Speaker unverified: evaluation

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…urney that might have gone a little bit too far on, “How should this be done?” This is one of our areas where probably Shopify is the weirdest bit of software ever made, but like, it’s working for us. So the internal systems you use will subtly affect the decisions that you make. Everyone's probably been in meetings where it's like, “Oh well we can't do that because the system doesn't support it.” And so again, do you want to have a Workday designed compensation system? Probably not. You wouldn't frame it that way. Which is why again, it's important that people think about what is the vision they want and does this offer support. I’m trying to make… true true. There were the kits in the LAN parties of the '90s that set up the internet sharing for everyone when that was still difficult. I'm a tool maker, infrastructure thinker in my entire life and I deeply believe in environments that cause people to accomplish bigger and better things than what they even imagined they could have done. Marshall McLuhansays first we make the tools and then they shape us, or something along those lines. I have a terrible memory for exact quotes, but the sentiment is right and so I think this is powerful and it's something I want to channel at every level. Again, I want the people who have a utilitarian problem of, “Hey, I need an online store” to accidentally catch Shopify because this is the go-to software. Having opinionated software that you use to tweak the environment. What I tend to visualize, it's like what are the things if you're sitting with a friend over drinks in an Irish pub… I’m with you so far. And the question is like, “Hey, you've done an online store, you've done an e-commerce business, you've done a retail business for Shopify, would you do this again?” The answer to the question is hopefully “hell yes.” And then there comes a list of things that we would like to do. Amongst bosses, it just makes it easy. It allows me to build the business not feeling like I have—when you try to paint a painting and you have mittens on—this sort of, there's perfect vision in your mind but you can't get it out because the tools… We've all used software like that. Exactly. So another thing is that it keeps me cutting edge. We are going through an enormous platform shift. Shopify predates smartphones like a software, so we have seen multiple platform shifts and usually what happens when you study any kind of industry upheaval or recession or anything, it's hardest on the small businesses, but really big businesses get bailed out anyway. And everyone in between has usually the line of credits or whatever capital to make it through. You're talking about an economic recession. Economic recession. So, something happens in the world, small businesses are the ones who are wiped out. The failure rates during recessions is enormous, and that's a huge drag on economies because 60 to 80% of all people will work for small businesses. d, small businesses are the ones who are wiped out. The failure rates during recessions is enormous, and that's a huge drag on economies because 60 to 80% of all people will work for small businesses. I think people felt this very viscerally in COVID with restaurants, which were obviously particularly hard hit by COVID. But I think people could see how shallow the balance sheets were because entire streets turned over with new storefronts. It was a very visual representation for people of how fragile a lot of the small businesses are. Yeah, and I mean many, many places never recovered. It's a very organic process by which an area becomes sort of hypercritical mass of interesting stores that then has people come there and just like this builds up over very, very long periods of time. Entire city’s centers can shift in these times, and so it's a very precarious balance and they have very tight margins. There's so much that makes them fragile systematically that at least all their sales disappearing because suddenly most people purchase from their mobile phones, that just their website doesn't work on—it's not their job to stay current with these kinds of things. So just inoculating from all these kinds of shifts, it's a really important part of a business. So you're talking about some of the disadvantages that small businesses have. I was realizing recently it actually really hit me when I went to buy something from a very large, famous brand—name redacted to protect the guilty—but very big, very storied. I was going through the e-commerce experience and it was horrendous. It was so bad and I realized that thanks to Shopify, we are now—I don't think it's hyperbole to say—we're living in an inverted world, where very large retailers are worse off in their e-commerce experience. They have worse systems and lower converting websites than small businesses, which have these amazing, super snappy and they're just more technically performant if you measure the latency, if you measure the full funnel conversion and everything like that. On any metric, by which, if you went with your stopwatch and you went from Bethlehem Steel to the internet, and we're kind of measuring things with your stopwatch, the small businesses are better off. Yeah, thank you. By the way, me too. I also have purchased from Nike. It wasn't Nike, but yeah, those kinds of people. Yes, I love the obvious version because the inversion is super, this is one of the very few spaces where this is true. You don't bloat. Exactly, but we can go deeper and deeper and deeper into the space. So it's just really, really quick. It's really easy to underestimate the size. Everyone underestimates the size of the internet and everyone underestimates the size of retail. We sit at an intersection of both those things. It is my favorite status that the companies, the industry supplying wooden pallets to warehouses. It's a 60 billion dollar a year industry. That gives you sort of an idea for how large retail actually is, at least directionally. And so what we have done from a company perspective is we were very, very clear that our mission is to make entrepreneurship simpler. an idea for how large retail actually is, at least directionally. And so what we have done from a company perspective is we were very, very clear that our mission is to make entrepreneurship simpler. Yeah, that's right. I think… Look, when I first started programming in my apprenticeship, my Meister taught me that in the software world you have about two years time, anytime you start an important piece of software to try to nail it, try to nail the problem domain. Because afterwards, it just magically—someone puts cement on the codebase and you're never going to change a thing. And that's the state of software in the nineties. And frankly, just a way the software works. Everything that got to scale was finished in the nineties with cement in it and then saw through the 2000s and in a lot of decision maker’s lives, that was the time when software adoption really started. Another thing I enjoy on the software quality side that both Shopify and Stripe sell on that's just a funny domain to pursue is, peak load. Where Stripe sells on— you can put a lot of transactions through the system at once. And obviously Shopify similarly, it feels to me that how you displace other e-commerce systems is, if you are getting very spiky sales, you can put a thousand requests per second through the system and that's totally fine, and most systems at a technical level can't do that. I guess I find it funny because, I think we grew up together expanding the requests per second at thresholds and you guys pushed us pretty well there. But, I'm curious, where did this come from in e-commerce culture? Because the marketers saying, “Everyone will come to the website and click ‘buy’ at the same time.” The engineers are like, “No, please do not! Stop encouraging that.” But it's become a real part of e-commerce culture, like the drops and things like that. Maybe you can fill me in on the drop history. It's funny… You seem to have started it. Yeah, it's really funny. I'm just as amused about this as you are— No engineer would ever suggest this. Because it's a very, very strange thing, but it works as this fantastic business builder. The one that did it for us first, it's somewhere in 2010, was this business called TheCHIVEwhich was some, I mean it's a website, it's like some community. I remember Supreme and I remember Kylie Jenner, it was like lip kits… really that's embedded in my memory from 2013, 2014 Stripe. That was definitely, that was a board level topic.…

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