Tobi Lütke, Shopify｜David Senra

One of the things I admire most about you is like you've been running your company for 21 years, something like that.

I love people that do things for a long time, people that chase excellence, that try to be great.

My entire life is founders, right?

So during the day, I read biographies of history's greatest founders.

I've read like 410 of them.

And then at night, I hang out with founders.

I don't think I have a single friend that's not an entrepreneur.

And then blah, blah.

I'm always asking the founders I most admire, who are the founders they most admire?

And your goddamn name comes up over and over and over again.

And what they talk about is that you have very unique ideas on company building and management.

And they use the word singular a lot.

So I want to kind of like lay out how you think about building companies, building products, building technology and then, you know, spreading the gospel of entrepreneurship.

I want to start with one thing that you said.

You said companies are technologies themselves.

What do you mean by that?

In a lot of ways, like, I mean, like take the social angle.

Like a lot of the companies are social technology in the sense that they allow us to go all in.

The only time you're really allowed to spend, I don't know eight.

I'm going to say eight because that's the right number to say really like fucking 14 hours a day, right.

Just singularly pursuing a thing is like.

I mean, we want kids to spend this time in school and that's okay.

And then university, you know, dedicate yourself.

Other than that, Like you can't just like not have a job and just be like really, really into things.

It's socially not acceptable.

So like company building turns out to be the perfect excuse.

Once you call it a company, it's not like tinkering around anymore with your ideas and you get to explore things.

What a company fundamentally allows you to do is like just run the counterfactual to the world you see around you, right?

Like you get to try to build a thing that you think ought to be there and um, then you means test it against the market and if the market uh um, agrees with you that this thing needs to exist it, it moves energy in the form of money back to you so you can do more of the thing that uh you, you were pursuing all along.

And not only that, it's like self-financing, like if you find out, like again, i started a company which i didn't think was going to be um uh, have this very, very big market.

And along the way, the market pulled Shopify out of the project I started, essentially.

That's an incredible intelligence to tap into.

So you put all these things together and you say look companies, the concept of companies is not that old.

It's like um, we're on a 500 year run and sort of kind of extracted from things called companies which weren't, which were actually more like quasi governments, like the east india company, and so um, the modern company is not that old.

I find that if you take that mindset that like, companies are just sort of a path, dependent solution to a social and somewhat legal problems, they allow thousands of people to join your project and it's called a job and therefore everyone accepts this and obviously you can make money, so it's a good deal.

And then you can figure out if this counterfactual of yours might be correct or needs updating along the way or any of these kind of things, and you could, at the end of the day, if you are lucky, you work with other people who are really all in and like inspiring and like taking it further than you ever think.

And it's just like the whole thing is just like I, just like I marvel at the institution of the company in a way.

Like because if it wouldn't exist for some reason and someone would propose the whole idea now, it would sound insane.

Like from first principles, none of this makes sense really.

Well, I heard you say something that was fascinating, really piqued my interest.

When you're like, we do not know how to build companies yet,

All companies are terrible.

Yes.

Including mine, which you said, and you know that's hilarious when somebody you're running a 200 billion plus dollar company.

And you think that in the next 20 years we're going to look back at what we were doing at this point and be embarrassed by what we were doing?

Why do you think that?

Because it's like everything else.

I'm sure when you listen to your first podcast, you're like, oh my God.

Please don't.

But like, it's honestly, this should be seen as the most joyous of moments.

You should actually do it if you haven't done it.

No, I do it all the time.

Okay, great.

Because what you, the difference between that and what you would do today is you progress, right?

And as a computer programmer, I experience this all the time.

I look at old code and it's like, what the hell?

Like, this is terrible.

Why would I do this?

This is way too abstract and complex.

And then I made it better because I now have the skills to do so.

And one of the saddest days of my life was when I opened old code and was like really impressed with how good it was.

That was one of the saddest days?

Really really saddest day of my life, because I mean like holy shit, the implication of this just hit me like a train right.

That you weren't progressing?

Exactly.

It figures because I wasn't programming all day.

I was, like, trying to, you know... build a company instead, which honestly is very, very similar.

This is one of the things Daniel Ek told me about you.

Yeah.

Here's what I'm observing.

Like you, I read a lot of books.

I try to figure out.

Like you know, I think someone like if you don't read books, you live a lifetime.

If you read books, you live a thousand, right?

So it's... I'm going to interrupt you real quick because I took notes on this podcast six years ago.

This is the first time I came across you.

And you said, books are the closest thing you'll ever come to finding cheat codes for real life.

You can access the entire learnings of someone else's career in a few hours.

It tracks, doesn't it?

Yeah.

I dedicate my life to this, so of course I'm going to agree with that.

Absolutely.

You're supposed to agree with me, but I really think we need to shout this more from the rooftops.

The one weird trick seems to be just read books.

It doesn't matter.

Let's make a habit of reading books.

Ideally, change jira every three books or so, at least for one book, and then that'll, that alone will give you a range that you can draw on for basically everything you'll ever do.

So like, look i i, i read lots of books, lots of them, you know, just like you know especially uh, when i went from programmer to a business um uh, like realizing i have to just learn business really quick, um i um, I got really dismayed with the quality of her business books pretty quickly because frankly, I think her business books are largely written by the people who have time.

Well, not the people who actually build companies, frankly.

So you read between the lines as well.

It depends on like.

If a person who started a company or a person writing a book is a salesperson, every problem can be solved with sales.

If a person is a marketer, clearly every problem can be solved with marketer.

And I mean, at least that I can take away as a trap to not fall into, right?

So I was determined to not be the engineering type founder who was going to see everything as an engineering problem, because that would be called blindness and this would cap my capabilities.

So I really tried everything, including just how to build the team in such a way that I delegate everything and I have my different business lines and arrange things.

This is sort of after the IPO and I realized I have to be a very serious public company CEO.

And so it almost killed the company, honestly.

How did it almost kill the company?

It was actually COVID that saved it at this point.

I had the inclinations that something was really, really going poorly.

It was a time we didn't have a lot of competition, which is also really, really hard for businesses.

It's not a good thing at all because again, you don't have good rivalry and you can't sort of Like, even if something seems really good, you don't know because there's no one else to keep you honest about it.

You have a distinction between a competitor and a rival.

Competition is one thing.

Rivalry is really good.

I mean, it's the same, but it depends.

It's a mindset change.

It's like I think if you again, if you compete with another company, like there's a lot of competition, we need also a version of what they have.

Copying, like you do with Xerox strategy very quickly.

Companies tend to get obsessed.

Like there's companies which have very, very like the most active channel in their Slack is their competitive analysis channel, where people just bring everything everyone else is doing.

And I think that...

While that has some merit, I think the problem is it makes companies very reactionary, right?

Like in the arts, part of everyone's art studies is, or at least in fine arts, you copy the great pieces like you make copies of great works.

Your next painting is not at the quality of a Van Gogh.

You just copy it, right?

So mimicry is actually not an excellent way of getting to excellence.

And companies end up falling very much into this.

Whereas if you treat someone like other companies in your space as rivals, much easier to have a positive outcome there.

Because rivalries inspire you to be best.

Like, Agassi could not have been Agassi without Sampras being there, right?

Like, and he very, very clearly states this in his book.

The Sampras that existed during the Agassi era that Agassi, like, understood wasn't a real person.

When you read Sampras's biography, He just liked tennis.

Yeah.

And August, he hated it.

I guess he hated it.

And so the rivalry he created for himself created him in a very real way.

In the last dance, which I loved, Michael Jordan he admits that he made up a slight at some point, which to me is one of the most profound moments.

Sometimes I play the last dance in the background while at work.

It's my favorite documentary.

My second favorite one is The Defiant Ones.

It's about the partnership between Dr. Dre and Jimmy Iovine.

Multi-decade partnership.

That's the description.

That's not what it's about.

It's one of the best documentaries about entrepreneurship.

Interesting.

Hip-hop rap history is incredibly entrepreneurial.

It's fantastic.

So we just recorded with Jimmy Iovine, who's the star of the documentary, two days ago or whenever.

I don't even know what day it is.

And that's exactly what he said.

He's like, they understood the business of music before anybody else.

That makes perfect sense and totally tracks.

You can see it from the outside.

We actually see it from the inside.

It was the first category of music that just like killed it on Shopify.

It's like there's just like so like opportunities converted into products like that.

And it's like they made different.

It was really, really cool.

This is a beautiful thing about Shopify.

It's a front row seat to just seeing how high agency the different industries are and how you know quick they absorb new ideas.

And it's just like, it's anyway, it's like a different topic, but like.

Almost like in video game, like a God level view of entrepreneurship, because you, how many, how many entrepreneurs on the Shopify platform.

It's like millions, right?

Yeah.

And you're drawing like insights for your own work from the entrepreneurs on your platform.

One of them we'll talk a lot about today was like the importance of differentiation.

But I want to come back to that.

I want to go back to like.

So you were thinking okay, right after the IPO I'm going to approach everything.

This is like an engineering problem.

I'll be a cosplay company, a public company CEO, like 60-year-old guy in a suit, like legal background, right?

Like that's sort of what everyone emulates for whatever reason.

And it just worked really poorly for me from a product perspective.

A company did fine, right, all the way through.

COVID happened to all.

And I'm like, Okay, so what my company needs here for me is like five different things.

One of them is all plans are invalidated fundamentally.

Like everyone who has a plan, just please throw it out.

We need to go and like go for everything we're doing and re-derive it because again, everything is based on a very long tree.

Like you start with axioms and then you make a huge amount of decisions on top and then you get to a conclusion and that's means this is how you spend your day-to-day building this thing, because of these things.

If any variable along this way is invalidated, what you should be doing is re-derive the entire thing on top right.

Like you should always prune back the decision tree all the way there and go forward.

People not being able to go out of their houses.

It's one of those things like I don't think we all knew that was a core assumption we had, that people could just freely move around in the world.

But we got told that we can't do this anymore.

And it ended up being quite long during COVID, at least in California and Canada and some places.

So we need to re-degrade everything.

And that was kind of clear to me and sort of what.

I you know, that's how you structure a computer program, frankly.

I went through the entire roadmap and what I figured out is first of all, that was really really hard to get.

And people were fighting, even very much resisting, talking about everything that's going on.

And I found out why, because there's just a lot of boondoggles going on.

There's just random projects by random people that I would never have found out about.

Why did you not know that it was going on in your own company, though?

Because the company was, let's say, 4,000 or 5,000 people.

You know, it's sort of quasi-distributed.

We started in Ottawa, Canada.

We had, like, Toronto office and Montreal office and so on.

And so it just turned out that, like you know, in the Toronto office there was a fairly big project to build the features to add to Shopify, so you could use it for running a supermarket.

Because you know, just they decided that the supermarket industry is very large and we should go and capture 1 of all that, like in the Dilbert comics.

And so, you know, and frankly, like I'm not saying those are wrong decisions.

The sort of really surprising thing about building a business or just in decision making in general, is that making the right decision is actually child's play usually.

Like it can make wrong calls which end up, because the world changes, ended up being a wrong call later, and so on.

That's a different thing.

But most of the time, the bad options in front of you just prune themselves away.

They just don't make sense.

They're too expensive or off mission or whatever.

The problem is and I think school unfortunately accidentally drills this into people is that there's one right answer is sort of what people think.

And once they find a right answer that could plausibly accomplish the goals that they set out, they go with it.

But that's like, well, there's probably hundreds of great answers.

And one of them is like far less work, far more, especially in an engineering project like the best solutions are always modular and components.

You build one thing and it will work with everything else you did.

Lots of the bad software that people use are things there which are just like hairballs inside.

They're like none of the pieces fit together and a huge amount of code has to be written to extend the new thing, make it usable from everything else.

And like, I'm not going to bore you with those kind of details, but if you look at the project brief, the team killed it.

Probably everyone made their bonus.

They delivered the thing.

It just.

It's like an island upon itself.

Now that, and after it's delivered, nothing else in the product works.

So you were looking at things as like cosplaying a like a CEO or a business person as opposed to an engineer.

I was trustworthy.

I was like saying, okay, cool.

You seem passionate and you seem to know what you're doing.

I trust you to do the right thing.

And when I hear you know obviously we're going to keep talking.

You give me updates on things.

People learn pretty quickly.

What are the projects that I'm interested in?

Talk to me about both and nothing else.

People learned how to direct uh my attention, um to the things that they wanted uh to have my attention.

So how did you fix that?

The moment i went through absolutely every project i did myself took like many like 16 hour days, that i cancelled probably 60 of the projects and over the course of a year, i turned over every one of my executives like.

This is basically the consequence of this, because i just realized that in many cases, the core skill was um Well, I mean, I don't want to be unfair, right?

Like it's just that trust was broken in many cases and in a real crisis like COVID again, COVID was hard hard hard, hard.

Hardest time of my life, for sure.

And in a crisis, if everyone is a one before, some people go to zero.

In a crisis, some people go to a hundred.

And I've found it's almost unpredictable.

In fact, if I would have been betting before COVID about who's going to be contributing the most, I would have been wrong, I think entirely.

Why do you think that is?

I've been thinking about this for a long time, and I still haven't gotten a good answer.

I don't think they would have known.

This is the interesting thing.

I think a real crisis tests you in a way that nothing else does.

Nothing prepares you right for it.

I think, at the end of the day, the thing that I have found is people who can adopt the fastest actually quite self-identify.

Now I would be able to predict it.

Very simple.

Have you started a company before?

So Shopify is... by a founder, by founders, for founders, causing more founders, right?

