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

“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.

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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):

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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

• Snowdevil
• Ottawa, Canada
• BeaverTails
• Canada Learning Code
• Digital Industries Table
• Tobi Lütke of Shopify: Powering a Team with a ‘Trust Battery’ by Adam Bryant, The New York Times
• Rubi-Con
• RailsConf
• Ruby on Rails
• The 4-Hour Workweek: Escape 9-5, Live Anywhere, and Join the New Rich by Timothy Ferriss
• Our Canadian CEO of the Year You’ve Probably Never Heard of by Trevor Cole, The Globe and Mail
• New York Stock Exchange
• Canadian Software Company Shopify Files for U.S.-Canada IPO by Maria Armental, The Wall Street Journal
• Spotify
• Slack
• eBay
• The Box: How the Shipping Container Made the World Smaller and the World Economy Bigger by Marc Levinson
• Malcom McLean and Containerisation, Maersk Line
• High Output Management by Andy Grove
• Drive: The Surprising Truth About What Motivates Us by Daniel H. Pink
• Influence: The Psychology of Persuasion by Robert B. Cialdini
• The Silk Road by Joshua J. Mark, Ancient History Encyclopedia
• The Industrial Revolution by Cynthia Stokes Brown, Khan Academy
• Dilbert by Scott Adams
• “Entrepreneurs Are the Only People Who Will Work 80 Hours a Week to Avoid Working 40 Hours a Week.” -Lori Greiner
• Craigslist
• How Sand Hill Road Became the Main Street of Venture Capital by Avey Alba, Wired
• Communication: Trust and Crocker’s Rules by Malcolm Ocean
• Extreme Ownership: How U.S. Navy SEALs Lead and Win by Jocko Willink and Leif Babin
• The Nine Enneagram Type Descriptions, The Enneagram Institute
• Grit: The Power of Passion and Perseverance by Angela Duckworth
• Fixed vs. Growth: The Two Basic Mindsets That Shape Our Lives by Maria Popova, Brain Pickings
• Mindset: The New Psychology of Success by Carol S. Dweck
• Dropbox
• Public Speaking Mastery, Dale Carnegie Training
• How to Build an Edge: Develop Your Talent Stack by Celestine Chua, Personal Excellence
• The Official PokÈmon Website
• Start-Ups Aren’t Cool Anymore: Are Millennials Giving Up on Entrepreneurship? by Stephen Harrison, The Atlantic
• Build a Business by Shopify
• Maker of iPad Cases Wins Shopify Competition (and $100,000) by Lora Kolodny, The New York Times
• The Great Gatsby
• Moleskine
• DODOcase
• Barack Obama iPad in DODOcase, HuffPost
• Neuromancer by William Gibson
• Kickstarter
• Dyslexia Does Not Stop You Coding by Simon Bennett, Medium
• Awareness: The Perils and Opportunities of Reality by Anthony de Mello
• Dungeons & Dragons
• Air Jordans
• How to Increase Your Luck Surface Area by Jason C. Roberts, Codus Operandi
• Alibaba’s Futuristic Supermarket in China Is Way Ahead of the Us, with 30-minute Deliveries and Facial-Recognition Payment — and It Shows Where Amazon Is Likely to Take Whole Foods by Harrison Jacobs and Annie Zheng, Business Insider
• WeChat
• Rotten Tomatoes
• The Business Of Video Games: A Multi Billion Dollar Industry by Kevin Anderton, Forbes
• The Elements of Style by William Strunk Jr. and E. B. White
• A Guide to the Good Life: The Ancient Art of Stoic Joy by William B. Irvine
• The Courage to Be Disliked: The Japanese Phenomenon That Shows You How to Change Your Life and Achieve Real Happiness by Ichiro Kishimi and Fumitake Koga
• What is an Adlerian?, North American Society of Adlerian Psychology
• Story of Cities #39: Shenzhen — From Rural Village to the World’s Largest Megalopolis by Ilaria Maria Sala, The Guardian

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

• David Heinemeier Hansson
• Francis Ford Coppola
• Harley Finkelstein
• Seth Godin
• Malcolm McLean
• The Vanderbilts
• Andy Grove
• Daniel Pink
• Martin Fowler
• Kent Beck
• Robert Cialdini
• Fiona McKean
• Scott Lake
• Pointy-Haired Boss
• Dilbert
• John Phillips
• Lee Daniel Crocker
• Jocko Willink
• Angela Duckworth
• Carol Dweck
• Josh Waitzkin
• Drew Houston
• Scott Adams
• Marc Andreessen
• Warren Buffett
• Dale Carnegie
• Lora Kolodny
• Leonardo DiCaprio
• Tony Robbins
• Patrick Buckley
• Craig Dalton
• Barack Obama
• William Gibson
• Anthony de Mello
• Peter Mallouk
• Jürgen
• Sam Harris
• Ray Kurzweil
• William B. Irvine
• Alfred Adler
• Sigmund Freud

The Tim Ferriss Show is one of the most popular podcasts in the world with more than one billion downloads. It has been selected for "Best of Apple Podcasts" three times, it is often the #1 interview podcast across all of Apple Podcasts, and it's been ranked #1 out of 400,000+ podcasts on many occasions. To listen to any of the past episodes for free, check out this page.