What Etsy Could Teach Google, Facebook And Twitter About Diversity

Tech companies pride themselves on solving big problems, but one in particular has been hard to overcome: a lack of workplace diversity. Which is what makes Etsy, the online marketplace set to hold its IPO this week, so remarkable: Its tech team is 31 percent female and overall the company is 51 percent female - 49 percent male.

Granted Etsy, an online crafts marketplace with 685 employees and 149 engineers, is smaller than these other big names (Google had 53,600 at last count), and the community it serves is mostly women. Over 90 percent of its 1.4 million active shop owners are women. While it's impossible to say with certainty how Etsy's stock will do when it trades for the first time Thursday, the 10-year-old company will prove that diversity, even among engineers and corporate leaders, is possible in tech.

"They’ve made diversity a priority,” said Elizabeth Ferrao, an organizer at the non-profit Women Who Code NYC. "Etsy is one of our biggest proponents."

To say that the tech industry at large is under fire for its hiring practices would be an understatement. The "diversity reports" released by tech companies last year told a dismal story: Facebook’s tech team is 85 percent male, Twitter’s tech team is 90 percent male, Google’s tech team is 83 percent male, and Apple's tech team is 80 percent male. "As CEO, I'm not satisfied with the numbers on this page," Apple CEO Tim Cook wrote in the report. "They're not new to us, and we've been working hard for quite some time to improve them."

The numbers were not always that balanced for Etsy either. In January 2011, Etsy had 3 female engineers out of 47, or 6 percent. But in 2013, Etsy had bumped that ratio to 18 percent female while increasing its team to 110 engineers. In its latest diversity report, Etsy’s technical team was listed as 31 percent female.

The change began to happen in 2011 when Etsy first approached Nicholas Bergson-Shilcock, cofounder of the Recurse Center. Originally called the Hacker School, the three-month programming retreat is based in New York.

Bergson-Shilcock said he was approached by Marc Hedlund, formerly Etsy's senior vice president of product development and engineering, who said the company wanted to improve its gender balance. And so, the companies decided to create need-based grants specifically for women and sponsored by Etsy. After the first three-month session, Etsy hired eight engineers from the program, five of whom were women. The company has now hired more than 20 alumni of Recurse Center.

“Etsy has put in time, energy and money,” Bergson-Shilcock said. “When you’re faced with a really hard problem, just talking about it isn’t enough. You need to put some real energy into it and invest.”

Funded with $7,000 from Etsy in the fall of 2012, Betsy Cannon was able to leave her job as a community organizer in Seattle to move to New York and train to be a programmer. She worked inside Etsy’s Brooklyn headquarters, connected with others in the tech industry and secured her current engineering job at Tumblr.

Now other tech companies, including Tumblr, Jane Street and Dropbox, have followed suit in providing grants for women at the Recurse Center. Etsy has pledged $210,000 in grants for 2015. The system works not only as a pipeline for recruitment but also serves as a clear indicator of how the company views diversity.

“I think at Etsy they have made [gender diversity] a priority. They’re upfront and explicit about it, and that’s worth a lot when you’re recruiting,” Cannon said. “Efforts like that make me and other engineers more likely to come back.”

That pipeline created a new culture at Etsy, and the company's approach has also attracted high-level talent. Etsy's efforts gained widespread media attention in Feb. 2013, when chief technical officer Kellan Elliot-McCrea spoke about diversity at the company at First Round Capital’s annual CTO summit and made its numbers public. The company admitted to employing 3 female engineers out of its 47 in 2011.

The company’s 2014 diversity report was titled “Diversity at Etsy: More Than Just Numbers.” Etsy embraces having a "frank dialogue" with employees on measures it can take to improve the company's culture. The company has since increased its flexible hours policy and added a speaker series.

At a talk hosted by the Women: Inspiration & Enterprise Network at New York's Soho House Tuesday, prominent New York-based investor Joanne Wilson addressed how she has witnessed diversity improving.

"The fact we're having this conversation means things are changing. My mother was told you could be a teacher, a nurse, a wife or a secretary," Wilson said. "We're catching up. As more women-owned businesses get sold, as more women-owned businesses go public, as more women businesses become household names, we'll see change."

Wilson's husband Fred Wilson, cofounder of Union Square Ventures, is an investor in Etsy, having participated in the company's initial seed round.

Dialogue is one thing -- now more companies are taking direct action. Women Who Code CEO Alaina Percival said she hears from tech companies that they are unclear what best practices are when it comes to diversity. That’s why her organization is working on building a checklist as well as looking deeper into issues surrounding workplace diversity. The company also curates gender diversity numbers at tech companies, providing an easy-to-read summary for those looking for jobs.

"Etsy is an example of a company that is proactive and thoughtful about their hiring approach," Percival said. “My goal is that companies will be better about recruiting and hiring women engineers, and most importantly that they will create a better workplace environment."