of Etsy’s Product Development Culture (PDC) transformation wasn’t about adopting Agile or Lean—it was about embedding a new way of working so deeply that it became second nature. Years later, employees no longer talk about Agile or Lean explicitly—not because they aren’t relevant, but because these principles are now woven into how Etsy operates. Experimentation, iterative development, and customer validation are no longer framed as «new ways of working»—they’re just how work gets done.
Leadership Buy-In: The Catalyst for Lasting Change
The transformation stuck because leadership didn’t just endorse the shift—they modeled it. Silverman and the Executive Team reinforced hypothesis-driven discovery by embedding it into Etsy’s leadership rituals. Teams weren’t just encouraged to use a standardized format for articulating assumptions—Silverman required squads to present their ideas in hypothesis form during Etsy’s Monthly Metrics Meetings.
This wasn’t just process change—it was cultural reinforcement. By ensuring that strategic discussions and decision-making were framed around hypotheses, Silverman set a precedent for how good work should be done—aligning leadership expectations with the behaviors needed to sustain the transformation.
Early Wins: Proving Value to Scale Adoption
To build momentum, we piloted new approaches before scaling them across the Product Organization. The Inventory Quality (IQ) initiative was one such pilot—a proving ground for hypothesis-driven discovery. Originally given a $7M goal, the team optimized Context-Specific Ranking (CSR) and ultimately delivered $11M in incremental value—beating their target by 57%.
This success wasn’t just a proof of concept—it built trust. It demonstrated that hypothesis-driven discovery wasn’t just theory; it produced real business impact. By validating the approach with tangible results, it became easier to scale across Etsy’s 100+ squads.
From Internal Change to Strategic Advantage
What began as a cultural shift became a recognized competitive advantage. By 2021, Etsy’s Agile teams were formally identified as one of the company’s six key differentiators. In its May 2021 Investor Presentation, Etsy leadership described its teams as: «Agile teams, mutually focused on delivering positive business and social impact.» This underscored that Etsy’s transformation wasn’t just an internal evolution—it was a driver of long-term business success.
How to Make Organizational Change Stick
The real measure of success wasn’t just changing how teams worked—it was ensuring those changes endured. Etsy’s transformation didn’t just take root—it became the foundation for how the company builds products today.
This transformation reinforced three key lessons for driving lasting organizational change:
Leadership must model new behaviors for culture change to stick.
Silverman and the Executive Team didn’t just endorse the shift—they actively reinforced it. By embedding hypothesis-driven discovery into leadership meetings and decision-making rituals, they ensured the cultural shift wasn’t just policy, but practice.
Shifting from outputs to outcomes unlocks real product innovation.
Holding teams accountable for business impact—not just feature delivery—fostered a culture of experimentation and validated learning over assumption-driven development.
Experimentation and hypothesis-driven decision-making accelerate product-market fit.
Etsy’s shift from 50-day learning cycles to just 5 days drastically improved decision-making speed. This ability to test, learn, and iterate rapidly became a competitive advantage, helping Etsy continuously refine its marketplace experience and drive sustained business growth.
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