🔑 Key Takeaways
- In times of crisis, businesses can thrive by being agile, creating products that add value, and fostering a supportive network of inspiring individuals.
- Aligning with a clear and consistent focus on gross merchandise sales (GMS) can help facilitate organizational change and ensure everyone is working towards common goals.
- Knowing your market, adapting to change, and communicating clearly are essential for success in business.
- During a period of high demand and rapid change, Etsy's success was driven by their adaptability, personal connection with sellers, and strategic experimentation to add value to their business.
- Understanding and meeting the needs of sellers is crucial in the early stages, but a marketplace also requires a world-class buyer experience and the ability to help them make purchase decisions.
- Marketplaces should prioritize customer satisfaction and leverage data to guide sellers, improve listings, and enhance buyer understanding for increased sales.
- By focusing on product messaging, recommendations, and buyer signals, platforms like Etsy and Airbnb can guide sellers and buyers to optimize their experience and increase conversion rates.
- Pay attention to details, experiment and test different changes to find what works, but be prepared for failures along the way.
- Etsy relies on experimentation to validate changes but also considers alternative methods when working towards bigger goals or when specific changes don't align with overall objectives.
- Etsy's success in attracting new buyers can be attributed to the strong bond between sellers and buyers, with early sellers playing a vital role in promoting listings and fostering a supportive community. Etsy's focus on removing barriers and implementing retention strategies ensures continuous engagement.
- Etsy's success is fueled by its strong brand that sets it apart from competitors, its focus on handmade and unique items, and its commitment to a personalized and human touch in the buying and selling experience.
- Etsy carefully selects its supplies, supports sellers in overcoming manufacturing and scaling challenges, addresses intellectual property issues, and navigates the challenge of successful sellers creating their own websites.
- Etsy recognizes the importance of supporting sellers, learning from their experiences, and promoting collaboration within the company.
- Collaboration and incorporating different viewpoints is crucial for product development. The PM plays a crucial role in selecting and owning the best ideas and making decisions when consensus is unclear.
- Tim emphasizes the importance of having a well-structured product stack and hiring product managers with collaboration, decisiveness, and curiosity. Implementing the weekly focus exercise can optimize time management and resource allocation.
- Regularly sharing updates and insights in a team channel promotes transparency, accountability, and alignment towards common objectives, leading to a more fulfilling work experience.
- Well-thought-out interview questions and simple, purposeful products can reveal valuable insights about a person's thinking process, mindset, passion, curiosity, and willingness to learn.
📝 Podcast Summary
Etsy sellers rise to the occasion during pandemic, demonstrating adaptability and community spirit.
When the CDC mandated face masks in early April 2020, Etsy saw a surge in demand for masks. The sellers on Etsy quickly adapted to meet this demand by using their sewing skills and available materials to make masks. In an unprecedented move, Etsy put out a call for sellers to make masks, showing their commitment to help both sellers and buyers during this time. This highlights the importance of agility and adaptability in business, as well as the power of a strong community. Additionally, Tim Holley emphasizes the significance of working on a product that adds value to people's lives and the importance of surrounding oneself with people who inspire and challenge you.
Transitioning to a Results-Oriented Culture: Etsy's Journey
Change can be challenging, especially when it involves transitioning from a more relaxed and consensus-based culture to a more results-oriented and fast-paced one. In the case of Etsy, this transition occurred in 2017 when the company realized the need for sustainable growth and a shift in working methods. The transition was a testing and trying time for employees who had their identity tied to the company and its mission. However, one effective strategy that helped facilitate the change was the clear and consistent focus on a north star KPI, gross merchandise sales (GMS). This alignment and measurement allowed for better prioritization and ensured that everyone was working towards the company's goals.
Understanding the market and competition for effective decision-making.
Understanding the broader context of your market and competition is crucial in making effective business decisions. While Etsy may not have a direct competitor, they are aware that their buyers are shopping on other platforms and in different places. This knowledge helps them better allocate resources and make informed choices. Additionally, having a clear KPI that teams can rally around and consistently communicating a clear narrative are essential for driving change and transitioning people to work in a different way. Etsy's guiding principles, such as digging deeper and minimizing waste, further contribute to their success as a small team. Lastly, the experience of the Covid-19 pandemic highlighted the importance of adaptability and seizing unexpected opportunities for growth.
