The Power of Female Representation: Insights from Etsy CEO

Table of Contents

1. Introduction
2. Gender Diversity at Etsy
   1. Statistics on Female Representation
   2. Focus on Performance Management
   3. Challenges in Building Female Leadership Bench
3. Importance of Diversity in Business
   1. Female Representation for Customer Understanding
   2. Diversity and Strong Financial Performance
   3. Expanding Focus on Diversity to Include People of Color
4. Talent Pipeline and Engineering Opportunities
5. Efforts for Increasing Diversity in Schools
   1. Script Ed - Teaching Computer Science in Inner-City Schools
6. Etsy's Success vs. Amazon
   1. Unique Factors Differentiating Etsy from Amazon
   2. Keeping Commerce Human
   3. Value, Selection, and Convenience
7. Etsy's Growth Potential
   1. Total Addressable Market
   2. Fee Increase and Seller Feedback
8. Conclusion

Gender Diversity at Etsy

At Etsy, gender diversity plays a significant role in the company, with more than half of the leaders being women. This statistic raises the expectation that at least half of those who get promoted should also be women. The board at Etsy is 50% female, and almost two-thirds of the senior executive team consists of women. These numbers reflect the presence of highly capable female leaders within the company. Etsy places considerable emphasis on objective and results-based performance management to ensure fairness and equal opportunities for all employees. The results show that gender or race does not predict an individual's performance or chances for promotion within the company.

However, building a strong bench of female leaders is not without its challenges. While Etsy has made progress by having 32% of its engineers as women, the representation may not be at a level that the company is entirely comfortable with. It can sometimes be harder to find female candidates compared to male candidates. Etsy acknowledges the need to actively seek and cultivate female talent to increase their representation further.

Importance of Diversity in Business

Having strong female representation within a company is not just a matter of social equality; it is also a business imperative. Etsy recognizes the importance of understanding its customer base, as 87% of its sellers and buyers are women. By having strong female representation within the company, Etsy can better understand and cater to the needs and preferences of its customers. The focus on diversity has resulted in strong financial performance, which further establishes the relevance and significance of diversity in driving business success.

Success breeds success, and Etsy has garnered a reputation in the market as a place where women can come and thrive. This reputation attracts great female talent, further enhancing the company's diversity and potential for success. Etsy aims to extend this focus on diversity to include people of color as well. The company recognizes that diversity encompasses various dimensions, and by creating an inclusive environment, it can attract a wider range of talents and ideas.

Talent Pipeline and Engineering Opportunities

To sustain and increase diversity, Etsy understands the need to address the talent pipeline, especially in fields like engineering. Opportunities in engineering are not equally distributed across the United States, which affects the diversity of talent available. It is crucial to rethink and develop strategies that reach students at an early age.

To bridge this gap, Etsy's chairman is also involved with an initiative called Script Ed, which introduces computer science education to inner-city schools. The program not only teaches computer science but also provides pathways to technology for students. Over 85% of the students reached through Script Ed are kids of color, and nearly 50% of them are girls. By focusing on the K through 12 pipeline, Etsy aims to lay the foundation for diverse talent in the field of technology.

Etsy's Success vs. Amazon

Despite being a smaller company compared to Amazon, Etsy has successfully held its ground in the face of skepticism. The concern was that Amazon, with its vast platform and reach, could overshadow Etsy's craft business and lure sellers away. However, Etsy's unique value proposition has allowed it to thrive in the market.

Etsy differentiates itself by keeping commerce human. While Amazon excels in selling commodities and mass-produced goods, Etsy provides the opportunity to purchase something special, personal, and unique. Etsy's offerings come with a story and the touch of a human connection—attributes that are hard to replicate on a larger scale.

Amazon's advantages in terms of value, price, and selection do not necessarily translate into Etsy's space. Etsy offers a wide selection of more than 50 million items from over 2 million sellers, and many of these items are made to order or customizable. This customization and personalization aspect of Etsy's offerings cannot be matched by Amazon's large-scale warehousing and standardized shipping processes.

While the idea of being owned by Amazon might seem enticing to some, Etsy remains focused on building its business independently. The company sees significant potential for continued growth and believes it has a long runway ahead.

Etsy's Growth Potential

Etsy envisions tremendous growth potential in the market. The company estimates its total addressable market to be $155 billion, considering its top six categories and top six geographic markets, while only accounting for the online portion. This projection signifies the vast opportunities available to Etsy as it continues to expand.

In order to invest more in its sellers and accelerate their growth, Etsy raised its fees from 3.5% to 5% after maintaining the same fee structure for 13 years. While there was some diversity of voices and initial feedback from sellers, the majority understood the need for the fee increase and recognized it as an investment in their success. The results have supported this decision, with no perceptible behavioral changes among sellers in terms of increased churn or prices.

Etsy acknowledges that it is still in the early innings of where it can be as a company. The investments made in marketing, tools, search optimization, and various facets of the business have already shown positive results. As Etsy continues to capitalize on its growth potential, it seeks to leverage its position as a leading online marketplace for unique and personalized goods.

Conclusion

Etsy's commitment to gender diversity, especially in leadership roles, is evident through its statistics and performance management practices. The company recognizes the importance of having strong female representation to understand its predominantly female customer base. Etsy's focus on diversity has contributed to its financial success, and it aims to extend this focus to include people of color as well. By addressing the talent pipeline and creating opportunities in fields like engineering, Etsy strives to attract and cultivate diverse talent in the long term. In a market dominated by giants like Amazon, Etsy's unique value proposition, which emphasizes human connection and personalized shopping experiences, has allowed it to carve out its own space. With a vast addressable market and continued investments in its business, Etsy remains poised for growth and future success.