5 key learnings from Etsy’s CEO on two decades in tech leadership

Josh Silverman on successful career planning, leadership, and decision making.

This post will cover the following topics:

• The superior alternative to long-term career planning
• The three relevant questions for world-class leadership
• Why importance & rollback costs are the only two decisive dimensions for decision making

“I certainly didn’t have a long-term plan for my career.”

Josh Silverman doesn’t believe in planning for decades. He thinks the notion to define what you will be doing in twenty years is overwhelming. The world changes quickly. It is very unlikely that someone will be able to follow through with a plan for the next twenty years. Hence, Josh plans his career in 3–4 year-long sprints. Each of these sprints needs to provide him an opportunity to create value for society. On a personal level, he seeks opportunities for vast learnings that increase his future career optionality. Additionally, he optimizes for being exposed to amazing and admirable people. Once he finds this sweet spot, he sprints with full commitment, passion, and curiosity. Using this approach will make your career a meaningful flywheel. It leads to fast trial and error iterations and limited downside risk.

“A job is putting everything on 32 red at the roulette table.”

There is little to no diversification for many jobs. Operational careers focus on a particular market, technology, and hierarchical structure. Your influence is limited by these factors. So it is highly important to choose the right battlefields. Go for opportunities where you can meaningfully affect a large number of people. The path to success for these missions can be full of stress, difficult decisions, and choices. But they are likewise the missions with the biggest meaning. Long-term, in spite of having to overcome difficult obstacles, purpose equals happiness. Especially in the case of success. But even if it doesn’t go well, these missions offer great room for skill development. The learnings will make you stronger for the next sprint. The struggle focuses the mind to concentrate on what matters. This concentration decreases the risk of changes dramatically. It allows for making bold bets.

“ Go for the vital few versus the worthwhile many”

Everything in business needs to have a purpose bigger than maximizing monetary value. It also should provide employees with something more than moving up a career ladder. Especially during tough times and crises, there is a need for a meaningful North Star and a shared belief. This North Star has to be fundamentally grounded into first principles. Ideally, this materializes into one or two key metrics. The question then is what are the fewest things for the largest impact on the targeted metric. Initiatives fitting into the strategy and having a positive ROI do not set the bar high enough. Resources are limited and competition in today’s world is fierce. Narrow down to what matters most for success.

“ Leadership is about three things. Defining success, defining constraints, and having the right people in the right position.”

As Josh took over his role at Skype, the team was struggling with Skype 4.0. Josh asked his leadership team what Skype 4.0 is solving for. He got eight different answers. Following this, Josh wrote a paragraph about what problem Skype 4.0 aims to solve. Additionally, Josh defined the available resources and the shipping date of the product. Defining success and constraints in a few words. The team shipped the video-focused Skype 4.0 within a few months and ahead of plan. Generally, Josh organizes his teams in squads. Each squad consists of a product manager, engineers, and analysts. Each squad gets one customer problem to solve at a time with one metric of success and a time constraint. The squad should improve its target objectives by using iterative experiments. However, Josh does not only track success by the progress on the defined success metric. Far more important is the boldness of the tested ideas and their foundation in good insights. Josh holds people and entire teams in great esteem as long as their intentions are right.

“Decision-making is about reducing the opportunity cost of failing”

Josh categorizes decisions by their importance and their cost of rollback. There are only a few decisions that are of very high importance and have a high cost of rollback. The few decisions with these characteristics need to be grounded in rigorous research. Every assumption needs to be challenged. The decision-making process needs to be openly communicated. Feelings should never drive these decisions. Retrospectively, failure for such decisions must be assessed. Likewise, post-mortems on successes need to be conducted. Take the time to reflect with the most critical eye, even if it is painful. Look always for opportunities where more could have been seen. For all other decisions, the speed of learning and improvement is the most important factor. The downside of these decisions is limited. Hence, making them fast and cheap is of utmost importance.