how i built this shopify

Tobi Lütke on Shopify and Starting Small with Guy Raz | How I Built This | NPR hello everyone and we


Updated on Jan 16,2023

Tobi Lütke on Shopify and Starting Small with Guy Raz | How I Built This | NPR

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Tobi Lütke on Shopify and Starting Small with Guy Raz | How I Built This | NPR

hello everyone and welcome to how I,built this resilience edition I'm guy,Roz I'm here with Toby Lukey of Shopify,we are taking your questions right now,on Facebook Twitter and YouTube so,please start submitting those questions,if you are a regular listener to how I,built this you may have heard,Toby's story it originally aired in,August of 2019 it's such a cool story he,started the company in 2006 after he,tried to find a good off-the-shelf,software to build his own e-commerce,site it was a site that was selling,snowboards but he couldn't find it,so he created his own software which,lots of other people wanted and that,turned into Shopify and today it powers,more than a million online shops but,Shopify actually took off during the,last economic crisis in 2008 when a lot,of people who lost their jobs basically,opened up ecommerce stores Shopify is,based in Ottawa @ob is with us from,there welcome Toby hey thank you so much,for having me,where where are you right now I'm just,selfi thought about right now at home at,home exactly yeah and how are you doing,how's your I know you've got a family,and and how's everybody doing yeah it's,a I mean via and week nine now working,from home it's I mean I think it is the,new normal,although not the normal anyone of us,expected you know four kids missing,we're friends I think all of us miss a,little bit a camaraderie that comes from,you know working in close proximity with,amazing people on difficult things and,but we had we are just we we we,celebrate entrepreneurship and we feel,like entrepreneurs and entrepreneurs the,things that they really really want what,my god so this is a time for,adaptability,yeah which which we'll dive into and,again if you're watching on Facebook or,Twitter or YouTube please submit your,questions for Toby we'd love your,questions and we'll get to as many as we,can,so I'm Toby right now intern,shop um you've got I think 5,000,employees and offices in Canada and,abroad how how are people working right,now presumably remotely yeah exactly,I think much like I imagine like,everyone else at least in the technology,industry is doing it like maybe behalf,of course slack which is taking over the,role of the hallways of office where VB,behalf or like regular Google meets I'm,going I'm jumping from Google me to,Google meat right now basically all day,long there's like it's interesting to,see these like there's like there's so,much new there has to be figured out,like hey I'm used to just sort of walk,around and and and meet people and and,I'm still trying to figure out how to,replace that kind of thing instead it's,much easier to say yes to meeting after,meeting and all day long in a scheduled,way I guess you're all kind of trying to,make it to yeah but one thing that,really is special is and we touched on,this in our conversation but like this,such a like so if I sort of found its,role in doing a recession this was the,financial crisis of onine or weight in,in in the way that he felt there was,something specific for us to do that,would actually help other people right,therapy people were losing their jobs,and and attempting and almost like a,like fall back to plan B for their lives,I always wanted to do this thing and and,and and and tried it and so now like we,were eight people back then now three or,five thousand people which is like it's,it's I mean everything changes but kind,of nothing changes like it's it's,amazing to see exactly the same spirit,permeate the team which is fat Hey,like our job is to get more small,businesses to survive that's the only,thing that matters right now,you've got empowering a million,ecommerce sites all around the world,tell me a little bit about what what,trends you've been seeing I mean have,you seen an increase in the number of,people late late 2008 this is an,important one because you saw in 2008,2009 when Shopify was just eight people,that you were finished at that financial,crisis was gonna wipe you out that the,exact opposite happened people started,to sign up for Shopify people losing,their jobs right Bo I might as well,pursue this idea that I had and and I,can do e-commerce and it's cheaper than,you know getting a lease on a store are,you seeing a similar kind of trend now,or is this different yeah now we're,seeing a similar trend it's mean look,when this then especially in Shelton,place started I mean the thing that,happened is at this point we don't just,power up people's online stores anymore,we have a fairly large point-of-sale,business as well and of course all that,than the way like the no one could get,to the stores in fact I think a lot of,shred a lot of more traditional,businesses especially have just figured,out that their stores have the only,connectivity into the global world of,Commerce and and and that felt very,stable but suddenly it wasn't yeah and,so one what we have