Rich Habits Podcast - 86: Building a $100B Company (Shopify) w/ Harley Finkelstein

Episode Date: October 14, 2024

In this week's episode of the Rich Habits Podcast, we sat down with Harley Finkelstein -- the President of Shopify. Harley was a breath of fresh air. He spoke toward the "cost of failure," the idea of having 1,000 true fans, where Shopify is reinvesting their profits right now, the mindset of successful business owners on the platform, and much more. If you're someone who's mulling over the idea of starting a business, do it! Austin began using Shopify in high school (2010), and Robert in the early 2010s as well. We highly recommend giving it a try :) ---⭐️ ⁠⁠Click here⁠⁠ to join our FREE webinar with NEOS Investments! 💥 ⁠⁠Click here⁠⁠ to sign up for the Rich Habits Network!💥 ⁠⁠Click here⁠⁠ to subscribe to the Rich Habits Newsletter!---⭐️ Want to start investing in real estate but not sure where to start? Join Robert and Austin on Fundrise -- specifically their Flagship Fund. With exposure to single-family, multi-family, and commercial real estate, this fund has it all. Click here to learn more!---⭐️ Skip the waitlist and invest in blue-chip art for the very first time by signing up for Masterworks: https://www.masterworks.art/richhabitsInvest in shares in great masterpieces from artists like Pablo Picasso, Banksy, Warhol, and more.Masterworks affiliated issuers have now conducted more than 420 offerings of securities, representing over $1.02 billion in Art Investments, as of June 30, 2024.See important Masterworks disclosures: https://masterworks.com/cd------⭐ Download our FREE Budgeting Template – ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠click here⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⭐ Earn 5.1% on your savings with a High-Yield Cash Account – ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠click here⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⭐ Trade stocks, options, music royalties and crypto on Public – ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠click here⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⭐ Get a $35 bonus when you start saving & investing with Acorns – ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠click here⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⭐ Automatically buy stock where you shop with Grifin – ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠click here⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⭐ Protect your family with term life insurance from Suriance – ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠click here⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⭐ Use code “Spotify” for 15% off our 4-module video course – ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠click here⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⭐ Optimize your portfolio with Seeking Alpha – ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠click here⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠---👤 Explore everything Austin does – ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠click here⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠👤 Explore everything Robert does – ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠click here⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠❓ Ask us questions for our Q&A episodes – @richhabitspodcast on Instagram📬 Inquire about working together – [e-mail]---Hankwitz Group LLC has an existing business relationship with NEOS Investment Management LLC. The opinions expressed are those of the author, and the author owns several NEOS ETFs.

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We were joined by Harley Finglesstein, who's the president of Shopify, a $100 billion company. 11% of all e-commerce goes through Shopify. They're the second largest e-commerce platform in the world behind Amazon, and he made sure that we all learned everything about the process of getting there. I would say, Robert, this is probably our best guest episode to date. I mean, Harley brought the heat. He gave us a ton of different nuggets of information, a ton of tools and resources. that he's personally helped build at Shopify, as well as let us know what they're building

and looking forward to in the future. So if you're an entrepreneur who's either selling already on the internet, maybe you've got that idea in the shower and you're ready to go bring it to life, hopefully this episode can be the playbook that allows you to go from zero to one and really, really build out and make money on the internet. Yeah, we talked about a ton of things. It was a joy just learning from someone behind the scenes from a company that big. And it just really emphasized a lot about mind. set and just getting out there. And we talked about how it's the greatest time since we've been alive to really be able to start a business, memorialize a side hustle, because the entry cost

is so low because of tools like Shopify. So this episode is near and dear to my heart, and I'm so excited about it. And just a quick note for any of you that have noticed, my audio is off, and there's some background noise issues. You all are very aware that I had to evacuate South Florida from St. Petersburg. So I'm in a hotel lobby right now and everyone is being quite loud. So thank you for bearing with me on this episode. It's been pretty rough the past couple weeks being disjointed from my home. And so I apologize for having any issues or quality of sound for this episode. So that being said, let's now jump into the episode. Harley, thank you so much for joining us on this week's episode of the podcast. You've been on shows like The Diary of a CEO with Stephen Barlett, the Tim Ferriss show with

Tim Ferriss, The Game with Alex Hermose and countless other awesome podcasts. We are just super grateful that you decided to join us, and we are thrilled to dig in to all things entrepreneurship and making money on the internet. That's right, Austin. We're welcoming Harley Finkelstein, the president of Shopify, one of the most important platforms enabling millions of entrepreneurs to start scale and grow their business online, and I couldn't be more excited. Austin, Robert, it's a pleasure to be on. And if I may just add one more thing. You mention our quarterly GMV of 67 billion or so. But a particular milestone that we crossed in Q2 was the cumulative GMV or sales sold on Shopify.

Since inception, we just crossed the $1 trillion mark with a T. That is not a real. I don't know why, but that just feels so incredibly meaningful to us that we could power a trillion dollars worth of business and commerce. it's pretty cool. In terms of total e-commerce, if you just sort of take the U.S. alone, we're about 11% of total e-commerce. So the only checkout larger than Shopify's in the U.S. would be Amazon's.

Unreal. So, Harley, you're now speaking to tens of thousands of entrepreneurs, investors, and aspiring business owners. Beyond the title of President of Shopify, please introduce yourself. Can you also tell us a little bit more about your personal journey into entrepreneurship and how you ended up leading a $100 billion company like Shopify. I self-identivize an entrepreneur. I'll start there.

