Dollars to Donuts: Alex Wright of Etsy

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Today’s guest is Alex Wright, who is the director of research at Etsy. We discuss the partnership between qualitative and quantitative research at Etsy and how his background in journalism helps him with the storytelling aspects of managing the research function.

Etsy’s not just in the business of trying to generate maximal profits every quarter. Yes, we’d like to be profitable, but we also want to serve the community of sellers; we want to be environmentally responsible; we want to support the local community. – Alex Wright

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Steve Portigal: Alex, thanks very much for being with us. I appreciate you taking the time to talk to us today.

Alex Wright: Hi, Steve. Thanks for having me.

Steve: Let’s just start very broadly as we do, and have you tell us about Etsy and what’s your role there, and what that’s about.

Alex: Sure. I started at Etsy about a year and a half ago. I was the first full time researcher hired at Etsy. Not that Etsy had never done any research before, but typically that it involved consultants or contractors or we had a product manager, at one point, who had previously been a researcher. There was some level of research going on.

The company made a decision that they wanted to put more of a focused effort around doing, especially UX research. I think there was a feeling that Etsy had gotten very good at experimentation and A/B testing and had a pretty well-developed approach to data analytics and experimentation. I think that there was a feeling that there was something missing and they wanted to create more space for qualitative research. I came in as a lone wolf researcher [laughs] about a year and a half ago. In the period since then, we’ve been able to grow the team. We’re now about a 10 person research team doing a combination of both UX research and market research, as well as some market trends analysis. We’re a hybrid team. Etsy is very product-oriented culture, so we tend to strongly emphasize UX research. We are now starting to do more marketing and trying to figure out how we can support that more effectively by doing more market research kind of stuff, too.

Steve: Before I ask you about that, maybe you could explain what Etsy is, in case anybody, somehow, doesn’t know.

Alex: Sure. Etsy is a marketplace for handmade and vintage products. It’s been around for almost 10 years now. We are now a marketplace with over a million sellers. In 2013, over a billion dollars’ worth of products flowed through the marketplace.

Our business is fairly straightforward. It’s a marketplace, we take a small commission on products that are sold on the site. Then we have a few other revenue streams like we have some promoted listings, we sell shipping labels you can have pre-printed. That’s our thing. Generally, it’s a very transparent kind of business model. We’re basically a marketplace where you buy and sell things that are mostly made by artisans and artists.

Steve: I may be joining two things that don’t connect, but when you say that Etsy is a very product focused company and that’s why UX research is what’s being done, does that have to do with the business that Etsy is in?

Alex: The interesting thing about Etsy is, it really grew very organically. The whole company started as essentially a mailing list for the founder, Rob Kalin was an artist, and he had some artist friends. He started originally a mailing list, just so he could tell his friends about his art shows, and they would tell each other about their shows. Eventually, it turned into a bulletin board, kind of a Craigslist-type thing. Then it just grew organically from there.

The interesting thing about Etsy is, it was very much a marketplace that was created by the community of sellers in a very real way. It wasn’t like there was somebody, some MBA with a business plan to build this marketplace for handmade and vintage goods. The market created itself, almost.

There’s always been this strong focus at the company on trying to create a platform for sellers to grow their businesses and for creative people and artists to be able to find a livelihood by reaching a global audience on the Internet. There has never been a lot of marketing. The emphasis has always been on creating the platform and the tools, and doing that in a very collaborative way with sellers. We’ve spent a lot of time talking to sellers. We have, historically, spent maybe less time talking to buyers, although I think that’s really changing now. When I say it’s a product company, really it’s because that’s the dynamic that really led to the creation of the company was very much this bottom-up kind of impetus.

Now, we’re at a point where as the company is growing, we’re starting to see more international expansion. We’re realizing that we probably need to be a little more intentional about how we talk about Etsy, and what it is. A lot of the research we’re doing now is figuring out what the brand is or should be, figuring out how that relates to the product experience.

At the end of the day, our company has traditionally been driven by organic growth, and not so much by big marketing campaigns or customer acquisition strategies. Very much, our emphasis has been on trying to build a good product, and with the assumption that if you build something that works well, people will want to use it. That served us well, so far. Again, we started to take a little bit of a harder look at how we could be more intentional about growth, going forward.

Steve: At the top, you started to describe more of a market research piece coming in. Is that correct?

Alex: That’s right. We are doing more marketing, especially overseas. The kind of organic growth that we’ve seen in the US is a little harder to replicate overseas. Although, we are seeing actually nice growth in some markets, especially the UK, right now.

