Grit Podcast | Transcript | CEO Etsy, Josh Silverman: Second Acts
Conversation between Josh Silverman & Joubin Mirzadegan
Energy management
Josh Silverman (Etsy): In many ways, yes. And I think I'm better at directing it now than I was before, making all of that energy more productive.
Joubin Mirzadegan: What do you mean by that?
Josh Silverman (Etsy): More work leading to better outcomes was my mantra as a young person. I mean, not a mantra, but if I wasn't working a 100 hours a week, I thought I wasn't doing enough and not serving my business and my employees. Much of that was really counterproductive. I think it was a disservice, not just to me but to my team as well. So, I've learned better how to make sure my time is really productive.
Joubin Mirzadegan: When you think about your current role and the experiences that led you here...
Meetings
Joubin Mirzadegan: Being in your prime energetically now, can you—is that because of a duration of energy? Like, is it because of the quality of the days that you're having? Does the question make sense? Can you couch what that energy actually feels like?
Josh Silverman (Etsy): Yeah, a little bit. I'm actually a lot more intentional about thinking about energy management and how I... First of all, I've become more aware that great leadership requires great conviction, and great conviction requires contemplation. In my earlier career, I was in meetings all day every day, seven days a week, 10 hours a day of meetings, and I thought that was being hyperproductive. In fact, it's important to have time to just think, to decide what's most important, and what do I truly believe. When I'm running from meeting to meeting, I don't have time to think enough. When I look back, I was making a decision in one meeting and then regretting it days later. There's nothing worse than having your leader make a decision and then change their mind, wishing that I had different information or heard from other points of view before making that decision.
Don’t make a decision in one meeting and then regret it days later. There's nothing worse than having your leader make a decision and then change their mind. Make sure you have all the required information or other’s point of view before making the decision.
Joubin Mirzadegan: So actually, how is your day structured right now?
Josh Silverman (Etsy): My day right now is structured roughly half and half: half meetings and half prepping for tomorrow's meetings. I spend hours every day preparing for tomorrow's meetings. I have hours blocked in my calendar. So today, I have hours blocked to prepare for the meetings I will be in tomorrow. The team has to get me the information for the meeting 24 hours in advance, and I read it carefully and thoroughly. I'll often ask a lot of questions, like who else have we benchmarked? I want to make sure that the right voices are in the room tomorrow. There may be attendees I'll ask to attend tomorrow that weren't originally on the invite list because I think they'll bring an interesting perspective. Tomorrow, when I'm in that meeting, it's going to be a 30-minute meeting, and I'm going to make a decision that we're going to live with for some time. I want to make sure I've really thought through what are the most important questions I have, studied the data, and heard from the right people. Giving myself time to think has been really helpful.
Joubin Mirzadegan: It turns out the meetings are shorter too, right?
Josh Silverman (Etsy): Yes, because we're already very prepared. Not infrequently, I agree with everything you guys are proposing. You have a clear recommendation. There's no need for a meeting; we can take it off the calendar. Or, I don’t think we’re prepared for this meeting; there's information I want, so we'll delay the meeting until you get me the following information. Giving myself time to think has been really helpful to me, and spending time on weekends to go on hikes and spend time in nature is beneficial. I'm often thinking about the business during this time—like the impact of AI on our future or our hiring plans—and some of my most productive times happen when I'm not in the office at all.
Joubin Mirzadegan: And are all meetings treated equally for a given day? Do you have the same set of contemplative time per meeting?
Josh Silverman (Etsy): Well, there are a few different types of meetings. There's a decision-making meeting, an accountability meeting, and then there's a performance review or career development kind of meeting. Roughly speaking, I can divide my meetings into those three. We're pretty intentional about them; is this a decision-making meeting or an accountability meeting? In decision-making meetings, the team is presenting a plan and asking me to approve it, like whether to allocate a budget for a certain investment. Accountability meetings are where each leader reports on key performance indicators (KPIs) in front of their peers, and we diagnose where we are on track and where we are not. This is a key operating cadence for our company.
Few different types of meetings. There's a decision-making meeting, an accountability meeting, and then there's a performance review or career development kind of meeting.
Joubin Mirzadegan: So accountability meetings may not be meetings where you’re making decisions in the moment, but they can be very important.
Josh Silverman (Etsy): Exactly. And then, of course, there are career development meetings where we need to be coaching our teams. Across those three types, the accountability meetings happen relatively rarely. Most of my day is spent in decision-making meetings.
Joubin Mirzadegan: Are you the final decision maker in all these meetings?
Josh Silverman (Etsy): Not much, no. That's why I have a lot fewer meetings than I used to. I would say only about half of my day I'm in meetings, and the other half I'm preparing for tomorrow's meetings. If it’s not going to affect the market cap of the company, I probably should not be the decision maker. That's something I've gotten better at over the years.
Joubin Mirzadegan: Can you give me an example of a meeting that you think other CEOs...
Etsy's strategy
Joubin Mirzadegan: Would you generally take the stance that you are not the decision maker on all things? What are the edge cases around affecting market cap?
Josh Silverman (Etsy): I think I spend less time reviewing product designs for things we haven't shipped yet and more time reviewing outcomes. The way we work, we decide on some things we want to get a lot better at. For example, right now we have an opportunity to be much better at discovery. We've done a good job of serving customers who arrive at Etsy already knowing what they want. I think we can do a vastly better job helping to inspire whole new shopping missions that you didn't realize Etsy could help you with.
Joubin Mirzadegan: Could you give a quick summary for those who might not know what Etsy is?
Josh Silverman (Etsy): Sure. Etsy is a marketplace for people who have made or designed the products themselves to connect with buyers who want to buy directly from the maker or designer of the product. We have about 7 million sellers and about 92 million buyers, conducting about $122 billion of commerce on our platform. We are a pure peer-to-peer marketplace, meaning we don't warehouse inventory; it ships directly from the maker's home to the buyer's home.
