The Tim Ferriss Show - #359: Tobi Lütke — From Snowboard Shop to Billion-Dollar Company

Episode Date: February 7, 2019

"Feedback is a gift." — Tobi LütkeTobi Lütke (@tobi) is the founder and Chief Executive Officer of Shopify. In 2004, Tobi began building software to launch an online snowboard store called Snowdevil. It quickly became obvious that the software was more valuable than the snowboards, so Tobi and his founding team launched the Shopify platform in 2006. He has served as CEO since 2008 at the company's headquarters in Ottawa, Canada.Tobi is an active advocate for computer literacy and education, and serves as a board member of Canada Learning Code, an organization working to give all Canadians access to digital skills. In 2014, Tobi was named The Globe and Mail's CEO of the Year. He served as Chair of the Digital Industries Table, an advisory board commissioned by the federal government to provide recommendations on how to turn Canada into a digital leader.Please enjoy!Click here for the show notes for this episode.This podcast is brought to you by Peloton, which has become a staple of my daily routine. I picked up this bike after seeing the success of my friend Kevin Rose, and I've been enjoying it more than I ever imagined. Peloton is an indoor cycling bike that brings live studio classes right to your home. No worrying about fitting classes into your busy schedule or making it to a studio with a crazy commute.New classes are added every day, and this includes options led by elite NYC instructors in your own living room. You can even live stream studio classes taught by the world's best instructors, or find your favorite class on demand.Peloton is offering listeners to this show a special offer. Visit onepeloton.com and enter the code TIM at checkout to receive $100 off accessories with your Peloton bike purchase. This is a great way to get in your workouts, or an incredible gift. Again, that's onepeloton.com and enter the code TIM.This episode is also brought to you by LegalZoom. I've used this service for many of my businesses, as have quite a few of the icons on this podcast, such as Automattic CEO Matt Mullenweg of WordPress fame.LegalZoom is a reliable resource that more than a million people have already trusted for everything from setting up wills, proper trademark searches, forming LLCs, setting up non-profits, or finding simple cease-and-desist letter templates.LegalZoom is not a law firm, but it does have a network of independent attorneys available in most states who can give you advice on the best way to get started, provide contract reviews, and otherwise help you run your business with complete transparency and up-front pricing. Check out LegalZoom.com and enter promo code TIM at checkout today for special savings and see how the fine folks there can make life easier for you and your business.***If you enjoy the podcast, would you please consider leaving a short review on Apple Podcasts/iTunes? It takes less than 60 seconds, and it really makes a difference in helping to convince hard-to-get guests. I also love reading the reviews!For show notes and past guests, please visit tim.blog/podcast.Sign up for Tim’s email newsletter (“5-Bullet Friday”) at tim.blog/friday.For transcripts of episodes, go to tim.blog/transcripts.Interested in sponsoring the podcast? Please fill out the form at tim.blog/sponsor.Discover Tim’s books: tim.blog/books.Follow Tim:Twitter: twitter.com/tferriss Instagram: instagram.com/timferrissFacebook: facebook.com/timferriss YouTube: youtube.com/timferrissPast guests on The Tim Ferriss Show include Jerry Seinfeld, Hugh Jackman, Dr. Jane Goodall, LeBron James, Kevin Hart, Doris Kearns Goodwin, Jamie Foxx, Matthew McConaughey, Esther Perel, Elizabeth Gilbert, Terry Crews, Sia, Yuval Noah Harari, Malcolm Gladwell, Madeleine Albright, Cheryl Strayed, Jim Collins, Mary Karr, Maria Popova, Sam Harris, Michael Phelps, Bob Iger, Edward Norton, Arnold Schwarzenegger, Neil Strauss, Ken Burns, Maria Sharapova, Marc Andreessen, Neil Gaiman, Neil de Grasse Tyson, Jocko Willink, Daniel Ek, Kelly Slater, Dr. Peter Attia, Seth Godin, Howard Marks, Dr. Brené Brown, Eric Schmidt, Michael Lewis, Joe Gebbia, Michael Pollan, Dr. Jordan Peterson, Vince Vaughn, Brian Koppelman, Ramit Sethi, Dax Shepard, Tony Robbins, Jim Dethmer, Dan Harris, Ray Dalio, Naval Ravikant, Vitalik Buterin, Elizabeth Lesser, Amanda Palmer, Katie Haun, Sir Richard Branson, Chuck Palahniuk, Arianna Huffington, Reid Hoffman, Bill Burr, Whitney Cummings, Rick Rubin, Dr. Vivek Murthy, Darren Aronofsky, and many more.See Privacy Policy at https://art19.com/privacy and California Privacy Notice at https://art19.com/privacy#do-not-sell-my-info.

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a world-class performer from any number of different domains, business, sports, entertainment, military, and so on. And today's guest, who will perhaps debate that he himself is world-class, but I'll not allow it, is Toby Lutke, who is the founder and chief executive officer of Shopify, CEO that is of Shopify. In 2004, Toby began building software to launch an online snowboard store called Snowdevil. It quickly became obvious that the software was more valuable than the snowboards, so Toby and his founding team launched the Shopify platform in 2006. He has served as CEO since 2008 at the company headquarters in the metropolitan epicenter of tech, Ottawa, Canada.

It's a fantastic place. I've spent time there. Beavertails, also incredible. Toby is an active advocate for computer literacy and education and serves as a board member of Canada Learning Code, all caps, CLC, Canada Learning Code, an organization working to give all Canadians access to digital skills. In 2014, Toby was named the Globe and Mail's CEO of the year. He served as chair of the Digital Industries Table, an advisory board commissioned by the federal government to provide recommendations on how to turn Canada into a digital leader.

And that report was published, that is, of the table in September 2018. Toby, welcome to the show. Thanks so much for having me. And I feel like this is a long time coming. We go way, way back, and we'll get to that. But I thought we could start with your penchant related to optimization. So I want to do a quick fact check here. So this is something I came across in the New York Times.

It doesn't surprise me, but here's how it goes. I also have a weird obsession with optimizing things. This is supposedly a quote of yours. Even when I was walking to elementary school, I counted the number of steps on different routes so I could figure out which one was shortest. And I'll just finish this up. So dot, dot, dot, I'll just connect some things. If I had to do something once, that's fine.

If I had to do it twice, I'm kind of annoyed. And if I had to do it three times, I'm going to try to automate it. Did you count steps? I did. That sounds ridiculous, doesn't it? It's one of those situations, you know, like where I think I was together

with my mom, my sister, and my sister was complaining about me trying to optimize something. I think we were talking about going for a walk and I'm like, well, you know, if a place we're starting from is the same as a destination why don't we just not go and my mom immediately said you realize you did this

from when you were like four or something and told me the story and it's kind of sort of unfortunately probably tells people way too much about me so I don't know why this made it into the New York Times I'm actually kind of unhappy about this right now, but here we are. And here we are. And the optimization or the looking for efficiency, is that something that either of your parents has? Or does that seem to kind of come out of left field? I think, I don't know.

It's probably one of those unexplained kind of quirks which and after probably many many years where it's um annoying everyone around me suddenly starts becoming useful right like after you know because you know as a especially as a programmer it's it's it's been wonderful right it's uh you know i i love these old machines where you know can understand every chip that's in the machine you You can kind of figure out what's what. Trying to make a video game in the 90s was really, really hard. And so those were the kind of things which really, really attracted me. And just to give people a snapshot of where things are now,

and we're going to certainly continue with this retrospective rewinding of the clock, but how big is Shopify at the moment? What are some of the numbers? So as you said, Shopify started in 2004 and became sort of, we released in 2006, which again, that's almost like 100 internet years ago, right? It's been a long time. And the company now is a public company.

It's about 4,500 people work at Shopify. We have offices largely across Canada, but also in Berlin and Australia and so on and all sorts of other places. We have about, I don't know what our newest official number is. I think it's called more than 700,000 customers and all around the world, 175 countries and so on. It's become this, by almost any metric, fantastic success.

I was mentioning when we were having lunch before this that I was unpacking some boxes that i'd not yet unpacked from my move from san francisco to austin and i found the the coin from the initial public offering and it really made me smile because i remember when we first met shopify had what would you say? 15 people. 15 people. And that was, was that 2008 or 2009? 2008, I think. It was 2008. And could you tell what you remember of that first meeting? Where did we first meet?

We met at a conference called RubyConf, right? It might have been RailsConf. RailsConf. RailsConf, that sounds right. Ruby and Rails being the technology Shopify has been programmed in. And you were invited as a keynote speaker. I think you did an interview with David. That's right.

David Hennemeyer Hansen. Exactly. So I think we talked in the green room. It's like, hey, I love everything about your book, but the worst part about it is you keep talking about using Yahoo stores for your supplement business, and you really should have used Shopify. And what can I do to convince you of, I wasn't that direct. I was probably really shy.

But the timing was perfect also because I was in the process of doing the final editing for the revised edition of the four-hour work week. And I had been polling my readers through social media and the blog and so on, which at that time, the blog already at that point had millions of readers and asking for suggestions for updates for the tools and resources. And Shopify was the most consistent recommendation for e-commerce

platform. And then I go to this, this conference, we meet in the speaker's room effectively you have uh let's say 15 or so employees and that was the beginning of of our exchanges and then collaboration which which we'll get into but it on one hand seems like a previous lifetime and on another hand, just does not seem that long ago. It doesn't, it doesn't. And I have to say for people who perhaps wonder this, does money change people? I have to say it's been so, I didn't expect you to change and you didn't. And it's really refreshing. I don't know if I've said this publicly,

but Shopify is one of those companies where everyone I've ever been involved with has been just such a genuinely good person. It's an example of when the good guys have won, in a way. And it just makes me so happy that you guys have had the outcomes that you've had. Thank you so much for that, Tim. Yeah, I just want to start there. So thank you so much for that, Tim. Yeah.

