Pod Insights Invest Like the Best with Patrick O'Shaughnessy Tobi Lutke – Building a Modern Business - [Invest Like the Best, EP.173] About this episode My guest today is Tobi Lutke, the co-founder, and CEO of Shopify. This is both a timely and evergreen conversation. Timely, as the world as moved aggressively digital in the past two months, and Shopify powers so much of digital commerce. Evergreen, because while we touch on Covid and the Shopify business, this is much more a conversation on business and personal principles, learning, design, and growth. Tobi is one of the CEO’s I look up to most for the type of company he is building and for the way he conducts himself. We discuss business focus, why video games help you learn the power of attention, what design means for products and organizations, and much more. Please enjoy my conversation with Tobi Lutke.
This episode is brought to you by the MIT investment management company (MITIMCO)
Reach out or learn more:
Email: [email protected]
Website: https://mitimco.org/partner/
MITIMCo 10 year Letter: https://mitimco.org/wp-content/uploads/2017/03/MITIMCo-Alumni-Letter.pdf
MITIMCo brochure: https://mitimco.org/wp-content/uploads/2019/01/MITIMCo-Brochure_web_2018-12-05.pdf
For more episodes go to InvestorFieldGuide.com/podcast.
Sign up for the book club, where you’ll get a full investor curriculum and then 3-4 suggestions every month at InvestorFieldGuide.com/bookclub.
Follow Patrick on Twitter at @patrick_oshag
Show Notes
(2:35) – (First question) – The launch of the new Shopify shop app
(2:44) – Daniel Ek Podcast Episode
(2:45) – Jeff Lawson Podcast Episode
(4:56) – Having the right focus and growing a good business
(9:06) – Marketplace business model vs the merchant driven business model
9:16 – Bill Gurley Podcast Appearances - 162 | 144 | 137
(11:47) – His role as a decisionmaker as CEO of the company
(14:07) – What does he mean when he talks about quality
(18:28) – His thinking on design and quality
(18:32) – Zen And The Art Of Motorcycle Maintenance
(19:59) – The Design of Everyday Things
(21:06) – Friction as a force in business and manufacturing
(26:04) – His thoughts on systems and being free of process
(26:08) – The Systems Bible
(30:01) – The game of Factoria and how it relates to systems
(32:16) – Transfer Learning
(34:33) – What Real-Time Strategy games have taught Tobi
(38:30) – Building context inside of a company and making it scale
(41:17) – Personality typing
(46:22) – The Tobi Blueprint
(46:04) – Why he likes The Guide to the Good Life and stoicism
(55:38) – Raising kids and the impact of Covid
(1:03:16) – The kindest thing anyone has done for Tobi
Learn More
For more episodes go to InvestorFieldGuide.com/podcast.
Sign up for the book club, where you’ll get a full investor curriculum and then 3-4 suggestions every month at InvestorFieldGuide.com/bookclub
Follow Patrick on Twitter at @patrick_oshag
Transcript 12,664 words · 4 speakers
Speaker names marked ? are inferred from speaking time and the show’s known hosts — they are not voice-verified.
0:00 Patrick O'Shaughnessy? I know firsthand how complex the tech stack is for asset management firms. And seemingly every new tool and data source makes the problem even worse, adding more complexity, more headcount and more risk. RidgeLine offers a better way forward. One unified platform that automates away the complexity across portfolio accounting, reconciliation, reporting, trading, compliance and more, all at scale. RidgeLine is revolutionizing investment management, helping ambitious firms scale faster, operate smarter and stay ahead of the curve. See what RidgeLine can unlock for your firm. Schedule a demo at ridgeline.ai. Hey everyone, Patrick here to highlight a very unique sponsor. This week's episode is brought to you by the MIT Investment Management Company, also known as MITIMCO, the Endowment Office of MIT. New and small investment funds, listen up.
0:45 Patrick O'Shaughnessy? MITIMCO is looking to find investors starting funds today. MITIMCO is partnership-driven, long-term focused and has an extensive history of backing investors early in their careers. These partners are key to delivering the outstanding investment returns required to support MIT's pursuit of world-class education, cutting-edge research and groundbreaking innovation. MITIMCO is focused on finding and partnering with the best investors across the globe, no matter the market environment. No firm is too small, too young or too non-institutional. If you or someone you know is currently in the process of starting a fund or recently launched, please email [email protected] . Again, that's partner@m i t i m c o dot o r g. Or discover more on their website, www.mitimco.org.
1:30 Patrick O'Shaughnessy? Some of MIT's best partnerships have been initiated during challenging market environments. MITIMCO looks forward to hearing from you.
1:40 Patrick O'Shaughnessy? Hello and welcome, everyone. I'm Patrick O'Chanise and this is Invest Like the Best. This show is an open-ended exploration of markets, ideas, methods, stories and of strategies that will help you better invest both your time and your money. You can learn more and stay up to date at investorfieldguide.com.
2:01 Speaker 02 Patrick O'Shaughnessy is the CEO of O'Shaughnessy Asset Management. All opinions expressed by Patrick and podcast guests are solely their own opinions and do not reflect the opinion of O'Shaughnessy Asset Management. This podcast is for informational purposes only and should not be relied upon as a basis for investment decisions. Clients of O'Shaughnessy Asset Management may maintain positions in the securities discussed in this podcast.
