Sensationalist headline but here's the tl;dr:

Etsy grew from 4% women engineers to 18% women engineers (out of a 110-engineer team) in a year.

Josh Kopelman writes about Etsy CTO Kellan Elliott-McCrea's speech:

Etsy’s decision to pursue women engineers is indicative of a broader change: making diversity a core value. But even after a number of concerted efforts to bring more women talent onboard, the company achieved almost no progress; in fact, one year, they actually saw a thirty-five percent decline in gender diversity even when this was a priority.

...

Eighty percent of Etsy’s customers are women. And while it’d be outlandish to suggest that hiring female engineers somehow makes them somehow chromosomally connected to the product, there are definitely some shared experiences.

Etsy also had a substantial “boys versus girls” dynamic, where engineers (mostly male) sat on one side and the women on the other... It was a broken system that required changes on both sides of the house.

Ugh, brogrammers must be eliminated.

So how did Etsy purge the brogrammer attitude? By making a Hacker School Hybrid!

Mark Hedlund, Etsy’s VP of Engineering, launched "Etsy Hacker Grants" to provide needs-based scholarships to talented women engineers enrolling in Hacker School (a three-month hands-on course designed to teach people how to become better engineers).

Etsy ran this program in the Summer and Fall of 2012 and watched the number of applications skyrocket each time. And in the summer of 2012, women ended up making up over half of the Hacker School class! For Etsy, the process was objectively worth the investment. If you figure that there’s normally a $20,000 placement fee, Etsy was able to hire eight candidates. You do the math.

...

Etsy attributes quite a bit of its success to its grants, which felt like a real invitation: it was a sign that Etsy was taking the project seriously, and hustling to get the message out there.

The process also had one major implication on Etsy’s hiring standards: it didn’t lower them, but definitely changed them. The experiment proved that it’s almost impossible to hire senior women engineers to join the organization so Etsy’s hiring junior engineers, instead. A lot of times, these people might not have enough hands-on experience, and Etsy might be inclined to pass on hiring these engineers. But by putting them through Hacker School and effectively getting to know them, they’re not as risky.

Not sure why that last paragraph bothers me, but it does.

I do remember first reacting to the Hacker School grants: 

http://pandawhale.com/post/989/etsy-grants-for-women-hackers

But back to Josh Kopelman. He concludes:

Etsy’s seen the most success when there’s either zero or two women engineers on a team...because if there’s only one, she’s a woman engineer as opposed to just an engineer.

Clearly we as an industry still have a long way to go toward gender equality.

But ridding the industry of "brogrammer attitude" is still an important component.

I had a friend that went to work for women.com back before the bubble burst.  They were definitely a merit-based developer environment.

The Hacker News thread touches on merit-based developer environments, too:

http://news.ycombinator.com/item?id=5177994

I wonder why the Etsy Hacker Grant program was open to BOTH men and women.

That structure shifted the messaging from "encourage more women to apply" to "women are encouraged to compete for merit grants, too". It's a subtle distinction but an important one.

Etsy design parameters for Etsy's Hacker Grant to improve the number of female engineers on their team:

Serious, but inviting - the standards were high, you had to work to get in, but people were made to feel welcome.

Balance- gender-balanced, skills-balanced, a wide range of skills and a wide range of team sizes.

Optimize for let’s build together - “Let’s build things together.” Rather than, “Let me prove to you how smart I am.”

Optimize for data gathering - running it into our offices meant we got a lot of data out of this situation. That made it both easier for us to evaluate things.

Normalize within your own organization - The data helped normalize the experiment within the organization

Very public

Not sure if these principles can be applied to a small startup. Etsy's pretty big, with a 110-person engineering team.

Natasha The Robot wrote about Etsy's Hacker Grants program:

My point is that if you really want to make this program about women, make it about women and give them all the resources to make sure they succeed. As soon as you put men into the mix, the program is no longer focused on women succeeding, but more on them competing with the men.

Read more: http://natashatherobot.com/problem-etsy-women-hacker-grants/