# Tobi Lütke on Companies as Social Technology & Continuous Progress
**Source:** https://youtu.be/ZSM2uFnJ5bs?is=OdkT8AaAl2CdlwSE

## Summary

Tobi Lütke, CEO of Shopify, articulates his profound philosophy on company building, characterizing companies as a unique 'social technology' that enables individuals to dedicate themselves entirely to pursuing innovative ideas. He posits that current company structures are still in their infancy and will be viewed as primitive in the future, embracing this perspective as a driver for continuous progress. Lütke also underscores the vital role of persistent learning and reading in achieving excellence.

- Tobi Lütke, CEO of Shopify for 21 years, is admired for his longevity, pursuit of excellence, and unique, 'singular' ideas on company building and management.
- Lütke defines companies as 'technologies themselves,' specifically 'social technology' that provides a socially acceptable excuse for individuals to pursue a single thing with intense dedication, potentially for 'fourteen hours a day.'
- Companies function as a mechanism to run 'counterfactuals' against the market, allowing founders to build things they believe ought to exist and receive 'energy in the form of money' back if the market agrees, enabling self-financing and tapping into market intelligence.
- The modern company institution is relatively young, evolving over the past 500 years from quasi-governments like the East India Company; Lütke marvels that if proposed today, the concept would sound 'insane' from first principles.
- Lütke controversially states, 'All companies are terrible, including mine,' and believes that in twenty years, we will look back at current company building methods with embarrassment, indicating a vast potential for future improvement.
- He views the experience of looking back at one's old work (e.g., code) and finding it 'terrible' as the 'most joyous of moments' because it signifies continuous progress and learning, contrasting with the 'saddest day' when old work still impresses.
- The interviewer, who reads over 400 founder biographies, highlights that Daniel Ek (Spotify CEO) specifically praised Tobi Lütke's unique approach to company building.
- Both the interviewer and Lütke emphasize the power of reading, with Lütke famously stating, 'Books are the closest thing you'll ever come to finding cheat codes for real life. You can access'

## Transcript

[[0:02]](https://www.youtube.com/watch?v=ZSM2uFnJ5bs&t=2s) - One of the things I admire most about
- Yeah. - 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,
- Love it. - I'm always asking the
founders I most admire, - who are the founders they most admire,
- Yeah. - 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.
- Yeah. - So, I want to kind of 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, I mean,
take the social angle. A lot of companies are social technology
in the sense that they allow us to go all-in.

[[1:03]](https://www.youtube.com/watch?v=ZSM2uFnJ5bs&t=63s) The only time you are 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 f****** fourteen 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 dedicate yourself. Other than that, you can't just, like,
not have a job, but just be
really, really into things. It's socially not acceptable.
So, 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
- Mm-hmm. - you get to explore things. What a company fundamentally allows
you to do is 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 then you means-test it
against the market, and if a market agrees with you that
this thing needs to exist, it moves energy in the
form of money back to you, so you can do more of the
thing that you were pursuing all along.

[[2:07]](https://www.youtube.com/watch?v=ZSM2uFnJ5bs&t=127s) And not only that,
it's like self-financing. Like, if you find out... Again, I started a company
which I didn't think was going to be have this very, very big market, and
along the way, the market pulled Shopify out of the project I started,
essentially. You know, that's an
incredible intelligence to tap into. So,
you put all these things together, and you say, like, "Well, look, the
concept of companies is not that old." It's like, we are on a 500-year run,
and sort of, kind of extracted from things
called companies, which were actually more like quasi
governments, like the East India Company. And so, the modern
company is not that old. I find that if you take
that mindset, that companies are just sort of
a path-dependent solution to 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.

[[3:07]](https://www.youtube.com/watch?v=ZSM2uFnJ5bs&t=187s) And then you can figure out if
this counterfactual of yours might be correct or needs updating
along the way, or any of these kinds 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 inspiring, and taking it further than you ever think.
And just the whole thing is just like... I marvel at the institution of
a company in a way, 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. It really piqued my interest
when you were like, "We do not know how
to build companies yet. All companies are terrible, - including mine," which you said.
- Yes. - And, you know, that's
- Mm-hmm. - hilarious when you're running a
200 billion plus dollar company, and you think that in the next
twenty 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 even you listen to
your first podcast, - you're like, "Oh, my God!"
- Oh, please don't.

[[4:11]](https://www.youtube.com/watch?v=ZSM2uFnJ5bs&t=251s) - Please don't. - But 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 time. Yeah.
- Okay, good. - The difference between that
and what you would do today - is your progress, right?
- Yeah. - 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 ever do this?
This is way too abstract and complex." But 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 really impressed with how good it was. - That was one of the saddest days?
- That's really, really - the saddest day of my life,
because I'm like, "Holy s***, the implication of this just
hit me like a train," right? - That you weren't progressing - and you weren't learning.
- Exactly. - It figures, because
- Yeah. -  I wasn't programming all day.
I was 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,
if you don't read books, you live a lifetime. If you read books,
you live a thousand, right?

[[5:19]](https://www.youtube.com/watch?v=ZSM2uFnJ5bs&t=319s) - 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 mean,
I dedicate my life to this, so - of course I'm going to agree with that.
- Absolutely. I mean, - you're predisposed to agree with me,
but I really think we need to shout this more from the rooftops,
right? The one weird trick seems to be
just read books, right? And it kind of doesn't matter.
Just make a habit of reading books, and ideally, change genre
every three books or so, at least for one book, and then
that alone will give you a range that you can draw on for basically
everything you'll ever do. So, look, I read lots of books,
lots of them, you know, especially when I went from
programmer to a business, realizing I have to just learn
business really quick. I got really dismayed with the
quality of business books pretty quickly, because frankly, I think the
business books are largely written by the people who have time, who are not the people who
actually build companies, frankly.

[[6:33]](https://www.youtube.com/watch?v=ZSM2uFnJ5bs&t=393s) - Yeah. - And so you read
between the lines as well. Depends on if a person who starts 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 a 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 that would cap my capabilities. So I really tried everything,
including, you know, 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. Like, I had the inclinations that something
was really, really going poorly.

[[7:36]](https://www.youtube.com/watch?v=ZSM2uFnJ5bs&t=456s) 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. - Yeah.
- And you think competition is one thing. -  Rivalry is really good. - I mean, it's the same, but it depends. It's a mindset change. I think again,
if you compete with another company,
like there's a lot of, "We need also a version
of what they have," copying, like you do
with Xerox strategy very quickly. Companies tend to get obsessed. There are companies, the most
active channel in their Slack is a 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, or at least in fine arts,
you copy the great pieces, you make copies of great works.

[[8:50]](https://www.youtube.com/watch?v=ZSM2uFnJ5bs&t=530s) 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
sum-outcome there, because rivalries inspire you to be best.
Like, Agassi could not have been Agassi
without Sampras being there, right? And he very, very clearly
states this in his book. The Sampras that existed
during the Agassi area, that Agassi understood,
wasn't a real person. When you read Sampras' biography,
he just liked tennis. - Yeah, and Agassi hated it.
- Agassi 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
might have made up -  a slight at some point, which
- Yeah.

[[9:51]](https://www.youtube.com/watch?v=ZSM2uFnJ5bs&t=591s) - to me is like 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
- It makes so much sense. - "The Defiant Ones." It's about the partnership
between Dr. Dre and Jimmy Iovine, the multi-decade partnership. - That's good.
- 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 this was. - I don't even know what day it is.
- Amazing. - And that's exactly what he said. - It's like they understood the business
- Yeah. - of music before anybody else.
- Yep. - That makes perfect sense and totally
tracks. You can see it from outside. Actually, we see it from inside.
Like, it was the first category of music
that just killed it on Shopify. It's like opportunity is
converted into products like that, and it's like they're made
different. It's really, really cool. Like, this is the beautiful thing about
Shopify. It's a front-row seat to just seeing how high-agency
the different industries are, and how quick they absorb new ideas. And anyway,
it's a different topic, but like...

[[10:55]](https://www.youtube.com/watch?v=ZSM2uFnJ5bs&t=655s) - Almost like in a video game, like a
god-level view of entrepreneurship, because you... How many entrepreneurs
are 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. - Mm-hmm. - 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 as like an engineering problem?"
- Yeah, I'll cosplay a company, - a public company CEO,
like a 60-year-old guy in a suit. - Like, a legal background, right?
- Okay. - That's sort of what everyone
emulates for whatever reason. And it just worked
really poorly for me from a product perspective.
The company did fine, right, all the way through.
COVID happened though, and I'm like, "Okay, so what my company needs
here for me is five different things. One of them is all plans are invalidated,
fundamentally. Everyone who has a plan,
just please throw it out. We need to go through everything
we are doing and rederive it, because, again, everything is based
on a very long tree."

[[12:03]](https://www.youtube.com/watch?v=ZSM2uFnJ5bs&t=723s) 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 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
rederive the entire thing on top, right? 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 rederive everything,
and that was kind of clear to me and sort of what I... That's how you structure a
computer program, frankly. I went through the entire roadmap,
and what I've figured out is, first of all, that was really,
really hard to get, and people were fighting,
even like very much resisting talking about everything
that's going on. And I found out why, because there are
just a lot of boondoggles going on.

[[13:05]](https://www.youtube.com/watch?v=ZSM2uFnJ5bs&t=785s) There are just random projects by random people that I would have
never found out about, all that. - Why did you not know that it was going
on in your own company, though? - Because the company was like,
let's say, four or five thousand people. You know, it's sort of quasi-distributed.
We started in Ottawa, Canada. We had a Toronto office and
a Montreal office, and so on. And so it just turned out that,
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 just they decided that the supermarket
industry is very large, and we should go and capture 1% of all that,
like in the [unintelligible], right? And frankly, I'm not saying
those were 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. You can make wrong calls which, because the world changes, end up
being the wrong call later, and so on.

[[14:08]](https://www.youtube.com/watch?v=ZSM2uFnJ5bs&t=848s) 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 just 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 are 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 which are just like hairballs inside, where
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 kinds of details, but if you look at the project brief,
the team killed it.

[[15:17]](https://www.youtube.com/watch?v=ZSM2uFnJ5bs&t=917s) Probably everyone made their bonus.
They delivered the thing. 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 like a CEO
or a business person" - as opposed to an engineer?
- Yeah. I was trust-falling. - I was 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 those
and nothing else. People learned how to
direct my attention to the things that
they wanted to have my attention. - So, how did you fix that? - The moment I went through
absolutely every project, I did it myself, took 16-hour days. I canceled probably 60% of the
projects, and over the course of a year, I turned over every one of my
executives. This is basically the consequence of this,
because I just realized that, in many cases,
the core skill was...

