How Etsy Evolved Product Prioritization Through Growth

Lessons from Etsy’s Chief Product Officer

The Core Business: The Vital Few

When a company experiences early growth, it’s easy to get into growth hacking mode — pursuing all the “worthwhile many” ways that could help the company grow even faster. However, leaning into growth too early can be a critical mistake, especially if your company hasn’t yet solidified its core business strategy. Instead, it’s important to focus early on the “vital few” initiatives that will move the needle of your business, and equally importantly, to decide what not to work on in service of the Vital Few.

  • Best-in-Class Search and Discovery
  • Human Connections
  • A Trusted Brand
  • Our Collection of Unique Items

Investing in Growth: Portfolio Theory

From 2018 to 2019, Etsy was laser focused on strengthening its core business. By 2020, Etsy was ready to revisit new growth opportunities and innovate ways to expand the business. 2020 was also a transformative year for the company. As the COVID-19 pandemic proliferated, people flocked to Etsy to buy masks while traditional retailers struggled to keep up with demand, creating millions of new buyers for the company to manage. In fact, in 2020, Etsy sold more than $740M in masks. Even after mask sales leveled off later in the year, more people than ever were shopping online. And, alongside this cultural shift to general ecommerce, consumers also demonstrated a greater appreciation for small businesses. People were more interested than ever in finding unique items made by real people to fill the spaces that they were spending their time in — decorating their home offices, kids’ play spaces, and finding gifts for loved ones that they couldn’t see in person.

  • Improvement: Optimizing existing experiences with the highest level of confidence in the near-term.
  • Expansion: Building new products and experiences with lower certainty and a medium term impact horizon.
  • New Business: Finding new business opportunities, which have a high potential impact but with many more unknowns and a longer term investment horizon.

Staying Focused: Focus Flywheel

Once Etsy strengthened its core business and created an intentional framework for product prioritization, they codified an operating rhythm to maintain focus and accountability in the form of meetings that occur on a weekly, monthly, and quarterly basis.

  • Weekly Experiment Review: The weekly experiment review is the most granular review of the Product org’s work. The meeting is led by the Analytics team and is attended by senior Product and Engineering leaders. The focus of the weekly review is to discuss the learnings from the completed experiments from the previous week.
  • CEO Monthly Metrics Meeting: The monthly metrics meeting serves as an accountability gut check across all functional areas of the business, and is attended by senior leaders across the company. At the meeting, the Product org shares progress towards goals across the full product portfolio as well as at a more granular initiative level.
  • Quarterly Product Reflection: The goal of the Quarterly Product Reflection meeting is for the entire Product org to zoom out across the whole portfolio of priorities and discuss one key question: “Do we have more or less confidence in our ability to achieve the outcomes that we set out to accomplish at the end of the quarter versus at the beginning of the quarter?” The meeting allows the org to evaluate the effectiveness of their current strategy and decide whether to stay the course or pivot.

Narrowing Your Focus

It’s easy for startups to get carried away with new and exciting ideas一after all, you never know which growth hacks may be fruitful. But at a certain point, implementing all the initiatives your company can imagine won’t be as effective as zeroing in on the few vital things that will significantly move the needle on your core business. Without a sound, focused product strategy to ground your efforts, your team will be pulled into too many directions and lose concentration on the things that matter. Instead, think about your product initiatives as precious investments that need constant monitoring and measurement to stay on track. And with the right accountability structures in place, you can drive towards profitable and sustained growth.

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