0:00

Hey upstream listeners. Today we're releasing a

0:02

recent conversation I had with Harley

0:05

Finkelstein, president of Shopify. We discussed

0:07

Harley's unique perspective on recently

0:09

implemented tariffs, political shifts in the

0:12

US and Canada, Shopify's 2024

0:14

financials and more. Please enjoy the episode

0:16

and let us know if you're

0:18

interested in seeing more business-focused discussion

0:20

on upstream. Harley,

0:37

welcome to the podcast. Great to be

0:39

here. Thank you for having me, Eric.

0:41

So there's a number of things I

0:43

want to talk to you about, Shopify

0:46

related, company building related, media related, but

0:48

first I want to talk about Trump

0:50

and his conversation on activity, on tariffs.

0:52

and what you think that mean. A

0:55

light start, you want to go right

0:57

to Trump, okay, wow, I like it,

0:59

I like how you roll. Yeah, so

1:01

most timely topic, you know, some people

1:04

say, hey, tariffs are really a sort

1:06

of negotiating tactic. Other people say,

1:08

hey, tariffs are really a sort

1:10

of negotiating tactic. Other people say,

1:12

hey, no, Trump's actually been pretty

1:14

serious about what you think tariffs

1:16

mean to him and then we

1:19

can get more into. what would

1:21

actually be the implications? Well, look,

1:23

I can't surmise what tariffs mean

1:25

to him in particular. What I

1:27

can say is that I, and

1:29

I think shopify, we pray at the

1:31

altar of small business and entrepreneurship.

1:33

I've been an entrepreneur since I

1:36

was 13 years old. My life's work is

1:38

increasing the amount of entrepreneurship that

1:40

happens in the world, making it

1:43

more accessible. So I usually take

1:45

an entrepreneurship lens to everything like

1:47

this. And I'll say this. If you look at

1:49

job creation. More than two-thirds of all

1:51

jobs globally have been created by

1:54

small municipal businesses and If you look

1:56

just look at shopify merchants alone or

1:58

shop like businesses alone And we moved

2:00

billions of orders across borders every single

2:02

year. So I think tariffs, they add

2:04

a level of complexity to an already

2:07

very difficult activity, which is starting and

2:09

running a business. And for these entrepreneurs,

2:11

not just on Shopify, just generally, I

2:13

mean, they're carving out a livelihood for

2:15

themselves and trying to find opportunity everywhere.

2:17

And one of the greatest parts of

2:20

being an entrepreneur in 2025, frankly, in

2:22

2024 even, is that for the first

2:24

time in centuries. your total addressable market

2:26

is a global one, that you actually

2:28

can sell. Like when you hit the

2:30

launch button on Shopify to launch your

2:33

store, your total address will market is

2:35

anyone with an internet connection. That is

2:37

remarkable. That allows you to actually access

2:39

customers all over the world. So I

2:41

think that we are absolutely a job,

2:43

but we are champions of open trade.

2:46

We've witnessed first hand what that does.

2:48

We think protecting and empowering every business,

2:50

especially the underdogs, is very important. And

2:52

we'll do whatever we can, obviously, to

2:54

help with some of these changes. You

2:56

know, right now, you can actually display

2:59

and collect duties right at checkout if

3:01

you're a Shopify merchant. And if you're

3:03

a consumer and you're in the shop

3:05

app, you want to basically browse for

3:07

stores and products in your own home

3:09

country. You can do that with our

3:12

new search filter. So we'll do all

3:14

that stuff also. But but ultimately, as

3:16

much as much as I believe entrepreneurs

3:18

are adaptable. and they kind of figure

3:20

it out, and obviously we're trying to

3:22

help with that. Ultimately, I think that

3:25

doing anything that's going to make an

3:27

already difficult journey, even more difficult, is

3:29

not great. If Trump said, hey, Harley,

3:31

I want you on my counsel to

3:33

give me advice on what policies would

3:35

be most helpful for entrepreneurs and small

3:38

businesses like the ones you work with

3:40

every day, even just more broadly, you

3:42

know, sort of blank slate, what would

3:44

you advise him? What would you advise

3:46

him? Oh man, so I would love

3:48

to do that. I'd love to do

3:51

that for any politician, any elected representative

3:53

on any side of the aisle in

3:55

any country. If you actually go through

3:57

step by step... and what it takes

3:59

to start a business. Even now where,

4:01

I believe in 2025, the cost of

4:03

failure of starting business has never been

4:06

lower. And I think the complexity has

4:08

never been better or easier. I think

4:10

scale has never been more available. I

4:12

think about these brands, the Vioris, the

4:14

aloes, the gym sharks of the world

4:16

who started their moms' kitchen table only

4:19

a few years ago, and they are

4:21

now multi-billion dollar companies. I recently gave

4:23

one of the keynotes at NRF, the

4:25

National Retail Retail Retailel Federation, a couple

4:27

weeks ago. And I brought up Cat

4:29

Cole with me, who's the CEO of

4:32

AG1, and if you know, AG1, athletic

4:34

greens, great company. I mean, that's a

4:36

$600 million company, that's like 10 years

4:38

old, that is one skew. I mean,

4:40

in the history of commerce, in the

4:42

history of entrepreneurship, that wasn't possible. So

4:45

as optimistic as I am about starting

4:47

the business right now, if you go

4:49

through the steps of business registration, getting

4:51

a bank account, essentially getting money, a

4:53

capital, you can build your business, incorporation

4:55

documents, shareholders agreements, It's a lot. So

4:58

if I were to have, you know,

5:00

the Eric Magic Wand that you're sort

5:02

of referring to, I would say that

5:04

let's just streamline all this stuff. Let's

5:06

make it as easy as ordering off

5:08

UberEats or something like that. Like, I'm

5:11

going to incorporate here. I need this

5:13

template. I need this bank account. It

5:15

has to work with this particular, you

5:17

know, this geography of customer. And just

5:19

make it easy. I'm not saying you

5:21

have to gamify it. Entrepreneurship is inherently

5:24

difficult. Most businesses will not succeed. We

5:26

know that. Let's not do anything that

5:28

makes it even more difficult. Let's try

5:30

to simplify things and lawyers and accountants

5:32

and banks and all these different parties

5:34

are all trying to, you know, they're

5:37

all doing the right things, but I

5:39

think there's way too much hill to

5:41

climb to get to an already difficult

5:43

hill eventually. Like make the onboarding into

5:45

entrepreneurship as easy as possible. Do for

5:47

that aspect of incorporation. What ShopaVa has

5:50

done for e-commerce, like simplify it, give

5:52

small businesses the same tools as big

5:54

companies have. That makes sense. And let's

5:56

say we've, from that to talking about

5:58

capital and funding, because that's often a

6:00

bottleneck for entrepreneurs, or certainly something that

6:03

would accelerate that. I mean, this is

6:05

even separate from a government perspective. because,

6:07

you know, we've seen in venture capital,

6:09

since that's a ready funding source, a

6:11

lot of people have tried to shoehorn

6:13

businesses that may not be fit for

6:16

the traditional venture model, especially as venture

6:18

is getting bigger and bigger and the

6:20

exits need to be bigger and bigger,

6:22

but most businesses can be very meaningful

6:24

and impactful without needing to be, you

6:26

know, multi-billion dollar companies. And I think

6:29

DDC was actually a type of company

6:31

or commerce that venture capitalists were funding

6:33

in the 2010s much more, but have

6:35

now been doing more deep tech or

6:37

hard tech because they've seen maybe it's

6:39

not the perfect fit and content businesses

6:42

as well. And yet they are good

6:44

businesses and would benefit from other capital.

6:46

sources and I know you guys have

6:48

a big capital effort underweight as well.