[[16:21]](https://www.youtube.com/watch?v=ZSM2uFnJ5bs&t=981s) Well, I mean, I don't want
to be unfair, right? It's just that trust was broken
in many cases, and in a real crisis like COVID...
Again, COVID was hard, the 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 found
it's almost unpredictable. In fact, if I would have been betting
before COVID about who is going to be contributing the most, I would have
been wrong, I think, entirely. - Why do you think that is? - I have 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, and nothing prepares you
right for it. I think at the end of the day, the thing that I have found is people
who can adapt the fastest actually quite self-identify.

[[17:22]](https://www.youtube.com/watch?v=ZSM2uFnJ5bs&t=1042s) Now, I would be able to predict it. Very simple:
"Have you started a company before?" So Shopify is by founders, for founders,
causing more founders, right? It's a celebration of entrepreneurship.
We believe entrepreneurship is glorious, and people will reach for their heroes,
and do 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 at 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 the founders of our companies that we purchased. I did a founder
off-site with them once a year, where 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 place is...
It's crazy here."

[[18:29]](https://www.youtube.com/watch?v=ZSM2uFnJ5bs&t=1109s) - Had you already started
turning over your executives? -Yeah. Once I realized that, I was like...
- Okay. - And it wasn't 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 in a moment of, like,
"Where the f*** 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? It's different from everyone else.
But the second-best thing is
to talk to people who have had this type of
relationship with a 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. You know what? Every one of those things worked. And it was really remarkable,
because it really fed into an intuition
I had anyway. And what I found is, during COVID, the founders of a company
were actually not doing well because they were similarly managed.
They were like irritants.

[[19:31]](https://www.youtube.com/watch?v=ZSM2uFnJ5bs&t=1171s) - What does that mean? - They don't settle.
Like, they talk about absolutes.
If something is s***, they say so. It doesn't matter if everyone has
agreed to move on or something. It just gnaws on them in a way
that's deeper than this other thing. - And it's exactly what
you have inside of you. - Exactly. And so I feel it's a very
special thing, and companies reject it.
Companies cocoon them. Sometimes they give outskirts,
like the skunkworks team, it's daycare for people who otherwise
tell you that your s*** doesn't smell, right?
And s*** does smell. So once I'm like, "No, you don't get to
put them in founder daycare. I'm going to put them
right in front of you, or, in fact, on top of you."
And so, you know, the difference that made
to this business is nuts. And so this is why I'm saying
COVID saved Shopify, because I needed to take a move
that was very much, "Okay, I built this company.
I got to this point. It's important."

[[20:36]](https://www.youtube.com/watch?v=ZSM2uFnJ5bs&t=1236s) It's actually maybe even more important
during COVID than before, because it was kind of, for millions of
small businesses, their livelihood for this time and the
only way to make livelihood. And I'm super proud of what we did,
because I think the businesses that
started in Shopify and came early, like,
actually grew and did better - during a...
- Some of them grew faster than you. - You said somebody beat you guys to
- Yes. -  a billion the other day.
- Yes. - which is the craziest thing.
When have businesses ever raised their customers that
started on the platform? It's the greatest. I love this thing.
And so, I mean, again, they're fantastic. They're heroes, they're
glorious, they're wonderfully discontent. My customers have the
same irritation with my software. And like I tell you, it's perfect, right?
It's exactly what I want. And so, this was one of
those moments saying, "You know what, Tobi, 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." - At that point, you were running
Shopify for how long? - Fifteen years?
- Now, it's... Yeah, about that...

[[21:37]](https://www.youtube.com/watch?v=ZSM2uFnJ5bs&t=1297s) - So that, you were fifteen years... - Fifteen years, yeah.
- This is very common in 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,
it 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. - Yeah.
- 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, the episode you did
on Larry Ellison. You were describing his frustration
with problems in his sales team, which literally, I had to.
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 biographies...
- Or I listen to... - Or I listen to founders.
Yeah, there you go. - The incentive problems around - commercial teams, it's like...
- Yeah, it's just like... - But that's the amazing part. I'm glad you picked that up,
because he's like, "I'm f****** embarrassed."

[[22:38]](https://www.youtube.com/watch?v=ZSM2uFnJ5bs&t=1358s) - He's like, "I'm 40-something years old."
- Mm-hmm, yes. - Yeah. - "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.
- Yeah. Yeah. - 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 it got to that point,
and I had to go, "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... - Who's that empathetic person?
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, like, "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 that was a term - Mm-hmm. - they first used there. - Tobi's relentless dedication to
improving his company reminds me of my friend Karim, who is
the cofounder and CTO of Ramp.

[[23:42]](https://www.youtube.com/watch?v=ZSM2uFnJ5bs&t=1422s) Karim is one of the greatest
technical minds working in finance. I spend a lot of time talking to Karim, 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 Tobi, Karim believes that nothing is ever good
enough, and it can always be improved. Karim 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
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[[24:52]](https://www.youtube.com/watch?v=ZSM2uFnJ5bs&t=1492s) Make sure you go to ramp.com to
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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 point 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
study you, respect you, take pieces of your philosophy as well,
because you're like, "Goddamn 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.

[[25:53]](https://www.youtube.com/watch?v=ZSM2uFnJ5bs&t=1553s) Instead of spending the next
ten 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
and 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 the founders channel to
step up and run the 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 the 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. I started a project on GitHub,
literally.

[[26:53]](https://www.youtube.com/watch?v=ZSM2uFnJ5bs&t=1613s) So, engineering tools,
my intuitions 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, how...
You know, I asked for all the sales, like 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 the 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?

[[27:57]](https://www.youtube.com/watch?v=ZSM2uFnJ5bs&t=1677s) 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 two, three
other people in it to help me with this, and really got into it. And so this is called Shopify OS,
the Shopify Operating System. It is really a large part of
Shopify now. What it did, is it became irrefutable
that we didn't know all the principles.
We had like, something... There were 8,000 people
in the company, and there were 5,500 different titles
in the company. And it's like... And some of them are just
senior and senior staff, but in some groups, senior staff was
lower than director and some above. And when I tried to make something software-addressable
and tried to reproduce it, it showed every crazy, unviable choice in the company
very, very easily.

[[28:57]](https://www.youtube.com/watch?v=ZSM2uFnJ5bs&t=1737s) So there's a
system in engineering, not actually a well-understood part,
but I think it should be called
desired state systems. And what desired 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 that." And that's what you see
on your web browser. I need a desired state
system for this company. So
we have this model we created, and then we hold it up
to the company, and the job of HR is
to be this reconciler. 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. When my head of sales comes to me and
says, "Hey, I need 50 new salespeople,"

[[30:00]](https://www.youtube.com/watch?v=ZSM2uFnJ5bs&t=1800s) I can put this now into the system,
and it says, "Well, that means you have to either
make these changes, or you're going to lose
some of your engineers." Because the system, based on
our agreements, recomputes everything. So we can always
look at the counterfactual, and then it's not like, "Yes, boss agreed while playing golf
to hire 50 more salespeople, and now someone has to carve... 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. 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.
So, 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. For instance,
we took the concept of... In engineering,
this was already around. Individual contributors are a really,
really excellent career track, right?

[[31:01]](https://www.youtube.com/watch?v=ZSM2uFnJ5bs&t=1861s) Like, you can make as much money in good
companies as an individual contributor as you can as a VP or manager. 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
for us that, when I really, really looked at it, is
like, "Hey, I need more great engineers." The best place to recruit them from
was my own management team. And that seems silly,
and especially because, are they actually great managers? They're really well-respected because
they're good engineers, so maybe, but don't they want to code? And so we created this sort of
mastery system, we call it, where, , just you know every job
has this ability to stay... You can get these,
basically, level upgrades frequently, and at any set of
responsibilities, if you're insanely good at it,
you can make lots of money. And, that just seems like, of course,
you design it like this.

[[32:12]](https://www.youtube.com/watch?v=ZSM2uFnJ5bs&t=1932s) Why would you not?
Like, why... -So they can stay individual contributors.
- Yeah, take an example. In engineering, if you're
a hundred times better than the 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 compensation in the industry, right?
Again, these are boring topics, - and you need to...
- No, it's not. - 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 personal responsibility people take.
I said as much earlier when we talked about the founders
who have been responsible for people's livelihoods. It changes you. It does, right?
So, I don't work, myself, well in
an environment where sort of like everything is pre-described. I don't like joining other
people's games, and so on. All these kinds of things are my biases,
and again, we are implementing my biases here. So in COVID, like this is 2022,
I think, or 2021, suddenly Shopify went down 80%
of stock value, right?

[[33:16]](https://www.youtube.com/watch?v=ZSM2uFnJ5bs&t=1996s) Again, I think that was a problem,
because I think the stock market is basically
like a polling market. It's sort of a betting market
on a future value, right? Like,
when you guys are wrong, then you're just bad at betting. So, I work on the real
market value of a company, which you guys are betting on,
but I don't know. So, there is such a discrepancy
from the way I see people talk about stock price and
how I have ever, or inside of companies, perceived. - But what was going on in your head
when it dropped by 80% though? - Well, I'm like, in my head
I'm relieved, because I'm like, "I mean, we have a stock loss."
- Relieved. - Yeah, yeah, of course, because... - What do you mean, "Of course?" That's not a normal reaction.
- No, I was not about to raise money. I had enough money in the bank. I'm German, so I don't take
debt much, and so on. - Were the internal metrics strong? - Yeah.
- You felt you didn't deserve...

[[34:16]](https://www.youtube.com/watch?v=ZSM2uFnJ5bs&t=2056s) - Yeah, the unit economics are amazing. However... 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, like... - But you weren't worried about the
fundamentals of the business? - No, but when it is 50 times revenue,
I see it as my obligation to do that. - Okay.
- Right? Like, 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've
got to give me a moment here." Like, I need a moment here
for doing this, right? So... - 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.
- Yeah. - And when I hear you talk about that,
I think of the time when... Amazon stock. Bezos talks about this-
- Yeah. - in his shareholder letters. - Yeah, yeah.
- It went from something like 180 down to 6, or a 120 down to 6.
- Yeah.

[[35:18]](https://www.youtube.com/watch?v=ZSM2uFnJ5bs&t=2118s) - And he's like, "Yeah, but they were
focused on something else." I saw the actual fundamentals of
the business, and I was like, "This thing's going to work." And so eventually-
- Exactly. - 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.
- Yeah, exactly. And Jeff's like, "I'm building
a very heavy company. Amazon will be a heavy company, so I'm not worried about this
short-term drop by 80% or 90%." - That really tracks. But, like, one of the effects was...
And this is right. Like, well, people got stock options at-
- Yeah. - the level up there,
and they rightfully say, "Well, how about it?" Right? 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 take some doing. I realized the psychological problem
with everyone being so underwater and having to spend years
getting to basically the zero point where the stock options are
worth even a penny again. And, of course, they were like,
"Well, but that's the company."