I just want to start there. It's really just, it gives me so much joy to think about. And let's get back to your odd behavior as a kid. So this is from a separate piece. And this isn't going to be all quotes, but some of these are just so fantastic. I can't not mention. This is from Globe and Mail. And this, I think, speaks to a superpower of yours that may have caused problems in the beginning. And I recall reading a quote,

and I'm going to butcher it, but Francis Ford Coppola, the director, incredible, legendary filmmaker had said, you know, you receive lifetime achievement awards for the things that would have gotten you fired in the beginning. That's a fantastic quote. Yeah. So, here's the quote, and this is the writer. From an early age, Lütke had what he calls authority problems. In schools in Koblenz, Germany, he preferred to deconstruct the questions teachers gave him rather than deliver the expected answers. And I was like, yep, that sounds right. He took shortcuts determining the minimum number of hours he needed to spend in a particular class and still pass that he could

spend most of his time with his computer. One of the patterns that I have observed with you over the years that I think is so, so valuable and so simultaneously important but undervalued or underdiscussed is not just asking the question in front of you but dissecting it to determine if it's the right question. So could you elaborate a bit on that or think of any examples uh that they could serve as as a launching off point or or even maybe start with why you do this yeah i've um

wow this is already going in interesting places isn't it like okay we are talking about my authority problem and my obsession with optimization. So where do we go from here? Here's one thing, which is here's what the authority problem thing has morphed into. And I think this is exactly the sort of pivot point from which it went from problematic to very useful. And that is I have a serious problem

just of accepting autotoxy. Like, here's how things are done. That doesn't grab me in any particular way. And so what I've sort of determined for myself is, I really want to understand the situation and the various pressures acting on the situation that I might get myself into. So you were taking us back

with the little coin that you found, which is one of those artifacts the New York Stock Exchange gives you when you take a company public. And so we got to do this together. Before that date, when you actually ring the bell, you, at least least traditionally like companies like

Spotify and Slack are now doing the direct listing which I think is really really healthy for that particular industry but before that you went you worked with bankers you built this prospectus and then what you and then you go on a road show and all these kind of things you spend a grueling like talk about I don't want to do a thing two times, three times. I had to give the same presentation a hundred and three times in eight

days. It's absolutely it was a complete haze. Toby's version of hell. It was my version of hell, which is funny because my business partner, Holly, is the opposite of me and loved it. So it's good to have these people around who can remind you. So Harley, probably the person I've heard most described

as a force of nature. That phrase applied to Harley. Exactly. Which I'm decidedly not. So Harley loved it. I wanted to automate it all the way through. But just taking us back there, because I think it's a good example of this kind of thinking.

One thing I did very early in the process of actually taking the company public was to not just understand how I could shop if I become a good public company, but there was this sort of obvious agency problem that exists on the investment banker side. And so I spent a good couple months talking to people, figuring out what kind of things happen

in the performance review of investment bankers like how do they make their money how do they make their bonuses how do they you know how do how do they string together career what's good what's bad you know if they get a lot of these kind of fees is that good for them or is that neutral if they you know so because this is this is the I would like to come to a conclusion, like, and often this is the same conclusion that orthodoxy would have just sent me to myself, because I want to say, okay, I'm going to do these following things because I, from first principle, argued that this is the right thing to do.

And I think this more often than not actually leads to very interesting insights where you can say, okay, because I understand what's at play here, I can disagree with someone's suggestion and I can maybe improve something slightly. long exercise in doing this over and over and over again rather than saying okay well the internet needs online stores they are super important entrepreneurship is one of the biggest economic opportunity online retail is one of the biggest entrepreneurial opportunities of our lifetime it's like 1.9 trillion dollar industry now it's going to be 4 trillion soon online stores need to be something that people can create okay cool but do people really care about online stores they care about selling right they care about becoming successful entrepreneurs they become of they they care

about um um reaching for independence and and the success of uh like of that so that so which pretty quickly sent us into a direction saying, okay, well, we do the online store thing, but let's actually build the software that actually supports people in the activity of reaching for independence. And because of this, it became something else, and success came through that.

This also, in a way, connects some dots from earlier today when we were chatting about a mutual friend, Seth Godin. Yeah. And, uh,

Seth and I, not too long ago had this conversation where he gave the example of, uh, which was borrowed from an example he had read, but he elaborated on it, which was, you know, no one wants a quarter inch drill bit.

They want a quarter inch hole. And it's like, no, but they don't really want a quarter inch hole. They want a shelf. They don't really want a shelf. They want a want a shelf. They don't really want a shelf. They want a place to put their books and so on and so forth.

So that you don't sort of mistake the current characteristics of a temporary solution as the ultimate objective. Because the world has sort of sorted itself into solutions based on a world that's long gone in a way. Like why, I mean mean just looking back at my industry like why was there a um uh online store industry and a point of sale system industry and

all these ebay power seller tools like each of those instances someone has a product wants to sell it through whatever channel like do you do you want to go to three, four, five different vendors to get software to participate in all these channels? No, you just want to do it. And so I think it's really worth going for life and just saying, well, hold on a second. What are people actually trying to accomplish? What is the actual problem here?

I think the most impressive story along those lines Well, hold on a second. What are people actually trying to accomplish? What is the actual problem here? I think the most impressive story along those lines that I've ever sort of come across is the... Are you familiar with Malcolm McLean's story around the invention of a shipping container? I'm not, but I've had a book about shipping containers recommended to me multiple times. Yeah, The Box, probably. The Box.

What was the person's name you said? His name was Malcolm McLean he's he's he's one of us entrepreneurs who would absolutely be on your podcast if he would be alive right now right because um spent the first money out of college on buying a truck started a trucking company um and tried to get things shipped across the country or even to Europe and realized like you can make the most efficient trucking system or the train guys have the most efficient trains and the boat guys have ships all over the world,

but getting something through multiple stations is impossible. You have to unload everything, unload the next. So he ended up just buying a bunch of tankers from the US Navy, which had surplus tankers at the end of world war ii and just just came up with this idea of putting a shipping container together which you can put things in the factory in maine and then bring ship them all the way to berlin and the moment he did that the cost of um sending like a unit of good went from i think six dollars to 16 cents it's incredible we We all live in Malcolm's world

because the shipping container has been hugely influential in history. It's like a lot of people talk about free trade agreements and globalization. In reality, globalization happens the moment a shipping container opens in a country. And it's a fascinating, rather underexposed story. But what's so cool about

this is um the reason why he pulled this off is because um again the the the vanderbilt and the train guys really loved the trains and and the boat guys loved boats and he was the only person who just cared about moving things he wanted to solve the problem of moving things in the world and then you come to better solutions. And we need more of that kind of thing. Yeah, the versatility, I don't want to get too taken off track, but the shipping container, when I was, the brilliance of the modular design

and the ability to take a single container and move it across different means of transport is an endlessly fascinating topic. And a lot of folks also don't realize the sort of genius of the design of shipping containers and the considerations of the dimensions and the ability to cool or control temperature. And then the entire aftermarket use of shipping containers also,

which is how I came into it. I kind of backed into it looking at different types of design and construction. That book was called The Box? Yes. The Box. So since we're talking about it, might as well just hit on something I was going to ask about anyway,

which is books. So you're, I i would say a voracious but very selective consumer of information and there's a lot of garbage out there you mentioned the box uh there's another book and i think it might have been in harley's office where i first saw it at shopify but high output management by andy grove that's one of the. That's one of the best books ever. One of the best books ever. So I want to, and then another one that I've listed here is Drive by Daniel Pink. I'm not sure if you want to comment on that, but could you mention a few books that you

have found particularly helpful and maybe start with High Output Management and why that is a good book so so i'll take you back sort of to early days i started at shopify as um uh you know hey i only want to do the technology i'm i'm programmer by trade right so this is my world um and i wanted to treat business as a black box um for the couple of years. And then for various reasons, I was sort of thrust into also having to take over the business side of Shopify around that time actually we met. And I did a poll with people I knew

for two books to read. So business folks. Exactly. So because up until this point, I was knee deep in Martin martin fowler and and ken beck and all these kind of luminaries of a programming world but i had no idea about business and so um the two books i read um which is funny because it tells you how good that selection process was because i still think was a probably a they would rank in the top five books I've ever read.

And I had a completely wrong view about how good business books were afterwards. Were High Output Management by Andy Grove and Influence by... Cialdini. Cialdini, exactly. So that was a very fortuitous two first books to read. You got off to a good start. Yeah.

So Andy's book is unapologetically almost a how-to manual that kind of deconstructs the world of business into first principles. It's like, here's what matters. Here's how to think about it. No one needs a degree. There's a little bit of circumstantial

contextual understanding that you just have to have but basically it basically at the end of the day making a business is an engineering exercise and which is brilliant for me because that's like that actually connected that that made the whole thing about becoming a ceo significantly less scary to me because you you know, engineering, I understand. And then Influence was just the most mind-bending book you can imagine because it essentially told you all the ways humans are flawed and influential and how, yes, computers are predictable

and you can deal with it, but then once you make things for people, you need to go into storytelling and framing matters, which are also news to me. I spend my teens with computers, not with people. So I came as a, like, my wife would, you know, would dine out on this topic and just probably make fun of me for hours.

But like, she always says, I'm an immigrant to a human condition. So those two send me off to a good start. I just want to say though, voracious reader, voracious? Voracious, yeah. Voracious, that's how you say that. I'm dyslexic.

I actually read very slowly. I sort of overcome dyslexia, but I read books very slowly. I think it's actually an advantage, frankly. I have very high recollection, but because of this, I have to be very selective on the books I read. So I'm not one of those 100 books a year kind of people.

How do you choose books now? Or maybe as an example, like The Box, why did that come on your radar? How did that make the cut? The Box came because I usually have a topic and then just dive, right? I dive into it. In this case I was like, hey I'm running Shopify. Shopify causes billions, like tens of billions of dollars of commerce activity and most of this is going to go through a logistics network that I don't understand and I feel

my job as a CEO is to have the most full stack understanding of every component that's at all related which is, frankly, given that we are working here in world trade, is almost the entire human condition. So it's an endless source

of interesting deep dives into topics. But in this case, I was more about the logistics world. It's a fascinating world because it's been built for millennia. And the Silk Road has still impact fascinating world because it's been built for millennia and um you know like the the silk road has still impact on the way the world economy works today and then stitching these things together is absolutely fascinating but um uh just even in the sort of first okay let me let me let

me start digging it became pretty clear that the that there was a history before the shipping container and a history after the shipping container. And if in these situations and there's a specific date where everything changes like the industrial revolution or something, another example of that. What I tend to like doing is I like to find the players like the people who had a lot of input

on this kind of thing or just at least who had the front row seat and then read their biographies because they don't tend to try to sell you anything other than that this person played an important role but they tend to be the most credible witnesses to the actual outside events without so much bias towards convincing you

that it was good or bad. And so in this particular case, it was very easy. There was actually a perfectly good book about exactly the guy who came up with it and so it was particular case it was very easy there was actually a perfectly good book about exactly the guy who came up with it and so it was obvious choice what other actually before we get to subjects and more books because this this may bridge over to something that i did not know i feel like i should have known this and it makes perfect sense but i did not know this so this this is i suppose one

of your problem domains we can discuss what that means uh when you became ceo and uh i have a question about that also but this this is uh this is quote from a media piece and i could try to paraphrase it but it'll take a lot longer. So you, as, as part of his, here's the piece as part of his self-directed crash course, he decided to fly to Silicon Valley. Now I'm going to pause here for a second because people listening might think, of course, you go to Silicon Valley to learn from fantastic entrepreneurs and so on, but it's, it takes a different turn here, which I think is really indicative of how you're thinking, how you apply very structured thinking to things. Back to the piece. He set up meetings

with venture capitalists and listened to their questions about Shopify's attrition rates and conversion rates and funnel, in parentheses, the various means by which a company attracts the attention and secures the commitment of new customers. It's a long way to say that. He had no idea what they were talking about, but he wrote down the terms. Then he went back to the hostel he was staying in and looked up everything on Wikipedia. He would then read up on how to calculate contribution margin ratio and the amount by which sales exceed variable production costs, then go to Shopify's database and get the numbers. Oh, he'd think that's an interesting way to look at the business. Then,

at the next meeting, he was able to answer one more question. This is a really clever way to go about getting up to speed. I mean, you're learning by observing the questions and defining the terms. See, this is why I love podcasts. My

favorite thing in the world is, like, books definitely rank up there but it's because one thing which is better which is being a fly in a wall when two experts talk amongst each other right which is one of those situations that was almost impossible to um uh line up as an outsider and now suddenly is completely democratized for the wonderful invention of podcasting. But back then, and before that, I sometimes managed to do it via finding a chat room or a forum where experts talked amongst each other.