seen is basically an,acceleration forward of almost all,trends you know we we've now companies,that never imagined that they might sell,directly over the Internet,have now come to us to do exactly that,we've had Heinz ketchup go online which,is a hundred 51 year old company that I,don't think ever expected to go direct,to consumer in the way maybe aalberts,doors but but right everyone's in,everyone's facing the same problems and,you know in seven days they stood up a,side you know you can buy ketchup online,and it's Wow,it's it's it's you'll be seeing a lot of,this are we seeing a lot of adaptability,where maybe previously it might just not,have exists,in the same way and III think that's,hopeful w before we get to questions I'm,curious I mean you you said something in,our interview on the podcast which if,you're watching us go back and listen to,that and start from August of 2019 it's,so good you said something and I'm gonna,kind of mess up your quote here but,suddenly as an entrepreneur you always,live in two states of mind you said one,is well state of mind is if we do this,we'll be unbeatable and we're gonna do,great it's not working out and then the,other state of mind is on complete dread,we're dead,are you you still experience those two,thoughts right now I totally I I it's,it's amazing how and I think I might,have even said this I think the thing,that changes as the company gets bigger,is that the oscillation between those,two things just keeps getting faster and,it's it like I I've liked it I have a,pretty incredible job now and I see a,good chunk of the word of small,businesses specifically and in just a,world of Commerce and it's III often go,from and then I'm talking with our,customers even even then like it just is,in some cases it's these incredible,people who are setting up from,completing new journeys and kind of,excited about us on the other side it's,that there's a lot of I mean business a,real challenge bears her some serious,hardship out there and everyone is,challenged in a way that I don't think,anyone like like no one would sign up,for it's this like hey everything I knew,is now invalidated I have to read arrive,every single idea I have about my,business every single idea I have about,being able to meet payroll or who I'm,working with or in which way I'm showing,up or what my brand actually stands for,and it's it's it's it's a crazy,situation but this this keeps going and,even in even then if any companies at,the point that Shopify is that like III,go through these mental states back and,forth often and in the same day it's uh,you sort of get used to it but not,really what I love about you because you,are the head of a the CEO of a 5,000,person company it's doing very well and,I love that you still have self-doubt,and and then you talk about it and I,think that's super important and healthy,for leaders just to see and to,experience them to do what do you think,Toby be if you were and if you're an,idea right or you know you wanted to you,have wanted to launch something for a,while is now a good time to do it I,guess it's hard it's hard question to,answer but are there opportunities now,given what's going on so I I think I'll,it is a surprising number of the best,companies in the world have been,launched in depth of recessions I I,think this is a local story I keep,coming I'm not particularly looking for,it and not asking it's just often people,just bring it up it's like hey when I,started this thing was exactly the time,everyone said this is a terrible time to,do it,I like I think well okay so the way we,are talking about this internally his,peers from from what we are seeing in,our retail space and this might between,other spaces too but I can't talk with,authority about it from what we're,seeing 2030 basically got pulled to,20/20 forward on all trends that relate,to digitalization again all these,businesses that only were retail just,disappeared whether there's a vacuum,that they left behind which they are,scrambling to fill in the businesses,that were more digitally native business,that had retail but also were online and,on the different channels like Instagram,or Pinterest they have replaced over 90%,of their lost sales from from retail and,so it's not really that at least so far,veneer,Corvus it's not that people have stopped,spending money people are like the mix,of how people spend their money has,changed it's a lot more online it's a,lot more on the kinds of routes that you,need around the house and so that is a,backdrop against which amazing,entrepreneurial stories can be written,because there is just like opportunity,especially on the recovery side whenever,that ends up happening where people can,just have bring bringing your options on,the market and I think that's a lot of,people now have a new understanding of,what the word is probably going to be,like then when we get back I don't think,you're going to go back to a word we had,we're going to forward into something,different in some cases waste is going,to be better and maybe in some ways it's,gonna be worse,both those categories have a lot of,opportunity for entrepreneurship,chubbie stand by my team is telling me,remotely so and please forgive me if,you're