[[36:20]](https://www.youtube.com/watch?v=ZSM2uFnJ5bs&t=2180s) They're like, "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...
I mean, I, not necessarily see it this way because, like, the risk was there
and these kinds of things, and again, it's like, other people
voting that's causing this price. I didn't set it. However,
I do receive the point. Like, they had no agency in the process. So, we rebuilt our compensation system to be completely 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 a number. Now you get sliders. You can say, how much
do you want in stock? How many do you want in RSU? How much of this do you
want in shop cash, actually, and how much do you want in cash?" And you can change it every quarter. It's like you decide how
much money you want. And you can even use,
like, a tool that's there to lock in the value of the stock
you receive for three years.

[[37:22]](https://www.youtube.com/watch?v=ZSM2uFnJ5bs&t=2242s) So, 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, if you grow 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, really well.
It's very popular. It was kind of hard to do
because doing this worldwide with people in many different countries
was, like, kind of a legal nightmare because there are all sorts of
rules around changing of salaries. We figured it all out,
so we have a blueprint. If other people want to do it,
it works really well for us. But we're kind of proud of it because,
again, it's a point of differentiation, and we believe it works much better.

[[38:26]](https://www.youtube.com/watch?v=ZSM2uFnJ5bs&t=2306s) And again, I want people at the company
to also feel like this is a company that never sleepwalks
into anything, right? 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 stock's dropping? - No, it was already there. Like, that was a-
- Okay. - early 2021 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, I mean, there were 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 talk to a lot of older founders. People think I'm obsessed with
old people. It's not that. It's like, this guy's got 50 years of-
- Yeah. - 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, like, so much
in the middle is going to..." He said exactly what you said.
It just like, blurs together. - Yeah. - So he's saying you should
document it more. - I totally agree. Lots of years
are totally running together.

[[39:28]](https://www.youtube.com/watch?v=ZSM2uFnJ5bs&t=2368s) I have reasonable
record-keeping on this, so I... And especially with
all this AI-led agentic, like, reprocessing of notes
and press, and so on, you can actually reconstruct
these histories and timelines, and I'm fascinated with this right now. But going back to the...
- So my understanding though- like, you're now looking at running a
company as 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 in... Do you engineer marketing? Do you engineer...
- Yeah. - 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 are doing this right now or how they would, that's what I'm working
on with them, to crystallize that message. And there are a couple of reasons why I do it this particular
way that we can get into.

[[40:31]](https://www.youtube.com/watch?v=ZSM2uFnJ5bs&t=2431s) They are partly psychological, but, like, it's also just...
- 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 at 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 very logical, engineering..."
- No, it's like...

[[41:33]](https://www.youtube.com/watch?v=ZSM2uFnJ5bs&t=2493s) - 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 as very idealistic, but I'm actually not that idealistic. I'm super... I'm like a craftsperson,
a toolmaker person. My entire life was making tools.
Literally, Shopify is a tool. I make tools very often for toolmakers. My hobby is making tools for engineers
or people who make tools, right? So, like, my life's a
fractal of toolmaking. It's all about toolmaking 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 toolmaking happens to be pragmatically an excellent
way to get really good at toolmaking. Like, 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.

[[42:42]](https://www.youtube.com/watch?v=ZSM2uFnJ5bs&t=2562s) It just works. I've used that very often to... 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... This works when you know
what you're doing, right? Like, you don't even...
It's not like a placebo. It's actually like you
just actively change your neural frontal cortex in this moment. So, I use this often. I sort of write to myself, message
in a bottle, and these kinds of things. That's all a different topic,
but like, it's... - No, no, no.
- So the point is like, I tell... - What's the topic there? Hold on.
You write messages to yourself? - Yeah. - Affirmations or just... - No, just generally, when I feel
like something is like, "Hey, there's something I've
figured out that I really like," I know I have to write a scheduled
message to myself to remember it. Because I need spaced
repetition on the idea.

[[43:43]](https://www.youtube.com/watch?v=ZSM2uFnJ5bs&t=2623s) - What's an example of that? - I mean, for instance, we have a
company keynote kind of thing, like a company get-together summit
once a year, and around a full week. And so, usually, I did a keynote there, and, like, then I write a
message in a bottle to myself of what was good about the process,
what was bad about the process, what to do next differently, and all the
topics are left on the cutting board, just to get a head start. 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 I think the
hints are everywhere, right? Like, affirmations are
one of those things that... I mean, there's a reason why
society creates rituals, right? Because rituals end up being largely
affirmations on repeat, right? So... - What do you think of visualization? - So manifestation, these kinds of things,
probably works too. You know what? The funny thing is, I think
everything works if you just do it. The question is,
what's effective and quick?

[[44:44]](https://www.youtube.com/watch?v=ZSM2uFnJ5bs&t=2684s) - It sounded to me before, like, I started
reading all these biographies, I was like, "This is some willy-foo-foo nonsense."
- Yeah - Yeah.
- And then you see very smart, analytical- - Yeah.
- logical, in many cases, inventors and engineers, and it appears over and over again.
- Yeah. - People didn't know each other. They worked in different
industries, at different times, lived in different parts of the planet-
- Yeah. - and they all talk about doing this. - And it's parallel construction. They all come to the same
conclusions in different words. - Yeah.
- And so, yeah, I personally... I mean, in the self department, I'm
extremely taken with the stoic philosophy: control what is under
your control, know what is, and then do the best possible job. The job is the thing. Like, the whole project in life is just
try to become very, very good at something and, ideally, cultivate
some significant skill, create potential services and products, and then share them with
as many people, right? Like, you do this because that's what
you're on planet Earth for, right?

[[45:44]](https://www.youtube.com/watch?v=ZSM2uFnJ5bs&t=2744s) 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 the most interesting places, as long as you remember what
your job is 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 are trying to use the world of
technology, use the world of retail through their own work,
then self-actualize, and that is a worthy goal
and worthy job. And so, like, AI comes out,
and 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 is pursuing the same
problem in a changing landscape, right? Like, now I get to reinvent
everything I've already done.

[[46:44]](https://www.youtube.com/watch?v=ZSM2uFnJ5bs&t=2804s) How fun is that, right? Because I really care
about these problems. Anyway, back to the affirmations and
sort of the brain sort of self-gymnastics. Going to my team and just saying, "Look, just tell me what you
will talk about on stage," is that. It's like, afterwards,
you need to internalize this as something that you have
committed to me, as imagining... I imagine that's something
they care about. They care about reconciling,
and so they have to do it, you know? Because otherwise, they said
something untrue to me, right? And, like, they don't see themselves as
someone who says untrue things, and therefore, you can actually
make the reconciliation work for your own benefit in this kind of way. It also just means, like,
it emphasizes difference, right? Difference is so important. Like, orthodoxy just really
needs to be off the table from the beginning of a project or from
the beginning of decision-making. - Have you ever studied James Dyson? - No, no.
- Okay, if I can only recommend one book ever-
- Mm-hmm.

[[47:45]](https://www.youtube.com/watch?v=ZSM2uFnJ5bs&t=2865s) - it's his first autobiography. He has a crazy line about this. So, this is also very common
with great entrepreneurs, and you hit on it in your earlier talks, well, if 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 path, that mission I'm on-
-Yeah. - I can't do it if... Literally, I can't be the
best if it's the same. - Yeah, right, exactly.
- Like, just think about this. - Yeah.
- And so, Edwin Land, who was Steve Jobs' hero and the founder of Polaroid-
- Yeah. - he had a personal motto. He says, "My personal motto is very
personal, and it may not work for you," but he said it is, "Don't do anything
that somebody else can do." - Right.
- 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? - Yeah.
- But he's writing that book when the business was fine, but he had
one product in one or two markets. It was doing, like, 300 million
a year in revenue. Not a bad business, but a very small
business compared to the size that it compounded to over the next
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."

[[48:45]](https://www.youtube.com/watch?v=ZSM2uFnJ5bs&t=2925s) - Yeah. - That's one of the craziest
sentences I've ever read. - I totally agree with that, though.
- 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 seven-out-of-ten
solution to everything by copying the seven-out-of-ten 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 it's a six out of ten,
you can iterate on this. You can take this past
the seven afterwards. So, very often, especially in technology,
the world belongs to the fast, the people who iterate,
the people who adjust, the people who understand what's
costly and what's unnecessary, and who prune away the rest. And I find that actually,
probably, pixel-for-pixel, the most inspiring picture that I think
exists, that I've ever come across, is the SpaceX Raptor rocket evolution.

[[49:47]](https://www.youtube.com/watch?v=ZSM2uFnJ5bs&t=2987s) Do you know the photo I'm talking about?
- 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 it's like, "Yeah, that's today's Picasso, right?" It's just like, this is it. Like, we're not at a point in 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 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 the decision
is more interesting than the decision. - Is this podcast constantly updated? - Yes.
- So it's internal- - Mm-hmm.
- only for Spotify. Goddamn it, only for Shopify.

[[50:47]](https://www.youtube.com/watch?v=ZSM2uFnJ5bs&t=3047s) - I mean, especially when we talk about
podcasts, that makes sense. It's like... - Well, they have...
It's funny, I looked at my end-of-year wrap on Spotify-
- Yeah. - and one of the podcasts I listened to
the most, which was shocking to me, was they have the
internal company history. - Oh, yeah.
- It's called Spotify: A Product Story. - Uh-huh.
- And it's... Because, you know, everybody else... I think one of the reasons that-
- Yeah. we have a mutual friend, obviously,
in Lulu, she's on your board, and the importance of
telling your own story. - Yeah. Yeah, yeah. - We went to dinner
one night, and I was like, "Lulu, what I love about you is, like,
you're repackaging old ideas." Like Napoleon told his own story. Julius Caesar told his own story.
- Yes. - Like, all these people did it.
It's a very valuable idea. And so everybody who's trying
to tell the company history outside of the company-
- Yeah. - you're like, "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 originally, I think they built it for
themselves, and then they published it. - I didn't know about this. I love this. - You should listen to it-
- Yeah. - because it's narrated by Gustav, who was Head of Product-
- Yeah. - who's now co-CEO.
- Yeah. And they take it in chronological
order, and so, like, Sean Parker played a big role at
the very beginning, right?

