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hello everyone and welcome back to conversations with Tyler today I'm chatty with Toby lutka who is the co-founder and CEO of Shopify the famous Canadian e-commerce firm Toby welcome so good to be here so good to see you Tyler
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I have so many questions do you still do standup meetings uh like um whenever we have hack days I do them I I you know what I feel they need to make comeback like the Friday afternoon standup meeting is just one of the greatest um uh accelerant um
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for for for for businesses I'm I'm highly encouraging everyone to do them the digital version doesn't look so well does it like it's some slack b or so telling everyone to stand up and type something it's just like doesn't do the
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same thing and it may more companies harder to monitor what other systems do you have for getting good information out of meetings um out of meetings so um um okay so I grew up as like Outsider like it's as an um um I kind of have an
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outsider mindset which is kind of hard to um um um um argue from first principles to this point but like um in a small town that was super not interested in in in in in Computing in Germany um um uh and um so I I I I learned all sorts of skills for um
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observing um people doing interesting things from afar you know just like I my my lifeline back in those days was like um getting a copy of um uh the the the back archives of the Linux Colonel mailing list and so on this is how I
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learned like C programming so so um um so I I grew up as like an observer on information that's what I do when I um uh just for fun a lot um and um um also that means I grew up on the Internet um which um it's good and bad so one of my
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um ways to get a lot of out of meetings often involves um saying High conviction incorrect things and just waiting to figure out like like seeing everyone wanting to correct me it's it's a more efficient way of uh um um so it's like Twitter you want to
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learn something say something wrong on internet yes um um it works in real life too um it's not people's favorite thing I do but uh like it we have a Wiki inside and there's a blueprint for me and it says that I do this so some
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people are reasonbly have reasonable warning these days the systems for making Med better should we also use them in our social lives family dinners you get together with friends I don't know I I I I've seen um I I I I think uh porting what makes companies
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work too far into private lives can also uh backfire um um I um although I did you know with my kids I always booked one in ones um so so um um they called them dinner appointments and we we we you know just I I I tell them I'm going
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to treat you as an adult and you uh you're going to have an out conversation until you say you're a kid again and um I'm going to answer every one of your question to the best of my abilities and we they choose some restur and we go
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there and that's what we've done for um for a while and of course that's um uh you know cell phones down I think that's an important thing to do um what we do with meetings is like we we inside of company we do a bunch of things we you
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know periodically delete uh all meetings um recurring meetings because um um it's just it's it seems very hard for people to subtract um it's very easy to add um that only leads one way and um so if you have ceremonies like
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this I would would be interesting what would happen if everyone would have to zero some their follow follow list you know zero budget their follow list I I think that would significantly change people's experience with social media I
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wonder if that's a good idea also with your your friendships it's striking to me when I'm in Italy I very often see what I call Street conferences that is people talking to each other often heatedly and they're standing when I'm in people are talking to each other
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heatedly they tend to be sitting do you have a similar impression what a fascinating observation um uh you know the idea amti it's something very German about it you can pound your fist on the table it's a stum Tish really but really you know um
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um I think Po in both of instances people do something which I think has a lot of relevance to um the sort of real life versus social media um uh conundrum that people are wrestling with which is that um I think there's a significant
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human need unacknowledged for venting I I think venting is like one of those extremely important um uh uh Outlets um um uh that like it's of original safe space in a way where like at some point people say okay well you're clearly off at least people say this to me like I I can go pretty far inventing you know Germans can be going very far like stereotypes are funny because they often are true and um so um uh venting catastrophizing these kind of
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things and then having your friends reel you in but the issue I think we've seen over especially sort of beginning of this decade is um as people like ported their venting online um and then got be sort of one take um retreated forever um
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because it just captured imagination um I I I I feel people misunderstood what was actually going on for a little bit and I I I hope um everyone has sort of climatized to this reality now so how do we create safe outlets for venting in
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companies or institutions what is it that one does because you don't want it to turn into negative contagion right MH MH I I actually think like even just talking about venting being a thing that's actually good and and and and prefixing then someone just wants to
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actually just say get a bunch of things like field test some um uh takes is a good idea I I I think I think that can disable the power of it spiraling everyone on um or uh right right after and I think that's I think that's useful
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but I don't know I've seen I don't I didn't didn't go to it because it wasn't my neck of awards but like I've seen um uh parties organized or evenings organized now where everyone gets a um um um a note with a outrageous um
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position um that they are supposed to represent for the rest of the evening and um um then they're supposed to like tear it up and toss it away um just to allow people to have plausible deniability on whatever they want to talk about because they can just like
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fall on oh I was told to represent this and I think that's you know that seems like I don't know if it's a good idea but I I i' I love that someone is trying this because that seems like um uh social license to actually like like
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talk about stuff that otherwise can't be talked about and seeing where it leads and often it leads to exactly the wrong place and then uh you know you get that out of your system and then you don't need to share this as a tweet afterwards
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are German meetings different yes um how so I'm German I grew up for 20 years in Germany I then moved to Canada you're from cin right I'm from cand right like I celebrated 2,000 years uh um uh when I was a teenager there um um Julius Caesar might
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have come through and that was probably most exciting thing that ever happened there um the um um I I I think it goes back into the stereotypes culture uh I um again I'm I'm I'm German I started a company with another German both in Canada for
