If You Want to Start a Business in 2024, Watch This Interview

a hundred billion company this is a pretty exciting time for entrepreneurship you're at that point in your stage like this gets important the cost of failure of starting a business today is by far the lowest it's ever been business advice to Harley 10 years ago you got one thing you can tell him welcome everybody to the game I got a special episode for you guys today as you know I do not have many guests on my podcast I don't like sharing the spotlight um so if somebody's gonna be on they've got to be really really special and have true expertise uh to give and I think uh the person I have with me today or that will be joining us today definitely meets that in Spades and so Harley is uh a god amongst men a legend in in the making and uh runs a a small company you may not have heard of it uh Shopify uh which right now is a publicly traded company it's worth right now I think it was 80 billion uh if I'm not mistaken hardly correct me there closer to is closer to 100 billion but yeah that was 20 billion off you you just round it down by2 billion which for someone like me like you know this is like I don't come from this world this is you know I'm I'm a tourist here uh that's a lot of money so a hundred billion doll company so that's uh so 10 10 figures is a billion 11 12 a 12 fig company there you go um and just uh the only thing that Rivals the the business success that he has is just the humility uh that he brings to it he was willing to hop on a call with me before this and uh we hit it off and uh I was like I just I know my audience would love to talk to you uh and and just kind of hear your perspective of Entrepreneurship and you have such an interesting story that I think will relate to so many people in my audience from the people who are just trying to figure out what they want to do uh to make money all the way to you know right now the 20% of my audience is uh you know winning entrepreneurs with you know large companies and and so forth so we definitely have the gamut from an entrepreneurship perspective kind of beginning middle and end and um yeah so thank you so much for taking the time to join us today it's a great honor to be here Alex thank you so much I'm a big fan of the Pod and I think what you're doing is making Business and Entrepreneurship um I mean very similar to the Mion Chava you're making it more accessible and I think that is the coolest thing in the world this idea that business was out of touch for most people both financially from a capital perspective or because of knowledge and insight and experience I think those days are long over and I think we were going through an entrepreneurial Renaissance right now and I think people like you and and your your community uh is leading the way on in that front well I appreciate it and I mean everything that we do is um just for everybody on the Pod is I know Harley and I agree on this um is to just try and break down as many barriers between where people are and where they want to be right A lot of people have this vision for their lives they want and there are things to get in their way some of them are between your ears some of them are between your hands and keyboard and so Shopify has taken a lot of that between hands and keyboard out of the way to decrease the friction of actually getting a product launch get it online actually get customers you can do it from anywhere in the world which is uh again something that 30 years ago just wasn't really a thing and now everyone can have access to this stuff so um I'm gonna go I'm gonna kind of break this uh po into three kind of sections Loosely uh so first kind of Chunk I want to talk about looking back and I think that'll that'll relate to a lot of people who are listening or watching right now kind of like Zero to Hero like what what got you to hear and all the things that that that come with that uh Second chunk will over what's hero to to superhero right like what is what's the for what's forward look like what's the future look what do you see um and I'll dive into some more you know specific details around that stuff and then at the very end we'll go kind of like final nuggets and wrapping it up of of like forward and backwards what are kind of like the principles and truths that um that you would try and pass on to the people who are listening cool love it let's do it all right that's our road map so I know a little bit about the story but my audience doesn't um so you have this really unique thing of being employ won and customer one can you walk us through like just the beginning of shop like even the decision to jump into Shopify what what the risks that were associated with that what was life prior to that and then like what what were the this the the factors that got you into that um step one because I think that's where a lot of people are right now yeah uh so I was born in Montreal I was born in Canada uh I moved to South Flor with my parents and my sisters when I was very young uh I was always entrepreneurial my parents did not have a lot of money um but my father to his credit u my dad's an immigrant he came to Canada from Hungary in the revolution my grandparents are Holocaust Survivors I mean we are you know we were we were poor immigrants um and although my dad never had much money to give me because I always had these little silly business ideas when I was a kid what my dad did for me which was very valuable was e even like when I was like 10 years old every silly business idea that I had he would validate it by actually making me these business cards that would say the name of the business and my name on it and I'm now a dad I have two daughters Bailey and Zoe who are five and seven and now that I think about parenting and stuff I'm I'm like I think a lot more about that that story and those stories of my father making those business cards because at the time it didn't seem that profound and in hindsight now is you know a father myself I realized these small things that we do for our kids have this massive impact and so even though these businesses were all very silly you know uh trading like trading cards and lemonade stands and eventually a DJ business when I was 13 years old I was always an entrepreneurial kid and partially was because I thought entrepreneurship was this fun activity like I I wasn't really into sports playing them or watching them uh I wasn't really into video games I was kind of into like this idea of like you know selling something and that was always fun for me uh moved to South Florida went uh finished high school there and moved back to Canada when I was 17 2001 to go to Mill University uh Migel is in Montreal where where I live now I went to Miguel because it was cheap my parents didn't have much money and so because I was born in Canada I kind of got this like instate tuition thing unfortunately very quickly uh once I moved to uh to Montreal to sort of Migel my dad got into some trouble and our family lost everything and once again I sort of you know pulled out this tool that I'd been tinkering with throughout my life called entrepreneurship um to to make some money I started t-shirt business when I was at Migel made t-shir for a bunch of universities across Canada like the promotional t-shirts you got the first day of school fro Frost or orientation uh stuff and I loved it it was great I wasn't necessarily passionate about t-shirts but I love this sort of idea of of of been a being able to support myself and and help my my family I was really can I hit on this real quick because I think absolutely jump in anywhere you want yeah the the point that Harley just made I just want to underline which is that the first business he had one I don't think that you thought this is going to be the business I will have for the rest of my life this is my dream this is my vision you were trying to make money right all is um and I think a lot of uh people who are aspiring are trying to find this like perfect puzzle piece that's going to fit all of these things it's going to be my passion it's G be fulfilling it can be the next Amazon when a lot of times I think it's a big fallacy because the first business just gives you a little bit of light to show you what the next step to take is because you learn a bunch of stuff from that first business that's right and so I just want to just take the pause for the audience that everyone's like I got to find the perfect thing when promo shirts for freshman and sophomores it glamorous right it's it's it's not glamorous and in fact the only unfair advantage that I had was that I was selling T-shirts to a customer who was who I also was part of that demographic meaning like I was selling T-shirts to the student council treasurer or procurement office so they can give them out to students and I myself was a student and so the pitch that I made was that one I very low overhead because it's just me I was I was the CEO and the janitor I was I was printing t-shirts myself uh so one I'm going to be cheaper two I'm going to care a lot because I really need this to work and three I am going to make t-shirts for people like me and so I I kind of know what your students want because I myself I'm one of your students um just to go step back because I think you said was super interesting so I I sort of skipped over this but when I was 13 years old the the business that really got start like started me an entrepreneurship a real business was again I was 13 so uh you know uh I wouldn't put too much you know uh Credence on the fact that it was a real business but it was a real thing was I wanted to be a DJ I was I'm Jewish I went to a lot of bar mitzvah when I was 13 years old and I thought the DJs were the coolest people in the world they were sort of magicians in my mind they would take a group of people that were sitting down eating some rubber chicken dinner in some Hotel ballroom and like three minutes later using their voice and using lighting and and music there'd be a Conga I just thought they were just they were like magicians I called around a bunch of DJ companies to ask them if they would hire me and of course they said no because I was 13 had no experience and and didn't know how to DJ um but because I had this sort of you know like silly confidence that that these business cards had provided for me I had this idea to start my own DJ company and hire myself so that was sort of when this idea of Entrepreneurship as a tool to solve problems was sort of cemented in my in my very you know immature young brain and then when I needed to make money again at 17 as was an undergrad in college I once again I didn't even think about you know I should go get a job somewhere immediately my thought was all right I got to start another business to make some money here so it began I I began to form this what what is now effectively my I think it's shopify's Mission it's also my personal mission which is an entrepreneurship is this incredibly powerful tool because it's Democratic and it allows anyone and anybody around to start something with very little it doesn't matter who you are what your last name is and and who your parents are my parents were nobody's it matters how much value you add and so I ran this teacher business all throughout college and developed a really good set of mentors along the way people that I sort of met and some people were lawyers and others were these random entrepreneurs and you know Dove Charney from American Apparel now he's sort of I guess disgraced but at the time he was a very big deal uh starting American Apparel he was another Jewish entrepreneur from Montreal and I met these people along the way and one of those ENT one of those mentors convinced me uh to when I finished college to go to law school not to become a lawyer but rather to become a better entrepreneur almost like finishing school for entrepreneurship and I was uh in inedibly impressionable I was 21 when I was finishing College again I had a little bit of money from the t-shirts but not much and he said look I'm going to teach law next year at the University of Ottawa which is the capital of Canada why don't you come to Ottawa go to go to law school here I'll be in town I can sort of help you navigate the city um and and you'll go to law school not with the mandate to to to get called to the bar or ever litigate or practice law but rather as a way to accumulate more skills that will be very valuable as you think about scaling a business longer term and I was 2005 moved to Ottawa no friends no family there um and by this point entrepreneurship was