[[51:52]](https://www.youtube.com/watch?v=ZSM2uFnJ5bs&t=3112s) - Yeah.
- He's obviously not there now, but he's on, like, episode one or two,
- Mm-hmm. - 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 shifts. They had to go from  desktop to mobile,
all the things they had to deal with. Well, just go listen to
what the company... - Did at the time, yes. - Executives and founders...
- It's totally right. - But not only what they did,
why they did it. - And the why is so much more interesting. Like, one of the
[unintelligible] of "Tobi said" is real inside of Shopify, right? It's like people just throw
these things around. Like, "Well, Tobi said we're
doing it this way," right? I just try to get people
to always ask, "When?" - When I said it. Exactly.
You change your mind all the time? - Yeah, and this is not even...
I learn about this because something is really, really odd,
and, like, really odd decisions. Like, there were easier ways available. How did we get there? It's like, "Well, everyone said that
you wanted it this way." It's like, "Under which context,
when did I say this? Like, clearly, we've
never talked about this," so it's like this very common thing, so...

[[52:53]](https://www.youtube.com/watch?v=ZSM2uFnJ5bs&t=3173s) - What's a typical episode? It's just you explaining the thinking of
what's going on currently in the company? - Yeah. It's like taking people
back to major decisions. - Are these short episodes? - No. Like, initially,
we went through phases. For the first maybe
50 episodes, we said, like, "We have to mix it down to 23 minutes," because we calculated that that was
the average commute in Shopify. So, we checked where everyone
lived compared to the offices, we ran the data, and it was 23 minutes. And so, we made it 23 minutes
because that seemed as good... Like, we needed a reason. - And you like designing your constraints. You talked about this a lot.
- Exactly. Exactly. 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...
20 minutes sounds right," but let's find an actual good
reason why it's 20 minutes, and then we found a 23-minute reason. So, sometimes you're allowed to just parallel construct the thing
you want to do anyway. Then at some point, we
abandoned it because, just like...

[[53:55]](https://www.youtube.com/watch?v=ZSM2uFnJ5bs&t=3235s) You know, the nice thing with
podcasts is people can skip, move. It doesn't matter. Like, you can just
keep going for hours and hours and... - 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... I mean, if you ran it,
it's like five hours. - What was that one about? - That was like the
philosophy of engineering with a bunch of our
distinguished engineers. Like, how... You would not believe how immature
engineering is as a discipline. It's just like, there are 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 software has a weird property. I mean, the best thing, and why the
business model of software is so insane, is because zero marginal copying
of software is free, right? It's like you can... We build Shopify,
the first person signs up, we make money. Second person signs up,
uses exactly the same thing, and it's like the second
instance of it is not...

[[55:01]](https://www.youtube.com/watch?v=ZSM2uFnJ5bs&t=3301s) It's 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 dead weight is in the system. If you compare this with
electrical engineering, there's a very clear cost
of manufacturing, right? Like, the bill of materials is the thing
that dominates the success of a product, because it dominates the cost, which
then dominates the product market fit. Also, manufacturability is a huge
component in electrical engineering. It's like, is the board laid out in such
a way that it's prone to defects? Did you choose all the
right components? Does one chip get really hot
next to a soldering thing that... You know, I remember the
original Xbox disordered itself if you just played certain games too long. So, you know, there are
real constraints like this, so excellence is obvious in a way. It's 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.

[[56:09]](https://www.youtube.com/watch?v=ZSM2uFnJ5bs&t=3369s) 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 a little bit like a factory is
polluting the environment. It's just like it doesn't
cost back to them. And so anyway, 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 these very, very heavy
client-side JavaScript applications that took over everything. They were just godawfully 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.

[[57:14]](https://www.youtube.com/watch?v=ZSM2uFnJ5bs&t=3434s) 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
in the most interesting places. Then they deploy it, and you know,
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's
working 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 problem in 2023 especially,
when I think a bunch of, frankly, us older engineers had to take the kids to the side
and just have a good conversation. - And that was the context- - Yeah.
- of the episode of Context.

[[58:14]](https://www.youtube.com/watch?v=ZSM2uFnJ5bs&t=3494s) - At least that's what led
to this particular thing. I don't know if we actually succeeded
there, but I think we didn't need to, because I think the world just changed. Like, the moment of the zero interest rate
phenomena, where they're gone... People actually wrote
better code all of a sudden. It's amazing how consequential the absence of 0% interest rates
actually ended up being. You could feel it in the engineering
team being less prone to accepting random waste into their stacks.
It's unbelievable. - Oh, that's interesting. I don't know if I've ever heard
anybody else make that point. I think this idea of hearing
directly from the founder in an audio way-
- Yeah. - is underutilized.
- Totally. - I did this episode on the founder of
Kinko's. He was dyslexic, okay? - Yeah.
- So... - 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."

[[59:14]](https://www.youtube.com/watch?v=ZSM2uFnJ5bs&t=3554s) He was also... I think he
said he had, like, ADHD, so he couldn't sit down at a desk. So, his job was like,
"What do I like to do best?" And he's like, "I just go around..." And all the Kinko's at the time
were owned by individual people, so it wasn't like one
cohesive corporate structure, and so therefore, there was 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 doing different trial
and error, good ideas. - Yeah. And so what he would do... This is back in the day, he would
call into a corporate voicemail, and so at the end of the day,
he'd give a three-minute update about all the good ideas that he saw. - Mm-hmm.
- And then you'd come in as a Kinko's employee the next morning, and you could play Paul's voicemail.
- That's cool - I love it. - And then this is 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." - Yeah.
- "Why don't you mandate that everybody in the company-
- Yeah. Yeah.
- does X this guy's way?" He goes, "Because if I do that,
that's the best way it will ever be." - Mm-hmm. Which kind of relates
to what you just said. - Mm-hmm.
- He's like, "Listen, there are probably a hundred different good
ideas or right ideas, - Yeah.
- and if I stop here and don't keep tinkering..."

[[60:20]](https://www.youtube.com/watch?v=ZSM2uFnJ5bs&t=3620s) going back to that word that you like-
- Yeah. - "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 actually a
really, really important thing. It's much more important
to create an 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 babyproofing." - Yeah. Yeah, exactly. I mean, exactly.
Absolutely, it's the same idea. Like, the babyproofing thing is real. Like, what is internal
proper policies, right? Like, processes, what are they? They are like, "Do this thing differently
from the way your intuition tells you to." Okay, why are you wanting people to
behave differently from their intuition?

[[61:21]](https://www.youtube.com/watch?v=ZSM2uFnJ5bs&t=3681s) Like, let's look at the
higher-order bits there. It's like, what other
opportunities do you have? Well, you could change the
environment in such a way that doing the right thing
is intuitive, right? That's pretty good because now
you don't have to post the policy. You could also hire people whose
intuition is better honed. Very often, policies and processes are
a sort of downside protection. You're trying very hard to avoid the people who do things wrong to be 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 an environment
almost as a box for people, like, "Here's the space,
and I want you to follow... Like, inside of this space is this
problem I need you to solve." Right now, my world,
in the commerce world, is attempting to figure out what
agentic commerce is, how it works, how all the companies
are working together, how the research labs
work with everyone else, how to expose product catalogues
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.

[[62:46]](https://www.youtube.com/watch?v=ZSM2uFnJ5bs&t=3766s) You know, that's a box. Like, inside of this,
somewhere in it, it's all dark, is the most beautiful solution. What tools do we have to explore this box? It's like, dark. I don't know.
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 them to do this. Like, I'm not there. I don't
want to control every decision. The company makes millions of
decisions every day, right? Like, in a building like this, right? But what I can make a decision of, is 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 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?

[[63:49]](https://www.youtube.com/watch?v=ZSM2uFnJ5bs&t=3829s) 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? Like, that's what we call 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 to transition."

[[64:49]](https://www.youtube.com/watch?v=ZSM2uFnJ5bs&t=3889s) There are some engineering leads,
design leads, give the okay, one. I give 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-off of accountability for autonomy. And so, that's how we found we can
almost operationalize this system, because what I'm finding is... I mean, all the biographies you read,
what you find, I'm sure, is that the moment of insight... Often the product that started it all, or 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, and then... Like, da Vinci probably did not have one "Vitruvian Man" as an
OKR given to him, right?

[[65:54]](https://www.youtube.com/watch?v=ZSM2uFnJ5bs&t=3954s) Like, 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, too, 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 are 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 there are 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 and couldn't. And like, well, what should
I be able to do if I would be...

[[66:55]](https://www.youtube.com/watch?v=ZSM2uFnJ5bs&t=4015s) 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, like, whatever the answer
to that is, we worked hard on, and I think we just discovered some
extraordinarily powerful systems and mechanisms in this sort of journey. - That was the prompt?
Like, what would a competent CEO do in this situation?
- Yeah. - I love to take the view that,
like, 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, right? Like, that's my favorite.
I love playing this game every year. Yeah. Figure out what I would
do differently, and it's like, "Let's go!" I have my to-do list. And I ask a lot of teams to do this a lot. It's like when we have
systems that just don't work, one of the most powerful,
maybe through affirmations, maybe through experience,
things you can do is just don't be prideful about
the prior work too much.

[[68:06]](https://www.youtube.com/watch?v=ZSM2uFnJ5bs&t=4086s) You're allowed to have pride in it, but, like, you want to wake up
better every day, right? You want tomorrow's version
to be better than today, and for that, you have to kind of
downgrade what's there. Like, the sunk cost
fallacy is so powerful. - But how is that an affirmation?
Like, how does that represent... How do you... When you're
actually talking to yourself, or you're writing this down-
- Yeah. or is this your inner monologue? - I literally write hit pieces
on the past, right? It's just like... - A hit piece? - Yeah, like, just all of the things that are wrong with the thing
I somehow am really proud of. - You are so much like some of
my favorite founders. Dyson's like this. My friend Karim,
who is one of my closest friends, - Yeah.
- he is the co-founder and CTO of Ramp. It's like nothing's ever good. The way I describe him is just like-
- Yeah. no resting on laurels,
no sleeping on wins. Do something great, and then do it again. - Yeah.
- Steve Jobs said this. He's just like-
- Yeah. "Well, what's the proper response
when you make something wonderful?" He's like, "You do it again."
- Do it again. Yeah, let's go. No, a lot of these great people, they
don't really have rearview mirrors. - Yeah.
- Like, they'll obviously learn from what they did, but they're not like, "Wow, look at my trophy room."

[[69:09]](https://www.youtube.com/watch?v=ZSM2uFnJ5bs&t=4149s) - Mm-hmm.
- They don't think that way. - Mm-hmm. Look, nostalgia was put on
death certificates in the 1800s, right? It's like, people died of
nostalgia in their minds. I mean, they really died of
something else, but like... - 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 barely a vice. So, I think nostalgia needs
a little bit more scrutiny. Overcoming sunk cost 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 raider is a great way to do that.
- Exactly. So, then you develop
tools for that preset. - You kind of separate yourself-
- Yeah. - ... because that was your decision.
- Yeah. - You might be like,
"Oh, well, like, - I feel a little sensitive about that."
- Yeah. - It's like,
"No, no, that was somebody else's." - Yeah, yeah. - This is a new company now. - So, one of the things that is unpopular
when I do it inside of a company, is thatI really s*** talk the past,
especially if I did it. It's still like systems that
I built inside of a system, so I- - You s*** talk the past publicly?
- Yeah, I trash.