It’s partly that we’re…We feel like we want to do more explaining what Etsy is, trying to figure out how to contextualize that in different countries, and doing more digital marketing, things like SEO and more traditional digital campaigns. We’re going through a process now looking at the brand, and trying to figure out how we could articulate a clear sense of what Etsy is. It was never really defined as a brand in a MBA sense. It’s something that now it’s been defined by other people to some extent, like the experiences people have with it. We’re trying to figure out where the gap is between the way that we understand Etsy internally, and the way that our buyers and sellers seem to understand it.

We’re doing quite a bit of research like brand positioning research and survey research, to try to get at a very high level, maybe to over simplify that research. We see internally. Etsy sees itself as a very socially conscious values-driven company, we’re a B Corporation, which means we really manage ourselves, using what we call stakeholder model as opposed to a shareholder model. In other words, Etsy is not just in the business of trying to generate maximal profits every quarter. We see ourselves as having an equally weighted mission between, “Yes, we’d like to be profitable,” but “We also want to serve the community of sellers.” We want to be environmentally responsible. We want to support the local community, and so we do a lot of outreach and things like that.

It’s trying to take that understanding that we have internally, and then mapping that against the way Etsy is seen maybe in the marketplace, which is more as this place that you can get quirky, unusual products, which is true but is only part of the story.

These are some of the things we’re trying to look at is, what is that? How could we do a better job of conveying what Etsy is really about? How much would that matter in terms of customer behavior? Those are some of the kinds of things we’re looking at.

Steve: I want to follow up, without putting you on the spot, with Etsy specifically. I think, you’ve described the dynamic that is very common in a lot of organizations. Maybe we can just speak about the role of research and how we think about these topics. Internally, we stand for something. Here’s what we’re about, and here’s what we’re putting out on the world. Out in the world, there’s a perception or a value proposition attached to us. In the example you described, those aren’t at odds, but they emphasized different pieces. I’m nodding my head as you described that. That’s very common. Often it seems that that good research can help uncover that gap and maybe start to make the connection. I wonder, what does one try to do when there’s a difference internally? Do you try to change the perception or do you try to change the identity?

Alex: Yeah, it’s a good question. I would say that’s really a dialogue that we’re going through just as we speak. One big open question is how important is it to convey values and the sense of social mission, even though that’s a big part of the reason a lot of people, myself included, want to work here.

The open question is, is there a segment of buyers that you might call socially conscious consumers where that’s an important part of the message that actually drives their behavior. That’s the research that we’re really just embarking on, we’re starting to get some signals around that.

Looking at the whole spectrum of people that to come to Etsy, trying to get a little more sophisticated about the way that we segment them in understanding broadly what are the attitudinal segments. When we look at people who come to the marketplace, when we have some people who would come in via, say, a Google search because they saw a Google product listing ad and may not even really know what Etsy is. They just saw this interesting thing and they brought it.

That’s a very different kind of interaction than somebody who is really engaged with the Etsy community and follows people, and has friends on the site, and makes it more of a daily habit and sees more of a connection there. Those are both, I think, important constituencies to understand.

From a marketing point of view the question is, which of those audiences do you want to grow? That’s where, I think, the brand comes into it, where does your brand go and how does it…? What are the gaps between the way your brand is manifesting in the marketplace now and the way that it maybe could, if you were trying to align with it growing a certain segment. These are still open questions around, there are some other interesting hypothesis floating around about that For example, a lot of audience is women, vast majority. We’re looking at questions of our core audiences, a lot of millennials and younger audience, or looking at, are there other adjacent audiences we could be growing. We are in the process of doing some more precise segmentation and then taking that segmentation and trying to map that to behavioral signals in the data.

When we do a big brand survey we can actually map the responses back, if there are current users anyway, we can map them back anonymously to our data source and to our internal traffic logs and see if, are there interesting signals about purchase behavior, things that we could then use to tie people into these segments and maybe do a better job of creating an optimized experience for them.

Steve: All that grouping is happening for both buyers and sellers, is that right?

Alex: That’s right, yeah. For sellers, we know a lot more about sellers than buyers. Etsy historically has been more close to the seller community. Big chunk of the company is out there constantly doing outreach and events and we talk to them a lot.

We have a more established seller segmentation. We have a number of what we call top sellers who tend to be the most successful. Sellers on Etsy tend to take it very seriously as a business, it’s basically, this is their livelihood is selling on Etsy, or a number of people who fit that description.

Then we have a long tail of people where it’s more of a hobby or they have some collection of some vintage items or they just like to do some knitting or make jewelry in their part time. There is also the part-time audience.