It's something I was always seeking in this case. So when I was trying to learn about some technology, like some esoteric 3D rendering algorithms that I found interesting. I used to try to find where people talk about optimizing these things, and then I just don't understand anything that they're talking about,

but then I'd chip away at it, and I would come into the knowledge. And so I tried to replicate this, and talking to venture capitalists ended up being sort of the way I figured out how to potentially do it. Because again, I had no background in business. I had no idea how this all worked. And I had to do it fast

because 2008, I wasn't doing it well. It was very, very tough to keep the company alive. So this is maybe a good opportunity to explain to people why you took over as CEO. Just the circumstances. The circumstance was simple and probably fairly common. I had a co-founder for Snowdevil, which was a snowboard store.

And we did the, like I did the technology, he ran the store and did a did the like i did the technology he did ran the store um and did a million other things like find us an office at some point and so on um but as the company pivoted much more to being a software company and um started growing and requiring more and more people at some point like it was just a different situation. And so he sort of came to me and said, decided that he wanted to transition out. And that really, I mean, that was very surprising because, again, I really wanted to treat business as a black box.

I thought business just, I mean, it was a program. We don't like business. Yeah, I was going to say treating it as a black box is a very diplomatic way to say it as a programmer. Yeah, yeah, yeah. I mean, I just didn't want to become the pointy-haired Boston And so this is the situation. It just arose. And I actually looked for a CEO for a long time. I met with a lot of people who came recommended as potential CEO replacements. And it was one of my early investors,

actually the only investor, frankly, who at some point took me aside and said, Toby, you will never find anyone who will care about Shopify as much as you do. And so you should just give this a go. And that was pretty scary advice, but I liked the challenge. I mean, why do we entrepreneurs do this thing?

Why do we even build companies? It's such a silly idea, right? Like, think about how irrational this is. This is not my quote, but like someone said, like you spend 100 hours a week avoiding working 40 hours a week for someone else. Right. It kind of makes no sense, right and and with a very especially tech like such a minor

chance of actually getting any kind of returns on it and so you don't do this for for for uh at least certainly well i can't i can only speak for myself i certainly did not do this for uh monetary reasons um reason why i did it is because I thought it sounded amazing not having to answer to anyone, back to our authority problems. And I wanted to make my own technology decisions and these kind of things. And I wanted to see what I can do. I wanted to challenge myself. And I said, this is the right time in my life. I was 24 when I started.

This is the right time of my life, I was 24 when I started, this is the right time of my life to give this a go, I will learn a ton. Like there's no way this could be a failure on a personal level other than in the way that, you know, maybe people lose money. I mean, failure was a very real thing, but I knew I would learn a lot. And so I reconnected with this and said okay there's another challenge to become the business side of the business as well

and um uh i'm gonna learn a lot again and so um i traveled to silicon valley i it's it's funny because i i found this hostel close to uh sandhill road where all of these people were back then. And I bought a bike on Craigslist and just biked to all these things. And they must, you know, they even see, like if you look at Sand Hill Road, it's not made for bikes. It's not made for bikes. And biking into these like gleaming palaces of capitalism.

I'm just having to imagine they're like, yeah, some guy's coming in from Ottawa, Canada. Ottawa, Canada? They're like, wait, is that him on the bike? This is exactly the situation. You're just adding to the picture that's perfectly accurate. And yeah, so I talked with them.

I learned a lot I thought they found this somehow I was endearing in some way because I actually did keep contact with a lot of them they didn't actually run me out of their offices which is also speaks to Silicon Valley you know it's it's amazing it's an amazing place where you can take meetings with people who will give you their time and advice. And I puzzled it out, right? Like I figured it out. It turns out I needed to learn a lot about certain terms and so on. But yeah.

Figured it out. Figured it out. And I'd love to talk for, well, first an observation, which is how much fun it was for me and also instructive to meet you when I met you. That is quite a transitionary period in which to meet Toby. So it's been really, really fantastic to watch as things have evolved over time. Now, that said, part of what makes it interesting is the good decisions, but also the challenges and maybe some of the bad decisions. Can you talk to, in any order you like, some of the good decisions that you made and some of the bad decisions that you made after taking on the role of CEO?

Yeah, it would be good to have some sort of obvious examples here. But I mean, it's almost every good decision starts somehow bad first, right? We've made almost every mistake in the book, but we are also the kind of company that wants to, in a way. You know, it's been so company that wants to in a way you know like we um it's been so important to me to build a company that is kind of that is unafraid of experimentation and and we're failure like within shopify we don't even we sort of i think we succeeded in this we eliminated the talk of a term failure like we we we name we call it the successful

discovery of something that did not work because i think it really changes people's disposition to it so um what did we do wrong like we did i well i was just gonna say i mean i don't want to interrupt your answer but if i think that what you just said could also take us in a pretty interesting direction right if if you if you want to buy some time to think about the failures. Yeah, let me buy some time. Not failures. Failures in quotation marks. Yes. So there are a number of things that seem paradoxical that I don't think are paradoxical

in practice. Maybe they are, but I want you to comment on them. And I just have to find the right quote here. Well, I'll give you the first part. So, the first part is a quote of yours, I believe. Your work here needs to make an impact like a crater, right? So, it's not just good work. It's not excellent. It's massive cosmic impact. It needs to be visible from outer space. And so people are encouraged to take risks. Now, at the same time, another quote here. Okay.

Toby Shannon, right? All right. So this is on, you know what's coming. This is on receiving feedback from Toby. Be prepared to be crushed, says Shopify's vice president of revenue, Toby Shannon. If you can't be crushed, you don't make it on the executive team. You need thick skin. It's not that Toby shouts or treats people meanly. He's simply direct, unfiltered. When he looks at the fruits of someone's labor, he says what he he thinks even if what he thinks is this is shit okay so

how do you how do you combine these two things successfully one of the things i love about you is that it is you get you don't get the sugar-coated kid glove version of Toby's thought. You get Toby's thought. So how do you encourage risks when the feedback you receive at the end might be, that was total shit. You can do better. Yeah. Now, I want to register that that quote came up in 2015.

And since then i have uh learned that um uh i i might that i should translate something like this is shit into is this really the best way we can do this but it's um uh i mean it's the same thing in a different form really here's something i've always like a wikipedia right like there's a i hope i get the name right um there's a a specific editor from the early days of wikipedia who i think was called he had a handle called kronker and he declared something called kronker's rules which said that he wanted everyone to edit his pages just to make them better. And he didn't want people to apologize for it

or try to politically give him credit or something. He said, I'm going to take 100% responsibility for my own mental state. You cannot make me unhappy by just giving me feedback in some way. So just give me the raw feedback without all the like shit sandwich around. And I love that.

I just, I would like to run my team on Cronkers Rules because I think it's just, there's so much time spent. Like first you have to talk about the weather and then, you know, like- Then you have to say nice sweater. That's a really nice sweater. Exactly. So you have to find something and then ideally address some very productive character traits then talk about the thing you want to talk about

and then figure out some way of afterwards talking about something highly positive again that's the sort of standard formula and I can do it but I don't think that the highest performing teams in the world should spend time doing this to each other i think there's a level of progression that comes if you're part of one of the teams and again like we are one of the bigger technology companies in the world certainly i think the fastest growing sas company um um on the market um and uh so you know

it's not like i want to compare too much to sports because sports is it's sports is sports but this is like a big game right like we need to be very good at what we're doing otherwise we cannot build shopify and so um i think these things are in the way. So yes, I want people to be impactful. Like, again, if a hard object collides with a soft object, then suddenly, like, there's no crater to prove it, right? And so I want people to take their sort of mental state in their own hands and just say, okay, I'm going to learn how to, you know, be intrinsically reminded that I'm good at what I'm doing and not have to rely on other people constantly telling me. Do you help, does Shopify have any type of training or resources

or cultural rules that are explicit that help to facilitate that type of awareness? Because there are people who meditate for 10 years with that objective and never quite get there. And you can hire the talent. You can already find the people. Like you could go out and you could hire Jocko Willink to run your HR department.

And you would give them all a copy of Extreme Ownership and be like, all right, here we go. But then there are people who come in who might be exceptional performers, but very sensitive in some way. I've run into that quite a bit. What do you do in a situation like that? Or what are the things that you do

or that Shopify does to help people take that ownership of their internal state? Because this is hugely important. Yeah, it's hugely important. One thing that's so neat about Shopify is again, let's get a little bit back to this Ottawa, Canada thing. Clearly, as you said,

this is off the beaten track of the startup world. Ended up being a phenomenally good place to build a world-class company, but for reasons that were also not clear to me when I started there. A couple of things that happen when you're not in Silicon Valley, right? Or in a not, let's call it a primary company creation city.

Tenure gets longer. If I hire someone through this very intricate hiring process that we have, there's sort of an understanding that the chance of us still working together in 10 years is actually really high. It's a commitment from both sides and the company needs to be worth working for for 10 years.

That's what I work on day in, day out. But because of that, we can have a very different relationship than in a place where the expected tenure is 18 months. In an 18-month place, I really have to kind of access every good idea and the productive power of, let's say, an engineer or so, immediately.