a part of my you my identity and so like I always did when I moved to a new place I I asked where the entrepreneurs hung out and very very fortunately very luckily I was directed to a coffee shop and I was told that there's a group of entrepreneurs that hung out at this coffee shop every Friday evening and they called themselves the young entrepreneurs Club the yec and um I started showing up there every Friday and meeting these young entrepreneurs and one of those entrepreneurs was This brilliant programmer uh named Toby who had just moved to Canada I think couple about a year earlier from Germany and he moved to Canada because he met a girl and he wanted to go be close to that girl her name is as all people move for that reason right very very good reason love is always a good reason to move somewhere uh and Toby had moved to Canada from Germany didn't have papers to work and so he was told that even as a new immigrant he could start a business and being in Canada where it's very cold a lot of snow he loves snowboarding he decided he wanted to build a snowboard shop on the internet in 2005 there were two ways to sell a product on the Internet the first way was to sell it through a Marketplace at the time like eBay was really the more the most prominent one uh Amazon I don't think at the time allowed for thirdparty sellers it was still a first-party Marketplace so You' eBay and you had a bunch of these sort of very nichy marketplaces but eBay being the big one so you could sell on a Marketplace or you would pay a company like IBM they had websphere or Oracle or at or um or sap all these big Enterprise companies had some sort of eCommerce functionality for very large Enterprises for like Walmart yeah uh and and that would be like a couple million bucks and Toby did not like the idea of of renting customers from a Marketplace and he did not like the idea of well he didn't have a million dollars to spend on on Enterprise software so that was impossible so he wrote this piece of software um using Ruby on Rails where he was a sort of core developer of rubyan rails the early days with dhh and a bunch of really interesting people and he wrote this piece of s to sell his snowboards and that's around the time where I met him he was like just you selling these snowboards and it was it was a really neat little business he was making real money and around that and and and again I was I'm in law school now and so I'd asked him if I can use um the software uh to sell my own my own products which in my case would be t-shirts and by that point he had already sort of figured out that the snowboard business was a good idea but the software that he had written uh to sell these snowboards was a great idea yeah and uh and and shortly thereafter I ended up uh building a store on Shopify this is 2006 at the time and I became one of the first people to use what would become uh at the time it was called jaded pixel it wasn't actually called Shopify originally um and I would be one of the first people to use the software and I built this I I ran this t-shirt business as direct to Consumer licensed t-shirt business all throughout uh law school and um and that was sort of my first entry into into Shopify meeting Toby and then when I finished uh finished grad school um I called Toby and said look like I love entrepreneurship it's it's everything I I think it's it's the greatest thing for me it's my passion my hobby I wanted I want to increase the surface area for more people and honestly what I experience building a beautiful scalable store sitting in my tax law class on Shopify um I think more people should experience that and um and I joined him about a year later in in 2009 or so uh and I was like the first non-engineer to join the company uh and uh and it was amazing it was one of the greatest I mean I just it was I have really fond memories of those very early days but that's uh long answer short question of how I got to Shopify no this is perfect because that's this is a great pause point because there I was writing down some notes just for the audience um and then I want to definitely we're going to go from like okay you're now in Shopify and what are trials and tribulations because of course I'm sure going from that to 100 billion was probably just straight line very smooth sailing you haven't had any issues um and I'm sure everyone will be glad to hear that very short story but we'll get to that one um but just everyone who's listening number one um the first business that Harley started was just for money and it wasn't just some magical thing that was going to be perfect he did what he had to do and he learned a ton of skills that really valuable along the way second thing is that uh and I want to emphasize this is people a lot of times are like man I don't know what to sell or what business should I start and I think the easiest one to use is just solve your own problem scratch your own edch totally like almost every business I've had well every every really good business I've had has come from that which is like like I mean even the the furthest one we have now because not com a family office and I wish I had had this available to me when I was scaling up our companies like somebody who'd already been there sold multiple times and like had a vested interest Etc um but scratching your own itch um also I want to highlight some people kind of get segmented in one thing or the other like you did a physical products business but earlier you done a DJ thing even though it was not you know you made money so you made a profit and so like in my mind like self-employed whatever like it was a service space business so you had a service business and you also had a physical product business so you were flexible in terms of how you were willing to make money and I was AGN I was agnostic to what I was selling I mean to your point you know I I I think one of the easiest ways to figure out what to sell you you know you said scratch your own itch another way to do it is simply just to like tell a bunch of people that you're thinking of starting a business and just leave it out in The Ether the reason that I started selling T-shirts to universities was as I told people that my dad wasn't around anymore mom had no money I needed to make some money I need to start a business the more people like I spoke to about that a lot of the ideas that I got were dumb but but more and more people started telling me hey what about this hey what about that most of the things that they mentioned were not great ideas but then someone randomly his name is Jamie once told told me remember this like they perfectly clear he said hey just so you know Migel spends $25,000 a semester on uh on t-shirts on printed Li un printed promotional t-shirts it turned out he was wrong these universities spent a quarter million dollars it has to be way harder than that right but because I was putting it out there this thing that I was looking sort of business a bunch of people sort of became almost like um my my my idea generation machine and so this whole idea that like I know there's there's a lot out there about like don't tell people your goals and and and and keep things to yourself I I call I think do things and tell people is super important even at the early stages of starting these things well I'm a big I mean my second book $100 million leads uh advertising is the process of making no and so if no one knows about your stuff no one can buy it they must first know about it in order to buy it and so if you just think about it from a first principal's perspective ain't no customers if they don't know uh so first way to do that so two things that I also want to highlight so you talked about two different types of people that you surround yourself with one was mentors so just for everyone in my audience we're talking people ahead right and then the other thing was the community of peers right he had the coffee shop where he met Toby who ultimately you know got got you into this thing again by chance but both of those thing increase your luck surface area the the amount of different potential opportunities for exposing opportunity well yeah and so um I just want to highlight that because a lot of people feel like entrepreneurship is lonely and it can be but to a degree it is a choice right and if you can't physically move environments uh you can do it online now and that wasn't available back then but now we've got online communities we've got school we've got you know all these things where people can connect um when I say School SK o.com school um people can actually connect and meet one another all right now uh the last one is resourcefulness and this kind of ties well into kind of the next the next chapter of this journey which is that like you did all this stuff like you Toby wrote code so that he could so he could sell his snowboards right like it's there's just there's a there's this whole like everything of course our whole mission is to make things easier make things more accessible to people but on some level like it's the fact that it becomes difficult is what makes the goal worthwhile right and if if everyone could do it then everyone would do it and then it would no longer be worthy right everyone can tie their shoes everyone can get dressed and so no one's like congratulations there's this whole um I think Chris Rock's kit where he's like what do you want a cookie he's like man I ain't never been pris he's like you ain't supposed to go to jail right and he goes this whole thing and so right now like the fact that it's difficult is just another barrier that somebody you might have to compete with will have to go over and so it gives yourself a little stripe that you can um show yourself about who you really are all right also remember remember this if you kind to think about like if you kind of um go back to I don't know go back 200 years and you think about starting a business um the one thing that besides Capital to get started and knowledge and understanding and Technology to help you do it forget all that stuff for a second one of the big risks of starting a business historically was that the cost of failure could affect your life in a very adverse way meaning um when my grandfather came to North America from Eastern Europe he started an egg business he had a little egg stall at at at a local farmers market which actually still stands today my uncle currently runs it um but he had to take a loan out on his home in order to afford the the fee and the the cost of actually renting this particular stall if this did not work the result of that would be no food on the table no roof over their head and that is that is effectively how businesses were built so that people with more Capital were able to take more risks people that had more Capital were able to invest more uh people that had more Capital were able to have you know be able to mitigate the cost of failure well one thing that has changed dramatically and I would say today like literally right now Alex you and I are talking about this the cost of failure of starting a business today is by far the lowest it's ever been whether you use a product like Shopify or use whatever you decide to do the cost of failure is effectively $39 if it works you scale it um literally like three feet from me I have um was a gift um from Ben Francis who's the founder of gym shark and it's a Christmas gift he gave a holiday if he gave me it's the original screen print from the original Jim shark uh the first t-shirt he made it was it was M Ben's Ben a big part of my life and I've been I think a big part of his life and so his gift was the original screen that created the first t-shirt uh for Jim shark when Ben started it was 2012 out of his dorm room if it would have gone if it would have failed he would have gone back to class I mean he was literally also delivering pizzas I think for Pizza Hut at the time if I get that right or some some pizza company but if it worked he would go on to build a multi-billion dollar company called gym shark so think about that the upside and that was 2012 that was like you know 12 years ago the upside today of starting a business is effectively infinite growth if you do it well and you're smart and you're adding Great Value the downside is a couple less cups of coffee or a couple less Starbucks uh for that week that is remarkable and I think that um I mean if there's anything that like there's one underlying Point here it's the um it's risk adjusted return right is that everyone here and now can get endless shots on goal right now because of how accessible