I've been an entrepreneur since I was a kid. When I was 13 years old, I told the story many times. But I want to be a DJ. Nobody would hire me. Mom and dad didn't have a lot of money. But they made me a business card that said DJ. And they were like, well, if no one will hire you, why don't you start your own DJ company and hire yourself?

And that sort of use of entrepreneurship, not as a moniker or a title, but rather as a solution, a tool to solve problems, has been effectively with me ever since. When I left South Florida, we were talking about South Florida earlier. When I left South Florida, I came to Canada in 2001 to go to McGill, had to support myself. Mom and dad didn't have any money. Mom needed some, mom and my younger sisters needed some financial assistance. I once again took out that tool called entrepreneurship.

I started a T-Shure business and eventually ended up becoming one of the first merchants to use Shopify back in 2006. So I've always self-identivized an entrepreneur. I pray at the altar of entrepreneurship. I even wrote a kid's book, which is right back here, called We Can Be Entrepreneurs, because I think most schools are not teaching kids about entrepreneurship. But I can use some fancy terms like entrepreneurship

is the greatest way to self-actualize and to find your creative outlet and your life's work. But ultimately, the reason it's so important to me is that I think it is the best way for individual to find their unique versions of success. And that success may be to build a $100 billion company. That may be to take wonderful vacations. It may just be to afford ballet lessons for your kids

or tennis equipment for your kids if they want to do that. And I got to Shopify because when I, in 2005, I moved from Montreal where I was in college to Ottawa, the capital of Canada, to go to law school, not to become a lawyer, but to become an entrepreneur. and started hanging out with a group of entrepreneurs in town every Friday night. We called ourselves the fresh founders. And one of those entrepreneurs was a programmer who moved to Canada from Germany a year earlier

and was selling snowboards on the internet, didn't find any good software of which to sell these snowboards. And so very famously wrote his own piece of software, his own code base, to sell snowboards. And I met that incredible entrepreneur founder, Toby, in 2006. And he had just transitioned from selling snowboards to selling the software that he had written for the snowboard shop. And I became one of the first people to use Shopify. And once I was finished school, I did a joint law MBA. And I started, I called Toby in 2009 and told him I'd love to join him in a small group of mostly engineers and help him build this great company.

And to take it full circle, Shopify's mission is all about entrepreneurship. And my personal mission is all about entrepreneurship. And I think when the Venn diagram overlap of your personal. and your professional day-to-day work when those things overlap. I think that's about as close as you can get to life's work stuff. You know, I think back to the older days when we would build a website for one of my consumer brands. And, you know, this was long before Shopify.

And it would cost me $15,000 or $20,000 just to build a shop and build a website. And then so fast forward to today, and you think about how big it has gotten for entrepreneurs. And it's just really cool because whenever people talk about it. about they bemoan their bad luck. I remind them that they can get an entire business, website, social media, everything up and running for like a hundred dollars. Whereas back in my day in the 90s and early 2000s, it was tens of thousands of dollars to get started with something like this. And so I just love being older, the elder statesman of this podcast and community, but also being able to have lived through that and then also the boom that we live into now. So I love

it. Harley, you identify as this entrepreneur and a lot of people hear the word entrepreneur. We hear the fake gurus on the internet that think, you know, entrepreneurship is the sexy billion dollar thing. How do you define entrepreneurship to the 42-year-old single mom listening right now who is trying to figure out how to make an extra $500 a month with her passion? You know, entrepreneurship comes in so many different forms. How do you define entrepreneurship? I think it's creating something out of nothing. I think it's looking at a problem and architecting a solution for it. So, Robert, I think one of your companies was silly bands. Is that right?

Yeah. So I have two young daughters who actually have silly bands. To me, whether it's silly bands or it's a T-shirt business or it's a software company, they all kind of start the same way. I think the difference between entrepreneurs and non-entrepreneurs are that one bemoans a problem and the other solutions for it. And if you actually look, we have millions of stores on Shopify, but you look across some of our largest stores. The homegrown success stories.

So removing, you know, Mattel or removing, you know, some of the large staples, removing some of the big businesses that have come on to Shopify when they were already big. If you look at the homegrown success stories, the gym sharks of the world, Ben Francis decides there's no great apparel. There's either yoga apparel or there's like weightlifting apparel. There's nothing in the middle. He creates that for himself and turns into a billion-dollar company. Or Trina, who is the founder of Figgs, who sees a doctor friend of hers in Los Angeles wearing doctor scrubs that look bad, are bulky, are not comfortable. She's like, I can do this better. Entrepreneurs see opportunity everywhere, and they action those opportunities. And I think that ability to identify a solution and then implement that solution, that's the difference. Now, you know, you sort of, there were some, there were some judgment in your question around, like, you see a lot of these, you know, gurus or wannabes.

Actually, back to what Roberts said, one of the coolest parts of building a business right now in 2024, yeah, the technology is great. Yes, you get instant distribution on a global scale because the Internet sort of democratized distribution. But actually, the best thing right now is that the cost of failure is so close to zero that if you try, try something and it doesn't work. You can try something else right away. And if you sort of rewind the clock, 10 years, 100 years, 1,000 years, you started a business, it required capital. And if the business failed, you lost that capital. Now, some of the stores on Shopify that are doing a billion dollars or more in sales on an annualized basis started by paying Shopify $39 a month. That is remarkable. And then when you also add to that,

the velocity of growth. It is also remarkable. You did not have companies in the history of business that went from zero in the, you know, $0 in mom's kitchen table setting it up to a billion dollar run rate five years later. We didn't have that. So not only is technology better,

but the cost of failure is lower, and the velocity for scale has never been more available. And I don't want to sort of overdo this or, you know, sounds like hyperbole a little bit, but it does feel like this is the golden age of entrepreneurship. I totally agree. And I love it because I've gotten to see both sides of it. Everyone now that has been around since Shopify has been huge, have been able to do all this, does not realize. You're exactly right. The cost of failure is so inexpensive. I'm going to adopt that. I'm going to share that and make sure the world hears it because it's so important because you can try more things and get yourself out there.