They need to be productive. And they need to be really pampered in some cases. To even keep them for the 18 months. That's right. If you have Facebook, Google, and then name five other companies who are all pitching the same employees at those five companies via headhunters. And so in a place like this,

it ends up, for better or for worse, in a world where people don't actually go having careers at companies anymore because the way to have a career is actually jumping between companies. So your new position is always slightly higher. And so, well, our cities aren't like that. We assume that we have these long-tenured relationships

and therefore Shopify can invest in the people who are part of Shopify in a completely different way. So we have a big amount of... We probably hired all business coaches in Canada and beyond at this point to be full-time employees of Shopify because we're investing so much in the people. We hire people on future high potential

and then try to get them there as fast as possible because that actually works for us and works for people and works for Shopify fantastically well. And so we have a lot of these opportunities because of that to make some slight edits to the normal psyche right like so feedback is a gift it's a it's such a simple sentence but really is not the way most people

think about feedback right and um feedback is a gift feedback is a gift because it is it clearly is it's not it's not meant to hurt it's it's meant to move things forward right like to to demystify something for you. I want frank feedback from everyone and I get it. Although, funny enough, I don't know if you know, like you might have a thought about this. I tend to get it from the Germans at Shopify

more frequently than anyone else. So there might be a cultural component in here too. So, but yeah yeah so this like did you call it crusher of egos or get your ego crushed yes be prepared to be crushed if you can't be crushed you don't make it on the executive team yeah i i would say that might be a little or learn learn how not to feel crushed yes so so i mean this is the executive team which is directly my team of the people

who I have the highest requirements of and we have worked together for the longest. So I think, I don't think it's like this everywhere in Shopify. So are there particular books, particular types of training,

exercises that are used within Shopify to help people take ownership of their internal state or to view feedback as a gift that people listening might be able to use or explore or think about in some way? The companies, they're very, like different companies have different sort of

personality traits testing kind of things that they like. Shopify is very partial to a system called enneagram enneagram i just had my first enneagram typing last week and you are a eight i uh appear to be a loyal skeptic six oh wow interesting yeah there you go yeah we could we could get into it this is all new it. This is all new to me. This is all new to me. But it's interesting. The Enneagram,

it has worked very, very well for us. Like in our internal system, you can actually see the Enneagram of everyone else. Really? And it tells you like how, like what nuances that means for how to work together, for instance. So that's one. But the other thing,

I think why personality tests are interesting is they, it doesn't even matter which one it is. After you kind of do one, it already kind of teaches you like, hey, wait a second. The way I'm wired is different from the people around me.

And I think this is so fruitful of a discovery, especially early in your career, right? Because again, a lot of the people we hire, like average age of Shopify is 30, 29, I think this is so fruitful of a discovery, especially early in your career, right? Because again, a lot of the people we hire, like average age of Shopify is 30 or 29, I think. So we get to people very early in their career and because the thing that we want to accomplish, and this is really the goal of all of internal programs,

is we want to take people from a, find out what parts of, what kind of areas they have a fixed mindset on and try to get people to become, to, to, to acquire growth mindset, right? Just think of their intelligence as something that can be trained. Think of their skill as a programmer, not as something static. And when someone comes and tells you that there's something you could have done better,

that's not someone finding out that you're not as good as you thought. That's actually a teacher appearing. And once people acquire this growth mindset on at least a number of different trades, usually they make it very, very far and they can have these like 10 years of a career in in one year on the on the wall clock and um it's it's it's a wonderful kind of thing when it happens how how would you suggest that people acquire a growth mindset

because there are books i don't know if grit i haven't read angela duckworthy's book uh great it's been recommended a number of times but there are a number of books that talk about the importance of growth fostering growth versus fixed mindset in child yeah rearing and you shouldn't say you're you're so smart you should say you worked really hard and did a good job and so forth. Because inevitably, if they have what's perceived to be a failure or make mistakes, it's then not indicative of them being stupid, but rather something related to effort and or chance that they can play a part in resolving or improving.

But if we're talking about, let's just say there are any number of people certainly listening to the podcast and they're like, you know what? I'm sure I have a fixed mindset somewhere, but I don't know if it's a blind spot. I don't know how I would spot it and then how do I fix it? What would your thoughts be?

I think that it's a really, really good question. I wish I had a better answer. I do find that Carol Durek's original original book called mindset is probably still the best source um that's d w e c k right yeah that was also uh we were talking about josh waits can during lunch also a book that he's quite a fan of yeah i'm a big fan of the book. It at least talks you through the theory and what I've observed is even the very, very high, super successful executives

who come to Shopify or have worked at Shopify for a very long time and they end up reading the book and they said, you know what, I was actually fixed mindset on all these free things.

And it's like, it really irks me now. It's just really funny the way how it just sort of wakes you up to this reality that we kind of all have it. It's not something you can completely overcome, but it's something that just having the awareness is really powerful. And also, if you have direct reports in a company, even if that book does nothing for you,

it will allow you to be a much better lead to those people because just priming you to detect fixed mindset talk in other people and pointing it out is hugely beneficial. So I want to note an observation that may or may not be true, but it seems to me that the discussion of fixed and growth mindset it pairs quite well with Enneagram also.

Enneagram, by the way, I was introduced to by Drew of Dropbox. Oh, yeah. And I was always skeptical and I still am somewhat skeptical of certain aspects of Enneagram, which I think actually means nine pointed. Uh, so there are nine different types. Uh, then there's a lot of discussion of, of, uh, through different books and experts about Enneagram.

Uh, but like you said, as you're in your commentary about Enneagram, it's, it's not necessarily the specifics of the sort of business acceptable horoscope that you get. It's the fact that you begin to look at relating to other people and your weaknesses and or fixed mindsets differently, right? And so I found it very useful. I had my, I'm going to have well my my girlfriend

did her typing and i'm going to have all of my employees do their typing also just so they think with an awareness about interactions through that lens even if the exact content may be you know 50 kind of hand wavy if that makes sense. Yeah, because here's why all these things matter. I once read that, I don't particularly believe in hell, but I like this definition of it. Hell is meeting the best version that you could have become at the end of your life. And so I think that one of the really, really fun things

about an experience like an entrepreneurial journey, like the company, the careers we have, the books we read, if they end up being pointed in sort of a direction that allows us to minimize the difference between that person we will meet and the person we are at that point of time, I think that's time well spent.

And there's some key, I think, events in one's life that have to go through it like at some point hopefully you realize that the people around you are very different that you have some unexplained traits in you which some of them being um becoming big strengths and some of them are weaknesses and you double down on your strengths and you you try to work around your weaknesses and by way later in life it might actually flip which one's which which is gets really weird um but um that's another one of those kind of things this sort of awakening to a growth mindset is is another one of those life events, I think. And so these events matter because what you're building eventually is like some kind of path that allows you to wake up smarter every day. Then if you get there, really, really powerful things happen.

Suddenly, you know, jumping into like a completely new job that you have no qualification for suddenly doesn't sound scary anymore. I mean, it probably still does a little bit, but the challenge and the thrill of it, of like, this sounds real. I could fail. I now have to grow to make this work,

actually become hugely motivating. And I think that one of the most amazing things that anyone can go through and can do in their lives is a variation on the theme of going on a journey, doing hard things surrounded by friends. Company building is one of those things. Often travel is another one. Sports are really good at these kind of things.

I would love Jaco's opinion on if war is like that. Oh, I think he would definitely say that. So, you know, variations on this theme is what you want to prepare for. I want to come back to something you mentioned earlier that I think is very, very relevant here. So you talked about, I'm going to try to tie a few different things together. You talked about taking risks and looking for opportunities for massive impact. You also talked about how you have looked at certain opportunities or transitions as opportunities for learning and that you've made a lot of mistakes, but it seems to me that you've even in some ways

optimized for learning. And I just want to highlight for folks listening and also just to remind myself that this is something that comes up quite frequently with people who seem to just step up to bat and hit home run after home run. If you really dig under the hood, that's not necessarily the case. But for instance, people who are in any number of different fields, whether it's Scott Adams and Dilbert, or some of the investors I deeply respect, like Mark Andreessen, who's been on the podcast, they talk about combining, rather than trying to be, say, the top 1% in the NBA, which is very hard to do and very attribute dependent, you could be, say, top 10%, or even top 25% in things that are rarely combined, right? It could be computer science and law. It could be Warren Buffett in value investing and public speaking. He says the best investment he

ever made was in a Dale Carnegie public speaking course, because it magnifies everything else that you do. And so there's the combining of skill sets that are rarely combined. And as Scott has also written about quite extensively, and I agree with that, if, and I'm paraphrasing here, so I might be mixing and matching a little, but if you optimize for learning new skills and developing new relationships that transcend any one given project, it's really difficult to fail completely, right? And so you end up accumulating these skills and relationships that then help for you to combine these different disciplines in unique ways.

So that I just want to mention because it's tempting and debilitating to think that you have to be the absolute best top 1% in X. And when you, when you really look at people, whether it's all the, all the various billionaires and magazine covers or what have you, that's not necessarily the case.

No. Yeah. I, I, so I could not agree more with you. And I, um, it's interesting because I,

I almost have two phases to my life in this regard, right? Because, um, I really was trying to become, I don't know, I don't know if I was trying to become the best programmer in the world, but I certainly was making a bit for it. My life was completely revolved around writing code,

understanding more of it, and just being very, very good at it. I was going for mastery anyways. And then this situation that happened there, again, I had to pause that world and have to go into business. And I ended up really, really liking so many aspects of it. I really pivoted from someone who was going to try to get, I would like to understand 100% of a field

to I want to as quickly as possible understand 80% of every field. I like it way better on this side and I'm eternally thankful for having realized this at some point. It actually doesn't take that long. You wrote an entire book on this, so I'm obviously not trying to convince you on this.

But it doesn't take long to understand the first 80% of any number of fields, right? But of course, you can't understand the 80% of every field. There's too many. So you'll follow your interests pretty automatically, and then you find out exactly this what you just said and this is something you know sort of it's worth looking into the shopify universe um there um the people who are really successful are the people

who usually have some multiple skill sets and combine them into some kind of new product it's like sort of an obvious example it's like boosted boards right like hey he's like electrical engineers um who also like skateboarding let's combine those two things by putting a battery into the skateboards and so it's really really really hard to be the best in the world at a single discipline but as soon as you start overlaying like three different interests um you make Pokemon inspired jewelry or something, you can make the best Pokemon inspired jewelry in the world pretty quickly. Right.

