Lessons from Josh Silverman, CEO of Etsy

Josh Silverman is the current CEO of Etsy. Previously he was the CEO of Skype, Shopping.com (eBay) and was co-founder and CEO of Evite, which he led from inception through its sale to Barry Diller’s IAC.

1. On the best way to have an impact in the world: "I started in politics thinking that was the best way to make an impact on the world. I got my degree in public policy and then went to work for [former New Jersey senator] Bill Bradley. After a while I realized I could reach more people and have a more immediate impact on the world if I joined the private sector. What I’ve learned is that to be an entrepreneur is to be a leader—you are driving change and getting people to join your dreams with their dreams."

2. On the highs and lows of being an entrepreneur: "I was surprised by how high the highs were and how low the lows were. Every entrepreneur needs a good internal regulator. Mine was my wife. You need to ride out the tough times. Really it just takes passion and drive. Being an entrepreneur is the ultimate equal opportunity."

3. On how every action you take as an executive has a big impact: "When you’re the leader of an organization, people are watching every single thing you do. They’re interpreting into every body language you have, how often are you on the phone, how often are you stepping away to conference rooms? So smiling every day, carrying yourself with confidence and conviction, all these things about what people want in a leader, it’s really important, it’s part of the job, it’s actually an important part of the job."

4. On never letting a good crisis go to waste: "Many leaders get paralyzed in a time of crisis. But it’s actually incredibly liberating, when the only alternative to success is abject failure, it focuses the mind when staying the course results in the company, you know, not existing anymore, you’re given tremendous permission, in many ways, the risk of change has dropped tremendously. And I think there’s a couple of things that I’ve learned to really focus on, the main thing is keeping the main thing the main thing. So what does success look like? And what are the fewest things we need to do to succeed? And how do we then clear the path and get rid of all of the noise in order to just do those few things. The other thing I’ve observed in companies that have achieved some level of success is they confuse that they’ve succeeded because of the things they’ve succeeded in spite of what the company has done has become lower. And we’ve got to keep doing that. And in fact, for any company have achieved success because of a certain set of things. And in spite of a certain set of things, many companies don’t really stop to reflect deeply on parsing out the difference and a time of crisis can give you a chance to really do that."

5. On having a common mission: "It’s important thing is to orient everyone around a mission that you all have shared belief in, if you’re going to take the team through very hard times, which building any business over time, you’re going to go through hard times together, you all have to have a shared belief in something bigger than yourselves and something bigger than the stock price for the market cap. So what is it that we are doing for our community at large and our customers that is so important that we should spend the hours we do want to take the personal risk? We do? You know, getting back to your question about happiness and risk, I don’t want to spend a lot of time on any endeavor in life that I don’t think will have a purpose greater than than myself. So finding that key purposes is important. And then when you frame everything in terms of service to that purpose, it becomes a lot easier to stomach, all of the change we’re making and questioning our own beliefs."

6. On prioritization: "When I started at Etsy, we needed to do a lot fewer things. So the challenge I posed to the team is what are the fewest things we need to do well to succeed? And if you’re going to say fewer things we need to do to succeed, you’ve got to define success. And the company had a bunch of metrics to track. You know, 10,12, it was definitely a data-driven company, 10, or 12, different metrics, and all of them sort of mattered. And the problem with having 10 metrics, or even five metrics that all matter equally, is if you have a project and you can ladder it up to any one of those five metrics, you can make the case for why you want to do it. And in other words, if it’s a good idea, you’re going to do it. And that’s way too low a bar. If it’s a good idea, it’s a candidate to be on a long list of good ideas from which you’re going to handpick the fewest you need to do. And that’s an entirely different mindset. So I picked one metric that mattered: GMV.And then, how do you go from the worthwhile many to the vital few. The worthwhile many, of all projects, which are good ideas, they’re aligned with your strategy, they have a positive ROI. And you’d feel comfortable standing in front of the board and advocating for them. If you do all of those projects, you’re dead in the water. So you’ve got to take the worthwhile many, and you’ve got to say now of all those, what are the few that I’m going to prioritize right now and why. The result was we stopped about 60% of all the projects in the company."

7. On removing dogmas and looking at core beliefs: "There’s often a lot of gold hiding under the sacred cow. One of the first things I’ve done when coming into a company is look at what their core beliefs are and inspect whether that core belief is actually adding value or not. In some ways, the things that people are unwilling to test or experiment with are often the things that are most valuable to test an experiment with. When I got to Etsy, there was a lot of resistance to moving to the cloud. Again, we at Etsy are, you know, we are handmade. And so we run on bare metal, and we do it ourselves. And, you know, Etsy has a wonderful engineering culture, and terrific engineers, but a lot of those engineers had earned their stripes by having the best sort of bare metal operations in the world. And yet you look around and say everyone else has moved to the cloud. So either we know something they don’t, or we’re missing something. And I want the chance to inspect whether, in fact, we’re missing something there tended to be. And I find this often an embracement of difference. We want to be different than everyone else. And I think that there’s an iconoclastic spirit in that, that I love, but I’ll challenge my team, I want to be better than everyone else. And so if you can’t tell me why different makes us better. I’m not that interested."

