Tobi Lütke — From Snowboard Shop to Billion-Dollar Company (#359)

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“Feedback is a gift.” — Tobi Lütke

Tobi Lütke (@tobi) is the founder and Chief Executive Officer of Shopify. In 2004, Tobi began building software to launch an online snowboard store called Snowdevil. It quickly became obvious that the software was more valuable than the snowboards, so Tobi and his founding team launched the Shopify platform in 2006. He has served as CEO since 2008 at the company’s headquarters in Ottawa, Canada.

Tobi is an active advocate for computer literacy and education, and serves as a board member of Canada Learning Code, an organization working to give all Canadians access to digital skills. In 2014, Tobi was named The Globe and Mail‘s CEO of the Year. He served as Chair of the Digital Industries Table, an advisory board commissioned by the federal government to provide recommendations on how to turn Canada into a digital leader.

Please enjoy!

Listen to the episode on Apple Podcasts, Spotify, Stitcher, Overcast, Castbox, or on your favorite podcast platform.

You can find the transcript of this episode here. Transcripts of all episodes can be found here.


Want to hear the story of a go-getter who launched his now seven-figure business on Shopify? — Listen to my conversation with SpyGuy’s Allen Walton in which he describes how he made the switch from overworked and under-appreciated employee to entrepreneur (stream below or right-click here to download):

#351: Real 4-Hour Workweek Case Studies — Allen Walton and SpyGuy, The Path to Seven Figures
Download


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QUESTION(S) OF THE DAY: What was your favorite quote or lesson from this episode? Please let me know in the comments.

Scroll below for links and show notes…

SELECTED LINKS FROM THE EPISODE

  • Connect with Tobi:

Website | Twitter | LinkedIn

  • Connect with Shopify:

Shopify | Twitter | Instagram | Facebook | YouTube

SHOW NOTES

  • How far back does Tobi’s obsession for optimization go? [05:58]
  • How big is Shopify today? [08:14]
  • How did Tobi and I first meet? [09:13]
  • From my perspective, Shopify is a living example of what happens when the good guys win. [11:45]
  • Did Tobi’s early authority problems lay the groundwork for his current success? [12:31]
  • Something Tobi and Seth Godin agree on: the current characteristics of a temporary solution shouldn’t be mistaken as the ultimate objective. [18:57]
  • Even though you probably didn’t learn about him in history class, here’s how entrepreneur Malcolm McLean changed the world. [20:25]
  • A few of the books Tobi has found indispensable for finding footing in the business world. [23:13]
  • As a self-described slow reader with dyslexia, Tobi has to be selective with the books he takes in. By what criteria does a book make it to Tobi’s “to read” list? [26:55]
  • How Tobi’s role at Shopify changed from passionate programmer to reluctant CEO, and how he rose to the challenge to crash course his way through the learning process. [29:50]
  • When pitching to VCs on Sand Hill Road, this is how Tobi rolls (literally). [36:05]
  • Good and bad decisions Tobi made as a fledgling CEO. [37:36]
  • As a man whose expectations for employees match what he expects from himself, is Tobi difficult to work for? [39:31]
  • How does Shopify company culture facilitate the thick skin required to abide by Crocker’s Rules? [44:12]
  • Feedback is a gift. [47:37]
  • How the Enneagram system is used at Shopify as an empathy exercise rather than a personal horoscope. [48:56]
  • How can a growth (versus fixed) mindset — per psychologist Carol Dweck’s work — be fostered? [50:30]
  • Tobi’s definition of Hell. [55:24]
  • How Scott Adams’ “talent stacking” applies to Tobi’s career trajectory. [58:03]
  • Tobi addresses the factors that contribute to an underreported entrepreneurship crisis. [1:03:08]
  • How Shopify’s annual Build a Business competition came about, what it aims to accomplish, and some of the hurdles it has faced along the way. [1:08:39]
  • The first Build a Business winner and how its success was boosted by a happenstance presidential endorsement. [1:15:43]
  • The fascinating patterns, principles, and stories we observe every year when Build a Business time comes around. [1:17:39]
  • Does dyslexia affect Tobi’s coding? [1:23:49]
  • In search of an extended sense of peace? Here’s a book recommendation. [1:24:12]
  • What Tobi means by “the next box.” [1:25:59]
  • What Tobi learned about the next box from Jürgen, his mentor. [1:30:18]
  • Is it possible to understand the box you currently occupy and aim for the box you want to occupy next? [1:33:37]
  • In what box does Tobi see himself at the moment? [1:34:37]
  • How does Tobi choose ways to stress test possible exits from his current box? [1:35:38]
  • We examine the reasons behind Tobi’s discomfort with comfort on a business level in spite of generally considering himself “the most fortunate person on the planet” on a personal level. [1:36:50]
  • On identifying himself as the bottleneck that held back Shopify for a period of time, what caused this, and what Tobi is doing to ensure he doesn’t take on this unenviable role again. [1:40:21]
  • Why does Tobi think the business not only survived this period in the bottleneck, but actually began to thrive? [1:42:35]
  • Increasing “luck surface area” and staying in touch with the front lines by getting in the trenches from time to time. [1:47:44]
  • How Shopify’s chief investor from the early days still helps Tobi focus on what’s important — by ensuring he’s not “meddling” in minutiae. [1:49:13]
  • Though the future is admittedly uncertain, here are two things Tobi believes a forward-looking CEO can do to peek into what seems most probable. [1:51:54]
  • Is modern China showing us tomorrow today? [1:54:05]
  • What can the massively successful but mostly ignored video game industry teach the business world about the human psyche? [1:55:00]
  • What would Tobi’s billboard say? [1:57:18]
  • What books does Tobi most frequently gift? [1:57:49]
  • What is the Adlerian separation of tasks? [2:00:01]
  • Why Tobi believes we, as a society, need to celebrate and support entrepreneurship now more than ever. [2:00:52]
  • What cities does The Oracle of Ottawa believe are doing the best job of taking business into the future? [2:03:00]
  • Parting thoughts. [2:04:32]