And so the speed with which you came up with that makes me think that that's a store on Shopify somewhere. Absolutely. Because you're in a, I mean, you're in a great position to see, I mean, hundreds of thousands of these examples. We see millions of success stories

and attempts at success stories. This is honestly the most interesting part of Shopify. We see this. Let's actually zoom out for a second here on my entrepreneurship topic, because it's really dear to me, but it's also at a state that a lot of people don't really quite appreciate. Entrepreneurship is in big crisis right now.

It's a complete counter-narrative to what most people think. But right now, new company formation is at the lowest point it's ever been. Gen X started a lot less companies, a lot fewer companies than its parents, and millennials are lower yet. So it's the least entrepreneurial generation so far.

And the numbers are going, like companies that are, all numbers are downwards. Is that measured by LLC formation, entity formation? Just general companies that are of all classes in the United States over time.

Once you look at the graphs, they're all just, they're looking like their tank. It's, especially since 2005, sort of 2006, the beginning, very beginning financial crisis suddenly fell off a cliff.

So why is that? Tell me, Toby. Well wish i wish i would knew it's like i know some contributing factors like one thing is we just don't need too many copies of everything anymore like back in the day you probably visited uh you lived in a smaller community you visited visited a big one, you saw, hey, here's like, what, like a certain kind of hardware store, some kind of business you've never seen before. You'd say, hey, I might be able to do that back home and that's a new company, right? Now everything's franchised and centralized

and it's a lot harder to do these kind of businesses. But the same thing is going on on the internet as well, right? The internet is, as much as it can be a democratizing force, it really benefits centralization. We have one social network, one search engine, and so on. So it's just harder to start businesses. And you kind of have to clock in in the top percentile of a field

or at least an intersection of multiple fields to even partake in entrepreneurship. And I think that's not good. I mean, if you would give me like, hey, here's two versions of a world, choose one. One in which entrepreneurship is common and easy and straightforward and one where it isn't like like i mean who does who takes the one where it isn't like where it isn't easy

so how would you make it how would you make it easier whether in the u.s or maybe not canada specific could be but is the is there anything that you would do to increase the number of entrepreneurs and why is that important? Is it important? Yeah, I mean, that's a good question, which I think should be studied. I mean, like one thing, if you look at this completely from an economics perspective,

like if you think that we need to provide employment to people, you should want, like a couple of mega companies are not going to employ everyone, right? I think everyone understands this. We need millions of 10, 20 people companies, SMBs. Almost everyone is employed by small businesses

if you look at the actual numbers. So with small business going away, that's definitely a force into the opposite direction. So how would you do it? I mean, one thing is, this is actually a real problem in the United States, but it's actually a problem everywhere, is licensing. It's a crazy situation that I can get a laptop

and start $15 billion Shopify and need to ask no one, but if I want to become a hairdresser, I need to get a laptop and start $15 billion Shopify and not need to ask no one. But if I want to become a hairdresser, I need to get a license for it, right? And I need to go for like, and there's quotas in many places and you can't because for all these reasons. So that's kind of one of those things that probably people have to have a look at.

But the other one is just friction. Like how difficult is it? Like how many things do you have to understand to start an online business? Like you build a look at. But the other one is just friction. How difficult is it? How many things do you have to understand to start an online business? You built a supplement business back in the day. What are all the things you had to learn? Well, I remember, even before that,

when I was taking a stab at a few businesses, all of which self-immolated, but just setting up a merchant account, I remember back in the day, was a huge, it was a complex and hugely involved task. I had to post a $30,000 bond to get a merchant account

when I started Snowdevil. Yeah. That was all the capital I had. It's wild. But those kind of points of friction are everywhere. I don't want to make this an ad, but Shopify is not the solution to this problem

because it's a much more global and bigger problem. But the retail world is one of the most accessible parts of entrepreneurship. And that's really all Shopify is. Try to take the learning curve of partaking in entrepreneurship,

building online businesses and make it as flat as possible so as many people can succeed. That's what we've been working on for the last 14 years now. I think this might be a good place to chat about the Build a Business competition. Oh, yes. The Build a Business competition. Oh, yes.

The Build a Business competition. We've been talking about smoothing the path or moving impediments to entrepreneurship, but you also have incentives. Incentives are also important. What is the Build a Business competition? Let's go back to where it's come from, because this is so relevant to's so relevant to to to to

i think two of us um well certainly to me i don't know it's relevant to you but you were involved um uh so this was 2009 um so at this point shopify was completely running on fumes it's like my um we were completely it just all sorts of things didn't work like you asked me earlier like things that didn't work like the company kind of didn't work right it wasn't like i had the numbers and and people were selling things and it was valuable to them but there was no real business being built around it and it kind of all just didn't function um my father-in-law was gracious enough to give me a check every week for running payroll so so at that stage um and and and he said he would do that for a certain time and by then by the end of it we kind of have to figure out what the heck to do

um at this point we were talking and um uh you know the reason why again we see the world in a similar way you you wrote for work week uh but what attracted me in this book is like what you were talking about you know just building uh like a business and then actually doing other things well like this like i was seeing people doing this on shopify but was like this is an under explored form of you know what you can do online. People should know about this, that this is what some people do, and we should obviously tell people that that's what people do on Shopify,

and Shopify is good for this kind of thing. So we had this conversation. I was at my cottage. I was actually on a boat when we had this conversation. And we were like, how can we overcome this built-in fear of failure that everyone's running around with? So many people come to me, come to you and say, one day I'm going to start my own business.

It's like, okay, what about today? What's wrong with today? And there's always all these kind of reasons. And I think our work in theory was we just should, we need to test this by really incentivizing people. And to which I said, we should, I don't know, we should give away like a MacBook Pro or something like that. And then you did what you always did in our phone calls.

It's like, Toby, first of all, that's way too nerdy and only you care about MacBook Pros. And then second, if you want anyone to notice, you need to go like 100x that in terms of price or something like this,

which is probably easier to say on your side. I also remember exactly where I was, by the way. I was in Glen Park walking down, I think it was Diamond Street past Oshetai. I remember the exact block I was on

when we were having this conversation. It's funny, yeah? Sometimes these things are just brand new in your mind because I think we both realized, we were sort of egging each other on to make something big. And what we ended up doing is said, okay, you're're gonna take the last

hundred thousand dollars in the bank and and and just put it up as a competition and say whoever is going to build um the biggest business like like from starting now in the next six months is gonna just get the check which is at this point i said this is either going to just get the check. Which is, at this point I said, this is either going to work and then we'll make the money during the competition to then give to people or the company is bankrupt anyways

in which case I'll deal with that in some other way. But we did and I think through some contact of you, I think you introduced me to Laura the New York

Times ended up talking about it because it was like surprising it's like tiny startup in Canada putting up something that's

beyond like every business plan competition in terms of price money right it was a pretty stunning amount

yeah biggest ever it was a huge success exactly you you were like super confident that it would be a big success from the beginning i thank you for this because i wasn't i was like oh my god and it's uh it's it's been really it's been really awesome to watch also year after year as it has grown and evolved. So, I mean, you could give some examples, but from the beginnings, right, which are, we're not entirely sure. I mean, on some level, you know where this 100,000 is going to come from,

but this is sort of an existential bet in a way. But like you said, it's like there are other kind of inherent issues that if we don't do it, it's not clear what the picture is going to look like. And then you flash forward and you're doing these build a business competitions. It's like a high end reality show in the sense that you have,

you know have the mansion from the great Gatsby with DiCaprio and people are flying all over the world and you have Tony Robbins coming in to mentor the finalists and so on. We took everyone to Fiji to

his place in Fiji. It's been so much fun to watch and you guys have done a fantastic job of executing and it's ended up coming full circle also as I'm considering with the audience that I have what could I do potentially competition-wise. You guys have taken the ball, run with it

and have done this so many years now. I'm like, hey, which lawyers do you guys use? Turns out, by the way, anyone who's thinking about doing something like this, I mean, you have the prize money, but then you have the putting together

of a competition, of this complexity, which is no joke. No joke. Every state, even every province in canada has completely different laws for this you everyone will come and ask hey is this a game of chance here or is this a game of skill because and which is actually an interesting question for like because the

intellectually honest answer is like chance i mean i i've tried to never get confused about this like shopify has enormously is enormously successful, but it's like 99% chance. You can predict all these kind of things which happen to transpire, which led to success. But of course, when you're talking to the lawyers, you have to say, this is a game of skill. Absolutely, 100% skill involved.

So we launched this in 2010 and we had an amazing win at the end with dodo case right it was so cool can you tell people a little bit about that patrick and craig two um brilliant entrepreneurs from san francisco who um um then what they what they did, I think this was around the launch of iPad. And so they realized these iPads need cases just like the phones. And so they got together with some traditional book binders and made some Moleskine looking beautiful. It was really just wood and whatever Moleskine is, a case for iPads. And I think they gave sort of flyers

to everyone waiting in line around the Apple store before iPad got launched. So people wrote about it. And they were one of the competitors in the competition. They won it. And fantastic story. There's a later picture of President Obama

with his dodo case which of course they used very successfully in every one of their marketing campaigns

and just I think actually like which goes back to sort of the thing that really excites me about the effects that

come from all these kind of things not just was this an entrepreneurial success story for them, and they got a $100,000 check in there,

and they also quadrupled, or even beyond, the amount of professional bookbinders in the San Francisco Bay region. This was an area which had a lot of bookbinding talent when that was an industry, and that's not an industry anymore because it's just not done manually anymore. But they got people out of retirement

to come back making these iPad cases. And just a little industry exists. And I think these are just the stories which I find so, so great. So let's talk about, we don't have to get into all the specifics of a ton of them, but I was very curious from the first competition to see what can people do?

What can people actually do? In six months, right? Six to eight months, it's nothing. I mean, some of these people are creating multi-million dollar businesses. Unbelievable. From ground zero. Yes. And it's been really inspiring to watch and inspiring not just because of the

size but also the variety that having been said one of the things i look forward to every year when you guys are are running the build a business competitions is what patterns will emerge because you begin to spot and this is much like i feel like with my audience from say the four-hour work week uh or the podcast but just the the the millions of entrepreneurs who allow me to pattern recognize because i just have the 30 000 foot view on my audience show me things that are coming right it's like the like was william gibson and neuromancer so the future is already here it's just not evenly distributed so you see these patterns that are sort of this like smoke signal in the distance and then five years later it's everywhere and with shopify for instance i remember

the first year that a number of the category winners because there are different categories right so it's not it's not all or nothing in term at this point in the competition there are different categories, right? So it's not all or nothing at this point in the competition. There are different, what would you call it, industries or product categories, which gives more people a chance to win. And it's like, wow, okay. So I'm making this number up, but it's like three out of the six used Kickstarter.