6:50

So what do you talk about what

6:52

what the funding landscape looks like and

6:55

should look like for these kinds of

6:57

businesses? Well, first of all, I don't

6:59

think every business is to raise money.

7:01

I'm sitting here drinking this delicious cenchity

7:03

which is made by a little tea

7:05

company called Firebelly that I started my

7:07

best friend during the pandemic. We are

7:10

not funded, we are bootstrapped. The money

7:12

that we spend on marketing and an

7:14

inventory is, you know, you know, primarily

7:16

based from sales. And so in order

7:18

for us to get more money, we

7:20

have to get more sales. And to

7:23

get more sales, we have to get

7:25

resourceful. And so I don't think every

7:27

company needs to be venture backed or

7:29

to raise money. I do think, though,

7:31

that at a particular scale, not a

7:33

big scale, but at a particular scale,

7:36

of a particular scale of an business

7:38

journey, that there is an opportunity where

7:40

math becomes a thing, meaning you can

7:42

spend a dollar here to make a

7:44

dollar 50 on this side. One of

7:46

the reasons that we started Shopify Capital

7:49

was it seemed obvious to us that

7:51

a lot of the traditional Funding sources

7:53

were not funding a lot of small

7:55

businesses most You know retail shops selling

7:57

physical products t-shirts for example can't walk

7:59

into a bank and get money But

8:02

because of the amount of information that

8:04

we have on our merchants we were

8:06

actually able to make really smart and

8:08

very thoughtful underwriting decisions. And it's very

8:10

simple. They get a little notification or

8:12

admin saying you qualify for shop like

8:15

capital, click here, they click there, within

8:17

a couple of hours the money gets

8:19

to positive bank accounts and they pay

8:21

it off, you know, as soon as

8:23

they can. The idea wasn't necessarily that

8:25

let's build a capital business. The idea

8:28

was let's use our size and scale

8:30

and our unfair advantage that we have

8:32

to actually do something that, you know,

8:34

wouldn't organically happen for entrepreneurs. And the

8:36

end result is that. If you speak

8:38

to entrepreneurs and merchants on Shopify that

8:41

have received Shopify Capital, some of them

8:43

call it a lifelide. Some of them

8:45

call it their, you know, like the

8:47

thing that got them to the next

8:49

level of growth. So I'm really proud

8:51

of that, but I don't think every

8:54

business needs to do so. Now you

8:56

talked about something, you hinted at something

8:58

that I think is worth discussing, which

9:00

is sort of that this, there was

9:02

a period of time where it's felt

9:04

like every direct to consumer company. like

9:07

pen company, mattress company, sneaker company, hospital

9:09

scrub company, toothbrush company, every one of

9:11

these direct consumer brands between like 2014

9:13

and like 2022, we're getting massively funded.

9:15

You had a bunch of IPOs come

9:17

out of it, some work really well,

9:20

some less well, but that was, I

9:22

don't think we should necessarily take very

9:24

many lessons from that, just because everyone

9:26

does something, doesn't mean you should do

9:28

it also. So I think like I

9:30

wouldn't, I wouldn't take too many false.

9:33

you know, statements of fact in that.

9:35

I do think that good companies that

9:37

get well funded, but with good investment

9:39

and good investors, are able to grow

9:41

faster. But again, some of the most

9:43

impressive companies on Shopify, Meundi's, for example,

9:46

or Fashion Nova, for example, I mean,

9:48

these are bootstrap companies that have built

9:50

billion dollar brands. also be a great

9:52

example of a, you know, self-funded company.

9:54

But then you have other companies like

9:56

Figgs, which is sort of revolutionized, the

9:59

hospital scrub business, Cheery and Heather built

10:01

this great company on Shopify, they took

10:03

it public, it's a great trusted public,

10:05

and the public, and the public, have

10:07

actually trusted public, and the public, and

10:09

the public markets have actually rewarded them

10:12

for it, which has been David, called

10:14

the big shop. where you interview Jewish

10:16

entrepreneurs and to learn their stories. Why

10:18

don't you talk about some of the

10:20

biggest learning or surprise that you had

10:22

interviewing these Jewish entrepreneurs? Well, we first

10:24

kind of said the tone as to

10:27

why I would do this. So first

10:29

I don't really do this. So first

10:31

I don't really watch sports and weekends.

10:33

I know, you know, I have friends

10:35

that sit around watching football or baseball

10:37

games. I'm just not a sports guy.

10:40

And actually when I was a kid,

10:42

this may sound really weird. every kid

10:44

born in the 80s had or you

10:46

know some celebrity or some I don't

10:48

artist or rapper or musician I didn't

10:50

have any of that on my walls.

10:53

The posters that I had on my

10:55

walls were actually not posters at all.

10:57

They were newspaper clippings of entrepreneurs. I

10:59

have really impressive entrepreneurs that I just

11:01

found to be remarkable and I was

11:03

as I mentioned or I may have

11:06

mentioned I was born in Montreal but

11:08

I grew up in South Florida and

11:10

Montreal is very much an immigrant city.

11:12

My grandparents are Holocaust survivors. My father

11:14

was an immigrant to Montreal to Canada.