[[70:13]](https://www.youtube.com/watch?v=ZSM2uFnJ5bs&t=4213s) I make fun of all the ways, and
this is hilariously wrong in funny ways. And I need to remind myself, especially
when I do a certain area I didn't work on, that I have to provide to it,
or I need these corporate raider, like I'm collecting these now. - It's almost like dissing 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 to.
I expect everyone. - 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 two" is accepted, you've converted your craft
into something for the company. It's 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, "This is now part of the
company's embodiment, essentially, so the product."
You've contributed it.

[[71:31]](https://www.youtube.com/watch?v=ZSM2uFnJ5bs&t=4291s) 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 the word ownership over
parts of the codebase or so. We only allow stewardship as a work,
just as a proxy term, because sometimes you
need to be able to talk about it. In this way, Shopify thinks of itself
more as an open-source project. You're contributing into the commons. People talk about Wikipedia, not about the 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 Ogilvy, who is one of the greatest
advertising agency founders. - Mm-hmm. - And he says that we have a divine
discontent with our work. - I love that quote. - 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..."
He organized his entire life. He's been an inventor and
engineer for 55 years now.

[[72:33]](https://www.youtube.com/watch?v=ZSM2uFnJ5bs&t=4353s) And he's just like,
"I see this product," And I ask myself,
how can this product be better? - Yeah.
- Then I make it better, and
then I put it down, 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 see the bad in everything." - Yes.
- But the interesting part is that he's intellectually and
emotionally mature enough. He goes,
"You have to understand, it doesn't. Like, I'm not a miserable person.
- Yeah. - I just look at it like,
this is a problem. That problem is an opportunity-
- Yeah. - ...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. - Oh, you get excited. Oh, s***!
- I get excited by finding problems. Just like, I love, I mean,
look, at this point, I'm such a long-term veteran
of tech company building. I love figuring out if we're bad at stuff. Because we have a
pretty good thing going on. By all intents and purposes,
this thing's working, right? So, when I figure out
that we are actually bad at something, I'm like, "Holy s***!
I have an obvious blueprint for now, how to become a better company,
which is actually my job, my craft, right?
This is all opportunities.

[[73:38]](https://www.youtube.com/watch?v=ZSM2uFnJ5bs&t=4418s) Things go into the commons. They are hopefully being
judged by everyone. I get grumpy when things that are s***ty 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 roasting the thing's
current state about. I want people to feel no deference to it. I don't want people to respect
the piece of code that exists, or the system that I want them to improve. And I want people to just find
their sort of energy source, because what I'm asking them is, "Go into the particular box
that contains this problem, and do the best possible, better than anything I could possibly
ask you right now for solving it. Because I expect people
to be highly agentic, and fall in love with problems, And just find better solutions than what 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.

[[74:40]](https://www.youtube.com/watch?v=ZSM2uFnJ5bs&t=4480s) So, the difference very often is just a
couple of words and a bit of framing, and I just find that's one
of the most powerful, sort of, tools you pick up,
I think, along the journey. It's like the fivewords to say at
the beginning of a sentence that change everything. And myco-founder actually gave
me one of those very early, which was probably why Ituned
into this kind of thinking, and just collecting these
kinds of things. Because- - Wait, what did you mean
by the five words you said at the beginning of the sentence? - I used to go, again, engineer. That's always been an interesting experience with four
other engineers working for me, and I stay pretty
current with engineering. I still do, not a ton of
production engineering. I sometimes start new
projects with people, and the first 20 to 30 pull requests or commits in many of the repositories for
things that we use come from me.

[[75:45]](https://www.youtube.com/watch?v=ZSM2uFnJ5bs&t=4545s) 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. So, 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 the whiteboard,
and just re-architect this." And so, at some point in that now. Daniel, my co-founder, explained to me, "Well, look, you get pretty
defensive then because they just came to show you, basically, what was objectively their best work,
because they presented it to you, and that matters to them." Like, it just doesn't matter if you go and make a much better system
here on top of your head. They are like, If I truly ever did this, they're going to be defensive
and try to save face. So, just put "for example"
in front of every sentence and say, "What do you mean?"

[[76:50]](https://www.youtube.com/watch?v=ZSM2uFnJ5bs&t=4610s) And now,
I tried this, and it works perfectly. So, instead of just telling them,
"Hey, instead of doing this, here's an architecture
that you should use," just say, "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 are all working
together on the same problem. I'm just 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. Oh, not this specifically,
it's things like this. Just frame things slightly differently,
and life's easier. - 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, and as a result, his mood, his energy,
and his decision-making is improved. His point was that you get paid
to make high-quality decisions, and you can't do that
if you're sleeping terribly.

[[77:50]](https://www.youtube.com/watch?v=ZSM2uFnJ5bs&t=4670s) 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, Matteo, and we live in the same city. A few months after
I started using Eight Sleep, I randomly ran into
Matteo at a restaurant, and I was with some friends. So, I go over and said "Hi." When I got back to my table,
my friend asked me who was I talking to? And I said, "That's Matteo,
the founder of Eight Sleep." And my friend replied,
"He looks like he gets good sleep." Matteo is living and
breathing his product. I had never had the ability to change
the temperature of my bed before I had an Eight Sleep. I had no idea how much that would
improve the quality of my sleep. I keep my Eight Sleep ice cold. It's cold before I get into bed,
so I fall asleep faster and wake up less during the night. That feature alone is worth
ten times the price. There are very few
no-brainer investments in life, and I believe Eight Sleep is one of them. That is why elite founders
like Mark Zuckerberg and Elon Musk have all said publicly
that they use Eight Sleep. I would recommend getting the Pod 5, which is the newest generation
of their signature product. It is a smart mattress cover that you
place on top of your existing mattress, and it is next-level sleep tech.

[[78:57]](https://www.youtube.com/watch?v=ZSM2uFnJ5bs&t=4737s) It automatically regulates your body
temperature throughout the night, independently for each side of the bed. The result is you get up to a full hour
of additional quality sleep per night. Make the no-brainer investment in your
sleep by going to eightsleep.com/senra, and use the code "SENRA"
to get 350 dollars off. You can try it for 30 days at home,
and return it if you don't like it, but I'm confident you will love it. I will never let anyone take
my Eight Sleep from me. Make sure you get yours at
eightsleep.com/senra. One of the things that
Daniel from Spotify. I almost said Shopify. Now, for him,
Daniel from Spotify, told me. - I want to be fair. - He's like, "You should ask him what were
some of the advantages of starting with Silicon Valley?" - I think there's just too
much cross-pollination. You kind of have to sync
with companies towards. 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.

[[80:04]](https://www.youtube.com/watch?v=ZSM2uFnJ5bs&t=4804s) 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 asmuch 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? And so, they give 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, free flights in, and sort of took the ideas
that are relevant, tried to always put a Shopify spin on it. I don't like taking ideas,
as you clearly can tell, and never did. Sort of like, figure out how to
localize them to our problems, and ideally, try to do something better.

[[81:06]](https://www.youtube.com/watch?v=ZSM2uFnJ5bs&t=4866s) And so, only very many years later, I did realize that 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 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. We had no one. When Shopify IPO'd, we had one member of the executive team who ever worked for a public company.
That's it. - Wow! - We had no one who took
the 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've had a real sense of
accomplishment about that because it meant we became our own thing. Our entire motto becoming a public
company was we are not going public.

[[82:09]](https://www.youtube.com/watch?v=ZSM2uFnJ5bs&t=4929s) We are creating a public
version of Shopify. And so that was like-
- What's the difference between those two sentences? - 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, for people who
work at Shopify did. I felt it was important to be different
and do things differently. One thing we did, and
you will appreciate this, Yes, we looked at the requirements. We talked about Formula One.
Formula One is fun. Sorry, it's a little bit of a veer, but Formula One I love because
it's like, there's a rulebook. It's the opposite of every other
rule book 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, right? And there's no engineer in Formula One who has anything to do
with a central casting engineer. 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?

[[83:12]](https://www.youtube.com/watch?v=ZSM2uFnJ5bs&t=4992s) Like, this is very important to them. So I count myself as of the archetype
of the latter, like a group of, 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, Essentially they just
studied the rule book, found this loophole and
you're like, good for that person. - Yeah. - And then you'll fix the loophole or
whatever the case is, but that's exactly-
- Yeah. - ... 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? So, okay, this goes on. And 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
looking around to figure out, like I never begrudge anyone
being an intelligent actor in the local incentive system,
but it's just like everyone's allowed. That's pretty much my
morality at this point.

[[84:14]](https://www.youtube.com/watch?v=ZSM2uFnJ5bs&t=5054s) Or at least a big part of it. You're allowed to do this.
I own the incentive system. You get too much out
of the incentive system, or the incentive system
tells you to behave in a way that is not congruent with
the company's goals. That is my skills issue in
designing the compensation. Not you. - Not their fault for-
- Yeah. - ... taking advantage of it. - But, really appreciate it if
you give me a heads-up. Because we are still the same team here, so maybe you raise your hand at
some point saying, "This is fine." - Yeah, not like ten years later, after,
- Yeah. So, back to the IPO, just like in the IPO,
we just looked for ways 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. It's like a horrible video player,
the IPO roadshow website. It's like an, And in every other IPO, we could find this CEO standing
in front of a screen, camcorder, and just sort of
going through the same slides.

[[85:23]](https://www.youtube.com/watch?v=ZSM2uFnJ5bs&t=5123s) - Mm-hmm.
- We're like, "There's no rule for that. Let's shoot a f***ing documentary here. Let's go through the history of why this
company exists and why it's important." And we said, "What video can be put onto
this space where no one expects it, that will somehow hook people into 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 looked forward to meeting you. What you guys did with
this video was insane. I didn't even know you could do this." Every IPO after this was like our way, so it was kind of like a nice
little moment of putting a bit of an agency into a process,
which was pretty. - I heard this story one time.
I think it was the founder of Sirius XM. I forgot who the person was,
but they were like, "Well, how do you make annual reports?" And there are no rules around this, so
you have to present certain information. - Mm-hmm.
- So they made a book, and the book would be illustrated. - Yeah.
- And 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.