That's interesting. And looking at the different tools and different approaches, different tactics and strategies that seem to be used with great efficacy each year is also something that I have really looked forward to.

And this goes beyond the tools into the approach, I think. And this is actually where I feel like I learned the most from the entrepreneurs. Because these are really the best who are coming. Actually, we had first-time entrepreneurs win categories, but they always had some kind of fantastic insight that they're kind of adding to this exploration

about how to build companies in this digital age. So even the Kickstarter folks, one thing, the question I always had is like, was Kickstarter itself valuable? Or was it that they had to put a certain video on their website where the founders of a company had to explain why this product needed to exist. It seems like such a, why does not every product in the world

have the inventor declare why they felt this thing needed to be created? Why can I only get that from the people who happen to go on Kickstarter? And most of them ended up figuring out approaches which are really about storytelling like what's the story like the dodo case story is a story of revitalization of a craft right which people connected with the the the beautiful object that came out of it um was completely imbued by this story um and and if if uh then then i was walking around with my daughter case like someone

would talk about it i would talk about how this was handmade by real book binders because i owned a part of that story and um that's that's really the great thing the really great thing is that um things that are powerful and work have actually not changed in the internet age like we're all kind of i mean our ancestors were the ones who were the storytellers or at least the people who listened the most to the stories.

This is how language developed, you know, like we are storytelling creatures and it's, it just is rediscovering this medium after medium is something that is really,

really fascinating. And if you, if you look back to the two books you mentioned, right, if you're looking at Influence or you're looking at Andy Grove's book,

also not snapshot in time dependent on the technology of right now. These are principles. And I've often thought about Kickstarter also and other platforms like it as a talent assessment for some of the basic competencies that one will need in the company they would then subsequently build. It's like, if you cannot sell your product in a video and then marshal resources and try to garner PR,

however you take your approach to raise a potentially nominal sum of money for a first manufacturer like how could you ever have the confidence then that you would be able to proceed and build something large over an extended period of time like like it's a it's a it's an audition in a sense and um so then it brings up all sorts of other questions. Just getting back to the very first thing or one of the first things I asked you about, like questioning the question.

It's like, is it a survivorship bias? Is it that there are more people tempting things and therefore they can kind of stress test and then run with the things that work? And that is why you have this higher percentage peering in say a shopify build a business competition uh in any case uh it's it's been it's been such a fun ride and uh thanks for having me as part of it well you kind of started you shouldn't under like you shouldn't downplay your your your um input on the whole thing so yeah it's uh and and uh i wanted to also before i forget and since i think other people

listening might find it of interest um mention a book that's kind of going to segue over to something that may or may not bear fruit we'll see but the the book that i would recommend all right bear with me guys this is going to get very tim ferris adhd for a second but you mentioned dyslexia do you not have any issues with real-time review of code as you're writing it no okay that's interesting none yeah okay that's just for another time i was just like sort of neurologically and optically, that's very interesting to me. Interesting. It's a fascinating question, but no, I don't. reasonably recently deceased Jesuit priest who is also trained as a therapist named Anthony DeMello. The book is called Awareness and the subtitle is The Perils and Opportunities of

Reality. But it's a collection of effectively transcribed talks that were given by Anthony. It was recommended by a guest on this podcast, Peter Malouk, who's in finance. And I decided to pick it up because he said it, every time he reads it, and he rereads it more than any other book, it gives him an extensive sense of peace. And I was like, that's an interesting, that is not the phrase or explanation that I would expect. It's a hell of a way to sell a book.

Yeah, and I picked it up. And awareness, the perils and opportunities of reality i think uh will uh you you you you might just find strikes a chord it's uh it's a very easy read and for me it did give me this extended sort of afterglow effect of inner peace for about two weeks and i've decided that i'm probably going to reread it less than a month after having finished it and it is it's proven very valuable for me even though i do have a meditation practice to reinforce sort of through the prefrontal cortex uh the value of owning your internal state and be choosing to be

or develop the responsiveness as opposed to reactivity. And this, on a macro level, makes me think of comfort, discomfort, and how humans relate to that. Something that came up in doing research for this was the concept of, and I may be i may be barking up the wrong tree here but we'll see where it goes the next box and what the box is not in the

shipping container sense uh could could you talk about what what i'm referring to yeah um it's it's um a term from a talk i gave i was invited to like a local event and they needed me to do a keynote and i don't tend to do these kind of things a lot so um but i kind of wanted there was something uh i i they just asked me to share something and so i said well um personal growth is something that i'm you know thinking a lot about and and and feel like I was going through so I decided to like just sort of explain it the way I see it without really going deep into the like current zeitgeist thinking about it and so this is this is sort of what I explained. When you're back in high school, I remember being back in high school,

and I remember that there was cool kids and uncool kids, and we probably were two different sides of that kind of divide. I was with the uncool kids. I was the Dungeons and dragons nerd kid so i actually got my ass kicked uh up until about sixth grade and then a growth spurt and then i was i was just an angry rageful vigilante but up until sixth grade i was definitely in the in the nerd camp all right so um uh and again i don't know why we keep talking about me as a kid because it's not that interesting, but it seems to keep coming up. And this is already going to tell you way too much about me as a kid.

At some point I decided, okay, I want to analyze why some kids are cool and why I'm not. And what I came back with was the cool kids all had Air Jordans. So I wanted them too. And of course, at some point I got them and it totally didn't make a difference.

But the reason why this is valuable is the high school is sort of, it's a universe. It's kind of a box. And it's hard to get in it because it feels very uncomfortable you don't understand it you don't understand the social network the influences and then you're trying to kind of make sense of it right in in your own way and and it actually becomes reasonably

comfortable then after you sort of explain it to yourself um now it's a small box narrow and you probably your understanding of it is wrong. Like clearly like mine was about how I could join the cool kids, right? At some point, hopefully what happens is you find a crack somewhere in the narrow box you're in and you go into the outer box where this box you just came from is like a tiny parcel in the corner.

Like it's a much bigger place, maybe college or so or work life but again it feels super uncomfortable you arrive in that new box not understanding physics not understanding the situation what's expected of you it's all ambiguous you have to reinvent everything even the things you figured out before are no longer true and you notice this at sort of an internal level and um the trick is though to at some point figure out figure it all out and then comes the dangerous part because it's now comfortable again and and and so what you have to do though is you have to go and find the crack and go into the next box around this where suddenly all your college life and all these kind of things

just are a small box in a corner somewhere and suddenly the world's much bigger and you need to learn more and understand more and so on i find i've met luckily at various times in my life these people who clearly occupied a much larger box and they just sort of bent down to me to talk to me because they could just somehow like you said this one thing and and what they said back to you was so clearly right but you could never have understood yourself based on this vantage point you had right and they were usually the way how do you then entered a larger box and so on can you think of any or are you willing to give any examples of an exchange like that? It's a recurring thing.

It still happens to me to this day. The specific case I was thinking of back in the days, I left school at the 10th grade. I started my apprenticeship as a computer programmer, which is a thing you can do in Germany. And I spent a good deal of time on computers. I understood them. Could do programming and so on but there was a guy who by the name of Jürgen Saar who was sort of my designated mentor

in this apprenticeship program and he was one of those people who not just like I could ask any question you would have a perfectly like you could write it down what he said back. Everything came back fully formed. Sam Harris type. Yeah, exactly. But then also he was just an incredible mentor to me because he created almost these scenarios for me. He would do my code reviews and so on,

but also he would sign us up to drive to some customer which I and him were writing some software for. And then he would just find an excuse for not being able to go and just let me go myself. And I was like 17, 18 years old. I had just got my driver's license. I'm just trying to imagine having spent a lot of time with you. I had to get 400 DMARC, this was before euros,

it's like 200 euros, to buy a suit from a company. I didn't know they had that money, right? Going to a customer and selling software. Now, why did he do that? Because he thought I could do it. And that was just it. It's like he thought,

he did think that I would probably not fail and that was good enough odds for him. And he also knew the customer well, so he knew that they wouldn't, like he couldn't pull a stunt like this and they would find it's funny. So there was very little personal risk for him. And then you do this and I learned a lot

and of course my code totally didn't work and I had to use some satellite uplink to get the new version. But I came back and said, hey, in this sort of worldview box thing I was in just yesterday, it's implausible that I would have succeeded doing this thing that I just yesterday did. So therefore, I think I'm in an uncomfortable new box box right now and have to re-look at everything I know and re-categorize everything. And Jürgen kind of just figured out how to get me through a couple

of one of those. And so I don't know if it's a good metaphor for growth, but it's the one that just sort of kind of came to my mind when the first time I was supposed to sort of explain this to people. And what I like about it is that it affirms the thing that makes it hard to grow because it is the dangerous part of when you feel comfortable in the box you're in. And every one of us has at the family reunion, the one uncle who decided to not traverse

into further boxes way too early, right? They figured they have the entire world figured out and everything makes sense to them. And of course, everyone else looks at it and says, oh my God, what are they talking about, right? So I have a few questions about that. This is a topic of comfort zones, our topic of great interest to me,

but also it comes back to awareness as well. For instance, do you know what box you are currently in and the next box you want to go to, or is it not possible until you have someone bend down and kind of poke you in the forehead? I don't think you can. I know I'm always in a box, bend down and kind of poke you in the forehead yeah i don't think i don't think you can i i'm i i know that i'm in i mean i i know i'm always in a box i actually am this is personal like

personally i think i i have figured out the box i'm in and i'm currently not seeing the exit which makes me uneasy wait what i'm sorry say that one more time one more time i i would say that i understand the box I'm in and I haven't found the exit and the funny thing is I've done this so many times that I'm actually really uncomfortable being comfortable I really dislike not understanding where my growth comes from so I'm a seeker right now

Are you comfortable sharing what the box is that you're in that you don't know the exit from? It's nothing terribly profound. It's sort of like, it's my life, right? It's like I understand how to be a public company CEO. That's just a crazy sentence that I never, when 16 year old Toby would never have imagined me uttering. But I understand the systems of Wall Street.

I understand the company that I've built. I understand how to, I think, be the best leader I can be for the company. I've made a lot of progress in my personal life. I started working out. Just have a meditation practice. All these kind of good things that you've been recommending forever

and I finally came around to um so so so that's that's good but it's comfortable in a way like i'm i'm seeking right now i'm trying to poke at this i i um i am trying new things to figure out how to break out of it how do you choose those things how do you choose the things that might be the right stress test to find that crack? Usually, I mean, books are generally good. Far-field books are useful. I'm really interested in psychology right now because there's a lot of more interesting topics than people think. But also challenging myself. I'm in a driver development program for motor racing, which is super fun. That sounds amazing. It's like, talk about getting in a car

and not thinking about anything for two hours, three hours. You are highly incentivized not to think about other things yeah well exactly because uh there's a real repercussion this is not like the successful discovery of something that did not work this was a wall so you know just like like doing things that uh that that are just different from from from anything else that's fit like import things from other people's boxes who are presumably in bigger boxes as a way of doing it.