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Americans so like ch sh f is sort of interesting uh mil of uh different cultures um I think that um well I mean straight up a bat it's it's Germans just are blunt like like they just like there's just no sandwich configuration that needs to be
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constructed to say if something is bad I think Germans have a more innately higher quality bar like is and and and um less tolerance for underperformance on that quality bar it's it's it's it's pretty um like products are either like
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below it or um you know good great work class above it but like below that nothing else registers as anything of value which is totally different in of America and I think that's good and bad that comes from this I think I think
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sort of a cultural appreciation for good products craftsmanship um uh done right and so on is is is is something you know like that's um more associated with uh with Europe but the quick iteration be embarrassed by first version um and and
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and then buil from there is something that you know North America does better and and so it's interesting um I I've seen this in in in in meetings where people fell on cultural lines of uh you know is this should we ship this should
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we not ship this is it valuable to build it this way or should we um you know spend a couple like spent months and months and months trying to figure out exactly what to build and then build that and try to get it as close to
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perfect as as possible or or should we just like itate very very quickly um and um so yes they go differently are Canadians different in meetings than us Americans yeah um as well yes that's uh true it's it's it's it's more on the
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side of American on definitely on on on a um minimum Quality Bar um it's uh I think Canadians are Le uh often more about long-term like just like um like like I've seen Canadians more often think about what's the next step after this step um um but also just lower
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ambition that's um I that's probably not the most popular thing to say around here but like uh Canada has sometimes like Canada's problem often culturally is um a go for bronze mentality um and um um which apparently is not uncommon
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for smaller countries attached to significantly more cultural um big or or just bigger countries um but I think it's um um it's actually I found it's very easy to look around because I think it's um if someone you know um I think a
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lot of our success has been due to um you know just me and my co-founder basically allowing everyone to go for work class and everyone's like oh okay well if we allowed to do this then let's go and I think that makes a big
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difference but this is in like ratcheting up the ambition for a project is is something that um one has to do in a company uh like in Canada but is there something scarce that is needed to inject that into Canada and Canadians or
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is it simply a matter of someone showing up and doing it and then it just all falls out and happens so I don't know um I I um in as much as shopa may be seen as something that succeeded um that alone Didn't Do It um I so um um it
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would have been very very nice if uh uh if if that would happened now um there's like another cord of Founders coming through who like some of them have been part of shopy or come back from from from Valle there's some great companies in Kary like Neo um that um
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are more ambitious but like it's um I think that um I think it's a decision I I I I think it's a bit of a a decision um and I I would like the the time it worked perfectly was um when Canada was hosting Winter Olympics which is now a little bit of an
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in history but there was actually a program C wide that's called own the podium which because you know that makes sense like it's it's it's home we love we have more winter than most so therefore let's do well and um um and
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then we're there like it's just like it's by far the best performance of Canada Olympic team of of of all times and it's um so I I I do wonder if it's actually like I I think to systematize it and and and make it stick that's um changing a culture is very very
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difficult but instances of just like giving everyone permission to to to to go for it have also been super successful why were you miserable in German school I think because German school at that time was um in love with uh serializing out
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answers and trying to fill you up with as many answers as possible and hope that you would be able to apply them to problems encounter later I don't know if there's a good theory for that being a sensible approach that would stand up to reason
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it certainly didn't work for me like I I kind of I'm literally opposite I need to I I need to have every problem before I can learn the answer to it um and um um that just um was in St contrast um you know what what being taught in the '90s
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and so and during these times was like in St contr with what was interesting for you know working with computers that was really just like the most fun thing for me to do uh during this time and seemed very valuable even uh then and um
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you know this this this Probably sounds too abstract like Latin as first extra language is just like not highly utilitarian um and um um that is not the like knowing Latin is very rely the correct answer to questions you might
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encounter later in life um so um it's it's it's not not saying it's not valuable in some way but maybe like start with English that would be a good start but there's plenty of technical talent in Germany and plenty of young people speak English quite well why
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aren't there more German Tech Giants I mean the hot take here on this is like there are they just they called Shopify and paler and others right like it's um um so it's but in Germany Germany is not a tiny Nation the EU is of course a large
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Market enough of you speak English to have a Common Language I would like I would love to know I honestly I I I think about this a lot but I don't know if I have if I'm best person to to to um analyze it because it's like what I'm hearing and
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uh it makes sense it's just that it Tech is something that Americans do From perspective of germs and it's like it's it's I think I really don't think the general population is believes that is truly like tech tech is adding a
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lot to life um it's seen as a uh um this may be a reflection of areas I go to visit again I mostly visit um family and friends uh in in smaller like not the tax centers of Germany and um having these conversations um and and there is a very much a pessimism uh
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about future that I think means you cannot build tech companies because you kind of have to be optimistic about the future to like otherwise why would you want to uh contribute to um you know progress and and making it go come come
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to be faster so um I think that's one thing I think it's very hard to uh uh hire staff that's willing like the like in North America I found that uh people take big chances um to if if they believe and have conviction in company
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doing something they would um leave a excellent career to uh give it a go um and it just like also seems to not be true in in in in Germany so like access to ex and talent is just simply harder based on um them to making culturally