Like it's a celebration of entrepreneurship.

We believe entrepreneurship is glorious and people will reach for their heroes and doing modern day heroics.

Go on a hero's journey with lots of naysayers, overcome incredible odds and lots and lots and lots of headwinds.

That conviction runs really deep.

Sometimes we buy companies, of course.

Many of the people we purchased are still in Shopify.

People don't stay for a very long time, because I think it's such a place for founders and for high-agency people.

So I always had a Slack channel with all founders of our companies that we purchased.

I did a founder offsite with them once a year.

They're just like, because I find their advice just to be so good.

They all have been responsible for people's livelihoods and that changes you.

So I went to the founders channel and said, guys, I need help, right?

Like this is, this place is, it's crazy here.

Had you already started turning over your executives?

Yeah.

Once I realized that I was like, and it wasn't like one moment.

It was just like.

How did you know that instinct to go to the founders channel and ask for help?

I think that at a moment of like where the fuck do I go?

Who do I have most in common with and who can actually relate to the types of problems here?

Because again, my relation to Shopify is different, right?

Like I started it, right?

Like it's just like, it's different from everyone else.

But the second best thing is talk to people who have had this type of relationship with the thing they created.

You know, I asked a lot of the founders to become my executives.

In some cases I took people from individual contributors in an engineering team and put them in charge of a very large thing.

And you know what?

At all, every one of those things worked.

And it was like really remarkable because it really fed into an intuition I had anyway.

And what I found is during COVID is the founders of the company were actually not doing well because they were like similarly managed

They were like irritants.

What does that mean?

They don't settle.

They talk about absolutes.

If something is shit, they say so.

It doesn't matter if everyone has agreed to move on or something.

It just, it nods on them in a way that's deeper than this other thing.

And that's exactly what you have inside of you.

Exactly.

And so I feel like this is, it's a very special thing and it's companies reject it.

Companies cocoon them.

Sometimes they find, they give out squirts, like the skunk work team.

It's like just like it's daycare for people who otherwise tell you that your stuff, your shit, doesn't smell right.

And shit does smell.

So once I'm like, no, you don't get to put them in like founder daycare.

I'm going to put them right in front of you, like in fact, on top of you.

And so, you know, the difference that made to this business is nuts.

And so this is what I'm saying COVID saved Shopify because I needed to take a move.

That was like very much okay, I built this company.

I got to this point.

It's important.

It's actually maybe even more important during COVID than before, because it was kind of like for millions of small businesses their livelihood for this time and only way to make livelihood.

And I'm super proud of what we did because I think the businesses that started in Shopify came early like, actually grew and did better.

Some of them grew faster than you.

You said somebody beat you guys to a billion dollars.

Yes, which is the craziest thing.

Which businesses ever raised their customers like that started on the platform, for it's the greatest.

I love this thing.

And so I mean again, like they're fantastic, they're heroes, they're glorious, they're wonderfully.

My founder, my customers have the same irritation with my software.

And like I tell you, it's like, it's perfect, right?

It's exactly what I want.

And so this was one of those moments saying you know what Toby like.

Maybe you didn't build Shopify completely by accident and your intuition might have been actually helpful, and cosplaying someone else is probably not what you need to do.

So at that point you were running Shopify for how long?

15 years.

Now it's, yeah, about.

So that you were 15 years.

15 years.

This is very common biographies.

I think it would surprise people like, oh, why did it take so long to figure it out?

It's like, no, it takes a long time to actually build the skills.

And then the important thing about intuition has to be refined.

Yeah.

So it's like maybe in 2005, you shouldn't have been trusting your intuition.

Trust your gut is sometimes good advice, but it really depends on your gut.

So it's like no one is born with intuition for building businesses.

Because first of all, building businesses are completely, every decade is different.

Like some problems are persistent. like, I laughed.

I listened to, I think, an episode you did on Larry Ellison.

You were describing his frustration with problems in his sales team, which literally I had to.

Like, it's like, you know what?

I didn't actually have to live that horror.

I could have actually, like, there, if I would have read the right... If you read software or any of the biographies.

Or listen to founders.

The incentive problem or on commercial teams.

That's the amazing part.

I'm glad you picked that up because he's like, I'm fucking embarrassed.

He's like, I'm 40-something years old.

I've been running this company forever and I didn't understand that incentives with my sales team mattered and they almost destroyed his company.

They almost went out of business.

I usually listen to podcasts when I'm sitting in my racing simulator to practice for my next race.

And I got to that point and I was like okay, I have to stop and just listen to this, because I'm just feeling so much empathy for Larry Ellison, of all people.

How funny is that?

So anyway.

Before you move on, because I love where you're going.

I can't help myself because you know this.

It's like when I hear you saying, I'm getting rid of the executives.

I'm going to build an executive team of founders.

That's not a new idea.

Rockefeller was doing that 150 years ago.

It's interesting how the building blocks that largely Rockefeller invented I mean we call these things trusts because it was, you know, like that was a term they first used there.

Toby's relentless dedication to improving his company reminds me of my friend Kareem, who's the co-founder and CTO of Ramp.

Kareem is one of the greatest technical minds working in finance.

I spend a lot of time talking to Kareem, and every single conversation centers around his obsession with crafting a high quality product and using the latest technology to constantly create better experiences for his customers.

Like Toby, Kareem believes that nothing is ever good enough and it can always be improved.

Kareem is running one of the most talented technical teams in finance and they use rapid, relentless iteration to make their product better every day.

So far this year, ramp has shipped over 300 new features.

Ramp is completely committed to using ai to make a better experience for their customers and to automate as much of your businesses finances as possible.

In fact, karim just wrote this ai is all i think about these days.

It is our duty to be first movers and push limits so we can make the greatest possible product experience for our customers.

That sounds a lot like the approach Toby uses.

Both Kareem and Toby never rest on their laurels and use rapid iteration to invent new products for their customers.

Many of the fastest growing and most innovative companies in the world are running their business on ramp, including Shopify.

Make sure you go to ramp.com to learn how they can help your business save time and money.

Let AI chase your receipts and close your books, so you can use your time and energy building great things for your customers.

Because at the end of the day, that is what this is all about.

Building a product or service that makes someone else's life better.

That is what I'm trying to do.

That is what Toby has dedicated his life to doing.

And that is what Ramp has done too.

Get started today by going to ramp.com.

So now you have the executives.

You're going through the most difficult part in your life.

Yeah.

And you realize, oh, I'm cosplaying.

I'm going to go lean into my intuition.

Yeah.

This is another thing why I think that decision you made six, seven years ago, however long it was, is why so many founders like study you respect, you take pieces of like your philosophy as well.

Because you're like, God damn it.

I'm just going to do this the way I want to do it.

I was like, okay.

I need to try something different.

You have to do things differently, axiomatically.

Obviously, axiomatically, if you do the same thing, you get the same results.

Differentiation requires new ideas.

Instead of spending the next 10 years of my life figuring out how well I can cosplay someone else?

What would a company look like if it just taps entirely into my intuitions, like in my biases?

I'm doing literally the opposite now as I did before, because this didn't work, so maybe the opposite works.

And worst case, I triangulate the midpoint between those things.

So, enabled by the very clear, fast and obvious success of asking people from Founders Channel to step up and run a company with me, My real set of intuitions.

Here again, intuition is your entire life's story rolled out for you to make a snap decision in a moment.

What does my intuition say about what a company actually should look like?

Let's forget about the path dependence.

Let's go full tabula rasa and go up from axioms.

And I started with really, really, really nothing. like a project on GitHub, literally.

So engineering tools, my iterations again.

What is the first principle of a company?

What are the inputs?

What are our decisions?

Put in config files what titles exist, what levels exist.

I asked for all the sales compensation data, all the market data. and put them into the repository.

I turned them into machine readable files because I got them as PDFs and so on and so on.

So I built a thing that then created like, at the end had all the information to create a model of the company.

Like literally, this is Python code which takes configuration files that we agreed on things like how many people should report to a manager all these bits and then computes them, uses something called a solver, like a SAT solver specifically.

And then with all these constraints, all these inputs, what should Shopify look like?

What departments exist?

What level exists?

How many people are there?

In which group and everything.

And of course, the first version very utterly incorrect.

And then I realized, are you doing this alone?

I started it and then I got like two, three other people in it to help me with this and really really got into it.

And so this is called Shopify OS, the Shopify operating system.

It's really not being part of Shopify now.

What it did is... it became irrefutable that we didn't know all the principles.

We had like something it was 8000 people in a company and it was 5500 different titles in a company.

And it's like so.

I mean some of them are just senior and senior staff, but in some groups senior staff was lower than director and some above.

And it's just like it.

Just when I tried to make something software addressable and try to reproduce it, It showed every crazy, unviable choice in the company very, very easily.

So there's a system in engineering not actually a well-understood part of it, but I think it should called desire state systems.

And what desire state systems are is it's a thing where you say, okay, here's what should be.

You hold that up to.

What is like you click on a website, on a link, and your React library behind it.

What it does is it says okay, I compute what it should be.

I see what it is.

And now I figure out what is the minimum amount of steps I take to get this to there.

And that's what you see on the web browser.

I need a design state system for this company.

So we have this model.

We create it.

And then you hold it up to the company and the job of HR is to be this reconciler.

Like how do you take the minimum steps to get from here to there, or change what we have in this system to approximate what we actually want?

So this is very technical.

Here's the effect of it.

Think about how much politics this removes.

Then my head of sales comes to me and says, hey, I need 50 new salespeople.

I can put this now into the system and says, well, that means have to either make these changes or you're gonna lose some of your engineers or like because the system based on our agreements recomputes everything um so i have um we can always look at the counterfactual and then it's not like yes boss agreed by playing golf to hire 50 more sales people and now someone has to carve like you have to find a pound of flesh somewhere in the engineering team and suddenly you don't actually work on innovation anymore because you never actually made the decision to not hire engineers because your budget doesn't allow anymore because, but you did make the decision to hire salespeople.

And maybe this is the right decision.

But now we can actually look at the consequences of every one of those things.

It was hugely successful because it just created such a legibility for us and such a simplicity.

It also just told us that so much was undecided.

Like, for instance, we took the concept of in engineering, this was already around individual contributors is a really really excellent career track right.

Like you, can make as much money in good companies as an individual contributor as you can as an individual.

VP or manager or like the best paid people in many companies are now individual contributors at this point in history, especially in machine learning, like at least at the machine learning labs like OpenAI.

But no other discipline really had that.

You had to become a manager to progress in your career.

And so I think one of the consequences was that when I really really looked at it, like hey, I need more great engineers.

The best place to recruit them from was my own management team.

And, like, that seems silly, and especially because are they actually great managers?

They're really well-respected because they're good engineers.

So maybe, but like don't they want to code?

Like it's like you know.

So we created like this sort of mastery system we call it where every job has uh, this ability to stay um.

You can get these basically level upgrades frequently and at any set of responsibilities you can.

If you're insanely good at it, you can make lots of money.

And like, that just seems like, of course you design it like this.

Why would you not?

So they can stay individual?

Yeah.

Like take an example in engineering.

If you're like, if you're a hundred times better than other people in this discipline, usually you can make more money than a vice president.

Now, That depends on the value you can bring, but it is possible.

And just like, I kind of hated the way we did like compensation in the industry, right?

Like, again, these are boring topics.

No, they're not boring to me and to the people listening.

Wait, why do you hate the way that they were doing compensation in the industry?

What I love about entrepreneurship is the level of responsibility, personal responsibility, people take.

I said as much earlier when we talked about the founders who have been responsible for people's likelihoods.

It changes you, it does.

I don't work myself well in an environment where everything is pre-described.

I don't like joining other people's games and so on.

All these kind of things are my biases.

And again you're implementing my biases here in COVID.

Like this is 2022, I think, or 21.

Suddenly Shopify went down 80 of stock value.

Again, I didn't think that was a problem, because I think the stock market is basically like polymarket.

It's sort of a betting market on the future value, right?

It's not like when you guys are wrong, then you're just bad at betting, in fact.

I work on a real market value of a company, which you guys are betting on, but I don't know.

So like there's such a discrepancy from the way I see people talk about stock price and how I or have ever inside of companies perceived

But what was going on in your head when it drops by 80% though?

I'm like, well, my head, I'm relieved because I'm like, you know, I mean, where the stock was.

Relieved?

Yeah, of course, because... What do you mean, of course?

That's a normal reaction.

I was like, I was not... about to, like, raise money.

I had enough money in a bank.

I'm, you know, German, so, like, I don't take debt, like, much and so on.

It's like, so... Were the internal metrics strong?

You felt they didn't deserve... You didn't deserve... Unit economics are amazing.

However, like, at the...

I don't want to say this right, but I honestly don't remember the exact numbers.

Like at the high point of our stock price.

I think we were trading at beyond 50x of revenue and stuff like this.

I'm like, yeah, that's not exactly value investing here, right?

Like, guys.

And so I get it.

But you weren't worried about the fundamentals of the business.

No, but like when it is 50x revenue.

I see it as my obligation to do that.

My job is to build the best company I can.

The betting market says that I can deliver that kind of thing.

And I'm like, Yeah, maybe, but you go ahead and give me a moment here.

Like, I need a moment here for doing this.

The reason I bring this up is because again, everything I talk to another entrepreneur and I just run it through this, whatever the hell's in my head from all these books.

And when I hear you talk about that, I think of the time when Amazon stocked.

Bezos talks about this in his shareholder.

It went from something like 180 down to six or 120 down to six.

And he's like, yeah, but they were focused on something else.

