LLenny's Podcast
← All episodes
Tim Holley (VP of Product)03 September 2023

Inside Etsy’s product, growth, and marketplace evolution

7Frameworks
15Insights

Frameworks in this episode

Marketing5 steps

Close the Loop: Intent-Signal Retention Engine

Turn every low-commitment user signal into a trigger you can legitimately fire later.

Read →
Leadership5 steps

KPI + Narrative: The Two-Part Turnaround Drumbeat

Pair one north-star KPI with one relentlessly repeated narrative to reset how a company works.

Read →
Marketing4 steps

Signals and Nudges for Choice Under Abundance

When every result is plausible, confidence beats relevance — surface glanceable signals, not more inventory.

Read →
Leadership5 steps

The Five-Legged Stool

Product, eng, design, insights, and marketing as one leadership team — with the PM accountable, not king.

Read →
Strategy5 steps

The Provenance Gate: Scaling Supply Without Diluting the Brand

Let sellers scale by outsourcing production — but only to a partner whose process they actually know.

Read →
Strategy5 steps

The Transaction Tiebreaker for Marketplace Prioritization

Stop arguing supply vs demand — make the transaction itself the thing every team is accountable to.

Read →
Productivity4 steps

The Weekly Focus Ritual

Post what you're focused on this week, and whether last week's focus actually landed.

Read →

Insights & moments

The myth-busts, hot takes, explainers, and tools worth keeping.

Hot Take· 1

Hot Take56:30

The PM's job is to choose the best ideas, not be a mini-CEO

Etsy rejects the PM-as-mini-CEO model, favoring collaboration across a five-legged stool of product, eng, design, insights, and marketing. As their CPO Nick puts it, the PM doesn't have to have the best ideas, they have to choose them, remain accountable for the call, and own what comes next when experiments fail.

  • Etsy uses a five-legged stool: product, engineering, design, insights, and marketing
  • It rejects the PM-as-mini-CEO 'directing from on high' model
  • The PM must choose the best ideas, not necessarily generate them
  • The PM is accountable for the call and for owning what happens after a failed experiment

“generally we don't we don't subscribe to this idea of PM as the mini CEO.”

Tim Holley · 56:30

“you don't have to have the best ideas, but you have to choose the best ideas.”

Tim Holley · 57:30
#product-management#leadership#collaboration#teams

Explainer· 5

Explainer18:30

Etsy built the seller side first, then the world-class buyer experience

Early on Etsy immersed itself in understanding sellers through studio visits, workshop tours, and hack weeks. The more recent phase has been building a world-class buyer experience that drives sales. With 100 million+ unique items, Etsy faces a different discovery challenge than a marketplace with 10,000 findable SKUs.

  • Etsy did studio visits, went to sellers' workshops and homes, and brought them into hack weeks
  • Deep seller understanding preceded the buyer-experience focus
  • Over 100 million unique items creates a discovery challenge unlike 10,000 commodity SKUs
  • Reviews play a heightened role because inventory is unique and sellers are unknown

“Back in the day, we were doing studio visits with sellers. We were going to their workshops. We were going to their homes.”

Tim Holley · 19:30

“Because when you have, you know, over 100 million items, all of which are unique, you've got a different challenge than when you have, you…”

Tim Holley · 20:00
#marketplace#product#buyer-experience#supply
Explainer35:00

Why AB testing is the highest bar but not always the point

Etsy runs the vast majority of changes as experiments, rooted in a deep engineering culture. Tim views AB testing as the highest bar of proof because it establishes near-certain causality, but argues it can miss the point for net-new bets or longer-horizon goals like retention and SEO. The through-line is always: is the change adding value?

  • Roughly 80% of experiments fail on average, which matches Etsy's experience
  • AB testing proves causality with near absolute certainty, the highest bar
  • It can miss the point when building toward a bigger net-new thing
  • Retention and SEO need different measurement approaches than in-visit conversion tests

“That proves with near absolute certainty that there's a causal relationship between the change you made and the KPI that you want to move.”

Tim Holley · 35:30
#experimentation#ab-testing#measurement#product
Explainer38:00

How Etsy acquires both sellers and buyers

Etsy's acquisition is two-sided. Early seller acquisition was boots-on-the-ground at craft fairs like Renegade, plus word-of-mouth and a Teams platform where sellers congregate. On the buyer side, Etsy leverages its huge long tail of niche inventory, which lends itself extremely well to SEO and Google Shopping.

  • Early seller acquisition happened in person at craft fairs like Renegade
  • Sellers refer other craftspeople, driving word-of-mouth growth
  • A Teams platform lets sellers gather and ask each other questions
  • The long tail of niche inventory makes SEO and Google Shopping powerful buyer channels

“we would uh on the seller side, we would be at craft fairs like uh Renegade and and other places where our sellers were selling…”

Tim Holley · 38:00

“And so, that lends itself really well to thinking about SEO. Lends itself really well to thinking about Google Shopping”

Tim Holley · 39:00
#acquisition#seo#growth#marketplace
Explainer42:30

Using the habit loop to close retention loops on Etsy

Etsy has long had retentive features like favorites. Tim frames retention through the habit loop: an action (favoriting), a trigger, and a reward. Once a buyer shows intent by favoriting, Etsy can close the loop through an updates feed and push notifications when the item goes on sale or is selling out.