Joubin Mirzadegan: Cool, sorry to interrupt.
Josh Silverman (Etsy): No problem. Etsy has grown enormously, and we've gotten better at being the place to go when you can't find something anywhere else. For example, during the pandemic, many people couldn't find various items, and Etsy was an enormous beneficiary of that. We've roughly held all of those gains, but we've struggled to grow on top of that. I think that's partly because we've become an ending point for commerce, where people go when they've exhausted all other options. I believe we have the opportunity to be a starting point. When you're just planning a wedding, Thanksgiving, or Halloween, we can do so much for you on those occasions.
Josh Silverman (Etsy): I feel strongly about this strategy and am driving it within the team. I challenge our product team to show me what a great discovery experience would look like. We talk about how we would measure success. For example, are we getting visits to last longer, are people favoriting more items, and what would we define as the success metrics? The team then goes and quickly ships their best ideas, experimenting and designing. We’re well-instrumented to do rapid A/B testing.
Josh Silverman (Etsy): I don't see many prototypes of things we are thinking about shipping. Instead, I see a lot more of "here's the 20 things we shipped in the last month from these five squads," and "here's what worked and didn't." We then discuss the insights we've learned and how we are going to apply them going forward. I believe this approach is empowering for the team. My job is to define success and set the constraints. That sounds easy but is actually quite hard. Being really good at articulating to the team what exactly success looks like and what our constraints are takes time and thought. But when done well, it empowers the team to figure out the best path to achieve that goal within those constraints.
Being really good at articulating to the team what exactly success looks like and what our constraints are takes time and thought. But when done well, it empowers the team to figure out the best path to achieve that goal within those constraints.
Joubin Mirzadegan: Where did you learn this approach? Did you just come up...
This version maintains the full discussion with clearer separation between the interviewer and the interviewee's responses. It also makes transitions smoother and concepts more understandable.
Learning to delegate
Joubin Mirzadegan: I don’t know if I've ever heard of that, and it seems brave. Especially for someone who would fill seven days a week with meetings, transitioning to this version of how you run your day-to-day is quite abrupt.
Josh Silverman (Etsy): It's been an evolution. First, credit to Ken Chenault for the phrase, "A leader's job is to define success and define constraints." That's a catchphrase of his. Ken, former CEO and chairman of Amex, I worked for Ken for four and a half years, and I learned so much from him. That articulation came from him, and it really resonated with me. I would add a third element, which is making sure you have the right person in the right role. But if you do those three things well as a leader, I think you're doing your job.
A leader's job is to define success and define constraints.
Joubin Mirzadegan: Can you repeat those three things?
Josh Silverman (Etsy): Yes, define success, define constraints, and make sure you have the right person in the right role. If you do only those three things as a leader, you're doing a great job if you do them well.
Josh Silverman (Etsy): I guess my journey started when I was the CEO of Evite many years ago. I was in my late 20s or early 30s. It was around 1999. I was dating someone who is now my wife. It was her birthday, and we'd been dating for over a year. I asked her what she wanted for her birthday, and she said she wanted to go for a hike with me during the daytime. I said that was impossible. She had never seen me in the daytime, as I was working from 7 or 8 in the morning until 9 or 10 at night, seven days a week. Weekends included. I would pick her up for dinner around 6 or 7 p.m., go to dinner, drop her back at her house, and then go back to the office. That was very common.
Josh Silverman (Etsy): So she broke up with me. She said she wanted to see me in the daytime, and when I said that was impossible, she broke up with me. We were apart for a little bit, and I really missed her. We eventually agreed that Sundays would be half days—I'd leave the office at noon on Sundays, and we would have time from noon onwards.
Josh Silverman (Etsy): At the time, I was a very young and immature leader. However, I discovered I was a much better leader because I often started answering emails with "I don't know, what do you think?" which was usually the right way to answer many of these emails. Instead of inserting myself and my opinion into every decision, I pushed the team to think about what they believed was the right answer. I learned to listen more and leverage my team better. That began my journey of delegation, which is a process all leaders go through over time. The challenge is to delegate without abdicating responsibility; those are two very different things. I'm ultimately accountable for everything we do as a team, so it's important to delegate with inspection and not abdication.
Josh Silverman (Etsy): Being very clear about what success looks like for the team and having a cadence of accountability where we drive as a team to achieve those outcomes together is a leadership toolkit I've learned and honed over the years. Frankly, I think I'm vastly better now.
Being very clear about what success looks like for the team and having a cadence of accountability where we drive as a team to achieve those outcomes together is a leadership toolkit I've learned and honed over the years
Setting an example
Joubin Mirzadegan: This might be a weird question, but personally, I try to block Fridays off to catch up on stuff. It's my only day that I control fully. I do an intentional set of things that aren't just hitting me in the face throughout the week. It's kind of like your version of a half-day, except every day is Friday for me. Other leaders at the firm do the same sometimes. However, I get worried that it might set an example where everyone starts to think they should take Fridays to assert their own agenda. If everybody starts doing that, I get concerned that the downstream consequence could be nobody having meetings on Fridays, so people might start their weekends on Thursday night. Does that ever occur to you in your world?
Josh Silverman (Etsy): Certainly, the example I set as a leader matters a lot in terms of what people think and do. I'm very aware that my behavior sets an example, for better or worse. Let me share a story from my time at Evite. One day, rumors went rampant across Evite that we were selling the company. I asked my executive assistant why everyone suddenly thought that, and she said it was because I had changed the position of my desk. It used to be that everyone could see my screen when they walked out the door, and then I changed it 180 degrees so no one could see my screen. They assumed I had something to hide, and if I had something to hide, it must mean we're selling the company.
