Tim Holley (VP of Product)03 September 2023

Inside Etsy’s product, growth, and marketplace evolution

7Frameworks

15Insights

Episode overview

Lenny Rachitsky talks with Etsy VP of Product Tim Holley about Etsy’s shift toward faster execution, a clear gross-merchandise-sales north star, and an outside-in view of competition. Holley explains how Etsy balances seller supply with buyer demand, improves conversion through reviews and behavioral nudges, and uses SEO, Google Shopping, favorites, and notifications across the growth funnel. They also discuss Etsy’s COVID-era surge, experimentation culture, cross-functional product organization, hiring criteria, and a simple weekly-focus practice.

Key ideas

A clear north-star metric—gross merchandise sales—helped Etsy prioritize work and align teams during its 2017 cultural transition.
Etsy’s COVID surge began with demand for face masks, after which the company focused on retaining newly acquired and reactivated buyers across more categories.
Successful marketplaces need both supply and demand, but Etsy frames its core job as bringing qualified buyers to sellers and facilitating transactions.
Buyer confidence and conversion improve through customer review photos and videos, scarcity signals, concise decision-making information, and values-based copy.
Etsy acquires buyers through long-tail inventory, SEO, and Google Shopping, while seller acquisition historically benefited from craft fairs, word of mouth, communities, and listing-credit referrals.
Favorites, sale and scarcity notifications, and an updates feed close habit loops and encourage buyers to return.
Etsy generally validates changes with A/B tests but also uses cohorts, pre-post analysis, and other approaches when experiments are unsuitable.
Product teams combine product, engineering, design, insights, and marketing, with PMs accountable for choosing among ideas and deciding when evidence is inconclusive.

Transcript available · source text is retained privately and is not published

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 →

People & resources mentioned

Attributed to the moment in the episode. Timestamps are approximate.

People · 6

Lenny RachitskyMentionstoday we've got another very special compilation episode something I've been pulling on more and more with the podcast and the newsletter
“Welcome to Lenny's podcast where I interview world-class product leaders and growth experts”
▶ Watch at ~1:08approx.
Tim HolleyMentionsTim is VP of product at Etsy where he's been for over 10 years
“Today my guest is Tim Hawley. Tim is VP of product at Etsy where he's been for over 10 years”
▶ Watch at ~1:17approx.
Josh SilvermanMentionsyour current CEO, Josh Silverman
“your current CEO, Josh Silverman, joined and it felt like a huge moment in the history of Etsy”
▶ Watch at ~6:44approx.
Stanley McChrystalCoinedTeam of Teams by Stanley McChrystal
“Team of Teams by Stanley McChrystal has been I think it's just A, a really fascinating read”
▶ Watch at ~1:05:01approx.
Yvon ChouinardCoinedLet My People Go Surfing by Yvon Chouinard, the Patagonia founder
“Let My People Go Surfing by Yvon Chouinard, the Patagonia founder”
▶ Watch at ~1:05:47approx.
Robert CaroCoinedPower Broker by Robert Caro
“Power Broker by Robert Caro. That is an absolute tome. It is huge.”
▶ Watch at ~1:06:24approx.