2:26 Patrick O'Shaughnessy? My guest today is Tobi Lutke, the co-founder and CEO of Shopify. This is both a timely and evergreen conversation. Timely, as the world has moved aggressively digital in the past two months and Shopify powers so much of digital commerce. Evergreen, because while we touch on COVID and the Shopify business, this is much more a conversation on business and personal principles, learning, design, and growth. Toby is one of the CEOs I look up to most for the type of company he is building and for the way he conducts himself. We discuss business focus, why video games help you learn the power of attention, what design means for products and organizations, and much more. Please enjoy my conversation with Tobi Lutke.
3:08 Patrick O'Shaughnessy? Toby, thank you so much for joining me today. I've been so excited for this conversation. You, along with some of the other public CEOs I've had on like Daniel Ek and Jeff Lawson, are the kind of builder that I aspire to be. And so I'm going to bombard you with business, strategy, video game, life questions, all over the map. Because it is Tuesday 28th of April and Shopify, just as of this morning, has launched a new initiative, a new app on the phone called the Shop App. I just think that would be a neat place to explore and begin to discuss some of your principles and ideas. Maybe you could begin by just telling us what that app is and how it continues your mission of serving merchants.
3:48 Speaker 03 Yeah, thanks, Patrick. Thanks for having me. I love the podcast, so a great honor to have me, but I get to be on here. So we launched this shop app. This morning, and it's a very new thing for us because it's a brand for first time is a brand for consumers from Shopify. Like Shopify was a very business to business focused company. Our core audience is of course entrepreneurs. The company exists because we are trying to massively increase the success rate of new form businesses and especially in the retail space. That's our mission. And because of that, we worked with entrepreneurs going through a process of building their businesses a lot. Most of the people we understand. And shop now is a app on your phone.
4:29 Speaker 03 It's came out of an app that's already been very popular. It was, we called Arrive, which had about 16 million installs. It's a package tracker. And we took Arrive and merged it with a couple of other things at the same time. Probably one of our most popular products is a product which is now called Shop Pay. You might see we're sort of renaming a lot of things underneath shop something. And Shop Pay is like, if you've ever bought something from an independent online store, that wasn't Amazon, and you might have gotten like a code at the beginning of checkout, the phone told you to enter and then it skipped right through the entire checkout. That's Shop Pay. And so we merged all these things together. Shop is now live. You can use it to see the products,
5:12 Speaker 03 the discounts, the connected businesses you have purchased from before. You can see what's new with them. You can find local businesses, which is sort of topical right now during COVID crisis, and then follow those and connect with local businesses this way.
5:28 Patrick O'Shaughnessy? I'm always curious about how founders and CEOs think about and articulate a north star within a business and how that helps you make strategic decisions. So talk about maybe even using the shop app as an example, how merchants and what merchants are trying to accomplish helps you make strategic decision. And before we started recording, you mentioned this really neat idea of making sure you have the right kind of focus. Explain a little bit about how you think that helps grow a good business.
5:55 Speaker 03 I'm fascinated with the concept of focus because it's one of those kind of things that a lot of people sort of think about almost in a binary way. Someone is either focused or not focused or company is focused or isn't. It's really so much more multidimensional. Once you look to see what are the effects of focus at which levels doesn't exist. So Shopify is one of the core values. And again, the origin story of Shopify really was that I built an online store. I realized no one built software to help new people, new entrepreneurs build online stores. That seemed like a pity and I figured someone should do this. And that was the opportunity which led to Shopify or realization that led to a company. And that's really what we're doing. So the mission is really about this. One of the core values is that we are merchant obsessed.
6:41 Speaker 03 Partly because we think that merchants are playing a much underappreciated role in the world of retail. The merchants are often the makers themselves. They are adding a little bit of themselves into the world and trying to build a business model around it. They are offering the choice that people have. In fact, a lot of what we like about the world is actually driven by our sort of voting with dollars kind of situation. People use this language, but I think it's often that people don't really follow the implications of what that means. We get to go to political ballots, maybe every four years, maybe a little bit more often. But we make an enormous amount of purchasing decisions.
7:22 Speaker 03 And of course, every time you buy a pair of shoes from a local cobbler rather than from a multinational. What you're actually doing is you're voting for everything that business represents. You're voting for that you like, that they are there and they are able to have this particular product. You're voting for the product. You're voting for them staying in business longer. You're voting for the entire supply chain and all these providing employments and so on. The world actually rearranges itself around every one of these single purchases and forms itself based on this. And so the merchants are very, very, very important active agent in this choice.
8:04 Speaker 03 And like a place, a city, a village that only has the single retailer where everyone buys from are not as best. Almost no way for this to be reversed. So our focus is on merchants. This is something I've been trying to maintain. I think. Focus of audience ends up being amongst all things that you could have focused on. One of the most significant predictors of a success of a company because it's very, very easy to get diffused between different stakeholders that you're building something for. It's very easy to get yourself in a situation where you have to actually optimize against the interests of your own customer base or against the interests of the people who are using your customers' products and so on, so on. And then that's actually very common thing.
8:47 Speaker 03 So Shopify has tried to say, okay, everything we are doing, we are on one side of a table and we want our customers and partners, API developers in this case, team developers, all of us, we are on all of the same table. This is actually rather easy in our world because the end result is we want to make other people look great, the merchants, we want to enable businesses be easier and we want them to sell. And so we can all agree on that, that's easy. So you're asking this question actually on an interesting day because shop is obviously something that we are bringing out, which we have to take the needs of buyers significantly more into account. So we actually, hopefully eyes wide open, go into this situation where we now have
9:28 Speaker 03 a completely new constituency and a new audience to serve and try to figure out the particular Venn diagram intersection of value between the interests of those two groups.
