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Tobi Lütke's Ambitious Evolution
Building Shopify Into an $87 Billion Juggernaut
Justin Gordon
November 19, 2023
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Recent Founder Deep Dives
Tobi Lütke
Tobi Lütke, co-founder and CEO of Shopify, went from selling snowboards online to building a company that as of this writing is worth more than $87 billion.
Millions of entrepreneurs around the world today use Shopify to build their businesses, from small businesses with a few sales to giants like Mattel, Skims, Kylie Cosmetics, and Gymshark.
Shopify has been at the forefront of the e-commerce revolution and, in the last two decades, Tobi has gone from a CTO at a tiny company to a world-class CEO leading a team of 10,000+.
It wasn’t an easy transition for Tobi, but his own evolution helped Shopify succeed to a level few could have imagined.
Let’s get to it.
Early Days
Tobi grew up in Koblenz, Germany, and early on in life, he was diagnosed with all sorts of learning disabilities. In hindsight, he likely had ADHD, and he’s also Dyslexic.
At the age of six, his parents bought him a Schneider CPC, the German equivalent of the very popular at the time Commodore 64 computer.
Tobi was hooked immediately.
He started playing lots of video games and in the years to come he even began rewriting the code and tinkering with the hardware for fun.
Decades later, he’d continue playing video games and praise their application to learning how to run a business.
It’s something he’d reflect on in an interview on Invest Like the Best:
But the real lesson, I think that you learn from these games is not even this sort of fluidity of resource allocation and multiple stakeholders and then quick reaction and short-term, long-term thinking, it's actually just recognizing that, even though a game simulates an economy, there's another resource that is way more limited and is way more important, which is your attention.
It's really, a real-time strategy game, especially played at a very high level one-on-one, it’s really a test of how good are you at paying attention to what's going on? How well are you investing your attention?
This passion for video games carried over to his approach to school, doing whatever he could to get back to his computer:
From an early age, Lütke had what he calls "authority problems."
In school in Koblenz, Germany, he preferred to deconstruct the questions teachers gave him rather than deliver the expected answers.
He took shortcuts, determining the minimum number of hours he needed to spend in a particular class and still pass, so that he could spend most of his time with his computer.
His approach to school also foreshadowed his later career path and he wouldn’t stay there long.
After the 10th grade, Tobi left school and became a software engineer apprentice at Siemens as part of a German program to increase the number of computer programmers in the country.
He was paid to program all day at 17 years old and he loved the two-year experience.
Then, around 2000, he went to Whistler on a snowboarding trip where he met Fiona McKean, who would later become his wife and an important figure in this story for a number of reasons.
After meeting in Whistler, the two of them fell for each other immediately.
Eventually, Tobi convinced Fiona to move to Germany with him. He was programming for a startup at this time and Fiona had just finished her Bachelor’s degree, so she made the jump and they lived together for 10 months back in Europe.
When Fiona decided to join a Master’s program in Ottawa, Canada, the two of them made the move back to Canada, living with Fiona’s parents.
It was around 2004 at this time, and Tobi, after working remotely for a startup for a while that ended up going bankrupt, was looking for his next move, hoping he didn’t have to join a big company, which was far from his ideal work situation.
Little did Tobi know at the time, that the next big company he’d work for would be his own.
But first, he’d launch a company that would lead to the founding of Shopify.
Snowdevil
After a work permit issue essentially prevented Tobi from working for a small startup in 2004, his only real option was to start a company.
But Tobi also wanted freedom and to challenge himself:
It kind of makes no sense, right? Especially tech, there’s such a minor chance of actually getting any kind of returns on it. So you don’t do this for – I can only speak for myself. I certainly did not do this for monetary reasons.
The reason why I did it was because I thought it sounded amazing not having to answer to anyone – back to authority problems.
I wanted to make my own technology decisions and these kinds of things. I wanted to see what I could do. I wanted to challenge myself.
I said, “This is the right time in my life.” I was 24 when I started. “This is the right time in my life to give this a go. I will learn a ton. There is no way this could be a failure on a personal level other than in the way that maybe people lose money.” But failure was a very real thing, but I knew I would learn a lot.
