20VC Etsy CEO, Josh Silverman on 2 Defining Traits of Great Leadership, The Danger of Attaching Happiness To Milestones, How To Structure Teams To Optimise for Experimentation and Agility &Whether You Learn More From Success Than Failure

In this insightful episode of "20 Minutes VC," host Harry Stebbings chats with Josh Silverman, CEO of Etsy, about his journey from public policy to leading transformative change in tech companies like Skype and Etsy. Silverman shares his approach to leadership, emphasizing the importance of defining success, setting constraints, and ensuring the right team is in place. He discusses the value of learning from both successes and failures, and the significance of maintaining customer focus and empathy in decision-making. Silverman also predicts the consolidation of online commerce, with Etsy positioned as a humanized alternative to Amazon. Additionally, the episode touches on the benefits of using platforms like AngelList for fund management and Remote for global employment solutions, highlighting the evolving landscape of business and investment.

• Harry Stebings hosts the 20 Minutes VC podcast episode featuring Josh Silverman, CEO of Etsy.
• The episode focuses on topics like happiness, learning, ambition, and vulnerability.
• Josh Silverman's background includes leadership roles at American Express, Skype, and Shopping.com, as well as executive roles at eBay.

"The best for me are always when you move completely away from the schedule and you talk about the things that really matter, happiness, learning, ambition, vulnerability."

The quote emphasizes the importance of discussing fundamental human experiences and emotions that drive personal and professional growth, which the episode aims to explore.

• Josh Silverman's career path was unplanned; he started with a passion for fixing the U.S. healthcare system.
• Worked for a senator in Washington, D.C., then became a management consultant before realizing his impact could be greater through business.
• Left a respectable job post-business school to start his own venture, co-founding Evite.
• Transitioned to leadership roles in companies needing a "second act" after a successful start.

"I started out as a public policy major in college with a deep passion for fixing the healthcare system in the United States."

This quote provides insight into Josh Silverman's initial career direction and his underlying drive to make a positive impact on society.

• Measures life in three to four-year sprints, focusing on accomplishments that are meaningful and can be proudly achieved.
• Prioritizes learning, working with amazing people, and gaining transferable skills that expand optionality.
• Believes long-term plans are challenging due to life's unpredictability and prefers manageable short-term goals.

"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."

The quote reflects Josh Silverman's approach to setting career goals in shorter, manageable intervals that allow for adaptability and focused achievement.

• Josh Silverman's career is marked by taking on challenging roles that others avoided.
• Evaluates opportunities by their significance and potential for learning and growth, even if they seem risky.
• Sees value in roles where the company's mission is fundamentally important and misunderstood, offering a chance for significant impact.

"My life has been punctuated by a series of inflection points where I've taken the job most people thought I shouldn't take."

This quote highlights the contrarian approach that Josh Silverman has often taken in his career, choosing roles based on potential impact rather than perceived stability.

• Josh Silverman sees Etsy as a platform that empowers creative entrepreneurs and is crucial for millions of sellers.
• Contrary to the perception of Etsy as niche, he views it as a massive market for special, non-commoditized items.
• Believes Etsy is well-positioned as an alternative to Amazon, focusing on products that are unique and have a personal touch.

"In a world that's becoming ever more commoditized and where automation is changing the nature of work, creativity can't be automated, and we're going to yearn more and more for something made just for us."

The quote captures the essence of Etsy's value proposition according to Josh Silverman, emphasizing the growing demand for unique, creative products in an increasingly automated and commoditized world.

• Josh Silverman discusses the value of a contrarian view during tough times.
• He emphasizes the liberating aspect of a crisis when the only alternative to success is failure.
• Silverman suggests that crises focus the mind and lower the risk of change.
• He talks about the importance of prioritizing the main goals and eliminating distractions.

"I mean, a phrase I use a lot, never let a good crisis go to waste. And many leaders get paralyzed in a time of crisis. But it's actually incredibly liberating when the only alternative to success is abject failure."

This quote highlights the opportunity presented by a crisis to make significant changes without the usual resistance, as failure becomes the only other option.

• Josh Silverman contemplates the relationship between success and personal happiness.
• He suggests that happiness often comes in hindsight when reflecting on meaningful achievements.
• Silverman believes that purposeful stress and difficult decisions can lead to accomplishment and ultimately fulfillment.
• He stresses the importance of aligning company success with customer success for collective fulfillment.

"In my experience, I don't often have happiness in the moment. I have happiness in hindsight, when I feel like we have achieved something of great purpose."

Silverman explains that happiness for him is not an immediate feeling but a retrospective appreciation of having achieved something significant and purposeful.

• Josh Silverman discusses the importance of questioning and testing core beliefs and practices within a company.
• He provides examples from his experience at Etsy and other companies where challenging dogma led to significant improvements.
• Silverman advises that resistance to change can be a sign of valuable opportunities for experimentation.