11:16

And so entrepreneurship was kind of always

11:19

around me, but not in sort of

11:21

the glamorous way that like, you know,

11:23

I got a hustle or a side

11:25

hustle or like, it's my life's work

11:27

or passion. All the great stuff that

11:29

you and I get to think about,

11:32

that wasn't the case. For most of

11:34

these immigrants, entrepreneurship was by necessity. It

11:36

was, it was, they had no other

11:38

choice. No one was going to give

11:40

them to give them the job. So

11:42

I was always fascinated by entrepreneurs and

11:45

I started my first coming in when

11:47

I was 13 at a DJ company

11:49

and I sort of teach your business

11:51

I was the way that I met

11:53

Toby and Shopify was I was one

11:55

of the first merchants to you Shopify

11:58

in 2005. So I've always been truly,

12:00

I guess, entrepreneur obsessed and certainly intrigued

12:02

by entrepreneurs and they sort of acted

12:04

as role models to me. But I

12:06

realize that a lot of the best

12:08

entrepreneurs that I knew, that I learned

12:11

about, they weren't really like well-known famous

12:13

people. I mean, you know, everyone knows

12:15

the Four Seasons Hotel, or most people

12:17

do, but no one knows Isie Sharp

12:19

Sharp. You know, people know Fiji water,

12:21

but nobody knows Linda Resnick. People know

12:24

Activision Blizzard, but they may not know

12:26

Bobby Kodak. So there were all these

12:28

people, and Larry Silverstein, I mean, the

12:30

guy built Manhattan, but most people have

12:32

no idea who Larry Silverstein is. And

12:34

so I started asking these incredible Jewish

12:37

Titans, many of them in their 60s,

12:39

70s, 80s, and even 90s, if they

12:41

would mind saying now with me and

12:43

telling me their story. And the idea

12:45

of Big Shaw was really to create

12:47

this. archive of the greatest stories of

12:50

the greatest Jewish entrepreneurs in the last

12:52

century or so. And I started with

12:54

Charles Broughman, who created, his family created

12:56

Seagram's, he brought Major League Baseball to

12:58

Canada, Al-Dobensadun, you know, Isie Sharp that

13:00

I mentioned, people like Mickey Drexler that

13:03

was, you know, basically built the gap,

13:05

he created Old Navy, was on the

13:07

board of Apple with Steve Jobs for

13:09

two decades, these really interesting people that

13:11

I just thought had incredible stories to

13:13

tell. And I really built Big Shot

13:16

really for myself. It was a labor

13:18

off love. And I started packaging and

13:20

putting on YouTube and Apple podcast and

13:22

stuff. And by like the second season,

13:24

you know, maybe by 10 or 11

13:26

interviews, all these different people started telling

13:28

me that like, this is incredible content

13:31

that they love these stories of these

13:33

these people. And a lot of them,

13:35

because, you know, in the case of

13:37

Isie Sharp or Charles Raufman, who were

13:39

in their 80s and 90s, or Leo

13:41

Cooperman, who created. Because they're kind of

13:44

at a later stage in life, they

13:46

have no, they're not trying to keep

13:48

secrets. They're not trying to protect their

13:50

own. Egoes, they just want to convey

13:52

and explain and they want to tell

13:54

their stories. And we've done about 16

13:57

episodes now. The next episode that's coming

13:59

out will be Mike Milkin. Obviously, you

14:01

know, junk Bond King, but one of

14:03

the greatest humans to ever to build

14:05

a business in finance. We just had

14:07

Linda Resnick who did Fiji and Palm

14:10

Palm Regented Juice. Seventy-five percent of all

14:12

pistachios in the US gridat are sold

14:14

by her company, wonderful company. And we've

14:16

packaged these things and we called it

14:18

a big shot and it's this amazing

14:20

thing and you know it's it's as

14:23

Kevin Kelly would say it's it's a

14:25

1000 true fans type of project meaning

14:27

you know there's a thousand people or

14:29

maybe 10,000 people that know it but

14:31

those 10,000 people love it. And the

14:33

stories, you know, I would say that

14:36

the biggest aha are takeaway from these

14:38

stories across all these titans, these billionaires,

14:40

and never these are not people that

14:42

grew up like with money. I mean,

14:44

you know, any sunshine who created the

14:46

modern day reets, the real estate investment

14:49

trust concept, and built a company called

14:51

Rio Can, multi-billionaire, incredible man. I mean,

14:53

he was born Bergenbelsen in a displaced

14:55

person's camp. His father, when they immigrated

14:57

to Canada from Eastern Europe, hid a

14:59

tiny little jewel in his boot. And

15:02

that's what helped them sort of get

15:04

started in business. And these are not

15:06

like rich people, but I would say

15:08

the thing that's most remarkable about these

15:10

stories is that almost to a T,

15:12

they all talk about the influence and

15:15

the value of their spouse. If you

15:17

were to ask, is you sharp, how'd

15:19

you create the Four Seasons Hotel, you

15:21

know, that the Golden Rule and attention

15:23

to detail and luxury and service, you'd

15:25

say Rosalie. And if you ask... Bobby

15:28

Brown, the cosmetics, you know, Queen, one

15:30

of the greatest cosmetics entrepreneurs on the

15:32

planet, you know, tell us about like

15:34

how you made that deal with S.

15:36

Taylor, she'll say, my husband helped me.

15:38

Every one of them, almost across the

15:41

board, I can't think of one that

15:43

didn't, I mean, Linda Resnick certainly says

15:45

is about Stuart Resnick, her husband. They

15:47

all attribute a huge chunk of their

15:49

success to the relationship they have with

15:51

their spouse. And... as you know, I've

15:54

been married for 13 years, I'm very

15:56

much in love with my wife, two

15:58

incredible daughters together, Zoe and Bailey. I

16:00

think a lot about that, about my

16:02

own journey, and about how Lindsay has

16:04

played a huge role in Shopify store,

16:07

and I think Toby would say that

16:09

about Fiona, his wife. So it's stuff

16:11

like that, it isn't like, you know,

16:13

some interesting strategy about leverage buyouts or

16:15

about a way to invest or a

16:17

way to analyze real estate values relative

16:20

to the cap rate. Yeah, that's fascinating.

16:22

We actually just started a podcast on

16:24

our network called Modern Relationships that interviews

16:26

couples on advice they would have for

16:28

other couples or how to find someone

16:30

great. So amazing. Well, I have a

16:33

whole book of notes on that. And

16:35

if you'd ever, you know, if you

16:37

ever would have me and Lindsay, my

16:39

wife, we'd love to come on and

16:41

we'd love to tell you. But so

16:43

actually funny, I know, you know, one

16:45

of the things you and I share

16:48

is our deep love and respect of

16:50

this, of the mentor concept, the mentor

16:52

model. One thing that Lindsay and I

16:54

have done since we've been married is

16:56

rather than have one mentor that we

16:58

emulate we actually have a series of

17:01

mentors almost like it's gonna sound super

17:03

lame but like vertical specific mentors we

17:05

have like I have a mentor in

17:07

my life who I think is one

17:09

of the greatest fathers truly like a

17:11

great dad his relation to his children

17:14

are unbelievable and he's like my dad

17:16

mentor But I also have like a,

17:18

you know, I run a large public

17:20

company. So I have like a large

17:22

public company mentor. And Lindsay and I

17:24

have like couple mentors, like a couple

17:27

that we really like, you know, they're

17:29

10, 15 years older than us, but

17:31

we really love how they, their relationship

17:33

and their, their, their chemistry together. And

17:35

so we've really, we kind of look

17:37

around for these mentors in different aspects

17:40

of our lives. They want to improve

17:42

and rather than pick one that, fascinating.

17:44

I mean, and that makes a lot

17:46

of sense to me. I think, you

17:48

know, when you're, when people are younger,

17:50

they have these big role models. But

17:53

as you get older and you start

17:55

to meet, a lot of people, you

17:57

realize that, you know, no one's perfect

17:59

that some people may be amazing in

18:01

one area of their life, but the

18:03

fact that they're so amazing at it

18:06

sometimes means they have to compromise in

18:08

other areas, or just no one's great

18:10

at everything. And so it makes sense

18:12

that you would have a collection of

18:14

people who excel in certain things so

18:16

you can learn from them in different

18:19

areas. Yeah, it's really cool. Well, we'll

18:21

put a pin in that for a

18:23

potential future podcast episode. You guys are

18:25

certainly invited. You guys are certainly invited.