I saw the actual fundamentals of the business there.

And I was like, this thing's going to work.

And so eventually I think Buffett always repeats that thing where, like in the short term, the stock market's a voting machine and in the long term, it's a weighing machine.

You just want to build a heavy ass company.

And he's like, and Jeff's like, I'm building a very heavy company.

Amazon will be a heavy company.

So I'm not worried about this like short term drop by 80 or 90%.

That really tracks.

And so.

But like one of the effects was and this is right like well, people got stock options at the level up there.

And they rightfully say, well, how about it?

But like, it's like, even if you say like, okay, well, I'm super game here to get us back there.

Like this is going to be, it kind of takes doing.

I realized the psychological problem with everyone being so underwater and having, you know, to spend years getting to basically the zero point where the stock options are worth like even a penny again.

And of course they were like, well, but that's, The company gave me those things at the time.

It's like I received them.

I was passive in this interaction.

Therefore, the company has some kind of responsibility to kind of make me whole here.

And I think that's actually you know.

I mean, I don't necessarily see it this way because like, Like the risk was there and like these kind of things.

And like, again, it's like other people voting that's causing this price.

I didn't set it.

However, I do see the point.

Like they had no agency in the process.

So we rebuilt our compensation system to completely work the opposite of what everyone else's does.

We give people, here's your annual salary.

Here's an internal system.

You go in, you look at it.

This is the number.

Now you get sliders.

You can say, how much do you want in stock?

How many do you want in RSUs?

How much office do you want in shop cash, actually?

And how much do you want in cash?

And you can change that every quarter.

It's like you decide how much money you want.

And you can even use a tool that's there to lock in the value of the stock you received for three years.

It's like...

Again, sometimes orthodoxy can come back on the table if you get there from good principles.

Like.

You can actually join Shopify and get exactly the same stock option deal that companies get at other places by using the tool we give you.

But you have full agency and you make this choice.

The consequence of this compensation system is kind of beautiful, because what happens is, first of all, it's super predictable.

Second, you know, if you go stock and the stock appreciates and you hold them, you make more money.

If the stock goes down, you now get more stock options in your next quarter.

So it's rebalanced against the actual value every quarter.

So it works really well.

It's very popular.

It was kind of hard to do because doing this worldwide for people in many different countries was kind of a legal nightmare because there's all sorts of rules around how to change around changing of salaries.

We figured it all out.

So we have a blueprint of how people want to do.

It works really well for us, but we're kind of proud of it because it's like it's it's, it's just like.

Again, it's a point of differentiation and we believe it works much better.

And again, I want people at the company to also feel like this is a company that is like never sleepwalks into anything, right.

We kind of, we are deliberate about things.

When you started this, I'm going to do it my way.

I'm working with the founder executive team.

You were in the process of that and the stocks dropping?

No, it was already there.

So that was a 2020, early 21 project, I think.

And then I think the stock market, when did that change?

Like 21, late?

These years are totally running together for me, because it just was.

I mean, there was no weekends, there was no everything else.

I can't tell, I can't remember who said this.

I was talking to a much, I talked to a lot of older founders.

I'm obsessed with like, people think I'm obsessed with old people.

It's not that.

It's like this guy's got 50 years as an entrepreneur, experience as an entrepreneur.

Turns out they know some shit.

They've seen some shit.

Surprise.

Yeah, and he's just like man you're going to remember the beginning of your company, you're going to remember the end, and so much in the middle is going to.

He said exactly what you said.

It just glurs together.

Yeah.

So he's saying you should document it more.

I totally agree.

Lots of years are totally running together.

I have reasonable record-keeping on this and especially with all this AI-led agentic reprocessing of nodes and press and so on, you can actually reconstruct these histories and timelines.

And I'm fascinated with this right now.

So my understanding though, like you thought, you're now looking at running a company as like an engineering project.

That's right.

So I'm like, let's engineer a company, be a company engineer, as I told my team.

That applies for every single department.

And like, do you engineer marketing?

Do you engineer everything?

Everything.

I require my executives to I mean, at least tell me, but actually do it.

Go to a podcast, some international conference and talk about how Shopify does the thing the conference is about differently and why that's better every year.

If they don't have a good answer for how they're doing this right now or how they would.

That's what I'm working on with them to crystallize that message.

And there's a couple of reasons why I do it this particular way that we can get into that are partly psychological, but like it's also just like No, let's get into them now.

What's the psychological?

I study the brain quite a bit and you know the main conclusion you get to about the brain is really that the brain is a retrospective narrative alignment mechanism.

It's actually terrible record keeping, but it mostly attempts to take the most salient version of our self-identity and reconcile the history with it.

And it sort of rewards you for actions that are directly congruent with this identity and it dissuades you from dissonance with your own identity.

But you can actually change your identity quite a bit and that actually makes this whole process work for you significantly.

What do you mean by change your identity?

Like the way you view yourself?

Literally affirmations work, right?

Like affirmations work, which is the dumbest trick that works.

I'm so glad you're saying this because people from the outside are like, this guy's like very logical engineering.

No, it's like... But you're all about intuition.

Now you're talking about affirmations.

You're speaking to the choir, just so you know.

I'm a toolmaker.

Like I always project very idealistic, but I'm actually not that idealistic.

I'm super... I'm like a craft person, toolmaker person.

My entire life was making tools.

I... literally my prop, my prop, I Shopify as a tool.

I make tools very often for tool makers.

My hobbies is making tools for engineers who are people who make tools.

My life's a fractal of tool making.

It's all about tool making aesthetics.

It's all about the craft behind it, but also not because of craft for its own sake, although I appreciate that too.

But even that's not for idealistic reasons, because appreciating the craft behind the tool making happens to be pragmatically an excellent way to get really good at Boomerang.

Everything is about outcomes.

What's the affirmation part, though?

The affirmation that, like if you tell yourself or write down a hundred times something about yourself, that writes it into the neural frontal cortex at such a deep level that your brain will start reconciling you to that.

It just works.

I've used that very often too.

Like I.

You know like I was terrified of public speaking until I just sat down for like a week and every day I spent like 10 minutes just writing that I like public speaking.

I love public speaking.

You wrote that down?

I know, yes.

And now you love it.

Yeah, like a week later, and I knew it's not, this works when you know what you're doing, right?

Like you don't even, it's like, it's not like a placebo.

It's like, it's actually like you just actively change your frontal cortex in this moment.

So I use this often.

I sort of write to myself, message in a bottle, this kind of things.

That's sort of a different topic, but like it's.

So the point is like I tell- What's the topic there?

Hold on.

You write messages to yourself?

Yeah.

Affirmations or just?

No, it's just like generally, when I feel like something is like hey, there's something I figured out that I really like.

I know I have to write a scheduled message to myself to remember it because, like I need space to repetition on the idea.

What's an example of that?

I mean, for instance, like we have a company keynote for that kind of thing, like a company get together summit once a year for a week.

And so usually I did a keynote there and like then I write a message in a bottle to myself with what was good about the process, what was bad about the process, what to do next differently, and all the topics are left in the cutting board, just so like to get a headstart.

So that's a random example of that.

How did you learn this?

That you could change identity, that affirmations work, that writing these things to yourself?

I think trial and error, but like I think the hints are like everywhere, right?

Like it's.

I mean, affirmations are one of those things that like I mean there's a reason why we, like society creates rituals, right.

Because rituals end up being largely affirmations on repeat, right?

What do you think of visualization?

Like, so manifestation, these kind of things, I...

Probably books too.

You know what?

The funny thing, I think everything works if you just do it.

The question is what's effective and quick.

It sounded to me before I started reading all these biographies.

I was like this is some willy-foo-foo nonsense.

And then you see very smart analytical logical, in many cases inventors and engineers, and it appears over and over again.

People that know each other.

They worked in different industries different times, lived in different parts of the planet, and they all talk about doing this.

And it's parallel construction.

They all come to the same conclusions in different words.

And so yeah, I personally I mean in the self-department I'm extremely taken with a stoic philosophy.

Control what is under your control, know what is, and then do the best possible job.

It's the job, it's the thing.

The whole project in life is just try to become where they go at something and ideally, cultivate some significant skill, create potentially services, products and then share them with as many people.

You do this because that's what you're on planet Earth for, right?

It's like do things that matter in the world, that are under your control, but also sign yourself up for like it's okay to sign yourself up for most interesting in places, as long as you remember what your job is in within them.

So in this way, like i love the current times and i love the technology industry, i have a role inside of it which is like i'm taking care of millions of entrepreneurs and small businesses that you know are trying to use the world of technology, use the world of retail through their own work.

Then that's actualized.

And that is a worthy goal and worthy job.

And so, like you know, AI comes out and I'm like people are like well, should I start an AI lab or whatever.

Or should I like, don't you want to work at OpenAI?

And it's like, I mean, everything would be interesting, but you know what?

What's really cool?

Pursuing the same problem in a changing landscape.

Right like now, i get to reinvent everything i've already done.

How fun is that?

Right, because i really care about these problems anyway, back to the affirmations and uh, sort of a brain um, uh sort of self gymnastics.

Um, going to my team and just saying look um, you know, just tell me what you will talk about on stage is bad.

It's like afterwards.

You need to internalize this as something that you have committed to me as imagining.

I imagine that something that care about, they care about reconciling.

And so they have to do it, you know, because otherwise they, you know, said something untrue to me, right?

And, like, they don't see themselves as someone who says untrue things.

And therefore you know you can actually make the reconciliation work for your own benefit in this kind of way.

It also just means, like, it emphasizes, like, difference, right?

Difference is so important.

It's so like orthodoxy just really needs to be off the table from the beginning of a project, or like from the beginning of decision making.

Have you ever studied James Dyson?

No.

Okay.

If I could only recommend one book ever.

It's his first autobiography, but one of the he has a.

He has a crazy line about this.

So this is also very common with great entrepreneurs and you, you hit on your other talk.

She's like well, if you wanna, I'm trying to chase excellence, trying to be the best in the world or make the best tools possible.

Like therefore that demands difference that, that path, that mission I'm on, I can't do it.

It literally can't be the best if it's the same.

Yeah.

Right.

Like, just think about this.

And so, like Edwin Land, who was Steve Jobs' hero and the founder of Polaroid, he had a personal motto.

He says my personal motto is very personal and it may not work for you, but it is don't do anything that somebody else can do.

He just would not.

I'm not making a Me Too product, but the reason I bring up Dyson because now he owns one of the most valuable privately held companies in the world, right.

But he's writing that book when the business was fine but he had one product in like one or two markets.

It was doing like 300 million a year of revenue.

Not a bad business, but a very small business compared to the size that it compounded to over the next, like four decades or three decades.

And he says in that book even at that time He's like differentiation and retention of total control.

And he goes, you make it different even if it's worse.

That's one of the craziest sentences I've ever read.

I totally agree.

It has to be different even if it's worse.

I completely agree.

I see it all the time because, again, it gets back into the copying of a painting problem.

Like.

You can make a 7 out of 10 solution to everything by copying the 7 out of 10 that are already out there in the market.

But if you make from tabula rasa axions your own version of it, you have mastery over.

Even if this is a six out of 10, you can iterate on this.

You can take this past the seven afterwards.

Very often, especially in technology, the word belongs to the fast, the people who iterate, the people who adjust, the people who understand what's costly and what's unnecessary and will prune away the rest.

I find actually we're probably net like pixel for pixel.

The most inspiring picture that I think exists, that I've ever come across, is the SpaceX Raptor rocket evolution.

Like, do you know?

Yes, I know exactly.

I use that as an image for the Dyson episode I made.

That's perfect.

Exactly, it's perfect, right?

Like, you look at this and say, yeah, that's...

That's today's Picasso, right?

It's just like, this is it.

We're not at a point of time where the great works and the masterpieces are being done by one person.

They are done by teams.

Very few teams can move forward by subtraction.

That is like... does not exist in industry usually, very, very, very rare.

So it's beautiful in that way.

You have to do things different.

You have to make them your own and you have to have mastery over the first version if you want to take this further.

I mean, this is, we talked, earlier about the podcast I do inside of a company called Context.

And it's about that.

It's like, how did we make the decision?

It's like everything around a decision is more interesting than a decision.

Is this podcast constantly updated?

So it's internal, only for Spotify.

God damn it, only for Shopify.

I mean, especially when we're talk about podcasts that make sense.

It's like well, they have.

It's funny.

I looked at my end of year wrap on Spotify and one of the podcasts I listened to the most which was shocking to me was they have the internal company history.

It's called Spotify a product story and it's because you know everybody else.

I think yeah, One of the reasons that we have a mutual friend, obviously in Lulu she's on your board and the importance of telling your own story.

We went to dinner that night and I was like Lulu, what I love about you is you're repackaging old ideas.

Napoleon told his old story.

Julius Caesar told his old story.

All these people did it.

It's a very valuable idea.

And so everybody was trying to tell the company history outside of the company.

No, you got all this other wrong.

We're going to make it ourselves.

And it's like, I think a 10 part podcast, but they originally, I think they built it for themselves.

And then they. like published it.

I didn't know about this.

I love this.

You should listen to it because it's narrated by Gustav, who was head of product, who's now co-CEO.

Yeah.

And they take it in chronological order.

And so like if, like Sean Parker played a big role at the very beginning, right?

He's obviously not there now, but he's on like episode one or two.

And then they interview the people that made the decisions.

And that's the whole point.

Like we were making think about all the crazy shift that had to go from, you know, desktop to mobile, all the things that had to deal with.

Well, just go listen to what the company, Did at the time, yes.

Executives and founders.