I would also love your help to clarify something. Not so much for me, because I think I know the answer, but maybe for people listening. And that's a distinction. I know, as I'm sure you know, many, many people who think that more money, more X, more Y will make them happier, content, or at peace, and they never reach that moving goalpost. And you and I also, I'm sure, have

come across, it's more common in Silicon Valley than Ottawa, perhaps, but people who have tens of millions, hundreds of millions of dollars and are absolutely miserable. And is the feeling very uncomfortable with comfort a symptom of lack of contentment, or is it something else? If that, if, if that makes sense in my time with you, you don't, you don't strike me as like, you are not one of those miserable, miserable people. I've seen you with your family. I've seen you with your friends. Like you surround yourself with good people. Like, I wouldn't be like, no, no, Toby's an unhappy guy. He's, and he's not going to be happy. Cause he's just chasing this ever growing number, which is definitely Toby's an unhappy guy. And he's not going to be happy because he's just chasing this ever-growing number, which is definitely not what you're chasing.

And I can say that for sure. But is there an aspect of it that makes it hard for you to appreciate where you are currently, or is it different? I think there is. You're right. I mean, I have an incredible, like I'm the most fortunate person on the planet,

I sometimes think, right? Like I have an incredible family of three boys, a wonderful marriage. I'm on one of those journeys at an incredible scale surrounded by friends. So I have kind of a lot of things going going on there uh going for me um but i mean look i i i certainly have my demons too right like i um um i do like i'm pretty serious that i i'm going for minimal distance of the person i'm meeting at the end of the life to the person I become. I set very high requirements to me,

partly because I know that I was the bottleneck of Shopify for a couple of years, around that 2008, 2009 time period. I was holding this back, and a lot of my family and friends or so were dependent on this thing working out for for all these reasons and so um i just i i'm i just really don't want to get in this situation again i need to i need to challenge myself intrinsically um to to be ahead like to

understand what comes next to you know for to for better for worse, if you're running a company and you're sort of a product type CEO, you have to have a pretty good crystal ball about the future and where things are going. And it doesn't need to be always right, but it certainly should be more right than it isn't. Because building software takes a while and if you're building against the now,

it's going to be old in two years when it's done. And so you need to build against the state of the world in 2021-22 and so on so um like i'm i'm chasing like becoming the best version of myself um and uh that has a lot of good comes from that but it's it can also be stressful what uh what do you think caused you to be the bottleneck could you define what that means to have been the bottleneck and What do you think caused you to be the bottleneck? Could you define what that means to have been the bottleneck and why do you think that happened? Was it because you didn't know how to hire, you weren't willing to hire because you, for whatever reason,

weren't expanding your skill set fast enough? What did it mean to be the bottleneck? Looking backwards, how do you do the forensic analysis? I just did not make decisions that I had to quick enough. There was this whole thing about, is Shopify a lifestyle business or a growth company?

I struggled with this so much. It seems silly now because obviously we can all look at the result of it becoming a growth company at some point. But it was really unclear to me. And so I ran it cash-based, like looking at bank accounts and making decisions based on, hey, I need this amount of money in the bank before I can put $5,000 in Google AdWords and so on. And I just made a lot of decisions way too slow

because I just didn't feel comfortable understanding the implications of them. I didn't know I was doing this, but I did, and I'm really unhappy that I did. I think I unintentionally slowed down the growth of the company for a period of time so that I could stay on top of it.

And once I only realized this after I finally made the call to just say, okay, let's get some venture capital. And once we had extra money and could spend it on all these marketing campaigns, which we never did, it's like every single one we tried worked. And the company

just took off in a to a degree that is almost almost comical like the vbcs are still talking about those times as something they've never seen before like i got i got my series b um uh i think six or seven months after the series a and they just gave it they wired the money before we even started talking about it's like you need more Like, you didn't raise enough money, right? Because the numbers were so good. And so it's, I just held it back and I don't want to do this again. So why did, just for people listening,

they're going to be like, wait a second, Ferris, don't gloss over that. So everything worked. Why did everything work? Was it because you were bootstrapped? And I don't, you know, I'm not trying to answer the question for you, but was it because you were bootstrapped and therefore all of the focus was on the product for an extended period of time? Was it because of something else? Was it because you had a lot of interaction with your customers and therefore knew how to position things that when you turn them into expensive

or more expensive campaigns, you had already honed the material. Why did things work? Yeah, a little bit of all of those things. Like Shopify, when it came out 2006, was a brilliant solution to the problem of I need to start an online snowboarding store. And that's it.

Unless you happen to also want start an online snowboarding store. That's it. Unless you happen to also want to make a snowboarding store, it was no good. But I was a customer support on top of everything else and here's the kind of interaction that happened all the time. Someone would send me an email saying, I cannot imagine, you're calling

yourself an e-commerce system and you don't even have this feature. And I'm on the other side of this email and I'm starting to try to write an essay about why they're wrong and it's clearly not coming together. Which then means I spend the entire night, I implement the feature,

I deploy it in the morning and I reply with an email saying, actually, what are you talking about? It's right here. So, you know, that on top of also having been a merchant and really understand, like I was and I still am in absolute love with this particular problem. In the same degree McFee, sorry, McLean was in love with shipping things. I'm in love with, for this type of business,

this sort of retail product-based business, I just want to give people a chance to build, to reach for independence and start something that's meaningful and turns them into an entrepreneur because I remember what it felt like when I did it. And so we spent years just chipping away at this problem, making it better and better, making Shopify better. It really came together around 2008, 2009.

And then the financial crisis kind of just happened and we thought we were dead. But suddenly at this point, it was actually quite good at this point. And it was also really cheap compared to everything else so people started the service itself shopify was $29 right it's not like we had people converting from like $900,000 a year bill to a $59 plan a month right like a month plan um so um which of course tells you exactly as how good i was at business at this time but um like but for us this was a point of pride right we we love this and so we um we we but we invested everything in the product like there was a 20 years in our mind roadmap which we couldn't get to because it was a tiny team. And so again, in this time frame,

the software was really good, but then the people who used it loved it, but it was hard to get the word out. And so, but to test anything, I always had to like, every time I had $5,000 additional reoccurring a month, I had to make a decision, am I going to hire this one person, which is going to be really good for a product?

Or am I going to spend this as a test in some kind of marketing capacity? And so what I ended up doing, finally, and that was the right thing to do, is I got the top five ideas for marketing ideas. I saved up the $25,000 so I could divvy that up amongst those ideas and said, okay, let's try all of them.

Because if one of them really accelerates our growth, then we are actually a growth company and we should get venture capital. And we should know sooner rather than later. No, no, I'm saying you do all five at once as opposed to sequentially because then you get the feedback. Exactly, yeah, exactly. Because otherwise we don't know, maybe suddenly, I mean, it's a reality change too much.

This wasn't, still not very scientific, but it was better to do it at the same time because there are different ideas, like radio and adverts in this way and other campaign in this way. And all five worked it was stunning honestly they all worked and they every single one clocked in better than um what we expected a highly successful campaign should return at which point i took this as a excel

spreadsheet to to to the venture capitalists and said, here's a formula, I need to fund this formula. This changed the conversation quite a bit. They're like, Toby, I remember when you came here on a bike.

Exactly. Exactly. Oh my God. First come with a bike when I come with a formula. As you said earlier, there's a lot of chance involved with a lot of this stuff, but you can,

and I wish I could give credit to the writer who came up with this term and I'm blanking. You may know who this is, but they talk about a, a luck surface area and increasing your luck surface area. So that chance has a higher likelihood of sticking. I know that's's there's a lot of a lot of uh confusion in that sense but uh the importance of that hands on those customer calls is sort of i think hard to over state yeah right and i know i know some companies

that require all of their executive hires to do a period of customer support. Same with us. Same with you guys. Yeah, on the front lines. And I still do, I take customer calls. I do periodically. I work with customer support.

I have my own account there. I take some tickets and I take the phone. I love it. I go visit customers all the time. This is actually like distance to frontline becoming bigger has probably killed more companies than probably many other forces that people would immediately think about

when talking about disruption. Yeah, I love it. To be honest, just a few more questions and then we'll wrap. We have some dinner and maybe some wine or something else to have later, but you mentioned the crystal ball

and the importance of looking into the future, particularly with the types of products you're developing and the technology that you work with. To go back to my notes, here we go. John Phillips considers it his job to go in Lutka's office once in a while and get him to clear everything off his desk. As CEO, he feels he shouldn't have any actual work to do. We'll kind of gloss over that part. Quote, he has guys to do that. And if he meddles in it, he'll cause a problem, which I like, that's pretty funny. But thinking

you have to be looking ahead. How does, this is just like, it would be a super fantasy of mine. Is it literally clearing stuff off your desk? What is, what does John or other people do to help get you out of the stuff you shouldn't have your hands in. Yeah. I mean, this has been such a journey, right? Like, I mean, I want to say I like the really high level strategic things and I like the absolute tiny minute details. Then you are also in the customer tickets. Right. The thing that I optimize away is everything between those two.

Oh, right. And so that helps a lot because, you know, again, these tickets matter, right? I think John has been, like he has been such a massive help. He's the same person I mentioned earlier who came to me and said,

you'll never, Toby, you'll never find someone who's going to care as much about Shopify as you do, which encouraged me to take the CEO role. So he was there at many important parts of Shopify journey and was full of good advice. And so he helped me sort of build out this practice over time

to just hire good, great people for everything in the middle and allow me to think about the sort of long-term, big picture kind of things and um but i really really really do like going and putting my chair in some part with engineers working on some um you know important performance detail and so on but that that teaches me something about the company and it also it just it allows me to access access the latent pieces of mastery that I once built, which is actually, you were talking about happiness and contentment.

Tapping into some kind of mastery, you just can't. You can't spend all your time just working on things which are going to finish two, three years from now. It just doesn't, the feedback loop is too long. It doesn't nourish you in the way that, like just doing something that's fun is to do now. So that's a really important component. But lastly on this crystal ball,

I mean, here's the way I think about it. I find that, like, so first of all, the future is not predictable. Like the future is a random walk and depends on macroeconomical events and climate change and a million other things. So you can't actually know the future. But there are two things you can do.