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20:28

influenced either yourself or the Jews

20:31

that you talk about because I'm

20:33

Israeli, you know, and I'm in

20:35

Silicon Valley, and it seems like

20:38

there's definitely been a big shift,

20:40

though it's not homogenous, in terms

20:42

of not just awareness, but almost

20:45

like a new political consciousness of,

20:47

hey, you know, I have to

20:49

start being way more pro-Israel or

20:51

and that might mean, you know,

20:54

supporting certain things or certain people

20:56

or being aware of, you know,

20:58

like Bill Ackman had this sort

21:01

of, you know, political or sort

21:03

of activism revival, particularly as it

21:05

relates to universities, right? And so

21:08

I'm curious, if anything, if anything,

21:10

has shifted for you specifically or,

21:12

you know, influential Jewish entrepreneurs, you're

21:15

talking about. We started Big Shot

21:17

before October 7th, but once that

21:19

happened. David and I

21:21

were like, we got to do more

21:23

of this. We got to capture more

21:25

of these stories. These people aren't like,

21:27

especially the ones in their 80s and

21:29

90s, like they're not going to be

21:31

around for 20, 30 years. We have

21:33

to capture these stories. Lindsay and I,

21:35

we were living in Ottawa for two

21:37

decades. It's capital of Canada. Parliament, which

21:39

is sort of our version of, I

21:41

guess, the White House in our Pennsylvania

21:44

Avenue in DC. G7 Capital had no

21:46

synagogue. And so Lindsay and I decided

21:48

we would go and build the Finklissen

21:50

Jewish Center there. It's not this, these

21:52

were all things that we had sort

21:54

of started to plant seeds in previous

21:56

to October 7th, but there was this

21:58

renewed sort of this catalyst, this energy

22:00

that were. like no we have to

22:02

do this right now. I said this

22:04

earlier, but I mean I'm the grandchild

22:06

of Holocaust survivors and historically I did

22:08

not experience a lot of anti-Semitism in

22:10

my life. I mean I grew up

22:12

in Montreal which is a very Jewish

22:14

city. I then moved to Boca Raton,

22:16

which probably even more of a Jewish

22:18

city. I went to McGill University, I

22:20

went to Ottawa U for law school

22:22

and business school. I just wasn't exposed,

22:24

I never had that sort of thing

22:26

and all of a sudden I started

22:28

feeling this in a way that I

22:30

hadn't previously. I say this loudly, I

22:32

mean I was on CMBC this morning

22:34

talking about our fourth quarter results, and

22:36

towards the end we started to talk

22:38

about Kanye Store, which Shopif I D

22:40

listed earlier today, and I made a

22:42

point to the Sarah Eisen who interviewed

22:44

me to say, just to be clear,

22:46

I'm a very proud Jewish entrepreneur, and

22:48

Judaism is a huge part of my

22:50

identity. So I think that for a

22:52

lot of us that didn't necessarily have

22:54

a deep connection, maybe we did on

22:56

the periphery, it is sort of renewed

22:58

that a little bit a little bit,

23:00

and it a little bit, and it,

23:02

you know. I think we're like 15

23:04

million Jews on the planet, some crazy

23:06

number like that. It never sort of

23:09

felt like we were this small in

23:11

this, maybe alone, up until very recently.

23:13

And I think that has created incredible

23:15

momentum and change, very positive, constructive, and

23:17

frankly, it's lovely. I like that my

23:19

children, my daughters, are now watching Lindsay

23:21

and I, you know, we're not religious,

23:23

but we have Shaba dinner every Friday.

23:25

my kids and I and Lindsay if

23:27

you look at my Instagram feed almost

23:29

every Friday night we say Shabbat Shulam

23:31

to the world it's very simple my

23:33

eldest daughter says we hope you had

23:35

a great week my youngest daughter says

23:37

we hope you have a great weekend

23:39

and together the four of us say

23:41

Shabbat Shulam whether or not you are

23:43

religious or you're Jewish or you're not

23:45

it's simply our way of wishing everyone

23:47

a great weekend we hope you had

23:49

a great week and but I think

23:51

there there's some beautiful I don't know,

23:53

there's something beautiful about that. Yeah. It

23:55

was our next day, so I want

23:57

to segue to shop a vibe. But

23:59

first, let me ask a broader question.

24:01

which also relates to the podcast because

24:03

it's on entrepreneurship is when you talk

24:05

briefly about how you see sort

24:07

of the evolution of entrepreneurship or

24:10

how you see it going forward. I

24:12

think that there are a lot of people

24:14

who have things in their lives that

24:16

give them great joy, great pleasure. Maybe

24:18

it's your workshop you go and

24:20

you make beautiful toys for your... nieces

24:22

and nephews. Maybe it's in your kitchen

24:24

where you make delicious lasagna for your

24:26

neighbors or big cupcakes or muffins. Maybe

24:29

it's, you know, something that you, I

24:31

don't know, it's a, it's a, it's

24:33

a particular piece of clothing that you

24:35

make around the holidays for your friends

24:37

and family. I'm not suggesting everyone

24:39

should commercialize their hobby, but I

24:41

do think there's a lot of people

24:43

out there who have a thing in

24:45

their life, but for some reason or

24:48

another, usually because they're either. They have

24:50

no experience or it's too expensive or

24:52

too complicated. They do not cross the

24:55

chasm from aspiring entrepreneur to

24:57

entrepreneur. And I think that with the

24:59

cost of failure being lower than it's ever

25:01

been with technology, and this isn't

25:03

a shop play pitch, but shop play certainly I think

25:06

has done a lot of this. With technology making it

25:08

easier to get started and to ramp and to scale

25:10

and to be more successful with, again, lower costs of

25:12

failure, I think in the future you will see more

25:14

people try their hand in entrepreneurship. I think that's an

25:16

amazing thing. Part of the reason that, so I, as

25:19

I said, I've been living in Ottawa for 20 years

25:21

and then about a year ago, my wife and I,

25:23

and our children, we moved to Montreal. Part of the

25:25

reason we moved to Montreal was because Lindsay and I

25:27

both went to college at McGill went to college

25:29

at McGill, which is a great school,

25:31

which is a great school, which I'm

25:33

Canada and Canada and Canada and Canada

25:36

and Montreal. And we both always felt

25:38

this weird connection to Montreal because of

25:40

its entrepreneurial spirit. What I mean

25:42

by that is, this is where, like,

25:44

Montreal is full of artists and chefs

25:46

and DJs and musicians. And, like, you

25:49

know, if you go down any of

25:51

the busy streets, there's no chain stores.

25:53

It's small business after small business after

25:56

small business. And if you talk with

25:58

heroes of the city... You hear stories

26:00

of Gila Liberte who created Cirque Salais.

26:03

LA who created a company called Kouchard

26:05

which owns, it's sort of like this

26:07

circle, which is like 7-Eleven in the

26:09

US. Or you hear stories of the

26:11

Broughmans or Is he sharp? Like the

26:14

people that are celebrated in Montreal are

26:16

all entrepreneurs. And we always sort of

26:18

felt this deep connection to the city

26:20

here, but that's your question. I think

26:22

where entrepreneurship is going is that it'll

26:25

be more accessible to more people and

26:27

more people will start. Connecting, like I

26:29

think the definition of life's work is

26:31

where your personal mission and your professional

26:34

mission or your employment mission are matched,

26:36

where they get married. That's shop thigh

26:38

for me. I have always been on,

26:40

you're obsessed. Shopify is a company that

26:42

I believe is increasing the amount of

26:45

entrepreneurship on the planet. Working and shopify

26:47

to me is my life's work because

26:49

the two things are just beautifully fused

26:51

together. There's this incredible collision of personal

26:53

and professional. I think more people will

26:56

find that. because of the vehicle called

26:58

entrepreneurship. It's fascinating, you know, in San

27:00

Francisco, there has been a lot of

27:02

sort of criticisms of entrepreneurs in the

27:04

sense that, you know, Zuck, for example,

27:07

donated a lot of money to this

27:09

hospital and then the people got mad

27:11

that he did that and, you know,

27:13

Elon was pushed out or left, however

27:15

you want to describe it. And so

27:18

there was... In the last few years,

27:20

it hasn't been the best relationship between

27:22

sort of the tech sector at large

27:24

and sort of the government or sort

27:26

of perception of it. And people are

27:29

hoping that with this new administration, there's

27:31

a lot more entrepreneurs and tech leaders

27:33

getting into government. I'm unfamiliar with Canada's

27:35

sort of perception towards entrepreneurs or sort

27:37

of what's happening there politically, what's happening

27:40

in the US. Elon is trying to

27:42

influence it in in some places in

27:44

Europe as well. You know, I know

27:46

you're a business person first and foremost.

27:48

Politics obviously affects business too. So how

27:51

can you, or what can you tell

27:53

us an audience that's not super familiar

27:55

with what's happening? in Canada or what

27:57

you expect to happen in Canada in

28:00

terms of as it relates to perhaps

28:02

some of the five shifts that are

28:04

happening in the US and maybe other

28:06

places. I mean, I actually think it's

28:08

somewhat apolitical, at least in Canada, although

28:11

obviously we're in the midst. We have

28:13

a Prime Minister that recently resigned. We

28:15

currently have no Prime Minister in Canada.

28:17

There's going to be an election soon.

28:19

I think the overtone window has shifted.