entrepreneurship is you basically just keep taking lottery tickets and if you lose then you just buy another scratch off right and you try it again and so you still have the upside except the thing is it's not rigged for you to lose like there actually is a lot of people who want you to win and there's an entire economy around you um well not just that right now what that's created is nearly a quarter 25% of us consumers in 2024 are considering stting a business that's the highest I believe it's ever been number two is since 2021 there's been 15.5 million new business applications in the US an 85% increase from 2004 to 2021 the White House put out a bunch of stats on this recently I mean that is the reason that it's happening is not just because technology is getting better and not just because of great podcast like like and content like you're putting out there it's because people are realizing that entrepreneurship may be the vehicle for them to actually find their life's worth work make their life better create Independence like do the thing that they love most this is a pretty exciting time for entrepreneurship and I think the cost of failure thing is a big part of it so now you're employee number one non non-developer employee number one you've you've used the product you fell in love with it and this is now aligned with your calling so walk me through kind of the the stages of growth and I'll if you can give kind of like internal external so this is what was happening externally maybe Revenue levels customer levels things like that and then mirrored what does that look like internally so I'm shifting a little bit towards my my business owners right now all right so now we're talking like okay we've got the business we're we're generating Revenue are is it cash flow positive do they have investor like how how what's yeah just give me the the scoop so we were bootstrapped um we had um a very very small angel investor um in early on which um his name is John um he's he's now a multi-billionaire I believe um and uh so so was his wife uh separately cuz she also put some money in but it was a very small amount of money we were bootstrap we were profitable um and we we when I joined we didn't have a CFO we didn't have a CMO I mean part of what I viewed my role as and anyone who's listening who is joining a very early stage company uh as a non-engineer like the person not running you know writing code um or or Building Product the the role that I wanted to that I felt I should play and that I I think I did play was this Swiss army knife let me figure out everything and anything that is going to be valuable to the people that are writing code and whether that's commercialization or sales or support or I mean literally figuring out like where we're going to like work at of like like figure negotiating the lease uh for it or um figuring out you know what are we who are we paying for I think we were paying Rackspace at the time like negotiating a Rackspace contract I think at the time we only had one payment integration which was the PayPal negotiating the PayPal rev share was very early days this sort of Swiss army knife type model I think was really really important because I mean the the you can be the greatest salesperson or marketer in the world if you have a great product matched with a great ability to sell and commercialize that's where this thing gets really interesting and I deeply believe that Shopify even back you know in 2010 had this incredible product Leaps and Bounds uh better than all the competition the competition at the time was like Yahoo stores or were a couple other like but very very few competitors and so this idea of being a Swiss army knife was important and that's what I did I you know if there was an opportunity for me to tell the story publicly um to a local newspaper in in Ottawa Canada I would take that opportunity if there was an opportunity for me to help someone get a job done internally I would take that opportunity but that Swiss army knife was that that sort of model of that was very very help helpful and as part of that um I think I earn the trust of of Toby in particular but but also you know the other Engineers because I was just there to add value that's it in fact um i' I'd actually been called to the bar and so I think my like I was I was also the company's lawyer and again I I've been out of law school for all of 10 months I think at that point but whatever I could do I was going to do that and it was only a couple years later we we raised our series a about a year later I think it was a $7 million uh investment from besser who L it um on a $25 million I think post um and then and that's really when we began to realize that okay there is a real there there that this company could be something remarkable large scalable and we can really make a dent on at the time it was really we were focused on smbs and e-commerce only very different than today where we do businesses of all sizes and Retail everywhere but it was smbs and and and it was it was e-commerce only and it was only until you know after our series B and C that we began really figuring out like okay what what are each other's superpowers and and this idea of rather than all of us become these sort of well-rounded objects these sort of riverstones what if we all were very precise on the thing that we think we could be the best in the world at and spend our time level did you start doing that so if we're walking through this because right now probably around probably like around series b or series C we began we hired a CFO we hired a CMO we hired a had sales it was around that time where we felt we were well capitalized I think our our series B was about 100100 million valuation uh this is like 2013 or so around that time um don't uh I have no I mean yeah I'm not sure a lot less than than $100 million many employees were around then just I'm just trying to get a uh probably uh probably 50 to 100 at that point okay yeah yeah okay got it so like low small midsized got it okay cool um and and a lot of what we were trying to do then is like find you know find at least a lot how I spend my time was find new channels so this idea that okay we can only sell so many people on Shopify but there's this m massive ecosystem of web agencies and Freelancers and developers who are in Oklahoma and are in you know uh places like South America and they're in Singapore and they're in Vancouver and they're in you know New Mexico and what if we actually created something whereby if someone walked in to their agency to their business and said I need an online store what could we do to actually make it so that they would say by default great we'll build it on Shopify that's sort of on the referral side on the product site another thing that was really um that we created around that time was the shopy app store which I believe today is one of the largest ecosystems of thirdparty developers on the planet I mean if you are building an app for Commerce today the best most effective go to market strategy is to put in the shopi app store because you have millions of of customers for applications that that now seems you know polished and and a really healthy kind of flywheel of an ecosystem but originally the reason that the app stores really set up was all these different Merchants were coming to us and they all had a very unique and and a very particular business and so we really focused on let's make shopify's core offering what most people need most of the time checkout payments inventory marketing anal analytics let's make that like world class but everything that is very specific to a particular Merchants business let's invite third parties from all over the world to build apps on top of it which meant that no matter what the particular needs of your business might be you would find 100% product Market fit using Shopify because of this app ecosystem and we didn't have to build everything ourself which would have been impossible and so some of these things now in hindsight seem like wow shop ecosystem is really cool and the App Store is is is is is humming but originally it was done because we couldn't build every feature ourself nor nor should we so what what were some of the like absolute key decisions or like business principles that you learned kind of scaling through this um focus was really important not being everything to everyone I mean today you know um last week was was the national retail federation's Big Show literally like the most important conference in Enterprise retail um and I I sit on the board now of NRF with like the likes of the CEO of of you know Brian from Target and John from Walmart and like you know these amazing people like that that run effectively all all of retail uh in all over the world and so now we're really obviously you know getting some of the biggest retailers who Shopify but there was absolutely no way we were even considering that in days because fundamentally we wanted to win our particular Market which was smbs in in English-speaking countries uh that wanted to sell on the internet and so one thing that was really valuable was like Focus don't sort of and a lot of our competitors by the way ended up going out of business because they kind of ran up Market way too soon and they left the entire base of smbs um available um they didn't like the idea that smbs you know some churn and not every business succeeds and we thought well what if we just slightly increased the chance of success and mitigated the risk if every single person thinking about starting a business like in the in the shower in the morning then did so with Shopify even though not all will succeed as long as the ones that do stay with us indefinitely they will offset the cost of ones that leave and so one was really making sure we were very very focused the second thing that was really important to us I think was that the product was super simple and you know now company like I don't know Mars or or Mattel or Staples or you know uh uh glossier uh Alo yoga view all these amazing Brands all you Shopify skims like and what's neat even today about Shopify is that the complexity of the product almost reveals itself over time rather than simply being inated with every single feature and functionality Shopify can be used by someone just setting up a store their mom's kitchen table it also can be used by Trina who runs figs which is a publicly traded company uh they make uh uniform scrubs uniform scrubs uh hospital scrubs and and the fact that the same codebase can make those things was something that was always important keep it really really simple and credit to Toby and his sort of vision around product because that's really what he he drilled in all of us was that the the product has to be incredibly simple so first is focus second is Simplicity and the third one was we really tried to run a really tight business meaning we knew what our sort of CA to LTV ratio is so cost of customer acquisition on one side versus lifetime value and as long I don't know if if you're I want to make sure I Define all the acronyms um okay okay so we knew what our cact to LTV ratio was and once we got it above one effectively it meant that okay now it's time to go raise money because the more dollars we put on the left side the more dollar 80s or whatever the ratio was we got on on on the right side and so by being meticulous and thoughtful about that um I think it was really helpful maybe the last thing I'll say which seems a little bit soft but it's important to say we were really really like patient meaning we want like even today we want to build a 100-year business we're now about 20 years into it we had 80 years left to go but even then when we were you know five eight 10 years in we still thought about this like really long-term business focused which meant that we were not willing to pull forward future profits at a discount like pretty much most of our competitors I think were doing at that point so what were what were some of the key growth kind of levers that you were able to pull throughout this process that like really accelerated like if you had to name the three biggest things in the first 10 years of Shopify that like man if we hadn't done this we wouldn't have been able to get to the next level I mean I think the App Store the ecosystem is really important both on making sure the product had a product had a 100% product Market fit um and also in the referral side I think that was really important because it meant that we had a we had effectively uh a distributed Salesforce that wasn't on our payroll and just