9:38 Patrick O'Shaughnessy? Can you say a little bit about how you think about the marketplace business model, not in opposition to, but maybe in contrast to this merchant obsessed way of thinking? Bill Gurley, who's been on a few times, famously says, you need to get, collect the demand in a marketplace. That's the most important thing. Suppliers will come if you have the demand. You focused on suppliers instead. So how do you think strategically about whether or not to engage in a marketplace business model or instead to maintain focus on the merchant side?
10:06 Speaker 03 Yeah, I mean, the reason why we've never successfully anyways built a marketplace is partly because it's the oldest request in the box. Like we've, if you go use a Wayback Machine, Shopify.com actually was a marketplace in like 2007. It's not that it's a new idea, yet the moment new people join the company, my first meeting with them is usually at least two people, I'd say, I have a really great idea, we really should take all Shopify stores together and make marketplace. So it's probably the most single discussed item in the history of Shopify. But the question for me has always been, Products are always created backwards from value. Why would we be able to make a marketplace that is more valuable for the buyers to go to, rather than just using Google to look for products or go to Amazon?
10:51 Speaker 03 So to the people who work for Shopify or know about Shopify or care about Shopify, which is not that big of a group of people, for them it's like, yeah, cool. If there's a search engine across all Shopify stores, they might go there and they would find this valuable. But why would other people find it valuable? And this question we kind of never could really answer. And this is why we didn't build a marketplace in the traditional sense. And shop is not a marketplace in the traditional sense. It's actually more like a shop of shops. You're finding, you're discovering merchants and brands to follow. And the products you see are based partly algorithmically, but based on the people you have already purchased. Like a shop is much more about intensifying the relationship that the buyers have, that the brands have purchased from, rather than doing kind of the opposite,
11:34 Speaker 03 which is what most marketplaces do, which is actually point you to a larger variety. Because a marketplace, it derives its power from the opposite of being friendly for the merchants. In fact, in most marketplaces, the merchants are really just, their margins are the opportunity and the future fees of a marketplace in every category. And so a marketplace actually derives power by diffusing the influence of any individual merchant. And so it hits people against each other in terms of it's a system. And those are challenges that are very difficult to handle and certainly were too difficult for Shopify that existed over the last 15 years now, 16 years now it exists. And hopefully, we will be able to navigate these difficult waters.
12:19 Patrick O'Shaughnessy? I'd be very curious to hear how your role as a decision maker has changed in your tenure as CEO. And I'm always especially interested in how you decide what sort of decisions you want to still go through you versus decisions that you want to delegate. So less interested in the decisions themselves and more just how you think about what to keep conceptually. How has that changed over the years?
12:42 Speaker 03 I mean, this is, if this would be reverse case, I wouldn't ask me this question because I don't think I actually have anything to teach on this. My team would all probably come and tell you that I probably violate every rule of how to do this properly. I'm a very detail oriented person, either culturally for being German or through some happenstance of my upbringing, have a very high minimum quality bar, which is something I'm teaching to other product people in the company. I'm fascinated with philosophy, I'm fascinated with how to make good decisions in general. I make my decisions about where I'm helpful, based on how how much I think
13:24 Speaker 03 the area that fits existing people is going to get it correct. What a company is, is like it's this sort of collaborative collective inquiry by a whole lot of people trying to figure out, well, what should the best products look like in this world? We've said ourselves as a problem, again, I keep saying, it's like, let's make internal entrepreneurship significantly simpler and more participatory and common. We have a hypothesis that it's possible to accomplish this. Shopify, the product is sort of our experiment for this hypothesis. And so I end up spending a good deal of time on product. I divide and conquer the areas with my product team, my chief product officer.
14:05 Speaker 03 But specifically for the key products that we're working on, I like being in product meetings. I sometimes am in the technical architecture meetings and hopefully I'm somewhat helpful at getting the team to point everything into the same general direction. It's not a chain of command company, I don't think that wouldn't work at this size, but it's, I think we're all kind of trying to seek, hopefully with very low ego, about what would be the best way we could do, given all the requirements of all the stakeholders. And then so it's multi-barren equation and sometimes I can have that and sometimes no, better don't.
14:39 Patrick O'Shaughnessy? Maybe you say a little bit more about, I love this phrase, having a very high minimum quality bar. What does quality mean specifically to you? Is that design, is it user experience, is it aesthetic design? What is quality?
14:51 Speaker 03 I grew up in Germany, so there's always been this, it's funny, like there's obvious stereotypes around and many of them are true. But I would say outside of Germany, there's always this sort of Germany is really good at engineering thing. But I'm actually really, I don't think so. I think that's a misattribution of something much more interesting, frankly. I think Germany has a culturally very high minimum quality bar, like a door that you close in a car, they don't feel any heft, just because it's mostly plastic parts. It's just would negatively affect a review by anyone in that sort of region of the world significantly more than, I think, outside.
15:28 Speaker 03 I think this is actually, like, can also be a problem. I think sort of a Germanic region, and by the way, I'm just including Austria and Switzerland, probably even having a higher minimum acceptable quality bar than Germany proper. They're not exactly entrepreneurial places, partly because people probably don't ship fast enough. The United States has a lower minimum quality bar. That's why I think people ship faster. I would say China, frankly, has an even lower one. And there's advantages in that too, in terms of speed, but quality is a sort of a hard concept to really just, it's not quantifiable. And I think this is partly why it's so hard to produce for the business world of today, because there's this sort of disease of everything needs to be quantifiable. If it can't be stated in an OKR, then apparently it doesn't exist.