Totally right.

But not only what they did, why they did it.

And the why is so much more interesting.

Like one of the, like the tourney of Tobii said, it's real inside of Shopify, right?

Like it's like people just throw these things around.

Like, well, Tobii said we're doing it this way, right?

Like, and I just like try to get people to like always ask when.

When I said, exactly.

You change your mind all the time.

Yeah, and this is not even I learned about this because something is like really really odd and like really odd decisions.

Like, there was easier ways available.

Like, how did we get to there?

And it's like, well, it's like, everyone said that you wanted it this way.

It's like I mean like, under which circumstances context, when did I say this?

Like clearly, we've never talked about this, so it's like it's very common thing.

So what's a typical episode is just you explaining the thinking of what's going on currently.

Yeah yeah, it's like taking people back to major decisions.

Are these short episodes?

No, like initially it went through phases.

There was a sort of for the first, maybe 50 episodes, we said like we had a.

We have to mix it down to 23 minutes because we calculated that that was the average commute in Shopify.

Like, so we checked where everyone lived compared to offices, ran the data and it was 23 minutes.

And so we made it 24 minutes because that seemed like as good, like we needed a reason, And you like designing your constraints.

You talk about this a lot.

Exactly.

So, you know, just like... Well, I also just don't like picking 20 minutes because it sounds good.

Like, I need a better reason.

So I might say I want something to be like 20 minutes sounds right, but let's find an actual good reason why it's 20 minutes.

And then we found 23 minute reason.

So sometimes you're allowed to like just parallel construct the thing you want to do anyway.

Then at some point we abandoned it because, just like you know, a nice thing with podcasts is like people can skip move.

It doesn't matter.

Like you can just keep going for hours and hours.

Do you have any ones that are like long?

I think there's one which we had to cut over a couple of episodes that ran like if you ran it four, it's like five hours.

It's like, what was that one about?

That was like the philosophy of engineering with a bunch of our distinguished engineers.

Like how, you know, like it's, you would not believe how immature engineering is as a discipline.

It's just like it's There's so many good ideas and so many bad ideas and it's so hard for people to sort through them in a way that's like way harder than any other industry, because it has a weird property.

Like software has a weird property.

I mean the best thing, and why the business model of software is so insane is because of zero marginal copying of software is free right.

It's like you.

Can you know?

We build Shopify.

First person signs up, we make money.

Second person signs up uses exactly the same thing.

And it's like you know, the second instance of it is not the same piece of software, so hence the margins of software are incredible.

The same thing causes a lot of problems for the creation of software, because you just don't know how much bad weight is in the system.

If you compare this with electrical engineering, there's a very clear cost of manufacturing, right like the.

The bill of materials is like the thing that dominates the success of a product, because it dominates when the cost, which then dominates the product market fit.

Also, manufacturability is a huge component in electrical engineering.

Is the board laid out in such a way that it's prone to defects?

Did you choose all the right components?

Did one chip get really hot next to a soldering thing?

I remember the original Xbox desoldered itself if you just played certain games too long.

There's real constraints like this, so excellence is obvious in a way.

It's like in the numbers and everything, everyone's trained on costing waste into the system.

Software engineering just throws away so much of the capability of these incredibly powerful machines, partly because it just doesn't cost anything.

However, at a certain scale it starts costing, but at this point it's being fixed by operations teams getting more servers, rather than engineering teams going back to fixing those things.

So the consequences of bad decisions in software engineering are an externality that doesn't accrue back to the engineers who caused it in almost all instances,

So it's like a little bit like a factory is polluting the environment.

It's just like it doesn't cost back to them.

And so anyway, so therefore it's a very tricky industry to move forward.

It actually quite often moves backwards significantly.

Computers got much faster and they threw a huge amount of capabilities away, making like these very, very heavy client-side JavaScript applications that took over everything.

They were just god-awfully slow and very error-prone and took forever to load, especially in e-commerce, where people visit sites rarely.

Some of our customers went out of business because they talked themselves into their own stack.

They hired a CTO who brought in their own team.

They used a set of technologies that they wanted to use because they are currently the in thing that has the most interesting conferences and the most interesting places.

Then they deploy it and it sort of works in the demos, but the problem is when you're going to a website for the first time, you have to load it all and you don't have an up-to-date MacBook, perfect hardware with much memory like everyone has who has spoken on engineering teams.

You might have an Android device and you might be on a train right now.

You're sitting there a minute and a half for this thing, for this online store to load.

Guess what the conversion rate of that online store is?

Zero.

Yeah.

I'm quite annoyed by this, although that was a real real real, real problem in 2023, especially when, like I think, a bunch of, frankly us, you know, older engineers I had to take the kids to the side and just have a good conversation.

And that was the context of the episode of Context.

At least that's what led to this particular thing.

I don't know if he actually succeeded there, but I think we didn't need to, because I think the world just changed.

Like moment zero interest rate phenomena, they're gone.

People actually wrote better code out of sudden, like it's like amazing how much, like how consequential, like the zero interest rate, absence of zero percent interest rates actually ended up being, you could feel it in the engineering team being less prone to accepting random waste into best stacks.

It's unbelievable.

That's interesting.

I don't know if I've heard anybody else make that point.

I think this idea of hearing directly from the founder in an audio way is underutilized.

I did this episode on the founder of Kinkos.

He was dyslexic.

Okay?

Yeah.

So am I. Yeah, I heard, which surprised me.

So he, actually a lot of great founders are dyslexic.

It's very common.

Yeah, it's very common.

So it shouldn't surprise me.

So he's like, I can't read your goddamn email.

And I'm not, he was also, I think he said he had like ADHD, so he couldn't sit down at a desk.

So he, his job was like what I like to do best is And he's like I just go around, and all the Kinkos at the time were owned by individual people.

So it wasn't like one cohesive corporate structure.

And so therefore there's a lot of experimentation going around.

So he would just travel the country and then he'd spend all his days in the stores and he'd be finding because of all these people, during different trial and error good ideas.

And so what he would do this is back in the day he would call into a corporate voicemail And so he, at the end of the day, he'd give like a three minute update about all the good ideas that he saw.

And then you'd come in as a Kinko employee the next morning and you could play Paul's voicemail.

Love it.

And then he.

This was an interesting thing that you might agree with, though after doing this a while, he's like you're resurfacing all these great ideas, right.

This guy in Memphis found the best way to do X.

Why don't you mandate that everybody in the company does X?

This guy's way?

He goes, because if I do that, that's the best way it will ever be.

Which kind of relates to what you just said.

He's like, listen, there's a probably a hundred different good ideas or right ideas.

And if I stop here and don't keep tinkering, going back to that word that you like, then that's the best it will ever be.

If you need something and you tell people what to do, you might get it or you probably will get it.

If you don't tell them what to do, you might get something you cannot possibly imagine if you have good people.

And so this is like actually a really, really important thing.

It's much more important to create the environment in which people can be their most excellent self than it is to prescribe.

Here's the precise moves to do.

So how do you create an environment that people can be the best version, the excellent version of themselves?

I heard you say is this related to your idea where you're like?

You said something that made me chuckle.

You're like, I don't do corporate baby proofing.

Yeah, exactly.

Absolutely.

It's the same idea.

The baby-proofing thing is real.

What is internal policies, processes?

What are they?

They are like, do this thing different from the way your intuition tells you to.

Why are you wanting people to behave differently from their intuition?

Let's look at the higher order bits there, like what other opportunities do you have?

Well, you could change the environment such a way that doing the right thing is intuitive.

Right that's, that's pretty good, because now you don't have to post a policy.

Um, you could also um, you know, hire people whose integration is better honed.

They often, policies and processes, are um sort of downside protection.

Um, you're trying to make hard to make, um to avoid the people who do things wrong to be of, you know, causing so much damage.

That's like the downside protection, but you're also really limiting what the best people can do, right.

So I think, in creating like an environment, almost as a box for people, like here's the space and I want you to fall like inside of the space, is this problem I need you to solve?

Right now, my world in commerce world is attempting to figure out what urgent e-commerce is, how it works all the companies are working together, like how the research labs work with everyone else.

How to expose product catalogs from the entrepreneurs, how to make sure that transactions can be met, what the large language models need in terms of information to do a fantastic job when people ask them to be their personal shoppers.

Um, you know, that's a box, like inside of this somewhere.

Somewhere in it it's all dark.

Um is the most beautiful solution.

Um, what tools do we have to explore this box?

It's like dark, like like i i don't know.

I i can take a stab at it, i can paint a picture of what i think is good, but that's just like sending people into the room with a couple of tools afterwards.

They need to make their own decisions and i want, want them to do this like i'm not there.

I don't want to like control every decision.

The company makes millions of decisions every day, right?

Like in a building like this, right?

But when I can make a decision of like help them really want to be on this journey, help them fall in love with the problem and see the potential.

And I can make sure it's the right team and everyone has the right skills.

And I can make sure that, that they know what they have decision power over and how to at some point because people are only willing to take so much risk how to transfer that risk to me ideally, or to a company, right?

In the form of our projects work in phases.

A prototype phase is what I just described, where you explore the problem.

Then you think of like, when you've learned what you need to learn, and think you have something that you can build, you make a proposal and you transition out of the prototyping phase.

That's a meeting, right?

That's what we call, it's a phase transition in our project system.

There's software that manages all this kind of thing.

They can use an AI to preview what the transition will be like, because it's trained on all the other reviews I've ever done.

So they can sort of mock do it and figure out what I will probably say.

That saves me a lot of time.

And then you have an actual meeting and you know.

Then they tell me what they're planning to do, what they've learned.

That helps me a lot.

And then I say, okay, okay to transition.

There's some engineering leads, design leads give an okay one.

I give an okay two.

And then they are in a build phase and then a new phase starts.

That's a new box.

They have agency to make decisions in there.

At this point, I assume the risk.

It's like a trade of... accountability for autonomy.

And so that's how we found we can almost operationalize this system.

Because what I'm finding is like I mean all the biographies you read.

What you find is, I'm sure, is that the moment of insight, often the product that started all the artworks that are defining the careers.

They were not really coming out of an office building environment, right?

Where someone had OKRs of a precise metric to hit.

Da Vinci probably did not have one Vesuvian man as an OKR given to him, right?

It's like you kind of have to create like a box for them, sometimes a physical space as well.

Like he was in an attic that just ended up being where he did most of his creative work, I believe.

And so you try to figure out what is this sort of environment where excellence and creativity can come together and then collapse it to saying okay, now the company needs what it needs because we need to make resource allocation decisions.

I mean, you're putting more people onto a project at this point.

There's a couple of sort of things that need to be decided, and then autonomy is regained until the next phase is releasing, at which point we do that review.

And sometimes we say okay, we're not ready to transition because we need some things we need to do differently.

But that's the way Shopify orchestrates now.

These are all things that exist today, based on the days during COVID where I reviewed every project.

I couldn't

And like well, what should I be able to do if I would be like, if I would be a competent CEO?

What would I have put in place so I could do this thing I need to do here in the beginning of COVID very, very quickly.

Given that I wasn't, and now I aspire to be, what needs to be created?

And so, whatever the answer to that is, we worked hard on, and I think we just discovered, some extraordinarily powerful systems mechanisms, in this journey.

That was the prompt?

Like, what would a competent CEO do in this situation?

I love to take the view that I'm a corporate raider and Shopify went bankrupt and I bought it on a fire sale and I'm marching in on day one here and previous management was crazy and we need to turn this place around.

That's my favorite.

I love playing this game every year figure out what i would do differently and then like it's like, let's go.

I, i have my to-do list and um, i asked a lot of teams to do this.

A lot like it's like when we have systems that just don't work um, one of the most powerful, you know, maybe for affirmations made, for experience.

Things you can do is just don't be prideful about the prior book too much.

It's a lot.

You're allowed to have pride in it.

But like, you want to wake up better every day.

Right, you want to be better than today.

And for that, you have to kind of downgrade what's there.

Like you can't, like the sunk cost fallacy is so powerful.

But how is that an affirmation?

Like, how does that represent?

Like, how do you, when you're actually talking to yourself or you're writing this down or it's just in your monologue

I literally write hit pieces on the past, right?

It's just like.

A hit piece?

Yeah.

Like I just like all the things that are wrong with the thing.

I somehow I'm really proud of.

You are so much like some of my favorite founders.

Dyson's like this.

My friend Kareem, who's one of my closest friends.

He's the co-founder and CTO of Ramp.

It's like nothing's ever good.

The way I describe him is just like no resting on laurels, no sleeping on winds.

Do something great and then do it again.

Steve Jobs said this.

He's just like, well, what's the proper response when you make something wonderful?

He's like, do it again.

Yeah, let's go.

A lot of these great people, they don't really have rear view mirrors.

They'll obviously learn from what they did, but they're not like, wow, look, look at my trophy room.

They don't think that way.

Look, nostalgia.

Yeah. was put on death certificates in the 1800s.

It's like people died of nostalgia in their minds.

I mean, they really died of something else.

I've never heard that before.

It's like we used to know that nostalgia is not a good thing.

It's like it was one of the bad indulgences.

Now it's belly of ice.

So I think nostalgia needs a little bit more scrutiny.

Overcoming Sankor's fallacy is one of those things that, like Any path that you can take to get there, is going to be enormously beneficial.

Well, I think playing the game of corporate raiders is a great way to do it.

Exactly.

So when you develop tools... You kind of separate yourself because that was your decision.

You might be like, oh, well, I feel a little sensitive about that.

It's like, no, no, that was somebody else's.

This is a new company now.