something small on that that really matters I remember at the time the Apple iOS store had uh an 8020 rev share split so if you built something um on um on app excuse me had a 7030 rev share split so you buil something on Apple you as a developer keep 70% 30% goes to Apple and I remember when we were talking about our rev share for our app store we actually said 8020 not that we were competing with the Apple the iOS store I mean we were we were a small little nothing company in Canada but this idea that we would be more generous than the incumbents might be was very important and the truth is the additional 10 10 points didn't really change it for us but it just meant that when you built on Shopify you deeply understood that you were going to get a very fair and a generous rev share split and that was one I think the second one uh we we really hammered hard was this thing called um the build a business competition it was like our big aha moment uh and it was you know we we had an article in New York Times about it but it started in a very kind of simple way um we had met Tim Ferris I think in 2009 or so and he became an adviser and Tim is now a very good friend to both my me and Toby And and we've done his pod he's a great guy but Tim looked at Shopify and said great product you guys are missing something most people even though your product is great easy to use and you're making entrepreneurship more accessible most people have a risk adversion to some entrepreneurship for one of two reasons either too expensive or they don't know how to use it and he had this idea that we should create a competition whereby someone would start a brand new business on Shopify um like Jan one and six months later the store with the highest sales would win I think we said $10,000 and then Tim said it's got to be 100,000 we did not have $100,000 to give out that way but our Hope was that by the time the competition ended we would actually have that type of money and we launched the the the first build of business competition uh in 2010 um and it got us you know I think the article in the New York Times I have to go check but I'm sure your listeners will keep me honest here but I think it's like a startup starts their own startup competition like launches their own startup comp it was because it was kind of a silly thing that we ourselves were starting a competition the winner that year was a compy called dodo case that made these beautiful um uh beautiful leather iPad case it was the year the iPad was coming out and so that was one of those ways where if you sort of read sort of the Jeffrey Moore uh I think it's Jeffrey Moore cross in the chasm book where he talks about you know technology adoption Cycles go from early adopters to mainstream it felt like the build the business competition helped us cross the chasm from early adopters to the mainstream and and over over I think we did the build the business competition for like five years after that and ultimately the stores were getting like Jim shark won one year uh and and like some Nick SAR won one year like these big companies ended up winning uh but so we couldn't give out 100,000 anymore so we had to come with these new ideas like how do we incentivize the creation new businesses and we did things like the winner would spend a week with Richard Branson on neker island and the winner would go and spend like go have lunch with Seth Goden and so we created this really cool stuff but I would say that's probably the second sort of Vector in terms of growth we found a way for us to cross the chasm I just want I'll pause right there we I'm a huge fan of the the build of business competition and oh you know about it oh cool yeah yeah yeah super super well acquainted with it oh that's so bring up yeah that was I mean that like that was something that was really really important maybe the third thing that I think was probably um really valuable was we began to look at what are the other things like what is the relationship that our product has in the lives of people that use it and the relationship started to look like when someone said they were going to work in the morning what they meant was they were opening up their Shi admin on their laptop or on their on their desktop so if we were becoming the center of like their day-to-day work where they added products and fulfilled orders and added new SKS and and ran marketing campaigns um what else can we do to be valuable to be helpful there one thing that most people don't realize today uh which is the case I'll bring it back in a second is that if you were to pretend today that Shopify was a single retailer like if you were to aggregate all our stores just in the us alone we would be the second largest online retailer in America after Amazon okay why is it important because if you are the second largest online retailer in America and you go to negotiate rates with payment gateways and shipping companies and Banks and all these different types of ancillary Services the economy of scale that you have is so massive well even in the early days back going back I know let's say 2013 2014 or so as we were thinking about adding new features new functionality we call Merchant Solutions we began to think about in that way whereby could we go and negotiate the best rates from from the payment gateways as if we were the second largest retailer we weren't second we were the 20th at that point or the 30th at that point but we were able to get economies of scale because of the aggregated size of our Merchant base and instead of keeping those economies to scale for ourselves we gave them directly to the merchants we took a little bit of margin because we want to make money but we gave so using Shopify you know to buy a domain using Shopify to uh to figure out who's going to process your credit card payments uh with in your Merchant Gateway it became much better to you to do it through us than do it on your own and over time that has turned into things like Shopify payments and Shopify capital and Shopify shipping all these big parts of our business today we're built on this philosophy that we have an unfair Advantage because these economies of scale and if we give it to Merchants it means that Shopify plays an even larger role in their lives so the three big growth strategies the first one is you had referral Partners so you made it easy for other people to basically work on the platform and promote your platform because if if you're a web agency and people want to store then if you make it easy for them and maybe they get some sort of financial incentive to do they they got a REV share for it yeah we gave them a REV share I think at the time in perpetuity like 20% of whatever we took they got which is awesome which for an agency is a as you probably know like recurring cash flow is is King yeah and it's on and what's interesting about it is it's on a business right so it's not like uh so basically as long as the as long as the quote customer continues to sell stuff you get a REV share basically Forever on the business which is a great longterm I mean it's it's an incentivizing offer so also these these agencies are not going to build their own e-commerce stack right so they needed someone might as well use Shopify and I this up because a lot of the business owners that I have you know they're like how do I how do I grow right and so that's why I wanted to really zero in on some of these growth strategies so one is you had referral Partners you brought in you you were generous with them uh to the app developers and to the web stores they got 20% of the of the of your cut awesome uh the second one was you you had a really sexy competition um and so I I talk about this in terms of like making offers to to an audience it's like how can we make it so good people feel stupid saying now right like and so for I would say that obviously it worked I mean I've heard about it we modeled it at school I just made the largest investment I've made um into a platform so we saw that so we have the school games and so we really looked at a lot of the stuff that you guys did there um try to make it fun and um but the the key point is that you made it fun you made it competitive you got you got customers to compete against one another but they're all winning um and the major and this was one point I still wanted to ask so is it um was the New York Times the only promotion that you did for that or was there other things that you did like was it all word of M like how well at this point like when we started this like Tim was just sort of coming out the 4our work week I think was in its second edition but he had this massive audience and part of the cool part part of the the the the Beauty and the value of working with Tim was not just he gave us a great idea we're like great Tim now you gotta help us tell the world about it also so if we would have gone to Tim with this idea I don't know if he would have said yes but the fact that it was like Tim's we got Tim to generate an idea for us it was his idea he felt personally invested in in fact he's I I've heard him say this on his on his own show where he'll say like you know he's one of the co-founders of the build of business competition I love that because we created a a real vested interest in him to actually make this a success and it wasn't just New York Times I mean there was a lot of Articles written about it but it also it gave us a narrative a thing that we were able to go and talk about it was difficult for me to go around and talk about I'm a like you know I'm sh's Chief Storyteller it's it's it's it was difficult for me to go around and talk about like software Ruby on Rails or the Simplicity of e-commerce but it wasn't as difficult for me to go around and say hey we created this thing we think we think everyone has you know Nike convinced the world that if you have a body you're an athlete like mind mind blown so so brilliant we were trying to go around and convince the world if you have ambition you could be an entrepreneur and so I had now this new beautiful asset piece of ammunition that I was able to go around to media and to the to anyone that would listen to me to blogs to celebrities and say there's a thing here we'd love you to talk about like oh that's kind of cool that was really helpful and so for the business owners at home um one big one obviously was Tim got involved and so if you're like how do I promote my business finding a brand Champion or finding somebody who I mean there's if you've seen um I think is it is it air that movie that's uh it tells the story of U Jordan's like yeah so like sometimes you need to find like if you're like if you have an audience awesome then you already know what you're doing but if you don't have an audience you're more of a product person and you're like shoot how do I get this to the world sometimes finding your Michael Jordan and in this instance like Tim was probably the Michael Jordan for that era for that for entrepreneurship definitely right for entrepreneurship at that time um and so being willing to and I'm sure that Tim had a good deal with Shopify for you know I'm sure that there was a deal with Tim that worked out there was for sure that he's profited a lot from um and so sometimes you just got to be really generous like the Michael Jordan deal was first of its kind it was it was it was kind of crazy the the the founder you know the Phil was like I don't know this like should I really go all in on this person and sometimes you got to make bets right and obviously this bet paid off the Michael Jordan bet paid off and so you come up with something really sexy and then you find somebody who's the perfect fit for it and then you put it together right and so just as like and there's always a perfect fit right there's always someone out there there's someone who if if if if you're if you have a product physical product or P of software digital product there is someone out there that has purchased from you even if you're a small business who probably has some sort of Leverage meaning they have an audience they have a community they have a big newsletter they have a big following they know a bunch of people if they have bought your product organically and they have a connection to you organically you asking them Point Blank hey I have this crazy idea you seem to like my my my tea um and I would love to feature you in a promotion would you be interested that is very different than cold calling them and saying hi I'm Harley from this Tea Company uh from Firebelly te and I'd love you to be a spokesperson like I think the