  • Favorites signal intent, short of adding to cart or purchasing
  • The habit loop framing is action, trigger, reward
  • The updates feed surfaces how favorited items have changed
  • Push notifications like 'now on sale' or 'only one left' pull buyers back

“how do we think about the habit loop? Of if you take an action, what's the trigger and then what's the reward?”

Tim Holley · 43:00

“we call it the updates feed. Essentially a feed of activity that you've taken that we're demonstrating how it's changed, what's new, and then pulling…”

Tim Holley · 43:30
#retention#habit-loop#notifications#product
Explainer44:00

How 'keep commerce human' lets Etsy coexist with Amazon and eBay

Tim attributes Etsy's survival against eBay and Amazon largely to brand: it stands for something specific in buyers' minds, backed by policies that maintain marketplace integrity. The brand's current statement, 'keep commerce human,' traces back to valuing the unique and handmade and actively shapes what Etsy will and won't build.

  • Brand means buyers don't expect Etsy inventory to match eBay or Amazon
  • Most content is effectively UGC: the seller's item or the buyer's review
  • 'Keep commerce human' is pithy but has lineage to valuing the unique and handmade
  • The brand permeates prioritization, so drone-dropped items no one touches don't feel Etsy

“the the the statement we have is keep commerce human. And that feels really simple, super pithy, easy to remember, but has has lineage when…”

Tim Holley · 46:30

“an item getting dropped off by a drone and a person never touches it, like that doesn't that doesn't feel very Etsy.”

Tim Holley · 47:00
#brand#positioning#marketplace#strategy

Story· 5

Story13:30

The night Etsy's traffic turned into Black Friday overnight

When the CDC mandated face masks in early April 2020, Etsy's traffic and sales exploded overnight as buyers searched for masks and sellers with sewing skills rushed to supply them. Etsy did something it had never done before: put out a direct call asking sellers to make masks. Tim's team then phoned individual sellers old-fashioned-style to check whether they could actually meet demand.

  • The CDC mask mandate turned a typical April day into Black Friday-level demand instantly
  • Sellers who made wedding dresses could pivot to masks quickly because the sew skill transferred
  • Etsy publicly called on sellers to make masks, a first in company history
  • The team literally called sellers to ask if they could meet demand or needed a pause
  • Next challenge was retaining the influx of new/reactivated buyers beyond masks

“And so, it felt like this is our time to shine uh to really help sellers continue to make sales, to help buyers find this…”

Tim Holley · 15:00

“Our sellers are incredibly astute business people.”

Tim Holley · 14:30
#covid#marketplace#supply-demand#etsy
Story07:00

Etsy's painful shift from consensus culture to moving fast

When Josh Silverman joined as CEO in 2017 (alongside layoffs), Etsy had to abandon an entrenched consensus-based culture that produced thoughtful products but moved slowly. For employees whose identity was tied to the mission, being told to change how they worked felt existential. Tim frames it as a hard but necessary business reset toward speed.

  • The 2017 transition coincided with a round of layoffs
  • Consensus-based debate produced good products but was not fast
  • Many employees had their identity wrapped up in Etsy's mission, making change feel existential
  • The core mission of helping small independent sellers was preserved through the shift

“we had had a pretty um entrenched consensus-based culture where we would really debate a lot of decisions and a lot of features.”

Tim Holley · 08:00

“The reality is it's a business and we needed to get faster at launching features, improving the experience”

Tim Holley · 08:30
#culture#leadership#change-management
Story33:30

A one-line cart change about carbon offsets lifted conversion

Tim's most surprising conversion win was a single line of copy added to the cart: that Etsy offsets carbon emissions from every delivery. It communicated Etsy's values rather than a product feature, resonated strongly with the type of buyer Etsy attracts, and drove an unexpected conversion uplift.

  • The win was a one-line text change in the cart experience
  • It called out that Etsy offsets carbon emissions from every delivery
  • It worked by communicating company values, not a feature
  • Small marketing-copy snippets can have outsized, hard-to-predict impact

“You know, we had one example where we added added some text to the to the cart experience, and uh we just saw huge uplift…”

Tim Holley · 34:00

“the the text change was in our cart where we call out Etsy offsets carbon emissions from every delivery.”

Tim Holley · 34:30
#conversion#experimentation#copywriting#sustainability
Story40:30

Why Etsy's referral program worked better for sellers than buyers

Etsy dabbled with referrals years ago in the Dropbox give-get era. The buyer program flopped because Etsy didn't yet appreciate the future value of a new buyer. The seller side worked better: it costs 20 cents to list an item, a small but real barrier, so listing credits (via the Teams platform) reduced friction and, as a bonus, resisted fraud since the credit only buys listings.