So one of the things that is unpopular when I do it inside of a company is I really shit talk the past, especially if I did it.

There's still systems that I built inside of a system.

You shit talk the past publicly?

Yeah, I trash.

I make fun of all the ways in which this is hilariously wrong in funny ways.

I need to remind myself, especially when I do this in an area I didn't work on, that I have to proviso it or I need these corporate radar.

I'm collecting these now.

It's almost like distancing yourself.

I need to help people not think that what I'm doing is I'm passing judgment on their prior work, because I'm not.

We are all...

Like, I expect anyone- Well, you are passing judgment on the prior work.

You're not passing judgment on them as a person.

This is what Rick Rubin talks about in his book all the time.

But it's not theirs anymore once it's out there, right?

Like, this is the thing.

Ooh, say more about that.

They need to disconnect from, like, the work is collected.

The moment the pull request is accepted or the okay to is accepted, you've converted your craft into something the company is in the company's commons.

A company is a collaborative project where everyone contributes.

And there's a process by which it's contributed.

At which point the company accepts it as being on quality and says like this is now part of, you know, like the company's embodiment, essentially so the product.

You've contributed it.

You deserve the credit for this and so on.

But the company could have had someone improve it at any point of time, right?

It's not yours.

It's like, we don't allow people to use word ownership over parts of a code base or so.

We only allow stewardship as a work like, just as a proxy term, because sometimes you need to be able to talk about it.

In this way, Shopify thinks of itself more like an open source project you can't be putting into the Commons.

People talk about Wikipedia, not about of a particular editor of a Wikipedia page.

You know what I'm saying?

I have a selfish question before you move on.

Yeah.

So you're looking at all past work.

There's this guy named David Ogilvie, who is one of the greatest advertising agency founders.

And he says that we have a divine discontent with our work.

It's a perfect anecdote to smugness.

Yeah.

Right?

Because he's like, you don't want to rest on your laurels.

Yeah.

I talked to James Dyson about this, though, because he has a very interesting organizing principle.

So we're going to take this cup right here.

This is a product.

He goes, this is organized his entire life.

He's been an inventor and engineer for 55 years now.

And he's just like, I see this product and I say, ask myself, how can this product be better?

Yeah.

Then I make it better.

And then I put it in them.

And then a short time after, I pick it back up.

How can this product be better?

I make it better.

I put it back down.

And he goes, I just, he goes, I see the bad in everything.

But the interesting part is he's intellectually and emotionally mature enough.

He goes, you have to understand.

It doesn't like, I'm not a miserable person.

I just look at it as like, this is a problem.

That problem is an opportunity.

And I want to work on that.

What is your inner monologue when you're critiquing your past work?

Are you harsh on yourself?

I get excited.

Yeah, no, no.

I get excited by finding problems.

Like I just like, I love, like I mean, look at this point, I'm such a long-term veteran of tech company building.

I love figuring out what would be better stuff. because, like, we have a pretty good thing going on.

Like, by all intents and purposes, this thing's working, right?

So, and you know, when I figure out what like we're actually bad at something, I'm like holy shit, like I have an obvious blueprint for how to become a better company now, which is actually my job, my craft.

This is all opportunities.

Things go into comments.

They are being hopefully judged by everyone.

I get grumpy when things that are shitty are not identified as such and improved.

And then I make people go do it.

And sometimes I do it by trying to create energy, by just like roasting the things current state about, just like i want i want people to feel no deference to it.

I don't want people to respect the piece of code that exists and that or system that i want them to improve um, and i want people to um um, you know, just find their sort of energy source, because i what i'm asking them is like, go into a particular box that contains this problem and do the best, possibly better than anything i could possibly ask you right now for solving it, because i expect people to um be highly agentic and, you know, fall in love with problems and just like find better solutions than what, you know, industry usually produces, and so on.

Right,

That's the entire point.

It's unpopular when people aren't in the right headspace for it.

And it's incredibly effective if they are.

So the difference very often is just a couple of words and a bit of framing.

And I just find that's like that's one of the most powerful sort of tools you pick up, I think along the way know, along the the journey, it's like the five words to say at the beginning of a sentence would change everything.

Um, and my co-founder actually gave me one of those very early, which was like probably why i tuned into this kind of thinking and just collecting these kind of uh things.

Because wait, what did you mean by the five words you say at the beginning of the sentence?

I used to go again engineer.

Um, that's always like an interesting experience with um uh, four other engineers working for me and um, like I stay pretty current with engineering.

I still do not a ton of production engineering but, like I do, I sometimes start new projects with people like The first 20, 30 pull requests or commits in many repositories for things that we use come from me.

So I like doing this.

It's part fun, part I sometimes need to tap into my craft.

Anyway.

So that's a surprising thing for people, of course.

My intuition was always like okay well, this is not the right architecture for this kind of thing.

And I know this for a fact because I've built this thing before.

So let me go to a whiteboard and just like re-architect this.

And so at some point, and that, like now you know Daniel, my co-founder like explained to me well look, you get people pretty defensive then because they just came to show you basically you know what was objectively their best work, because they presented it to you and that matters to them.

So and then you just like it doesn't matter if you go and make a much better system here on top of the hat.

They are like, if I truly ever did this, they're going to be defensive and try to save face.

Just put, for example, in front of every sentence.

And say, like, what do we mean?

And now, like, I tried this and it works perfectly.

So instead of just telling them hey, you know, instead of doing this, like here's an architecture that you should use, just say, like I could think of doing this a couple of other ways.

Maybe it's something you want to consider.

For example, what about this?

And then just do it.

Now you're on the same side.

You're on a team.

We're all working together on the same problem.

I'm adding input.

Now, everything is the same.

It's five words or so in the beginning.

I just find the magic of these five words.

Not this specifically.

It's things like this.

Just frame things slightly different and life's easier.

Yeah.

I read something Jeff Bezos said that changed my perspective on the importance of high quality sleep.

He said that he makes sure he gets eight hours of sleep a night.

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And the product that has made the biggest impact on my quality of sleep for years is Eight Sleep.

I'm lucky enough to be friends with the founder of Eight Sleep, Mateo, and we live in the same city.

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And I said, that's Mateo, the founder of Eight Sleep.

And my friend replied, he looks like he gets good sleep.

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I had never had the ability to change the temperature of my bed before I had an Eight Sleep.

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One of the things that Daniel from Spotify, I almost said Shopify now for him.

Daniel from Spotify told me.

He's like you should ask him like what were some of the advantages of starting with Silicon Valley?

I think there's just too much cross-coordination.

You kind of have to sync with companies towards, like...

Entropy creates equilibria.

And so you end up with the companies just being very recognizably similar to each other.

And the activation energy for being very different is super high, because that means people come with the wrong ideas into your company, behave incorrectly and you have to tell them to behave differently.

Where, if you are outside of a place like Silicon Valley, where people just move along between companies,

I mean first of all, especially early.

I traveled to Silicon Valley a few times a year, but I tried to just take it all in and learn as much as I could.

But of course, what I got from everyone was not actually the answers to my questions about how to do things.

I was getting... the aspirations, usually, or the highlight reel.

People wanted to seem smart, right?

So they gave me the best version of what they think the answer should be, or what their company ought to be doing.

And so, which is great, because then I took that back home with me three flights in and sort of took the ideas that are relevant, um tried to always put like a shop for spin on it, like i, i don't like taking ideas, as you clearly can tell, and never did um sort of like, just like figure out how to localize them to our problems and um um, ideally try to do something better.

And so only Very many years later I did realize I was always like always, for my career was comparing my and our average to everyone else's aspirations and highlight reel.

And just like that alone is a really, really good thing.

And if you then try to do better than that, you know sometimes like just ignorance is an incredible way of actually just doing better.

And so that helps, the process of having to translate, being able to translate things.

Like we had no one.

Like when Shopify IPO'd.

We had one member of executive team who ever worked for a public company.

That's it.

Wow.

We had no one who took a company public.

We had no one who was an executive at a public company.

We had one executive who worked at a public company once.

And it's just like, I think that's cool, right?

I felt a real sense of accomplishment about that because it meant we could, we became our own thing.

Our entire motto becoming a public company was we are not going public.

We are creating a public version of Shopify.

And so that was like, What's the difference between those two?

Again, becoming something else.

It's like we don't want to like a lot of people avoid.

When they're a public company they're going to be different because, like people sort of expect public companies to be a certain way.

At least the people who worked at Shopify did.

I felt it was important to be different and do things differently.

One thing we did, I think you will appreciate this, is, you know, we looked at the requirements.

We talked about Formula One.

Formula One is fun.

Sorry it's a little bit of a veer, but like Formula One, I love because it's like there's a rule book.

It's the opposite of every other rulebook on planet Earth.

People read it so that they can comply.

The Formula One rulebook is a rulebook that is read so that you figure out how to beat it.

It's like there's no engineer in Formula One has anything to do with central casting engineers.

Central casting engineers actually usually want to get requirements and then comply to them.

They're like the people going to Formula One are the people who want to beat the system, right?

Like this is very important to them.

So I count myself as of the archetype of the latter.

Like the group of like, I would have liked being an engineer in Formula One.

I like beating the systems that other people tell me to abide by.

I heard a story one time that somebody had hacked your compensation system to get more money than you know.

Essentially, they just studied the rule book, found this loophole and you're like good for that person.

And then you'll fix the loophole or whatever the case is, but like that's exactly the kind of person I want working for me.

Exactly.

I mean yeah, especially if it's.

I mean there's a way.

I mean what happens next ends up mattering right.

Like so okay, this goes on.

Like at some point this becomes well, you're just exploiting a weakness fully.

I mean I don't want to give too many provisos, but generally like people who are like looking around to figure out, like I never begrudge anyone being an intelligent actor in the local incentive system.

That is just like, everyone's allowed.

That's pretty much my morality at this point.

Like it's like, or at least big part of it.

You're allowed to do this.

I own the incentive system.

It's not.

You get too much out of incentive system, or incentive system tells you to behave in a way that is not congruent with the company, the company's goals.

That is my skills issue in designing the conversation, not your job.

Not their fault for taking advantage of it.

But really appreciate if you give me a heads up.

Like, so, because we are still the same team here.

So, like, you know, maybe raise your hand at some point saying this is fine.

Yeah, not like 10 years later after, you know.

So, back to the IPO.

Like in the IPO, we just looked for ways how to, like within the constrained rules by the SEC, do we have agency where we can do different things?

We sort of honed in on the IPO roadshow video like It's like a horrible video player, the IPO Roadshow website.

And every other IPO we could find was this you know CEO, standing in front of a screen camcorder and just sort of going through the same slides.

We're like, there's no rule for that.

Let's shoot a fucking documentary here.

Let's go through the history of why this company exists and why it's important.

And he said what video can be put onto this space when no one expects it.

That will somehow hook people in to full screen the video within the first 20 seconds and actually watch the entire thing.

And we heard so much about this on the road.

Like so many people were like, I always look forward to meeting you.

What you guys did with this video was insane.

I didn't even know you could do this.

Every video after this was like our way.

So it was like a nice little moment of putting a bit of like agency into a process which was pretty.

I heard this story one time.

I think it was like the founder of SiriusXM.

I forgot who the person is.

But they were like, well, how do you make annual reports?

And there's like no rules around there.

So you have to present certain information.

So they made a book and like the book would be illustrated.

And she's like, no one said we couldn't do it.

It's like, we're just going to do it our own way.

Let me ask you a question, though, because I think I heard you say this as well.

You were getting what you felt was bad advice or incomplete advice, or maybe advice not from first principles about whether to go public or not.

Some people were saying stay private longer.

Yeah, I get you.

The advice was always like don't.

Who was telling you this?

Other founders?

Yeah, founders.

Silicon Valley orthodoxy definitely is to avoid it.

Yeah.

I don't know I can tell you the story of my decision, but like it's just like, basically it's like.

I mean I suppose I'm predisposed also, when everyone agrees with something, to take the counterfactual just to hold it up to see if I potentially like it better.

I just find plan B usually is a better one.

Everyone puts plan B.

I think for many many, many people on planet Earth, always doing their plan B would lead to a better experience.

Plan B gets the ambitious one.

If this event happens in my life, fuck it, I'm just going to build a company.

It's like such a common plan B.

That might be what you actually want, but you're lying to yourself or you're scared, or whatever.

Yeah, and also, again, you are a human being.

Therefore, your firmware comes preloaded with a problem called the sunk cost fallacy.

We just do, right?

It's like you've got to operate that out of yourself a little bit.

You've got to be able to discount what has happened more to make good choices, because otherwise you just chase bad with good money all the time or chase bad plan with Yeah.

I think humans are reflexively scared of change too.

They'd rather be in a boring or even miserable environment than actually change, because the fear of change is so great.

So wait, so people are telling you stay private longer.

So don't go public.

Being private is better.

Friends of mine at Stripe are running this experiment.

They managed.

What they put off in terms of figuring out how to stay private for such a long time is actually remarkable.

I just think they spend a lot of time figuring out how to stay private.

I don't think that's the most valuable way to spend time.

So you went public in 2015?

Yeah.

What were the arguments for staying private longer in 2013 2014, when you're having these discussions?

We were tiny.

We were 800 people.

We were Canadian.

So they were saying, you're too small?

Yeah.

I mean, when Shopify's first trades happened, a billion, 15 billion dollar valuation, right like.

So that's pretty wild that you know the public market almost got like venture.

It could have got ventured if you bought shopify.

Yes, you essentially had venture returns in the public market.