16:11 Speaker 03 And so it ends up being a nebulous concept. A lot of people don't like it as a concept, just because again, how do I create the checklist to figure out if this is a quality product? Well, you don't. You judge it. You make, you use it and you understand the problem it's trying to solve. And then you make a judgment. It's like, does this feel right? It's partly the way it looks and it's partly the way it talks to you. It's partly the way it feels. But it's everything from the frame rate of animations to the copywriting, to the precision of illustrations, but all the way down to the architecture. How quickly did the app launch? How hopefully quickly can the app be improved over time?
16:53 Speaker 03 And so all this, you combine the requirements and make a judgment on. One thing I would say is maybe feeling somewhat self-conscious right now. We made a company-wide decision to lower our minimum acceptable quality bar due to the pandemic. If you observe Shopify right now, we are launching a lot, almost just because of this one change. So we are pulling a lot of our roadmap forward in time. Everything that can help businesses right now, just because again, we are in a crazy world right now. Many people live under shelter in place audiences and Shopify is not just online stores. We have a very large retail business, a point of sale business
17:34 Speaker 03 as well. And there's a lot of people trying to figure out what to make out of the current situation. And a lot of people are realizing in a day roundabout way right now, that a retail store is really a participant in the global world of commerce, but is connected to that world of commerce by the very tenuous strand of a street. And that street has been shut down and therefore they got completely unplugged, the same way you might get unplugged from the internet by turning off your router. So what everyone's realizing is everything is now digital. The core of every business has to be digital, has to be a digital database, a mini-cloud. And from there, you have multiple strategies of how you need to connect with
18:17 Speaker 03 your audience. Hopefully shop is going to be one, but your online store, your emails are important ones, your retail stores, all the retail stores you have are such things, selling on Instagram, Facebook, Google, and eBay are all kind of ways of just different channels now for business. In a lot of ways, that's exactly the realization that we've tried to explain to everyone for the last 10 years, that this is really the way everyone has to think about the retail business. And so we now find ourselves in this, well, we were correct, but even we were not ready for the implications like this would happen. So this is why we're trying to just chip as much as possible right now.
18:58 Patrick O'Shaughnessy? Before leaving the notion of quality, you said philosophy, so I'm reminded of the book that got me into philosophy, which was Robert Persig's Zen and the Art of Motorcycle Maintenance. And he talks about this notion of quality a lot in that book, as sort of the thing that does the job most efficiently. Motorcycle part doesn't need to be the part shipped from the factory, it needs to be the thing that elegantly solves the problem. And I've seen you mention Dieter Rams elsewhere, which is a person that I'm sort of obsessed with from a design standpoint. Say a little bit about the influence on your thinking of if you're a Persig fan or a Dieter Rams fan, as it pertains to design and quality.
19:32 Speaker 03 Yeah, absolutely. So, you know, again, I was born in 1980, I grew up in Germany. When I was in San Francisco a couple of years ago, I was staying in a hotel next to the MoMA and I went to, I saw Dieter Rams exhibit and went to it because I've been a lifelong fan. It struck me that, basically, I visited my house, I grew up in a middle-class family, in Germany, that's just, also not artifacts that came from the catalogue of best-designed objects ever, that was just the objects we were surrounded by. So I think this actually played a large role in this. And I think, actually, but you see the background, there's a lot of Dieter Rams projects, objects behind me. But like, it's an influence for sure. Honestly, I don't think I have anything too piffy to say about this. I don't tend
20:14 Speaker 03 to be like, what kind of person would just sort of comes up with, hey, here's like the one sentence that's gonna explain this entire thing. I just, I find Rams's timeliness of design to be just objectively true. I find, I love Newman's book, The Design of Everyday Things. There's just a pragmaticness to the great designers that I think is extremely underappreciated, and none of them talks about how something looks. And this is sort of, if you go to his vinyl players and you push any of the buttons, there's a chunk to this whole interaction, the chunkiness to even pushing the buttons. That is, once you do that once, you will never think about this object in the same way you did when
20:56 Speaker 03 you just saw it. Because you realize, you make an assumption about this, about how this would all work or how this would sort of interact. And this assumption is so vastly, you realize your assumption could not have possibly been high enough, correct enough, because you immediately feel that Rams thought about this significantly more than your snap assumption by just seeing it. And I think maybe that's kind of at the end of it, the experience. Like, if you are positively surprised, if your expectations, your intuition's expectations don't prepare you for the quality of experience you will have, I think then you're working with something that is well-designed.
21:38 Patrick O'Shaughnessy? Do you think that that same sort of general idea, which I take sort of to mean remove all unnecessary steps and frictions and thinking in the user to just help them get the job done faster? Do you think that same idea can be applied to building a company, maybe specifically since people are so important to a company like yours? Can't really build a culture, but sort of set a standard within a business through a design lens?
22:04 Speaker 03 Absolutely. I mean, this really gets into a concept of friction, which I think is probably the most powerful underacknowledged force that exists in the world of business and products in general. A lot of what the people think the world is just like is actually products of accidental introduced friction, or sometimes willingly introduced friction. Just to give some examples of that, I don't know if it's a good example, but it's an example that comes to mind. This was sort of very early formative experience in a company. We might have been 40 people back then, and it's the first time that we just sort of said, hey, yeah, we probably need to get some lunch for a place. And so we got lunch catered. And that was really, really obviously successful and cool and all these kind of things.