28:22

you know there's that a great meme

28:24

where you have this person standing here

28:26

and saying I'm centrist and then over

28:28

time everything shifts around that person so

28:30

like now somehow he's on the right

28:33

or somehow he's on the left or

28:35

she's on the left or she's on

28:37

the left or right but that person

28:39

actually hasn't moved but the overtime window

28:41

shifted I think it's fairly a political

28:44

I think Canada's issue which is not

28:46

to I actually think it's quite different

28:48

than in the US and I really

28:50

admire the US for this is that

28:52

there is a deep inherent celebration of

28:55

success of success in the Obviously, you're

28:57

giving a great counterargument in San Francisco

28:59

with Zuck in the hospital, but generally

29:01

I think that entrepreneurship, and if you

29:03

are successful in the US, it's a

29:06

badge of honor. I think there is

29:08

this term that is often referred in

29:10

sort of the Commonwealth countries, Canada, UK,

29:12

Australia, and New Zealand, called the top

29:14

poppy syndrome. Are you familiar with that?

29:17

And effectively for those that don't know,

29:19

it's when the poppy, which is effectively

29:21

a flower, grows too tall. you chop

29:23

off its head, meaning like, grow, but

29:25

don't grow too much. Be successful, but

29:28

don't be too successful. And I think

29:30

that is a very dangerous thing. I

29:32

mean, it is a very dangerous thing.

29:34

And in capitalism, there's lots of faults

29:37

with it, but ultimately, I think it's

29:39

the best system we've humans have discovered

29:41

that has been proven time and time

29:43

again. Again, I'm not saying it's perfect,

29:45

but it is the least amount of

29:48

tradeoffs relative to all other potential systems

29:50

governing systems, governing systems. I like this

29:52

idea of, and I don't know, I

29:54

can't speak for US politics, you know

29:56

much more about that than I do,

29:59

but anything that makes entrepreneurship more accessible,

30:01

that reduces the amount of red tape

30:03

and regulation, that celebrates more, that makes,

30:05

you know, at Shopify we refer to

30:07

failure, this is sort of a cultural

30:10

value of ours, but failure is. the

30:12

successful discovery of something that did not

30:14

work. I love that because what it

30:16

means is people at Chopin like take

30:18

big risks, calculated risks, smart risks, that

30:21

risks, and they learn from that risk

30:23

and then they apply it to their

30:25

next, you know, endeavor. I wish not

30:27

just for US or Canada, but I

30:29

wish for the world that we celebrated,

30:32

you know, tries, tries at bat, shots

30:34

taken, but not scored in a different

30:36

way. I don't think it should be

30:38

a failure. And then, you know, I...

30:40

I'm going to sort of, they sound

30:43

pejorative a little bit, but you know,

30:45

when I was in law school, I

30:47

did not go to law school to

30:49

become a lawyer. I went to law,

30:51

some kind of a better entrepreneur, and

30:54

I remember feeling out of place, I

30:56

remember feeling, spoken down to, people kind

30:58

of laughed at me, and thought it

31:00

was kind of a silly thing that,

31:03

oh, you're not going to go work

31:05

in a big fancy white shoe law

31:07

firm, you're not going to take the

31:09

big salary tower every day like you're

31:11

gonna be an entrepreneur selling t-shirts like

31:14

it was it wasn't a cool thing

31:16

when I was in high school it

31:18

wasn't a cool thing and I don't

31:20

necessarily need to be cool, but I

31:22

do think though that the celebration of

31:25

entrepreneurship, and that's part of why Shopify,

31:27

you know, is the entrepreneurship company. We

31:29

tell so many stories about our successful

31:31

entrepreneurs and how they've built these incredible

31:33

companies. It's also why Big Shot is

31:36

important to me, because I want to

31:38

celebrate these stories of unlikely success, because

31:40

I think entrepreneurship is not just a

31:42

great way to make a living or

31:44

to put food in your table. It's

31:47

a great way for humans to self-actualize,

31:49

to find their thing. make high status

31:51

is what we're going to encourage and

31:53

get more of. So that makes a

31:55

ton of sense. As someone, you know,

31:58

who's less familiar with that culture, is

32:00

it because they have more of a,

32:02

you guys, more of an emphasis on

32:04

kind of egalitarianism? I think it's, it's,

32:06

it's, it's, it's, it's, it's, it's, it's

32:09

probably has something to do with sort

32:11

of the, the aristocracy that comes from

32:13

the commonwealth, from the UK. I'm not

32:15

really sure. bend. We have socialized medicine.

32:17

We have a welfare state. There's unemployment,

32:20

you know, income if you don't have

32:22

a job. So some of it I

32:24

think it probably has to do with

32:26

that, but I mean just look at

32:28

the worst graph I recently saw was

32:31

if you look at the top five

32:33

US companies by market cap, Apple, Invidia,

32:35

Microsoft, I don't know what the other,

32:37

meta, Google, some of those, they've all

32:40

been creating the last 30 years. If

32:42

you look at the same top five

32:44

in Canada, other than number two. which

32:46

is Shopify. It's the Royal Bank, Shopify.

32:48

I think it's TD Bank. I think

32:51

it's two other banks as well. Of

32:53

the top five, four out of the

32:55

five were created, I think, 100 years

32:57

ago. That's unbelievable. And actually, one of

32:59

the things that I think a lot

33:02

about for Canada is how do we

33:04

become a country of acquirees? I want

33:06

to be a country of acquirers. Shopify

33:08

is an independent, large-scale, publicly traded company.

33:10

I'm very proud of that. When I

33:13

went on the road show to take

33:15

the company public with Toby in 2015,

33:17

we did 93 meetings. I remember meeting

33:19

with actually near you on Sandhill Road

33:21

at the Rosewood Hotel, which is where

33:24

a lot of a lot of the

33:26

crossover funds that do private and public

33:28

in Silicon Valley like to meet. I

33:30

remember meeting some of them and then

33:32

telling us that the last time I

33:35

saw Canadian Company go public, I didn't

33:37

work out so well. It was Rim,

33:39

Blackberry, and it was Norttel. if you

33:41

sort of look at the landscape of

33:43

public trade of companies here in Canada,

33:46

there's very few. There's not very many

33:48

publicly shared companies. So some of that

33:50

is role modeling. Part of what I

33:52

hope Shopify does as its legacy is

33:54

that we encourage more great founders, great

33:57

companies to think about let's be the

33:59

best company on the planet, but let's

34:01

happen to do it from Canada as

34:03

opposed to let's be the best company

34:06

in Canada or the best vertical company

34:08

in our area. That makes a lot

34:10

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skip the wait list. Let's segue into

36:09

Shopify. So it was earnings day. What

36:11

can you talk about in terms of

36:13

reflecting on 2024, the things you got

36:16

right, or the biggest innovations? What can

36:18

you share with our audience? I think

36:20

2024 was probably Shopify strongest year in

36:22

our 20-year history. I think our market

36:24

position has gotten really strong. We had

36:27

this amazing operating model where We're not

36:29

just growing our top line revenue, we're

36:31

also growing profitability or free cash or

36:33

margin. I think this is shot by

36:35

operating as best as we have yet,

36:38

which I love. If you look at

36:40

GMV, which is really a proxy for

36:42

how our merchants did, we did nearly

36:44

$300 billion in GMV this year in

36:46

2024. And we did about $9 billion

36:49

of revenue for the year. So that's

36:51

roughly like, that's 2.5x GMV and 3x

36:53

more revenue than just five years ago.

36:55

We also had operating income that surpassed

36:57

1 billion. That is four times more

37:00

than our previous peak, which is in

37:02

2021. And then if you look at

37:04

sort of the big COVID crazy time

37:06

for Shopify, our operating income, this in

37:09

2024, was 12x more than it was

37:11

then. So. I think those are really,

37:13

those metrics are good and I'm really

37:15

happy. We can grow the top line,

37:17

we can grow our business, also we

37:20

can be profitable. What I also, I'm

37:22

really, I'm really pleased and they're proud

37:24

of is like this consistency. We've had

37:26

seven consecutive quarters over 25 revenue growth.