We might look at it from a pure data analytics point of view, we might look at that and say, “Oh, we have five buckets of sellers, we have brand new sellers and we have these small scale sellers and then medium and big and then super top sellers.” I think what that misses is the attitudinal dimension. For some of these sellers it’s really just a hobby and they are perfectly happy to be in that, what might look like from one point of view a less successful business. Then there are other people maybe in that segment of lower sales who really have an aspiration to grow their business. From a data analytics point of view, they might look like the same people.

I think trying to deepen your understanding of the attitudes and the expectations that some of these people have, then gets you to the point where you could then target those different types of sellers with different kinds of messages like, “Do you want to grow your business or do you want to just get better at knitting or something?” [laughs] “What is your intention? Or is it maybe you are doing this for fun or is it serious business?” We are trying to get more…this, I think, where this kind of research can really inform, not just the product development, but also looking in more of a service design direction of looking at some of the programs and communication and the outreach we do as sellers, I think, can really be informed by this combination of data analytics and more attitudinal market research.

Steve: You are describing a “Yes, and” with the two methods as opposed to “One is better than the other.”

Alex: I think that’s right. Really the approach we’ve been trying to take, is we have a pretty good data analytics team and we also have a data science team that works on things like personalization. We try to really avoid having it seem like an either/or decision about do you do qualitative research or market research or do you do data analysis. We see those things as very complimentary. There are points of friction there. Some aspects of data analytics and A/B testing and experimentation have gotten sufficiently sophisticated that they’ve displaced the need for certain kinds of more traditional usability research. I think that’s fine.

I think we are increasingly trying to use especially more qualitative UX research methods to focus more on hypothesis generation and looking for the white space opportunities for new products and less in this like QA mode of how can we optimize the check out process because we have computers that can do that now. [laughs]

Steve: If I was thinking about taking advantage of good data analytics and good qualitative research. I’ll say, for me, historically it has been one leads in to the other and that’s because I have a foot in one camp. I am often coming up with questions for another set of tools to answer or I’m taking questions that have emerged. But the way you are talking about, it makes me think that you could do something that I haven’t got to do yet, which is start at the beginning and say, “We have these two pieces and we’re going to use them together and maybe ping pong them to answer an initial question.”

Alex: Yeah, that’s certainly where we are trying to take things. Just to be transparent, I would say, it’s a process. Certainly when I first got here it was more… and even today it’s still some of this I where…Often you’ll have a product manager or designer has questions and they’ll go to find people who they think can help answer their questions. They might go to a UX researcher or they might go to a data analyst.

There certainly have been cases where the product manager, with all good intentions might just go to both of those people, but the result is that, the data analysis and the UX research get brought together downstream. What we are trying to do is really make sure that that collaboration happens as upstream as possible.

A couple of things we’ve done to that end, we recently established a couple of cross-functional teams or what we’re we’re calling, we have what’s called a buyer insights team and a seller insights team, there’s also something called the marketing insights team.

The idea is that those who are cross-functional teams made up of data analysts and researchers who really get together regularly and just keep each other abreast of inbound requests for data or for research, and then trying to figure out how they could complement each other’s works. It often comes up where we’ll be doing a piece of research and the analyst will say… Here is, maybe I will give you a more concrete example: we were doing some work around the sold orders process, what happens when an item gets sold on Etsy, what happens? The way we did that was, our initial thought was to go and do some in depth, some field research, so we actually had a couple of researchers who went out with the product managers. Went out and did a bunch of field studies with Etsy sellers, where he went out up to their studios or if some of them work at home, some of them work in dedicated studios spaces.

We really wanted to just follow them through the process of what happens when this thing sells, it becomes invisible to us at that point. What we found was that a surprising number of sellers, as soon as they sold the order, the first thing they did was print out the confirmation on a piece of paper. Several sellers actually then used that printed artifact as their main workflow.

Some of them would have a big kind of bulletin board in their space and they were literally like tack up these printed order receipts and use that to manage their process of packaging things, shipping them and so forth.

What we realized was that, the quality of the research suggested that this printed artifact was actually pretty important part of the process and it had just been a total afterthought, like nobody had ever spent any time thinking about what that looked like or how it is used, or is it the right information on that page that you use, it just didn’t look like much.

As a result of that, we then went back and talked to the data analyst team and ask them, did they have any…”We are seeing this in qualitative research. Looks like while we were printing this thing out, is that true?”