watching this because there's no,camera man there's no lighting it's just,me here sitting here there's totally,sitting there Darla but my team's,telling it's like that my audio is,coming up I'm gonna pop off for a sec,Toby you don't have to be by yourself,there don't worry we're gonna read you,on the sex just stand by five seconds,ten seconds I'll be back,you,right I'm good thank you sorry about,that everybody thank you for your,patience apparently my audio is now,better so yeah I mean Toby this is the,thing like I also I've been looking at,companies that have started at difficult,times I mean slack uber venmo I mean all,these brands that we used there's,actually an amazing supermarket chain in,the United States called Publix which is,one of the biggest in the south it was,started in 1930 if that you know the,beginning of the Great Depression and,struggled for like 10 years and today it,employs 200,000 people and is an,enormous company employee-owned so,there's there are really amazing stories,out there um and anyway I just I think,that's an important point to make as as,an entrepreneur you know it's a scary,time right but to your point I mean,there are still reasons to to kind of,get in there right and put your hat in,the ring and you need to be extremely,comfortable as an entrepreneur like I,sort of charging into the unknown,because that's literally what are you,committing yourself to yeah the doing a,recession it's that there is an,advantage but it's not just you doing it,it's everyone has to do it and so in a,way it's actually draws it's more equal,environment than that I also think that,the formative years of companies end up,mattering a lot more than I think,anyone's willing to admit and I like I,can absolutely see a supermarket chain,found it right at the dawn of a Great,Depression having a more sustainable,attitude towards expenses and therefore,for the entire life history they are,some you will pick up skills based on,new experiences doing your formative,years and I think like I can see how,that's um Toby I want to get to some,questions we got a lot of questions,coming in from Facebook and YouTube and,Twitter so all right here's a question,from from Colette Wu she asks how to,Shopify prove to their customers that,their their service can really work out,for them and make their business you,know kind of launch off from from your,platform what are what are ways that,Shopify could actually do that I I don't,think there's one specific answer it's,it's a trust relationship right that,you're trying to build with people like,we've you think about Trust in the form,of a battery which we are trying to,charge through solving real problems,what all of Shopify books on and every,person's committed to this is is trying,to help the entrepreneurs on the,platform to be more successful ideally,and they might have imagined themselves,to be and and and and give people the,skills that they might not even maybe,they didn't think they needed maybe they,didn't think they would be part of that,journey but like ideally we want make,everything as simple as possible so,whether the people who use shop if I can,focus everything on trying to create the,best products and find the finder right,market and I think all of these,interactions over time hopefully people,end up trusting Shopify and then Shopify,then says hey here's a new idea for you,or maybe a new channel you might want to,expand in then that's something people,do and and and over this like,interactions trust this build chubbie,what kind what are some kind of like,types of stores you've seen people,launch in recent weeks I mean any any,examples that stick out well one of the,most amazing things is like right up at,the earliest time to live in chat and,place happened and they even even right,before we saw new businesses and some,existing businesses pivot towards,mask-making,which is of course becoming much more,important we all know that there's a,significant shortage in PBE and some,people we took the sneaker factor is to,create masks and and and a lot of people,drove efforts from home but that's,that's one of the things we saw but,other thing is it's just been an,enormous community effort of bringing,sort of a favorite local businesses,online so that they can do,curbside pickup or even people get,together to have someone do deliveries,in the neighborhood and what's been,remarkable is that that we've seen some,of these businesses actually do better,than they've ever done before which is,like it's not the rule but like this,stories have been around from the,beginning where people were surprised,about how well this works and are,becoming more and more frequent and vbv,here this in our cause of our customers,and like just sort of local even even,local newspaper stories which is really,awesome what if what if you're like you,were planning on launching we've we've,had a version of this question before,but I think it's most apropos to you,what if you are planning on launching a,product or service right before the,pandemic happened and here you are out,in the world you've got a Shopify store,front and you're trying to generate,interest but you can't be out in the,world,what are worl ways that people are able,to