Josh Silverman (Etsy): It was a great lesson for me that people are paying attention to everything I do. I had one engineer who was an older Chinese man, and feng shui was very important to him. His wife called me and said he was losing sleep over the fact that I had my back to the door because it was bad karma. So I changed the positioning of my desk to help this one person, but the team read so much into that change. I'm very aware that how I carry myself, my disposition, and demeanor every day, and certainly my actions, set a very big example for the team.
People are paying attention to everything a leader does. Be aware of how you carry yourself, your disposition, demeanor every day. A leader’s actions set a very big example for the team.
Joubin Mirzadegan: Do you have ways to measure productivity that aren't based on just "fingers on keyboard"?
Josh Silverman (Etsy): Yes, that's been very helpful. The unit of work at Etsy is the squad, roughly 8 to 10 people. Each squad is given one very clear customer metric they are expected to move, like one customer problem they are expected to fix with a measurable KPI. For example, making recommendations better to generate x% more favorites per visit or shortening expected delivery dates for packages to generate an extra $50 million worth of purchases.
The unit of work at Etsy is the squad, roughly 8 to 10 people. Each squad is given one very clear customer metric they are expected to move, like one customer problem they are expected to fix with a measurable KPI.
Josh Silverman (Etsy): Every squad knows exactly what success looks like for them, and we can measure whether they are actually achieving success. How much value has the squad created for our broader community? Because we have good metrics to measure value creation, I don't lose sleep over whether someone's logged into the VPN for a certain number of hours. What I care about is whether your squad has genuinely generated value for our broader community. I sleep pretty well at night knowing that we are well-instrumented for that. We're always learning how to get better, but that's important.
Josh Silverman (Etsy): I still work plenty of hours, but they aren't necessarily 9 to 5. I don't consider hours that I'm not typing on a keyboard to be non-working hours. Avoiding the idea that meetings on the calendar are the only version of productivity is also crucial. For example, if I look at yesterday, I had several blocks of time on my calendar. At 4:00 p.m., the finance team needed to send me a deck that I was reading from 4:00 to 4:30 for a meeting I have today at 1:00. They knew they had to get it to me by 4:00 because it was blocked on my calendar, and I would read it and comment on it in detail.
Joubin Mirzadegan: How does the finance team structure the document for you?
Josh Silverman (Etsy): That particular document was about squad allocations for next year. We were discussing how many squads to allocate to different tasks, and the team needed to present the information so I could understand and agree or not agree on our next year's investments. Yes, this influences market cap, and I'm the final decision maker on that. Nick and Rachna—Nick is the Chief Product Officer and Rachna is the Chief Technology Officer—are responsible for how much gross merchandise sales we will generate from the work our product and engineering teams do collectively next year.
Josh Silverman (Etsy): Every squad ships subject to an A/B test, and we measure whether it created a measurable lift in conversion rate or engaged visits. Nick and Rachna have a goal to hit. Last year, we said our teams delivered $1.3 billion in gross merchandise sales based on the work their squads did. They have a goal for 2025 as well and will map out where they think we can move the needle the most, allocating squads accordingly. For me to hold them accountable, I need to empower them, so I'm inclined to trust their recommendation because they are ultimately accountable for hitting their goal. But I will certainly have a lot of questions about why they chose this allocation and how we feel these squads will work together. We'll push each other's thinking together.
Joubin Mirzadegan: Can I revisit the Evite story for a second?
Evite's rise and fall
Joubin Mirzadegan: 1999 was probably even easier to get funding as a tech company than it is for an AI company today.
Josh Silverman (Etsy): Yes, definitely.
Joubin Mirzadegan: How much money did you raise?
Josh Silverman (Etsy): We raised 26 million.
Joubin Mirzadegan: And how big did the company get at its peak?
Josh Silverman (Etsy): In terms of headcount, we were at 120 people.
Joubin Mirzadegan: And how old were you then?
Josh Silverman (Etsy): I was 29. So many lessons, so many lessons. I went out wanting to raise a 2 million seed round, and we ended up raising 8 million in our first round. It was so easy to raise money, but that wasn't helpful to us in many ways. We had so much competition so quickly. It was very hard to get resources, hire staff, and secure office space because everyone was flush with money. People were being held accountable to very weird metrics.
Josh Silverman (Etsy): The difference today from then is that there really were no revenues or profits coming from internet companies in 1999. So "eyeballs" was the metric everyone was being held accountable to, and it was so easy to game that metric. Today, it does feel like the fundamentals of revenue and profit still drive valuation, and I think that's very important.
Joubin Mirzadegan: What ended up happening to Evite?
Josh Silverman (Etsy): We got bought by what was then called Ticketmaster, now IAC.
Joubin Mirzadegan: Was it a good outcome for your shareholders?
Josh Silverman (Etsy): No, definitely not. The company was underwater from the last valuation. My shareholders did not get back all their money. I felt a tremendous responsibility to get them something back. In 2000, the market absolutely crashed for consumer internet companies. Publicly traded comparables were trading at a discount to cash. For example, if a company had 200 million of cash on their balance sheet, their market cap was $150 million. The market just wanted them to shut down and give the cash back. It felt really bleak.
Josh Silverman (Etsy): I felt like we should try to sell the company because the best thing we could do was get our shareholders some money back. In hindsight, recognizing that markets come in waves and that they are overly exuberant during good times and overly negative during bad times, Evite would have done better to ride it out. We had enough cash on the balance sheet. We were not break-even but close.
Joubin Mirzadegan: You don't think you should have sold?
Josh Silverman (Etsy): In hindsight, we probably shouldn't have sold.
Joubin Mirzadegan: Why do you think you sold?
Josh Silverman (Etsy): I felt such a responsibility to the people we'd raised money from. I felt like they wouldn't be able to get their money back in any near-term time frame. I thought the best thing I could do for them was to try to get them back as much cash as I could in the nearest time frame.
Joubin Mirzadegan: So, you felt some guilt that you were going to lose their money?