37:28

That's six consecutive quarters of double digit

37:31

free cash. That's a predictability I think

37:33

really matters. If you look at also

37:35

the types of people that are coming

37:37

to Shopify, historically with small business e-e-commerce

37:39

in the U. But now, just in

37:42

the last quarter alone, we've had Warner

37:44

Music come to Shopify, Champion, Game Stop,

37:46

Carl Loggerfeld, Goop, Crocks, Aldo, David's Bridal,

37:48

Hunter Douglas, F.C. Barcelona. And I think

37:50

what's interesting is that there isn't just

37:53

one on-reped to Shopa, which is e-commerce.

37:55

We see, like, you know, Point of

37:57

Sale, for example, our physical retail, for

37:59

example, We did 588 million in 2024

38:01

in revenue from Point of Self and

38:04

Physical Retail. That's up 33% of the

38:06

year before. We have B2B, which is

38:08

our wholesale product, which is also doing

38:10

well. And then international. I mean, again,

38:12

going back to that historic thing, I

38:15

said, it was mostly North America. Today,

38:17

50% of our base are actually international

38:19

merchants. You know, this is my 15th

38:21

year at Shopify. We took the company

38:23

public 10 years ago, we're almost at

38:26

the 10-year anniversary of the IPO, so

38:28

I've done 39 earnings calls. One thing

38:30

that I think we've done well and

38:32

we'll continue to do well is we

38:34

don't just look at the next quarter,

38:37

like we are dedicated to building this

38:39

durable company for 100 years, and to

38:41

make sure that the business model that

38:43

we've cultivated is amazing because unlike most

38:46

companies that there's sort of this tension

38:48

between their customer success and their success,

38:50

they want to charge the customers more.

38:52

That's not the case of Shopify the

38:54

case of Shopify. Our entire business model

38:57

is predicated on our merchants doing well.

38:59

The better they do, which is GMV,

39:01

the better we do. And if we

39:03

do everything we can to make them

39:05

successful, we become successful. That I think

39:08

is remarkable. Yeah, well, fascinating. What more

39:10

can you say more broadly about just

39:12

how people are shopping or what trends

39:14

are you seeing in commerce? So sort

39:16

of macro level, I mean, you know,

39:19

the question I got to the NCMEC

39:21

was. The state of the consumer. How

39:23

is the consumer doing? The consumer is

39:25

doing really well and buying from brands

39:27

they really love. That's the state of

39:30

the consumer. There is no, like, consumers

39:32

are not randomly buying t-shirts that they

39:34

don't really care about. There are... If

39:36

they can afford, you know, a true

39:38

classic tea at 30 bucks, or they

39:41

can afford a $700 James Percetee, they're

39:43

buying stuff that actually is meaningful to

39:45

them. They are voting with their wallets

39:47

for those brands to exist in the

39:49

world. Why has Viori had this huge

39:52

meteoric rise or aloe or on-running all

39:54

these Shopify stores? Because on-running, if you

39:56

wear them, they're incredible sneakers. They don't

39:58

just feel good and look good. They

40:00

like, the brand of it, the whole

40:03

thing is incredible. So, you know, for

40:05

the brands that consumers love, which are

40:07

mostly on Shopify, we're seeing incredible,

40:09

you know, strength with the consumer

40:11

and a lot of resiliency. In

40:14

terms of how consumers are shopping,

40:16

that's where it gets really interesting.

40:18

So at NRF, I did a

40:20

keynote early January, a couple weeks

40:23

ago, and I brought up two merchants

40:25

with me. I brought up cat call

40:27

from AG1 from athletic greens. The

40:29

favorite daughter stories is insanely cool.

40:31

I mean Sarah and Aaron Foster

40:34

are two of the great entrepreneurs

40:36

I've ever met. So they have

40:38

this brand called Favorite Daughter. They

40:40

also have a podcast called the

40:43

World First Podcast. They also have

40:45

a hit Netflix show called Nobody

40:47

Wants This. Okay, those are three

40:49

things. They don't look at those three

40:51

things. They don't look at those three

40:53

things. They talk about the TV show.

40:55

And on the TV show, everyone's wearing

40:58

favorite daughter. And the clothing is

41:00

also promoted on the podcast. And

41:02

like, you don't know where one

41:04

channel starts and one channel ends.

41:06

You don't know what is marketing,

41:08

what is content, and what is

41:10

entertainment, and what is commerce. It's all

41:13

kind of blended together. That's where

41:15

the future retail is. It is,

41:17

you know, initially it was single

41:19

point solution. I sell online or I

41:21

sell offline. Then it became Omni Channel.

41:23

I sell everywhere. This sort of new

41:25

thing, which I don't have a better term

41:28

other than to say post-omny channel, I need

41:30

a better name for that, is I don't

41:32

sell everywhere. I sell in the places

41:34

that matter most to my consumers. And if

41:36

my consumers are spending time, we've

41:38

announced a partnership earlier in 2024

41:41

with Roblox. Why would Shopify power

41:43

commerce on Roblox? We have millions of

41:45

stores of stores. Most of the

41:47

stores are not going to do

41:49

anything on Roblox. But some of

41:51

those stores, some of the time

41:54

will find incredible. customers, new customers

41:56

and existing customers in the Roblox

41:58

universe. Therefore, the ability to conduct

42:00

business there is amazing. We have a

42:02

Spotify integration. Also, if you are, you

42:04

know, if you're Bioncane, you have a

42:06

huge artist profile in Spotify, but you

42:09

also have a brand on Shopcify, one

42:11

of the FIs, called Sacred. Now you

42:13

can sell sacred on your Spotify, artist

42:15

profile. That's like, again, not everyone should

42:18

do that. But for Drake sewing OVO

42:20

or Biont to selling Sacred, that makes

42:22

sense. And so we're trying to make

42:24

it so that when you come to

42:26

Shopify Shopify, every surface area. where transactions

42:29

can happen, you can do that. I

42:31

don't think you should activate every one

42:33

of those. I think you should activate

42:35

the right ones at the right time

42:37

based on precisely who you're selling to.

42:40

Yeah, it's interesting. I just spent a

42:42

few days at Mr. Beast's sort of

42:44

set up. In North Carolina. Yeah, yeah.

42:46

Amazing. I know the team. I know

42:49

Jimmy and I know Jeff, his CEO.

42:51

It's an amazing team. It's an amazing

42:53

team. We do a lot of Mr.

42:55

Mr. Beastz. You know. You know. what

42:57

he's built from, from not just his

43:00

content obviously, but his sort of chocolate

43:02

business, just the whole empire, and a

43:04

lot of build on Shopify. Yeah, amazing.