market and to you know to spread the,word about what what it is that they're,offering right now how do you do that,right now okay I think I think it's a,better time than ever to do this food,specifically social media there's a lot,more attention there especially like I,mean it depends a lot on your product of,course but I mean we found the most some,random subcategories of products and,ending up doing extremely well one of my,favorite examples of this is if you have,a subcategory of parts called take the,decorative tapestries which I never,would have imagined being some but once,you realize hey that's sort of a real,world zoom background kind of accessory,then you realize why people are now,buying decorative tapestries and wall,art and all these kind of products so,like I think what you have to ask,yourself is like um this product i'm,creating how does how does this fit into,this story of a times i mean this is,always a question you should ask,yourself and i'm doing marketing but I,think now especially if you can if you,can tell like if I buy your product fits,better in,in the future that's emergent after this,or fits in well at the time since every,problem that's you will find an,incredibly receptive audience yeah you,know we we had a Stewart Butterfield on,from slack a couple days ago and and,Stewart acknowledge that there's sort of,this kind of weird position that he's in,which is slack is obviously doing very,well,because of the crisis so many people are,relying on slack to communicate you just,mentioned that that your team is as well,you're in a similar position I mean most,businesses are not doing well now,this is not good for ninety five ninety,nine percent of businesses but Shopify,of course has benefited from so many,people signing up how do you feel about,that is that I mean obviously it's good,for your company or a publicly traded,company you've got a responsibility to a,hold you know a series of constituents,but I don't know is there something a,little weird about it too yeah no it,certainly is I it I don't exactly know,how I feel about this either it's I mean,one thing I can do is try to share any,good fortune coming our way right the,nice thing like the most wonderful thing,about Shopify is that we can actually,make a difference but I we will work at,Shopify was like we all made life,choices that meant we didn't wind up,being doctors or nurses or frontline,workers so it's very hard for us to join,the real heroes office crisis and and,make make the difference in the most,important realm but at least we are,choppa fire we can make a significant,impact on the the second wave economic,crisis that that comes from a,humanitarian crisis we can like because,like we really really believe believe,that the merchants and for small,business under entrepreneurs are such an,important part of the economy like more,than like moving,50% of people in the world book for,small businesses like right and so what,we try as much as we care and is launch,everything everything even if you're,uncomfortable about the quality if we,have something in the pipeline in the,roadmap anywhere that makes a difference,right now,then vo vo currently getting this out of,a door we've been this has probably been,in terms of launch is the most,productive time you've ever had if we've,launched entire massive new things but,we ended up not even talking about it,just because it doesn't fit into the,times like one example of this this we,launched like an app that allows you to,buy carbon offsets for for all the,packages going around you can install it,it it'll it'll set over the leg to me,that's actually super important because,it's a topic I think a lot about right,this moment,climate change is for a brief period of,time the second most important topic on,the planet so so we are trying like,flipping everything forward like local,delivery curbside pickup all these,things are things that we are trying to,build better software for because here's,what happens like again I said this,earlier we'd like we brought twenty,thirty ten years forward so that also,means we all are in twenty thirty right,now there's soccer 2020 quality software,if you if you go back and try to use,quasi 20 2010 quality software you,remember to be really good but if you,try it it's not it's ten years out of,date right so we found ourselves not,like facing problems without software,offer quality that we would like to take,into the to solve the problems and,before I mean it's we're in a 2030,situation with 2020 software essentially,that's yeah,that's interesting we're getting a lot,of questions about Shopify obviously,from probably from blood Shopify,customers I want to get into some of,them this is from ljv he asks about,online shopping has obviously increased,a package delivery many of those,packages are getting delayed is that,something that Shopify will want to get,involved with and also,do you think now is a good time to get,into the trucking business via yeah so,we will we will get more involved in us,will be financed for shopping for,fulfillment network so be actually,building the infrastructure for delivery,it's not going to be BB can't accelerate,that as fast as you can potentially,accelerate the