8. On the best way to make decisions: "One of the problems that Skype had and maybe some of your companies have this, is way too much consensus management. Too many decision had to be made by consensus and too many conversations happened outside of the room. So you’d all get together and talk about mobile and people would go off and say, ‘These guys are smoking crack, it’s never going to happen.’ So there was a lot of vetoing by fiat. The engineers would say yeah, sure and then they just wouldn’t ship it. I dealt with that by structuring important decisions and insisting on a white hat and a black hat, so for important decisions, like should we launch a mobile product, I’d assign someone to be in charge of ‘we should’ and someone to be in charge of ‘we shouldn’t’ and I’d get the major decision makers in the room and let them hash it out. As the leader, I don’t want to be in the debate, because then I’m perceived to be biased, but to hear other people have a really good hard debate about the product, about the decision, listen with as unbiased a mind as possible and then say, “I’ve heard you both. I’ve heard the team, and here’s what we’re going to do.” And on mobile as well as many other things, just driving discipline around the idea that we can disagree, but once I’ve made a decision we’re going to commit."

9. On putting a system in place to learn from failure: "You can have a lot of learnings if all you do is fail, but at the end of the day, you’re not gonna have anything. I think your point about not doing post mortems on success is a fascinating one. And this notion, I think that gets back to that we succeeded in spite of the following, you know, because of the following things, but in spite of the following things, that’s a great process to put in place to try to unpack that. I think that setting up a system to learn and picking when you can fail are two important things to put in place if you’re going to embrace failure. A decision matrix that I use a lot actually is a two by two framework of the importance of the decision and the cost of rollback. And if you think about each decision you make in terms of how important is that in? What’s the cost of rollback, there’s a relatively few things that are both very important and very difficult to rollback. Those are things where failure is really not a good option. A pricing change is a very common example of that if you get a pricing change wrong, it can have a dramatic impact on your customer base for a very long time. And so we are extremely deliberate about pricing changes, we do mountains of research, because we really can’t afford to fail on many other things, you know, the cost of rollback is very low. So something can be both very important, but have a very low cost of rollback, so you can just ship it."

10. On seeing life in sprints: "I’ve tended to measure my life out in three to four year sprints over the next three to four years, what would be a great accomplishment I could be really proud of, and then I’ve poured myself in with no reservation and a tremendous amount of passion to get to that three to four year milestone. And in picking what those milestones would be, you know, mostly it’s to I think I would learn a ton what I work with amazing people, and would it give me skills that are transferable and useful that expand my optionality rather than contract then constrain my optionality and using that as a metric has been helpful. I think this notion that you’ve got to figure out what you’re going to do for the next 20 years can be so overwhelming, and life has so much luck and fate involved that if you hang everything on some 20 year aspiration, the probability that something is going to derail you is great, three to four years at a time, that’s kind of an amount of time I can actually get my head around and try to manage and have a lot of agency into the outcome."

11. On focusing on your strengths: "I think there’s table stakes, and there’s your spikes or strengths, right? So whatever your job is, there’s table stakes good enough. I’m not a project manager. By nature. It’s not what I’m great at. But to be an effective CEO. There’s a table stakes level of project management that I need to have and be capable of. And I’ve worked hard to get to table stakes, I’m not saying I’m going to be great. And I surround myself with people who are much better at that than me. But if I don’t have some level of orientation around operations, I won’t have enough empathy for the people on my team who really need to do that and make that work. And then I do try, I’ve learned try to learn more and more, what are the things that I’m uniquely good at? And how can I leverage those more and bring those more into the company. But I think this notion that only focus on your strengths and sort of let yourself off the hook on all your weaknesses, I don’t know, I don’t love that. I know, I always want to evolve, I always want to get better. I’m a continuous work in progress. And I just don’t think I’m capable of that."

12. On seeing yourself as a work in progress: "I think the poor folks who worked with me, wouldn’t recognize me and I hope 10 or 15 years from now, I look back at my current self and say, Oh my gosh, I’m so much better. I mean, I definitely see myself as a work in progress. And I think of myself as as a crafts person in the craft of leadership. I’m constantly trying to hone and refine my craft and get better and a couple of things. I’m a very active role modeler. I’m a voracious reader. I read biographies all the time, and I try to go meet all kinds of impressive leaders and not just impressive leaders you read about in the paper, every person I work with, I learned something from the people who work with me at Etsy are amazing, incredible people. And every person I work with, there’s some quality they have that I admire that they do better than me. And I’m constantly looking at what can I learn from this person and how they handle this situation or how they think about this craft or how they ask those questions and think how can I start to incorporate that. The second thing that’s been very helpful for me is times for real contemplation. I’ve had had a couple of periods in my life where I’ve had, you know, three months off, five months off, and the chance to reflect back on my work and think what would I have done differently with the most critical lie, those have been incredibly valuable and painful, you know, looking back at every prior job, I will look back and say, these are three or four places where I as a leader really needed to evolve. And as painful as those reflections are, they’ve made me much better."

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