Introducing a product supply tradition at Etsy

Choosing a accomplice

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
on the lookout for a vendor. After an intensive search, they chose Thoughtworks,
primarily as a result of they perceived an in depth cultural match and deep alignment
relating to trendy software program growth.

Thoughtworks has an identical method to Agile as Etsy – being Agile
quite than doing Agile. Etsy’s crew was not seeking to undertake a
methodology that blindly follows strict rituals and practices, and wished
a accomplice 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 related rules
relating to worker care, range, open-source, and expertise
sustainability.

The Thoughtworks crew began by embedding into product groups, working with
each purchaser and vendor groups, on numerous vital initiatives similar to cost
mannequin modifications, Search Engine Optimization (search engine marketing), and a notification platform.
This enabled Thoughtworks to know how Etsy labored, created a direct
affect on supply, and improved growth practices similar to automated
testing.

For Thoughtworks, Etsy was fairly totally different from the standard shopper.
They’re a totally digital firm, and their technical course of and product
practises are very mature. Not like most purchasers who have interaction Thoughtworks,
Etsy had no giant transformation to undertake, and no ingrained habits
that wanted a significant shift. What they have been searching 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 turned extra of an
alternate of concepts drawn from totally different experiences.

Scaling Product Supply and Discovery

Thoughtworks and Etsy fashioned a cross-functional Product Supply
Tradition (PDC) crew to research the present product supply and discovery
course of. They analyzed all the software program growth worth stream,
wanting intently on the complaints of managers and crew members. Chosen
occasions have been replayed to achieve a deep understanding of “how” it occurred
quite 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 plenty of 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
  observe of their method. A code change sitting in a repository and never
  deployed to customers is just not useful, and successfully prices the corporate cash. Etsy
  deploys a whole bunch of instances a day, with a 30-minute decide to manufacturing lead
  time.
• Options are prioritized utilizing knowledge: Product managers and knowledge analysts
  collaborate to find out an anticipated worth, measured by KPI modifications. If the
  function doesn’t ship sufficient worth versus its price, as evidenced by an A/B
  check, it’s not 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 staff 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 plenty of 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 modifications main some product
  managers to expres a need for better possession over their product
  selections.

Time to studying

The crew created an enchancment program, primarily based on lean pondering and the
concepts of Marty Cagan, who had just lately introduced at Etsy. The management crew was
studying his e book Impressed.

I promise you that not less than half the concepts
in your roadmap will not be going to ship what you hope. (By the way in which, the
actually good groups assume that not less than three quarters of the concepts gained’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 cut back.

They have been additionally taking a look at different metrics.

• Bettering the time to market
• Bettering the effectiveness of merchandise (e.g. income, buyer
  engagement)
• Worker happiness

To affect the KPIs, they got here up with plenty of resolution hypotheses:

Lightweight prototypes that incorporate extra direct person analysis

Etsy has robust experimentation infrastructure and analytics capabilities.
They run many concurrent A/B checks on {the marketplace}. The issue the PDC
crew noticed is that the suggestions cycle may be fairly gradual. 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 checks 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
need to emphasize that these are experiments, usually run utilizing prototypes.
A prototype is just not one thing that’s prepared for prime time and positively 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 scale 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 diminished the extent of ceremony. Third, they
created a dual-track system, with a design and analysis crew regularly
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 decreasing the price of
experimentation, they might improve the variability and amount of experiments,
discovering concepts that confirmed extra worth.

Determine 1: Experiment validation course of

Blueprint for product supply

The PDC, at the side of product crew leaders, got here up with a set of
product supply rules and associated supply observe modifications. The
practices included: smaller extra centered tales, redesigning story partitions to
higher match the crew course of, utilizing spikes to cut back technical uncertainty, and
higher methods of managing tech debt. They didn’t need to take away the autonomy of
groups. Steady enchancment is a giant a part of Etsy tradition. These practices
are supposed to be handled as smart defaults that may be tailored and improved
for every crew’s particular context.