Josh Silverman (Etsy): Huge guilt. Now, I look back and realize that we're all grown-ups making decisions together. We had walked away from some acquisition offers that would have been, you know, we had indications of interest in the kind of 200 million range just months earlier, pre-blowup. It made it feel so...
Self vs. company
Josh Silverman (Etsy): Much worse. I think I identified the success of the company with my own self-worth to a very high degree. I've learned to separate those two a little more, and I think that has made me a better decision maker—a less emotional decision maker. That’s been very healthy.
Joubin Mirzadegan: You mean, on a good day for the company, Josh is personally having a good day. On a bad day for the company, you’re having a bad day.
Josh Silverman (Etsy): I think my wife would agree with that statement. I’ve learned to make the correlation between those two less direct.
Joubin Mirzadegan: How?
Josh Silverman (Etsy): More time for contemplation, more time for thought, more time for exercise.
Joubin Mirzadegan: But what about when you have a terrible earnings report or when you lose your most important lieutenant? How does your brain process that now compared to before?
Josh Silverman (Etsy): My brain used to process it as "I let everybody down, I’m a failure, this company is going to go down." I would go to the logical extreme of bad outcomes, and it all felt personal.
Joubin Mirzadegan: How do you reframe that line of thinking into something productive? Productive as defined by disassociating yourself from the outcome.
Josh Silverman (Etsy): As I hear you say it, everything resonates. It’s an egocentric way to view the world, thinking it’s all about me. Obviously, it’s not all about me. But a line of inquiry I’ve learned is to ask myself whether someone else in a similar situation would have made a better decision. Often, the answer is no; I’m making the best decisions I can with the information available. But sometimes the answer is yes, and in those cases, I pick up the phone and call those people. I try to learn from them.
Josh Silverman (Etsy): Over time, I’ve gained confidence. Frankly, I think I’m a better CEO than I was when I was 30. Twenty-five years of experience and constant self-improvement have made me better. I generally feel like, in most situations, someone else wouldn’t have done better with the same deck of cards. I also have a pretty good network, and I’m often calling friends and saying, "Hey, how would you handle this?"
Joubin Mirzadegan: You don’t have a specific practice around this?
Josh Silverman (Etsy): I'll give you an example...
Legacy
Joubin Mirzadegan: This might be a petty example, but I was talking to my cousin about turbulence recently. We were both in Lisbon for his wedding and experienced really bad turbulence on the way there. Turbulence never used to bother me, but now it bothers me more than it used to. I was frustrated by how much it affected me. My cousin, on the other hand, wasn't bothered at all. I asked him how that could be, especially when we were bouncing so much our heads almost hit the ceiling for a solid hour and a half. He said, "If this is how I go out, then so be it. If this is how it all ends, that's how it's meant to be." He had come to some kind of acceptance about the extremity of it.
Joubin Mirzadegan: On the flight back, I thought about his perspective, and it was actually kind of helpful. If this is how it's going to be, so be it. It would be a crazy way to go. Does that make sense?
Josh Silverman (Etsy): Yes, it does. While that is a fatalistic outlook, I've been very fortunate in life. If something were to happen suddenly, I'm grateful that my kids, my wife, and my family would be okay. But I do spend a lot of time thinking about my legacy and what I've left behind. Would I be okay with the reputation and legacy I've left?
Josh Silverman (Etsy): I don't feel fatalistic in the sense of "que sera, sera"—what will be, will be. I feel like I have a lot of agency to affect outcomes. To relate to your turbulence example, I hope what I said wasn't interpreted as "it is what it is." I believe I have a lot of agency in affecting outcomes, but given the agency I have, am I making the best decisions with the information available? Am I making the right bets?
I believe I have a lot of agency in affecting outcomes, but given the agency I have, am I making the best decisions with the information available? Am I making the right bets?
Josh Silverman (Etsy): Those are the questions I ask myself. Often the answer is yes, and sometimes it's no. The good news is that when it's no, we can course-correct. This year has been challenging for Etsy. We haven't grown in the past couple of years due to a challenging macro environment and a recession in discretionary product spending for two straight years. We’ve held our pandemic gains in ways that no one else has, but it’s frustrating that we haven’t seen growth.
Josh Silverman (Etsy): Reflecting on this during one of my hikes, I realized that my career has often involved coming into companies that had a successful first act and helping them unlock a successful second act. I asked myself, "If today was my first day at Etsy, what would I do differently?" I came back to the office and told my whole team in December that we're having an offsite in January. I said, "You're all fired and rehired for that offsite in January. I want you to come back in the new year as if today is your first day on the job."
Josh Silverman (Etsy): This approach has been incredibly helpful. There are many ways I'm running the business today that are very different from how I ran it in the past six years. The playbook that was successful in the first six years might not be the one that will make us successful in the next several years. This has been a reflective process for me, realizing that we can do things differently and I can do things differently. I'm willing to have fresh eyes and view everything as though today were my first day, without being defensive about the past. I think that’s really helpful.
Control and agency
Joubin Mirzadegan: Maybe it's this idea of control—how much agency you really have in the world versus what you think you have. Do you ever wonder, as someone who believes they have an incredible amount of agency in the world, that maybe it's actually much less than you'd like to believe? And that maybe the negative self-worth comes from the gap between what you think you can control and what you actually have no control over?
Josh Silverman (Etsy): That is a great insight. No one's asked me that before, so that's good on you. I've done a lot of interviews, and no one's asked me that question. It's cool.
Josh Silverman (Etsy): I would prefer to live in a world where I think I have a lot of agency. How much agency each of us has, I don't know. I will say that I've been fortunate to get to a position of authority where I influence the lives of 2,200 employees and 7 million sellers. It's some level of limited authority, but I make decisions that have real consequences. Based on that, I feel accountable, and I think that's right. I don't think my team or the community of sellers and buyers would want it any other way. I think they deserve a leader of this organization who feels agency and accountability.