[[86:31]](https://www.youtube.com/watch?v=ZSM2uFnJ5bs&t=5191s) Or some people were saying,
- But if I said- - "Stay private longer."
- So yeah, I get you. The advice was always like,
"Don't," right? It's like. - Who was telling you this?
Other founders? - Yeah, founders. At Silicon Valley,
orthodoxy definitely is to avoid it. And, I don't know. I can tell you the story
about my decision, but it's just basically 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. - It's your personality,
embedded personality trait. - I just find plan B is
usually 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, right? Like, plan B gets the ambitious one, "If this eventhappens in my life, f*** it,
I'm just going to build a company." It's 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?

[[87:40]](https://www.youtube.com/watch?v=ZSM2uFnJ5bs&t=5260s) 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 a bad plan with, You're always in the data,
- Yeah, I think humans are reflexively or whatever, just to
- ... scared of change, too. - 100%. - They'd rather be in a boring-
- Yeah. - ...or even miserable
environment than actually change- because the fear of change is so great.
- Yes. Yeah. - So wait-
- Exactly. - ...people are telling you
to stay private longer? - Like, being private is better. Friends of mine at Stripe are
running this experiment. They managed what they could of, in terms of figuring out how to
stay private for such a long time, which is actually remarkable. I just think they spent a lot of time
figuring out how to stay private. And I don't think that's the most
valuable way to spend time, right? I think you could. - So, you went public in 2015?
- 2015, yeah. - What were the arguments for staying
private longer in 2013 and 2014, when you're having these discussions?

[[88:43]](https://www.youtube.com/watch?v=ZSM2uFnJ5bs&t=5323s) - We were tiny. We were 800 people.
We were Canadian. - So they're saying, "You're too small?"
- What was our revenue? Yeah, I mean, when Shopify's
first trades happened at, I think a billion, 1.5 billion dollar
valuation, right? Like so, - That's pretty wild that the public market almost could
have gotten a venture if you - And people did, yes.
- ...bought Shopify. You essentially had venture-
- Oh, yeah. - ...returns in the public market. - Every once in a while, someone puts together a list of
the best stock market returns over the last ten years, or whatever. And yeah, I own that list, right? 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. These obviously accredited
investor laws and stuff like this, all they do is like, make it so.

[[89:46]](https://www.youtube.com/watch?v=ZSM2uFnJ5bs&t=5386s) 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, this is such a f***ing
conspiracy to keep everyone private, because that just sequesters all the growth exposure
to institutional investors and people who are already accredited. And so, I just really
dislike that whole thing. I think, like, man. Again, it's about building things
and sharing what you've figured out, and people buying a
ticket to ride on Shopify, because they like what we're building. It's like, please.
That's clearly what we want. So, I just think the institution of
public companies is good. I mean, but my beef is just with the
whole notion of influence over companies. Again, path dependence. Like, one stock,
one vote is like, yeah, but no. Like, everyone who studies
decision-making knows that you want to move towards people who have the most context
should make a decision.

[[90:54]](https://www.youtube.com/watch?v=ZSM2uFnJ5bs&t=5454s) That doesn't say about
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 for repeating what everyone else was saying at the time?
- Well, no, I- I think people are generally right.
It washes out, right? Again, people have problems
with the concepts of, Very often,
a new idea is dismissed because someone can formulate a reason against it, and somehow that
dismisses the entire thing, right? We live fundamentally,
most people spend their entire lives sadly in a vitocracy, right? Where you need 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, which is a very common
way to evaluate options.

[[91:55]](https://www.youtube.com/watch?v=ZSM2uFnJ5bs&t=5515s) 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 isflawed. It's just that 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; therefore, the usual
default position is not to do it. So that, I think, is incredibly
undisciplined because you need to think in propensities, you need to think in chances, and sometimes you need to really, really
lard up a decision for all the pros and cons that can bearticulated,
and in your mind, look at where the scale comes out. For a company that's trying to sell the
e-commerce platform for everyone, especially for many American companies,
being a Canadian private company that's tiny, and it's not ideal.

[[92:57]](https://www.youtube.com/watch?v=ZSM2uFnJ5bs&t=5577s) So, people don't usually go
public because of marketing or name recognition, but it's. - Super valuable. Anyway- - 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. In the end, it's not even close. The downsides have been a
couple of annoying phone calls I have to do every couple of quarters, at least for the first ten
years, I suppose. I thought that, actually, most of the
process was quite valuable. I learned a lot about my own business,
having to. - Explain to others. - Exactly. - There have been a few previous guests on
the show: Brad Jacobs, John Mackey, and Daniel Ek, obviously,
running public companies. In Brad Jacobs and John
Mackey's case, they both said, Jacobs makes that point, well, one,
he thinks it's wonderful free marketing- - Mm-hmm. - ...and advertising; two,
you now have a currency. Mackey said the same thing, like, it
benefited Whole Foods being public fast, because then he used that currency to
acquire a bunch of his other competitors, and accelerated his growth.

[[94:01]](https://www.youtube.com/watch?v=ZSM2uFnJ5bs&t=5641s) - That's such a good point.
- But Brad Jacobs' point was just like he likes the pressure of that check-in, - Yeah.
- where he's like, "This is what I'm trying
to do with the company, this is what I'm saying, I'm doing the company,
and this is our results. - Mm-hmm. - And I want somebody to say,
"Oh, like, there's a big disconnect here." - Mm-hmm. - And I want the pressure to
actually perform in and have some of 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, argumentatively, I really, really believe in the
sort of stoic, maybe, Adlerian idea of separation of tasks. What do I have 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
aperson 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 f***ing problem, right?

[[95:03]](https://www.youtube.com/watch?v=ZSM2uFnJ5bs&t=5703s) So, it's a really, really freeing
way to think about what talent. My job is to make a company worthy
for the best and brightest to work for. 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 be
worthy of the kind of talent that you would like to have. So, I mean, this goes from office space. If you have any to a company, like the amount of bullshit
people have to deal with to, How much bullshit politics 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 it's just like, impact matters. In a way, this is likely
going to be misquoted, but I think the talent
eventually takes care of itself.

[[96:05]](https://www.youtube.com/watch?v=ZSM2uFnJ5bs&t=5765s) There are not that many
good companies to work for. There are not many good companies that
deserve the attention of people who are the most capable people, because they have the option to start their own companies.
- That's a very interesting idea. There are 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. Wait, what do these
people look like, though? - Because, 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 stop. - And I just knew-
- How? -...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 would 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 work for, and I can dislodge all of them." So, if I go to Silicon Valley,
I can't pay what Google pays, potentially, or someone else makes up for their
skills issue by just overcompensating.

[[97:09]](https://www.youtube.com/watch?v=ZSM2uFnJ5bs&t=5829s) Yeah, it's called compensation because you kind of have to compensate people
for the s*** you ask them to do. And you know, if there's a lot of s***,
you have to compensate people for it, but if you have an enormous
amount of resources, you can make up for
skills issues by money. And so, in the East Coast,
which was much more hedge fundy, and much more high finance,
and 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 wanna work for." - Oh, yeah. - That's on one end of the spectrum,
which is great. You also had this thought experiment that I heard you say before,
which is one of the worst things that could happen on the other
end of the spectrum, is you wake up ten years from now and you built a company
you don't want to work at. - Yeah, totally. - 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. Again, you should
take pride in your work.

[[98:09]](https://www.youtube.com/watch?v=ZSM2uFnJ5bs&t=5889s) In the inputs and how you. Did you accomplish the things you
set out for in the aggregate, right? Like, be easy on the path,
but the outcome should matter to you. And man,
I just shake my head sometimes with how people over
complicate these things. It's just like, it's kind of. Man, people know what
we're looking for, right? And I'm talking about very, very,
very fortunate people here, people who have a lot of choices, who have incredible competency,
and some of the rarer skills, and combining this with enormous drive. Like, there's a couple of
different attributes that all have to come together
to be one of those people who can command hundreds of thousands, millions of dollars of
compensation packages that you can make in this industry. But partly because you're worth it, right? Like, you're contributing more than
that to a mission like this, and therefore,you can command
this kind of compensation.

[[99:11]](https://www.youtube.com/watch?v=ZSM2uFnJ5bs&t=5951s) And that's 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, and you are selling an
exclusive subscription, and 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?" I'm like, "Well, be too good to ignore,
then we increase compensation." You know, it's 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
just the collaborative project we are all working on? And so, I think this just sort of
clarifies and simplifies things, right? So I mean, all of 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.

[[100:15]](https://www.youtube.com/watch?v=ZSM2uFnJ5bs&t=6015s) There's always an information gap
and a reputation lag, and I'm out there recruiting and telling
people about the company a lot. What helps me a lot is that people are
curious about the company, and I've heard about the
company, and so on now. But that is because of things
that were under my control. I tell people that it's an
unshared-attention company. There are 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 play bit. 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 skill set, partly by 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.

[[101:23]](https://www.youtube.com/watch?v=ZSM2uFnJ5bs&t=6083s) Therefore, the compound
return to your career is going to be vastly higher
here than anywhere else. Because you get to a potentially higher
compensation level earlier in your career because you're worth 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 a clarifier that
I think is worth talking about. - I'm going to quote David Ogilvy again,
because I think it's interesting. He says, "Talent is most likely to be
found amongst non-conformist 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 are two ideas I got from
two separate entrepreneurs. I've mentioned both of them already, but I
because they use the same terminology when they're looking for talented
people to hire in their company. Daniel from Spotify and Karim from Ramp. And they both said the same thing to me:
"They hire for spikes." - Mm-hmm. Spikiness. Yeah.
- Spikiness. So, a lot of big corporations they want
you to be well-rounded. Like, no, no, this guy might
be a bipolar alcoholic- - Exactly.
- ... or this guy might have some other might not shower.
- Yeah, yeah.

[[102:30]](https://www.youtube.com/watch?v=ZSM2uFnJ5bs&t=6150s) - Like Steve Jobs, he was hired at Atari. Everybody's like, Nolan, Nolan Bushnell,
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%.
- Okay. - It's like, we never look at the
credentials and stuff like this. Again, I'm a high school dropout. I would be rich if I would start making
everyone want to have a PhD. The path by which we do it,
is we go through 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 high agency experience. We look at it like, "Something went
wrong in your story at some point." Well, now let's zoom in.
How do you react? Give me minute by minute.
This is what we want to know, right? Because a lot of us are entrepreneurs. Like, I talked about the founders
of companies we purchased, but most of the people, just in general,
in Shopify are entrepreneurs. Many started Shopify stores,
built a business, and then fell in love with the company, and applied for a job, and got it.

[[103:32]](https://www.youtube.com/watch?v=ZSM2uFnJ5bs&t=6212s) 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 so, is that every day they are
surrounded by people they deeply admire and can learn from. So, it's a very important part of this. So, lots of entrepreneurship,
lots of entrepreneurial impulses. And then, 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, this is really what
we fill our buildings with. And, you know, again,
create the space then, and let them be
creative in this sort of, This is how it always worked,
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,
none, like, really zero.