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decisions differently partly because I think startups are a uh low status Pursuit um from the best I can tell let's say we compare Germany to the Netherlands which is culturally pretty similar very close to cands they have asml Adan Netherlands is a smaller
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country why have they done relatively better or you could site Sweden again culturally not so distant from Germany you're asking very good questions that I much rather would ask you you know like um uh I I don't think I have I I I don't
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know I I I wish I know I like I spent um I I I I I started a small company in Germany didn't do anything um um um so it's not like people didn't do this um and um I came to Canada did it again this time it Ved and and then I was
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heads down for a very long time building my thing because it just like was consuming so like I I I didn't pay too much attention to to um po I wasn't even very deliberate about where I start a company just I started in OTA and
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because that's where me and my wife were during the time she was studying there and then we we could find great talent there that was overlooked it seemed and um gave everyone a project to be ambitious with and uh it worked and you
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know I think that if you create in a geography a consensus that um your company that really really is worth working for because it's it's interesting work great work and might actually lead to something then you can build it and um um uh I think this is
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something that I I I just I don't quite understand why this is not possible to do in uh you know so many places in Germany because again Germany does have this wonderful appreciation of cmhip which I think is actually under
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represented software I think um it's only recently um usually by Europeans um uh being brought up uh Patrick hollison talks about it um more and more and and certainly I do too um but like making software is a crafts is is a craft um
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and um I think in this way Germany Czech Republic other places Poland are like extremely enlightened in in in making this part of her apprenticeship system and I apprenticed as a computer programmer and I thought it was exactly the right way to learn these things um
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now um that that means there's I believe a lot of talent that then um makes decisions other than uh putting it together to build ambitious startups and um so something needs to be uncocked by the people who have more insight than I
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have I think part of a hypothesis is that the Netherlands and also Sweden are somewhat happier countries than Germany people smile more it's superficially the more optimistic the more optimism going it's striking to me that Germans
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contrary to stereotype I think they have a quite good sense of humor but a lot of it is irony or somewhat black and maybe that's bad for Tech and I wonder people in the Bay Area I mean do they do they have a great sense of humor I'm not sure
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they do uh maybe there's some correlations across those variables I I I think they actually banned buo for a little while from the Bay Area I think it might might make a comeback now it's uh I think that I I really do think there um it seems
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like an easy out but like it's actually potentially I I I like the the optimism angle is lot bearing for this uh you got to believe that the future is going to be better than today um to want to make the Future come um uh sooner which is um
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in your tiny tiny tiny little way I'm not talking about every company is change of world but like every company is kind of uh causing like like if you want it to work it's like causing progress uh both like add to the vector of progress but
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also uh maybe just change uh some trajectory in some space a little a little bit I think I think if shopifare wouldn't have happened something like this might be a highly distributed uh uh like many many pieces of software or um
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something else would be there it would not look like Shopify it's like like the the world of computing is extremely PA dependent I mean just like every other part of the world um so you want to be able to add something because so this is
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also why ignorance is usually useful because like um um uh you should um be ignorant to the low odds um in the beginning I think one of the reason why um uh you know at least some uh Founders often are young and um I um you know
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these kind of things are important another aspect of the European Union if like it's just like people also study very long right like I I know this has gotten sort of updated in the time since I was there but man I had a in my trips
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home I had a lot of 32ye old student friends um and that's just like cool um you know that's a there there a significant amount of Nobel prizes awarded to people for their work in their uh 20s right so and um we should just have a clear cultural understanding
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that those are um useful years to be out and Building Things and um um you know I think it's it's nothing is single causal and I think there's a lot of contributing facts I would have trouble I think waiting them but like optimism
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is the one lack of optimism the one I would put on the top of the list what is a German language word that you still use when you think because there's no close English language equivalent uh I would I don't have hve right that would that's a
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possible compend is like is such a good word okay so what that means is um uh is um by trying to improve something you made it worse um and it's it's it's like I mean again maybe it's also like born out of pessimism about the future but like it's
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just so wonderful because you see it often you know some you know chess fence people don't often know um uh what parts of a world large system are important parts that have a lot of cultural or or technical understanding coted in them
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and which ones are just there because we were in a hurry building the system and um sometimes you find out which is which very quickly after wordss and a word is useful in how aboutand you know the process of coming to terms with something rather than just
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putting it out there but there are beautiful like I mean even gal is a word that isn't I mean that might actually have been um uh integrated now in English but like it's there's no equivalent um uh like like of that um uh
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and um I don't know there's there's a um but but the reverse is also interesting you know um entitlement is not um some a word that Germans have right like which which I find really really interesting I I make I sometimes in Shopify I have to
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explain to people when I saidon it's like hey gratitude and entitlement are two sides of a spectrum like um and um it's your choice where you are here after you have pleasant experience or or maybe with some downsides um uh along
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the way um very important conversation to have of in sometimes um uh if if uh you know if I don't know the provided food is cold or something like this um so um try to like I this I get in these situations I sit down okay but I'm doing