Joubin Mirzadegan: It's interesting that you've been able to hold on to this idea of agency so strongly throughout your career, while also being able to disassociate your self-worth from that agency. You've been able to decouple those things.
Josh Silverman (Etsy): I've gotten a lot better at it. You mentioned earlier that when Etsy's having a bad day, I'm having a bad day, and I said my wife would agree with that statement. I've gotten better. I've become much more mindful about it—recognizing that, for example, our stock is down today or our numbers aren't as good as I'd like them to be and that's affecting my mood. I've become much more conscious of that.
Josh Silverman (Etsy): The next thought I have is, what is the most productive way to get the numbers back in the right direction? There’s always a lagging metric, like our stock performance, and I ask myself if it's productive for me to feel this way. Sometimes the answer is yes because projecting urgency to the team can be very productive. If I show up with a sense of urgency and focus, it can drive the team forward.
Josh Silverman (Etsy): However, if I'm feeling anxious, down, or pessimistic—all of us have those moments when the numbers are down and we feel bad, and I certainly have moments of self-doubt. That's not helpful to the team. So, I try to be very mindful of what I'm actually feeling and distinguish which feelings are productive. How can I harness the productive ones and separate myself from the unproductive ones?
Joubin Mirzadegan: That makes total sense. Can you give me an honest assessment...
Joining Etsy's board
Joubin Mirzadegan: Can you give me an honest assessment of the state of Etsy when you joined the company? You came from the board, correct?
Josh Silverman (Etsy): I had been on the board for six months and attended two board meetings.
Joubin Mirzadegan: What did you think after your first board meeting?
Josh Silverman (Etsy): Honestly, I thought we lacked accountability. I felt Etsy's heart was in the right place, but we lacked focus and accountability. Best practice when you join a new board is to try to say just one thing in your first board meeting—make it smart, pick your battle, and say one thing.
Josh Silverman (Etsy): I walked into the board meeting with the mindset that I would try to only say one thing. The very first page of the board deck showed gross merchandise sales, and it was clear that sales were decelerating. In fact, we were two quarters away from having no growth at all. The CFO presented that slide, then moved on to the agenda, which included topics like revamping our mission statement, discussing our values, and exploring several new business ventures.
Josh Silverman (Etsy): Three minutes into my first board meeting, I couldn't help myself. I had to raise my hand and say, "Wait, can we go back to page one where we said that growth is decelerating and approaching zero? Why do we think that is?" The response I got was, "Well, we're about as big as we can be in the handmade market." At the time, Etsy was doing about 2 billion in gross merchandise sales.
Josh Silverman (Etsy): I questioned, "If that's true, why are we wasting our time here? 2 billion in the scope of retail is tiny. Maybe we should just fold up and go home if that's all we can be. But I don't think 2 billion is all we can be, so where are we focusing our time and energy right now?"
Josh Silverman (Etsy): What I observed was that we were focusing on a bunch of new bets. When growth isn't going well, the instinct is to lay more chips on the table, and that's what we were doing—spreading ourselves too thin. We had a passionate team that cared a lot, but we weren't holding ourselves accountable to growth.
When growth isn't going well, the instinct is to lay more chips on the table, and that's what we were doing—spreading ourselves too thin.
Josh Silverman (Etsy): When I came into the company, we went through a lot of changes to focus on the few key areas that would truly drive growth. We developed a playbook that was exceptionally successful for six years. At that time, we were doing just over 2 billion in annualized gross merchandise sales. Now, we are at about 12 billion, and I believe we can be much, much bigger. But that's going to require yet another new playbook.
Joubin Mirzadegan: The stock rose 50% in the first six months of your tenure.
Becoming CEO
Joubin Mirzadegan: When you started, you said you went through a lot of changes. Can you be specific about what sort of changes you implemented? That’s a big jump.
Josh Silverman (Etsy): Yes, it was a big jump, and after a couple of years, the stock went up 1,000%. My strategy was different. I believed that the core of the Etsy business could be very big, and instead of focusing on a lot of new ventures and bets, we should concentrate all of our energy on making the core better. The way to make the core better was by making it easier to buy things on Etsy. We were spending a lot of time and energy on the wants of our sellers—a long list of them—but the main reason they hire us is to bring them buyers, to bring them sales. The way to do that is to make the shopping experience on Etsy much better. If we improve the shopping experience, our sellers will be more successful on Etsy, which is ultimately what they want. They don't necessarily want some fancy widget; they want to drive successful sales.
I believed that the core of the Etsy business could be very big, and instead of focusing on a lot of new ventures and bets, we should concentrate all of our energy on making the core better. The way to make the core better was by making it easier to buy things on Etsy.
Josh Silverman (Etsy): So, I asked the team what the fewest things were that we needed to do to drive more sales. I felt a lot of urgency because we had activists, and I didn't think we would be an independent company in six months if we couldn't show that we could inflect the curve. I thought we were going to get bought for pennies on the dollar, and I feared the epitaph on Etsy's tombstone would be that we failed because we tried to be a good citizen. That felt like a devastatingly bad indictment. I knew that being a good corporate citizen is part and parcel with being a good business in today’s day and age—you have to do both. Our challenges were primarily due to a lack of focus and execution, not because we tried to be a good citizen.
Josh Silverman (Etsy): I challenged the team without coming in with specific ideas on how to make the company grow faster. I felt the buying experience on Etsy was very challenging, so I asked the team for their best ideas to remove friction from this experience. They came up with a long list, and I said if an idea wasn’t going to produce at least $10 million of gross merchandise sales (GMS) in the next 12 months, we weren’t even going to consider it. This didn’t mean we would fund every idea that met this threshold, but we couldn’t waste time on anything that didn’t.
I asked team for their best ideas to remove friction from buying experience.