Every once in a while someone puts together a list of best uh, stock market returns over the last 10 years of like whatever and like yeah, like i, i own that list, right like just because i decided to take shopify, like i did the old school thing, That was normal.

That's what everyone did.

People went public fast.

And, by the way, this is kind of important.

Public market needs to have growth, because where else is prosperity coming from for people who don't have, like these obvious accredited investors, accredited investor laws and stuff like this?

All they do is like make it so that like, when you're rich, you can invest in private company stock.

Yeah.

And when you're not, you can't.

And, well, where are the returns?

Like, of course, it's such a fucking conspiracy to keep everyone private because that just, like, sequesters all the growth exposure to uh uh institutional and um investors and um people who are already uh accredited and so i i just i just really dislike that whole thing i think like man like again it's it's about building things and sharing what you've figured out and like people buying a ticket to ride um the shopify because they like what they're building it's like please, like, that's clearly what we want.

So I just think the institution of public companies is good.

I mean, where my beef is, is with the whole notion of, like, influence over companies.

Again, path dependence.

Like, one vote, like, one stock, one vote.

It's like, yeah, but, like, no.

Like everyone who studies like decision-making knows that you want to move towards.

Like people who have the most context should make a decision.

That's like, doesn't say the leadership of a company.

This is literally what I'm talking about creating space for creativity, because I want the decisions to be made locally on the ground.

So were the arguments for staying private back then just mimetic?

They were just repeating what everybody else was saying at the time?

I think people are generally right.

It washes out right like.

Again, people have problems with the concepts of like.

Um, very often a new idea is dismissed because someone can formulate an idea like a reason against it and somehow that dismisses the entire thing.

Right like like we live.

Fundamentally, most of people spend their entire life sadly, um in a, in a in a vitocracy, right like where um, you need um everyone to agree to do something, but you only need one person to vote against it to not do something.

And again, good companies overcome this in important ways.

And so similarly, one good argument dismisses the entire idea is a very common way to evaluate options.

What people very, very often don't do is reformulate all the arguments against the status quo right.

Like the thing you're doing right now also is flawed.

It's just, we really understand the upsides and downsides.

The new thing might have way higher upsides.

Or actually, maybe not.

Maybe the upsides are obscure or hard to know for sure, but the downsides are clear and they can be formulated.

The usual default position is not do it.

So I think it's incredibly undisciplined, because you need to think in propensities, you need to think in chances and sometimes you need to really really load up a decision for all the pros and cons that can be articulated and make it a little bit like in your mind, like look at where the scale comes out.

For a company that's trying to sell, like the e-commerce platform for everyone, especially for the many American companies, being a Canadian private company, that's tiny and it's not ideal.

People don't usually go public because of marketing or name recognition.

Super valuable.

Put it on the pro side and then put everything else on the pro side too.

We might get better people working for us because some people really want liquid stock.

And so on, so on, so on.

And it's not even close.

The downsides were a couple of annoying phone calls I have to do every couple of quarters, at least for the first 10 years, I suppose.

And...

I thought actually most of the process was actually quite valuable.

I learned a lot about my own business having to- Explain each other?

Exactly.

There's been a few previous guests on the show Brad Jacobs, John Mackey, Daniel Ek, obviously running a couple of companies.

In Brad Jacobs and John Mackey's case, they both said, like, Jacobs makes that point.

Well, one, he thinks it's wonderful, free marketing and advertising.

Two, you now have a currency.

Mackey said the same thing.

It benefited Whole Foods being public fast, because then he used that currency to acquire a bunch of other competitors and it accelerated his growth.

But Brad Jacobs' point was just like he likes the pressure of that check-in where it's like this is what I'm trying to do with the company, this is what I'm saying to do with the company and this is our results.

And I want somebody to say, oh, there's a big disconnect here.

And I want the pressure to actually perform and have these expectations externally.

We talked about the environment that you're building at Shopify.

I'm curious about how you think about the talent that's inside the environment.

Yeah, of course.

I mean, automatically, I really, really believe in the sort of stoic, maybe Adlerian idea of separation of tasks.

What have I control over and what I don't?

I always love the particular formulation about thinking about how other people think about you.

Like, again, you need to make yourself a person worthy of being liked.

If someone then dislikes you, that's up to them.

It's not your job to make people like you.

It's your job to be likable.

And if they make the category mistake, it's their own fucking problem, right?

So it's a really, really freeing way to think about the world.

Talent. my job is to make a company worthy for the best and brightest to work for.

Like this is the part everyone skips.

Everyone's like, oh, we need to hire a better recruiting team.

Well, maybe you need to also just like be worthy of a kind of talent that you would like to have.

So I mean this goes from like office space, if you have any, to a company, like amount of bullshit people have to deal with to how much you know.

Can you subtract from the whole thing?

And can your large company feel like a small company with lots of resources and lots of impact?

You know it's more fun to ship software to millions of people that you really respect than to a few people who you then try to make a sale for at some point or like it's just like.

You know, impact matters.

In a way, This is likely going to be misquoted, but I think the talent eventually takes care of itself.

There are not that many good companies to look for.

There are not many good companies that deserve the attention of people who can be the most capable people because they have the option to start their own companies.

That's a very interesting idea.

There's actually not that many great companies.

It's your job to make one of your companies, one of those companies that the best people in the world will want to.

What do these people look like, though?

The reason why I didn't move to Silicon Valley is because I knew how to create geographical consensus in the eastern seaboard that Shopify is the best company to work for full stock.

And I just knew I had the ability to do it because I knew how to build a company that I would want to work for.

And I think...

Given that I estimated I will need somewhere between a thousand people or something like this.

Back in those days I'm like I'm going to find another thousand people that think like me about how good a company needs to be to book for, and I can dislodge all of them.

So if I go to Silicon Valley, I can't pay what Google pays potentially, or like someone else makes up for their skills issue by just overcompensating.

Yeah, it's called compensation, because you kind of have to compensate people for the shit you have to you ask them to do.

And you know like if there's a lot of shit you have to compensate people for, but you have enormous amount of resources you can make up for skills issues by money.

And so in in East Coast, which was much more hedge fundy and much more high finance and like for the kinds of hackers I wanted, I knew how to do this.

But wait, I want to pause there.

I love this idea where you're like, I'm going to build a company that I would want to work for.

Oh yeah.

That's on one end of the spectrum, which is great.

You also had this like thought experiment that I heard you say before, which is like one of the worst things that could happen on the other end of the spectrum is you wake up 10 years from now and you built a company you don't want to work at.

And then you have this great line I want to pull.

It's like, that's dystopian.

There's so many companies I wouldn't want to work for.

Why did I use my life to build a company to build another one that I wouldn't want to work for?

You just should build a company that's worth working for.

Yeah.

Like, again, you should take pride in your work.

Like in the inputs and how you like, did you accomplish your things you set out for in the aggregate right?

Like, be easy on the path, but like the outcome does, should matter to you.

And like, man, I just shake my head sometimes with like how people overcomplicate these things.

It's just like, it's kind of, man, people know what they're looking for, right?

Like, and some, you know, I'm talking about very, very, very fortunate people here.

Like people who have a lot of choices, who have like, incredible competency and, in some of the rarest skills, and like combining this with enormous drive.

Like sort of you like.

There's like like a couple of different attributes that all have to come together to um be one of those people who can command like hundreds of thousands, millions of dollars of uh um compensation packages.

You can make in in in this industry, but partly because you're worth it right, like you, you're contributing more than that to a mission uh um like this and therefore you can command this kind of um, And that's like the way this all fits together.

I think of everyone as an entrepreneur, really.

Your capability is that you are the entrepreneur of your own work output.

Your product is what you can do and what you can accomplish.

Your market is the companies that exist. you are selling an exclusive subscription.

That's the institution of employment, right?

It's a two-sided opt-in relationship.

Whenever people come to me and say, hey, how do I earn more money?

It's like, well, be too good to ignore when we increase competition.

You know, like, be better.

You're making this amount.

You would like to make this amount.

In which way have you become so good that you can add that amount of increase to?

You know, just like the collaborative project we're all working on.

And so I think that's just sort of clarifies and simplifies things, right?

So I mean all this said, I don't want to make it sound like it's inevitable that if you just do all the right things, you end up like there's always a information gap and reputation lag.

And I'm out there recruiting and telling people about the company.

What helps me a lot is people are curious about the company and have heard about the company and so on.

Now,

That is because of things that were under my control.

I tell people that it's an unshared attention company.

There's no part-time jobs.

You will have to put a lot into it.

You're going to get even more out of it.

You will make great money, but we attempt to never be the highest compensation bid, because we have found that the people who optimize for that above all else actually don't do well at the company.

Because Shopify is a mission-driven company.

Exactly.

And the thing I'll promise is like In terms of your own skillset, partly based on demand, partly by osmosis and partly based on culture that's surrounding you, you will advance vastly faster at Shopify building capabilities, skills and correct ways of thinking and mental models and these kind of things than I think at any other place.

Therefore, the compound return to your career is gonna be vastly higher here than anywhere else, because you get to a potentially higher compensation level earlier in your career, because you're with it.

The entrepreneurial story is very fractal in Shopify.

It's just like, what is your product?

What's the market and does it fit?

So it's just a clarifier that I think is worth talking about.

I'm gonna quote David Ogilvie again, because I think it's interesting.

He says like, talent is most likely to be found amongst nonconformist dissenters and rebels.

So when I asked the question about, like hey, we know the environment, we have a description of the environment.

What are the people in the environment?

There was two ideas I got from two separate entrepreneurs.

I've mentioned both of them already, but I like because they use the same terminology when they're looking for talented people to hire in their company.

Daniel from Spotify and Kareem from Ramp.

And they both said the same thing to me.

They hire for spikes.

So-

Spiking it.

So a lot of people, a lot of big corporations, they want you like well-rounded.

Like, no, no, this guy might be a bipolar alcoholic.

Or this guy might, you know, have some other, might not shower.

Like Steve Jobs, he was hired at Atari.

Everybody's like, Nolan, Nolan Bush, the founder of Atari, like you can't hire this guy.

He stinks and he wants to sleep at the office.

And Nolan's like, yeah, but he's really talented.

So he's going to sleep at the office and you just got to hold your nose when he's around.

Do you agree with the idea?

100%.

It's like exactly, it's like we never look at the credentials and stuff like this.

Again, I'm a high school shopper.

It would be like rich if I would start making everyone want to have PhD.

The path by which we do it is we go for a life story.

We ask you like, hey, give us your story.

And it's a very important ingredient in our hiring process.

And frankly, what we're looking for is like high agency experience.

We look at like something went wrong in your story at some point.

Wow.

Now let's zoom in.

How do you react?

Give me a minute by minute.

This is what we want to know, right?

Because a lot of us are entrepreneurs.

Even everyone like I talked about the founders of companies we purchased but, like Most of the people just in general, are Shopify entrepreneurs.

Many started Shopify stores, built a business and then fell in love with the company and applied for a job and got a million.

So there's a huge amount of company building background.

And we want to be surrounded by people we admire.

That's, I think, the biggest product any company can deliver to their employees is that every day, they're surrounded by people they deeply admire and can learn from.

So it's a very important part of this. lots of entrepreneurship, lots of entrepreneurial impulses.

And then, so we look for this high agency behavior.

And then you know, obviously did you drive a particular craft that you're applying for to excellence.

How do you think about this kind of thing?

Can you just sort of talk about the excellence or actually perform it?

And then, you know, this is really what we fill our buildings with.

And, you know, just like, again, create the space then and let them be creative in this stuff.

This is how it always works.

And it's worked really, really well.

We couldn't do anything other than this in the beginning, right?

Like in the beginning, we had no money, like really zero.

I didn't take a salary for four years.

I heard your father-in-law covered your payroll when you couldn't make it.

That's right.

So yeah, we were living with my parents-in-law Fiona, my wife's old bedroom, from which, I also added, I put a Kia desk and I built a lot of Shopify from there.

And, you know, like, I mean, just kept costs low.

That was the main thing.

Make every dollar count is something that I'm so glad.

This is what I worry sometimes with all these really, really big seed rounds like, like money.

The main thing money does is it gets you.

I mean, sometimes it reveals, but usually it just like makes you get a whole lot more of what you got before.

And people, did a race early, probably because they were not tied with money.

Then you get a whole lot more not-tied-with-moneyness at a larger scale and it gets really, really bad.

You're making my heart sing, because I feel like I'm on an island by myself about this, because I've spent 10 years reading 410 of these biographies.

All of them control their costs like crazy.

They'll tell you whenever you're getting constraints to your best friend.

And then I talked to these young founders.

I usually don't meet startup founders because I'm not an investor, but a good friend of mine is like hey, meet this kid, meet this young kid.

I met him.

And one of the things he was talking about it's like yeah, let me show you pictures of like this beautiful office we're moving into.

And he was showing me everything.

And I was like, this is stupid.

Like you haven't done anything.

You don't deserve this.

And I go, go look at like, where did like Apple start?

Look at Microsoft.

Microsoft started, we're in a strip mall in Albuquerque, New Mexico.

And you need a triplex in Soho.

Like, what are you talking about?

And the question?

What I pointed to him was like okay, how does this make your product better for your customers?

And his answer was, well, I'll be able to recruit better talent because Office is nicer.

Then you don't have a mission.

It can work.

But like, I feel like you're...

You built a $200 billion company in your wife's childhood bedroom.

That's where you started.

Maybe we should repeat that over and over again.

Just go look at where these companies were.

You mentioned the Larry Ellison episode I did earlier.

They were in a shitty office building.

I think they had three separate rooms.