"There'S often a lot of gold hiding under the sacred cow."

This quote suggests that deeply held beliefs or practices, when questioned, may reveal opportunities for growth and improvement.

• Josh Silverman emphasizes the importance of a shared mission and purpose beyond financial metrics.
• He discusses how having a clear and meaningful mission can help teams navigate through tough times and embrace change.
• Silverman shares Etsy's mission of keeping commerce human and how it frames their decisions.

"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 on it?"

This quote underlines the need for a company to have a mission that motivates and justifies the effort and risks taken by its team.

• Josh Silverman introduces the concept of focusing on the 'vital few' initiatives that will lead to winning, rather than pursuing a long list of 'worthwhile many' good ideas.
• He defines 'winning' as achieving the primary metric of success, which for Etsy is Gross Merchandise Volume (GMV).
• Silverman advocates for strategic prioritization to achieve significant goals.

"What are the fewest things we need to do in order to win?"

This quote encapsulates the strategy of focusing on the essential actions required to achieve the company's definition of success.

• Josh Silverman discusses the principles of effective leadership taught to him by Ken Chanalt.
• He talks about the importance of defining success, setting constraints, and ensuring the right people are on the team.
• Silverman shares his leadership experience at Skype, highlighting the significance of clarity and allowing the team to innovate within defined parameters.

"Leadership is about defining success and defining constraints."

This quote explains the key responsibilities of a leader in setting clear goals and boundaries to enable their team to succeed effectively.

• Skype 40 aimed to drive user engagement by inflecting the platform's engagement metric.
• The deadline for shipping Skype 40 was set as December 31, with a clear directive to prioritize this project above all else.
• The team was empowered to take almost any risk necessary to ensure the project's success.
• A pivot from audio to video calls was identified as the most effective way to increase engagement.
• Video calling became the centerpiece of Skype 40, altering the brand and mission of Skype.
• The product was successfully shipped by the deadline and significantly impacted the business's growth curve.

"Skype 40 will be measured by driving engagement. We're going to dramatically inflect engagement in our platform. We have only until December 31 to ship it, and nothing is allowed to get in its way."

This quote outlines the core mission of Skype 40, highlighting the focus on user engagement, the urgency of the deadline, and the permission to take significant risks.

• Milestones and evidence of progress are crucial for accountability without instilling fear.
• Josh Silverman emphasizes the importance of tracking and data collection to understand customer usage patterns.
• Early and frequent pre-releases (Alphas) were used to gather evidence and de-risk the project.
• At Etsy, the work is organized into squads, each with a specific customer problem and success metric.
• Squads' progress is reviewed monthly, and the company supports a culture of public accountability.
• The cost of failure is kept low, allowing for risk-taking and pivots when necessary.

"Delegation is not abdication. And so saying you have until December 31 to do it doesn't mean you go away and come back on December 31."

This quote emphasizes the difference between assigning tasks and completely stepping away, highlighting the need for ongoing oversight and progress checks.

• Teams are evaluated on the quality, creativity, and boldness of their ideas.
• A team's failure over several months can still be esteemed if their ideas are bold and customer-centric.
• Timid or customer-detached teams present a greater challenge.
• The process of red hat, green hat is used for challenging decisions and ensuring all viewpoints are considered.

"A team can fail four or five months in a row, and I will hold them in great esteem."

This quote reflects the value placed on a team's creative and customer-focused approach over the immediate success of their projects.

• Leaders need to be comfortable with not always being liked and make decisions with transparency and the customer's interest at the forefront.
• Josh Silverman discusses the difficult decisions made at Etsy, including layoffs and project cancellations, all aimed at better serving sellers.
• Transparent decision-making and acknowledgment of different viewpoints build trust.
• Leaders need to demonstrate good judgment and be right more often than wrong, with a willingness to pivot when necessary.

"I think if decisions are made transparently with the customers interests, leading first, people will respect those decisions, even when those decisions are difficult."

This quote highlights the importance of transparency and customer focus in decision-making to gain respect, even during tough choices.

• Success should be analyzed just as thoroughly as failure to understand contributing factors.
• Failure should be affordable, and decisions should be made considering the importance of the decision and the cost of rollback.
• At Etsy, the agile development system allows for quick and low-cost testing of new ideas.
• A two-by-two framework helps determine the importance of decisions and the cost of rolling them back.

"For every experiment that fails, we ask ourselves, could we have learned this faster and cheaper?"

This quote emphasizes the importance of efficiency in learning from failures and the constant evaluation of the experimentation process.

• Josh Silverman reflects on his evolution as a CEO, suggesting that his past teams might not recognize him now.
• He expects to continue evolving and hopes to look back on his current methods with a critical eye in the future.

"Oh, I think the poor folks who worked with me at Evite wouldn't recognize me."

This quote signifies personal growth and the expectation of continued evolution in leadership style and decision-making.