Then went and realized that actually we had never been tracking that, nobody had ever thought to track how many times this page has been printed out, so they added some code to fire an event when that order form got printed out, and they found that, sure enough a significant percentage of people were printing it out. That led to the insight that, “Oh actually, we need to really focus on that, that print experience” and understanding that workflow which also lea to some other insights about how we can optimize that process for people. Just one example where I think qualitative research and quantitative analysis can really complement each other.

Steve: I like one aspect of your story where maybe it would be ideal if product managers knew to engage the different services that they have access to, but as a response what you guys are doing is saying, “We’re all going to talk, so that we’re in touch with each other.” You’re not asking other people to change. Everyone’s taking care of everyone.

Alex: We figure it’s better for us just to talk to each other rather than try to impose some process where we have some accountant manager you have to talk to before you can talk to an analyst or researcher. We’re just saying we’re a much flatter organization.

It just feels like just trying to create forums where that kind of cross-functional collaboration can happen, seems to be working so far. We’re still experimenting with it, figuring out what’s the right, how often should these groups get together? How do they really tactically work together? So far it’s gotten some decent results.

Steve: It’s just nice to hear quant and qual, to use those horrible words, framed as allies. That’s a really nice aspect of your story.

Alex: Yeah, that’s really the approach we’re trying to take. I think that’s also interesting because for some more established companies that have had stronger research disciplines or more established market research or even UX research, I think that the growth of, to use another cliché, Big Data or data analysis has really emerged in the last few years and started to challenge some of those ways of doing things.

Whereas I think at Etsy we were coming really from the reverse position where we had a very developed data culture and almost no real qualitative research happening where we’ve been trying to create the space for research in the opposite direction. It’s not like we were really giving up anything. It’s more just like trying to find the open spaces where we can maybe add some value.

Steve: That sounds like it’s part of just the overall growth that you mentioned upfront, where there was a history of this work at the company. It’s in the roots, but the decision to hire you was putting a stake in the ground and saying, “We’re going to commit to this in a more formal, deliberate way.” Is that right?

Alex: That’s right. I think a lot of the impetus for that came out of the design group. Technically the research team is part of the product design organization. I think a lot of the designers felt like they just weren’t getting a rich enough picture of user interactions to make good decisions. Everything was being very adjudicated with data and they felt like [laughs] something was missing.

There was a lot of the impetus for creating my role in that continued to grow, it has come from within the product design group, although we really work across a number of different functions now. That’s where we live at the moment anyway.

Steve: What has been that trajectory from the lone wolf, I think you described your initial stage, to having a team? How has the team grown?

Alex: It’s been a combination of recruiting folks from the outside. When I first started, for several months I basically just ran a series of studies on projects that seemed like they would benefit from research. Then pretty soon it got to the point where I didn’t have bandwidth to do all of the studies people asked me to do.

I brought in a contract researcher who I had worked with in the past, a woman named Jill Fruchter, who’s been great. I’d worked with her in my previous job at The New York Times. She contracted with us for a bit, and then at the beginning of last year we brought her on full time.

Also, there was another person already here at Etsy, my colleague Roxie Karpen, who had been a market researcher in her previous life. She was in the member operations part of the company and was doing some level of survey work. We had been doing these member surveys. She was running that, but she was really wanting to get back into more of a research role.

She’s more of a quantitative survey researcher, so she joined the team. Then as the year went on we just started to see demand grow, and we were able to make the case to bring in more researchers. Currently we have about four dedicated UX researchers.

We also recently just hired our first quantitative UX researcher, which is a really interesting role, which I don’t think there are too many people out there in the world with that job title. The ones I’ve been able to find all work at Google and Facebook.

We’ve created a role like that, which is basically somebody doing survey research exclusively for the product organization, so looking at things like customer satisfaction, and feature-level feedback mechanisms, and things like that.

Recently another person joined the team who was an internal transfer to do more market trends analysis, so looking at less about individual user interactions or understanding the Etsy audience particularly but more looking at macro trends in the market and in the e-commerce space.

We’re hoping to do more forward looking research that might look at the future of, say, in-person payments or shopping at craft fairs or things like that and trying to look at can we do some more long term research that might yield product ideas down the line or might just lead to other kinds of opportunities that we don’t quite know what they are yet. That’s roughly what we deal with.

Also interestingly one another person on the team is another internal transfer. We have a dedicated research engineer, which I feel incredibly lucky to have. We have an engineer on the team who had previously done some research. He’d been at DoubleClick for a while He was really interested, so he raised his hand. He’s on this permanent assignment from the engineering team, so he does a lot of our tooling. For example, we wanted to do a mobile diary study recently. He built a little diary study tool that allowed us to basically collect input from sellers through, for example, phone message, voice mail, or email, or text. They could all get consolidated into one thing.