software book we are,doing we actually see they are,significant delays well publicized that,Amazon is prioritizing essentials some,logic merchants struggling with getting,packages out of the door quickly,although that's actually getting much,much better and now we see small,businesses be really quick so I think,there's actually there's really good,reasons for why people should shop local,and and and shop from small businesses,right now because they just don't have,the capacity issues right it's a,question we're getting a lot of,questions and I I'm just gonna throw,this out there to give you a chance to,respond to this you've responded it to,this before you've written about this um,on your blog I think you know the,question I'm gonna get a lot of people,are asking you know why does Shopify,allow sites like Breitbart on you know,to sell their products some people say,you know they promote racism and so on,so forth so you've responded that in the,past what what is your answer that,question yes if you have a the other,fairly really well-defined,acceptable use policy which is for you,hold everyone to so like it's if you see,something that you don't think should be,acceptable please submit it that helps,us a lot we have a lot of automated,systems we are this is something about D,taken very very seriously,so please submit sites that you think I,violate any acceptable use policy all,right well thank you everybody for that,question and I I know that's a an,important question for a lot of people,so thank you for that this is from a a,Shopify dev on Twitter Shopify dev,rights do you've any plans to allow,Shopify stores to run on local hosts for,debugging and/or testing,no current plans but we want to ship,better development to us to make it as,good as being able to do this job if I,runs on a very very very complex server,farm that thousands and thousands of,machines it's like it's a little bit,harder to crunch that down to a single,machine we're getting we're getting,we're going we're getting some deep cuts,here Toby from from Shopify folks here,here's a question that a version of a,question I'm getting to Siobhan Lee,asked his question on Facebook and,others I mean how is this how is what's,happening now going to change the way,Shopify works the way you operate,everything about your culture everything,I mean presumably it's gonna change it,pretty significantly ya know I think,what I I but I don't I think a good,culture is not defined by keeping it a,certain way in fact I think the way a,lot of companies end up inevitably,destroying their own culture is by,seeing it as a static thing that has to,be kept rather than wanting to evolve,that with the situation that they are in,like it's impossible to have the same,culture in a five people company as you,have in a 500 people company but what,you can have is a great culture in both,and one of them can evolve into the,other oh like over time so this is,really what it's about so you have to be,adaptable we will all change like again,but I think where office centricity is,is going to change we will have a lot,more norms about the way we work,together and and work together maybe,digitally by default you're seeing but,we're also seeing things which are good,right like I think one thing that I've,learned personally is that a meeting,with people who are remotely is,significantly better if everyone is in,their own tile instead of if they're if,some people are in the same room,I exactly and and and so I hadn't I did,not know this before going into this,whole fake totally in a in a video,meeting where you're looking at a,conference table was like nine people,around the conference table and it's,just not your so right I never thought,about that everyone getting their own,tile makes it a better meeting it,absolutely does and I think then like if,you have a lot of meeting rooms which,now like I can't tell you the last time,I was in a meeting with just local,people like Shopify it's like,distributed because we have we always,maybe had more offices as a younger,company then I think most companies,especially in Silicon Valley do so via,orison in Ottawa Toronto Montreal and,Waterloo and you know Berlin Vancouver,services can so on and and and so I have,not been to a meeting with just local,people in a long time and and and so now,I'm like III I think I I know I know,something about what it's like to be a,fun person on the resume call and not,wanting to interrupt and offices the,systems be like this so I think feel,like we're learning we're learning about,a good way to work together it's is it,as good as the previous one and probably,not but it has a different set of,trade-offs and I think this is on this,idea this is a new break in the,foundation of the modern company and on,top of which we can build great cultures,if you want to tell me how is this,changed you as a leader I mean you are,you're still I mean you're such a young,founder you started this company you're,so young and you oversee 5,000 people,and it's a publicly traded company and,it's a big responsibility,I mean how do you think it's changed the,way you operate as a leader and the way,you think about what it means to be a,leader I I'm I I'm learning a lot I,I