Through Fiona, he met his future co-founder, Scott Lake, who was a friend of Fiona’s family.
Scott and Tobi ended up snowboarding together at different times and Scott became a person that Tobi shared ideas with.
With the rise in blogging at the time, Tobi and Scott had an idea:
What we had in mind was something that wrapped good storytelling around products that people are excited about… but we were just much too early.
One of those ideas became Snowdevil.
In starting Snowdevil to sell snowboards online, Scott did a lot of the business setup and building relationships with vendors while Tobi handled the tech side of things. They both put $20,000 Canadian dollars into the business as well, which was all the money Tobi had at the time. They kept costs down with no office, just working at various coffee shops.
Snowdevil, as described on their website today, took a different approach to selling snowboards:
Snowdevil is not your typical snowboard store. Instead, Snowdevil is a partnership among two riders who are only interested in selling boards and bindings that they love to ride on. Nothing else.
Every year the guys at Snowdevil only choose about 10 types of boards and 5 types of bindings that they feel offer the best quality and design that the industry has to offer.
If this sounds a little elitist, it’s because it is. If we don’t like it, we wont sell it.
If you want big brands like Burton or K2, you should try Walmart. If you want high-end top quality brands like Never Summer, Nidecker, Technine and Arbor you should try us.
Yours truly,
Scott (Never Summer Legacy board, Nidecker Carbon 900 bindings)
Tobi (Arbor Draft board, Technine MFM Solo bindings)
Of course, they had to actually build the online store and this was in 2004 when there weren’t many great options.
Initially, Tobi thought he’d get the store online in a week, but with no software available to allow him to build what he really wanted, he had two paths forward. He could either compromise his idea or he could fall back on his programming skills and build something himself.
At the time, to get Snowdevil going, Tobi had to post a five-figure downpayment to get a Yahoo! merchant account, all the capital he had.
Fun fact, Yahoo! acquired Viaweb in 1998 for $49 million and the founder of the company was?
Paul Graham, who would later start Y Combinator.
After finding the programming language Ruby on Rails, which was created by David Heinemeier Hansson of 37Signals and had only recently been released, Tobi got heavily involved in the community.
He also decided to use Ruby on Rails to build Snowdevil and, 2.5 months later, the site launched.
Tobi had worked 16 hours a day coding the site throughout those months and he loved it:
It didn’t feel like I was doing crazy hours… there was literally nothing else more interesting in the world at this time.
Tobi also built a side project while hacking in Rails, a blogging platform called Typo, which ended up getting thousands of users.
But I digress.
With Snowdevil’s site ready, the very first order came from a gentleman in Pennsylvania, a meaningful milestone for Tobi and Scott and a metric they’d later end up tracking with Shopify.
But wait.
Where exactly was Snowdevil getting customers from in 2004?
At the time, the minimum bid was $0.20 on Google Ads and they could get an order for a $500 snowboard from those ads.
Let’s just say they had great profit margins and did well, recouping their initial investment quickly and basically being out of stock the entire time.
This was winter though and snowboards were in high demand.
By Spring, with sales slowing, Tobi and Scott thought about how they would make the business sustainable all year, which naturally meant they’d need to expand beyond snowboards.
At the time, Tobi was getting more and more people asking him to license the Snowdevil software for their own stores.
He finally decided to pursue the opportunity, a decision that, with the benefit of remarkable timing, would prove monumental.
Starting Shopify
After deciding to allow other stores to use his software, Tobi called Daniel, his friend from Germany, and asked him to spend a summer in Canada in 2005 to build it out.
While they started creating what would become Shopify, a name that Scott came up with, in the summer of 2005, it’d be a year and a half before it actually launched.
To fund this venture, they raised $200,000 in 2005 from Fiona’s parents and other family and friends.
By the time they launched Shopify in 2006, they had collected 4,000 to 5,000 email addresses of people who were interested.
Working from a small office above the coffee shop where they got their first order for Snowdevil, they never actually installed internet in their office, just using the coffee shop’s WiFi.
I love the resourcefulness.
In October 2006, Shopify made $8,000 in revenue, using a business model that charges a percentage fee to merchants on every order made through the platform.