days by the way especially go back like to come to present day for a second the days of Brad Pit Hawking Colgate or or toothpaste are over nobody wants these artificial um connections or sponsorships when you look at what Jimmy Mr Beast has done with Feasta BS or Emma Chamberlain with coffee or you see what Kim Kardashian is doing with with skims because these are all on Shopify I have a very deep understanding of these businesses these are authentic real products that were built curated organized by these incredible celebrities who care so deeply about the product like so the the days of artificial sponsorship pay to play thing I think are over and I think I think what we did with build a business was almost like showcase that hey Tim's for some reason interested in our business hey Tim how do you think we can grow our business oh that's a good idea we'll do the competition but by the way we need your help for this competition and it's it was really meta and I I want I just really want to hit on this because this is what a lot of a lot of businesses need growth right they've got a product they're like how do I let people know about it and obviously you can you can run ads or if you already have an audience then you already know that stuff but if you're like well shoot how do I do it Scrappy right and so like making an incentive that gives people a big reason to say yes right finding a brand Champion that already has distribution can can be the unlock because all of that acquisition is really just based on the negotiation you have with that one person and if they can bring a lot like every you have the opportunity to make a true win-win and obviously Shopify want and Tim want and the main one all of the people who built stores were the real winners here um and I'll bet you some of the winners on the stores also did the exact same strategy that shop was also doing and so you've got a te company and they find Mrs T on I don't know on Instagram who just loves tries teas all day it's like if she really did like the product then she would be a spokesperson so just finding that out okay cool and then the third one you said um and I want to zero in on this was it was the econ so you said growth strategies and you talk more about the economies of scale was that just that because that seems a little bit more product focus and I'm I'm game for that I just want to make sure that I I yeah I think on that one I mean it's product focused but it's also just simply like business focus my my ability to go and negotiate with a large payment Gateway every year got easier and easier why because I was coming to them as a much larger Merchant now if you just take a very simple uh you know a very simple example 10 individual Merchants go to negotiate with the payment Gateway on their own they're all going to get some rates but if I do it in aggregate with all 10 my rates are going to be much much better and I can literally give those 10 Merchants the exact same rates you know less maybe you know a couple basis points that I want to keep for myself from from a profitability perspective that kept getting bigger that doesn't mean by the way we can talk about you know shop you know like our our whole shipping thing because we divested shop shipping uh what's called sfn shop fil Network a couple months ago about a year ago at this point because there are sometimes we have got into areas that were not main quests we sort of call them side quests that maybe we shouldn't have done on our own in fact in the case of shipping we found another company called flexport um whose main quest is an end to-end Logistics platform which is what we were trying to build oursel and rather than build it oursel we're like you just do it and that we can talk a bit about the value of what some companies are very very good at partnership I think shop is one of those companies if you look at what we've done with a firm for buy out pay later or Global e around crossb payments we've really we pride ourselves in being a company that is a really good company to partner with which is very unique in Tech which is sort of all kind of fresque yeah and I wanna and I I'm gonna I'm gonna bring this to the the brick and mortar chiropractor like so just just down to to home base um those relationships don't need to be these massive Billion Dollar Deals obviously they work at scale but you know I think about I think okay so if I'm a chiropractor what are all the things that um anybody who's my customer also gets they might go to the gym they might like smoothies they might like uh yoga right they make other things that are ancillary and I think okay well what if I go to each of those businesses and say hey with every smoothie just put a coupon you can slap it on there for a free adjustment so they're going to get a free adjustment and a smooth like you're going to enhance the value proposition that you have to your customers at no cost to you but then I get free leads and so it they get a win and then I get free customers or at least a free shot at a customer yeah and so these Partnerships and and you know this has been a huge core to every business that I've built is I mean I think I've built almost the same amount of revenue from Partnerships and affiliate relationships um as I have just from act you know direct sales and generating them ourselves because you are known as like I mean you know you and I know each other sort of from Community our our own communities like you are known as being a good partner meaning you leave enough on the table so your partners can make money from it you know uh doctors actually do this really really well on their own referral side meaning if you go to see a doctor and that doctor can help you great they they'll they'll they'll work on you if they can't they'll recommend someone else if you what I've noticed is that a lot of them recom like it's almost like a a closed loop circuit where Dr a if they can help you always recommends Dr B who always recommends Dr C and and Dr C always recommends Dr a and sort of this I think if you're a chiropractor for example you if you sort of vend diagram out meaning you look at your customer base and you ask them you know where do you go where do you work out what clothing do you do you like to wear what where do you go to get your smoothies for example you probably have your own version of that but also the people hang in the Smoothie Bar are also asking the Smoothie person hey do you want any good chiropractors and the yoga instructor is also saying hey I think you need a chiropractor as well and so creating your own version of an affiliate program even if it's not called an affiliate program it's sort of your own creation of it actually is incredibly effective and if you overd deliver meaning every time the chiropractor recommends the yoga instructor uh the you know the yoga instructor's client comes back and says man that yoga instructor you recommended is amazing you should send more clients to that yog instructor and so there is an opportunity to sort of overd deliver to create even more leverage in this sort of closed ecosystem of reciprocity and I'm going to give everyone three quick tips on this number one if you're going to create one of these relationships give them customers first if you give them customers first they're way more like send them five people and then make the call be like hey by the way I thought maybe it'd make sense if we did some now they're going to want more of what you J just gave them and they're going to be happy to talk second one is in terms of generosity like if you know what your cost to acquire a customer is you should be willing to give at least that for referral to a referral partner because like you either pay Zuck right or you just pay another small business owner and I can almost promise you that a referral from a partner is going to be worth more in LTV so you still get a a better LTV to C ratio by going to a stronger Channel with like a referral partner um and one little thing that uh Lila's really good at this and she has just drilled it into me over time which has been helpful for Partnerships is she says never count the other guys's money yeah and so just because you're making someone else a ton of money like it has nothing like if you take out how much that person makes and you just look at your side of the table make the deal make sense for you if they make a killing awesome they're going to be an amazing partner right and so I just want to underline that for because some of the mistakes I made early on is I wanted I saw how much I would make but I've lost deals because I got too greedy trying to say well he's gonna make even more than me and I would encourage you not to think that way because if everyone grows such it's such an amazing reminder so I don't I don't watch sports I don't really play sports so my Sunday project this is a little bit weird and nerdy but I I I have this project it's called Big Shot it's an archive that I'm creating of the greatest stories of the greatest Jewish entrepreneurs of the last half century and so I'm meeting these people most of them are in their 80s and 90s and I sit down with them and I record it I put on YouTube it's not a big podcast just it's mostly a personal project but it's fascinating and i' I've sat down with people like Izzy sharp who's the founder of the Four Seasons hotel or um a guy named Larry Silverstein who's the owner of the World Trade Center these were poor kids I mean these people grew up with nothing zero um or Fran Weisler who's the queen of Broadway way these are very poor people that grew up and and and eventually created you know they're billionaires and they've created Empires um when you ask them at 90 years old and so I think Izzy sharp from the Four Seasons Hotel is 95 years old when you ask these people tell me one or two things that I don't know I'm I turned 40 this year so Izzy tell me something I don't know that I should at my age almost to the I've done about 12 of these interviews so far with these like older you know icons and legends on Titans almost all them to a te say make your partners really really rich now the reason I I bring this up now is because these are people in their 90 in their 90s who they got nothing you know they're not trying to have Swagger they're not trying to like Flex they're so and the reason I love interview them is because they're so transparent but to a te every single one of them from these Titans of industry in real estate to the the the the queen of Broadway has always made their Partners incredibly rich and that is not something that is intuitive but it's something that I think like is is legitimate I I I love I love this entire line of thinking because um I mean it goes down to the just more of abundance mindset most of the people that I know they were wealthiest in the world just don't see business as a zero some game yeah right it's just like everyone actually can win whereas in a lot of games it isn't it isn't structured that way uh whereas like even just the the build a business competition you mentioned earlier like sure there was one winner but do you think that number two to number 100 in on the list was like oh man I'm so bummed that I only got to 100 that's the craziest part number two number and number 100 are have built million-dollar brands also right and that's this idea of like positive some thinking I think is so important I know there's like you know like I'm an optimist I know you are you were also Alex but one thing that I think people Miss is often when you go to raise money for those of you that are looking to raise money one criticism you often get from investors is this concept of Tam total addressed Market how big is your market and effectively what they're trying to say is that if you look at your Market it's a pie and your Tam is effectively the pie and your your your market share is a slice of the pie I think that's very flawed thinking and I think if we would have done that at Shopify we would not be a hundred billion dollar company our version was not let's take a piece of the pie rather let's grow the pie itself and so um we'll get to the IPO in a second but we took our company public in 2015 May 2015 on the New York Stock Exchange it was a billion dollar company at that point so um but you know um 1% of the market cap that is today at the time um every when you before you go public you in this road show we did 93 meetings all over the us and you're meeting these investors and you're meeting These funds and you want them to invest in these big funds that have trillions of dollars under