And I love that because of the availability of all of these tools like Shopify. So let's get into one of the questions I have, and that is for a lot of our listeners, it's what is my first step? We get this all the time. So let's talk to those people for a second. They want to start their own business. They want to make money on the internet. They want to memorialize their side hustle and really get going, but they're overwhelmed in the space.

So let's talk to them about that leap and that first step. how Shopify plays a role in that. So before you answer that question, Harley, I want to make sure our listeners know about this episode sponsor Funrise. You've all heard us talk about the importance of diversifying your investments for a while now. And there could be a major opportunity today in private market real estate, especially with the market timing right now. Because we know it's a lot of hassle to be a landlord.

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investing, including objectives, risks, charges, and expenses. This and other information can be found in the flagship funds prospectus at fundrise.com forward slash flagship. All right, let's hear what Harley has to say. Well, I think traditionally, you would say step one, go make your business plan. And not to say that I don't like business plans, but I don't think you need that. I think it's a waste of time. I think ultimately step one is figuring out, you know, where you have some alpha, some unfair advantage, some unfair opportunity. If there is, you know, I think you mentioned 42-year-old mom as sort of your hypothetical example here. My wife is, she's not 42, she's 40, but she's a mom. She's a four-year-old,

mom. She's in a lot of mom groups, Facebook groups, Reddit communities, what's app groups. You may not think that there's alpha there, but there is so much alpha that my wife has, meaning like she has a disproportionate amount of insight over me for that particular demographic, which is a very important demographic. She knows what they're looking for. She knows what their frustrations are. She knows how to contact them. And she even knows if she builds something for that community how to access them. And so the first thing I often tell people is, what do you already doing now? What do you already have now that you simply are undervaluing. And it may be someone who is, you know, you make amazing banana muffins for your

neighbors. And every one of your neighbors is telling you, this is incredible. I, you know, I've had a hundred different banana muffins. These are the best. That may be your alpha. You're already doing something that is a value. You're simply not monetizing it properly. Now that's, I'm going to, I'm sure, get it criticized. Not everything should be monetized. Something should just be making muffins for your neighbors. Something should just be art or a hobby. But for a lot of people, a lot of the time, there's something you're already doing that is under monetized because you're not thinking about it like a business. So the first thing is figure that out. And then I think at that point, I mean, it's not a Pinterest Shopify.

There's other e-commerce platforms. I think ours are the best. But you just go to Shoplight. Add a logo. Frankly, there's even logo generators if you want. But you don't even have to have a product. You can simply just add an email sign-up list, posted on Instagram or TikTok stories or on M. and see who's interested.

There's this amazing blog posts. It must be, I don't know, 10 years old this point by Kevin Kelly, who's an amazing thinker and writer and entrepreneur. But the blog post, I think it's one of the most important ones. It's called 1,000 true fans. Actually, Tim Ferriss, who you mentioned earlier, Austin sent it to me many years ago.

Tim has become a friend and mentor and advisor to Shopify and someone I'm very close with. He loves Kevin Kelly. And this Kevin Kelly blog post is called 1,000 true fans. And it talks about that like the best way to build momentum is to first start with your like 1,000 people that really, really care. And the access that my wife has is hypothetical example, she's got a thousand, she can find a thousand moms in her sort of age bracket between all these different channels and and chat rooms and WhatsApp groups that she has. So she can just send it to them. Hey, I've been listening to all of you talk about your own.

lack of great sunscreen for your child that is, you know, free of this chemical, but has this chemical and works like this and waterproof, I actually just decided I would, I'd make it. And I'm using it to my kids and works really well. And if you're interested, I haven't made, I haven't got it's full production yet, but I'm taking pre-orders. Here it is. What do you think? In the next 24 hours, you will know whether you have a there or there or not. And if you start seeing pre-orders come in, maybe there's a there there. If no one, is coming. Maybe you actually misinterpreted the market. Maybe you misinterpreted the lack of option of a proper option in that particular category. And you kind of move on. But when you think about

the brands on Shopify that have hit terminal velocity that have turned into multi-million dollar billion dollar companies, a lot of them started kind of like that. I definitely start lean and mean. Every time someone books a one-on-one call with me with a consumer product's idea, Their mind is always, I'm going to get the patent. I'm going to get the trademark. I'm going to get 10,000 units. I'm going to do this because my sister and my brother and my cousin said it's cool. I'm like, stop all of that.

Get to market, get lean and mean, test the market, see if there's good product market fit, then worry about scaling because so many people want to go spend $100,000 at a time when they don't need to because you have the ability to test and do these pre-orders and be able to really sample the market and see where you're at? The instinct, Robert, for everyone, is the same, which is, I'm going to go build a business, therefore I must invest capital. And just that's not the way businesses are built anymore. There's some business that do. If you were going to go and create a manufacturing company, you probably need to do that. If you're going to create, you know, I live in Canada. We have a resource rich economy here. If you're going to go drilling, you probably need some equipment

for that. But generally, if you're building something that's a modern consumer package, goods company or a modern product, you don't need to do that, but there are still so many people who believe that. And I think the reason that is so dangerous, because that prevents some people from making the leap into entrepreneurship. They assume, I don't have experience, I don't have enough money. Both things are no longer, like deep requirements anymore. What's more important is deep conviction, creativity, a great network, frankly, just sheer hustle, determination. That's how you build the next Supreme or Kith or Nike. I'm showing all the products I have are behind me.

