Founder to CEO: Tobias Lutke, Shopify
For my second installment of the Founder to CEO series, Im very pleased to
share my conversations with Tobi from Shopify.
I have had the pleasure of working with Tobi and the Shopify team in the past.
They are building a truly special, market-leading company. Tobi comes to Canada
from Germany. Before co-founding Shopify, Tobi was active in many open source
projects. The best known of which is the Ruby on Rails framework where Tobi
served as a core team member.
As you will learn from this post, Tobi is probably the most brilliant high
school dropout you will ever meet.
Like many of us, Tobi learns by trying. He had trouble in school but computers
fascinated him early. He learned arbitrage in order to earn money to buy
computers. He was still in Germany at the time and was able to do co-op work
terms instead of spending time in the classroom. His interest in retail was
sparked at one of those early co-op terms.
Never set out to build a business
Tobi likes programming for artistic purposes. Just for the sake of it. He and
his partners started an online snowboard store that became Shopify just to
create a good job for myself.
A reluctant leader
Tobi was not the first CEO at Shopify. By his own admission he had paid no
attention to the business side of things before his original co-founder left.
Even after he left, Tobis first reaction was to find a replacement CEO. But,
even in those early days Tobi knew he wanted to build a product and tech-centric
company. In addition, he knew that the person who runs the product should run
On being CEO
Ignorance is bliss: According to Tobi: Ignorance is the single biggest driver
of entrepreneurship. It was two years before it ever occurred to me that this
might not work.
Self-awareness and introspection are key: Tobi has always had this. I perceive
my days as if there is a camera behind me. I can replay my day and learn from
it. Introspection is all youve got. Youre not going to get a lot of feedback
If, like most startup entrepreneurs youre mind is always going, Tobi recommends
meditation to help train your mind for introspection. (I completely agree with
As CEO of a growing market leader Tobi lives in the future. He always has to be
thinking years ahead. If he talks to his team about what hes thinking about he
can defocus them. It is a great discipline and insight to realize this. Human
nature will make us want to work on what the CEO is thinking about. This does
not mean Tobi doesnt share his future plans, but it does mean he is careful
about not defocusing the team from short term execution.
It takes a village: There is a strong ecosystem around Tobi: An early angel
investor continues to play a strong mentorship role. Benchmarks Peter Fenton
helped him put together his 1st investor deck (great when you consider that Tobi
never took money from him).
Tobi thinks everyone that is serious about their performance should have a
coach. He and most of his exec team have one.
When you are the CEO, you never get to blame anyone ever again. Everything
that goes wrong is your fault.
Tobi likes Oscar Wildes approach: Be yourself. Every other personality is
taken. Design the CEO role around your strengths and passions. Companies are
manifestations of their founders. Shopify is good at all the things I am good
at and bad at all the things I am bad at. Dont try and be someone else. Be
Advice to CEOs: Build for a problem that you have. This allows you to do high
bandwidth customer development with yourself giving you an unfair advantage.
Tips & Tricks
30 day trial: Tobi frames all new things as a trial makes it easy to try and
fail. If its a formal initiative there is more pressure for it to work. This
removes the risk. That way you dont look flimsy if something you introduced
Weekly accountability: Tobi gets a list of key accomplishments and planned
objectives every Monday from his team members. This makes it easy for him to
know what to talk to his team about.
Dont do top down process. Only the people who use a process are allowed to
come up with a process. It should not be imposed from above.
Perspective: I truly care about macro and micro things but nothing in between.
I can zoom in on tiny details and zoom out to big vision. Tobi is a lot like
Mark Zuckerberg in this respect. All great CEOs must be able to context shift in
Weekends / offsites are better for working ON the business (because youre not
Be special: Admittedly it takes resources to do some of the things that Shopify
does but from their office to their perks that include free housekeeping they
are focused on creating a special experience for their team members.
Speaking to VCs was one of the best ways to learn about my business.
As an introvert Tobi has learned to act extrovert. Learning to act is a
tremendously useful skill but it takes its toll. I have to unplug to recharge
It will come as no surprise that Tobi and his team have thought a lot about
culture. Its so important that one of the founders, Daniel, has assumed the
role of Chief Culture Officer.
So, what is culture mean at Shopify?
- Design, product & technology hold supreme importance
- Elite individual performance expectations
- They dont equate long hours with high performance
- No one owns something internally. We all own everything that everyone else
made. Everyone is empowered to fix something that is broken. Does not matter
who made it.
- Retraining: 1st 6 weeks are designed to get people to accept that there is a
completely alternative way here
- Complete transparency: Tobis the first to admit if he does not understand
Begin with the end in mind: Tobis approach is to always have the best tools for
the job in order to make the job simple. The Shopify team took a year to change
Rails to make it perfect for Shopify. Make the right thing easy. This is a
metaphor for building businesses that work well This approach to building his
company comes right from the rails framework.
Performance is not about winning. There are only two kinds of teams: ones that
get better every day and ones that get worse. We have to get better on
average every day. If we do this every day eventually we will be unstoppable.
This thinking leads you to get a coach. Youd be crazy to go without one.
Final thoughts from Tobi:
Dont read too much. Ignorance is so important.
Lets build a company we wont be embarrassed about 50 years from now