One is really important, which is just draw the trend lines forward, sort of like a minor version of what Ray Kurzweil would do. In 2009, we knew that almost all traffic to Shopify would be coming from mobile phones by just looking at data

and connecting two points and drawing it forward. It was kind of predictable. Computers getting faster, AR classes being around and all these kind of things. We should add those into our calendar to say by then they probably are very important getting faster you know ar class is getting being around and all these kind of things like we should add those into a calendar to say by then they probably are very important and and we should

be aware of them so that's one component the other much more interesting component is you need to be a credible witness to reality and you have to have a model of what, this is currently January 2019, almost no one in the world knows what January 2019 actually looks like. Because of exactly the William Gibson quote you just talked about, the future is already there, it's just not evenly distributed yet. It used to be that you could go to Silicon Valley

and what you would see around you, observing the things around you would be a pretty like potentially 95 accurate rendition of the most up-to-date current version of the particular time you were in so if you were an entrepreneur in Silicon Valley and you looked around yes you and and you just said okay I'm I'm seeing what Uber did with making cars just appear by pushing a button on my magical piece of glass in my pocket I'm gonna do I'm gonna try to disrupt the laundry industry I'm gonna do it in that way right you just by osmosis kind of are aware of what's possible now it's much harder China is a much bigger component, for instance.

A lot of innovation is coming from China. And a lot of people have not realized that China is completely flipped on its head in terms of it's not just copying ideas from the West, it's actually delivering ideas. These fully automated supermarkets that people are talking about and coming to various cities are all over China. The way they use facial recognition

to gamify citizen behavior in certain cities and WeChat, some of the features built into it. It's incredible. I want to steer away from the moral and political side of China, but I think just looking at it

through just what is life like in China, it's appreciably more futuristic than it is anywhere else by just they are in a post-credit card world for WeChat Pay and all these kind of things. It unlocks completely new business models for them. And so it's worth our understanding. But there's other things like

who actually in the business world understands the video game industry? It's the biggest industry no one cares about, right? It's like, so... Yeah, I remember one time, I don't want to interrupt, but I will, since I've apparently had too much caffeine, which is, I remember one point,

I know nothing about, very little about video games, but I remember I was looking at, because you see it all the time, if you go to, say, Rotten Tomatoes, you see the box office earnings of the biggest movies in the world, at least domestically. And then I saw some of the numbers

for video game releases. And it was a multiple of the entire total of the list. Yeah. The video game industry is a good deal larger than television music and Hollywood combined. It's incredible. Right? But it's also one of the most competitive environments ever.

It essentially is a massive industry on the Hollywood model that a hit is everything that everyone aims at. One hit clears the money from the industry. And so what these guys have found out in the video game industry about just human psyche is fascinating and hugely futuristic compared to what these sort of business people figured out and

so you see so what i'm getting at is you do the trend line thing and i think that's table stakes and people just need to do a good job of doing that but that's also not that hard and then you have to look around the planet and just say, where is competitive fields? What tools have the winners figured out in them? How can I import those back into the rest of the world? And I think through the intersection of those two disciplines, you can actually get a crystal ball and make assumptions on the future that start becoming reasonably precise so that they are better than not having them as guiding posts for making product decisions and so on.

Toby, the Oracle of Ottawa. That sounds so wrong in a way. You shouldn't have just said that because now I'm going to make it my job to make that your next headline. It's a thing now. So let's wrap up with a couple of questions that I like to ask and listeners seem to enjoy. I'll just go for some of the hard ones.

If you had a billboard, metaphorically speaking, to get a message or quote, a question, a word, he's lifted his glasses and scratching his eyes as I'm asking this. That's a sign of... I know you asked this question. That's a sign of approval. What might you put on it? Can't be an advertisement.

I mean, I'm going to stay on topic. Entrepreneurship is precious and needs to be celebrated. That's what I would put on stay on topic. Entrepreneurship is precious and needs to be celebrated. That's what I would put on the billboard. On the billboard. Besides the books that you've mentioned, are there any other books that you would put,

that is one that comes to mind as most frequently gifted or recommended? It doesn't have to be one book. It could be whatever comes to mind. I mean, the most frequently gifted book is The Elements of Style because I just I like good writing is that a passive aggressive thing to employees?

people hate getting that book but like a lot of I think I might have 50 copies in my office it happens frequently John by the way great use on the semicolon however here's a gift. Yeah, it's more like, hey, I like the content of the memo,

but I don't think you've written a non-passive sentence in a year, so I think we need to talk. Not to stereotype, but that's the most German thing I've ever heard. We have to talk about your passive voice. Yeah, exactly. A book I love giving to people, I try to, of course, aim at the right moment,

is A Guide to Good Life. It's one of the best books I've ever read. That's the introduction to Stoicism, William Irving? Yeah, exactly. I think that's the best gateway to rock into this William Irving. Yeah, exactly. Yeah. I think that's the best gateway to rock into this world. That is a great book. I read it absolutely... Did you read The Courage to be Disliked?

No, but I love the title. It is probably the best book I've read in the last couple of years. Wow. It's an introduction to Adlerian psychology, which was sort of anti-Freud. They were sort of the two factions in Vienna. What was the name? It's called The Courage to be Disliked.

But the psychologist? I think Alfred Adler is the name. And absolutely fantastic. I mean, clearly a student of stoicism, but I think he took it further. His concept of the separation of tasks is probably, maybe that would be another thing I would put on a billboard. But it's hard to put on a,

I think it requires a little bit of context and explanation. What is the separation of tasks? It's just the basic idea of, it's not your task to be liked. It's your task to be likable and someone else's task to like you or not. It's up to them. The biggest wedge between your psychology and someone else's that could ever be driven into it. I think potentially a more tangible way

of getting people into this mindset than I think the a more tangible way of getting people into this mindset than I think the Stoics who came at it through a very sort of high-mindedness, right? Like it all makes sense, but it doesn't, like I think what Adler does really well is he developed tangible tools to facilitate a lot of this kind of outcomes that the Stoics were sort of reasoning about.

So fascinating book. Courage to be Disliked. That is one of the better titles I've heard in a very, very long time. Agreed. Do you have any parting requests, asks for the audience, last comments that for now you would like to to make anything you'd like to ask them to do suggest that they might check out or any anything at all that you'd like to say um yeah it's a big broad question i mean like again like uh we didn't really get into this too much i sort of alluded to it probably enough though like i'm a huge fan of people just going for it, reaching for independence, building businesses. I think it's worthwhile for especially your listenership to sort of understand that there's no force in the law of the universe

that makes entrepreneurship stick around. It actually happens because governments and various people made very deliberate choices to facilitate it. Reducing friction massively increases the participation in entrepreneurship. This is not a plug of Shopify. Shopify is a player in this space, but actually we need more companies

to figure out ways to reduce the friction of entrepreneurship across the entire entire spectrum of how people engage in entrepreneurship because i think if you don't this is going to end up being a serious economical issue eventually because by the time people figure out like why is employment going away, why is small business employment going down, it's actually because small businesses are going down. There's potentially so many systemic effects in play that it's going to be hard to undo a lot of the damage. I think it's an underappreciated area of entrepreneurship.

It is entirely possible to build a company that's highly valuable by focusing on this you don't have to go up market like the way everyone tells you to especially investor types and and Shopify proves out a way if you're looking for for a kind of blueprint and so I would love for more people to think about this when you're going into your oracle toolkit with the crystal ball and surveying the global landscape are there any particular countries or cities that you think are worth examining or modeling that do a good job i don't know if singapore would be an example yeah i would say it's sort of singapore but it's also like stockholm is another one so which what's going on in Berlin is really interesting.

But also Shenzhen. Shenzhen. It's it. I think visiting Shenzhen would be highly, highly... And that's S-H-E-N-Z-H-E-N? Shenzhen? S-H-E-N, yeah, I think so. Shenzhen. This is exactly the kind of thing I have trouble with dyslexia.

Chinese is pretty hard for everyone who's not Chinese. Okay, good. But it's, you know, just because you go in the, like the world's biggest electronic markets and you realize, hey, if I wake up early enough and make my goal to, I'm going to build my own cell phone, I can be done by the end of the day by just getting components in this place, right?

And these buildings just don't exist anywhere else in the world. And that kind of everything is possible phone i can be done by the end of the day by just getting components in this place right and these buildings just don't exist anywhere else in the world and that kind of everything is possible attitude is also shared by everyone there and it's just it's a it's a it's a it's a really fascinating place it's really interesting so i think that's a that's a place which figured it out yeah that's uh i mean that has sort of a of a silver lining on what could be a very large systemic problem is that there are exemplars out there. I mean, people can find out more about Shopify at shopify.com. On Twitter, they can say hello to you, at Toby, T-O-B-I. And then Twitter, Instagram, LinkedIn,

of course, Shopify is on all these platforms. And I'll link to everything in the show notes. I also have a Reddit link here. And maybe you can explain what that is. There's a shake of the head. Shake of the head, Shake of the head. No Reddit. I don't know how that made it there.

I thought it was anonymous on Reddit. This is no good. Okay. Your account. That is not to be mentioned. The name that shall not be spoken. And I'll link to everything we discussed, the books and so on,

the principles, philosophers, psychologists, in the show notes at tim.blog forward slash podcast. As per usual, you can just search Shopify or Toby, T-O-B-I, and everything will pop right up.

Toby, thank you so much. This was fun. Yeah, really good time. I have always enjoyed spending time with you. You've remained, you've started off very humble and understated. You remain very humble and understated, which I think is a real testament to you. to develop a cultural around the personality and attributes of their leaders. And you've assembled a fantastic team and built a wonderful company that's doing a lot of good. Thank you so much, Tim.

And again, kudos to you too. Well, actually, thank you to you too. You were a big inspiration along the way. You were a massive help. Thanks for making yourself available when we needed you. And it was incredibly gratifying to spend, you know, that really fun day

at the New York Stock Exchange, ringing that bell, being there together. So it's, again, it's all about being on a journey surrounded by friends. So thank you so much for being a friend to the company.

Oh, my pleasure. And, you know, what an honor to have been in the right place at the right time. RailsConf. And, uh, it is, it is, it is really important to have companions on the path. So many adventures ahead and to everybody listening, thank you for tuning in and, uh, try to figure out which box you're in and check out some of the resources in the show notes. Thanks for listening.

Hey guys, this is Tim again. Just a few more things before you take off. Number one, this is Five Bullet Friday. Do you want to get a short email from me? Would you enjoy getting a short email from me every Friday that provides a little morsel of fun for the weekend? And Five Bullet Friday is a very short email where I share the coolest things I've found or that I've been pondering over the week. That could include favorite new albums that I've discovered.

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