PEOPLE MENTIONED

Posted on: February 7, 2019.

Please check out Tribe of Mentors, my newest book, which shares short, tactical life advice from 100+ world-class performers. Many of the world's most famous entrepreneurs, athletes, investors, poker players, and artists are part of the book. The tips and strategies in Tribe of Mentors have already changed my life, and I hope the same for you. Click here for a sample chapter and full details. Roughly 90% of the guests have never appeared on my podcast.

Who was interviewed? Here's a very partial list: tech icons (founders of Facebook, Twitter, LinkedIn, Craigslist, Pinterest, Spotify, Salesforce, Dropbox, and more), Jimmy Fallon, Arianna Huffington, Brandon Stanton (Humans of New York), Lord Rabbi Jonathan Sacks, Ayaan Hirsi Ali, Ben Stiller, Maurice Ashley (first African-American Grandmaster of chess), Brené Brown (researcher and bestselling author), Rick Rubin (legendary music producer), Temple Grandin (animal behavior expert and autism activist), Franklin Leonard (The Black List), Dara Torres (12-time Olympic medalist in swimming), David Lynch (director), Kelly Slater (surfing legend), Bozoma Saint John (Beats/Apple/Uber), Lewis Cantley (famed cancer researcher), Maria Sharapova, Chris Anderson (curator of TED), Terry Crews, Greg Norman (golf icon), Vitalik Buterin (creator of Ethereum), and nearly 100 more. Check it all out by clicking here.

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29 comments on “Tobi Lütke — From Snowboard Shop to Billion-Dollar Company (#359)

  1. Hey Tim,

    Thoroughly enjoy your podcast and the guests you have. It has been enjoyable to say the least. Whenever I was listening to certain episodes regarding psychotropic medicines I could not help to thank about Wade Davis. Have you attempted to have him on an episode? It would be great considering his proximity to a significant amount of early western research.

    Like

  2. Just wanted to share with you how much I enjoy your Podcasts. I listen to them during my commute and find the topics and interviews fascinating.
    Keep up the good work!

    Like

  3. Dear Tim,

    you probably hear “thank you” so often that it might lose its emphasis, but I cannot understate how valuable your podcasts are for me. I feel an inner sense of peace when listening to your podcasts, probably because I feel deeply understood.

    I especially love the nuances in how you’re doing your interviews, following your own curiosity and deepening the conversation, being so present with your interviewee. The way you connect things and what you share about yourself often makes me think: That’s just like me. And realise: I can do even better. Actually, I name your podcast as one of the main resources in learning how to cope with ADHD – paradoxically most great resources don’t name ADHD explicitly very often (too bad!), but are detailed descriptions of one’s own experiences that others can draw from – and your podcast is just a goldmine for that.

    Most of all, I wanted to say: Thank you.

    Anastasia

    Like

  4. “Feedback is a gift ”
    It was great to listen another inspiring story about Toby. Thanks to Tim and team who made this possible.

    Like

  5. As a fellow Canadian and German I am so happy that Tobi has found the success he has. His mindset, way of thinking and attitude toward life is something to be celebrated. There are not may folks is his position that are as humble as he is. Tobi leads by example. Let that be an example to us all. Clearly I am a fan-boy (don’t mind admitting it).

    Like

  6. Among many favourite quotes from this podcast, I’ll pick: “Failure … we call it the successful discovery of something that did not work.” Really enjoyed this one, so had to comment and forward it to a friend or two who are starting or running small businesses. – Thanks!

    Like

  7. Love Crocker’s Rules – hadn’t heard of it before – but very useful. And love your work. It has been more helpful than you could imagine!

    Like

  8. Hi Tim,

    Thanks for another awesome and inspiring podcast!