And it's such a good thing to get out there to people. It's so freaking true what you can do now right now. If you have an idea, it doesn't have to be this game-changing world-renowned idea. You can reinvent a mousetrap of a product that's been around forever and make a better iteration of it and crush it. And so this is a great episode for all the entrepreneurs out there. and I love it. So, Austin, I know you have a great question, so I'll shut up for a little bit.

Harley, I think something you said earlier that really resonated with me was sort of this idea of curiosity and specific knowledge, right? Your wife has the specific knowledge of maybe having some children, maybe she likes the sunscreen, right? She's really in on that.

And it comes back to Naval Ravikon's, you know, Twitter thread of how to get rich without getting lucky. And so I think, one, I really encourage everyone to read the blog post of 1,000 true fans, but also, you know, sort of this blogger. post that Nival Ravacant wrote, and we'll have it linked out in the show notes below. But it just comes down to like, with entrepreneurship, if you have that specific knowledge,

which is something that can't be taught, it's one of those sort of experiences. It's that unique experience that everyone does have. It's a passion. It's a curiosity. It's something about them that gets them fired up every morning to go do what they love to do. That is what's going to separate you from everyone else that might also be trying to build in whatever space that you're building in. Let me sort of just make one more point on this.

how much of a problem this is. My best friend is a guy named David Siegel. David Siegel, he's going to hate me for sharing this story. David Siegel was the founder of a company called David's Tea. David's Tea had 400, at its peak, 400 locations in North America. He took David's tea public on the NASDAQ at 2015. Same time I took Shopping Public. We did in New York Stock Exchange.

He did NASDAQ. He took a public. I think it was an $800 million market cap. And then eventually he left. And we would meet and he'd ask me, what should I do next? And I was like, I don't know. I was like, let's brainstorm. Let's figure out.

But every time he'd come over, he'd bring me the most delicious tea. And I'd be like, what is this? And he's like, oh, this is like my personal stash. He's like, I could never sell this David's tea because it was too high end. David's tea was really middle of the road, a lot of flavor tea and stuff like that. And he'd show me all these sort of things. And eventually during the pandemic, I'm like, dude, like, you care more about tea. than anyone else I've ever met.

You care more about the product, the accessory, the farm it's from. You can tell me more about tea than any other person on the planet. Why are you not starting another tea company? It's like, oh, I don't know. I was like, what do you know? Like, it's so unbelievable. And so David and I, Joe, the pandemic started a tea company together called Firebelly Tea.

I'm drinking the tea right now. That's the strainer. even someone who's had incredible success, who's taken his company public for $800 million, he still didn't see what was right in front of him because he was sort of searching for something, I don't know, more unique or less obvious. Sometimes it's good to find things that are less obvious. And other times, the thing you want to actually create and start is right in front of you. I really want to encourage everyone listening right now to kind of take a self-awareness test

and look around and say, what is right in front of you? What are you really good at? What do you wake up every morning and get curious about? How do you spend your free time? Can you turn that into a side hustle or, you know, a business or whatever else that you're excited to do? But I do think, though, that there's a very big misconception that making money on the internet is easy. We all know it's not. Maybe in the beginning, it could be easy. Get some quick wins with a couple sales. Maybe you go viral on TikTok or something, but building what the, you know, companies that you would share, like figs, think Allbirds is another Shopify long-term winner and these other massive billion dollar companies are doing. It takes so much effort and organization. So how do you think Shopify

is supporting those who are trying to create long-term success online versus just getting those quick little wins? Earlier in the conversation, I mentioned that Shopify was the second largest checkout on the internet in America. That's a fun little flex, a fun little fact toy that I like to pull out every now and then. But why does it matter? It matters because when you aggregate a bunch of tiny little dots, you get this magnificent light. And what we realized was that if any one of these individual merchants, entrepreneurs, small or big, went to go negotiate for things like shipping rates or payment rates or capital rates, if they were doing it all in their own, they would walk in as small business number 4,252.

But if we go ahead and do it on their behalf, the economies of scale that the second large zone that retail in America are entitled to, that's what we were able to get. That's our size, our scale. So what if rather than have an entrepreneur, small business owner, think about a thousand different problems, they can only focus, they could only focus on the one thing that matter of just making a great product, what would that do? How would that change the trajectory of their business? And so we began to think about, let's look at all the problems, let's figure what we can solve on their behalf for them, where we can leverage our economy of scale.

And rather than keep those economies scale for ourselves, we can distribute them to everybody that uses Shopify. The counter to that is my father's an immigrant came to Canada in 1950, 1956 from Hungary during the Hungarian Revolution. His parents were Holocaust survivors. When they came to Canada, my grandfather had no money, didn't speak the language. He started to sell eggs at a local farmer's market. And actually, that stall, that farmer's market stall,

still exists about five kilometers where I am today. My uncle today runs it. He had to do it all on his own. Everything was on the line. He had to mortgage his house to pay for the insurance and pay for the rent on this little stall. He had to buy inventory. what we've tried to do with ShopRite today is whether it's Shopify Capital, which makes it easy to find funding,

or Shopify markets, which makes it easy to expand digitally and physically around the world, or things like having the best converting checkout on the planet, or Shopify audiences where we help merchants actually find look-alike audiences across meta and Google and Pinterest and Snap and TikTok, what if we were able to use the leverage we have, the insight we have, so that you as a merchant using Shopify can just focus on making the very best tea. And you don't have to think about going and trying to convince a bank to give you some capital on five data points when we have way more. The ability for Shopify to make an underwriting decision is so much bigger because we see so much more.