Josh Silverman (Etsy): We came up with a very short list of initiatives that we felt had a high chance of driving GMS in a short amount of time. We drew a new organizational chart on a clean sheet of paper to give one clear owner to each initiative, with the fewest possible layers and the leanest squads. In my fifth week, we did a big reorganization, which included a fairly large layoff. The layoff wasn't the goal, but when we outlined what we needed to achieve our objectives, we realized we could do it with fewer people and move a lot faster.
We drew a new organizational chart on a clean sheet of paper to give one clear owner to each initiative, with the fewest possible layers and the leanest squads.
Josh Silverman (Etsy): Product velocity increased dramatically—the number of shipments and software releases increased fivefold with 20% fewer people. When I joined, we had about 300 to 400 different initiatives going on. We got that down to 40 or 50. We had around 1,800 to 1,900 people at the time, so it wasn’t uncommon to have a lot of projects, but many of them were new ventures.
Josh Silverman (Etsy): For example, the team had spent 18 months developing a marketplace for craft supplies called Etsy Studio. This wasn’t a crazy idea; we had millions of sellers who needed raw materials. Creating a marketplace for craft supplies would give us a ready-made audience of buyers. However, it was a brand new URL and domain that we’d need to build from scratch. A few hundred people had worked on it for 18 months, and it launched on a Friday. My first day on the job was Tuesday, and I shut it down on Friday. It was up for a week.
Josh Silverman (Etsy): You can imagine the disappointment among the couple hundred people who had worked on it. They didn’t love their new CEO. Not just them, but there were also hundreds of other projects we shut down, so almost everyone in the company had a new job and a new focus by the end of my fifth week. Many people found it very challenging, but some found it exciting because we were bringing focus to the company, talking about accountability, and measuring success in a very clear-eyed way.
Joubin Mirzadegan: Were you worried about losing internal support?
Josh Silverman (Etsy): A lot of people quit, but many more doubled down and said this was exactly the place they wanted to be and were excited for the new direction.
Culture shock
Joubin Mirzadegan: To shift the tides in the way that you did—it sounds like that was a major culture shock moment.
Josh Silverman (Etsy): It was very much a culture shock moment. On my first day in the office, I talked to the team and said, "Hey, it feels tough for us right now, but there are several million sellers out there who have a really hard time just putting food on the table. We deal with high-class problems relative to what they're dealing with. This isn’t about us or our emotions or feelings; it’s about whether we're doing the best we can to serve them and their needs."
Josh Silverman (Etsy): I told them, "For some of you, this will resonate, and you’ll be up for the challenge. For others, it might not." My leadership team and I had to stand up every day at the end of the day and discuss the number one topic: who quit today. Every day, some really essential person would quit, and we just had to figure it out and keep moving forward.
Josh Silverman (Etsy): However, after about four months, we started to see that we were inflecting growth. We were shipping things that were driving meaningful, incremental growth. The company was transitioning from deceleration to starting to accelerate and grow again. About nine months in, we could really see traction to the point where the stock price was recovering. We were able to beat and raise expectations every quarter, showing clear traction.
Josh Silverman (Etsy): Communicating urgency to the team without being able to share all of the information was one of the challenges. While there’s a lot to be said for being a public company, there are some drawbacks. One of them is that I can't always share all the information I’d like to.
Communicating urgency to the team without being able to share all of the information was one of the challenges.
Joubin Mirzadegan: When the board called you, were you surprised?
We need you, trust us
Joubin Mirzadegan: How long did you take to think about that decision?
Josh Silverman (Etsy): Well, it was a Thursday, and I was at the TED conference. Late at night, just after planning the speeches I was going to attend the next day, I got a call from a board member. He said, "We just had a meeting and have elected you CEO. I know you told us you didn't want the job, but we did it anyway. We need you, and trust us, it's going to be okay. We are announcing you as the new CEO on Tuesday."
Josh Silverman (Etsy): The background is that we had an earnings call on that Tuesday, where we were going to announce that we had missed consensus. The stock was expected to drop from 10 to something much worse. The board felt that if we didn't announce a meaningful change during that earnings call, the company might be sold, possibly for much less than 10. The board said, "We are announcing you on Tuesday. Fly back, and we'll make it work. We just need you."
Josh Silverman (Etsy): So, I booked a plane ticket for the first flight in the morning. I had a conversation with my wife on Friday and ultimately decided that Etsy is an amazing platform for so many people. If I can be helpful, I have a responsibility to do it.
Josh Silverman (Etsy): Initially, I didn't want the job. The board had asked me to join a couple of times, and I’d said no because I suspected they wanted me to eventually become CEO, which I didn't want. When I finally agreed to join the board, it was under the condition that they wouldn't ask me to be CEO.
Josh Silverman (Etsy): The reason I didn't want the CEO position was that I knew the challenges Etsy faced would require me to do a lot of difficult things that had a high probability of being bad for my reputation. I knew I would have to lay off a ton of people and be painted as the villain. There was a 100% probability of being seen as the villain for only a 5% to 10% chance of success. Looking back now, it seems like an obvious decision because the stock has done well relative to when I started. But at the time, it didn't feel obvious at all. It felt like there was a 100% chance of being the villain for a small chance of future validation.
Joubin Mirzadegan: Do you feel like you're still the right person for the job?
Josh Silverman (Etsy): I have to earn it every day. I have a ton of energy and passion for the company, and I think I understand the business well enough to know where to push and ask the right tough questions. But I have to prove it every single day. I took this job on January 1st, and if you ask my team, they will tell you that we are running the company very differently this year than in prior years. We've adopted a new focus, imagining we were fired and rehired as the new executive team. I think this new strategy is helpful and we have to prove it.
eBay and Skype
Joubin Mirzadegan: It's interesting that you were reluctant to come in the way that you did because you have built a career around initiating second acts for companies. You've done it at eBay with Skype and across the board, which usually requires a lot of change. And with a lot of change, there are usually a lot of people who don't like you, right? If you knew that's what you were good at, were you planning just to ride out board roles after your time as Ken's number two at American Express for four years? What was the alternative?