He does a lot of that kind of ad hoc tooling work and then also did some level of data analysis querying, if we want to do a particularly targeted recruit. For a particular kind of buyer or seller he can help us write the SQL queries to really pull that exact profile of people from our database.

That’s been a really great experience –a first for me, to work with somebody who really, I think, in a dedicated engineering role. It’s maybe something that I think a lot of in house research teams struggle with, is getting support from engineers to do the tooling that they need. I think I would just offer my strong endorsement of that set up.

We’re really lucky to have somebody like that. It’s made our team much more effective, and allowed us to do things that otherwise we’d probably have to hire vendors to do. That’s been working really well.

Steve: If the metaphor when you started was lone wolf, and now you’re describing a really strong and diverse team that’s come together in this way, is there a metaphor for who you are collectively now?

Alex: Do we have an animal metaphor? [laughs]

Steve: Or any metaphor.

Alex: All right. I think we’re a pretty young team, even though some of us are younger than others. We’re still gelling, I think, as a team. I’d say, you could say we’re a little bit of a pack of maybe wild puppies, or something. [laughs] We’re still trying to get a little more disciplined and coordinated, but we’re doing pretty well.

I think it’s a great team, and I feel very fortunate that we managed to get a good mix of qualitative and quantitative researchers coming together. Etsy’s still a growing company. You can’t exactly call it a start up now, but it’s still pretty entrepreneurial kind of culture. Everything a little bit like standing up in a boat. We’re still figuring it out as we go, I guess.

Steve: Are there things that you do as the leader of the pack of puppies, to help the team gel? I guess I’m probing around things that are…you’ve described a lot of how the work is getting done. Are there other things that maybe fall into the category of team building –given your culture, and the things you work on?

Alex: Yeah, that’s certainly becoming much more of what my role is now. I’m not really doing so much research these days. I’m more of in a general management role. A lot of my role is trying to work with internal stakeholders to figure out where the need is, make sure we’re balancing the level of attention we’re giving to different projects, and that the team feels productively engaged in that.

The way I see my role as the manager of this team, is really trying to create a container that allows for some knowledge sharing to happen, and for people to grow and develop, and continue to progress along their own paths.

We’re trying to really avoid being too much of the research department. We’re really trying to avoid getting too siloed. I’ve seen that happen in other organizations, where you create this cross-functional research team, and then this starts to be seen as its own little island of insights.

We’re trying to really work in much more what I would call a semi embedded model, where we have researchers who are, especially the UX researchers, really live with the product teams. They actually sit with them.

Not that we have a researcher embedded with every product team, but generally we have a small team that works with sellers primarily, and a small team that works with buyers primarily, and they live in those worlds.

I would say that the research team is like a secondary layer of container that allows us to just learn from each other and make sure that we’re prioritizing things properly. That we’re staying close to the…At the end of the day Etsy is a product company, we’re not a research company. I think it’s very important that we align around what we do as an organization.

At the same time, you don’t want to get too close to the subject, [laughs] as a researcher. It’s always managing that tension a little bit. You want to be close enough that you’re seen as a trusted partner, and that you have some influence. At the same time, you don’t want to go get so embedded that you just drink the Kool Aid and lose your perspective and become biased in all kinds of ways. We’re constantly trying to walk that tight…I guess my job is helping people walk that tight rope a little bit, staying one foot in the product teams, but still keeping some cohesion, and some ongoing dialog happening as a research team.

Steve: That container needs to be porous to a certain extent.

Alex: Yeah, exactly.

Steve: That’s interesting. I like your description of the research department. As you say it, I see the sign with capital letters, and I see where they are in the office.

Alex: Yeah, up on some other floor, with their lab and their lab coats on. We try to avoid that. [laughs]

Steve: I would hypothesize that, that happens in organizations as a response to resistance. Do you think that’s right?

Alex: I think that’s probably true. Maybe in some cases it can be seen as a way of strengthening the practice, or exerting more influence. I get the argument. There’s no one right answer for this. I think it depends on the company.

Etsy particularly is a very flat and distributed company. I’ve worked in other organizations that were much more top-down hierarchical, where maybe something like a research department actually does make sense in that it maybe gives you a little more status in the organization or something, if you have to do a lot of presentations to senior managers and make your insights feel important, because you have a big department behind them and a big budget. At Etsy it’s really much more like product teams pretty much tread their own course and I think you need to adapt to that world. I’m certainly not saying that what works for Etsy would work for other companies. I’m not sure it would.

