Speaker unverified: evaluation

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…es in the gold mining space. It's just really sort of interesting. Because I’m like, “What is your day like?” The same question. It's much more interesting. What is a gold mining executive’s day like? I mean my conclusion, which wasn't maybe what he was trying to guide me to was, essentially government relations or investor relations, if you know how much is in the ground, it's a capital play. But somehow if the investors like you better, then you get a higher multiple at which point it behooves you to purchase all the other gold mines really quickly. So I imagine it involves playing golf, because that’s probably the technology there. So isn't one of the conundrums for you, as someone who thinks about companies and organizations a lot, the lack of measurability of R&D, which is probably half of what Shopify spends its money on is R&D. And so if you're running a factory, it's pretty easy to measure the inputs and outputs and how many widgets are reproducing per hour and what's the labor efficiency and everything like that. It's very measurable. Whereas when you're building software it's like, “I don’t know, we put a bunch of engineers on it and hopefully in six months they have a great product out there in the market.” But the intermediate measure is yeah, you can measure pull requests per engineer per day or whatever and everyone knows that's a very broken proxy. And lots of thoughts on this specifically. I would love to actually know how you think about this too. So traditionally when you look back in business history about when people got a little bit scientific about business or actually started to improve them, clearly it all started as sort of a vibe space. Then Frederick Taylor came up and brought the wonderful new technology of stopwatch to the production line and timed the various steps, and of course produced I think Bethlehem Steel, at the end of the 1800s and drove massive efficiency gains. And so that's like the hero's journey of business books. And that’s still so much of the corporate culture today. It's how org charts tend to be structured. It's how the financial statements are, the kind of business that financial statements are optimized for is kind of a factory. In a world where almost no company was terribly conscientious and no company metabolized all the value available to them. Someone starting to hill climb some source of efficiency gains, or just becoming a better company, was a breathtaking change. Once someone starts hill climbing, everyone has to or gets left behind. So that became the story and it's remarkable to think that that was probably good enough for probably 80 years or 90 years from this point on. Right, it's— It's a lean basically, which is kind of the 2.0 of that. Exactly. So you said a car industry with exactly Toyota and so on, some new ideas came on but they were all around the drive for efficiency. The downside of a drive to efficiency is that it requires you to act on quantifiables. You can only measure what you can measure thematically. So that's not the entire space of how to make better companies. There's a huge amount of things that are unquantifiable— taste, quality is hard to quantify. measure what you can measure thematically. So that's not the entire space of how to make better companies. There's a huge amount of things that are unquantifiable— taste, quality is hard to quantify. Well not only that, because those are the obvious examples of unquantifiables, but the big one is… I'm curious, there's team at Shopify that's doing a great job of their product and there's a team that's lost and has kind of a wooly direction and actually their dev tools suck and so it's very hard for them to make forward progress and they're thrashing with lots of “keep the lights on” work. Just how do you distinguish between the team that's struggling and the team that's executing really well? Yeah, I mean this is why my answer is…here's what I've found works: have rituals by which we talk at the latest every eight weeks, and so let the teams talk about the progress against the goal. We have an internal system called GSD— getting shit done. It's for the central register clearinghouse, it's our wiki, it's our feeds and stuff like this. But it also has every project in it. And so it's built around teams updating everyone else registering, “Here's something we learned.” And so that was step number one. Let's get the actual state of a business into a legible internal system, by which you can reason about it. Where is every project, what are the deadlines, what has changed? And so this is what these reviews are about. his is what we have on the screen—they get a little tldraw that we can drag images and mockups and everything into, but that's their area. But all the metrics and all the things are on the screen right in front of everyone and we can talk about that and how many people are on a team and this kind of stuff. And giving everyone an opportunity to just talk to me, even if it's only quickly, is incredibly valuable. Is it like people want to get into running? The couch to 5K program starts with:get off the couch, go walk down the block, go walk down two blocks and things like that. It turns out that from an organizational point of view, having a centralized source where you track all the projects and you list out your goals and you post updates…that sounds too simple to work in the same way that getting off the couch is too simple as a step to running a marathon. But it turns out both are true. I think honestly it's not a complex idea and it's extremely valuable for 15 other reasons, other than it powering these reviews. But yeah, it's not terribly complex and it works. No, we took inspiration from GSD—your system—as we built out ours similarly. Having a centralized internal source of truth for projects that are going on is surprisingly helpful and it feels like it shouldn't be. But it is. from GSD—your system—as we built out ours similarly. Having a centralized internal source of truth for projects that are going on is surprisingly helpful and it feels like it shouldn't be. But it is. Yeah, it's funny because… so again, it's an internal system. Shopify has a culture of building internal software. I mean I tend to point out Shopify itself started out as internal software to power my snowboard store, so it'd be funny to not do this. And so I think fundamentally companies are all pretty bad. All the companies of today are pretty bad compared to the companies we will have in the future. And I don't know how I would possibly run Shopify without having GSD and I think there's going to be some productization of GSD that'll be available to everyone that's probably going to be renamed 15 times or whatever— become a category of software that's going to exist. And then everyone's going to be wondering how the hell did we build software before we had it? And I try to have Shopify live in that particular state a little bit earlier. Has your proclivity for developing internal software ever led in just a really hilariously overbuilding internal software direction? Oh yeah, absolutely. All the time. What's the most ridiculous internally developed piece of software? You have static sort of internal GeoCities. It's static site hosting, which is, it's the most incredible… Yeah, it's like a nineties web of all pros and cons. Well, what I think is interesting is you think it's important to build your own HR software and you would recommend people at least think seriously about that. Maybe you can share the worldview there. I’m not sure I exactly recommend it, but we have ideas about how to do HR, in terms of compensation and so on, that they're just different from what's normally implemented. This is most true in project management software, like again GSD. If you use software by others, you have to buy into their vision. Some vendors tell you the software can do absolutely everything and that should be— Softwares have a worldview. So you're adopting Workday's worldview when it comes to your HR, which may or may not be what you want to do. That’s right. And I think that's important to realize and it's important to use to your advantage. And I think this is why it's really, really important to buy software. The people who buy the software are the people who should use the software in the end because they have a better view of what needs to be had. So in our case in HR, we had some things that were not doable with Workday and other systems and so we did it ourselves. I mean, this led to a journey 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.…

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