[[104:34]](https://www.youtube.com/watch?v=ZSM2uFnJ5bs&t=6274s) I didn't take a salary
for like, 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 older bedroom,
from which I also added. I put an Ikea desk, and
I built a lot of Shopify from there. And I mean, just kept costs low.
That was the main thing. Making every dollar count is
something that I'm so glad. Like, this is what I worry sometimes with
all these really, really big seed rounds. The main thing money does is it. It just gets you, I mean it sometimes it reveals but usually It just, like, makes you get a whole
lot more of what you got before. And, people did raise early partly because
they were not tight with money, and you get a whole lot more tight,
not tight with moneyness, at larger scale- - Mm-hmm.
- ... and it gets really, really bad.

[[105:40]](https://www.youtube.com/watch?v=ZSM2uFnJ5bs&t=6340s) - You're making my heart sing, because I feel like I'm on an
island by myself about this, because I've spent ten years
reading 410 of these biographies. All of them control
their costs like crazy. They'll tell you when we're getting
constraints to your best friend. - Yeah. - And then I talk to these young founders. I usually don't meet startup founders-
- Yeah. - because I'm not an investor, but a good friend of mine is like-
- Yeah. - ..."Hey, meet this young kid." I met him, and one of the things
he was talking about was like, "Yeah, let me show you pictures of this
beautiful office we're moving into," and he was showing me everything. And I was like, this is stupid. - Yeah.
- You haven't done anything. You don't deserve this.
- Yeah. - And I'm like,
"Go look at where did Apple start? Look at Microsoft." Microsoft started work in a strip
mall in Albuquerque, New Mexico. - Yeah, right. - And you need a triplex in Soho?
What are you talking about? - That's so true.
- And the question that I pointed to him, I was like, "Okay, how does this make your product
better for your customers?" - Right. - And his answer was, "Well, I'll be able to recruit better
talent because the office is nicer." Then you don't have a mission. It can work, but I feel like you're not
increasing the - You built a two hundred billion dollar
company in your wife's childhood bedroom.

[[106:41]](https://www.youtube.com/watch?v=ZSM2uFnJ5bs&t=6401s) That's where you started. - Yeah. - Like, maybe we should repeat
that over and over again. Just go look at where
these companies were. - Yeah. - You mentioned the Larry
Ellison episode I did earlier. They were in a s***** office building. - Yep. Yeah, yeah. - 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 to themselves, they
usually decline right after. - Yeah. - So, that has a long, running
history and business history. I do think there's an art-- like I do think that companies under-invested 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. Like that's probably an aside, but like- - Oh, let's go down there.
What does that mean? - So again, we didn't have a lot of money
but we wanted nice office spaces. This was-was the decade where
 there was a lot of open concept versus own room office spaces.

[[107:50]](https://www.youtube.com/watch?v=ZSM2uFnJ5bs&t=6470s) 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 was good immediately,
which was annoying as hell. And before he was our designer
and just literally everything else, too. Now a DJ, and before that,
he won poker tournaments. So, it keeps going. - Yeah. - 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. Because if this is just your buddy
who does stuff like this... Anyway, he, at some point,
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 B office space. That's kind of cool, and you need to
figure out how to create play spaces are like, a ten out of ten on
doing world class work because - But inexpensively.

[[108:57]](https://www.youtube.com/watch?v=ZSM2uFnJ5bs&t=6537s) - But, you'd need to figure out
how to make this cheap. Man, we built a bunch
of offices in a row, and Daniel was insanely good at this. - Yeah. How many years into Shopify? - This is like, two thousand,
I think, ten was the first one. It was the sixth year since founding,
 four years after Shopify launched. We went out of, sort of
above,a coffee shop, which was really nothing,
to our first office. - So how do you do this? - Daniel, like he said, first of all,
the dichotomy is wrong. It's not between open office
and closed office spaces. There's like, a perfect midpoint, because and it has to come
from your strategy of products. Shopify loves the five-person team. We increase to eight sometimes,
 but we think the best team size is one, because a single author
can do things that is impossible to do for teams and hit
high notes that are unreachable.

[[110:00]](https://www.youtube.com/watch?v=ZSM2uFnJ5bs&t=6600s) But I think product has
rather played the field of what can be done as solo projects. Actually, it's changing again
because of AI, which is a exciting bit. But like, 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,like, figuring out, too. Like, 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 parcel out the tasks. Each of these gradations is,
I think, a ten X loss of productivity. So Shopify is like, our 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, and never make the office feel dead, but they also throw you around. It's like- - What's a pod? What does that mean? - It's a room, that just sits up to Like, when you put the seventh person
in, it's uncomfortable.

[[111:09]](https://www.youtube.com/watch?v=ZSM2uFnJ5bs&t=6669s) It's like, 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
to 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-person teams because that's the most comfortable
thing to put in a pod. So, 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. Like,everyone sits around
the windows in pods, and they are structured in
such a way that, it all  works. The coffee area is on the other side. To create serendipity, we cut through
every floor eventually to create stairs that we 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.

[[112:16]](https://www.youtube.com/watch?v=ZSM2uFnJ5bs&t=6736s) So, design-- Being super conscientious
about this is really important. Daniel did an amazing job. I think we open-sourced the floor plans,
and I think lots of-- Like, 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, many people cargo cult it like, they
just Xerox copy it, essentially, instead of understanding, so they
make pots to bake or whatever. Look, you know, these kind of things. - We talked about
cargo culting a few times. - Mm-hmm. - You observe that behavior
in other companies. I'm curious what, internally, you have
caught your own company cargo culting. - Oh, we are in a Toronto office here. The Toronto office actually
has a few floorsthat are clearly a mimicry of these ideas
that they figured out, but they don't understand
where these come from.

[[113:18]](https://www.youtube.com/watch?v=ZSM2uFnJ5bs&t=6798s) Like, again, the pod's too big. It is like, more the
nice meeting room is right on the window, has lots of light. Just like, maybe this is
okay to have a few, but I went with the
teams through it because we then changed some of the floor plans, and
they moved here and realized, like, "Holy s***, this is like..." Oh, Norman doors everywhere. F***!
That's the craziest thing. -Wait, what? - I fundamentally allergic
to Norman doors. - What's that? - Doors that you push, and then, - You can't tell. - you realize you can't tell. - Yes! - Yeah. This is the most
fundamental design error that you can possibly make, is like
create affordances on inner product that make people predictably
do the wrong thing. This is such a like, literally everyone
who's ever involved in the process of designing a Norman door
should revoke their design license. I'm being facetious,
obviously, that isn't a thing.

[[114:18]](https://www.youtube.com/watch?v=ZSM2uFnJ5bs&t=6858s) But it's just like, man like - Yeah. - skills issues as a door is
a very common occurrence, I think, in places that are
not conscientiously designed, and all of those doors
are in place very fast. The funny thing is, you can usually
turn a Norman door into a non-Norman door by cutting things away and putting a push
plate somewhere, you know, so that helps. So I make a big deal out
of these kind of things. And it's like this just 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 that, like a handle that you put
on some totality of a body of work. From perspective of people creating
product, the product doesn't exist. It's what other people call your work. A product is just details.

[[115:19]](https://www.youtube.com/watch?v=ZSM2uFnJ5bs&t=6919s) It's many, many little details that
are appreciated if they compose right, and make a bloody
mess if they don't, right? 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 the ambient noise levels and soon. Just like you go in a room,
and it's silent. It's just like you notice
when you're talking while going to a meeting room, at least on the floors
we fixed, based on pre specs. It's kind of uncomfortable to talk in the
hallway because it's so echoey, then you walk in a meeting room,
and immediately, it's just a different noise
level because it's just diffused. We have enormous amounts of,
like In fact, we actually worked with companies on Shopify to
create the products of sound dampening that now supply all companies, tech
companies, which is really fun. And so, in fact, everything in our
offices is from Shopify stores, right?

[[116:19]](https://www.youtube.com/watch?v=ZSM2uFnJ5bs&t=6979s) Because again, if anything
we are doing is not mission aligned, we just didn't align
to a mission, axiomatically. 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 one
hundred percent Shopify quarter. 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. They really looked great
and were at the right price level, but we can't place the order
unless you come to our price. So sometimes we are maybe cheating. - That's actually a good
way to get a customer. - Yeah, it's also a funny way
of doing enterprise sales. - I want this thing, but you just need
 to migrate over to our platform first. - Yeah, yeah. Yeah, yeah. - All of the founders and extreme winners that I have studied have
this one trait in common: They have excessively
high energy levels.

[[117:20]](https://www.youtube.com/watch?v=ZSM2uFnJ5bs&t=7040s) If you're going to be
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for a twenty-five-dollar credit towards your membership. That is functionhealth.com/senra. - All right, I want to talk
about video games. I want to talk about AI. - Sure.
- I want to talk about them being related. I mentioned my friend,
Karim a few times. I went to his house last week, and
I was like, Dude, I'm talking to Tobi. 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 you thought you learned more about building a company from StarCraft than by 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 - Yeah, have said-- 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 again, this is like, man,
the world has such a weird way of somehow changing itself around
me to make the stuff that I thought was irrelevant, relevant, so as late in life.
It's absolutely amazing.

[[119:29]](https://www.youtube.com/watch?v=ZSM2uFnJ5bs&t=7169s) It's just like okay, so video games. Video games are best
for-- I mean, this depends very much on the video game, but in the
aggregate, very often, say, the good video games are simulations. They are a world upon itself, and you are a high-agency
actor, and you modify things. You perform actions,
you make decisions, and then the game rearranges themselves, giving you usually a very quick feedback
loop because otherwise it's unfun. But you learn about 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 when I was going
through my teens in the '90s, StarCraft was the biggest game. And 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.

[[120:32]](https://www.youtube.com/watch?v=ZSM2uFnJ5bs&t=7232s) But like, 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, right? 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 like, 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
that information is everything. Like, there's no right decision. There's only context in which
decisions turn out to be correct. And while resource management
is extremely important, you have to understand that resource
management is not just quantifiables. It's not just minerals and vespene 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,
than it is to actually attack their base.

[[121:42]](https://www.youtube.com/watch?v=ZSM2uFnJ5bs&t=7302s) 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 to a very high level, you will play the same people
over and over again. They get a sense for how you play. So at that moment, there's always been the people
who are just incredibly prepared. They're just like, they perfected
playing a single way, which my play was always different. Chess, StarCraft, all the same. Like, 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.
Their skill set is-- Their ability to play chess is the
crystallized intelligence, not the fluid intelligence,
to roll with the punches. And so, I learned a lot
about myself doing this. But I also learned a lot about
how do you, like You know, just like,
how to approach a game.