Etsy's Success Through Adaptability and Personal Connection
During a period of high demand and rapid change, Etsy prioritized connecting with their sellers and understanding their needs. They reached out to sellers personally to assess their ability to meet demand and offered assistance to those who needed it. This old-fashioned approach of knowing their customers and supporting them proved to be powerful. Additionally, Etsy faced the challenge of retaining new buyers and driving frequency of purchases. They shifted their focus to driving retention and experimented with measuring change over longer time horizons. This forced them out of their comfort zone and required a different understanding of how to add value to the business. Overall, Etsy's success during this time was based on adaptability, personal connection, and strategic experimentation.
Balancing the Needs of Sellers and Buyers in Building a Successful Marketplace
Building a successful and thriving marketplace requires a balance between focusing on sellers and buyers. Tim Holley, from Etsy, emphasized the importance of understanding and catering to the needs of sellers in the early stages of their marketplace. They immersed themselves in the seller's world, visiting their workshops and homes, and involving them in product development. This deep understanding of sellers served them well. However, as the marketplace grew, they also recognized the need for a world-class buyer experience to drive sales for their sellers. They addressed challenges such as gaining buyer confidence in unique inventory from independent sellers. Ultimately, a marketplace needs a qualified set of buyers and the ability to help them make purchase decisions to ensure sellers can make sales.
Prioritizing customer satisfaction for successful businesses.
Focusing on customer satisfaction is crucial for the success of any business, even if it means pushing hosts or sellers to make certain decisions. Just like Airbnb transitioned from primarily focusing on making hosts happy to prioritizing the happiness of the customers buying their products, marketplaces like this one need to ensure that buyers have a positive experience. By leveraging their insights and data, marketplaces can guide sellers to make better decisions that lead to sales. Additionally, marketplaces with a large inventory face the challenge of helping buyers choose among numerous options. Encouraging sellers to provide more information and improve their listings can enhance the buyer's understanding and increase the chances of making a sale.
Enhancing seller value on Etsy through effective communication and buyer signals.
In order to increase value for sellers on Etsy, it is important to focus on making their time spent on the platform as valuable as possible. This can be achieved through effective product messaging and recommendations that communicate with sellers. By utilizing the buyer experience as a signal, highlighting key aspects such as photos and snippets of information, Etsy can guide sellers in optimizing their inventory and customer support. Similarly, Airbnb saw success in shifting to an instant buying experience by defaulting search results to show only instantly bookable listings, encouraging hosts to adapt. Furthermore, on the buyer's side, emphasizing reviews and providing glanceable information are crucial in increasing conversion rates and helping buyers make confident decisions.
The power of small changes in user experience and business outcomes.
Small, seemingly insignificant changes can have a significant impact on user experience and business outcomes. Both Airbnb and Etsy experienced major wins from simple tweaks in their platforms. Airbnb's idea of opening each listing in a new tab increased conversion by 1%, while Etsy's addition of a single line of text in the cart about carbon emissions offsetting drove conversion rates. These examples highlight the importance of paying attention to the details and thinking about the effort-reward balance. It is crucial to continuously experiment and test different changes to find those that resonate with users and drive positive results. However, it's also important to keep in mind that not all experiments will be successful, as failure is a common part of the experimentation process.
Etsy's approach to experimentation and alternative methods for measuring value
Etsy primarily relies on experimentation to validate changes and ensure a causal relationship between the change made and the desired key performance indicator (KPI). However, there are instances where experimentation may not be suitable, particularly when working towards a bigger goal or when a specific change is not indicative of the overall objective. While A/B testing is the predominant method used at Etsy, the company is expanding its approach by considering cohorts over time and exploring alternative ways to measure value. Additionally, Etsy focuses on acquiring sellers through craft fairs, word-of-mouth, and its Teams platform, while attracting buyers through its extensive inventory, tailored SEO strategies, and Google Shopping.
The Power of Seller-Buyer Relationships in Etsy's Success
Etsy's success in driving new buyers is rooted in the relationship between sellers and buyers. The early sellers on Etsy played a crucial role in attracting buyers by promoting their listings, creating a unique opportunity to grow the marketplace. Sellers who pour their heart into their products are more likely to value and support other sellers within the community. Referral programs were explored by Etsy, but the focus shifted more towards removing barriers for sellers, such as the listing fee, to encourage more participation. Additionally, strategies to enhance retention were implemented, such as the use of favorites. Etsy leverages this action to trigger personalized recommendations or promote items that are selling fast, creating a habit loop that keeps buyers engaged.