At the time, the thought was that it’d be hard to get people to trust them so Tobi and Scott didn’t want to charge an upfront fee.
It ended up being a mistake.
The day before Tobi married Fiona, he changed Shopify to a subscription model.
This was also a mistake, as Tobi would field calls from customers asking about why the change was made.
It was 2007 by this time, some companies were paying as much as $50,000 per month for their own e-commerce solutions, and guess what Shopify’s fee was at this time?
Less than $30 per month.
Kinda crazy.
Around this time, as they were running out of money, Scott and Tobi also raised $250,000 from a Toronto-based angel investor, John Phillips, valuing Shopify at $3 million.
The next year would bring a company shakeup and more struggles.
Founder Exit & Early Struggles
In 2008, Shopify was struggling, with Tobi later admitting it was tough to keep the company alive at this time.
He’d describe how all sorts of things didn’t work, with no real business being built around people buying and selling things.
It got so bad, he needed help from his father-in-law to cover payroll:
My father-in-law was gracious enough to give me a check every week for running payroll at that stage. And he said he would do that for some time. And by the end of it, we kind of had to figure out what we had to do.
It’s also the year that Scott decides to leave.
At the time, there were around 10 people in the company and they were making about $60,000 per month.
Scott’s departure meant Tobi would have to figure out the “black box” that is business:
The circumstance was simple and probably fairly common. I had a co-founder for Snowdevil, which was the snowboard store. And I did the technology, and he ran the store and did a million other things like finding us an office at some point, and so on.
But as the company pivoted much more to being a software company and started growing and acquiring more and more people, at some point, it was just a different situation.
And so he sort of came to me and decided he wanted to transition out and that was very surprising because, again, I really wanted to treat the business as a black box. I was a programmer. We don’t like business.
But Tobi didn’t want to become CEO initially and he looked for another CEO first:
I actually looked for a CEO for a long time. I met with a lot of people who came recommended as potential CEO replacements.
And it was one of my early investors, actually my only investor, frankly, who at some point took me aside and said, “Tobi, you will never find anyone who will care about Shopify as much as you do. And so you should just give this a go.” And that was pretty scary advice. But I liked the challenge.
Taking the reigns of Shopify, Tobi used meetings with venture capitalists as a way to learn how to become a CEO:
And then I just don’t understand anything that they’re talking about. But then, I chip away at it, and I would come into the knowledge. And so I tried to replicate this.
And talking to venture capitalists ended up being a way I figured out how to potentially do it because, again, I had no background in business. I had no idea how this all worked. And I had to do it fast because, in 2008, Shopify wasn’t doing well. It was very, very tough to keep the company alive.
In those meetings with VCs, Tobi stayed at a youth hostel, bought a bicycle on Craigslist, and stayed 2.5 weeks in Silicon Valley meeting with investors, biking from the hostel to Sand Hill Road.
From that visit, he got term sheets from Benchmark and Sequoia but all offers were conditional on Tobi moving his company from Ottawa to Silicon Valley, something he was adamantly against.
But this is 2008.
Lehman Brothers collapsed.
There was a global financial crisis.
Founders were getting notices that term sheets would no longer be honored.
Something unexpected also happened.
Lots of people who lost their jobs started businesses.
And do you know what platform they were using?
Shopify.
With the financial crash actually boosting Shopify’s revenue, they’d make more than $1 million in 2008 and be cashflow positive.
As an aside, one of their first major customers was Tesla Motors, which started selling through Roadster on their store powered by Shopify.
With this growth, Tobi was forced to confront his idea of what type of company Shopify would become.
Holding Shopify Back
Initially, Tobi wanted to build Shopify into the best 20-person company in the world.
He didn’t want to build a company with thousands of employees and he admits that around 2009 he was a bottleneck, holding back the company:
I just did not make decisions that I had to quick enough. There was this whole thing about, “Is Shopify a lifestyle business or a growth company?” I struggled with this so much.
It seems silly now because, obviously, we can all look at the result of it becoming a growth company at some point. But it was really unclear to me.
And so I ran it cash-based looking at bank accounts and making decisions based on “Hey, I need this amount of money in the bank before I can put $5,000 in cool adverts and so on.”