22:49 Speaker 03 And then afterwards, everyone cleaned up and it was good. So by month two of that, the novelty has worn off, like as everything that we experienced gratitude for, eventually trend towards
23:03 Patrick O'Shaughnessy? Being used to it.
23:03 Speaker 03 Taking it for granted, or worse, towards entitlement, frankly, but in this case for granted. And it started to more and more that Daniel and I actually ended up having to clean the kitchen area. And so, so we said, okay, this is interesting, let's try something. So first, we just attempted to say, posting a new policy, everyone has to clean up. And that worked for a little while and then it stopped working. And then we tried sort of social nudging. We posted a picture of Daniel, my co-founder, like being really sad, doing dishes, just seeing if we can change people into doing it. And that worked for a little while. And eventually what we realized is it obviously worked back to the mean. And so eventually Daniel said, you know what? Instead of trying to get people to change their mind, let's just make it simpler for them to do the thing that we want them to do.
23:45 Speaker 03 And then we said, okay, we'll have always, every exit, there's four exits in this room, has a thing for the tray and the cutlery, and we make sure it's always empty. Never had a problem. We are now 6,000 people. We serve millions of lunches a year and it's not an issue. Just because since then, our floor plan design just involves putting the trays stationed to all exits. So we see this as such a massive component. Think about policy in companies. Think about process in general. You can actually separate process into two different things. There's process that makes something previously impossible possible, or makes something that was previously possible ten X easier. Those are good processes. But that's a set.
24:28 Speaker 03 Everything that doesn't accomplish either of those two things is bad process. The only reason why you have that process is because you're trying to get people to act in some meaningful way, different from their intuition. It's not about, hey, here's enabling something new. It's about, I would like you to do this particular thing, this expense filing or whatever, whatever process is, in that particular way, because that makes it easier for me. But by that, you're actually creating a unintuitive process for everyone and somehow be okay with that. And it's amazing once you realize this. So many things like dress codes are really just, that's like corporate baby proofing. It's like you're literally not trusting yourself to dress.
25:10 Patrick O'Shaughnessy? Do you think that this sort of thinking also makes it very hard to leave a company? I would imagine somewhere corporate world is so full of these silly frictions that if you get to someplace that doesn't have them, it would be very hard to leave.
25:22 Speaker 03 I mean, yes, sure, maybe that's actually seen as a benefit in some places. To me, that sounds like very dystopian. I think when I hire someone, we talk about this sometimes. I think everyone has five creative hours in a day. And if you and I work together at Shopify, I would love four of those hours for Shopify. I think that's sort of a relationship that exists with a mission-based company. Now, how much I get out of someone depends kind of on how much they apply themselves. So first of all, a company needs to be worthy of people applying themselves fully. But then second, it also behooves the company to not create the amount of red tape in process to make it so that thirty percent of everyone's brain has to just keep
26:06 Speaker 03 all the kind of directives in the working memory about all these things where the company wants someone to behave differently from how common sense and judgment would otherwise make them behave, which is again what actual processes are. And so trying to create a process light company where basically you say, hey, we trust each other, we even have language around trust in the company, around the trust battery. And here's your best judgment and let's collaboratively inquire into this problem that we want to solve.
26:36 Patrick O'Shaughnessy? Am I interpreting it right then? You remind me of another favorite book called The Systems Bible by John Goll, which I picked up thinking it was going to help me design good systems. And all it really did was convince me not to have systems at all, because they end up sort of perverting their own original process cause. Is the conclusion then that you actually try to be free of process for the most part? And sort of decentralized and more reliant on just good intuition of the people you hire and hiring great people?
27:04 Speaker 03 Yeah, exactly. Loosely covered, highly aligned is, I think, still the best sort of general principle to build a company with. It's important to explain what that means in most cases, because that's not actually an intuitive idea. But yes, Shopify has lots of different product lines, which are largely independent. And we avoid process as much as possible. We hold ourselves to the standards that process has to make something new possible or something existing techniques easier before introducing it. And then we have a good communication system where we get together and the company comes together once a month, just does a pulse meeting of what everyone sees. But information has to flow really, really freely, but that's kind of it.
27:43 Speaker 03 Again, as long as everyone's there to kind of try to who's really bought in what the company is trying to change in the world and what company is, is doing. Then this actually works really, really well. By the way, systems thinking is fascinating topic. I actually, we do a company sort of kickoff event called Summit once a year. It's also not quite the way you would imagine something like this. It's actually a lot more about philosophy and teaching people how to think. Because again, everything has to rise from the quality of your thought. I think two years ago, I actually spent the entire, my 45 minutes of my summit talk, just teaching systems thinking. Because it's just, what is the one edit I would like to make to this company right now? But I know everyone's going to watch this because everyone's been paid to watch my summit talk.
28:24 Speaker 03 So I tried to implant systems thinking in everyone. It's actually kind of, it had some really interesting downstream effects. It's also lots of wonderfully underappreciated mental models and topics out there.
28:36 Patrick O'Shaughnessy? What do you think in that 45 minute curriculum, if you will, is most underappreciated? Like, what have you found to carry the most freight or have the highest impact on people once they learn it from you?
