Etsy's performance culture is led by a team of two that focuses on measuring performance data, building tools to analyze logs and servers, training engineers, and motivating teams. They use tools like Logster to aggregate Apache logs into Graphite for generating graphs of metrics like response times. Profiling tools help identify slow database queries, services, and third party calls. The goal is to prove that improved speed leads to more usage and make all engineers consider performance in their work.