I just made a lot of decisions way too slow because I just didn’t feel comfortable understanding the implications of them. And so I didn’t know I was doing this, but I did and I’m really unhappy that I did.
I think I unintentionally slowed down the growth of the company for a period of time so that I could stay on top of it and only realized this after I finally made the call to just say, “Let’s get some venture capital.”
At this time when Tobi said he was holding the company back, Shopify was taking off.
In 2009, they passed $100 million in total gross sales on the platform and did more than $2 million in revenue.
The same year, they launched the Shopify App Store, building an API to allow third-party developers to create tools for Shopify stores.
This platform ended up being a huge moat for the company, later solidifying Shopify as the dominant platform.
And this is all from a company based in Ottawa, Canada, not Silicon Valley, which ended up being a blessing:
So one thing that’s so neat about Shopify, let’s get a little bit back to this Ottawa, Canada thing.
Clearly, as you said, this is off the beaten track of the startup world. It ended up being a phenomenally good place to build a world-class company, but for reasons that were also not clear to me when I started there.
A couple of things that happen when you’re not in Silicon Valley, when you’re not in – let’s call it a primary company creation city. Tenure gets longer.
If I hire someone through this very intricate hiring process that we have, there’s sort of an understanding that the chance of us still working together in 10 years is actually really high. It’s a commitment from both sides. And the company needs to be worth working for for 10 years.
In building the team, largely in Ottawa, Tobi also wanted to find out in what areas people have a fixed mindset and help them acquire a growth mindset:
Think of their intelligence as something that can be trained. Think of their skill as a program and not as something static.
And when someone comes and tells you there’s something you could have done better, that’s not someone finding out that you’re not as good as you thought. That’s actually a teacher appearing.
And once people acquire this growth mindset on at least a number of different traits, usually, they make it very, very far, and they can have these 10 years of a career in 1 year on the work clock. And it’s a wonderful kind of thing when it happens.
Tobi’s own growth mindset, and a number of successful experiments, would push Shopify to another level entirely.
The Build a Business Competition
In 2008 Tobi met Tim Ferriss, the author and investor, in the speaker’s room at a Ruby on Rails conference when Shopify had around 15 employees. Tim would later become an investor in Shopify.
More than a year after meeting Tim, to encourage more people to become entrepreneurs, Tobi and the Shopify team had an idea:
We were like. “How can we overcome this built-in fear of failure that everyone is running around with?”
So many people come to me, come to you and say, “One day, I’m going to start my own business.” It’s like, “Okay, what about today? What’s wrong with today?”
And there were all of these kinds of reasons. And I think our working theory was: we need to test this by really incentivizing people, to which I said, “We should give away a MacBook Pro or something.”
After talking with Tim about the idea, he got some advice:
Go way bigger.
Tim wanted Tobi to offer 100x the prize.
He thought this would get attention.
So Tobi did, offering a $100,000 prize for the Build a Business competition, an uncomfortably large amount.
Whoever built the biggest business, having the highest two months of revenue, in the next six months would get the check.
And, sure enough, it got plenty of attention, with The New York Times covering it.
Imagine that for one second.
A small company from Canada getting covered by The New York Times for a business plan competition.
Why?
Because they went big and stood out.
$100,000 was well beyond any other competition as far as prize money.
The competition ended up being a huge success, with Shopify getting over a thousand new merchants to sign up.
This competition was part of a number of experiments Shopify ran at this time, part of Tobi’s way to figure out what kind of company Shopify really was:
Let’s try all of them. Because if one of them really accelerates our growth, then we are actually a growth company, and we should get venture capital.
They also tried more things like Google Adwords, sponsoring a podcast, and even creating an affiliate program for web designers.
They’d end up trying five experiments.
All five of them worked.
They made the money back in 5-6 months from those experiments and, more importantly, had a formula that they could plug bigger numbers into.
Shopify was certainly a growth company and Tobi would go down the path of raising significant venture capital.
Going BIG
In 2010 Shopify did $124 million in merchant sales in just that year alone.
Tobi raised a $7 million Series A in December at a $25 million valuation.