Etsy's Unique Brand and Inventory Drives Success
Etsy's success can be attributed to their strong brand and unique inventory. Etsy's brand stands for something in people's minds, creating a distinct image that sets them apart from competitors like eBay and Amazon. The marketplace's focus on handmade and unique items differentiates them and attracts buyers who appreciate the value of these products. The team at Etsy has also prioritized maintaining the integrity of their marketplace through clear policies on what is allowed to be sold, which further distinguishes them from other platforms. Additionally, Etsy's tagline, "keep commerce human," reflects their commitment to a personalized and human touch in the buying and selling experience, which resonates with their target audience. This combination of a strong brand, unique inventory, and a focus on maintaining the human element has contributed to Etsy's continued growth and success.
Etsy's Unique Identity and Support for Sellers
In order to maintain its unique identity and stand out from competitors, Etsy carefully selects and enforces its policies regarding the types of supplies allowed on its platform. While ensuring a wide variety of high-quality and relevant items, Etsy invests in constantly reviewing and refining its selection. Additionally, they understand the challenges faced by sellers, such as limited supply and the need for production assistance. By providing support to sellers, especially those who struggle with manufacturing or scaling their businesses, Etsy helps them elevate their offerings and make more sales. Furthermore, Etsy acknowledges the potential issues regarding intellectual property and actively works to address them. Lastly, they recognize the "graduation problem" where successful sellers may consider creating their own websites to avoid fees, and this is a challenge that Etsy has faced and continues to navigate.
Etsy's Support for Sellers and Learning from Past Experiences
Etsy recognizes the importance of understanding their sellers and providing them with the tools they need to succeed. They acknowledge that sellers are smart business people who want to grow their businesses and make more sales. While some sellers may eventually scale out of Etsy and create their own websites, Etsy still plays a role in their growth and sales strategy. Etsy's role as a distribution channel and its supportive seller community create a certain level of stickiness for sellers. Additionally, Etsy's attempt to create a marketplace within their platform called Etsy Studio was a learning experience for the company. Ultimately, they decided to discontinue it as it didn't align with their new goals and constraints. Etsy values collaboration between functions and understands the importance of a well-executing product team.
The value of collaboration and diverse perspectives in building successful products
Collaboration and incorporating different viewpoints is essential in building successful products. Tim Holley emphasizes the value of working in a tight team, including product eng design, insights partners, and marketing partners. Rather than having the PM as a mini CEO, Etsy values a culture of collaboration and decision-making through consensus. Tim acknowledges that it's not always easy, but it's the best path to take in order to consider different constraints and considerations when developing features and products. While there is a leadership team of five decision-makers, the PM plays a crucial role in selecting and owning the best ideas and ultimately making decisions when consensus is unclear.
Aligning Structure and Design with Strategy for Optimal Customer Experience
An organization's structure and design should align with its evolving strategy. Tim emphasizes the importance of having a product stack that consists of core customer teams, partner teams, enablement teams, and infrastructure teams. Each team plays a crucial role in delivering the best possible experience for customers and ensuring the smooth functioning of the organization. When it comes to hiring product managers, Tim highlights three key qualities: collaboration, decisiveness, and curiosity. These qualities are essential for navigating the changing priorities and opportunities within a small organization like Etsy. Additionally, Tim shares the value of a simple exercise called weekly focus, which involves setting clear goals, reflecting on previous accomplishments, and creating accountability. Consistently practicing this exercise can reveal patterns and help optimize time management and resource allocation.
Enhancing Collaboration and Productivity through Regular Updates and Insights
Having a platform or channel for team members to share their focus, progress, and priorities on a regular basis can be immensely helpful in improving collaboration and productivity. Tim Holley talks about how their team uses a buyer experience product channel to share updates and insights every Monday. This serves as a kind of standup meeting, where individuals discuss their goals and accomplishments for the week. By focusing on priorities rather than tasks, the team is able to align their efforts towards common objectives. This practice creates transparency, encourages accountability, and promotes a higher-level perspective on work. It also fosters a sense of trust and engagement among team members, leading to more fulfilling work lives. A lo-fi yet effective approach, this practice can be implemented by any team looking to enhance their day-to-day operations.
The importance of interview questions and simple, purposeful products for gaining valuable insights
Asking certain interview questions can provide valuable insights into someone's thinking process and mindset. Tim Holley emphasizes the importance of using questions that test how individuals think on the spot and how they handle constraints. This approach can be particularly effective in product interviews. Additionally, asking about what someone has taught themselves or their favorite product can reveal their passion, curiosity, and willingness to learn. Tim also highlights the value of finding products that are simple and purposeful, like the Nara Baby app that he discovered for tracking baby data. Overall, the key takeaway is that well-thought-out interview questions and simple, purposeful products can provide valuable insights and experiences.