how shopify outfoxed amazon

How Shopify Founder Tobias Lütke Built An Amazon Alternative this video is brought to you by wish,po


Updated on Jan 06,2023

How Shopify Founder Tobias Lütke Built An Amazon Alternative

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How Shopify Founder Tobias Lütke Built An Amazon Alternative

this video is brought to you by wish,pond,there are some rivalries that everyone,knows david versus goliath tyson vs,lewis or empire versus the republic,there's one that you might not have,heard of but will shape the future of,e-commerce all together,shopify versus amazon,jeff bezos's company wants to create the,biggest online marketplace that is,controlled by one company,shopify on the other hand is the,rebellion in this scenario they want to,decentralize e-commerce and enable,anyone to launch an online store by,giving power to the individuals shopify,has grown into the second largest,e-commerce platform with nearly 2,million merchants,so how did it emerge as the legitimate,threat to amazon's dominance join us as,we break down shopify's story and learn,how the company started who the founders,are and how they plan to grow the,business in the coming years,shopify's story starts in 2002 when,tobias lucca moved across the world to,canada at the age of 22 to be with his,future wife fiona mccain,upon arrival he faced a major problem,without a degree luca couldn't get a,permit to work in canada,while he couldn't get a nine to five,tobias realized that starting a business,could easily earn him money it was time,to bet on himself he decided to combine,his newfound hobby of snowboarding with,his interest in e-commerce and start an,online snowboard shop,now luca didn't have a lot of business,knowledge or capital,so he needed help to get things off the,ground luckily at a mckeen family event,he met scott lake who had startup,experience,the two clicked and in 2004 they founded,the online snowboard shop snow devil,with investment from fiona's parents,you have to realize this was at a time,when launching an online store wasn't,easy,luca tried many e-commerce solutions to,make it work but they were all so bad it,made his skin crawl,the straw that broke the camel's back,was trying to make a custom design on,yahoo stores it barely allowed luca to,change the background color of the top,frame this was the spark he needed luca,got so frustrated that he decided to,write the software to power his online,store himself,soon he realized that people were more,interested in the software that powered,it than the snowboards people were,saying you know it's really cool that,you guys have this uh you know snow,devil the snowboard store but would you,license the software,and then we sort of realized well maybe,maybe,helping other people go through this and,building their stores might actually be,a better business than than selling,snowboards and this is sort of how we,pivot but you can't pivot into a new,startup with no capital so lucca and,lake raised two hundred thousand dollars,from friends and family,including lucas uncle and mckean's,father,the next step was finding the technical,founder,luca went with his gut and recruited his,friend daniel wyman for the position,finally in 2006 after working on the,software for a year shopify was launched,the tool allowed anyone to set up an,online store in minutes shopify focused,on features like customizable store,templates order tracking inventory,management payment processing,and paypal and credit card integration,a big turning point came two years after,launch when lake stepped down a ceo,this left luco with the task of leading,the company a position he didn't want,instead he met with silicon valley,venture capital firms to find someone,else to fill the role but had no luck,eventually angel investor john phillips,convinced him to take on the role by,saying you will never find anyone who,will care about shopify as much as you,do and so you should just give this a go,in the years that followed shopify would,transform into an e-commerce pioneer the,platform empowered merchants by,launching innovative solutions like its,api or app store after nine years of,massive organic growth shopify made its,public debut on the new york stock,exchange on the 21st of may 2015 and a,valuation of 2.1 billion dollars,in the following years shopify continued,to grow and widen its product offerings,innovative solutions like shopify,capital allowed merchants to get loans,with minimal paperwork this focus on the,needs of direct to consumer businesses,helped shopify replace ebay as the,united states's second largest,e-commerce platform after amazon by 2019,but it was the 2020 pandemic that had,the biggest impact on shopify's growth,it forced many businesses to go online,while also giving customers even more,choices,the result was an astounding 96 percent,growth in revenue in q3 2020 compared to,the same period in 2019,despite some challenges in the past,shopify continues to grow with over 3.7,million websites using the platform,by january 2022 shopify had reached a,massive market capitalization of 141,billion making it the world's 95th most,valuable company,from 2016 to 2020 its annual revenue,increased 6.5 times while generating 2.1,billion in revenue in the first two,quarters of 2021. a 57 year-over-year,increase,so how does shopify generate all of this,revenue the answer is multiple sources,its core subscription services account,for 63 of total revenue while its,enterprise plan that costs over two,thousand dollars per month brings in,another 23,the remaining 14,comes from apps themes domains and,shopify plus platform fees,so what does the future hold for shopify,the platform continues to invest in new,technologies that make it easier for its,merchants to sell products such as,shopify markets which enhanced,cross-border commerce a no-fee money,management platform called shopify,balance and tick tock shopping which,lets consumers buy products directly,from the app,and while not giving any specifics,shopify has said growth will continue in,a normalized fashion if at a slower pace,than during the 2020 boom,while there are reports that amazon is,working on a successor to web store in,order to try and regain its lost,opportunities,luca welcomes the challenge saying that,i think of amazon as a worthy rival if,they knock it out of the park and make,it super easy to start new businesses on,it and i'm like i actually accomplished,my mission,as a result of luca's frustration with,existing e-commerce tools and a pivot,from his online snowboard shop shopify,has grown to become the second largest,e-commerce platform in the us while its,main rival amazon has focused on its,customers at the detriment of its,sellers shopify's merchant focused model,has helped it become the platform of,choice for businesses big and small that,want to start selling online,that's it for our breakdown of shopify,what do you think of this ecommerce,platform do you think they have what it,takes to be amazon what company would,you like us to break down next let us,know in the comments

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