Shopify CEO Tobias Lütke on how to maintain a startup culture at scale

Ottawa-based Shopify has grown from scrappy startup to a multi-billion dollar company. Here’s how they keep themselves focused on what matters

Shopify CEO Tobias Lütke

Shopify CEO Tobias Lütke. (Hannah Yoon/CP)

Eleven years ago, Tobias Lütke was a small business owner, trying to sell snowboards over the Internet. Fast forward to 2016, and he’s CEO of Shopify, a Canadian e-commerce company that went public last year at a $1.27 billion valuation. Of course, taking a scrappy Canadian startup public comes with its own set of challenges—how do you maintain the same energy and innovation when your staff is in the hundreds, instead of the dozens? How do you handle the pressure to move to the larger U.S. market? With a multibillion-dollar valuation and strong growth in the number of merchants using his platform, Lütke is surprisingly calm about the future of his company. We talked with him about how to keep that startup flame alive, choosing to stay headquartered in Canada and competing with Amazon.

When asked to name a Canadian startup, Shopify is often the first to come to mind. But you’re a multibillion-dollar company now—do you still consider yourself a startup?

I think being a startup is state of mind.

Right, so how do you work to keep that state of mind?

I think every company in the world starts with [a startup mindset]. If you fail to keep it up for a long time, then it’s gone. It’s something that can get lost along the way.

I sometimes interview people who I really want to come to work for us, and they’re reluctant to do so because they describe themselves as a “small company” person. They look at Shopify now and say, “It’s 1,500 people, it’s sort of a big company, I’m a small company person.” So I ask them to deconstruct that—what do they mean? Do they really mean they want there to be a limit to the number of people around them? Or are they talking about something else? What people are usually talking about, is that they themselves want to have a personal impact that’s meaningfully felt within the entirety of the company. Well, that’s something that can be preserved.

When we start new interns in our R&D team, we make sure that within their first week they actually make a change to Shopify that impacts our customers. Minutes after they send the code over, it’s going to be in front of a hundred million shoppers. And it just blows people’s minds, because that’s the kind of personal impact they want to have in the company.

I think that, plus the amount people care, and the amount of empathy they have for customers, and how open we are with information—I think all of that combined is what we might label as a “startup culture.” I think that if you’re willing to put a lot of work into that, you can keep it.

How important is it that you remain a Canadian company? Did you ever consider moving to the States?

At various points, there was a choice—should we uproot and go, or should we say? Everyone was saying we should go. But, I tend to think, when everyone says do one thing, you should do the opposite. I’ve found that to be a sure-fire way to be successful. You can build a world class city anywhere. People are no smarter in Silicon Valley than they are here. Some of the smarter people from Canada might move there, sure, but that just means that there’s more competition there. I really encourage people to find a place that sort of culturally aligns with what they’re trying to accomplish, and then just go for it.

In an e-commerce space that has giants like Amazon, how do you ensure that there’s a demand for what Shopify offers? How do you think the market will change over the next year?

Here’s the thing—I don’t actually know. It could be that Amazon is the ultimate solution for all e-commerce, and our company will eventually die because of that. If that’s the case, that’s OK, because that’s just the way things have decided to go. But what I do know for sure is that it’s worth trying to preserve the opportunity for small businesses to engage in e-commerce—for entrepreneurship to thrive online. Because that goes away if Amazon controls everything.

The confusing thing about tech is that essentially every tech company in the world is fremenies with every other tech company in the world. So, we might be competing with Amazon for payments, and they may not like that we give people online stores that people use outside of Amazon. But, they also really want the products on Shopify to also show up on Amazon. And, often when you buy something on Amazon, you’re actually buying it off of Shopify, and just don’t realize. So, it’s so multilayered.

Our objective is to preserve opportunities for personal entrepreneurship in a space that’s always changing. Amazon has the ability to invest money in the changing trends, but the small business that sells Pokemon jewelry? They can’t. So, someone bigger has to do that, and playing that role is important to us.

You’ve been quoted as saying that Shopify is a “ten-year overnight success.” Looking back on how long it took to get where you are now, is there anything you would do differently?

One thing that certainly made a difference for Shopify is that it’s run by a founder. I started out as a computer programmer with no business background—getting to where I am now, as CEO and with the knowledge that I have, it took years. The time I took speaking with mentors, reading, learning, that did constrict the growth of the business for a while. We went from two to 20 people in the first six years of Shopify. It’s not that great a growth, but it allowed me to find my own on-route to this highway that we’re on now.

It’s hard to talk about what I would do differently, because I would very much not want to do anything differently; it was all important to where we are now. I can tell you what I would absolutely do again: I would still start by building a store myself, and doing one year of just selling snowboards—paying attention to all the complications that come with that. I think there’s nothing nearly as powerful in the world of business as having that experience.