After getting advice from John Phillips that he should mix up the type of people was hiring, branching out from the same type of programmers, Tobi hired Harley Finkelstein who would later become Shopify’s President, which, along with the hiring of Toby Shannan, changed things:
So Lütke hired Finkelstein, and Toby Shannan, a warm, bearded, bear of a man, and several others from different backgrounds, and everything changed.
All of a sudden there was diversity of opinion. Instantly there were a multitude of possible solutions to any given problem.
"I made one change," says Lütke, "based on one comment by John, and it massively impacted the company."
It got him to reconsider how big Shopify could be. "You know what?" he said to himself, "I think this is a growth company.”
In October 2011, Shopify announced an additional $15 million investment from Bessemer for their Series B.
Bessemer thought Shopify could grow way faster if they didn’t have to go out and raise another round so this $15 million was basically added on top of their Series A.
By the end of 2011, Shopify had over 100 employees, 10,000 merchants on the platform, and had grown from $124 million in merchant sales the year before to $275 million.
By 2012, the number of merchants grew 4x and the next year Shopify would make another big move.
In August 2013, Shopify launched its Point-of-Sale system, tying together online and brick-and-mortar retail.
At this time, Shopify had 216 employees and 60,000 customers paying them more than $20 per month. They were growing quickly, adding 40 people in the prior month alone.
A couple of months prior, in June 2013, after IBM laid off a number of people, Shopify also pulled off a recruiting ploy to hire them:
We got this news that IBM was doing big layoffs in the city and we were thinking, “Well, you know, we want to hire lots of people, we are growing quickly, Shopify is doing extremely well right now, so why don't we send some people out to the office and put a recruiting booth out?”
It worked and Shopify hired a few people from IBM.
By the end of 2013, after raising $100 million in December, Shopify had 80,000 customers and 300 employees but was still kinda under the radar.
That would soon change in a big way.
Going Public
In 2014, after more than 10 years of living at Fiona’s parents’ place, and the same year Tobi was named CEO of the Year by The Globe and Mail, Tobi and Fiona moved out.
Tobi said his lifestyle didn’t require a lot of money and I just found this part incredibly interesting that it wasn’t until this time that they moved out.
Anyways, in 2014 Tobi launched Shopify Plus, essentially the enterprise version of Shopify, and the company would do more than $100 million in net revenue.
At this point, they had 120,000 customers and the product was priced between $14 and $179 per month with enterprise customers paying $1,000. They had 500 employees with 400 based in Ottawa at this time.
Shopify also had more merchants on its platform than its two biggest competitors combined by this point.
The next year, Shopify would go public, at a time when they had 800,000 Shopify merchants and when, every 52 seconds, someone was experiencing the magic of making their first sale.
On the How I Built This podcast, Tobi would say probably 90% of Shopify’s success was luck. The timing, in particular, was very lucky.
Tobi doesn’t think Shopify would’ve been as successful had it been started two years later, especially with the global financial crisis helping Shopify significantly.
At the time of the IPO in May 2015, when Shopify had a $1.3 billion market cap, Tobi owned 6% of Shopify.
On The Tim Ferriss Show, Tobi reflected on the IPO process, taking an approach I found quite interesting:
One thing I did very early in the process of actually taking the company public was to not just understand how could Shopify become a good, public company, but there was this sort of obvious agency problem that exists on the investment banker side.
And so I spent a good couple of months talking to people, figuring out what kinds of things happen in the performance review of investment bankers. How do they make their money? How do they make their bonuses? How do they string together a career? What’s good, what’s bad? If they get a lot of these kinds of fees, is that good for them, or is that neutral?
After the IPO in 2015, Shopify continued an impressive growth streak.
By 2018, they had 4,000 employees and by the end of the following year, 218 million people had bought from a store powered by Shopify.
Absolutely wild.
Tobi even has a store himself on the platform, with his bestselling item being socks, but he keeps the store itself a secret.
When the pandemic hit the following year, Tobi started hosting a weekly internal podcast for the 6,000 Shopify employees:
I host a weekly podcast within Shopify, which is internal-only context. And the topic is: let's go back to major decisions, talk about all the variables that we considered and how did it work out? Was it the right thing? Was it not the right thing? Because again, you only ever get the result of decision with hindsight and there's, of course, a hindsight bias.
