Etsy shut down one of its newest businesses in less than 2 weeks, and the CEO says it's an example of his team's new approach to growth
- Etsy went through a challenging period in 2017 in which it shut down a new company just days after launching it.
- But now, the online marketplace has experienced growth.
- At Business Insider's flagship conference IGNITION, CEO Josh Silverman explained how a focus on four core areas of Etsy's business helped invigorate growth.
For 18 months, 150 Etsy employees worked to launch a marketplace that would connect makers with craft supplies. Etsy Studio, the new store, launched on Valentine's Day in 2017.That was a Tuesday. By the next Friday, Etsy Studio was no more.
Etsy CEO Josh Silverman said that decision was necessary - but "very painful."
"It's been a very eventful 18 months," Silverman said at IGNITION, Business Insider's flagship media and technology conference. "We went through some tough times, which have been well-documented and reported."
Silverman credited that success to Etsy's pared-down business strategy. As he told Fortune in March, Etsy had 800 product and marketing initiatives in the pipeline.
He axed half of them."We asked ourselves, 'What are the fewest things we need to do well in order to succeed?'" Silverman said at IGNITION. "And that discipline and focus has been incredibly important for us."
The culling process also led to the ending of Etsy Studio a mere week and a half after it was launched. "That was a really good idea, but it wasn't one of the few most important ideas to reaccelerate growth at Etsy," Silverman explained.
Silverman actually shares that point of view with his would-be rival in the e-commerce space: Jeff Bezos. While the Amazon founder extols the value of failure and experimentation, Bezos also said knowing when to kill products that aren't really working is important, too.
"On the day you decide to give up on it, what happens?" Bezos previously said. "Your operating margins go up because you stopped investing in something that wasn't working. Is that really such a bad day?"
As for Etsy, it's now just focusing on four essentials: Making it easier to find things on Etsy; buying that with trust; improved marketing; and improved seller relations. Each of those priorities has an "owner" and a team dedicated to it.
"We cleared the path and stopped doing everything else to give those teams room to run," Silverman said. "As a result, growth has been steadily accelerating for each of the past four quarters and we're serving our sellers better."