Josh Silverman (Etsy): I didn't really know. A lot of things in my career, in hindsight, appear well planned out, but they really haven't been. I wasn't sure if I was going to run another company or work with private equity firms to buy and turn around companies. That was something I had been exploring. I wasn’t really sure.
Joubin Mirzadegan: Can I explore the eBay and Skype saga of your life for a minute? I think it's fascinating. Let me just read a few stats for you. You joined eBay in 2003 as the GM of international expansion. Then you spent three years doing other international expansion-type work. During that time, eBay acquired Skype for $2.6 billion. In 2006, a year after that acquisition, you became the CEO of Shopping.com, a subsidiary of eBay. You spent two years in that role, from 2006 to 2008. Meanwhile, eBay took a $1.4 billion write-down on Skype, readjusting its valuation. Two years later, eBay sold part of Skype to Silver Lake, a private equity firm, and retained 30% equity. Is that all correct?
Josh Silverman (Etsy): Yes, that’s correct.
Joubin Mirzadegan: So when you took the Skype job as CEO within eBay, it wasn’t the bell of the ball. It had just been written down.
Josh Silverman (Etsy): That’s right. I had built a reputation within eBay as the person who fixes things that eBay bought but didn’t know what to do with. In my international role, I ended up finding and buying several classified sites in Europe and building the eBay classified business there. That went great and really set my career up at eBay. It was also super fun, and I learned a ton. Then they asked me to take over Shopping.com, which they had bought and didn’t know what to do with. Those two years were tough because it turned out that Shopping.com wasn’t really a business; it was just a Google arbitrage engine. I did the best I could with it and think I made some good progress.
Josh Silverman (Etsy): Around the same time eBay bought Shopping.com, they also bought Skype, and that acquisition went badly. eBay decided they needed a new CEO for Skype. I immediately raised my hand, but they looked everywhere else first. No one wanted the job, so I got it by default.
Joubin Mirzadegan: Why was it hard to find someone?
Josh Silverman (Etsy): Skype’s business model was based on free international phone calls at a time when international phone companies were reducing call costs to zero. People believed Skype's value proposition was diminishing. Additionally, Skype's culture was famously contentious. Everyone I talked to said it would be career suicide to take the job.
Josh Silverman (Etsy): But I felt Skype did something really important. When I talked to friends about Skype, they said it let them be with people when they couldn’t be in the same room. That felt incredibly valuable. So, I moved my family first to Estonia and then to London to take the job. I’m really proud of what we did together. I challenged the team to rethink Skype's purpose—not as a provider of free phone calls, but as a service that enabled people to be together when they couldn’t be physically present. This pivot led us to focus on video calling.
Josh Silverman (Etsy): Shifting to video calls unlocked a whole new chapter for Skype. Revenue and user growth reaccelerated, and we became profitable. We launched Skype for Business, targeting enterprise sales of communication technology. After making these changes, Silver Lake came in and bought a stake in the company, allowing us to spin it out of eBay. Not long after, Microsoft bought Skype for $8.5 billion. Silver Lake had come in at a valuation of $2.75 billion.
Josh Silverman (Etsy): By the time the sale to Microsoft happened, we had already turned Skype around. We had pivoted to video, became a top app on the iPhone, and reignited growth. I’m pretty proud of that achievement.
Pushed out
Joubin Mirzadegan: So you were there for two and a half years. Did the acquisition by Microsoft happen after you left?
Josh Silverman (Etsy): No, I came in, then Silver Lake spun it out, and about a year after the spin-out, Silver Lake pushed to have me fired because they wanted someone with experience taking a company public. After two and a half years of work that I'm incredibly proud of, I got pushed out of a company that I loved. That was a real heartbreak for me.
Joubin Mirzadegan: I didn't know that. That must have been tough.
Josh Silverman (Etsy): It was devastating. Months after I got fired, Skype was sold for three times the amount that Silver Lake had paid for it.
Joubin Mirzadegan: If I may, how much of your self-worth was tied into Skype at that time?
Josh Silverman (Etsy): It was devastating for me. My entire self-worth and self-image were tied to the success we had achieved at Skype. I felt that I had done amazing work with the team, and the numbers backed that up. That experience was crucial in teaching me to separate my self-worth from other people's opinions.
Joubin Mirzadegan: Was it a complete surprise?
Josh Silverman (Etsy): Total shock.
Joubin Mirzadegan: How long did you lick your wounds?
Josh Silverman (Etsy): I took my family on a hiking and camping trip for a few months in places where there was no cell phone signal. My kids had been through so much—my daughter had lived in three countries over the course of first grade: Estonia, London, and Luxembourg. She kept having to adapt to new schools. We needed time to reconnect as a family. My son was still very young, and my daughter was only in first grade. I had been on the road 200 days a year, and at one point, my daughter even asked where I lived and if I could come home more often. I had made tremendous sacrifices.
Josh Silverman (Etsy): It was important for me to not be running away from something but to be running toward something. I wanted to make sense of my experience and figure out what I was going to pursue next and why. Clearing my head was essential for that.
Joubin Mirzadegan: Maybe the reluctance you felt about coming to Etsy as CEO was linked to how devastating the Skype experience was for you. Could that be why you didn't want to join the board initially, suspecting they'd push you into the CEO role?
Josh Silverman (Etsy): It could be. I haven’t thought about it that way, but that’s possible. Basing my self-worth on what a few other people think of me isn’t a helpful strategy for happiness. I’ve learned to measure my success and find happiness and value in my own way.
Joubin Mirzadegan: When you came back from hiking with your family, did you...?
Accountability and family
Joubin Mirzadegan: As you turned the pages of grief, from anger to resentment to sadness, did it eventually ignite a fire in your belly to prove them wrong?
