Tobi Lütke: preference

Transcript context

…I talk about look in the future and then think backwards a lot. What would we want to have done 20 years ago on this, or 10 or 5 years ago? What's the decision our future selves would want us to make, is useful. I find future casting to be generally extremely valuable. I definitely did not build Shopify to flip. I had lots of opportunities to sell Shopify to various people. I didn't consider it, because it's just too interesting of a journey and I think that's too... If a endpoint [inaudible 01:02:34] all companies is a convergence on a set of four or five people who can afford them, that just creates too much of a monoculture, I think, in thinking. I like that Shopify is different. I think this is good. I think it's a terrible place to work for many, many, many people. It's the best place in the world to work for some people. That's so good. That's what we want, I think. We want more of this. We want people to be able to window-shop for a place where they can be enormously successful, because the place's set of beliefs just fits you like a glove. 100 years. We have very long-term plans. 100 years, you can't talk about this software product, but you can talk about the mission itself, whatever things that will survive for 80 years that are left on this particular timeframe. Entrepreneurship is just precious. Shopify exists, basically you make entrepreneurship more common. That is the thing we wanted to cause in the world. We have had, I think, success doing this already, but again, there's no speed limit and no stopping point for this. As I keep saying, the word's unbelievably path dependent. And therefore, if we are part of a path, we can cause it to be more in adherence to the things that we value and would like to see. This is the wonderful thing about company building. They can have lasting impact. We are making decisions based on all the things that we can do. What are the things that will be most long-term valuable for the long-term pursuits we are on, and how can we normalize entrepreneurship? It's a thing that's really important to me, just because people don't spend enough time on it. It's all economics. Our [inaudible 01:04:44] living entirely depends on businesses. We are all part and tag of an environment that is extremely entrepreneurial and actually celebrates entrepreneurship as a courageous act and a glorious act even. But that's not true in most of the world. In fact, most people never encounter anyone who engages in doing that. It's not something people see as one of their options. I want us to make these choices. And I think the long-term focus matters. It's also really powerful for decision making. And I know this is potentially intuitive to most, but also rarely practiced. You've had a lot of people from Stripe on here. Stripe and Shopify have had a very long-term partnership. decision making. And I know this is potentially intuitive to most, but also rarely practiced. You've had a lot of people from Stripe on here. Stripe and Shopify have had a very long-term partnership. Stripe and Shopify had potentially the most valuable partnership, or at least one of the top ones in history, of technology, because we were both very small companies and we decided, hey, let's work on an assumption that both of us are going to win our markets, and work together. So, Stripe's [inaudible 01:06:02] for payments and we're allowed a part of Stripe and so on. When you're in a partnership like this, you play basically iterated prisoner's dilemma. Every instance, every turn you can make a choice: coordinate or defect, defecting if the other person collaborates, collaborator effect. If both collaborate, everyone gets a point. If one defects and the other one collaborates, you get a lot of points, all at one moment. Being a good partner in business is like this corporate marshmallow test that companies tend to fail in a very funny way. If you see the videos of kids doing actual actual marshmallow tests, the smart ones actually turn the chair around, look away from the marshmallow, and sit on their hands, and just go vibrating. Because they know it's the right thing to wait for getting two marshmallows in the future, but man, if they just look at a marshmallow, they'll just eat it. Most CEOs, most companies can't even successfully do that and just engage in pulling future profits forward at a discount or even defecting on partnerships that would be much more long-term valuable. If you're talking about long timeframes, like 100 years, there is no question. But clearly, the correct way to play iterated prisoner's dilemma is coordinate for both sides. It's way more valuable [inaudible 01:07:27] doing that over long periods of time than any momentary defection could possibly be convenient at a moment. It's a huge amount of product decisions. When we are deciding roadmap, end up being very influenced by this, because I get pitches for things we should do and why don't we do this kind of change to the system, there's so much money in it, and all these kind of things. I'm like, cool, but almost always come in a form of putting future profits forward at a discount. But we have a long time horizon. Let's not take the discount, let's... Also, you often compromise the entire business after a while because you end up just... Your customers notice if you're going into value extraction. The best companies, I believe, at least from a perspective of a leader, resemble some kind of cockpit, or maybe a room full of dials or levers for monetization. My job is adding as many of these levers as possible to the room, and then not pulling any of them. Because I think we do best if we are on the same side of a table of our customers and we had them become entrepreneurs, which is a mission, and we want to support them to be more successful, which is the business model we are in. We get a very, very small stake of the sales in our monetization system. And therefore, we are incentivized to make everyone as successful as possible. ccessful, which is the business model we are in. We get a very, very small stake of the sales in our monetization system. And therefore, we are incentivized to make everyone as successful as possible. Again, when I get a PowerPoint from investment bankers or so, where they tell me I have enormous pricing power and I could massively change the prices, I'm like, "Yeah, but I'd leave Shopify if that happens to me, so how is that good?" He's just like, "Why?" It just goes like that.…

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