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this in German now because this is the moment where like I have to roll out this thing and then I'm just like struggling because there's no term and and I'm like that's an interesting fact that we don't have a word for this so this is happens as well now of course
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someone's going to send me like a string like this which actually perfectly represents it and does better it but anyway nothing I could easily um recall do you still read books in German I uh occasionally I I I I have
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like I must read one book in in in in in in in German a year as a um sort of self policy which I have violated last year which I was not like super happy about but like um um it's it's like one thing which I find disappointing uh is when you know like
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obviously I take the opportunities when I when I want to go through something that's um originally written in German that I going to try to read like read this in the um in original um um so like writtenin truck an example of this it's
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like the English translation is so much better because um the translator asked for so many clarification by writtenin that that it it just ends up being like readable so I found a book which was um was actually beautifully said I think
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MIT published it of like um the original German uh the English translation and a translation back to German from the English translation all in three columns and that was perfect so um sometimes the English translations also just often get
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updated again like for C or something like this um and I I do I'm actually a fan of rewriting books uh like every I don't know 25 50 years for next two generations down line um because it's they just get hard to access so often
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you get that by reading the English translation so I'm trying to I I feel like I lose opportunities to do this in your opinion where exactly is the dividing line between North Germany and South Germany so people in fryborg they'll say
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like oh it's Manheim but that's insane right where is it for you you know you asked me to to to to to poon's Nest here like I I I I'm going to have too many unhappy people by actually committing at all to this question so I'm I'm going to
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take a PA like I would say limberg is still South Germany because historically it's been Catholic but somewhere not too far north of Lindberg North Germany would start it's very it's very hard to draw a straight line b i you end up with
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a very very very Jagged line um I think if you if if you're trying to do a best possible job there um um I it's it's anyway lots happened in Germany for a long time like to to to to cause culture to be calcified to wherever it is now
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yeah now Canada in the data I see right now Canada seems to be having a per but a GDP recession and I'm not sure how to interpret that the US has been growing at a decent clip uh Europe more or less steady growing at a very slow pace why
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in per capita terms does Canada seem to be moving backwards is that a composition effect or how do you read that yeah I um I mean this bores me a great deal um I um and look we saw this I mean okay so comparing to United States is a bad idea
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in general I mean actually it's the best possible idea if you're going for optimism but it's not the best idea if you um are looking for um staying sane right like America like like America is exceptional it's it's it's an unbelievable um economic might it's an
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unbelievable country in so many uh ways um I you hear in every country well if you compare to United States invisible one thing um things are bad like well Ian I mean I think the comparison of Germany to Netherlands is a lot makes a
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lot more sense I think that's where you can make real um uh you know figure out what might be uh actionable America is just like really really really really different so first of all that um every once a while Canada is an economy that
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really can hang with America I think 2 years of 145 um like it it was looking really really well I think what happened there um again nothing has a sing is sing singularly causal but like it's um it's it's the productivity numbers are
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just really low and I think the um employment in the public sector having grown the degree it has is just like again I don't know if it's if it's causally related uh or or correlation with the same thing but like I it's it
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just me is pretty clear to me that if um um the ratio of referees to to to to builders is or critics to builders is going out of work that like things grind to a Hal so um the service and even Shopify adoption like it's it's it just
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took a lot longer for Canada to to to want digital products um um and um um Jif is always selling and and and finding its best customers in the United States for first 10 years easily and then you have already like if you you believe me that CH is pretty good now
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there's a compounding Advantage for the people who have adopted it earlier and um um I think that is sort of like a tiny Zoom of a much bigger fractal that I think is is at play there how is Canada changed the most since you moved
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there H it feels like it's the optimism angle and I think this is like the thing that worries me the most it just I think Canada had is massively had a massively underappreciated at the time project in multiculturalism that worked and it um
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uh start started under Pierre turo really um just putting country together like with with great leadership great vision and Canada had a string of leaders that were like kind of almost too good for a small country um and um
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um you know there was like this hey we getting along well we are friendly we are um um like it's it's a it's a high trust environment um and um uh there there the best days are going to be ahead of us um and I think I it's so hard to point at exactly what uh what
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changed it um but um um the cultural narrative has just simply shifted now I I I do think people are a little bit more circumspect and um looking at the the country I think the the sort of problems are more clear like it's it's
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like there's a lot hanging on real estate and real estate is not by itself like that's that's it's valuable to a second order uh because of all other sort of things being valuable I think the worst thing is like this uh from my
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perspective is this um that Canada seems to be okay just exporting uh the raw materials for everything and that is usually like that started as beaver pelts being sent to London for turning into high margin hats um and it's like Canada has no
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refineries it all goes to Houston even though produces a good deal of uh uh like energy um um and uh you know this is say what is like basically a raw material export um as well as one of the greatest schools in planet Earth um uh
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and uh you know water L students are l bearing for silen Valley uh companies um and um you know there's a lot of uh Readiness to export the COC cultural conversation about like you know maybe we should have people build things here
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as well um and um um there's just no it seems like a country which is now so has so little self-confidence um that um I I see this as running Shopify um a ridic huge amount of our uh employees we hired last night year I