management and this idea of Tam would come up over and over again and I needed to have an answer for what the Tam was and I remember it off by heart it was there were 46 million retail smbs on the planet I think I think at the time we had 100 or three 200,000 of them so big big growth opportunity ironically if you sort of you know we're now nine years past the IPO if you look at Shopify today a lot of our customers are not uh just SBS we have very large companies we're also well beyond e-commerce we have tons of merchants uses for point of sale physical retail we have t we have a capital business a payments business there was no way for them to actually to for me to give an answer around Tam in terms of like foreshadow what we would become and so I love this idea that you're talking which is like positive some thinking and optimism where share share the wealth that other people around you because rather than sort of thinking of the pi as sort of this finite space think about the pi as infinite and encourage more people to participate that's how you build these like generational hundred-year multi-billion dollar companies I talked to a fund manager um the other day and he was uh and he has a public a public fund and he was he was saying you know one of the things that I really like is that I've got 10,000 people praying that I win every night isn't that great yeah and I think Zig Ziggler said something to the degree of like you can have whatever you want in life as long as you help other people get what they want first um and I I just I just really really believe that because I've so I actually feel like I've actually put some numbers to this but I think that from an entrepreneurship perspective it's about on10th and what I mean by that is like you get to keep about one tenth of the wealth that you generate for other people and so I've just seen that from like the number of entrepreneurs that I look at like how much the market cap like not market caps the U like total revenue that's run through their platforms versus how much their Equity stake is and what it's valued at like the amount of times that I've seen that equation done where like it's 10x like you have to make 10 times the amount of money for other people as you'll be able to make um it's just been really cool and I think framing it that way is like how do I make everyone else a ton of money like everyone loves doing business with someone who makes them money and then they like and then they will want you to keep doing business with them so 2022 our 2023 numbers are not out yet Q4 earnings are coming out soon so can't talk about that but I'll tell you last year in 2022 shopify's Revenue was but $5.6 billion under six billion our Merchants the people that use Shopify made almost $200 billion doll in in gmv and revenue and sales that is I mean that is amazing I'm very proud of that I love the fact that our Merchants made 200 and we made Five Point something like that is the that the reciprocity that I think is important we I also love the fact that our our ecosystem Partners made more than $6 billion dollar last year that matters because it means for 2023 they're going to come back and work with us again and so I wanna I this is a really good line of thinking for I think a lot of the people in the audience so one is we we've got this big theme of reciprocity and what are what are some of the other because I'm I'm skipping one ahead but I think I think I think it's worth it so what are some of the you asked you put this question which is what are some of the things I don't know it should which is actually a question that I ask people too so I I like that you asked that question what are some of the other things that came up from those conversations or just things that you would share um as some of the big breakthroughs and like really ones that you were like I really thought this and I was dead wrong and I see this now and it changed everything um all right let me go uh a little personal for a second because I I think um these conversations don't really add as much value unless you can sort of take off the facade yeah um I have I turned 40 two months ago my wife turned 40 a month ago so we've like been doing a lot of like reflection on our life and and you know we're grateful and we love what we do we're doing our life's work and all that but one of the things that I really believe on a personal level is more true to me now than ever is this idea that vulnerability is actually this incredible superpower and my life has gotten dramatically better when I became a lot more vulnerable and I'll give you a quick example um I became I was I was the chief operating officer of Shopify between pretty much 2015 or so in 2020 so post IPO until sort of the pandemic and I loved being shop coo um it was a big role I had thousands of thousands of reports and most like pretty much all the non-engineering organizations you know rolled up to me and I I thought that was cool I thought that was really fun and and and I felt good about that but I I wasn't I wasn't happy um I didn't feel necessarily that I was the best coo in the world um but there was no way in hell I was ever going to raise man and say this is not the right role for me this is not what's going to keep me at shop ofite for a long time and it was only until I had a really good chat with Toby and I was like look I was like um like there is someone who's better at this role than I am I'm certain of it and turns out it's Cass who's our current COO uh he was initially he was running product for payments for us our money product but he's now he he loves being the COO and running operations the way that I love storytelling and I never would have had this new sort of this next gear of of my career at Shopify had I not had a little bit of like just gotten over my own my own my own crap to say this is really not for me and I think this idea of of vulnerability showing weakness as being this like weird bravado insecurity thing I think the more you show vulnerability the more you ask for help the better things become and I recognize that it's easier for someone like me to show vulnerability at my stage than it would have been for me to show 10 years ago um but I actually I I'm as I get older I I believe that less and less that I actually believe at any stage being really honest with yourself and being honest with the people around you about what you want to do what you love doing what you're really good at like this idea of I've mentioned the term life's work a couple times there's a great Japanese term which is iy guy which is effectively like what do you love what ises a world need what can what can you get paid for that idea of of finding your thing at at a stage in life where you're not 95 like Izzy sharp from the Four Seasons but you're 40 like like like I am or you're 50 or 60 or 30 I think is a great gift and I think you're able to find your thing a lot easier when you simply are a lot more um vulnerable about that and and more more than ever I I really look at that today as as as a real strength that's the first the second thing I would say is even uh Shopify is you know we have I don't know eight or nine thousand people at the company Shopify is very much a Founder Le company but also the people that work at Shopify have this incredible Founders mentality they act like an owner with every expense that they spend um the Speed and Agility they use um they reject like best practices quote unquote they reject processes that don't make don't make sense don't make don't make it faster and not just that we encourage that if you look at the most like some of the biggest areas of Shopify They're ran by founders of companies that we've Acquired and they've stayed at Shopify long past the earnout dates because we've created this sort of crafters and Founders Paradise at this company in in many ways it is like this this incredible like um Collective of Founders and and and entrepreneurs and I think that you can do that at any stage of company but if you but if you're not careful it goes away really quickly and there are very few companies at our size today that feels like a founder-led entrepreneurial everyone calls themselves the largest startup like it's it's almost you know it's such a common thing to say it's it's most of them are not like that and I think one thing that you can do as the founder of your company is instill this Founders this Founders mindset or founder mentality and you can keep it there if you work at it and I think the results are almost always unequivocally better what do you do tactically in order to keep that so a couple things are very simple in most companies of our size the way to to get a promotion is to go into management there's one track it is and it's it it always leads to a manager type role um we don't do that there are other tracks that Shopify there is a manager track there's also an individual contributor track or we call the crafter track there are these other tracks that allow you to stay at our company for a long time and if your craft is engineering or it's product or it's sales or it's storytelling and it's it's sort of brand building we are absolutely in fact not even okay with it we are going to be super happy if your mandate for your career is to get really really good at being the world's best marketer or the world's best sales rep or the world's best whatever um so one is we've created these different tracks at Shopify and we've cre which is sort of you know like the way I like to is like Shopify is really a crafter's paradise that's one the second thing that is really important is we also encourage like real disagreement we invite people to actively disagree when something just doesn't feel right um now if like if we've made the decision we've beat it up you know dis you know disagree and commit sometimes has to happen also but instilling a place where like you encourage open debate is really I think super important I I I think most companies talk about transparency and they talk but it's it's it's total to encourage that I I just I always get into the weeds but like yeah the track makes a ton of sense like that was like for me you know with with with our companies like I will I will that'll probably be my number one take away from just my tactical takeaway is like interesting having individual contributor tracks because one of the big issues that a lot like when you have a star media buyer right in a company that guy usually doesn't want to then manage media bu like he's us like that person and why do you want that person to like you want that star media buyer to be a media buyer and what if that star media buyer is a seven and actually wants to become a nine or a 10 at some point now all of a sudden you have like the world's greatest media buyer so one thing is I think you do have to have a conversation with people um no matter what size your company is like what tracker you want are you in a manager like there are some people who are just so great at management you want them to manage teams they just they're really good at that stuff but I think having a conversation say what track are you on really really matters the second thing I think that's also uh that's that's also really important is um I know every company want likes to talk about things like you know transparency and and open communication um we write a letter to our board um every quarter we share that letter with the board the whole company we and it's not redacted it's exactly letter that even at our size that we share with the board we share with the entire company a small now not every letter is going to be this holy mindblowing you know uh piece of content they're always really interesting um but sometimes you know it's more like making sure the trains are are are on time and stuff like that but what it does do over time is it it really brings everyone into the same page of like hey the things we're telling the board we're also telling you that there isn't these like two different versions of The Narrative of the company and um I think that's something that is it's it's it seems simple uh but it's really really impactful especially if you do it really consistently I'll give a I'll give I'll give the listeners a tactic that we have done for this which is um we actually run open book financials in all of our companies and so when we do quarterly it's like here's where we made money here's where this like we spent money and it didn't work out well and so that's helped for everyone feeling like they're on the same page that we're not hiding anything and if things are