Steve: That’s an important observation too. You’re getting now into, how does this function of research exist within different kinds of teams throughout the organization? I think we tend to want to know the single best practice for how to do that.

Alex: I’ve done some work talking to peers at other companies and trying to locate, how does Google do it, how does Facebook do it? There really is no one model. There’s certainly some companies that have much more of the centralized customer insights team model.

My last company at New York Times was like that. eBay is organized like that. Yahoo has been somewhat organized like that. That can work. My last company was analytics and market research and UX research were all part of one function.

There are other alternative models. Google appears to have a very distributed research function where researchers really just exist across the organization. My sense is that it’s much more of a sort of informal community of practice there.

Facebook on the other hand seems to have something more like what we have, which is market research and UX research. A somewhat more departmentalized model within the product design group.

I’m always interested in hearing about what’s working or not working. My sense is more and more companies are developing their in-house UX research capabilities and figuring out where that lives, and how it relates to a product, and how it relates to market research, analytics. These are all I think just interesting open questions, that I think it’s pretty mature to claim that there’s one true way at this point. I think it’s just an interesting thing to look at and see how it evolves over the next few years.

I wish I knew who to talk to. [laughs] I’m going out and often trying to just make connections with people at other companies, but I feel like there’s not really a great forum for that conversation to happen, like in the industry right now. I don’t know where that is, or where it could be, but I would love to see that, that dialogue happening a little more. I think we would all benefit from that.

Steve: I think I’m glad you just put that out there. Maybe by putting that out there, that can change. We won’t solve it in this conversation, but I think it’s a good call out. I’m having one of those moments where I thought about when you think of a question you have already heavily framed or maybe over framed. As I’m thinking about speaking to you and thinking about the structural and departmental, and organizational issues, what was underneath all that is designing to overcome resistance. The more that you talk and I’m hearing more about maybe designing for efficacy. You’re not talking about resistance, you’re talking about how to have impact.

Alex: Yeah, I think that’s right. It’s not like we’ve never encountered any resistance or anything. There’s been stuff we had to work with. I think particularly when I was first starting, there was certainly, I think in some quarters, I wouldn’t say skepticism but just unfamiliarity with qualitative research methods and the value. I think there was a little bit of a default instinct to just see if there was a question or an alternative hypothesis just to throw it into an experiment. I think it’s been a learning process for the organization to figure out when does that make sense, and when could you maybe take a different approach. Do the more qualitative exploration that might actually lead to a better experiment down the road.

I don’t want to paint too rosy a picture of things. We’re all still learning and trying to muddle through some of these questions a little bit. I think generally my sense is not to sound too self serving, but I think there’s growing interest and receptivity to research and seeing it as just another part of the tool kit to product managers and designers can lean on. We really try not to position it as an alternative to data analysis or anything. We just don’t see that as a fruitful way to frame things. [laughs]

Steve: What would you like to see it like in, I don’t know, five years or something? Do you have a goal state?

Alex: I think we’re really at the point now just getting to a certain level of competency with our product design and trying to take a more user centered approach to the way we design and build products. I think we’re making some good headway there.

I think that the bigger opportunity for Etsy is really looking at a wider landscape of issues around. There’s this whole complex ecosystem of buyers and sellers, and increasingly we’re also looking at how manufacturing can enter into that. I think manufacturing sometimes sounds like a dirty word, but the vast majority of manufacturers in the United States are companies with four or fewer people. Etsy definitely sees an opportunity to create a more sustainable marketplace for small scale manufacturing to happen, and trying to figure out basically people who have made things, and maybe need some help getting it built. We certainly have what we have called internally the graduation problem where an Etsy seller is making this handmade thing, and they start getting so many orders that they can’t keep up. They might need some help with getting something produced. That’s something where we feel like Etsy has a potentially productive role to play in that. It gets into more of like a service design kind of question. It gets into questions around the whole manufacturing ecosystem and how could we do more. I think it gets into questions of doing a combination of service design, product design, and looking at macro-economic trends, and how they could maybe reveal some opportunities in the marketplace for us to create new services.

That’s where I aspire to go is more in that direction. I think for the moment, we’re definitely just trying to make sure we’ve got our shoelaces tied, and we’re [laughs] able to move forward in a reasonable way with doing fairly tactical product design.

Steve: Is that where it leans heavily right now? Is focus on the tactical?

