This will be the final PodSnacks of 2020. Wishing you Happy Holidays and a Happy New Year! See you in 2021!
Host: Reid Hoffman
Guest: Tobias Lütke, Founder & CEO, Shopify
Category: Biz & Tech | 🏗️ Founder Stories
Podcast’s Essential Bites:
[12:52] “Basically what initial Shopify was, is that we wanted to build the perfect piece of software that I wish I would've found when I started my snowboard [online] store.”
[14:50] “Building a platform is the most valuable thing in the world. But you can't do it immediately. You have to build a base of people using the product first, because otherwise the platform is not valuable.”
[15:11] “The lucky thing about our industry is that the first 80% is almost the same for everyone. Everyone needs a website, everyone needs a payment gateway, everyone needs a domain, everyone needs the shopping cart, and a product grid and some content management system, order workflow system. All that stuff is, luckily, the same. It's the next 20% which are perfectly unique. […] We knew that if we would add all the features for all our unique customers, we would end up with this problem of having something that is impossible to use.”
[25:05] “Even to the day of our IPO roadshow, we really flew around to talk to all these financiers. We got our deck out. And they said ‘So that sounds interesting. How have I never heard of you?’“
[27:04] “Silicon Valley has always, and still does – and potentially will always – underestimate commerce, just straight up. There's a reason why most commerce companies can't come from Silicon Valley. And I think this actually has a lot to do with osmosis […]. And the early successful business models were advertising-based. And by the way, in China, they are commerce-based. And I think that is a very, very big difference between those two places. Business models are generally more about selling things than advertising.”
[28:35] “I always try to say, well, you realize why there's only 40,000 [online] stores? Because no one has ever built software for new businesses. The entire software world did the obvious thing, they built e-commerce software for existing retail businesses who wanted to go online […]. And that makes sense, most existing businesses have money, new businesses don't yet have money. In fact, they are also not terribly sophisticated. They need a lot of help, probably lots of support. So no one built this thing, but that is why it didn't look big. So it's a completely chicken-and-egg problem that […] I want to solve.”
[29:15] “Now, just on Shopify, we have a million merchants on the platform. Every 50 seconds a new business has their first sale on Shopify alone […].”
[30:12] “I couldn't answer the question about why I believe I can be the most magnetic, obvious company to work for in Silicon Valley. Because there's already Google, and Facebook was growing very fast. And I didn't think being top three would be that valuable. You want to be number one, right? And so I'm like, ‘But I can do this in Canada.’“
[30:36] “I realized that almost every business book that I then was reading, was not written for me. […] The rules of secondary cities are completely reversed. For instance, when I hire someone, the chance of us working together in five years or 10 years, is massive, in Ottawa and Toronto. […] So that's just one very tangible difference. Where the average tenure of engineering in Silicon Valley is 18 months at this point. And that means I can invest completely differently into people. […] And which means that I can build a learner's organization.”
[34:04] “It's [an] amazing and super gratifying part of Shopify's journey now where you know a lot of little lights can become a sun. We have wonderful stories of people from islands in the Pacific selling furniture, all over the planet again; people actually moving there to help which hasn't happened in generations. So that's super gratifying. And this is the opportunity to be taken really seriously about what we can do, and we put a lot of small things together to act big.”
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