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Notes From Chad

Aug 28, 2012

by Chad Dickerson handmade and vintage goods

It’s been a busy summer, and I hope everyone has had a great one. Today, I’m going to give you an update on how Etsy is doing, a behind-the-scenes look into some of my daily work, and also talk about overall communication.

The marketplace is healthy and strong. Last week, the Etsy community passed $500 million in sales so far this year. As you know, for the entire year of 2011, the total was $525 million — and we still have the biggest part of the year to go! More sellers are seeing sales on Etsy than ever. With the exception of December 2011 (a holiday bump), more sellers made a sale in July 2012 than any other month in Etsy’s history. The overall growth rate in sales for the marketplace was higher in July this year than it was last year. We have an amazing and grateful community, as you could see in a recent forum thread, “A Long Overdue Thank You Note to Etsy/Admin.” Thank you — Etsy would be nothing without the community, and I am both thankful (for your investment in Etsy) and humbled (by your gratitude, and where we fall short). Congrats to all of you who are having such a successful summer!

As Etsy grows, we think a lot about keeping the personal touch. We don’t want to become like other rapidly-growing companies — increasingly walled-off, more distant, and less human. When I wrote about our vision for the future in May, I said: “We believe, more than ever, that Etsy can help fundamentally change the way the world works by making it possible for individuals to make and sell things to other people around the globe — a people-powered economy.” Etsy has grown tremendously in the past few years: we now have 800,000 active sellers and more than 40 million visitors to the site every month. Communicating effectively with a growing community in a very dynamic global marketplace is a major challenge. We’re working on it and we know we can always do a better job on communication as we grow. People are at the center of Etsy, and always will be.

Most of our communication is about decisions that affect the community, so I’m going to tell you how I think about the large and small decisions I make every day.

Etsy is a unique kind of business in that our success as a business is completely tied to the success of our sellers. Etsy does well as a business only when sellers do well. Because of that, before I make any decision, I ask myself two simple questions:

  1. Which choice will make the most sellers successful for the long term?
  2. Is this the right thing for the long-term health of the community and the marketplace?

To make these decisions, I have to understand what is happening in the community and what your challenges are, and I get information in a variety of ways. Some of that information comes through people who work on the products at Etsy, but I also spend a lot of time directly with the community. I don’t have a staff that intercepts my email and convos. I forward many of them to the appropriate teams inside Etsy to pass on the feedback and/or to address whatever issue is at hand (most we can correct, and some we can’t). I’m available on Twitter. I have 1-on-1 conversations with sellers every week to get their feedback and I take detailed notes on those conversations that I share with the company. I do rotations in Support — as I noted in the report on the 2011 holidays, one of every seven support emails was answered by people like me who don’t normally work in Support. 1-on-1 contact with sellers is one element that makes Etsy really special and I’m committed to always keeping that channel open, even if I am not able to personally respond to every message as the community continues to grow (and when I don’t, it’s only because I’m doing the other parts of my job, keeping a 300+ person company running!)

One such decision was when I gave the go-ahead to the “no longer pay for quantity up front” project a few months ago. For Etsy’s entire history, sellers had been paying for quantity up front and I had been hearing how time-consuming and frustrating it was to renew single items as they expired. Making such a change would obviously result in Etsy making less money, but it was time to make the change. One of the sellers I spoke with recently told me she was able to get three hours more sleep a night because of this change.

Another way we get feedback is via experiments, which I know is controversial in some corners. The methods that we use at Etsy are widely used at other major websites that you use every day, except almost no one talks about it. I know and understand that the word “experiments” suggests that we’re treating your Etsy shop like a maze and buyers and sellers like lab rats. We don’t for a minute view it that way, and we make every effort to ensure that each test we try has as minimal an impact as possible on any individual shopper or seller. But why run tests at all? Wouldn’t it be better to only make changes we’re certain of?

Let me tell you about one recent experiment. We had some internal disagreement about whether to suggest items for buyers to consider once they’d added something to a shopping cart. While that feature works well on other sites, it wasn’t clear whether it would work well at Etsy (where many items are unique), or whether it would produce a meaningful sales lift for our sellers. We thought this might be good, but we don’t want to launch things on a “hunch,” we want evidence. Experiments give us evidence (data) about decisions without committing to an expensive all-or-nothing approach.  So we ran an experiment which showed that turning on this feature would add $9,000,000 in sales over the course of a year — wow! A huge improvement for a relatively small change. Seeing that, we launched it as soon as possible. By testing the results, we were able to:

  1. Make sure the change would actually benefit sellers, and quantify by how much;
  2. Correctly prioritize work on this feature compared to other features that may not produce as big a result; and
  3. Validate our assumptions about this kind of feature, driving us to do more work on recommendations that could have similar impact.

Testing told us this feature would put money in sellers’ bank accounts in a big way, and as a result, we acted on it. If we had simply launched it, we would not have accurate comparisons (since sales go up anyway as we get closer to the holidays), we would not have been able to compare it to other work as easily, and we would not have had as strong a signal to keep going with this type of work. While not every test produces $9,000,000 in results, every test does keep us focused on the best changes we can make for our business and more importantly, for yours.

As you can imagine, with such a diverse and dynamic community, not every decision we make benefits every individual seller, not every prototype works as expected, and not every experiment delivers the result we want for the community — though those are certainly our ideal outcomes. For every decision I or the team makes, we get lots of feedback, positive and negative. Even the “no longer pay for quantity up front” decision — which we believe was a clear win for all sellers — received its share of criticism. We know that no change is free. Every change we make has some cost, in that sellers have to learn a new way to do things. We make every effort to only make changes that will be profitable for you and your business in the long-term, even when they require some adjustment.

We also do our best to communicate about less pleasant topics. One of those was our recent series of site outages, which our head of operations John Allspaw carefully explained in minute detail. We know how much you depend on us, and we hate when we have to write posts like that one. Some of the messages I get are harshly critical of Etsy, and while we enjoy the good feelings that come from praise, the critical ones are probably more important because they challenge us to do better. Last week, I was taken to task by two sellers on a variety of topics. After a couple of email exchanges, I invited both sellers to come visit Etsy and talk about their concerns face-to-face. We’re open to criticism.

My favorite thing to do is to give sellers good news. Just this morning, I sent convos to two sellers who had recently asked me for the ability to add color and sizing information to their Etsy listings. I let them know that this long-requested feature is being tested now. The response after taking a look: “OMG…it’s awesome!” (If you’d like to join this prototype, go to the Listings Variations prototype and click “Join Prototype”). Occasionally, I search Twitter for “first sale Etsy” and favorite the tweets of new sellers who’ve had their first success in the community. Etsy is such a positive force in the world and I’m proud to be helping set the stage for sellers day in and day out.

As we head into the all-important fall and holidays season, with the momentum of a great summer almost in the rear-view mirror, I know it’s important that we communicate with you better in the coming months and I’m recommitting to improving. I’m going to start the effort by stopping by the Forums to answer any questions about what I wrote above and to get your feedback directly. I’ll be there tomorrow, Wednesday, August 29, from 11 a.m. – 12 p.m. ET. I’m looking forward to interacting with you in real time.

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