And then as your business requires more, the complexity of Shopify almost reveals itself when you need it. And so this idea that you can build something for everyone. So if you have an ID in the shower in the morning, you can test it. But then even Supreme, that's the original Supreme Skaport's old, the shoplight behind me right now, when Supreme does these massive flash sales every Thursday at 11 o'clock, EST, we can also handle that type of throughput. Or we can handle skims or fashion nova, these massive businesses. What would the end result be?

And I think the answer to that question that I believe and we've now seen is that, you can actually, it's not that we're changing physics. Most businesses don't succeed. We get that. But what we're trying to do is we're making it a little bit more likely that they do succeed and they do grow faster. And we do that by leveraging the fact that this is really a community of entrepreneurs and we sort of feel responsible to be the guardians of those of that community.

So I fly to, you know, to meet the biggest shipping companies in the planet or meet the biggest payment companies in the planet. And I negotiate as if I am their representative in the room. and then I bring back those incredible prices and technology and infrastructure and product. And we give it to the merchants and say, here, now you can go back to making the world's best T or the world's best skateboard. That is amazing. And, you know, I think beyond that too, something that I, and I'm going to admit this, I have made my first like spent 500, I think 400, I think 400, 80 bucks, whatever it was on the Shopify app. I discovered something called Onward Reserve, which was the name of the company that I guess is doing some Shopify stuff.

And I spent all this money and I discovered that 100% organically from within your Shopify app. Right. And so it's like beyond just the, you know, capital, the audiences, all these cool things, you're also giving your merchants an opportunity to be organically discovered by people that are just looking to buy cool stuff. So I just, I really commend you guys on that. Oh, thank you for saying that. It means a lot to me. So Shopify has really transformed the way entrepreneurs approach e-commerce.

But let's talk about competition in the space. over the years. You know, with the explosion of AI and other platforms and so many tools being available, how does Shopify stay ahead of the curve and really empower its entrepreneurs? So back to that IPO Roadshow back in 2015, we did, I think it was 93 meetings with investors. It was a two and a half week process. I loved it. I'm a storyteller. So the fact that I was able to go and tell the Shopify story to the largest funds in the world who eventually become investors and long-term investors was the hope. I really enjoyed it. And they asked where Shopify was going. We painted this sort of this picture for them of the future of retail is not going to be

online. It won't be offline. It'll be everywhere. And what we were building is this retail operating system so that anyone that uses our product can sell on any surface area. And the obvious ones at that point was online and offline, mostly, a little bit of social media commerce. But last week on X or two weeks ago, I announced that now we are powering commerce inside of Roblox, just as an example. So it's pretty crazy. Yeah, Roblox has this unbelievable amount of daily actives and great place, another service area. So back to the IPA Roadshow.

When we presented this vision that we were going to power commerce everywhere, some people got it. Most did not. They most said, well, just stick to e-commerce. We're like, well, no, that's not how you're creating this false. dichotomy between online and offline retail, almost as if they're competing with each other. And you hear that a little bit. If you listen to an earnings call from a company like Best Buy, for example, or Macy's, you hear this term channel conflict, which is effectively that one channel online is hurting another channel, offline or vice versa. And our belief was if we want to be really

relevant, not just in 2015 on the road show, but in 2025, we actually have to stay ahead of what people want so that when you use Shopify and you decide I want to activate a new channel or I want to create a new type of campaign or I want to try a new type of technology, the answer is it is available. And to do that, I think you really sort of have to keep the most important thing, the most important thing, which means for us making the important things easy and everything else possible. And so as commerce evolves, we try to stay ahead of it. I put out a post in like 2018 on X, I think, or Instagram, talking about the future of AR for commerce. I mentioned reality.

And I was using a company out of Waco, Texas, called Magnolia, which was owned by Chip and Joanna Gaines. Oh, yeah. They had that show. A big target guy right here. I love me some Magnolia. Okay. So we were doing this thing with Magnolia, whereby using the Magnolia app,

this is before iOS, and I assume Android, had native AR functionality built in. But using the Magnolia app, you could actually place furniture around your home, or at your office. And I was talking, I was like, how cool this is. And I remember reading the comments. I was like, no one's ever going to use this. This is so silly.

What a gimmick. But we've been patient about this. At that time, it is true. Most people were not trying to use augmented reality or virtual reality for digital tryons or digital placements. Today, AR is built in to all of our phones. And so many other merchants and huge brands, including the biggest ones like IKEA are using this technology

so that before you purchase you can see what something looks like. That is, to be very specific, that is the way that we stay ahead of the curve, is by not just providing the product and service and functionality that people need right now, but by as close as possible accurately predicting what merchants and business will need in the future. And, you know, AI is another one as well.

We've been, we're a little bit less hand-wavy, about AI like a lot of other companies are, because our version, our view of it is it has to be practical. How is it going to help? So right now, built into Shopify is something called Shopify Magic, which is not one single product. It's embedded across the entire product. So things like product photography or product descriptions or email marketing newsletter subject lines, things like that, you can simply ask Shopify magic to generate on your behalf. There's no reason that if you were taking a photograph of a pair of headphones

that you should have a background that doesn't look nice. And so Shop by Magic simply makes it look better for you. And it's based on the hundreds of millions of products sold on Shopify. We know what product photography is going to convert better for that particular vertical or that particular product.