43:06

Yeah, incredible. And a lot of creators

43:08

are saying, hey, wait, you know, I

43:11

haven't just built this media thing. I

43:13

also want to build, you know, something

43:15

similar to what Jimmy has done. And

43:17

then, yeah, and then reverse, if you've

43:20

got this great sort of product. You

43:22

want to own your own channels. And

43:24

so yeah, it just seems like they're

43:26

the fusion of those of commerce and

43:28

content is is just accelerating, you know,

43:31

increasingly. That's exactly right. I think, you

43:33

know, it's this weird thing because Since

43:35

the invention of commerce, which is about

43:37

as old as currency, you first started

43:39

with a product and then you found

43:42

an audience for the first time ever

43:44

you start with an audience in some

43:46

cases and then build a product. It's

43:48

for Mark. It's so cool. It's so

43:51

cool. And if you do it well,

43:53

and so on time, I mean, you

43:55

know, like you have Mr. Bees and

43:57

feastables, you have Emma Chamberlain and Chamberlain's

43:59

coffee, you know, we host Kim Kardashian

44:02

with Skims, for example, Drake and OVO,

44:04

like there are these incredible brands. that

44:06

are real brands that will be around

44:08

for a very long time, where they

44:10

start with an audience, they have deep

44:13

understanding and empathy for that audience, and

44:15

then from there, they expand, they created

44:17

a product that that audience beloved, like,

44:19

not loves, but like, it's beloved to

44:22

them. That is amazing. Let's talk about

44:24

AI. How are you guys using AI

44:26

internally or how is it transformed your

44:28

company slash, how are you thinking about

44:30

it as it relates to your overall

44:33

product of business? We are not a

44:35

hen-waavy AI company, let's only talk with

44:37

AI, and partially we actually find that

44:39

to be completely, you know, useless. We

44:41

try to be very practical when it

44:44

comes to AI. I mean, you know,

44:46

both Toby and then our new CTO,

44:48

Michael, okay, for Microsoft, you know, are

44:50

people that have studied, you know, when

44:53

I'm hanging with my kids on Saturday

44:55

afternoon, Toby's reading white papers about new

44:57

large language models. So, Shop is a

44:59

very, very, very technical technical company. We

45:01

sort of look at AI from both

45:04

commerce first, meaning like Shopify is the

45:06

expert in commerce and our AI needs

45:08

to also be an expert in commerce,

45:10

but also innovation first, like have the

45:13

most visionary AI leaders, the best team

45:15

to find practical ways to use the

45:17

newest and most advanced models. So what

45:19

does that actually mean at the ground?

45:21

Well, from a merchant perspective, if you

45:24

shopify today, You have Shopify Magic not

45:26

in one spot but embedded across the

45:28

entire platform. So for example, like suggested

45:30

replies for Shopi inbox, which are AI

45:32

generated replies that enable quicker sales resolutions

45:35

or can answer customer questions in Shopify

45:37

inbox. Or the media editor, which creates

45:39

most beautiful AI image generations across all

45:41

services in the admin, whether you know

45:44

product photography or new logos. We have

45:46

sidekick which effectively acts as a bit

45:48

of like, you know, your, like, it's

45:50

your sidekick, it's the entrepreneur's sidekick, which

45:52

acts as a merchant's most trusted ShopFi

45:55

expert, which can tackle, you know, time-consuming

45:57

tasks, can, you know, do things like

45:59

give you advice and say, you can

46:01

say, I'm not getting any sales, like,

46:03

why not? Well, you know, your traffic

46:06

is coming. from Pinterest, have you actually,

46:08

the Pinterest channel? Like, it's your business

46:10

coach. And then, you know, for our

46:12

developers that are using Shopify, we call

46:15

developer assistant, which is, like, boost focus

46:17

on innovation and using these incredible LLLM

46:19

power tools for developers. So that's on,

46:21

like, the, the merchant side. Internally, in

46:23

terms of how we make Shopify better,

46:26

there's a lot of really cool implementations

46:28

of that. Probably the most obvious, too,

46:30

are, one, our developers, our support organization.

46:32

There are sort of two types of

46:34

support conversations. You have high quality conversations,

46:37

local conversations. A high quality conversation is

46:39

business coaching, where to spend money, how

46:41

to build your store, you know, how

46:43

to find a great, you know, new

46:46

channel, you know, pricing, promotion. A locality

46:48

conversation is configuring your domain name, your

46:50

scene name, or I'm, you know, I'm

46:52

locked out on my account. I need

46:54

a username and password issue. So by

46:57

adding... AI across our support organizations, it

46:59

means that our team can actually focus

47:01

more on these high quality conversations and

47:03

less than low quality conversations. And that

47:05

is unbelievable. So I actually think that

47:08

although we are not talk about AI

47:10

as much as a lot of other

47:12

Silicon Valley companies do on their earnings

47:14

calls, we actually are probably leveraging it

47:17

more than any of them in some

47:19

ways. And we're probably on the highest

47:21

receiving end of any company that can

47:23

benefit from AI, I think, in tech.

47:25

Totally Totally. Another thing you guys implemented

47:28

or moved to is this crafter manager

47:30

model. Why don't you explain what that

47:32

means to you guys and what that

47:34

means for a career pass? It's interesting

47:36

because at most companies, the obvious route

47:39

for promotion is to become a manager.

47:41

So you kind of just graduate up

47:43

and what happens is you end up,

47:45

let's see you're a designer or you're

47:48

a salesperson. You're the best salesperson. You're

47:50

the best salesperson. But companies are not

47:52

set up for it. Promotions typically. are

47:54

locked for managerial positions. You go from

47:56

individual contributor to manager. And that didn't

47:59

feel right to us. It sort of

48:01

felt like we have some people who

48:03

simply want to be craft experts. And

48:05

so we created a program called mastery,

48:07

which means that you can get promotions,

48:10

you can make more money, you can

48:12

get more titles, you get all the

48:14

things you want, and more responsibility, but

48:16

you can do so from the. from

48:19

the auspices or from the, from the,

48:21

from the, the, in sort of the

48:23

category of being an individual contributor, that

48:25

you can continue to perfect and mash

48:27

your craft and get promoted without requiring

48:30

you to leave your craft itself. And

48:32

that's, and it's created these two tracks,

48:34

manager track and, and, and I see

48:36

track or a crafters track. And it's,

48:38

it's amazing because not only are finding

48:41

people. that are at Shopify, really love

48:43

it, but people are also coming to

48:45

Shopify that tell us, I really, like,

48:47

this is the place where I feel

48:50

like I can actually be the best

48:52

of thing that I do. And it's

48:54

been great for us. It's been great

48:56

for people that work here and for

48:58

new people to come. But it's kind

49:01

of shocking that that is even something

49:03

that someone would ask about, because it

49:05

seems so obvious, like, why would you

49:07

pull your best, you know, you know,

49:09

doing the craft to go manage other

49:12

people. Some people are great managers, but

49:14

some people are actually like just the

49:16

very best of crafters. And we want

49:18

to sort of change that. We want

49:21

to change the model of how typically

49:23

that's done. And does this mean you're

49:25

looking for more crafters? For sure. I

49:27

mean, we're always looking for people to

49:29

come join Shopify. And so if anyone's

49:32

listening, and you're in a company now,

49:34

which is force you to become a

49:36

manager, at your craft, please. Give me

49:38

a chef. Yeah, I feel like this

49:40

this makes a ton of sense and

49:43

you guys are going to be pioneers

49:45

in sort of encouraging other companies to

49:47

to follow suit. Yeah, it's just in

49:49

most companies people can only advance by

49:52

climbing the corpus. ladder. And that often

49:54

forces them into these roles and steers

49:56

them away from their true passion. And

49:58

I think mastery, as we call it,

50:00

is really a system that truly prioritizes

50:03

and rewards people that work at Shopify

50:05

who are on this continuous journey of

50:07

improvements. And, you know, manager track and

50:09

crap, they're held separately. And being a

50:11

manager has, you know, like, it shouldn't

50:14

affect your compensation. Employees, like, it's, people

50:16

of most companies feel like they have

50:18

to go in a certain track, but

50:20

this has unlimited growth potential for crafters.