  • The buyer referral program failed partly because Etsy undervalued a new buyer's future purchases
  • It costs 20 cents to list an item on Etsy, a small but meaningful barrier
  • Seller referrals gave listing credits, lowering the barrier to open a shop or list more
  • Listing credits are fraud-resistant because the reward is only Etsy listings, not cash

“on Etsy, for those who aren't familiar, it costs 20 cents to list an item. And that may seem like a very small financial outlay…”

Tim Holley · 41:00

“but in certain markets and certain pockets we saw it work pretty well.”

Tim Holley · 42:00
#referrals#growth#sellers#fraud
Story53:30

Why Etsy shut down Etsy Studio

Etsy Studio was a marketplace-within-Etsy aimed at the gap between Pinterest inspiration and craft-supply stores like Michaels, connecting ideas with the supplies and tutorials to make them. It felt brand-aligned, but its launch coincided with the 2017 pivot to refocus on the core marketplace, so it failed to check the new boxes of short-term sales and ROI-positive marketing, and was killed.

  • Studio targeted the intersection of Pinterest inspiration and craft-supply retailers
  • The concept felt aligned with Etsy's creativity and maker brand
  • Its launch collided with the 2017 refocus on the core marketplace
  • Under new goals it didn't drive short-term sales or ROI-positive marketing, so it was cut

“you've got Pinterest fails, right? You've got all these great inspiring items or or or projects on Pinterest and then you have people who've no…”

Tim Holley · 53:30

“you know, when when we laid out what we're optimizing for which is driving sales in the short term, marketing dollars being as ROI positive…”

Tim Holley · 54:30
#product-strategy#focus#failure#etsy

Q&A· 1

Q&A51:00

The graduation problem: why successful sellers don't just leave

As sellers succeed they ask why they pay Etsy fees instead of running their own site. Tim argues Etsy's fees are low and competitive, and while smart sellers will distribute across channels, building and driving traffic to your own website is neither cheap nor fast. Etsy stays sticky through tools tailored to seller needs and the Teams community.

  • Etsy's fees are positioned as generally low and highly competitive
  • Smart sellers naturally distribute across their own site, other marketplaces, and in person
  • Building your own website is hard to build, hard to maintain, and expensive to drive traffic to
  • Stickiness comes from tailored tools and the Teams community

“I think the the the core thought there is our fees are generally low and highly competitive.”

Tim Holley · 52:00

“Reality is that's neither cheap nor fast. It's hard work. It's hard work to build, hard work to maintain, expensive to drive traffic to.”

Tim Holley · 53:00
#retention#sellers#fees#marketplace

Tool· 1

Tool1:05:00

Tim Holley's most-recommended books

In the lightning round Tim recommends three books tied by a theme of trust and how you engage people. Team of Teams by Stanley McChrystal shaped how he thinks about pushing decisions to the edges; Let My People Go Surfing by Yvon Chouinard inspired him on culture and treating employees well; and The Power Broker by Robert Caro is a fascinating tome about one person's outsized impact on New York.

  • Team of Teams by Stanley McChrystal, on trust and disseminating decision-making to the edges
  • Let My People Go Surfing by Yvon Chouinard, on culture and treating employees well
  • The Power Broker by Robert Caro, a tome about one man's outsized impact on New York
  • Tim suggests chunking The Power Broker a few chapters at a time so it isn't insurmountable

“Let My People Go Surfing by Yvon Chouinard, the Patagonia founder.”

Tim Holley · 1:05:30

“It took me probably an entire year to read cuz I'm an extremely slow reader”

Tim Holley · 1:06:30
#books#leadership#recommendations

Takeaway· 2

Takeaway09:30

One north star KPI plus a repeated narrative drove the turnaround

Tim credits two leadership moves for making the change stick: making GMS (gross merchandise sales) an absolutely front-and-center north star that grounds every prioritization discussion, and telling a clear narrative repeated relentlessly. Clarity on the goal married to clarity on the why is the powerful combination.

  • GMS became the drumbeat and measuring stick in every meeting
  • Teams could align through one or two levels of abstraction and still ladder up to GMS
  • Josh's skill was telling a clear narrative and using it consistently
  • You must repeat a message far more than three times before people internalize it

“just having that being absolutely front and center, being the drumbeat that we talk about in every meeting, the the measuring stick that we measure…”

Tim Holley · 09:30

“You know, the old adage of you need to say something three times before people understand it. I would wager you need to say it…”

Tim Holley · 11:30
#kpi#leadership#communication#prioritization
Takeaway22:00

GMS resolves the buyer-vs-seller prioritization fight

Rather than declaring one side always wins, Etsy anchors on GMS, which by definition represents a buyer buying from a seller. That reframes the question from 'which customer' to 'what transaction are we facilitating.' Etsy still keeps dedicated seller-experience teams, but limited marketplace real estate means not every team can build for buyers.

  • A seller only stays on a marketplace if they make sales
  • GMS represents a buyer buying from a seller, so it isn't one-sided
  • Too many teams working the same buyer surface get in each other's way
  • Etsy has insight and data individual sellers lack and uses it to guide them

“is a seller will go there to make sales. And if they're not making sales, they probably won't go to that marketplace.”

Tim Holley · 22:00

“GMS represents a buyer buying from a seller.”

Tim Holley · 23:00
#marketplace#prioritization#strategy