Oracle, that's where Oracle started.

I think I mean there's a well-documented effect of when companies build monuments to themselves, they usually decline right after.

So that has a long running history and business history.

I do think that companies underinvested into office space for a very long time, and it actually was a mistake.

I think space around us is actually extremely important, but it doesn't need to be expensive.

That's probably an aside, but like- Oh, let's go down there.

What does that mean?

It's just like, so again, we didn't have a lot of money, but we wanted nice office spaces.

This was the decades where there was a lot of open concept versus own room office spaces, right?

Like it was sort of a kind of fight.

My co-founder is Daniel Weinand.

He's a polymath.

He learned programming when I asked him that I needed some help with programming and just like, was good immediately, which was annoying as hell.

And before he was our designer and, just like literally everything else too, now a DJ, and before that he won poker tournaments.

So it's like, it just like, it keeps going.

It's like one of these little.

It's actually really really helpful to have someone like Daniel as a childhood friend, because it really really misleads you about human capabilities.

This is just your buddy who does stuff like this.

Anyway, he, at some point, like he really, really tapped into this.

No one can be more creative than the space around them.

And no one can care more than the person they work for.

That's the way he sort of created this philosophy around this.

I told him, look, here's max budget and we are getting like B office space.

That's like kind of cool.

And you need to figure out how to create spaces that are like a 10 out of 10 on doing world-class work.

But inexpensively.

But you'd need to figure out how to make this cheap.

Man, I mean, we built a bunch of offices in a row and I was insanely good at this.

How many years into Shopify?

This is like 2010 was the first one, six years in founding, four years after Shopify launched.

We went out of like sort of above a coffee shop, which was like really nothing to our first office.

So how do you do this?

He said like, first of all, the dichotomy is wrong.

It's not between open office and like like closed office spaces.

There's like perfect midpoint, because and it has to come from your strategy or focus project

Shopify loves the five person team.

We increase to eight sometimes, but we think the best team size is one because like, a single offer can do things that is impossible to do for teams and hit high notes that are unreachable.

But I think PlayaDev has rather played the field of what can be done as solo projects, actually changing again because of AI, which is the exciting bit.

But most projects worth doing need to be done in teams.

Then there's a magic number at five.

It's sort of what the military ends up figuring out too.

They test these things and come to the same conclusions.

You can sort of temporarily go up, but then at some point you have to split teams and puzzle out the tasks.

Each of these gradations is like a figure 10X loss of productivity.

So Shopify is like, of all like R&D team is I think three and a half thousand people.

That's really lots and lots and lots of small teams.

And this is also why we need this legibility coordination layer that I talked about earlier.

Okay, so pods.

Daniel figured out how to make pods that are like exactly.

They are private enough while being open enough.

They never make the office feel dead, but they also draw you around.

What's a pod?

What does that mean?

It's a room that just sits up to... When you put the seventh person in, it's uncomfortable.

Again.

Think about how much policy you don't have to post if the environment just makes you do the obvious thing.

You can play the uncomfortable too many people in this area when you know what you're doing.

Now you don't need to post a policy about how many people you want in a pod.

And people self-organize into five people teams because that's the most comfortable thing to put in a pod.

Not meeting rooms.

Meeting rooms go in the middle on our limited floor space because we don't want people to spend all day in meetings and then get out of the dark rooms.

We put, like everyone sits around the windows, in pots and they are like, structured in such a way that you know it's all books.

The coffee area is on the other side.

To create serendipity, cut through every floor eventually.

To create stairs that move teams in such a way that certain teams that have to work together but work on infrastructure separated them out in floors so that they going to each other would run into other people who are using the infrastructure to you know, and so on, and so on, and so on.

Being super conscientious about this is really important.

Daniel did an amazing job.

I think we open sourced the floor plans.

This is not interesting anymore when you look at what they look like, because I think that work has gotten absorbed into the tech industry as a right midpoint.

But many people, Like they just copy Xerox, copy it essentially instead of understanding.

So they make pots too big or whatever.

You know, these kind of things.

We talked about cargo-culting a few times.

You observe that behavior in other companies.

I'm curious what, internally, you have caught your own company cargo-culting.

Oh, we actually, we are in a Toronto office here.

The Toronto office actually has a few floors that are clearly mimicry of these ideas that Daniel figured out, but they don't understand where these come from.

Like, again, pot's too big.

It's like more...

The nice meeting room is right on the window, has lots of light.

You know, just like again, maybe this is okay to have a view, but like I went with the teams through it because we then changed some of the floor plans after we moved here and realized like holy shit, this is like oh, Norman doors everywhere.

Fuck.

That's the craziest thing.

Wait, what?

I'm fundamentally allergic to Norman Doors.

What's that?

Doors that you push then... You can't tell.

You can't tell.

Yes.

Yeah.

This is like the most fundamental design error that you can possibly make.

It's like create affordances on a product that make people predictably do the wrong thing, like like.

This is such a like, like literally everyone who's ever involved in the process of um, designing a uh, a norman door should uh, you know, revoke their design license.

Like i'm being facetious, obviously that isn't a thing, but like it's like, it's just like man, it like.

Yeah, skills issues as a door is like very common occurrence, i think in places that are not conscientiously designed and like all those doors are replaced very fast.

Like I mean, the funny thing is, you can usually turn a normal door into a non-normal door by cutting things away and like putting a push plate somewhere, you know.

So that helps.

So I make a big deal out of these kind of things.

Like.

It's just like this needs to like.

I cannot surround people with things that are underperforming the quality of engineering we want to do.

And that's down to the detail of the doors in the office.

Yes.

Wow.

Yeah.

Yeah, of course.

Yeah.

I mean, because product is not a thing.

Product is an abstraction.

Product is a name, like a handle that you put on some totality of a body of work.

From the perspective of the people creating the product, the product doesn't exist.

It's what other people call your work.

A product is just details.

It's millions and millions of little details that are appreciated if they're composed right and make a bloody mess if they don't.

So from the inside perspective, you have to sweat all the details.

The way you do anything is how you do everything.

And that is absolutely down to the floor plans and know the ambient noise levels and so on.

Just like you're going to rumors like that, like silent, it's like.

It's just like you you notice when you're talking while going to a meeting room.

Um uh, at least on the floors we fixed um based on previous specs um, it's kind of uncomfortable to talk in a hallway because it's so echoey.

Then you walk in a meeting room and immediately, like, it's just a different noise level because it's just, like, diffused.

We have enormous amounts of like.

In fact, we actually worked with companies on Shopify to create the products of sound dampening that are now really really like supply all companies, tech companies, which is really fun.

And so, in fact, like, everything in our offices is from Shopify stores, right?

Because, again, like...

If anything we are doing is not mission aligned, we just didn't align to our mission, axiomatically.

So, you know, just you can go pretty far in these kind of things.

When you need something for office spaces and it's not on Shopify, we usually put a call out for someone to start that thing.

So it's on Shopify and we help them get started and build the thing, and then we can maintain our 100 Shopify quota.

So it's also fun.

That's incredible.

We did at least one enterprise sale with a supplier because we really wanted their floorboards for something that would really look great and were at the right price level.

And like, yeah, but we can't place for order unless you come to our price.

So sometimes you have maybe cheating.

That's actually a good way to get a customer.

Yeah, it's also a funny way of doing enterprise sales, yes.

I want this thing, but you just need to migrate over to our platform first.

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I got to talk about, I want to talk about video games.

I want to talk about AI.

I want to talk about them being related.

I mentioned my friend Kareem a few times.

I went to his house last week and I was like, dude, I'm talking to Toby.

He's also obsessed.

He has an engineering mindset like you.

He's obsessed with playing video games.

And you've mentioned a few times where, like you know, you thought you learned more about building a company from like Starcraft than almost than you know talking to a bunch of people or reading a bunch of books.

But then his whole thing was just like he's got to feel like it's even building with AI.

Now is even more like a video game.

Completely.

Factorio, yes.

Okay.

So that's the example he gave me.

I haven't played the game.

Can you elaborate on this?

I completely agree.

So like, so again, this is like man.

The world has such a weird way of like somehow changing itself around me to make the stuff that I thought was irrelevant relevant later in life.

It's like absolutely amazing.

It's just like, okay, so video games.

Video games are best thought.

I mean this depends very much on the video game, but in the aggregate, very often the good video games are simulations.

They are word upon itself, and you are an high-agency actor, and you modify things.

You perform actions, you make decisions and then the game rearranges themselves, giving you a feedback loop of usually a very quick feedback loop, because otherwise it's unfun.

But you learn about the consequences of your actions.

So, like competitive multiplayer games are very obvious there, and StarCraft and strategy games, they're not that popular as a category of games anymore but, like You know, when I was going through my teens in the 90s, StarCraft was the biggest game.

And, you know, I loved it because it was really, really hard.

It was easy to learn, hard to master, which is exactly, I think, a hallmark of everything that's worth doing for motorsports, for kiteboarding, for my hobbies, tennis.

All these things are like this.

But it specifically, is honest in a way that there's two people on the map mirrored.

Everyone has the same potential, every single game, and one person wins at the end.

Additionally, it's a game of imperfect information.

It's not like chess, you don't see the moves.

You see only some information that you In fact you have to invest.

You have to use one of the things that could get you resources instead to go to the enemy base to figure out what he's building, and then you need to interpret this.

So all these kind of things is like, what you learn in this game is information is everything.

There's no right decision, there's only context in which decisions turn out to be correct.

While resource management is extremely important, you have to understand that resource management is not just quantifiable.

It's not just minerals and gas that you have to manage, which allows you to build units.

It's also your attention.

And frankly, attacking other people's attention is much more profitable very often in a game of StarCraft when it is to actually attack their base.

Because if you overtax their ability to pay attention to things, they will make mistakes.

How do you overtax their ability to pay attention to things?

You can do an early attack.

You can do any number of things, especially if you play against the same person.

When you get a very high level, you will play the same people over and over again.

They get a sense for how you play.

At that moment, there's always been the people who were just incredibly prepared.

They just perfected playing a single way, which my play was always different.

Chess, Starcraft, all the same.

I disrupt the other person's play.

I do moves that aren't in books.

They're not in books because they're not good, but other people can't deal with it because they need their preparation.

That's like.

Their skill set is their ability to play chess.

Is the crystallized intelligence, not the fluid intelligence, to deal, to roll with the punches?

And so you know, like I learned a lot about myself doing this, but I also learned a lot about you know.

How do you like, you know, just like how to approach a game.

Like, how do you get better?

How do you, How do you get more out of every game you play?

Because I never, ever in my life had as much time as some other people could to invest in something like this.

So I always had to like how can I get more skill progress units out of the time I have than other people out of less constrained calendars, right?

I'm talking very fondly of StarCraft.

It might just have been oddly the right teacher for me at that moment when the student was ready.

And so I could have maybe learned the same lessons from any number of things.

But I think it was specifically good because of it being a simulation.

You start a new game.

It had skill-based matchmaking.

So you should play against other people of your skill set based on, you know, ELO rating.

And...

So you had a very, very clear sense if you started winning more games when you lost, that means you were progressing.

If you started losing more games, you were regressing on an absolute scale compared to all other players in the world.

And I think that was a perfect little sandbox to explore how to, you know, think about when it's time to build infrastructure, when it's time to invest in resources, when it's time to prepare, when it's time to reveal your hand, when it's not time to reveal your hand.

And I think it was a perfect place to spend time for me in my teenage years, given what I did afterwards.

So back to your AI question.

I just find that working with AI agents, especially for, like I mean, we are recording this.

This is like week three of 2026.

If we would have recorded this in week 52 of 2025, it would even be different, right?

Like.

I might not even make this analogy so strongly, but that's how much is happening, that the world changes every three weeks right now.

We figured out some new harnesses for genetic loops that are much more autonomous and frankly, supported by models which didn't exist at the beginning of December.

Even that can perform at this level.

And so I look at my computer and I have like six different agents going, all coordinating between them.

They send emails to each other, which I think is hilarious.

And so you know, just like I'm like man, this like is starting to really look like starcraft.

My attention is paid like.

This one is currently working on a module for what i really really need, so i'm zooming in, paying attention, doing a little bit of micro, giving a little bit of extra um, double check, sort of um, the output of the critic which looks at all of them all the time to figure out if they're still on task.

It's the exact same thing right, like it's like.

It is a fascinating time.

It's just like, I can't describe how fast progress is right now.

I just like, you know what I tell my team?

It's like, you know, 21 years now, starting companies is really, really, really hard, right?

So first years, let's like just like that's interesting and everything's urgent because, like you're getting to a margin i've got like within a week of running out of money so many times and sometimes you build out many times.

It was like just like, like the clearance of the one-time try hurdles that shop went through was like millimeters at times.

Like there's so like i bet you, if you rerun the first six years simulation 10000 times, we would not succeed in most of them.

Right.

So like like, in a way, like luck is a big component timing, all these kinds of things people, luck especially.

After that, you know, IPO.

You think that's probably the most interesting thing period of the company.

I think it was hard. and maybe not terribly interesting, right?

I guess financing event at the end of the day.

Maybe some aspects were interesting, but there were aspects of how we make it our own as a process.

Partly this is why I did it.

This is why we made changes to the process, or why we wanted to have our own stamp on it, because I didn't want to join someone else's process.

I wanted to have it my own.

Then there's COVID, which was very, very hard, definitely not interesting, actually fucking annoying mostly.

And so I'm just trying to figure out, 2026, man, this is going to be hard and interesting.

Those are the things you're most attracted to, hard and interesting?