The PDC crew first examined the observe modifications on pilot product groups to
set up their effectiveness after which iterated. As soon as the observe
demonstrated an enchancment, the crew added to a information base and offered
mild teaching to introduce the brand new practices to all product groups throughout
Etsy.

Lean Portfolio administration

Some giant initiatives have been nonetheless being carried out, although there was
not clear proof of the initiative creating worth. That is the standard sunk
price downside. To resolve this, the PDC crew
urged taking a lean method to portfolio administration.

Our runway ought to be an inventory of hypotheses to check, not an inventory of
necessities to construct. After we reward our groups for his or her means to ship
necessities, it’s simple to quickly bloat our merchandise with pointless
options—resulting in elevated complexity, greater upkeep prices, and
restricted means to alter. Options delivered will not be a measure of success,
enterprise outcomes are. Our runway is a collection of questions that we have to
check to cut back uncertainty and enhance our understanding of development
alternatives.

— Humble et al, Lean Enterprise (p96)

As an alternative of making prolonged venture specs and plans, the PDC crew
coached product groups to develop consequence statements for every initiative. With
consequence statements, beginning with a buyer or enterprise consequence permits the
crew to experiment with many various concepts to realize the result by tying
them to measurable KPIs. The much less exact an consequence is, together with its KPIs,
the more durable it’s to specify. When making ready for attainable initiatives, every
product crew created a two-page temporary summarizing the result, the measurable
affect, and the preliminary funding required.

The manager crew prioritized the result statements, and every assertion
was considered as a “wager” amongst a portfolio. Impressed by the Lean Worth Tree
idea, the chief crew would observe an everyday cadence to find out if a
wager was paying off, giving them the chance to pivot early.

Stronger product & engineering collaboration

One other enchancment was to incorporate engineers early within the product ideation
course of and to have them be part of person suggestions periods. The crew examined
engineers becoming a member of the speculation technology and validation periods and
working intently with designers throughout design sprints. The outcomes of the check
confirmed an a variety of benefits. Engineers improved their understanding of the
buyer, constructing empathy for his or her wants. They may present on-the-spot
suggestions on the feasibility of an method and shortly create prototypes to
reveal concepts to customers. Cross-functional engagement allowed engineers to
contribute plenty of nice concepts that made it to the product.

After the preliminary PDC initiative Etsy continued to strengthen the
collaboration between teams. At each degree of the group, product and
engineering are companions, which suggests they’re capable of have wholesome trade-off
discussions. The platform group expanded the usage of product managers for
infrastructure and developer tooling groups – encouraging groups to consider
technical capabilities as merchandise and end-users being Etsy engineers. The
technical product managers do analysis and prioritization actions, simply as
they might for a buyer product.

What was the affect of product supply tradition?

Testing with pilot groups indicated that the Time to Studying went from 50
days to five days. Through the pilot, one product supervisor mentioned, “What I like about
the [direct user research sessions] pilot is that it lets us check our concepts
quicker, it was very nice to not spend as a lot time diving deep into
one thing that we didn’t even know we have been going to make use of.” An initiative on
stock high quality that was predicted to ship a seven million greenback income
improve as an alternative delivered eleven million {dollars} in incremental worth utilizing
the PDC urged enhancements. Following this pilot success, the crew coached
all the product growth group on the product supply method.

In keeping with Mike Fisher, “It is rather onerous to isolate the advantages of a
course of change on a corporation of a number of hundred engineers since we don’t
run A/B experiments of this kind. Nonetheless, we did take a look at excessive degree
productiveness metrics after having PDC applied for over 2 years, and all of
our metrics have been very optimistic. We had improved our velocity by doing this
work, and we have been capable of produce finally extra advantages for the consumers and
sellers – extra options, higher search, higher processes; the entire
market turned higher for consumers and sellers and that was the objective.”