They also launched the Shop App in May 2020:
So we launched this Shop app this morning and it's a very new thing for us because it's a brand, for the first time, it's a brand for consumers from Shopify.
This was a time when every company had to make changes - Shopify was no different.
Tobi had to change Shopify’s incredibly high quality bar at this point:
One thing I would say, maybe feeling somewhat self-conscious right now, we made a company-wide decision to lower our minimum acceptable quality bar due to the pandemic.
If you observe Shopify right now, we are launching a lot. Almost just because of this one change. So we are pulling a lot of our roadmap forward in time. Everything that can help businesses right now, just because, again, we are in a crazy world right now.
Changing their quality bar at the time didn’t negatively affect Shopify, they made it through, and today are a juggernaut in the industry.
Shopify Today, Tobi Takeaways, and Favorite Books
Today, Shopify is valued at $87 billion, more than 60x their valuation at IPO 8 years ago.
Tobi is now a multi-billionaire and has come a long way from the 2008 and 2009 days of holding the company back.
How has he become a world-class CEO?
For one, he likes to study how great companies are made:
I tend to go backward in history and try to build my own picture from multiple viewpoints.
He mentioned that he’s read biographies from many of the major players in the industry and historical entrepreneurs like Henry Ford and John D. Rockefeller.
As Tobi would say on The Knowledge Project podcast:
I find history is absolutely underrated. I get most of my lessons from there.
In helping people more effectively work with him, Tobi talks about the idea of a Trust Battery, a mental model for how to think about your relationship with people.
By writing down all the things about how he works and thinks, he can shorten the time it takes to work effectively with him, something he talked about on Invest Like the Best:
So usually before I have my first meeting with anyone in the company after they join I send them my blueprint, which I've written, that just tells people all these things, all the downstream implications of my personality type and things I've learned about myself.
You can kind-of skip the first year of working together where they have to painfully figure out how I work. Sometimes I get one back from other people and it's awesome. It just really accelerates everything.
Part of Tobi’s operating system?
Preferring conversations over PowerPoint presentations, small meetings over large meetings, and, because of his challenger personality type, always challenging other people’s ideas, just like he would do with his own.
And one other important thing to know about him is he’s a big proponent of personal growth and said a great line about it:
There is no speed limit to personal growth. It depends on your interests and it depends on, again, the environment.
This manifests itself in Tobi with how he approaches reading.
He actually has a book club at Shopify, but his love of reading came very late, with Tobi not really reading any books for the first 20 years of his life.
Reflecting on his reading habit he’d say:
I started picking up more and more books and sort of devouring them from that point on. I found books are sort of the closest you’ll ever come to finding cheat codes for real life. You can access the entire learnings from someone else’s career sitting down for 12 or 14 hours.
Some of those books that have been cheat codes in Tobi’s life, as he’s mentioned in various interviews I read or listened to, include:
The Design of Everyday Things
High Output Management
A Guide to the Good Life
Finite and Infinite Game
The Talent Code
Parkinson’s Law
Cryptonomicon
Team of Teams
Mindset
Drive
It’s clear Tobi is a voracious learner and with his growth mindset he’s led Shopify to a level few believed possible in the early days.
Tobi’s Wisdom
In each edition of the Just Go Grind newsletter, I like to include a few more quotes at the end from my research into the founder who is featured, sharing their wisdom.
Because the world has sorted itself into solutions based on the world that’s long gone in a way. Just looking back at my industry, why was there an online store industry and a point-of-sale system industry and all of these eBay power seller tools? Each of those instances, someone has a product and wants to sell it through whatever channel.
Do you want to go to three, four, five different vendors to get the software to participate in all of these channels? No. You just want to do it, right? And so I think it’s really worth going through life and just saying, “Hold on a second. What are people actually trying to accomplish? What is the actual problem here?”
On systems thinking:
People are terrible at deciphering cause and effect or even correlation vs. causation.