Year 21 is like, this is going to be the most interesting year in this company's history, probably in everyone's, I think literally everyone's career.

Just everything is lined up.

It's like doesn't matter what you've got, like everyone's gonna be measured against.

How well did you prepare yourself?

Like what your skill set, how quickly can you react to everything that's happening?

How quickly can you readjust?

How quickly can you re-derive everything?

You put out this internal memo where you're just like I think it's.

You know the language better than I do, but it's basically it's a company expectation that the first thing when you have a problem, you reflexively try to use AI.

When did you put that out?

A year ago?

Yeah, no, maybe not quite, but like something along those lines.

And people were just like, this is ridiculous.

There was like some pushback.

And now to your point about how fast everything's moving, it's like, of course you would.

Yeah, exactly.

People will look at that memo in two years and just like, He didn't say anything.

It's like saying the sky is blue.

Yeah, exactly.

So this excites you?

Oh, yeah.

Man, I love that.

It's like, this is what I'm here for.

It's just like, if I wouldn't have happened, I don't think I would. run a job for anymore.

It's just like, it's much better leaders if in times, like, if times is stable.

Yeah, but I thought you were in love with this problem.

This unsolvable problem.

So you'd still work on, but you wouldn't be running it?

What do you mean?

I mean, I think I would.

Be no, I might try my hand at a different aspect of helping people self-actualize.

Like, I mean, my personal mission is to cause more entrepreneurship, right?

Like that's like I'm going to judge my own career by have I the thing I discovered that was meaningful to me?

Have I helped the maximum amount of other people do this thing?

When did you realize that was your mission?

So I know exactly because it was like preparing for one of those internal events summit talks which I was like it's always a bit of a like soul, like I do a lot of this like message in a bottle reading and like self introspection.

And it was like, it was 2014.

I was preparing for my summer talk and my biggest struggle was with my own identity.

I think I was mentally preparing for the cosplay period, which I, again, wish I wouldn't.

But I was like, but I like engineering.

I want to spend my day hacking on stuff and building things, not managing.

And so I again, I used my trick, partly to give a talk on something that I was sort of come to realization but maybe not fully internalized.

Basically I said I loved engineering because it turns out That was the way how I as a kid, when I started doing it, could build things.

What I actually love doing is building things.

And specifically, I love building things that share a thing that I have experienced.

This is a moment of becoming an entrepreneur, getting your first sale.

And so I made a talk about combining those two things and just saying my mission uh, in life my craft is actually building things.

In general.

I built.

I started with products like the code, i then create products and now i create companies that create products um, and i engineer those um and uh that cause more of this kind of thing.

So i i kind of wrote that as a personal mission for me and uh said like i will attempt to run, shopify and try to be um, the best CEO I can be until someone taps me on the shoulder and say other people could be better for this company, as long as it's in cohesion with my personal mission.

But I'm also like, I'm perfectly fatalistic about this kind of thing.

I don't do the job for money.

It's like I do it because I feel like I can contribute a lot.

I love this idea that you view entrepreneurship as a way to get self-actualized.

Oh, yeah.

I mean, what's more honest.

But it's also your form of entrepreneurship.

I was reading, I never read comments of podcasts and YouTube videos.

I highly recommend to get that.

But people were telling like, this is like one of the good entrepreneurs.

This is like what you're building and the other entrepreneurs you're trying to enable.

It's not like the crony capitalistic.

There's like a lot of like dirty part.

I'm just a capitalist as they come.

So I understood what that comment meant.

Out of every single note that I took from all the talks that I've seen you give before.

The one that was at the top of my list is exactly how I feel about what I'm trying to do.

And you said, focus on craft and giving a shit.

And you said, it doesn't matter that a bunch of this stuff isn't quantifiable.

It's exactly how I feel.

It's such a basic thing, but it's like, why?

Like, it's so, it's, it's, it's, it's so simple, but it's just not easy, right?

Like in any which way, like companies hate that qualifier.

It's in fact, it's like, it's amazing to see it.

Like, man, you hire the first team together.

And like, if you get to talk about building a company on podcast, that means you were successful.

So the first team clearly did this.

And therefore the first team was very good.

And first team you hired based on your gut.

You just knew.

These were people you needed.

You make mistakes, but you correct.

And that's all just sort of like judgment taste, maybe even bias, like i think we need to move nostalgia into the bad category of words and bias into the good category of words, because bias is actually perfectly fine.

It's like.

It's like without bias, you actually have no convictions like you.

You should try your convictions.

This is really what i learned through the thing.

So you make the first team as a pure play.

This is the best.

I know how to make decisions and then everything want, everyone wants you to write it down, And you know what happens when you write it down.

Like, here's the things that you are looking for.

Here's the thing.

Wow.

The people who read it are the people who are very, very good at following lists.

So the people that you probably described not the people who go look for the cheat sheet, the people you are trying to avoid hiring other people who will study the cheat sheet very well.

So you just gave everyone a way of performatively doing the thing that you want to see without being intrinsically like this.

And so you end up very quickly losing your company once you systematize things.

However, everyone is telling you to do it.

There's a giant conspiracy against these things, taste, quality.

If it can't be put in numbers or can't be written as a list, companies hate it.

Yet almost everything you have to do to build a great company are these things.

And you shouldn't write down.

Actively avoiding to write something down is sometimes the most important thing you can possibly do.

Do you think it's also related to the way you brought up sunk costs a bunch of times?

Yeah.

Where it's like well, I wrote this down, I changed my mind, but there's some kind of human element where it's like oh, I don't want to contradict this because it's in writing.

Yeah, exactly.

Again, people like to be consistent over time.

I just don't find that important.

I found the, The cheat code to always being right is just like change your opinion every time you get better information.

Because as you get closer to a point where you have to make a decision, that means you will wind up with the right one if you do not stop at some point to incorporate new information.

Even if you are wrong and try to figure it out, again, what do you do?

You have one momentarily chance. to steer your concern to the best possible outcome.

Are you going to take it?

Or are you going to be the person who just leans into the comfort of somehow character consistency?

Why?

For what?

Again, what's the job you want to do?

Do you want to look good or be good?

And so you've got to just change.

It needs to be okay to change your mind when better information comes along.

And again, here's the crazy thing.

I think if you go through the transcript of this podcast, you will find or just ask an AI to do it.

It will probably point out various contradictions inside of what I'm saying about what you do.

In this, I'm probably on multiple sides.

The reason is actually, this is almost the most important thing, everything comes in layers.

There's just so many different.

The optimal operating system in some frame of reference is often contradictory on the opposite of a larger frame of reference.

Because you know I like this box.

Talking about boxes, because inside of a box, After a while you can have a map of it.

You can illuminate all the corners and you understand what's there.

You may decide what isn't the right box to pursue.

Maybe you need to figure out, maybe you need to bend it and say okay, actually the problem is actually an aspect of another problem.

And maybe if we put a larger box, if we solve that, then this problem doesn't even need to be solved.

That happens.

But this is exactly what I mean.

As you zoom out, you actually need to completely change the way you problem solve, because you're starting to work with much longer timelines.

You need to actually make bets at a high level, that you shouldn't make bets with infrastructure, because in engineering again, you can run benchmarks, figure out if something is fast enough and it'll be a yes or no right.

You don't need to bet on the trajectory of.

You know databases are going faster at a certain thing.

It's like, you don't need to, you can measure.

So there you want to be super quantifiable.

When you try to figure out which market to go into, like you need to figure out.

Well, right now you have to figure out how's AI going to change that market right?

Like it's because you need to figure out if a joint market or you is that market going to be a temporary, unnecessary aspect of something else we are already doing and will be absorbed into a different category of products.

And is this still valuable for you to do and so on?

And, you know, what are humanoid robotics going to do to the world of logistics?

And, you know, you've got to work with trend lines mostly, right?

Which is not important in many other decision making.

I think there's probably like four or five different levels by which you have to look at a problem.

And that is actually a lot of.

The skill of a good executive is to be able to meet the team where they are and, like help them talk about the outside world.

Quote unquote.

Like.

Here is how their work relates to all the other frames of reference, all the other abstraction, and how it like sits as a part in the larger company.

And everyone should be able to connect what their day-to-day work back to the mission.

Like it's not, like you work on customer support.

Well, you're helping people literally not giving up on them. being entrepreneurs.

It's not even subtle.

It's actually an easy exercise to do for people when you ask them to do it.

But it's distressing in how many companies.

It's actually kind of unstated.

The company mission is some kind of set of platitudes or something that aren't actionable.

Those are unforced errors.

And I think things go better when you get them right.

Hey, real quick, I need a favor from you.

Right now I'm conducting a survey to better understand the listeners of this show.

So the survey is entirely anonymous.

It's going to ask you things like what your position is at your company, what your household income is, things like that.

This information is going to help me both keep and attract the best possible sponsors for the show, which then, in turn, allows me to create the best possible conversations for you.

Now, I don't want to just ask for something without giving you something.

So, as a thank you for completing the survey, I'm going to host a live stream on YouTube where I talk about some of the most important things I've learned from spending hours with the guests on this show and some of the best ideas that they have shared with me after our conversation.

So please do me a huge favor and complete the survey.

It takes just five minutes, probably less than five minutes for you.

But after you complete the survey, I'll email you a link to the live stream.

A link for the survey is in the show notes of this episode and and is also available on davidcenracom.

I love the idea of tying everything back to the mission.

I do hope people go through the transcript of this conversation.

I think it's going to be incredible.

I've printed out some of them.

And I'm sure people are going to tell me about all the contradictions.

And this is the fun bit, right?

Like you know, I find contradictions in my belief systems all the time, because we are like balls of contradictions.

I'll get messages.

I'm like, I'm listening to this episode you did in 2019 and you said this.

And on the new one, you said this.

I'm like, I've read 250 of these things since then.

Like, what do you think I'm doing this to stay the same?

That's the point.

I had high expectations of this conversation.

Toby, you exceeded them.

I hope we do this at least once a year.

And I think the next time we do this, we design with the constraints that you like and we just evangelize entrepreneurship and the fact that it's one of the most important things in the world.

And I think you're creating a lot more entrepreneurs and I'm trying to create a lot more entrepreneurs.

I'll tell you one thing.

I, just I, because I'm not sure if I maybe I've shared this publicly, but like I think you are going to get more mileage out of this than anyone else.

The um When we did surveys with our customers about like, because we wanted to like like.

I mean we need to identify where our customers, what they do, whatever we eat, these kind of things.

What we have found.

This is long time ago, before your podcast existed.

It was like almost 80 the high seventies of percent people checked the box saying they have someone who, if they sent a entrepreneurial question to, would respond to the email in 24 hours.

And I initially thought that was insanely cool how many people have such a resource.

It's not like it in the general population though, right?

Eventually I clued in, I think it was probably on Wikipedia, I read about survivor bias.

And I realized fuck, the reason why they are my customers is because they have someone who responds to these questions in 24 hours.

It's the other way around.

It's causal. the concept of entrepreneurship is so underexposed and underexplained.

It's sort of got better in the 10 years, 15 years since these surveys.

But I think I love what you're doing because you're just bringing this concept, like you're rolling this out for people to introspect, like an entire life story of entrepreneurship giving people the thing that is implied by the question is like

Do you have any exposure to the world of entrepreneurship in some way that you actually know what you're signing up for?

Because the people who don't know it exists, the people who have no relation to it, or the people who don't happen to have someone in the family or friends who have at some point started anything well,

They just won't try.

It's not part of their toolbox.

And just putting this part into more people's toolboxes is going to be so load-bearing, because I think actually in this world of AI, there's going to be disruption and so many more people than people believe have a plan B with entrepreneurship.

And I think we can.

I think making things will be much simpler in a world of just-in-time manufacturing and 3D printing and additive and resin printing and all these products, just humanoid robotics, Dreadnought lights off factories making anything on demand, and 3D printers in every home, or at least very, very commonly in homes now.

You know, in that world more people will realize and working with AIs about learning the skills of figuring out how to make the better cup and how to design a better version and not having a Norman door.

Is capitalism the best part?

And I think it would be much more common and much more uh, exciting.

And i i just like it's so fun to work on and like in that way, like you and i work on the same project, which i think is super, super cool right, like it's like because the information gap is getting the stories out, telling people that's possible and and it's so important for people to then try and hopefully when they might use Shopify and then hopefully we can push them behind.

I love that.

I appreciate you saying it.

Appreciate the time.

Thank you so much, Toby.

Awesome, man.

[기업 구축의 본질: 토비 뤼트케(Toby Lütke)와의 대담]-[Tobi Lütke, Shopify]

📋 Summary

기업은 그 자체로 기술이다 (Companies are Technologies)

엔지니어링 마인드셋으로 기업을 설계하다

창업자 중심의 조직 구성과 대리인 문제 해결

직관의 정교화와 정체성의 변화

차별화와 '노먼의 문(Norman Doors)' 제거

AI 시대의 새로운 스타크래프트

🎯Key Sentences

📝Key Phrases

📖 Transcript

[기업 구축의 본질: 토비 뤼트케(Toby Lütke)와의 대담]-[Tobi Lütke, Shopify]

📋 Summary

기업은 그 자체로 기술이다 (Companies are Technologies)

엔지니어링 마인드셋으로 기업을 설계하다

창업자 중심의 조직 구성과 대리인 문제 해결

직관의 정교화와 정체성의 변화

차별화와 '노먼의 문(Norman Doors)' 제거

AI 시대의 새로운 스타크래프트

ListenLeap으로 딥러닝 학습

🎯Key Sentences

📝Key Phrases

📖 Transcript

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