Josh Silverman (Etsy): Yes, 100%.
Joubin Mirzadegan: Do you feel like that fire still exists?
Josh Silverman (Etsy): Yes, I think the fire is always going to be there. I always have something to prove to myself, but I think I've gotten better at understanding who I’m trying to prove it to and what legacy I am trying to leave. Candidly, now it's mostly about my kids. What example do I want to set for them?
Joubin Mirzadegan: It actually makes me really sad to hear your daughter asked you where you live.
Josh Silverman (Etsy): Yes, that was tough. The day before we were about to do the big layoff in my fifth week at Etsy, she was in sixth grade, old enough to be very aware. I took her on a walk and said, "Tomorrow, there’s going to be a lot of news coverage about your dad firing hundreds of workers, and it’s all going to be negative. Let’s talk about what you’re going to read in the press and why this decision is necessary, why it’s actually the right thing to do, and why I believe it’s a high-integrity move."
Josh Silverman (Etsy): As a leader with kids, these are always things you have to think about. Ultimately, it worked out very well, but it wasn’t obvious at the time that it would. These are decisions and accountabilities any leader needs to carry.
Joubin Mirzadegan: What do you do now outside of work? How does your day look like before and after work?
Josh Silverman (Etsy): First, I have more time for myself now. I don’t work the hours I used to, and I think I’m a much better leader for it. I’ve realized I need to be in fewer meetings, so I pull myself out of a lot of things that I used to be involved in. I still work through the weekend, but not all day every day, and not in an office. I spend some time reading and prepping for the next week.
Josh Silverman (Etsy): For example, last weekend, I went to Austin City Limits, the music festival, with my kids. Both my kids came, one of them is in college now, and they each brought a friend. My wife and I had a great time with them. On the plane ride there and back, I was reading materials for the week, but in the context of enjoying a music festival with my family. Both my kids play volleyball, so I go and play volleyball with them. You’ll find me in Central Park on the sand courts, playing two-on-two with my son against other people. I love it because it’s really physical and it’s a team sport, and I get to play with my kids.
Joubin Mirzadegan: Do you do something physical every day?
Josh Silverman (Etsy): Gyms are not my thing; I can’t run on a treadmill like many people do. Team sports are what I love and what excite me, so I try to do something physical three to five days a week. More often than not, it’s volleyball or tennis or something similar.
Time horizons
Joubin Mirzadegan: You have a leadership principle around thinking in increments of three to four years. I have a similar one—I'm sure I borrowed it from you somewhere down the line. Can you talk about that a little bit?
Josh Silverman (Etsy): Yeah, earlier in my career...
Joubin Mirzadegan: Sorry to interrupt, but is your recent recommitment in January a version of a new three to four years?
Josh Silverman (Etsy): I think so. As I've gotten older, it's become easier for me to have longer time horizons. But when I talk to younger people or those early in their careers about how I’ve thought about my career, I often share this approach. When I first graduated from college, the idea of knowing what I was going to do for the next 20 or 30 years seemed impossible.
Josh Silverman (Etsy): So in the early stages of my career, I picked goals that were about three years out. I asked myself what I could be really proud to have accomplished in three years, and then I went all in on achieving that. Plan A was to make it work, and plan B was to make plan A work—leaving myself no plan B.
Josh Silverman (Etsy): Early on, my focus was on healthcare policy. I really wanted to help fix the healthcare system in the United States. I did anything I could to get a job working for a senator or congressman in healthcare policy, and eventually, I landed a job and did that. That experience led me to other opportunities, but the idea was that 20 years felt impossible, while three years felt manageable.
Josh Silverman (Etsy): The framework was to pick something I was genuinely passionate about, that would surround me with smart people who could help me grow, and would put me in a community that expanded my options rather than reduced them. If an opportunity met those criteria, it was worthwhile to commit three years of my life to it. As I've gotten older, it’s become easier to think in terms of four, five, or even six-year time frames. But certainly, for the first 10 to 15 years of my career, this approach was very helpful.
The framework was to pick something I was genuinely passionate about, that would surround me with smart people who could help me grow, and would put me in a community that expanded my options rather than reduced them.
Gen AI-supported art
Joubin Mirzadegan: Could you talk about the decision you've had to grapple with around AI on Etsy, especially for sellers? I read an interesting analogy you used involving electronic music. Could you explain it within that context?
Josh Silverman (Etsy): Sure. What you're referring to is our recent decision on whether generative AI-supported artwork should count as handmade on Etsy. This was a contentious issue. When we have such issues, I typically ask the team to do a "red hat, green hat" exercise. I'll assign some folks to argue one side and others to argue the opposite.
Josh Silverman (Etsy): This technique is something I've learned over my career, particularly at American Express. I noticed that teams would come to me with decisions where they had already aligned on what they thought was the right answer. Often, this was not the optimal answer but rather a lowest common denominator that everyone could agree on. So, I trained the team to argue for one of two distinct paths because it's usually better to choose one clear direction rather than a muddy middle.
Josh Silverman (Etsy): In this case, the question was whether a poster created with generative AI should be considered handmade and allowed for sale on Etsy. It boils down to what we define as a tool. Sellers are allowed to use tools, like a carpenter using a drill or a designer using an iPad. Generative AI is a new tool.
Josh Silverman (Etsy): The most persuasive argument, to me, was the analogy with electronic dance music (EDM). EDM, which is incredibly popular, involves humans partnering with machines to create music. Similarly, generative AI can be seen as a tool that people will increasingly use for various creative tasks. Therefore, we decided that generative AI-supported art should be allowed for sale on Etsy.
Joubin Mirzadegan: Fascinating. I can't wait to see what your next commitment looks like. I'm really excited to watch from a distance. Thank you for doing this.
Note: This version maintains the conversation with clearer separation between the interviewer and interviewee responses for readability.