I said this earlier, systems thinking is the best cure for this kind of thing, but there isn’t always a cause for things. Much more often there is a system that just reinforces something.
One of the most important predictors of success for a company:
I think focus of audience ends up being, amongst all the things that you could have focused on, one of the most significant predictors of the success of a company because it's very, very easy to get diffused between different stakeholders that you're building something for.
It's very easy to get yourself in a situation that you have to actually optimize against the interests of your own customer base or the interests of the people who are using your customers' products and so on and so on. That's actually a common thing.
On solving the actual problem, the story of Malcolm McLean:
He started a trucking company and tried to get things shipped across the country or even to Europe and realized we can make the most efficient trucking system, or the train guys have the most efficient trains, and the boat guys have ships all over the world. But getting something through multiple stations is impossible. You have to unload everything.
So he ended up just buying a bunch of tankers from the US Navy, which had surplus tankers at the end of World War II and just came up with this idea of putting a shipping container together that you can put things in the factory in Maine and then ship them all the way to Berlin.
And the moment he did that, the cost of sending a unit of goods went from, I think, $6 to $0.16.”
And he was the only person who just cared about moving things. He wanted to solve the problem of moving things in the world and then, you come to better solutions.
We need more of that kind of thing.
On a lesson from Stoicism:
Everyone on Twitter who has more than one follower probably has one person following them, who doesn't like them. So it's relevant.
And even the example I mentioned, it's almost more relevant in thinking about how to do the best job you can, because it's like, what is my job?
My job is to do the best job I can. My job is not to make someone else think I did the best job I can. My job is not to make my company think I did the best job I can. My job is not to make the market think that Shopify is a valuable company. That's actually totally not my job. My job is just do the best job I can. And that's it.
I think that there is a difference between how you build a company in a primary talent market and sort of secondary talent markets, which primary talent market really is the Bay Area for a technology company, or LA for film, right?
For instance, one of the biggest differences in secondary places is, if I hired someone, the chance that we are gonna still work together in a decade from now is super high.
That doesn’t sound like a big change, but it changes absolutely everything for the company. It means that it’s a much better idea to hire for future potential rather than for current skill. These basic ideas all start having way more dividends because the people, after you make them better, they stay with you longer, you get to benefit.
On experimentation within a company:
But almost every good decision starts somehow bad first. We’ve made almost every mistake in the book. But we also are the kind of company that wants to in a way.
It’s been so important to me to build a company that is unafraid of experimentation and where failure – within Shopify, I think we succeeded in this.
We eliminated the talk of the term failure. We call it the successful discovery of something that did not work because I think it really changes people’s disposition to it.
I always chafe a little bit about spreadsheets lead to fake certainty, and very often the spreadsheet ends up winning the meeting. And I find that there's a lot of ways how that can go very wrong.
I'm encouraging people to next to ideally to every column that has an assumption in, put your confidence in. And then instead of having a final number about what's best, I want to see the error margins.
On doubling down on your strengths and challenging yourself:
“And you double down on your strengths, and you try to work around your weaknesses.
And by the way, later in life, it might actually flip which one is which, which gets really weird.
But that’s another one of those kinds of things. The sort of awakening to a growth mindset is another one of those life events, I think. And so these events matter because what you’re building, eventually, is like some kind of path that allows you to wake up smarter every day. And if you get there, really, really powerful things happen.
Suddenly, jumping into a completely new job that you have no qualifications for doesn’t sound scary anymore. It probably still does a little bit. But the challenge and the thrill of this sounds real. “I could fail; I have to grow to make this work” actually becomes hugely motivating.
I think that one of the most amazing things that anyone can go through and can do in their lives is a variation on the theme of going on a journey, doing hard things surrounded by friends. Company building is one of those things. Often travel is another one, sports are really good at these kinds of things. I would love Jocko’s opinion on if war is like that.
On his own life philosophy:
This is sort of my own and home-grown life philosophy but I just have a strong sense that the goal in life is really to try to become the best version of yourself.
I know it sounds like super fortune cookie but it's as if at the end of life you meet the person you could have become and the work of life is really try to minimize the difference between that person and the one that actually showed up and I find not understanding a thing feels almost immoral to me.
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