going really well they can see it and if something doesn't go as well like some of the decisions that happened downline we like well that was suffering and I guess this this does make sense that we decided to divest in this kind of endeavor that we were doing and I know I love suie but I get it you know like even even if people aren't like stoked about it like they get it um so I I was just I love this is great by the way um and so acting like an owner you you operationalize that um by creating individual uh contributor tracks and by having manag tracks really so people can be honest about what they're really good at and the one tidbit I'll give for people who actually aren't owners they just like uh entrepreneurs sorry U employees in businesses is no one can fault you once you own your flaws like if you're like hey I really suck at project management and if you say that upfront then people are like they don't they don't talk behind your back about it they'll just talk to your face about it because it's not a secret you're like I know I suck at project management and so the more it's like Eminem's whole thing is like if he claimed every single deficiency and flaw that he had no one could say anything back to him in rap battles and even though you know hopefully Corporate America is a little bit nicer than a rap battle maybe it isn't um yeah I it may not always be but I think you're right about that I think also the thing that what what happens is when you say to someone look I don't want to be a Riverstone I don't want to be well-rounded I want to be really really pointy at at this thing and that means that these other things around me I'm gonna hire or I'm gonna find teams who are really good at those other things now you're beginning to actually put yourself in a position where if you're not like the world's greatest I don't know writer for example um but you're really good at like coming up with like you know great slogans or you're not the world's great ad you know you're not great at writing ad copy but you're a great media buyer now if you say look I'm not good at ad copy but I'm I'm so good at finding opportunities for for great exposure if you say you're not good at that that means it invites someone who may be really good at copy to come and be your like your your your your your buddy your best your you know your best friend at work that stuff really really matters and I I think um I I think that stuff is really great the only other thing I will say is this um I know a lot of compan talk about Mission and Northstar one thing that we are very clear on even from from from day one till now is um we are a merchant obsessed and what does that mean when given any decision whereby we have to pick one of two things we always ask ourselves what is better for merchants now by the way that is different than let's say Amazon for example who is very famously consumer obsessed they don't like that's what they care about they're very clear about that when you work at Amazon there's like 100 th people work there they are consumer obsessed by creating this this very simple theistic of which allows you to say given two opportunities both seem pretty good how do you actually evaluate it well what's the one that's best for the merchant that means that thousands of people work at Shopify on a daily basis are making independent decisions that all roll up to that centralized Mission which is we are Merchant obsessed we care first and foremost about the millions of of business owners that you Shopify and again it sounds obvious but most companies totally mess us up and where the the vision emission stuff gets really important just for everyone who's listening is like once you get to about 100 employees that's where you're you're usually two to three levels away like if you're the founder you're two to three levels away from people who are getting hired you're starting to hire people you don't even know their names like this is where this really becomes important because decentralized decision- making is the only way you can continue to scale and you need people to make decisions that would be in align with align alignment with you like you can't be in every room to make every decision and so that's where mission and values create decision-making Frameworks that people can use as litmus tests of okay what would Toby do right now well I know that Toby says Merchants are Northstar and Merchants would not like this then we don't do it right even though we'd make a little bit more they don't like it and that's what correct I just want to highlight that because a lot of the people I mean obviously we take businesses on um smaller than Shopify that we invested but like we'll we'll go through this exercise with leadership because usually when they're at you know between1 to $30 million a year this is when this gets really important to get to 100 million a year uh in revenue and so forth and so like if you're at that point in your stage like this gets important I also think something you're sort of you're sort of skating or flirting with a little which which has to be said is I think that there is a strange thing that as you grow so you mentioned a 100 people there's actually a real thing it's called it's called dunbar's number it's 150 people right and dunbar's number basically goes back to like the days of like when we're all living in tribes that basically a tribe size should never go beyond 150 there's some sort of science around humans can only really remember 150 people at any one particular time I went through the 150 Mark a long time ago at Shopify it does change and there's no question about it but the one thing that often happens when you cross that 100 Mark or 150 150 person Mark is you begin to do this whole like um you know macromanagement you sort of get out of the weeds and actually I think this whole narrative that micromanagement is bad is total horseshit I actually think that the best leaders I know whether they're running like trillion dollar companies uh because I know some of those or hundred billion dollar companies or million dollar companies the best leaders I know are in the Weeds on the things that matter most and even you know I'm preparing now for my earnings call which is in two weeks like I'm In The Weeds on this like we have an IR team who could prepare all this no I want to actually go through every single word in the script in the press release in the narrative I want to go like word for word on my own before anyone even takes a look at it because it matters so much and if that's my craft that's what I'm supposed to be resp responsible for then I'm going to be in the Weeds on that I think there's like this this Corporate America you know bashing of micromanagement and I I think I I'm I I think some micromanagement is actually really positive and needed we agree and um we have a little saying for this internally which is win in the weeds yeah like that's like that's where you're gonna go Toe to Toe with somebody's like you're gonna win in the weeds like that's how you do it and I like I feel the same way if some cor you know some some president of some other company of our size uh is not in the Weeds on on on earnings on on press on Partnerships I'm going to run circles around them because I am in the weeds because you have the the visceral knowledge of like the stuff that really makes it and one of the things that also helps with this is that if you're in the weeds when something goes wrong you know why it went wrong and you can make a pivot where if your two levels removed you don't know why it didn't work and then your decision- making of what to do next then relies on secondhand and it gets really really messy after that you make really dumb moves um okay so we have reciprocity is one of the big driving things we have uh vulnerability and then the Downstream impacts of how you've kind of implemented that within Shopify with the individual tracks um and encouraging open disagreement among people and giving everyone kind of a North star so everyone's aligned with how we're are like what Frameworks are we going to disagree around like it's not whether we're doing customer or we're doing Merchant the disagreement is going to be which of these best serves the merchant if we're going to disagree correct right so um I want to zoom out and so I said we're going to look back and I think we took a little bit of of final nugget stuff and moved it Forward which I loved anyways so if we're looking forward right um you sit in this really unique perch that I mean maybe 10 people on Earth sit on that you sit on top of this mountain of data and you kind of see around the corner and so what's kind of what's what's what's what's coming right H what are you what are you thinking about for Shopify um and just kind of the marketplace overall for retail entrepreneurs or even just uh entrepreneurs in general look we talked a little bit about the sort of idea that the cost of failure is trending toward zero it's never going to be zero because ultimately like the sort of asmt because ultimately like you have an opportunity cost like you could be doing something else um so it's never going to be zero but it's getting close to it I think a couple things around the entrepreneurship thing one is I think entrepreneurship now more than ever before is default Global I think this idea that we've imported um physical geographies and borders of countries in from the physical world into the digital world is really silly I don't think I mean you know you see a lot of great Brands behind me that I'm close with I put up uh you know from kth to Supreme uh to Mom spaghetti which is M&M's company to Firebelly which is my little T side hustle um uh master and dynamic headphones these are some of the companies that I love that I'm connected to none of them have Geographic limitations that's just not how they operate I get it it's more complicated sometimes to sell although frankly we have a product called Shopify markets and markets Pro which makes everything really easy there um but I I don't want to this isn't a shopy pitch just I think one like your total addressable Market when you're getting started is anyone on the planet who wants to buy your particular product first second of all is I think the idea um if you listen to any of the earnings calls from these big um big retailers one of the terms you often hear is this concept of Channel conflict which is a very simple thing it's online is doing well but it's hurting offline Instagram Commerce is doing well but it's hurting my online store I I when I think about the brands that I admire the most across millions of stores on Shopify none of them none of them use the term Channel conflict why because they are Channel agnostic what they care about is serving their customer in the way that their customer loves to be served or wants to be served which is very different than pretty much you know the history of retail where if you wanted to buy bread you went to the baker uh in the Town Square you want to buy shoes you went to The Cobbler down the streets in the 80s I I'm a you know I'm an 80s kid um when I went to go buy a video game I'd have to line up at the store at this hour doors open wait in line use this credit card no not that credit card use this one that whole thing was the concept of the retailer dictating the process of purchase to the consumer is over and the reason that you're seeing you know things like shop pay for example become so popular is because seamless simple easy convenient checkout is what every consumer wants and so modern retailers today one are geographically agnostic two are Channel agnostic they sell across every channel the reason why you see us do things like we there's a there's a Spotify channel for Shopify so if you're an artist most most merchants on Shopify are not artists but if you're an artist and you have your Eminem for example and you have a great popular artist profile uh and fan base on Spotify now you can sell your merch directly from your artist profile page and Spotify won't be important to most people but our if we want to qualify and re-qualify to be the retail operating system for these millions of stores our responsibility is every surface area on the planet digital physical anywhere in between that a transaction could happen we have to make that easy so that's probably the second thing I think that's happening in retail and then the third thing that I think is is kind of like a an interesting thing um is that I think business is becoming at all sizes personal and you do this very well Alex maybe better than