mean before this I used to do a an AMA,ask me anything about once a quarter of,the entire company and I was sort of in,personally bent again now it's something,I'm doing weekly like I I've been,hosting every town hall since because I,think just,there's so much to do this entire,company has incredibly clarity of,mission right now again about what we,set out to do but exactly how we do this,is is really left to all these parts of,a company we love to be loosely covered,but loosely coupled only really works,then we come together and and base our,decisions on the same fundamentals and,so so just the amount of communication,and the ways to communicate have evolved,so much I gave you one example like for,instance like I used to love I loved,spending time with my product teams I,loved getting into deep detailed like,engineering conversations this this used,to be like III just walked into the part,of a team that book on on this and and,we did a little workshop and I can't do,this anymore but one thing I do have I,have a really good video set up now and,and and I think this is something,everyone off like hitting that record,button is really cheap going through a,flow or mock-up and just talking about,this and then putting this into the the,right slack Channel it's not as good,because it's not as fun because this the,it's very interactivity is missing but,then I get a video back with response,and suddenly I'm like hey this is its,diminished but also a lot more efficient,and by why I can do this with more,groups in this out and so again I I,think just keeping an open mind about,how to reproduce the situations that,that you appreciated before in New,Voices is just such an important,ingredient invisible thing so we we got,a comment I just wanna read this comment,from from facebook from Mary Kim Bruzzi,she's a Shopify user she writes I'm,watching from Ann Arbor after many years,with mostly under a mostly underutilized,Shopify site we quickly pivoted to focus,on adding products and promoting the,website she says in the last eight weeks,they've seen a 5,000 percent increase in,web sales and she appreciates what shop,provides help to help them do so I,wanted to read that comment,from from Mary chubby before I let you,guys want to say hello to some people,watching Deven Kumar in India jameelah,value Bell yay yay ooh I hope I'm,pronouncing right Atlanta m'kay Lankford,in Kansas let's see Thompson and Denmark,Betsy Sudha and Gainesville Florida Jody,Davis Lynchburg Virginia,Lois Lee new in Toronto Sonya Paz in,California Trevor Carter in the UK,Taylor Simone Oh Simone Oh in south,Louisiana Elsa you minore Jungmann and,san francisco and many more I'm sorry if,I'm angle to your last name or your,first name please forgive me we have,some really cool stuff coming up on the,show if you like these conversations by,the way please let other people know,about them they happen every Wednesday,and Friday right here nine Pacific noon,eastern this Friday I'll be talking with,Andy Puddicombe and rich Pierson the,cofounders of headspace if you use that,app that's Andy's voice that you hear,all the time,next week every single day at noon,eastern nine Pacific I will be speaking,to a different person we're doing a,whole week on fashion the fashion,industry and beauty industry it's been,hit really hard and we're gonna hear,from some some of the leaders in that,industry Marcia Kilgore of beauty pie,she founded bliss Jenn Hyman a Rent the,Runway will join us Sarah Lafleur of mmm,Lafleur Ali Wehbe of try bar and James,Reinhardt of thredUP,so check that out next week fashion week,all all week on on how I built this,resilience edition we've got a new,episode on the show this week it's with,Pat Brown the founder of impossible,foods like Toby story it's an incredible,journey that he took to basically to,fight climate change that that's why he,decided to start that company it's a,really cool episode tomorrow on your,podcast Q if you are subscriber to how I,built this we've got a bonus episode,from these conversations you'll hear,some eNOS rot author of salt that acid,and heat and Alice Waters with the owner,of Chez Panisse and the founder of the,Edible Schoolyard with her daughter,fanny we did those conversations a few,weeks ago and tomorrow we'll release it,on the podcast if you miss any of these,live conversations you can find them on,our Facebook page slash how,I built this or on the NPR YouTube page,that's it that's a lot of announcements,a lot of information or process maybe,too much Toby,thank you so much it's so great seeing,you this way I know last time we saw,each other it was in San Francisco and I,hope to see you again soon,congratulations on what what you've been,working on and and I think you're right,I think it's a I think it's a good,moment to you know it's not obviously,maybe that's not the right word but it,is there are opportunities now and if,you're thinking about it now now is that,you know now may be the time to kind of,jump into it yeah absolutely thank you,so much for doing it I love the show and,it's it's bringing us all closer,together and these conversations are,invaluable so thank you so much thanks,Toby,you

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