28:45 Speaker 03 I think the one thing systems thinking cures you from is cause and effect thinking. It teaches you how to not see a thing and say, this happened because that happened because that happened. But it actually thinks like, okay, well, If this is a thing, and it's a thing everywhere, what systems are actually reinforcing the thing to be this way? And how can we affect the systems that are reinforcing this kind of thing? One topic that was very, very big topic over the years in Shopify is like, why is entrepreneurship going down? Why are the baby boomers the most entrepreneurial generation? And then why was Gen X less entrepreneurial? Why were millennials less entrepreneurial? And mapping this out as a systems diagram on a whiteboard, like you say, it doesn't matter if you get it correct. Every single time you're trying it, everyone in the room learns stuff.
29:30 Speaker 03 Because everyone comes to that kind of conversation with completely different perspectives and has different opinions on why and what is actually in the way. I mean, conclusions end up being largely friction and risk, sometimes capital related. There's actually some science that this may reverse now, which is awesome. Because, I mean, again, Shopify and others have worked very, very hard on trying to reduce friction. I think the internet has made it actually rather harder to start new businesses. Because in a previous world, every city kind of needed a copy of everything else, which lowered the bar. If you could travel, you could bring valuable ideas home. Now it's more competitive than that. Cost and effect thinking is just something that unfortunately we all accidentally taught by school.
30:14 Speaker 03 It's you study, then you write a test. That leads to a mark, that leads to a final score, that leads to your, can you go to university or not? It's sort of a way unfortunately everyone thinks about the world. But of course, in a reality based system that tries to get you to be able to think well and learn fast. And there are tests that judge your ability of doing so. But there is no linearity in the results. It's all, you have to think about it completely differently.
30:41 Patrick O'Shaughnessy? Can you describe the game Factorio? And how it relates to what you do in the game? And how it relates to this idea of systems?
30:49 Speaker 03 I'm a card carrying member of video games are really good club, I guess. I don't think that's that small of a club. It's just randomly, not a lot of people openly carry that particular card in the business world, I find. By making a conscious effort to say, There's nothing wrong with playing video games. Video games are amazing. I learned so many of things in my life through video games. I mean, the only reason why I learned programming is because I wanted to make changes to the video games I was playing when I was a teenager. And there are just some, like, obviously not all video games are created equal. I tend to point at a couple which are extremely valuable. Factorio is one of those where I straight up say it's the one video game that everyone in Shopify can expense because it's just bound to be good for Shopify if people play
31:32 Speaker 03 Factorio for a little while because part of Shopify is we are building warehouses and fulfilling for products for our customers. We are building global supply chains, logistics networks. And Factorio is kind of something that makes a game out of that kind of thinking. And you know what? It's actually not surprising because that kind of thinking is super fun. It's super fun to take the idea of, hey, here's a factory and that factory needs imports and those imports come somewhere out of the ground and that needs to be producing at a rate that it needs to be consumed and as we more consume, kind of have to increase production, all these kind of things. When I look at this world and study it through books and conversations and before committing a company going to this direction, I invariably find this is an unbelievably exciting world.
32:17 Speaker 03 And so I love that video games are getting a little bit more mature where it's not necessarily like, I mean, I enjoy a good session of Call of Duty as well, but we all kind of understand that that is popular. Building a supply chain is less obvious, but when you play this particular game and it's going to be, it'll suck you in and your brain will have pathways that will light up in many, many, many, many more situations than you can possibly imagine. The, the theory of why I think video games are so interesting is because of transfer learning. There's a good book called The Talent Code which sort of talks about this. And there's a famous story about people analyzing why Brazilians were better at playing soccer than everyone else for a while. And then there's a million reasons again, it's a system which is reinforced by all
32:59 Speaker 03 sorts of things, but people have not found all the reasons and reinforcing mechanisms that made this true during the nineties and eighties when people looked at this, maybe early two thousands. And one of the reasons ended up, one of the inputs into this system, and in Brazil, there was a culture of playing a pickup version of soccer that was played in a much smaller space with fewer players. And so then the players played this, they did the things that you need to do to be good at soccer, but they did it significantly more often because there simply was more ball contact. In the end, it's like, just because that's a different game than soccer, it doesn't mean that people are not going to learn these things. They will end up having had more ball contacts than a player would have gone
33:41 Speaker 03 through the British system by the time they went into Premier League. And so this is one of these things. What other situations exist where you can kind of, in a compressed way, practice a skill that you need in a business world? I make strategic decisions as part of my job for the company. Those strategic decisions are, I hope I'm doing them well. I only find out a couple of years later. But the way I'm doing them is I'm trying to get as much context as I possibly can and try to use, like resolve this many stakeholder situation plus technical abilities plus future timelines plus the way the internet will go. And compress this all in kind of situation. How often do I do this in a year? I mean, a couple of times, sure. Maybe once a month. I don't think so. Major company
34:26 Speaker 03 decisions, do I bet the company and allocate all my funds to this thing? Really don't come around that often. But if I sit down for an evening of poker, I make decisions very much like this. Once I have basically a go no decision. So that's another one of those instances for transfer learning. And then when you look at something like playing a game like Starcraft, which I think is particularly good, or a Factorio, and you in a very compressed fun environment make, follow a certain activity over and over and over and over again, which otherwise comes around only rarely. And doing that, they change your mind and change your brain and then will prepare it in some situations that you can never really predict ahead of time.
35:04 Patrick O'Shaughnessy? So I grew up playing probably too much Starcraft and Warcraft and fine real-time strategy games, just in general. Maybe you can describe what real-time strategy means for those that haven't or don't play them, are especially interesting in the different strategies that can be applied. In Starcraft, most particularly, the sort of teams, I guess you could call them, or races that you can be are quite different in their style. Describe what real-time strategy games have taught you, what they are, and sort of the different styles that you see as successful, whether that's turtling or sprinting or what have you in an RTS game.