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think it was um 60% or so of our Engineers with boomerangs um coming back from storyed American companies U most of them were Canadian because like they and and often they say it's because we keep we wanted to work for Apple because my parents said man
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you're really doing well in Tech you you might actually get a real job in that apple or or so and um uh and and you know if you hear this a lot you do and then you go there and you know what um uh you actually like it that job and
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then you come back and and and and um um I think this kind of thing needs to happen a lot we need to have some more of these stories out there can is pretty good country um it's it's I think it's a major major asset to the United States
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as a as a as a great friend and um um I think a stronger Canada is better for for absolutely everyone do you agree with the stereotype that Canada is especially weak when it comes to branding so there's Shopify there's Molson you could say there's hockey NHL
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but not that many Canadian Brands why is that or do you premise because Canada exports no products right you know shop lul lemon export I'm sure forgetting I mean moreon sure but like um I don't think it's like not ability to do
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branding it's just Canada does not appreciate commercialization of any kind um it's like Canada wants to in you know invent um like it's it's remarkable how many papers that are foundational to the current revolution of um uh of of a I
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boom uh in the University of Toronto water loot papers um uh you know Jeff Hinton and and his lab and so and and J Benjo and so on it's um like like Canada love like loves to have a Eureka moment and it seems as seems It's seen as a low
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status um thing to do to then go and try to build a business around it which you know is probably amazing from a perspective of our neighbors but like um probably not so good for the uh you know so wealth of a country like it's it's we
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are not metabolizing any of the kind of uh Innovation Shopify is little is very much an operation here as like let's make something at least was a brand to businesses initially and increasingly people um Beyond businesses uh recognize it um and um so yeah like I I think
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that's that is an important thing like it's the same thing as like hey we don't refine the oil or we don't make for hats for from from the Beavers or um you know we just don't create the final product we we we send the raw materials
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everywhere and I I I would if I could change one thing it's I would do that I would put um like and by way this is deeply encoded in policy right so there's a thing called uh Sr tax credits I'm not going to bore you with a details there but like you can claim those to if
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you if you do says research and development um and um um try to claim them for anything that's commercially related it's it's it's actually it's it's remarkable we at various points stopped just applying for them just because we were just too
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commercial in lots of ways so you're being paid for doing original research which I think is a great policy uh like because some like often original research kind of could need a boost but then going and um turning this into a
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product you're like completely left out like if you want to claim anything you will have to ask every one of your people and the staff to have meticulous time sheets and and submit an ungodly burden of documentation which literally
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makes the commercialization jobs terrible and so therefore you know it's like um the good people want to um um work in this environment and so on so on so on do you think in Canada there will be an enduring backlash against
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immigration I don't mean the phony student visas let's assume that's taken care of but immigration as it had been proceeding is that the standing equilibrium or is that going to dwindle an ASM toote so can Canada is about I I
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I don't know if it's accurate numbers but I think there directionally right this is kind is about 41 million uh people in the last three years um free million people immigrated to Canada which you know is a significant percentage increase in in in in size of
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population um there is a lot of cultural conversation about this uh I think the the most of the conversation that I see is not really about uh veracity of of of immigration in general but actually about like the sort of um fact that in
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this time of adding 3 million immigrants we added like almost no housing which like so that's it you know just that's that's just like not a great idea to do that um and um um that's causing a lot of uh you know bad down scener effects
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immigration has my entire 20 years I've been here 20 something um been very popular in Canada which I thought was one of the most unique parts of the country um that's sort of part of a statement I made earlier about um an
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almost unacknowledged uh effortlessness to multiculturalism that that that worked and um um Canada also implemented the thing that everyone's talking about the skills-based Visa program with point with Point systems which is um welld
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designed and and um has been doing a lot of work for Canada uh in in the past it's not quite clear to me why um we' walked away from uh sort of these priors that have clearly identified to work all of it and and and and certainly like things in policy land
36:56
changed um and opinions changed I don't think people like this um experiment my significant hope is that this is not going to be one of those baby out of a b water uh moments because we have a great skill based um um immigration system and
37:11
I think Canada should just like fall back on that and and then you know run that up why does Ottawa remain such an underrated City so Americans will take a three-day trip to Toronto or Montreal but Ottawa is excellent there's the
37:24
national museum very good food obviously it's nation's capital why does it stay so unknown what a wonderful setup and it's close right thank thank you for the platform It's a Wonderful City like I um uh you know we I mean it's not we ended
37:42
up there because my my my but born there but then actually started there didn't maybe not expecting to go back and then we stayed for 20 years and we built like Shopify built a great company there because it's just like people really
37:55
love it there and they were like itching for better employer I suppose um and um and and and yeah I I mean I have to I mean obviously it's it also gets really cold I I had this wonderful Parts like where just like my commute to work was uh the
38:10
the the canal or Skating On the Canal every day and um um you know where else in world can you have a commute like this but also um you know the first time I visited it was really really cold in Winter and I was like I I I sort of had
38:22
my questions and um then in the summer you go to a cottage and that's just like the other side of a w thing um um and it's just like it's a wonderful quality of life and I think that matters it's it's um don't you have the world's
38:37
largest outdoor ice skating rink and it's seven kilometers or something yeah but that was my commute that was your commute all seven kilometers or how much of it well uh maybe two of those was was a commute um I was right right office downtown and
38:52
then um we were living along with Canal like two blocks in and it was was very cool very very very nice thing uh nice way to startop a day I I'm I'm I'm sure I wrote my best code those days the future of the internet when will virtual reality stores
39:08