anyone but you know your own personal brand and your business's brand they're not separate anymore um a couple uh a little while ago I saw very uh very highend brand their online store was down um I'll say it was Versace Versace went down I think eight months ago when I tweeted I said Versace like let me help you out um and it end up leading to some of the Versace Brands coming on to Shopify at that point was I the president of Shopify was I Harley the entrepreneur was I Harley the like human like it I think this idea that that you know work life balance or work life Harmony the separate I think it's I think it's over I think people I think we as entrepreneurs and aspiring entrepreneurs in 2024 we have to sort of incorporate all these things into our backpack our businesses our personal life like you know you talk about uh you talk about your wife Lea right all all the time about being part of like you you sort of mix in between total addressable market and talking about your wife I do the same thing like Lindsay my wife is a huge part of my life and when I go home I talk about work and I was talking about our kids and I like I think this there's sort of this wonderful harmonious situation now where we don't like we're not separating these things we're not waiting to retire to live our life I think more and more you're able to kind of like have a personal brand but it's also your business's brand and you're also an extension of the company but you're also your own person and I actually think that's a wonderful new thing that new phenomenon um that is very different than our parents and grandparents and great-grandparents had yeah and they don't really get it as I know right I mean Mr Beast is he a YouTuber or is he a or is he a confectionary genius with his chalk who cares he's this amazing guy he's a great entrepreneur and he makes content and he makes chocolate and he makes burgers and he makes cool videos and he's a cool dude and like who cares how you sort of categorize these people um and that's the reason why actually back to what we said at the beginning authenticity is going to rule here and if you are if you are full of people are going to figure that out very quickly and they're not going to buy from you and they're not going to want to participate in your journey but if you're not full of and you invite people along into your journey and you you talk about your kids and your spouse and your business people cheer for you and it goes back to what I think you said you know uh earlier is is um that that that quote about you know you want as many people cheering for you as possible on your journey forg the exact quote but if somebody like that and um because I I like defining terms a lot it's like one of my hobbies but defining it from a behavioral perspective so a lot of people are like well what is being authentic or like I want to be authentic like how do you do that um the best definition that I that I have that's working is um behaving as if you could not be punished and so oftentimes like we censor ourselves for fear of punishment we like the many things that we don't say or don't do because we're afraid someone's going to say something or someone's going to do something in reaction and so basically if you're in an empty room you have almost no no potential for punishment right and so it's how you act as if you could not be punished is how you are authentically um so we talk about this concept of like you are the niche so it's like what is Rogan he likes he likes he likes aliens he likes you know weird the government stuff he likes uh fighting he likes comedy he likes biohacking he likes taking crazy drugs like he likes all sorts of stuff and so if you're to say hey I want to start this podcast where I talk about aliens fighting comedy like all like people be like you're crazy but it's Joe Rogan and so it also creates a one-of-one category that only you can really occupy and so I I I genuinely do believe this um that everyone is kind of unique um in terms of their distinct interest and kind of like if they were a chart like how how the the point of their Rock is in one directions versus hundred other ones and so I do think there is a thumb print there that that is unique to the individual where people do become rounded Stones is because they pull back on their pointy bits and so then they do look more uniform and so people look uniform but aren't in reality and so looking at these three big things in terms of what's coming around the corner in Commerce and kind of like where the best brands are indexing number one is that they see everyone as a potential customer around the world not not not not just their local area just even people who speak their language uh second was that they don't really care where the customer comes from like if more people know about your stuff and you put it in more places more people will buy it and as long as you treat them well you'll make more sales in your more rep repeat customers and then the third one is creating allow basically allowing yourself to be you publicly and being more okay with the association that's going to happen inevitably with you starting a company because if you really believe in the product it's going to be in mesed in your identity like it's going to be part of who you are and rather than caging these things out or boxing them just leaning into the fact that like you're you and you own this thing and I think that what we were saying earlier with kind of Tim Ferris and these brand Champions like those other people can contribute their thumbprints to your product as well well if you're authentic then other people that are kind of like you like you know I I I like to I like to be exothermic like I like to take I'm very high energy always have been um I like to add energy to other people and other other situations and rooms and conversations and so I'm just going to like I want to be exothermic and so everything that I do I want to like I want to be the exothermic person what that means is people see me being exothermic mean you and I sort of connected like you and I are kind of social media friends like I was being exothermic and you were being exothermic we're like hey let's be exothermic together that's how you and I that's why we are talking right now because I try to be authentically me on the internet and you try to be authentically you on the internet and so we connected and like Med like yeah we kind of like each other that you get tons of people coming at you asking to do stuff together and immediately you're like ah something is off here and and I I I feel the same way sometimes when people come to me and they say like I want to connect I want to do a deal with you um when you are exothermic and if you are or when you are authentic you actually invite other people that are similarly authentic in your way into your lives and you create these amazing communities and friendships and relationships and it's it's really fun but you know I mean it's it's a great sort of place to wrap up I think which is like is a deep optimism I think around the entrepreneurial community and for those of you that are listening whether you're an entrepreneur or aspiring entrepreneur one of the best parts of Entrepreneurship is that all of us not actually not all most of us didn't sort of start with like some sort of like we didn't start on third base most of us started at the beginning and we've been building ourselves and so when we see other people building on their own whether they're chiropractors or they Tech entrepreneurs or they're lawyers or accountants or they're someone who's creating you know I love my Ember mug I love the the guys at Ember they make these great coffee mugs that stay hot whatever they are I am rooting for them and they're rooting for me and that actually that's sort of wonderful like ecosystem reciprocity go back to that that makes entrepreneurship a little bit less lonely and also the greatest tool for humans to find their own version of success whatever your version of success is make a lot of money uh put food on your table be creative whatever that version is entrepreneurship is this amazing vehicle and today it's more accessible than it's ever been and there's it's tough not to be optimistic about that last question business advice to Harley 10 years ago you got one thing you can tell him um I think a lot of you know a lot of people don't know where to start we kind of talked this a little bit earlier when we talked about t-shirts but just find a problem that that you feel yourself and just solve it um yeah like it's hard to imagine how to scale and how big it could become don't even worry about that but like if there's a hobby like you know um one of my best friends is really in is is his name is David seagull he's the founder of David's Tea this big tea Empire he sold the company 2016 and he was trying to figure out what to do and all along the way David was like coming over to my house and you're hanging out a lot and he's obsessed with tea um I was like dude like you have a thing it's tea why aren you build another Tea Company and so that's where Firebelly came from and I love this idea that like you know the thing that you're searching for is probably right in front of you and I I know some people say that you know you shouldn't commercialize your hobbies but I'm not sure I'm not really sure I believe that like if you have this amazing hobby this amazing interest this amazing pain point you feel a lot that's exactly what you should be working on that's the first thing the second thing I think is like you know um I'm this is my 15th year at shop advice I'm 40 years old so more than a third of my life has been spent at this incredible company and I if if people if Toby and the board will have me I'll stay there as long as I possibly can but finding someone who um like from a partnership perspective um someone you work with closely I think a lot of people start companies and businesses with people that are just like them people that they would have been friends with in high school I think it's fun and I get it um and you know Firebelly for example Dave and I are both kind of similar with our little te thing um but actually I think some of the most impressive things I've ever seen built were built by people that probably would not have been friends in high school again going back to this idea of like of pointy objects they're pointy in their own way but their points are not the same and by combining their points they kind of create this like Avengers thing which on their own they'd be doing cool stuff but like you know doing it all together uh means they can build hundred billion dollar company um so those would be some of the things I I would say maybe the only other thing is like you know one just going back to like life life and work Al together one of the most important uh decisions all of us can make is finding an incredible incredible partner um spouse wife husband boyfriend girlfriend whatever um I think people underestimate how important that is and I think I I often refer to to Lindsay uh at her 40th birthday I said you know Lindsay is my superpower um that I have this incredible part and and I I I think we all not all but I I I know a lot of people that take for granted um how important that particular decision is uh I I think finding a wonderful life partner for you uh whoever you are um is just probably the most important decision you're ever going to make and I think we all some people think about it very thoughtfully others sort of do it halfhazard and I think that's a mistake yeah 71 correlation with your subjective well-being hell yeah so is that true are you making that up no no that's correlation with subjective wellbe the strength of relationship with your significant other um with that I feel like it's a great stopping point thank you so much for giving your time like just just this is so fun I hope it was valuable to your to your community and your listeners I'm I'm a huge fan I'm part of your community and uh I I tried to bring as much insight and and thoughtfulness as I possibly could um it's it's an honor Alex for me to be uh talking to you for I don't know the last 90 minutes it's beyond mutual and on just behalf of you know MOS Nation thank you so much appreciate you

Channel: Alex Hormozi

Views: 414,933

Keywords: Alex Hormozi, Alex Hormozi Business Tips, Alex Hormozi Gym Launch Secrets, Hormozi, Business guides, Business tips, Skillsets, Skill Stacking, The Game Podcast, mozination

Id: YZdE8U5eD_s

Length: 89min 1sec (5341 seconds)

Published: Wed Feb 07 2024