35:37 Speaker 03 This is a very complex topic, of course. I should say, I just spent a lot of my formative years in my teens playing real-time strategy games, Starcraft, Warcraft, exactly as you described. It feels impossible to say that spending a lot of time in your formative years with something doesn't somehow shape you in the full future. So it's hard for me to say are these games generally useful? I can say for me, they absolutely were. And I think they teach you a lot of things which I think are unobvious lessons that I'd never encountered in business books being described, but are definitely these really sort of invisible forces that are really obviously a big part of my day anyways, such as, I mean, yes, you have to learn a game which is complex.
36:20 Speaker 03 You will have to learn complex interaction between different, everyone can play a different race, they are all different. And how, if you're one race and you play the other race, the way you have to approach a game is going to be completely different than if you play against another one yet again. And so I just like learning to tame this kind of complexity and making strategies in something like this is important. But then these games are always have an economy component to it where you have to make decisions, especially a lot of decisions between long-term and short-term planning. Am I gonna spend the resources I'm gonna get over the next minute on a army which I'm trying to cause economic damage with on the other side? Or am I gonna invest in infrastructure which then allows me to get an army quicker but later? Or a bigger one later? It's all about how do you make this decision?
37:05 Speaker 03 Well, you can guess, but you could also try to get information one way or another. So you end up sacrificing some of your workers to actually go out to get information, like doing scouting, that you otherwise wouldn't be entitled to, which then can, even though you're taking economic damage over doing that, you then be out ahead because of the information you gained. And this ends up being this incredible, interesting, multi-layer game of chess that you all are performing in real time. But the real lesson, I think, that you learn from these games is not even this sort of fluidity of resource allocation and multiple stakeholders and then quick reaction and short-term, long-term thinking. It's actually just recognizing that there is
37:47 Speaker 03 Even though the game simulates an economy, there is another resource that is way more limited and is way more important, which is your attention. It's really, it ends up being that a real-time strategy game, especially played at a very high level, one-on-one, is really where you're tested of how good are you at paying attention to what's going on, how well are you investing your attention? And in fact, at a later levels, it gets to the point where you actively do things to your opponent, which are designed to just drain their well of attention, you making stuff they have to pay attention to, so that they can't actually do as good a job as they would otherwise do on their normal game. And the subtlety that comes from all this is all present in a world of business, but
38:31 Speaker 03 it's not really, really understood, I think, or well-studied.
38:35 Patrick O'Shaughnessy? I know that we're not supposed to ever go into politics on these shows, but what you just described seems to be the, the strategy that you almost have to respect in Donald Trump, that he is a master of sucking up other people's attention and time. And I've never heard it framed that way in video games, but what a powerful idea that the return on our attention in the digital internet era, well-placed, is probably the highest it's ever been. It's also the easiest to be distracted and let your attention diffuse. A lot of what you said was so interesting in the gaming context and also before about building context, like you're trying to, in systems thinking, you're trying to collect context from a lot of different domains to make a good decision. How do you do that inside of a company? So how do you help, I don't know how many employees Shopify has, thousands of employees,
39:20 Patrick O'Shaughnessy? have the appropriate context and make that scale? Are there ways that you've found it successfully doing that? That's something I'm grappling with now.
39:27 Speaker 03 Yeah, so Shopify has 6,000 people and it's a high-context company. To be very successful at Shopify, you kind of have to understand the thinking of Shopify. And it's one of the most important things for us, for the systems of a company, to help get everyone up to context. Context, finally, I host a weekly podcast within Shopify, which is internal-only context. And it's literally the topic is, let's go back to major decisions, talk about all the variables that we are considered and
39:58 Speaker 03 How did it work out? Was it the right thing? Was it not the right thing? Because again, you only ever get the result for a decision with hindsight. And there's of course a hindsight bias. Everyone says, oh, we should have known this. But no, like you had a finite amount of information at a certain point. And of course, you need to make a decision too. By the way, you can spend forever creating context. You have to kind of make a decision somewhere between exploring forty and seventy percent of the entire problem space. Because otherwise, it just takes too long. This is I think Colin Powell's rule for decision making. And so that's one way. Every time when I have a board meeting four times a year, I rewrite a pre-read for that, which goes to the entire company after a board meeting. So that's a good source for context.
40:42 Speaker 03 A lot of the recent, especially director and plus hires actually told me that they just spent through the entire board letters to read through. And that was very helpful because it kind of creates a sequencing. You can almost go for a journey of a company with it. I mean, we have an internal vault, which is well maintained. Every product, we have an internal system, like lots of internal systems. But one internal system is that all the projects that anyone in Shopify has worked on are in a centralized system called GSD for getting shit done. You can just make it, follow it, and then you get the email updates. There's a lot of these kind of things. Shopify is a default to open companies. So like, which really means that by default, everything is shared, but it's not a context through push company.
41:23 Speaker 03 What that means is it is your own job to get the information outside of your direct line of work that you think are relevant for you to build up your understanding. And this is a very clearly communicated piece of information to people. In fact, during the hiring, we are saying, you will do better if you have a little bit of archaeology tendencies in this company. And it's an important part of being successful. And I think setting the expectation is really important.