Alex: The general approach we’re taking at the moment is sort of a portfolio approach where we’re doing probably about 70 percent of our research is pretty tactical. About 20 percent is a little more longitudinal, of trying to look at other kinds of questions that might lead to longer term product ideas.

We know for example people use Etsy to plan weddings, right? We’re very interested in doing a longitudinal study around that, that might lead to some future product concepting. We have a registry product now, but there’s probably a lot of directions we can take that. We could have potentially really interesting implications for the way we do merchandising and other features we might develop.

We’re trying to do, maybe about 20 percent of our research is a little more long term focused. Then about 10 percent we’re, and this is more of an aspiration at this point, but it’s intention is to do more concept car research, where we might try to really take a few unexplored territories and just do a piece of strategic research to see is there an opportunity around this space in the market.

For example, if we wanted to look at doing some things., say around families, or DIY crafting, or alternatively looking at a brand new market that we haven’t entered yet. Those are some of the, a new vertical market or something. I’m hoping the next year we’ll carve out some portion of our time to really do those kinds of more speculative research projects that might lead to a long term product outcome. The challenge is always balancing that kind of work against the here-and-now demands, which tend to overwhelm that kind of work pretty quickly. That’s something we’re aspiring to, but we haven’t done yet. [laughs]

Steve: Early on you mentioned this brand work. Does that fit in the 70 percent tactical?

Alex: It’s a good question. What I was saying, I guess more in terms of product research, the brand work is pretty important. I would say it’s both tactical and strategic. It would certainly probably affect some brand marketing that we’d probably be doing at some point. It’s filtering into some brand positioning work that we’re also doing with an outside agency. I think will also result in some possibly identifying some new segments that we might end up developing new products for. I would frame that a little bit differently. It’s just a more foundational piece of research that’s going to influence a bunch of stuff over time.

Steve: I like how it sounds like you’re able to even take the output of tactical, let’s call them explorations, and ladder them led up to the strategic implications of those.

Alex: That’s something we’ve been trying to do, especially on the buyer side. Jill Fruchter does a lot of our buyer research, she really tries to make a point of having a consistent set of evergreen questions that she always asks buyers that are much more part of this ongoing longitudinal kind of study. Then she’ll focus it more on the tactical product questions. We sometimes try to do all those things in the same session with people. Last year, she did quite a bit of this. When we started off the strategic planning process this year, she was able to then pull together some top-line themes that really emerged out of a whole year’s worth of interviews with buyers, which was really helpful. I think especially on the buyer side, we’re often trying to understand the gap between the way we might look at events from a business outcome point of view, and trying to reframe that in terms of understanding user’s expectations and attitudes.

For example, we might look at what’s happening on Etsy in terms of conversion rates or gross sales. Obviously at the end of the day, what grows the business is the sellers making sales. From a buyer’s point of view, we know from a lot of the research we’ve done, that a lot of people relate to Etsy in a different way. They relate to it more like Pinterest. It’s much more of a source of inspiration, an idea. It’s almost like entertainment for a lot of people. Having that understanding and developing that understanding really helps us evolve the way we think about the product s we’re not just thinking about it in terms of this e-commerce funnel where we’re just trying to convert you to buy this thing, but really are trying to understand some of this softer stuff around: What is the job that you hired Etsy to do today? A lot of times, it’s about trying to discover and explore and get inspired. It’s trying to figure out how do we make sure the site is doing those things, and how could we even put some metrics around those things to make sure we’re measuring the gap between the buyer’s expectation and the experience, and not just looking at this in terms of dollars and cents.

The hypothesis being that the sales will follow if people are happy with the experience. To some extent, reframe the way we’re thinking about the buyer experience. It’s not purely a conversion sort of conversation.

Steve: Yeah, I like the dynamic between those. Obviously having someone doing what Jill’s doing where she’s – even if the study is not longitudinal, she herself is living in this space over time and meeting many people and asking many questions.

Alex: Exactly. Which I think is the big benefit of having an in house research team. You have somebody who can really develop that implicit knowledge of things over time, and just live with it, become really start to function as a user advocate in a way that I think is hard to do if you’re just working with vendors or consultants who come in and do a study and give you recommendations, and then go on their merry way. I think the value proposition for us is that we’re deepening our understanding over time and able to really be a source of insights. Often we can bring in an insight from another study to a particular project that might not be directly what that teamthought they were looking for. Sometimes we can help them shift their thinking a little bit by saying, “Oh, if you consider this aspect that came out of this thing we did three months ago, that nobody’s actually addressed yet…”

So far, I think we’re making some headway, but we’re still figuring things out too. I think a lot of what we’re wrestling now is figuring out the right cadence of research, and sometimes there is such a thing as too much research. We’ve seen some teams that are really enjoying doing research, and get a lot out of it, but we’re having to balance that demand with other projects and figuring out, where do you reach the point of diminishing returns? At what point do you have to say no and move onto something else that might have more juice available for another project?

