They say that many of the best business ideas are born out of anger – deep frustration with something that just should work better. Shopify is no different: it was launched in 2006 after the founders tried to open an online snowboarding store but found the existing software fell short of their needs. That same platform now empowers more than 800,000 entrepreneurs and was involved in purchases by more than 100 million individual shoppers in 2016. Designed to be invisible, it has integrated into 400,000 individual retail shops and brands. And the company has done the unthinkable – encroaching on Amazon’s turf to carve out a lucrative niche in e-commerce. As Shopify CEO, Tobias Lütke put it, “The information age is rapidly changing how commerce is done and by whom … by harnessing these changes to empower entrepreneurs, Shopify is meeting a need that is not only global and growing, but that is likely to continue growing for the foreseeable future.” And it seems that enabling a new wave of American dreamers is working: no other software as a service company has crossed the $one-billion-dollar revenue mark at a faster growth rate than Shopify.
Shopify has helped democratize people’s ability to build a brand. What has the impact been?
Shopify allows the next wave of entrepreneurs to disrupt brands and create a retail environment with more, not fewer, voices. One of the things we worry about a lot, and our mission, is that we stand against the homogenization of retail; it’s not right that just 3 companies dominate the conversation. We believe that there are lots of big marketplaces that are great for generic products, but the world is a more interesting place when you have more voices in the retail ecosystem. We’re allowing disruptive brands to succeed in a world where things have been stacked against them, by giving them access to enterprise technology that only a handful of companies would have previously been able to afford. There was a time when if you wanted to sell something online, you needed to be quite technical yourself. You needed an army of engineers. Shopify’s innovation was to give you everything you need to start, sell, market and manage a business, even if you yourself are a layperson.
Shopify recently launched a TV ad. Can you tell us about what’s driving the desire to have a greater presence?
Our intention is to become a 100-year company, and to do that we have to build a brand. Shopify has built a name by having more than 820,000 merchants, but we haven’t yet built a household name for our brand. One activation I’m proud of is “That Storefront” campaign. We took over empty retail locations and turned them into ‘imagine your business here’ moments to let the next set of entrepreneurs really imagine their ideas come to life. We leveraged abandoned storefront inventory and posted signs with messaging: “That Business … you thought of 3 months ago could become a business. Shopify. Let’s build you a business.”
I was so proud of the creativity of that idea; those stores became new channels. It’s an interesting and effective use of out-of-home space that creates a new medium for advertising. It also sends a compelling message that could potentially outlive the campaign. One thing we hear a lot is how challenging it can be to find meaning in data, and then to use that meaning to make decisions about the future. We have a real sense of where the market is going and what will happen in the future. We’re not the kind of operation that relies exclusively on data. We always say that we’re data-informed. We believe there has to be room to apply judgment and creativity as well. I was a data scientist myself, running analytics before I was a CMO. It’s become a convention for businesses to say, ‘We’re data driven,’ but anyone who has been a practitioner of data analytics realizes that there are limitations of what data can do. All models are designed to fit the past, but inevitably fail to predict something in the future because something foundational changes. That’s why it’s so important to incorporate good judgment and creativity to understand what the future can bring. We combine market research on brand and customer sentiment, an intuitive sense of what makes our platform robust from a product perspective, as well as what we think will be successful for creative. Those 3 things come together to form a campaign.
What is next for you and your customers?
Some companies say, ‘We’re customer obsessed.’ We say, ‘We’re merchant obsessed.’ What’s next for us is what we’ve always done, which is to be everywhere that our merchants might want to sell something, so they can be everywhere where their customers might want to buy. We will continue to provide and expand on the tools you need to run a fully thriving business. Over time, we’ve gone from enabling businesses to easily create online stores, to adding merchant solutions, to incorporating shipping rates, to buying ads on Facebook and Google within the platform, to getting small business loans through Shopify Capital on our platform. Our objective is to essentially be evergreen and everywhere our merchants want to sell, with the full suite of products you need to sell successfully and to be a true retail operation.
What keeps you going?
I’m very lucky to be in a business with an ambition to be here in 100 years’ time. In general, for CMOs, there is a lot of pressure to do more and faster with less. A lot of that desire to do more, better, faster and with less is really about the drive to get short-term results. At Shopify, we don’t suffer from any version of ‘short-term-ism.’ We’re in it for the long-term.