And are a lot of people using it out of millions of stores? Most are still probably not using it. But they will. And when they are ready to use it, it will be available to them. And that is the best way for us to stay ahead of the curve. And it's the reason why we've seen a lot of competition.

We still have competition, but we've had competitors come and go, and there's always new entrance. But the key for us has always been simply be the product that is future-proofed for these merchants. I love it. I think as long as you're staying ahead of what's next and you're offering all of those tools, I just think it's incredible for the future and for your growth. And I'm definitely certainly pumped.

I'm thinking, man, I got to do some more here and get moving on some of my consumer product sites. But no, I love that answer. That is fantastic. I'm curious. Would you define Shopify Magic right now as the thing right now that's going to be around for the next two, three, four years like the augmented reality was in 2018 that is now used by the IKEA's and the Amazon's? Are you thinking like this has some tailwinds behind it that'll be around for years to come? Or are you maybe taking your 16% free cash flow and reinvesting? that into something else in the business. AI is definitely an investment area for us. I have this

not as big as your show, but I'm not a sports guy. I don't watch sports on weekends on Sundays. I'm not watching football or basketball or basketball or whatever people do. But I'm a student, as I mentioned earlier, I pray at the altar of entrepreneurship and I'm a Jewish entrepreneur. So I started creating this archive about two years ago called Big Shot. Bigshot.com, is the URL where I'm trying to create an archive of the greatest Jewish entrepreneurs of the last half century. So people like, Izzy Sharp who created the Four Seasons Hotel, Leo Cooperman, who created Omega, David Rubenstein from Carlisle, the Queen of Broadway, Fran Weisler. These amazing, iconic people.

Bobby Brown was one of my most recent ones who created, obviously, Bobby Brown Cosmetics. The next episode that's coming out, you're hearing it first, is Mickey Drexler. Mickey Drexler was the CEO of the Gap for 18 years or so. He created an Old Navy. He's also responsible for creating or really modernizing. J. Crew. He's probably one of the best retailers that's ever walked the earth. He's an amazing, amazing man. Great story. I asked him about merchandising. And he told me with great detail and sophistication how much effort and time was spent on merchandising at the Gap, Old Navy, and J. Crew.

I mean, they had, not teams, they had full companies effectively doing merchandising, picking what product goes where, at what price point, connected with what other product to cross-sell. The sophistication was unbelievable. Most people don't have team that size. Most merchants and brands are not good at merchandising. They're good at making their thing. They're making their tea, making their headphones. Merchandising was not something that they thought they'd have to get really good at. And eventually, I mean, Robert, you would know this from your own business. You've got to get really good at this thing. This is sort of merchandising is what you show to what customer at what time in what sort of venue, in what context. AI is going to do that way better than these teams could.

Now, if you combine a Mickey Drexler-type merchandising team and AI, they can work faster, more effectively. They can blow the doors off the place. And I think now there's still some trepidation to use some of these AI tools because it feels, I don't know, lazy, I guess, or it feels like you're phoning it in or outsource. No. It allows you to automate tasks better than you can on your own so that that Mickey Drexler team at the Gap from 20 years ago, they can work on the most important things. things at the most important time and not waste time on things that large language models can do better. Yeah, one of the cool things right now, we recently launched a puzzle company and we had that exact feedback in a negative way. We saw the puzzle industry. My girlfriend is very into puzzles and we

saw it as being very archaic and with everyone living this van life and people are renters now and they're not getting homes, we just saw a huge opportunity to put puzzles in bags like a coffee bag and make them with AI, oh my God, we got so much pushback. You would not believe the people saying, we can't believe you did the artwork using AI. You're putting graphic designers out of business. And I'm like, no, no, no, no, no, you don't understand. We still have graphic designers. They're just working on the more important things. Exactly. And so it's so great that you brought that up, because it's so true. You know, Austin and I talk a lot of times that AI is not going to take your job. The person that understands integrating AI better than you do is going to take your job.

And so it's so funny that I'm just now going through that with the puzzle company because our puzzles are so vivid and incredible just because of we did all of the art using AI and it's just completely changing the game in the puzzle world. So it's a lot of fun and I'm really glad you touched on that point. I also want to encourage everyone to go to www.bigshot. com. Go listen to Harley's podcast. I'll definitely be tuning in now as well. I'm really excited for that. Now before we move on to our next question, let's take a moment to hear from this episode, sponsor Masterworks.

Robert, did you know that Bank of America just released a new report that over 80% a multi-millionaire respondents aged 43 and younger invest in or are looking to invest in find artwork for a portion of their portfolio? And that kind of makes sense to us because we diversify with art ourselves. We've both been using Masterworks art investing platform to diversify for what, five years now? Yeah, that sounds about right because, you know, both Robert and myself invest with Masterworks. and we even interviewed their founder and CEO Scott Lynn on the show a couple weeks ago. Now they've hit over 950,000 users and a billion dollars in capital raised because with Masterworks, you don't have to be an art expert or spend millions of dollars to invest in artwork.