matter um I that's a very spe like that's a good question I virtual reality stores I don't I don't have a great answer um there I I don't think they will I I don't think we will Port the exact like the The Fifth Avenue boutiques online other than for uh
39:27
having virtual Twi like uh virtual twins for them for for people who specifically want to see those I I don't think this going to be um um the the future of e-commerce is going to be um uh strolling through um malls or virtual
39:41
malls or these kind of things so I I think the exact way this is all going to compose is going to is going to be different I think the Innovation and virtual reality are going to be much more about uh um you know virtual
39:53
avatars or like or or or real people like helping you like like talking to the product like Shopify represents mostly the catalog of product that people really want rather than the Necessities right like it's like the Fifth Avenue boutiques would also be
40:07
once using shop point of sale um and um purchases are lot a lot more deliberate around this like people often spend uh weeks sort of thinking about this with something they would like to purchase and they're really looking forward to
40:19
package arriving hopefully very quickly and so I think there's lots and lots and lots of touch points there um the place that is probably the most virtual um area that we see is already like Furniture like the placing the
40:33
couch in your living room is just like better than looking at it in in in in in in some store right like uh so so I think we see the early innings in this and there's a couple of technologies that we are tracking like um Garian
40:47
Splats and these kind of things that are just like going to make it vastly simpler for people to um um make digital twins available from uh um you know whatever they managed to put together in real life and so I think I think a bunch of this is coming but like
41:03
I don't know if what what's the date and what exactly is for form factor not talking about back office but actual retail do you see in advance how AI is going to be changing retail and what does that look like I think it will play a um I think
41:21
it will play a significant role for sure I change retail I think it will also I mean I think we will see significantly better products being made I I I do think so I I I have extremely U bullish um uh um view on AI on specifically
41:37
around the utilitarian value I think there's enormous advantages in for company building I think there's enormous Advantage for product creation I think um um what we Engineers um experience around um uh co-pilots just right now getting good that are helping
41:54
us do the job that we already have a sign significant craft in but like do it better is extremely uh convincing and I think I think people would want want a um co-pilot or a sidekick or something like this along um more of the things
42:11
they do which are like at the edges of varability which which I think in in a retail World um uh on the creation side of businesses and a creation side of uh products it's just like basically all the time it's it's a stretch it's a way
42:26
you put yourself out you create the best thing it's a very it's a very um it's a deeply personal thing to create the so first version of a product that you you try to create a company around and so um I think that's really really powerful
42:38
like super like highly intelligent very knowledgeable zero judgment um uh all this available fast returning um uh even text um AIS are going to be fantastic but increasingly I think um I I think software is going to go through a um rethink um in for this
43:02
decade I it's just quite clear that um most software like we have learned how to build excellent um user interfaces quite approachable like we simplify a enormously complex space to um uh easy to reason about Point decisions um uh in
43:24
in in in a in a pretty approach and legible uh interface which also look good and you know like all these kind of uh things that's sort of top of the of of a hill we've been climbing for 20 years since b or a little bit less since whatever
43:39
whatever moment you pick in which um web 20o started which really was the beginning of every like Engineers saying hey we figure out how to build the applications off the internet and um that's the string we've been pulling uh
43:53
on for all these years and we built all very very valuable companies um but that's replaces um you that basically replaces the like going directly to the database or going to a command line and we build like these interfaces I think
44:08
now we are instead of a creating a place where someone can run around and and switch a whole lot of toggles and and and and change preferences to uh suit their particular idea I think people can just tell us their goal and then we can
44:23
V together on this I think goal oriented software is actually what we always wanted cuz that's actually meets people where they are it's like how you work with colleagues together too um and it's not I'm actually really excited figuring
44:35
out what this is going to look like I I love the times where there significant transition um um I thought the 2010s were kind of boring because we kind of just kind of did the stuff that we figured out in the sorry the 20s were
44:47
boring T were sorry I should say this right 2010 to 2020 was boring so um because we basically just scaled the stuff we figured out um towards the end of a um 2000 to 2010 period um and so now we're going to get into much more interesting times again and um there's a
45:06
lot to be figured out and that's exciting in industry and I think what where we end up is a much much much much higher Mountain that we couldn't have seen from the original Hills right and so that's that's that's always exciting
45:18
to me and I think it's going to be very valuable to people now you work with so many retailers do you feel you understand retail price stickiness because economists don't a lot of economic models imply prices are sticky
45:31
but when they move they should move a lot but you look at the data we have it seems that big and small price movements are about equally likely which means we as economists are fools how well do you understand all this I don't think I have a better line
45:48
honestly I I just like business are just so different that they are hard to uh average out and like there are a lot of businesses that do their pricing strategy is Aesthetics and Aesthetics is one of those hand WS that humans do to
46:03
explain a way enormous amount of background processing that goes into it uh in the best case scenario um like lots like an entire career um of of of knowledge rolled into an intuitive quick decision or completely making it up like
46:19
like sort of both sides of a like U um Mid Meme here and um like I I I think economics fundamentally will have to um uh uh you know roll a lot of a lot of data points into um an average and then try to see uh which direction people do
46:36
and there's a lot of cancelling sh out going on in in the spaces that we we are concerned about um um but sort of interesting I mean we went for a high uh inflation period and just like tracking when prices in the system were kind of following um um that was
46:56
deep compl different based on what kind of products are and and and and how people consider purchasing buying these products um obviously on margins too so again I I mean I feel for the economists um um like because I don't think you
47:12
know I think physics has given us a um sense that there is a simple equation underneath everything um uh and we've built an aesthetic around this and I think um often too many other fields want to be more like and um I I think I
47:29
think actually things are wonderful when they're complex like I think um I don't know if you want to talk about company building but like um you know companies are complex adaptive systems much more than uh being um sort of Industry applied versions of military
47:44
uh uh slightly more complex organizations of military service um that's a recognition which is not that like old right like it's it's it's um to a certain degree can explain why um um companies run by some of the engineering
48:02
type people have been outperforming um things because people have a incorrect understanding what engineering is and how it works engineering um is fundamentally at least for the last 30 years has mostly spent time on trying to take non-
48:18