    I was wondering if you’d be interested in doing business here in Brazil. I’ll be honored in talking to you 🙂

    Best regards

    Like

  9. I really enjoyed on this interview with Tobi. I myself is from Canada. I really like his attitude on the optimization methods that catapulted to his present day success with Shopify. I hope i listen to more podcast to inspire me on my online business pursuit.

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  10. An inspiring guy.
    Said a few things that made an immediate impact on me.
    The one about Hell being meeting what you could have been just before you die. That seems a lot more encouraging than the usual, “you only have one life” mantra.
    The other one was what he said about getting your own cellphone made in a day in Shengzen.
    Make one wonder what is really possible. Most folk never see the kind of stuff that puts those ideas in their heads. Such is the value of these podcasts.
    I’d love to hear more of this guys thoughts.
    It’s also nice to know that folk like this are looking after my Shopify store……..

    Like

  11. A megapisode.
    Tobi’s analogy around the self-awareness of the box you’re in was profound. And, I had the notebook out to jot “Hell is meeting the best version that you could have become, at the end of your life”. And, glad to hear Tim reference “Awareness” as mentioned in the Peter Mallouk episode. After one-clicking it to Kindle, I had to buy a hard copy too this last week…

    Like

  12. Tim, I second all the positive responses here, and also wanted to say I find it somehow inspiring that you too are a Six on the Enneagram. I share some of your scepticism about it (naturally), but admire greatly how you’ve triumphed over the doubt and anxiety inherent to our Type which can be such huge impediments to success.

    Like

  13. Haven’t you interviewed Tobi before? I felt a good exchange between you two, maybe it’s the fact that you know him, given that you were an early investor in Shopify. How synchronous! Got to know Shopify back in 2010 when I was setting up an e-commerce business, a multibrand with little to no stock, on demand basis. After some months, the production couldn’t catch up with the on demand orders, so we had to cancel some orders and send apology emails with discounts for other products. During the podcast Tobi emphasizes quite a lot on failure and how that takes to new directions. That also was a path I forcefully had to take, and yes, I ended up in yet again new failures but also surprising new success entry points. You mention in Tools of Titans that you are an avid note taker. How do you define failure when you have to sit down to journal about that? Is it just that you notices a couple days in a row that go bad and that pushes you into new decisions? When do you admit to yourself something -failed-?

    Like

  14. Dear Tim,
    I really enjoyed listening to Tobi and You during a long car ride.
    Tobi is a insoring person and I follow his journey for a while.
    Propably because I’m not too far from his hometown here in Germany and I’m a new shopify customer since few weeks to built up a side business selling items I advice my clients while I’m runnung several practices as a Physio.

    After Tobis Episode I listened to Lebron James and Mike Mancias talk.

    Keep it up! It’s always fun and your conversations let me start going around questionsmarks to understand them.

    Cheers from Germany,
    Axel

    Like

  15. Thanks for having Tobi Lütke on your podcast, Tim. This is one of the few episodes I listened with great intent until the end. (I often stop and start 2–3 times due to the volume of content, and lack of time.) My favorite quote at [31:17] put a smile on my face: Tobi shares his appreciation of podcasts and the ability for anyone to hear conversations normally inaccessible to the common-folk like myself. Thanks for letting us be “a fly on a wall while two experts talk amongst each other.”

    Like

  16. Tim, This is a sincere thank you for the amazing impact you’ve had on my life and the way that I think about what’s possible for me. I’ve been with you as a listener/reader since 2015. The Four Hour’s have all brought a lot to my world and my thinking. I’ve always appreciated your use of divergent thinking to tie together seemingly dissimilar patterns. I’ve also always appreciate how you will take a moment to notate how many times over a given habit/ritual has been repeatedly a habit of the ultra successful. What got me most about Tobi’s interview is the fact that it was another amazing example how important it is to get your product or service into the market and then listen to customers as much as possible and react with lightning quickness. I loved when Tobi would have overnight coding sessions to add features that were missing… Do whatever it takes because that’s always what it takes. Keep doing what you’re doing. -Steve

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  17. Dear Tim,
    Dear Tobi,

    Really great Episode! Thanks a lot.
    Tim, your Podcast (and your books) improved my personality a lot. So keep on ging.

    Would have loved if a part of the conversation would have been in German – just to hear your German language skills Tim. Danke!

    All the best from the Munich,

    Dirk.

    Like

  18. Very much appreciated the podcast! Great episode! One minor thing – you always ask your guests for books and I really want to read the recommendations but I need to dig into the transcript to find them later. Any way to list them in a separate section in the references? You and Tobi know it’s all about efficiency. Thank you for considering!

    Like

  19. Hi Tim! wonderful and illuminating podcasts!
    I am very keen to know you take on the following question:
    can one master any advanced mathematics field e.g. Algebraic Topology as efficiently and smartly as you do in your entrepreneurial endeavour.

    Thanks!

    Like