Josh Silverman, CEO of Etsy, shares the challenges faced by Etsy and how they successfully turned the company around. He discusses crisis management, the challenges of being CEO of Skype, navigating internal culture, Etsy's commission increase, and leadership lessons.
Prioritizing gross merchandise sales (GMS) was the key to turning around Etsy's financial difficulties and lack of focus.
Providing clarity and setting constraints allows teams to innovate and prevent wasting resources on less impactful projects.
Deep dives
Josh Silverman's Turnaround Journey at Etsy
When Josh Silverman took over as CEO of Etsy, the company was facing financial difficulties and a lack of focus. He quickly realized that the key to success was to prioritize gross merchandise sales (GMS). By cutting down on unnecessary projects and focusing on initiatives that would impact GMS, Silverman was able to turn the company around. He also made important decisions such as raising the commission fee from 3.5% to 5% and reinvesting the additional revenue into marketing and support for sellers. Through his transparent leadership style and emphasis on Etsy's social mission, Silverman was able to inspire the team and create a culture of success.
The Importance of Clarity and Constraints in Leadership
One of the key lessons that Josh Silverman has learned in his leadership journey is the importance of providing clarity and setting constraints for the team. By defining what success looks like and what the specific constraints are, he allows his team to innovate and come up with effective solutions. This approach helps focus efforts and prevents wasting resources on less impactful projects. By aligning the team's values with the company's mission and being authentic as a leader, Silverman fosters a culture of excellence and empowers his team to achieve their goals.
Navigating Challenges and Making Bold Decisions
Throughout his career, Josh Silverman has faced numerous challenges and made bold decisions to drive positive change. Whether it was turning around struggling businesses like eBay Netherlands or Skype, or restructuring and refocusing Etsy, he consistently took decisive actions to drive growth and success. He believes in making data-driven decisions rather than being restricted by dogma and is willing to take calculated risks for the benefit of the company. By communicating effectively with stakeholders and being transparent about the challenges and opportunities, Silverman has been able to build trust and rally the team towards achieving their goals.
Balancing Economic Success with Social Responsibility
Josh Silverman emphasizes the importance of balancing economic success with social responsibility in business. He believes that companies can be both good citizens and profitable by prioritizing initiatives that have a positive impact on society. At Etsy, this includes empowering creators and artisans, promoting diverse and inclusive workplaces, and being environmentally conscious. Silverman recognizes that businesses like Etsy offer buyers a unique and special experience that stands out in an increasingly disposable world. By maintaining a strong sense of purpose and focusing on customer needs, he is confident in Etsy's ability to thrive regardless of economic headwinds.
Josh Silverman built Evite and turned around eBay. Then, in 2017, Etsy came calling. The online marketplace for creative goods was in deep trouble. Growth had plateaued and the company was on the verge of being sold. Josh stepped in as CEO and got the team focused on one simple metric that made all the difference. Originally published in 2020.
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