deterministic systems make them deterministic which is kind of what we do in the real world with um policy mostly and and and process and um so I think what we can do now uh like if you're an engineer running a company I think you come pre-equipped with ideas
48:37
like uh systems thinking um uh instead of um you know worldw to organizational structures um and um companies are ultimative non-deterministic systems that you're trying to get to uh build fantastic products at Great uh at Great
48:53
Pace um inclusive of all the creativity by various uh actors in the company and and like trying to build inside of it a culture um a story incentive systems that are just making so that um the maximum amount of everyone's activity
49:09
actually uh you know like f like further submission and um I find these these things just so fascinating to to to um to think about because I this is sort of going back to the beginning I I saw myself as an outside and I've made a study of other
49:28
fields from afar and I just um um there are so many amazing ideas in basically any given field that you can possibly name or imagine um like and often what happens is like every field kind of reinvents the same uh core ideas and
49:44
give different names to them and making a study of doing this kind of thing and just saying okay well how do we build better company I think companies are very bad like all of them like I think literally everyone um but I'm my my me my contemporary
49:57
um myself especially we're going to be terribly embarrassed by the companies we ran uh in the early 2020s and so um because there's all these things we didn't yet have or didn't yet understand or so and then um you know eventually we'll figure this
50:10
out and then how could we even build anything before we figured out this thing again I find that just like such a interesting um um meta field of research it's almost applied good thinking like what if we never figure it out I mean
50:24
how sure are you that in the future it will be that much better we'll have better technology but organization yeah um well we have we have New Primitives on which we can um build like sometimes also philosophies right like but I'm not saying you're
50:39
going to build the perect company there's no like everything is a set of trade-offs I I I just like compared like if the best soccer team on planet Earth is like uh gets at like 80% of hood the 80% of perfection you you
50:55
freeze frame the replay everyone very few people use a muscle that incorrectly while actually approaching role and then um you know beautiful orchestration of um um uh uh you know Corporation without with zero communication and you know that's like what's a
51:11
Company the company is 5% like how many memos are never read and um like partly because um so so which to me tells you you if you just get to 6% you're already doing better like that's that's pretty good way of not being as embarrassed as
51:28
everyone else I think realistically there's going to be limit because these are not this like soccer gam is the same one every time you can actually practice for it like a company's you know every day is a new day a new puzzle box dumped
51:38
on everyone's desk um it's it's it's it's a different environment but still like I think companies are vastly better now like and I started as an engineer even like uh apprenticing under um my M he said you have two years after you start writing
51:53
code for project um after which it's like someone put C men in a Cod base and you're never going to change thing again and that was just like accepted back then and now like we have pieces of software that are 20 years old and feel
52:04
feel feel the Delight to work on because we just um build up these understandings there's no like a lot of these lessons work in other areas as well what do you think is the most common mistake your third-party retailers make in modeling
52:18
the world um thinking we have to build PR for that other people like I think this is the this is the sign killer it's just like um Shopify is like someone's called it Kevin Kelly's 1,002 fans essay applied that scale um it's um
52:40
like like yes everyone's different but actually there's clear um clusters and um um the people who are willing to dedicate themselves to build a product and like like go through that entire rigma Ro and in put is out there they're actually inside of a cluster
53:01
more like the people everyone else wants to be and if they build things that uh they would love to have in the world um turns out that's they have extreme insight and authority over this rather than um running so this is I'm a little
53:13
bit like there was some cross pollination from The Lean Startup book to um the retail world and I think that's especially in retail this has been bad I'm actually wondering if that was such a good um uh set of ideas I
53:26
think there good ideas in the book but like it feels a little bit ungenuine to just like I think customers are not the people who should say uh what needs to be built I think they need to explain their problems and it's like about it
53:39
like the builders have to figure out how to solve these problems better um I think that's otherwise it's an application of vision and um I think the best companies end up like following a long-term vision and um a long-term
53:51
Mission so I think that's part of it and then um um the people who have access to Capital they underinvested too um which I know it's scary to do internet marketing uh and it's getting harder and harder but like it's not priced out yet so did you
54:13
learn all this selling snowboards or it took until Shopify um I know I I mean the the reason why I love uh um I mean okay so the greatest thing about running Shopify is like my customers are like incredibly inspiring inividual right
54:34
like it's like it's you know it's it's in a lot of places it's very hard to convince people to actually talk to their customers it's actually like sometimes um our problem is the opposite we have too many people in conversations
54:45
with our customers um they are super open to sharing what they see and um they're delightfully discontent with what we give them they they will tell us how to do this better every single time but they will also tell us here's why
54:59
because um you know they you know they are entrepreneurs and and Shopify is honestly like a celebration of you know uh sort of the small bits of capitalism um it's like we love entrepreneurship um I should say like plenty of our customers have started on Shopify and
55:15
are now like absolutely massive Billion Dollar Plus retailers um so it's not it's not like you know there's a great variety um uh spending prettyy much entire spectrum of of of a retail industry in size um represented on the
55:29
system now um but a lot of uh largest are home people who started on the platform um which now has been around for 20 years and um uh but we we love entrepreneurship we love founding the concept of uh uh companies as a um self-expression um and um um you know
55:51
just there's glory in entrepreneurship and it's actually it's underappreciated it's like really really really everyone talks about it and politicians always like are like Pro business formation but like often the behavior doesn't confirm
56:02
to this is keeps getting harder to um policy-wise I mean let's talk about you know that's certainly an aspect in Germany as well um um to to it gets hard and harder to start companies in some places again the United States is the
56:15
opposite we not where we have apis to start businesses which is exactly how things should be um and so um friction changes the behavior a lot of because everyone's allowed to be an intelligent actor in their local incentive system and um if
56:30
you're massively like um disincentivized of um starting a company then um um by just like BS you have to deal with and people want so um we want to be counter Force to that we want to uh remove friction where we can like again we
56:45
can't we can potentially Advocate against that policies um but um we can do a lot about what happens after you know the policy stop mattering and the next step because every single time we have found every single time we've made
57:00
um shopware more approachable or things that were previously complex and um uh gating uh for people's success every single time we made uh something significantly simpler um it actually caused more success uh like more people who otherwise didn't like didn't make
57:16
the hurdle and ended up making it through it and like not stopping is actually the thing that really really leads to success in a in a in a reductionist way and um um so we find that just to be a really really