Exactly. And the fact that Masterworks has successfully exited 23 paintings to date with each returning a profit doesn't hurt either. Listeners can learn more at Masterworks. dot art front slash rich habits which is also shown in the show notes of this episode as with any investment past performance is not indicative of future returns investing involves risk important regulation a disclosures can be found at masterworks.com forward slash cd all right let's go ask carly another question so we talk about mindset a lot on this podcast and for you what is the mindset

of a successful entrepreneur in today's digital economy and what qualities or habits should someone cultivate if they really want to be successful online? I think the cornerstone of entrepreneurship is optimism. I think you have to be an optimist. I think if you're not, it's just not going to work out. And so I generally bring an optimist mind to everything that I'm doing. Some things that work out, some things don't. I'm okay with that.

As long as the things that do work out offset the cost of, not just financial costs, but just the cost general of things that don't. I'm good with that. So optimism really does play a gray role here. I mean, you guys have mentioned curiosity, so I don't need to cover that. I'm sure you talk a lot about that with other guests too. I do think there is like this inherent appetite for experimentation

that the best entrepreneurs I know have. They're curious about, hey, let me just, let me take $15 or $100 and experiment with this new ad platform, see where it goes. Let me try and add a little bit differently rather than have a polished beautiful ad. Let me just literally take a photo or a video on my iPhone of my, of myself playing with the product and see how that goes. This idea of like, hey, what would happen if I try this? What would be the result of that?

This sort of application for experimentation is a big one. You know, Toby taught me this really early on, which is sort of this focus on subtraction. It's very easy to add things, very difficult to subtract things. So again, really focused on what you're really, really good at and like allow yourself to leverage your superpower. Now, in terms of this subtraction, that could be a product lineup.

If you add a bunch of products, it's going to be really, really hard to take those away later on. So be very thoughtful of what you add. You don't want to create the paradox of choice. When you're hiring for a team, hire very carefully, very difficult to subtract after you sort of have a big team.

But also this focus on like self-awareness. You know, I was shopped by chief operating officer for five years or so. And I think it was okay at that. But I knew I was never going to, to be, there was no chance it was ever going to be the best in the world at that. The role that I'm in now is the president of the company, which, you know, for me, it's really being our chief storyteller, both for merchants and partners, investors, the general public for media. I'm not there

yet, but one day, you know, I have a chance of being really world-class the storytelling thing. This is really where I should spend my time. So that sort of self-awareness part is important. And it also allows you to, you know, I think a lot of entrepreneurs, they end up working or co-founding companies with people just like them, sort of like the people you were best friends in high school end up becoming your business partners. Actually, I would say the opposite. You should go and find someone who like, you were definitely not quite friends with in high school and make them your business partner because ultimately they're probably going to be far more effective at the things you're not really that good at. We tend to spend most of our time in high school or generally with friends that are like us.

And then I think, you know, sell where your customers spend their time. I mentioned us powering commerce and Roblox, but we also power commerce on YouTube and on Spotify and a TikTok. I don't think the Roblox channel is right for everybody, but if you are selling, you know, if you're a toy company or you're selling or you're a musician and you're selling merch, you definitely should be activating the Spotify channel. Why? Because the people you're trying to sell to are your fans, your listeners. They're coming to your Spotify artist profile page. Have your merch there. So that goes to, really understanding who you're trying to sell to and creating the least amount of friction

between where they're already spending time and ultimately where you're transacting with them. And then maybe the last thing for the small business that are listening, don't try to be with the big companies. They're very well resourced. Don't try to do what they're doing and do it better. Instead, do what they're not doing, things that they can't really do because everything they do has to have scale. So doing things that don't scale is really effective. I have a coffee machine right here that I really love. It's called X Bloom. It sort of emulates the pour over that all, you know, every hipster copy shop does, but it does it automatically. I could have bought, you know, Breville or I could have bought some fancierger coffee machine, but I want to buy from an

entrepreneur, small business. And what was so neat was I got a handwritten card from the founder. And the founder and spent some time trying to learn about me, my social media profiles were public, went to Instagram, you know, knew my wife's name and said, I hope you share your coffee with Lindsay, my wife. It meant so much to me. There is no way that any of these larger coffee companies would have ever spent the time to do that because in a meeting, if someone would have proposed that, somebody would have said, we can't do that because it doesn't scale. So bring us a better idea. But I don't, I wasn't in the ex-blue meeting at this point, but someone in the next to the meeting said, hey, what if we actually did some research on who's buying our coffee machines?

They're a thousand dollars. They're quite expensive. They're giving us a chance we're a small business. Let's show them that we really care. And I think that's how you outcompete those who can scale or are too big to take those small actions. I think that is so powerful. And gosh, I forget who sort of talks about that, about the idea of doing what's like tedious and non-scalable in the beginning. Because to your point, these big dogs can't do that, right?

It all has to become economies of scale and actually work for them. And now because that person that sold you the coffee machine wrote that handwritten note, and they did their research, you're not talking about their company. It's going to be listened to now by tens of thousands of potential new customers for this coffee machine. And I'm sure you're going to scream from the mountaintops about how much you love this machine for years to come. And so it just shows a lot of people listening to Harley's points. Don't be afraid to get your hands dirty. Don't be afraid to do the mundane tasks again and again and again and again because that is what

keeps people sticky. That's how that customer stays around and keeps coming back and then tells their friends about it. Doing the same thing over and over, I know Alex Homozy talks about this a lot for a very long time is how people become successful. They think it's like a real alpha inconsistency. Absolutely. It is 100%. So my goodness, Harley, thank you so much again for joining us today on the Rich Habits podcast. If you're someone looking to start scale or grow a business online, Shopify should definitely be on your radar. Please visit Shopify.com. to learn more about how their platform can support your entrepreneurial journey. And Harley, before we sign off, if there's anything else you want to share,

plug the podcast or any other cool thing you're doing, please let our listeners know what's going on. Let me just plug entrepreneurship. If you're listening and you've had an idea in the shower for the last couple of days or a couple of weeks or a couple of months, and that idea keeps coming back to you, for the love of God, please give that thing a try. Let that thing out of your mind.