Resources · 29

productroadmap.aiMentionssoftware · Ignition
“Productroadmap.ai is the first AI roadmapping suite”
▶ Watch at ~2:09approx.
IgnitionMentionssoftware · Ignition
“As part of Ignition's broader go-to-market operating system, productroadmap.ai can also help create better handoffs”
▶ Watch at ~2:30approx.
EppoRecommendssoftware · Eppo
“Check out Eppo at geteppo.com. That's geteppo.com and 10x your experiment velocity.”
▶ Watch at ~4:09approx.
SoulCycleUsescompany
“it felt like SoulCycle was a really interesting way to do that”
▶ Watch at ~5:01approx.
EtsyUsescompany · Etsy
“what we do every day at Etsy is we help our sellers make sales”
▶ Watch at ~5:22approx.
The New York TimesMentionscompany · The New York Times Company
“I just remember this New York Times story back in the day when your current CEO, Josh Silverman, joined”
▶ Watch at ~6:39approx.
AirbnbUsescompany · Brian Chesky, Joe Gebbia, and Nathan Blecharczyk
“So at Airbnb, there's always this thinking of who do we prioritize if we have to make a decision”
▶ Watch at ~21:39approx.
OneSchemaRecommendssoftware · Christina Gilbert
“Learn more at oneschema.co/lenny.”
▶ Watch at ~33:19approx.
Etsy TeamsUsesproduct · Etsy
“we have a Teams platform where sellers can come together, ask each other questions”
▶ Watch at ~38:45approx.
Google ShoppingUseswebsite · Google
“Lends itself really well to thinking about Google Shopping”
▶ Watch at ~39:09approx.
DropboxMentionscompany · Drew Houston and Arash Ferdowsi
“this was back in the days of of Dropbox referral program being, you know, a huge huge driver of their growth”
▶ Watch at ~41:17approx.
eBayMentionscompany · eBay
“You shouldn't expect the same inventory on Etsy as you might be looking for on eBay”
▶ Watch at ~44:51approx.
AmazonMentionscompany · Jeff Bezos
“it's not the same as eBay and it's not the same as Amazon”
▶ Watch at ~45:30approx.
ZazzleMentionscompany
“people take her designs and just sell them on every platform on Zazzle and probably Etsy”
▶ Watch at ~50:49approx.
Etsy StudioMentionsproduct · Etsy
“you built a marketplace essentially within Etsy called Etsy Studio”
▶ Watch at ~53:27approx.
PinterestMentionscompany · Pinterest
“you've got all these great inspiring items or or or projects on Pinterest”
▶ Watch at ~53:44approx.
MichaelsMentionscompany
“you've got a marketplace like Michaels or or these other places where you might go for craft supplies”
▶ Watch at ~54:00approx.
SlackMentionssoftware · Slack Technologies
“Is there like a Slack channel people post these in?”
▶ Watch at ~1:04:03approx.
Team of TeamsRecommendsbook · Stanley McChrystal
“Team of Teams by Stanley McChrystal has been I think it's just A, a really fascinating read”
▶ Watch at ~1:05:01approx.
Let My People Go SurfingRecommendsbook · Yvon Chouinard
“Let My People Go Surfing by Yvon Chouinard, the Patagonia founder. Incredibly fascinating read”
▶ Watch at ~1:05:47approx.
PatagoniaMentionscompany · Yvon Chouinard
“Yvon Chouinard, the Patagonia founder”
▶ Watch at ~1:05:51approx.
The Power BrokerRecommendsbook · Robert Caro
“Power Broker by Robert Caro. That is an absolute tome. It is huge.”
▶ Watch at ~1:06:24approx.
Infinite JestMentionsbook · David Foster Wallace
“It's like Infinite Jest where you just never you're intimidated”
▶ Watch at ~1:07:06approx.
YellowstoneRecommendstv show · Taylor Sheridan and John Linson
“We loved Yellowstone and all of the I guess the prequels. They've been, yeah, just really really fun fun to watch”
▶ Watch at ~1:07:22approx.
NetflixMentionscompany · Netflix
“we cut all our cords and we only needed Netflix”
▶ Watch at ~1:07:46approx.
Nara BabyRecommendssoftware
“I found this one app called I think it's called Nara Baby or Nara something. Super simple, allows both both parents to enter information”
▶ Watch at ~1:09:05approx.
HuckleberryUsessoftware
“I've been using Huckleberry, which is both awesome and not awesome”
▶ Watch at ~1:09:32approx.
LinkedInUseswebsite · LinkedIn
“find me on LinkedIn. That's probably well, not probably is my most professional platform”
▶ Watch at ~1:11:01approx.
InstagramMentionssoftware · Meta
“Instagram like said is a is a is a farce”
▶ Watch at ~1:11:09approx.

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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

Key ideas

Frameworks in this episode

Close the Loop: Intent-Signal Retention Engine

KPI + Narrative: The Two-Part Turnaround Drumbeat

Signals and Nudges for Choice Under Abundance

The Five-Legged Stool

The Provenance Gate: Scaling Supply Without Diluting the Brand

The Transaction Tiebreaker for Marketplace Prioritization

The Weekly Focus Ritual

People & resources mentioned

People · 6

Resources · 29

Insights & moments

◆Hot Take· 1

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

✶Explainer· 5

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

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

How Etsy acquires both sellers and buyers

Using the habit loop to close retention loops on Etsy

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

❝Story· 5

The night Etsy's traffic turned into Black Friday overnight

Etsy's painful shift from consensus culture to moving fast

A one-line cart change about carbon offsets lifted conversion

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

Why Etsy shut down Etsy Studio

?Q&A· 1

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

✦Tool· 1

Tim Holley's most-recommended books

▲Takeaway· 2

One north star KPI plus a repeated narrative drove the turnaround

GMS resolves the buyer-vs-seller prioritization fight

Hot Take· 1

Explainer· 5

Story· 5

Q&A· 1

Tool· 1

Takeaway· 2