57:29
important Discovery and then um um again when we are part of a journey I I I like to create the center systems and the the business system of Shopify in such a way that we actually on the same side of a table with our with our customers like
57:46
best thing we can do to grow Shopify is make our customers more successful um because sort of we in this together um um economically speaking and um um so they take an active role in like talking to us like every one of the product managers has like hundreds of
58:03
WhatsApp conversations with um uh active whatsa conversations with uh uh fast growing businesses and I think that's just kind of that's a really really really fun way to build a business um um it's a very very very rare thing that
58:16
your customers are it's like um often the source of your inspiration what's an interesting book you've read lately h H interesting B I've been sort of on a fantasy kick which um is not super conducive to that but what do you learn about management from Reading
58:34
fantasy you read Sanderson right is that am I correct that's right that's right yeah I read Sanderson um um they're long they are long they have commitments um my uh my my my son read uh pentire Stormlight arives four books on March
58:50
break and I have such reading speed Envy um since then um it's um takes me a lot a lot longer um the I I mean I think fantasy is full I mean fantasy is very often a mirror to society in some reductionist way it's a sort of it's a simulation it's a a
59:07
simpler scenario with some variables changed and um um any book that you don't like toss across a room um um is a book that uh usually has realistic characters that have some depth to them and um um following the story given sort
59:24
of the the changes in environment is fantastic I mean obviously a lot of rings is an amazing management book if you will like like the way gun the way gun shows up in just the right time um in in in in in has the exact right combination of words is certainly
59:38
something that's um uh extremely valuable um at least it conforms to um like the best version of the businesses that um systems that we used to build um and I think that's a that that's that's really valuable I think as um most
59:54
interes see seeing like a state is just a fantastically book I I he just passed away you probably saw that on Twitter it's yes yesterday or so a couple days ago um yeah what a fantastic mind and like a I I know no um it it's one of
1:00:08
those books you read which feels like it should be um um a book a particularly good book in a space of lots of books but it seems like totally like there seems to be nothing around it it's just like I think people ask me oh recommend
1:00:21
to me other books like seeing like a state and I'm not sure what to say exactly there's nothing there's nothing quite like it is it's it's really wonderful I've um I I've been fascinated with uh with the Burnham books um um you
1:00:34
mean managerial Revolution and and mellan are just like especially for when they were written incredible books and um just the the degree by which we have known a lot of these kind of things but haven't known the solution to some of
1:00:47
you know the things that Burnham um discusses are just remarkable I I think the best book I've read um was a conflict of Visions um recently by um Thomas sa I I just find that is an incredibly um insightful book by creating a prior to a lot of sort of
1:01:05
political conversations um like a like a like a higher order differentiation between people this I I I just found myself to be a very much a um someone who I I I I just I fundamentally think humans are limited and that's the best
1:01:19
thing about humans like and that systems that we can build can uh lead us to incred ibly amazing feats um of of of cooperation coordination and um like optimizing everything you do to find the best set of trade-offs feels like an
1:01:35
extremely mature way of uh seeing the world and um um I I I'm I'm just constantly fascinated with um uh like uh s writing so final question what is it you hope to learn next um I mean I have been on a um wonderful sort of reconnecting with
1:01:55
engineering uh kick for last little while i' I've really really um had a great time coming back I think co-pilots and AI has allowed me to uh like mitigate all the downsides of of of just not spending time um any like weekends
1:02:11
and working on comp um Computing projects I again I I'm incredibly interested in and in in in um LM Transformer the machine learning world and it feels like an almost unending well um of uh of information um and uh a progress so I'm just like I'm fairly uh
1:02:31
tapped on on on on this um it's it's it's hard to sa this as a field because it just like changes every every couple days um I am most thinking about and I really feel like I can contribute a little bit to um just figing out how to have higher
1:02:48
trust companies at scale I I just think people like the people make a lot out of um people describe as I'm a small company person or a big company person and I just don't think what actually the differences I think people are using
1:03:01
labels around um something they feel and they haven't got the right words and there's probably many things that contribute to this but certainly parts of these things are um a sense of agency and ability to impact an ability to um
1:03:17
like not um have like a lot of what happens in companies is that uh policies and and and and and um uh processes they are well- meaning they bring up the floor so no one actually does something really really wrong but but they people
1:03:33
don't see it they also bring down the ceiling and so you end up in in this com in this places where it doesn't matter who you are you're going to do seven out of 10 work and you know just the all concept of Entrepreneurship is about
1:03:45
going for world class um um and people need to leave in many places after a company gets to a certain size I really think this is uh simply a PA dependent um unacknowledged uh situation that just comes from the way we have uh like the
1:04:01
tools that we had to um uh coordinate in um people and everyone's sort of wholesale dismissal of trust as a part of this I think the best areas of a company like Shopify keep this like ceiling open so that everyone can reach as high as they
1:04:22
have ambition uh for like some sometimes teams come together and just do absolute work class that means you have to be willing to accept uh underperformance as well like a floor can't be quite so high so sometimes you get something you can't chip sometimes
1:04:36
you get something have a direction then the wrong way this all comes with a territory and businesses tend to think about these things as disastrous events and um uh will do everything to not experience this and therefore sty all um
1:04:48
uh uh creativity I think there's I think we are now gaining tools um and approaches that can do this in at scale um I think um just like what the engineers experience with um you know writing code and then um you have a copilot that helps you write code well
1:05:10
given um what you're working on um and quickly gain the insights that you need and the task very very understanding and then um after you done with it there's automated systems that test uh there's uh like automated uh linting automated
1:05:24
um um tests and so on it's to me this I I know this sounds incredibly nerdy but what this basically is is um trusts plus co-pilot and automated verify so as as as as a take on the trust but all trust but verify um thing I think that creates
1:05:42
a wonderfully um fun environment it's it it it turns um working on areas into you know almost video gamish um um and I think we know how to build these systems now and I think we can build enormously better companies um uh this way that are
1:05:59
just more fun for everyone and that also lead to just better uh products and I I just this is clearly possible because I've seen it be possible and we just have to uh come up with a couple more ideas along those ways and we kind have to
1:06:14
figure out the particular downsides because again nothing is perfect just different sets of trade-offs I think the different the trade-offs of building a company this way rather than just reducing it to zero trust and mechan
1:06:25
nice everything is uh enormous for society and like just productivity and and then just like fun at work and um um yeah so I'm excited about that Toby lutka thank you very much great great conversation I really enjoyed this thank you Tyler