That’s something we’re still figuring out how to prioritize things, not just in terms of relative priority in the business, but where are we going to get the most value out of research, and where is the research team going to maybe learn or develop something. It’s not as straightforward as saying, this project is more important than that project, but trying to bring in some other dimensions into that judgment as well. It’s something we’re still pondering, I guess. [laughs]

Steve: I can imagine that a sense of scarcity helps you with priorities. If we were to double the size of your team, I’m not sure that is perfect for you.

Alex: Yeah, exactly right? I think one mantra at Etsy right now is to try to do fewer things and do them better, I think that we’ve grown quite a bit. Last year, we were trying a lot of different things, that’s been very much the culture here. Anybody can have an idea and try it out, but as the company gets bigger, you need to be a little more disciplined about that. We’re trying to really set our sights on what we think will be some higher value things and do fewer of them. That affects what we do from our research point of view as well. We’re trying to not spread ourselves too thin, we’re trying to find a way that we can really live with a project over time and not just be doing too much context switching between projects all the time.

That’s always a challenge, because inevitably you always feel like you don’t quite have enough…It would be nice to meet the demand where it is, but I think you’re right. I think if we double the size of the research team, I’m not sure that would be in the best interest of the company. I think that might actually slow things down. [laughs]

Steve: I’ll be doing a little context shifting myself and ask you if there’s anything about you and your background, or your passions that makes you great at what you do.

Alex: Good question. I’ve had a very circuitous career path, I guess. Today I’m a research manager, I’ve certainly worked as a researcher in the past. I would say for the past seven or eight years, I’ve been in some permutation of a research role.

Before that, I was a UX designer for many years, and often wore both hats then too, like the design and research back and forth a bit. Along the way, I’ve also been a writer. I’ve done a fair amount of journalism, I’ve written a couple of books on the history of the information age. If anything, if there’s one sort of, I guess maybe, strength that I bring to what I do, I think a lot of what I do now is much more about storytelling and trying to take insights that are coming out of studies, and trying to make them compelling to a larger audience. In a way, my role is almost like being an editor. We have a lot of researchers now generating reports and insights and a lot of what I do is try to sift through that, collate it, and distill that out to a larger audience. I think having a background in journalism and storytelling is certainly helpful in trying to help sell the value of research, I guess.

Steve: Is there anything that we didn’t talk about that I should have asked you about?

Alex: No, I think we’ve covered quite a bit of ground. Nothing really comes to mind.

Steve: Any questions for me?

Alex: Yeah. I’m curious, what’s your take on this whole question of qualitative and quantitative? Even if we don’t like those terms? Are you seeing that tension elsewhere or do you feel like it’s that whole question of is that are they opposing camps? Or can they learn to play together? I feel like you’ve talked to a lot of people out there in the field. Just curious to hear what impressions you’re getting out there from talking to people.

Steve: I think it’s organizational culture. It ties in with, where does research sit? What’s research advocating for? I think in some camps there are the skepticism that you described. I think when they become catchphrases like Big Data, I think we used that already in this conversation, it’s almost like the competing catch phrases, Design Thinking with capital letters, Big Data with capital letters. There’s an element of snake oil to each, and I don’t mean what lies beneath them, but more how they’re presented and more how people glom onto them. I feel like I’m just going to throw some more clichés in. You guys are keeping it real. You’re having conversations in your storytelling, real people talking to each other, and finding out how to pull their pieces together.

I think that’s a cultural aspect. Organizations that have cultures that let people do that, where real people can meet and talk about what they learned or what their questions are, seem to be more successful at pulling these pieces together. Finding the gestalt between the two of them, then those that are more territorial and that have the research department.

Alex: It’s interesting, yes.

Steve: That’s my take on it.

Alex: Yeah, I know that’s really interesting. It’s funny, you may or may not know it, Etsy’s corporate motto is “Keep it real.” [laughs] For what’s worth.

Steve: Good.

Alex: That’s what we try to do. [laughs]

Steve: This has been really interesting and really inspiring. I just want to thank you, Alex…

Alex: Thanks for having me and taking all this time. I definitely enjoyed the conversation. We’ll stay in touch.

Steve: All right. Thank you.


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