Let the world see it. Let the world judge whether it's a great idea or not. You may start an $800 million tea company like David. You may build a $100 billion company like Shopify. You may start somebody that just allows you to find your life's work and maybe quit a job you really don't like and gives you, you know, it doesn't pay you that well and doesn't really give you that much satisfaction. This is the golden age of entrepreneurship. And it is, it behooves you to at least give those ideas a try today. Because that was not something that our parents and grandparents and great-grandparents had the luxury of doing. And we can do that right now. And it can get really, really big. And I've seen that happen more times than I can count. And it's unbelievable. So my only plug is, if you are thinking about entrepreneurship, you are probably an entrepreneur, which means you probably have a great idea, which means you must start that business.

And you can do with Shopify or if you don't want to you shop, but you don't have to. But you got to let that thing out of your mind. and let the world decide for itself, whether it is valuable. I love it, Harley. Thank you so much. This is a very special episode for me. All of this just really leads to the power of resources like yours with Shopify and the fact that people can just go out and give it a shot without having to spend tens of thousands

of dollars or months to do it. So this is a very special episode. Thank you so much for carving out the time for Austin and I. We really appreciate it. Pleasure is all mine. Robert, I think that conversation with Harley has been the best conversation we've had with any guests now on the Rich Habits podcast. This guy has helped build, actively build a $100 billion company for which that company has generated and sort of process now a trillion dollars, a trillion dollars of sales for entrepreneurs and merchants all around the world. I just, I feel so humbled that we got to talk to him and learn from him.

I mean, it's just been absolutely wonderful listening to what Harley had to say. And a couple of things that really stood out to me. First and foremost, come back to that idea of finding your 1,000 true fans. I could not be a larger, you know, supporter and proponent of that strategy. It's what I did personally as I began, you know, sort of publishing content on the internet. Because once you can find those 1,000, 100 people, but especially 1,000 people, once you find those 1,000 people that want to pay you $10 a month in, you know, a subscription or maybe they buy a or whatever it is from you, $10 a month at 1,000 people is $10,000. That's $120,000 a year, right? And people just kind of wave that away like, no, I'll never get there, no way. It's a lot easier than you

think. And back to that second point of what Harley was talking about that I am such a big believer in, which is do the things that are not scalable in the beginning to stand out, right? Back to the idea, an example of that coffee machine. Harley was talking about how, you know, the founder looked him up, who he was, did all the research, and even wrote his wife Lindsay's name on the note, explaining about how he wants them to share the coffee. And it's like, because of that one small act that that entrepreneur did, he's now introducing this coffee brand to tens of thousands of listeners, I'm sure not just on our podcast, but every time he shares that example. I think the episode was incredible. We have so many budding entrepreneurs on the show. And with so

many incredible tools, and to hear it from his perspective was just really awesome. And I'm excited to get this episode out there, share it, and have so many people learn from it. It was really incredible. What do you think was your favorite, maybe two or three takeaways from the episode? I think it's really all about the mindset of understanding just start. And the fact that we have so many great tools available now for little to no money. So that would be number one. Number two is like we talked about.

So many people think you need this big audience or you need hundreds of thousands of followers and hundreds of thousands of dollars to make a difference. And there's people out there literally with one, two, three thousand followers that have meaningful followers that are crushing it out there on e-commerce through TikTok and Instagram. So I think that would be number two. And then number three would just be to see what they've been able to do with one really great idea. And that is build such a huge business. So I think those would be the three takeaways for me. Yeah.

I also want to encourage people to learn more about that magic that he was alluding to with the AI. If you're an entrepreneur who's struggling with maybe writing some descriptions or photos or whatever else is going on with your business online, definitely check out Shopify's sort of AI tools. It seems like they're reinvesting a lot of money into that and they think that that is the future. So there's a lot to get excited about. With that being said, Robert, thanks everyone so much for joining us on this week's episode of The Rich Habits podcast. If you're new around here and you like the interview, you like the conversations we're having with types of folk like this, definitely consider hitting the subscribe button, the full. follow button on Spotify, wherever you listen to the podcast. If you learn something, if you know an entrepreneur who could get inspired by this episode, they've had those shower thoughts, they've want to

take that next step. They're really excited, but they don't know where to start. They really looking for that just nudge in the right direction. Send them this episode. This episode can be the difference maker for them. And we really, really appreciate all of you that come back every single week to listen to the Rich Habits podcast. And don't forget, we have an Instagram account, Rich Habits Podcasts on Instagram. We post nice, nice, fun little clips. We also get those DMs from you guys for our question and answer edition episodes. So don't forget to shoot us some DMs. And like I said the other day to you, I feel so blessed that we get to share our deal flow, share our connections and really let everyone absorb this information and hear it from people like this.

You know, the president of Shopify, people from BlackRock and all these incredibly smart people around the country that are in the world of finance and business building and e-commerce. I just love it because it really just opens the door to all this great information and learning, not just for us, but all of our listeners. So I'm very, very happy with this episode and just so proud of everything we're building with the Rich Habits Network. Are you one of those media strategy people clicking through slides, scrolling spreadsheets? Yes? Good.

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And you're right next to artists like me, Lizzo. So, are you ready to talk to fans? Spotify Advertising. You're among fans. I have a great start to your week.