50:23

Yeah, best thing. Speaking of sort of

50:25

different company, sort of trends, let's talk

50:27

about in-person and remote, because a few

50:29

years ago, during COVID, there was this

50:31

sort of thing around like, hey, you

50:34

know, everything's gonna be remote, or in

50:36

more nuanced was like, you would be

50:38

like, hey, if you're gonna be remote,

50:40

be all remote, but if you're gonna

50:42

be in person, basically people were railing

50:45

against the hybrid, hybrid norm. if not

50:47

become the norm, certainly become a sort

50:49

of accepted norm, even though a lot

50:51

of people were worried about it. One,

50:54

you share how you guys have evolved

50:56

on this topic and where you're at

50:58

now. So I'm in the, I'm in

51:00

the Montreal Port today, we have a

51:02

bunch of ports or offices around the

51:05

world. I'm in the Montreal One, it's

51:07

earnings day, so I'm here, GAFR, CFO

51:09

is literally right next door to Montreal,

51:11

he flew into Montreal from New York

51:14

City for today for the earnings call

51:16

for the earnings call. to create some

51:18

like really good scaffolding around whatever you

51:20

choose. If you choose to be remote,

51:22

create a program around that, be very

51:25

clear about that. If you choose to

51:27

be in person, do that. If you

51:29

choose to be sort of a version

51:31

of two, that's okay too. Shopify is

51:33

what we call digital by design, which

51:36

means that we default digital. So we

51:38

work digitally most of the time for

51:40

most things in most roles. However, we

51:42

come together a lot. So we come

51:45

together in real life for things like,

51:47

you know. intentional moments, internships, on-boarding, we

51:49

do bursts which are basically on-sights or

51:51

off-sights for Shopify Summit, we... drop in

51:53

when we want to. And that means

51:56

that anyone in any of these cities

51:58

where there are ports and there's reports

52:00

in New York and Montreal and Toronto

52:02

and lots of other places, you can

52:04

just drop in anytime you want and

52:07

just work from there. So I don't

52:09

know exactly, like, I don't think there's

52:11

any perfect model. I think there are

52:13

a bunch of tradeoffs for each model.

52:16

We've picked the model that works best

52:18

for us, which we call digital by

52:20

design. And it's sort of like work

52:22

from anywhere. But the asterisks on that

52:24

whole thing is we want people to

52:27

get together a lot. And so we've

52:29

made space to make that happen. And

52:31

then once a year we do a

52:33

massive Shopify summit with the whole team,

52:35

gets together, it's magic, it's wonderful. It's

52:38

been working for us. And especially for

52:40

Shopify, which has been, you know, we've

52:42

been built out of Canada. For the

52:44

first 15 years of our company, based

52:47

until COVID, if you want to be

52:49

a leader at Shopify, you kind of

52:51

had to move to move to move

52:53

to Canada. Whereas now our CFO is

52:55

in New York, our general counsel Jess

52:58

Hurts is in DC, our CRO is

53:00

in Texas, our CTO Michael is in

53:02

Seattle, Toby's in Toronto, I'm in Montreal,

53:04

and it works. Yeah, it's it's it's

53:06

it's it's fascinating. It's the, you know,

53:09

you've been doing this for 15 years,

53:11

you said your company has been public

53:13

for 10 years, you know, you must

53:15

have had, you know, employees, I've been

53:18

there for quite a long time. How

53:20

are you, how do you think about

53:22

building a culture where people want to

53:24

spend a long time? or how do

53:26

you think about retaining sort of talent

53:29

at that level or is it some

53:31

combination of actually you are going to

53:33

turn over your your team every you

53:35

know every few years or how do

53:37

you think about just longevity because it's

53:40

not something that you know many entrepreneurs

53:42

you know get get to but but

53:44

they hope they get to and so

53:46

want to plan for a little bit.

53:49

I think that a couple things on

53:51

that one is we have a concept

53:53

called tours of duty at Shopify which

53:55

is three years and effectively every three

53:57

years. you're in a new tour of

54:00

duty. You can do a tour of

54:02

duty twice, but there is a moment

54:04

in time where you get to talk

54:06

to the person you're reporting to, and

54:08

you can say, look, for this next

54:11

tour, I'm going to continue on this

54:13

journey, or I'm going to try something

54:15

different. So one, it gives this obvious

54:17

demarcation time stamp every three years to

54:20

have that conversation. That's really helpful. The

54:22

second thing is, as best as I

54:24

can tell, the most impressive, impactful people.

54:26

Like those that optimize for learning and

54:28

growth tend to be the most impactful

54:31

people at the, certainly at Shopify, but

54:33

I assume at every company. So that's

54:35

all good. But what is the requirement?

54:37

Well, the requirement is, you know, there's

54:39

that, there's a law of ecology, I

54:42

think it's a law number two of

54:44

ecology, which is that for a species

54:46

to survive in any environment, the species

54:48

needs to grow at a greater equal

54:51

rate of change to the environment itself.

54:53

Otherwise, it goes extinct. I think companies

54:55

are a little bit like that like

54:57

that. to remain the president of Shopify,

54:59

I have to re-qualify for my job

55:02

every year at a rate of change

55:04

equal to or greater than Shopify's change.

55:06

And if I don't, I should make

55:08

room for someone else. But if I

55:10

do, you know, maybe that entitles me

55:13

to, or at least gives me the

55:15

opportunity, probably not an entitlement, but gives

55:17

me the opportunity to reapply. And I

55:19

think that type of like... thoughtfulness and

55:22

philosophy really really is helpful. And I

55:24

feel that I feel that every single

55:26

year that okay like ShopaVise growing top

55:28

line say you know 20-something percent year

55:30

on year. Am I growing 20-something percent

55:33

you know year on year? Am I

55:35

growing 20-something percent? You know year on

55:37

year? Am I keeping up to it?

55:39

And I'm keeping up on growth and

55:41

learning as being the key metric. You

55:44

tend to recruit great people. Maybe the

55:46

only other thing I'd say is like

55:48

I don't think you'd find a company

55:50

that has a company that has more

55:53

a more concentration, higher concentration of founders

55:55

in Shopify. You know, and we do

55:57

a lot of these sort of tucket

55:59

acquisitions, a lot of amazing, you know,

56:01

founder-led technology. companies we acquire and those

56:04

founders are running large pieces of Shopify

56:06

today and you know and then this

56:08

is very much a company that builds

56:10

software for founders but we ourselves are

56:12

founders in Shopify most people at Shopify

56:15

either self-identify as an entrepreneur or our

56:17

entrepreneurs themselves and I think you know

56:19

this is like a founder's you know

56:21

it's a crafters paradise but it's also

56:23

like a founders paradise. Well, that's a

56:26

great note to end on. I

56:28

would be mindful of time. Probably

56:30

there's been a fantastic conversation on

56:32

all things. Shopify company building and

56:35

the state and future of entrepreneurship.

56:37

Thank you so much for sharing

56:39

your wisdom with us. Thank you,

56:41

Eric. Upstream with Eric Tormburg is

56:43

a show from Turpentine, the podcast

56:45

network behind Moment of Zen and

56:48

Cognitive Revolution. Do you like the

56:50

episode? Please leave a review in

56:52

the Apple Store. Hey,

56:59

Eric Torenberg here. I've spent months

57:01

talking to some of the most

57:03

interesting couples in tech digging into

57:05

one question. What actually makes great

57:08

relationships work? The answer surprised me.

57:10

Delian and Nadia Asparov discovered

57:12

that overcommunication can actually harm

57:15

a relationship. You'll hear

57:17

Livboree and Igor Kurgenov break down

57:19

their dumbbell theory of conflict. And

57:21

Iika Ho and Kamila Hermann's practice

57:23

of relationship yoga offers a completely

57:25

different take on how partnerships can

57:27

catalyze personal growth. These conversations

57:29

surface things most couples never discuss publicly,

57:32

from the mechanics of fighting well to

57:34

the real tradeoffs of having kids to

57:36

how relationships can emerge stronger through crisis.

57:38

If you want to understand what actually

57:41

makes great relationships work, not just the

57:43

standard advice, but real insights from real

57:45

couples. That's TMI. No, it's not. There's

57:48

no relationship. Podcast, we need to get

57:50

the weeds here. People need to know

57:52

what to do. Follow the link in

57:54

the Show Notes for Modern Relationships on

57:57

Apple Podcast, Spotify, or wherever you listen.

58:00

new episodes out every Friday. Friday.