• Josh Silverman views himself as a work in progress in the craft of leadership.
• He actively role models and is a voracious reader, especially of biographies.
• Josh values learning from every person he works with, acknowledging that each person has qualities he admires and can learn from.
• Periods of contemplation and reflection have been crucial for Josh in evaluating his past performance and identifying areas for personal growth as a leader.

"I'm constantly trying to hone and refine my craft and get better... 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?"

This quote emphasizes the ongoing process of self-improvement and learning from others that Josh Silverman practices.

"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."

Josh reflects on his past experiences to identify specific areas where he needed to improve as a leader.

• Josh Silverman discusses the concept of "table stakes" and "spikes or strengths" in the context of job competencies.
• He believes in reaching a baseline competency level in necessary skills for his role, even if they are not his natural strengths.
• Josh surrounds himself with people who excel in areas where he is weaker.
• He is against the idea of focusing solely on strengths and ignoring weaknesses, emphasizing continuous evolution.

"But to be an effective CEO, there's a table stakes level of project management that I need to have and be capable of."

Josh acknowledges the need for a certain level of proficiency in skills that are critical to his role as CEO.

"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."

Here, Josh rejects the notion of only focusing on strengths and advocates for continuous self-improvement.

• Josh Silverman feels a strong sense of responsibility towards the people who depend on him as a leader.
• He finds the weight of this responsibility to be a healthy and motivating factor.
• Josh critiques the advice that suggests leaders should only focus on what they're good at, considering it flippant given the stakes involved.

"I have a lot of responsibility, and I owe it to the people who count on me to try to be the best I can."

Josh expresses his commitment to being the best leader he can be for the sake of others who rely on him.

"Thank God I feel the weight. Of course I should feel the weight."

This quote underscores the importance of feeling and acknowledging the weight of leadership responsibility.

• Josh Silverman reads extensively, with a current focus on a biography of Ulysses Grant.
• He finds inspiration in stories of historical figures who succeeded despite not fitting the typical mold of success.
• Josh appreciates having an external perspective, separate from Silicon Valley's echo chamber.
• He expresses skepticism about bold, declarative statements that emerge from Silicon Valley.
• Josh supports a more democratic ecosystem for entrepreneurship globally.

"I really love not living in Silicon Valley so that I can maintain enough objectivity and external perspective."

Josh values his distance from Silicon Valley as it allows him to maintain an objective perspective.

"I think it's great for the world if we have a more democratic ecosystem for entrepreneurship."

Josh advocates for a global spread of entrepreneurial opportunities beyond Silicon Valley.

• Josh Silverman highlights the importance of a challenging yet supportive board.
• He specifically mentions Fred Wilson, chairman of Etsy, as a memorable board member.
• The Etsy board is characterized by its constructive debate and constant challenge to the company.

"They challenge us constantly... They do it wanting us to win."

Josh describes the positive, growth-oriented challenges posed by the Etsy board.

• Josh wishes he had a better understanding of Etsy employees' perception of the company's challenges when he started.
• He acknowledges that there was a gap between his assumptions and the employees' actual understanding, which needed addressing.

"I think I assumed that employees were better grounded in all of the challenges Etsy faced than they actually were."

Josh reflects on his initial misunderstanding of employee awareness of Etsy's challenges.

• Josh Silverman shares his vision for the future of online commerce, predicting consolidation around fewer platforms.
• He believes Etsy is well-positioned to be an alternative to Amazon, providing a more human and meaningful shopping experience.
• The discussion includes the idea that people may seek fewer, more significant purchases that resonate on a human level.

"I think there's going to be only a tiny handful of places to buy things online."

Josh predicts a consolidation in the number of online shopping platforms.

"I think Etsy is incredibly well positioned to be the antidote to Amazon as the default."

Josh envisions Etsy as a significant alternative to Amazon, offering a different kind of shopping experience.

• Josh Silverman reads about 50 books a year, crediting Audible with changing his reading habits.
• He is currently listening to a biography of Ulysses Grant, finding inspiration in his unlikely success story.

"I read about 50 books a year because audible has changed my life."

Josh's reading habits have been significantly influenced by the convenience of audiobooks.

• Harry Stebings expresses his enjoyment of the conversation with Josh Silverman.
• The dialogue was driven by genuine curiosity, deviating from a scheduled set of questions.
• Harry appreciates Josh's tolerance and depth in discussing topics such as happiness and vulnerability in leadership.

"You could tell that all of the questions were pretty much off schedule and just from my interest, Josh was incredibly."

Harry notes the spontaneous and interest-driven nature of the conversation with Josh.

• Harry Stebings promotes various services, including Angelist's fund admin platform, Remote's global employment solutions, and Ramp's spend management platform.
• These services are described as game-changers for businesses and investors.

"I always love to see you there."

Harry invites listeners to engage with him on social media.

"It was great to talk. Thanks very much for the conversation."

Josh thanks Harry for the engaging conversation on the podcast.