[[122:46]](https://www.youtube.com/watch?v=ZSM2uFnJ5bs&t=7366s) Like, how do you get better? 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, and 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
 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 Elo rating. 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, if you
were regressing on an absolute scale compared to all other
players in the world.

[[123:49]](https://www.youtube.com/watch?v=ZSM2uFnJ5bs&t=7429s) And I think that was a perfect
little sandbox to explore how to 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 teenagers years, given what I did afterwards. So, back to your AI question. I just find that working
with AI, like agents, especially for I mean,
we are recording this. This is like week three of 2026. If we would have recorded
this in week fifty-two of 2025, it would even be different. 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 agentic loops that are much more autonomous
and frankly, supported by models which didn't exist
at the beginning of December, that can perform at this level.

[[124:57]](https://www.youtube.com/watch?v=ZSM2uFnJ5bs&t=7497s) 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, I'm like, Man, this 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 double check,
sort of 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.
It is a fascinating time. It is just like I can't describe
how fast progress is right now. You know what I tell my team? It's like, 21 years now, starting
companies is really, really, really hard, right? So first years,
 just like, it-- that's interesting, and everything's urgent because
 you're getting to a margin. We got, like, within a week of running
out of money so many times, and sometimes we were bailed out.

[[126:01]](https://www.youtube.com/watch?v=ZSM2uFnJ5bs&t=7561s) Many times it was just like the clearance of the one-time try hurdles, which I've went through was like,
 millimetres at times. Like, there's so I bet you if
you rerun the first six years simulation ten thousand times, it would not succeed in
most of them, right? So in a way, luck is a big
component, timing, all these kind of things.
 People luck, especially. After that, IPO,
you think that's probably the most interesting thing, a
period of a company. I think it was hard and maybe
not terribly interesting. It's financing event at
the end of the day. Maybe, but some aspects were interesting, like figuring out-- 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 f***ing annoying, mostly.

[[127:04]](https://www.youtube.com/watch?v=ZSM2uFnJ5bs&t=7624s) So I'm just trying
to figure out, like 2026, man. This is going to be
hard and interesting. - Those are the things you're most
attracted to, hard and interesting? -Year twenty-one is like, this is going to
be the most interesting year in this company's history, probably in, I think, literally, everyone's career. Just everything is lined up. It's like, doesn't matter what you've got, everyone's going to 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 rederive everything? -You put out this internal memo where
you're just like... I think it's for, 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. -Yeah. -When did you put that,
that out, a year ago? -Yeah, no, maybe not quite, -but, like, something along those lines. -And people were just like:
-Yeah. "This is ridiculous." There was, like, some pushback. -Yeah. -And now, to your point about how fast
everything is moving, it's like, of -Yeah. -course, you would. -Yeah, exactly. People will look at that
memo in two years and just like, "He didn't say anything."

[[128:05]](https://www.youtube.com/watch?v=ZSM2uFnJ5bs&t=7685s) -Right. It's like saying the sky is blue. -Yeah, exactly. So does this excite you?
- But it's also like- - What's it like- Oh, yeah! Man, I love that. -Okay.
-It's like this is what I'm here for. It's just like I... If AI
wouldn't have happened, I don't think I would run
Shopify anymore. Like, there's much better
leaders if in times like- -Whoa, what?
 -If times are stable. -Yeah, but I thought you were
in love with this problem, -Yeah, but like I-
-this unsolvable problem. So you'd still work on it, but
you wouldn't be running it? What do you mean? -I mean, I think I would be no,
l might try my hand at a different aspect of helping people self-actualize. Like, my personal mission is
to because more entrepreneurship. I'm going to judge
my own career by: 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 message in a
bottle reading and self-introspection.

[[129:08]](https://www.youtube.com/watch?v=ZSM2uFnJ5bs&t=7748s) It was 2014. I was preparing
for my summer talk, and I'm like my biggest struggle
was with my own identity. I think I was mentally preparing
for the cosplay period, which I wish I wouldn't. But I like engineering. I want to spend my day hacking on stuff
and building things, not managing. And so, again, I used my trick partly
to give a talk on something that I was sort of come to realization,
but maybe not fully internalize. To 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.

[[130:10]](https://www.youtube.com/watch?v=ZSM2uFnJ5bs&t=7810s) 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 in life, my craft is actually
building things in general. I build.
I started with products, like code. I then create products, and now I create
companies that create products, and I engineer those. And that causes more
of this kind of thing. So I kind of wrote that as a personal
mission for me and said, I will attempt to run Shopify and try to be the best CEO I can be until someone taps me
on the shoulder and says, 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.

[[131:10]](https://www.youtube.com/watch?v=ZSM2uFnJ5bs&t=7870s) 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 against that. But people were saying, 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 they're crony capitalistic. There's, like, a lot of dirty part
I'm as 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 s***." 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 why It's so simple,
but it's just not easy, right? In any which way. Companies hate the
unquantifiables, in fact. It's amazing to see it. Like, man, you hire
 the first team together, and if you get to talk about building a company on a podcast,
that means you were successful.

[[132:13]](https://www.youtube.com/watch?v=ZSM2uFnJ5bs&t=7933s) So the first team clearly did this, and therefore,
the first team was very good. And the first team,
you hired based on your gut. You just knew. These were the people you needed. You make mistakes, but you correct. And that's all just sort of like judgment,
taste, maybe even bias. 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, without bias,
you actually have no convictions. Like, you should try your convictions. This is really what
I learned from the thing. So you make the first
team as a pure play, this is the best I know
how to make decisions, and then 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. Well, 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 a cheat sheet.

[[133:15]](https://www.youtube.com/watch?v=ZSM2uFnJ5bs&t=7995s) The people you are trying
to avoid hiring are the people who would study a 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 is other things that 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.

[[134:16]](https://www.youtube.com/watch?v=ZSM2uFnJ5bs&t=8056s) I might change 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 cheat code
to always being right is just change your opinion every time
you get better information. Because as you get closer to a point that
you have to make a decision, that means you will
wind up with the right one. It's like if you'd not stop at some point
to incorporate new information. And if even if you are wrong, and if I figure it out again, what do you do? Like, you have to you have
one momentarily chance to steeryour 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? What, like, why? For what? Again, what's the job you want to do? It's like, you want
to look good or be good. And so you're going to like, just change it needs
to be okay to change your mind when better
information comes along.

[[135:19]](https://www.youtube.com/watch?v=ZSM2uFnJ5bs&t=8119s) 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 to do. I'm in this. I'm probably on multiple sides. The reason is actually--
This is the almost most important thing, everything comes in layers. I guess there's
just so many different like, what's the optimal operating system in some frame of reference,
is often contradictory and the opposite of
a larger frame of reference. Because, you know,
I like this box, talking about boxes, because inside of a box, it is
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 wasn't
the right box to pursue. Maybe then you need to figure out-- like, maybe you need to bend
 it and say, "Okay, actually, the problem is actually an
aspect of another problem, and maybe if I put a larger box, if you solve that, then this problem
doesn't even need to be solved."

[[136:20]](https://www.youtube.com/watch?v=ZSM2uFnJ5bs&t=8180s) 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 much more with longer timelines. You need to actually
make bets at a high level, but you shouldn't make bets with
infrastructure, because you can. In engineering, again,
you can run benchmarks, figure out if something is fast enough, and it'll be a yes or a no. You don't need to bet on
the trajectory of databases are growing 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, you need to figure out Well, right now you have to figure out
how is AI going to change that market. It's because you need to
figure out if you join market or is that market going
to be a temporary, unnecessary aspect of something
else we are already doing, and will it be absorbed into
a different category of products? And is this still valuable
for you to do, and so on. And what are humanoid robotics going
to do to the world of logistics?

[[137:23]](https://www.youtube.com/watch?v=ZSM2uFnJ5bs&t=8243s) And you got to work with
trend lines mostly, right? Which is not important in many
other decision-making. So 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 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 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. You work on customer support,
well, you're helping people, literally not giving up on being entrepreneurs. Like, 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 attitudes or something that aren't actionable.

[[138:27]](https://www.youtube.com/watch?v=ZSM2uFnJ5bs&t=8307s) 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 is also available on
davidsenra.com. I love the idea of tying everything
back to the mission.

[[139:29]](https://www.youtube.com/watch?v=ZSM2uFnJ5bs&t=8369s) - I do hope people go through
the transcripts of this conversation.
- Mm-hmm. - I think it's going to be incredible. - I printed out some of them. - And I'm sure people are going to
tell me about all the contradictions. It's just- And I think, again,
this is the fun bit. 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 two hundred
 and fifty of these things since then. Like, what, do you think
I'm doing this to stay the same? - Right.
- Like, what's the point? - It's a good point. - I had high expectations
of this conversation. Tobi, 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 which 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 with my books as well. - I'll tell you one thing. Because I'm not sure
if I-- maybe I've shared this publicly, but I think you are going to get more
mileage out of this than anyone else. When we did surveys with our customers
about because we need to identify where are our customers, what they do, what do they read, these kind of things.

[[140:34]](https://www.youtube.com/watch?v=ZSM2uFnJ5bs&t=8434s) What we have found, this is a long time
ago, before your podcast existed, it was, like, almost 80%
or high 70% people checked the box saying they have someone who, if they sent an
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. - And then- It's not like in
the general population, though, right? - Eventually, I clued in. I think it was probably on Wikipedia when I read about
survivor bias, survivorship bias, and I realized, "F***, 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. And the concept of entrepreneurship is
so underexposed and underexplained. It's sort of got better in the ten years,
fifteen years since these surveys. But I love what you're doing because
 you're just bringing this con-- 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.

[[141:40]](https://www.youtube.com/watch?v=ZSM2uFnJ5bs&t=8500s) It's 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 their 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 making, putting this part
into more people's toolboxes, because it's 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 than entrepreneurship. I think making things will be much
simpler in the world of just-in-time manufacturing and 3D printing,
and additive and raisin printing, and all these kind of like 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 AI is 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.

[[142:52]](https://www.youtube.com/watch?v=ZSM2uFnJ5bs&t=8572s) It's capitalism, the best parts,
and I think it will be much more common and much more exciting,
and it's so fun to work on. And like, in that way, you and
I work on the same project, which I think is super,super cool. It's because the information
gap is getting the stories out, telling people that's possible, and it's so
important for people to then try, and hopefully then
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, Tobi.
- Awesome, man. - I hope you enjoyed this episode. Please remember to subscribe wherever
you're listening and leave a review, and make sure you listen
to my other podcast, Founders. For almost a decade, I've
obsessively read over four hundred biographies of history's greatest
entrepreneurs, searching for ideas that you can use in your work. Most of the guests you hear on this
show first found me through Founders.


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