41:49 Patrick O'Shaughnessy? I've seen you talk elsewhere about different personality typing, something I've been fascinated by my whole life, starting with Myers-Briggs. And I realize I feel a little self-conscious wading into this topic just because I know it's hard to nail down what actually matters, what's real, what's empirical. There's the big five, Myers-Briggs, Enneagram, et cetera. But I'm curious, it seems like we share an interest in this, why you're interested in personality typing? And whether or not you think it can play a productive role within a company?
42:17 Speaker 03 I think it can play a very productive role in company, but probably I've seen it also being incredibly misused and used for things it was never meant for. So it's like one of those topics that I wouldn't generally say, hey, do personality types and then act based on whatever the results of this are. Here's what I think the best thing is about personality testing is you afterwards get a result and you will probably forget everything it said, but there's one takeaway that you will have, which is like, oh, my God, everyone is apparently really different. And that is one of those life's moments from which you never can go back. It'll change how you think about everything. And it actually takes usually quite a while for people to get this realization.
43:00 Speaker 03 Or like people have sort of intuitive, oh, yeah, people are different. I remember because my friends went to like tennis and I was in the soccer kind of thing. Oh, you have seen the entire world differently. We are observing the same situation, but our takeaways are polar opposites. It was a good or not is something is conditional based on what we are actually looking for in the same situation. Just having a working understanding of this and actually having an appreciation for other people's perspective is, I think, hugely valuable development for everyone. And I think personality tests are a way to get there. It certainly helped me in understanding it because I'm a challenger.
43:40 Speaker 03 Like Enneagram way was Nate and INTP, I think in Myers-Briggs was ranking. I mean, I totally say it took me to my late twenties to realize that not everyone takes all their own ideas and challenges them, trying to wrestle them down or try to figure out like, why talk myself out of ideas? And then I do that with everyone else's ideas and everyone thought I'm just being difficult. In reality, from my perspective, me taking one of someone else's ideas and then challenging it and trying to propose in it is actually a sign of significance. I trust your ideas so much that I will treat them exactly like my own ideas. And this does not come from a perspective of me trying to be difficult.
44:20 Speaker 03 This comes from me, a perspective of me trying to figure out what's true and correct and truth seeking. Helping other people explain this is really good. So usually before I have my first meeting with anyone in a company after I join, I send them my blueprint, which I've written, which just tells people all these things, all the downstream implications of my personality type and things I've learned about myself so bad. You can kind of skip the first year of working together that they have to like painfully figure out how I work. And I sometimes get one back from other people and it's awesome. It just really accelerates everything.
44:52 Patrick O'Shaughnessy? It's almost like these profiles help you just put on a different colored pair of glasses and see the world through someone else. Maybe just makes it easier to communicate with somebody else. I would have guessed, just I'm sort of recently discovered the Enneagram idea. And again, I'm not recommending this, like you aren't for any sort of major decisions or anything, just out of interest. I would have guessed that you were a five, not an eight. So I'm an eight with basically an eight and seven, so almost tied at the top. So I'm curious, the investigator, which is the type name for five, would seem to describe a lot of your career. Is that also something that you've thought about?
45:24 Speaker 03 It's exactly, it's an eight and five is ended up tracking almost to the same number. So yes, good. I find information investigator is the personality type that they are. I sometimes talk with people about the concept of a ground state, which is kind of a really interesting concept underneath the topic of personality types. What it means basically is it's the answer to the question, what do you do when you're not doing anything? What do you do when you're not expanding energy? Often television watching or something like this. And some people are blessed with extremely valuable ground states. I've got lucky in that sort of ingesting information is just kind of what I like doing. I just, when I don't do anything, I'm just trying to basically do the equivalent of what I described
46:07 Speaker 03 in the scouting analogy with real time strategy games. I try to get as many information I'm not entitled to, which wouldn't have made it to me in any other way, so that I can make better decisions about things.
46:18 Patrick O'Shaughnessy? For those interested in this, I think a mutual friend of ours, Graham, and I have talked about this five concept that we call aliens, and aliens in the nicest sense, that five, almost as if an alien race came down and started just looking at stuff that they would just figure it out as it is without any baggage, sort of a first principles type mindset. This seems to be very common in some of the most successful investors, I'm sure, and entrepreneurs as well. But some of the most kind of crazy successful investors have this insane ground state, I love that term, that is the investigator. So, anyway, it's a rabbit hole of a topic, but maybe something for people out there to explore. Anything else on the Tobi blueprint that you think is interesting and worth sharing? And why did you first do that? Is that something that others can replicate?
47:01 Speaker 03 Yeah, I first learned about it from my friend Luke Lebec, who was then a TripAdvisor, who is now part of Shopify as well. He told me, he ran a very small but extremely world-class sort of team with a lot of senior people, and he ended up making that discovery of being able to skip an entire year of collaboration and just get right in it by doing it. So I followed suit and I found it extremely valuable as well. I don't know how generally, I don't know how common it is of a concept now. It feels like the kind of thing that after the first person successfully did it, it should have traveled probably more than it might have. Maybe not enough people have talked about it, or maybe people end up being surprisingly uncomfortable, talking about their strengths and weaknesses, which might
47:43 Speaker 03 also be the case. But is there other interesting things in there? I imagine, I mean, we hit a lot of these kind of things. Even, I think that technology can probably solve most problems. That's, I think, useful to tell people. Why? Because technology is how we can take otherwise complex systems and make them friction-free. And I think that's, again, friction is one of the most world-shaping Unacknowledged forces and technology tends to be the solution to it. I think the bit about challenging ideas is in there. It's these kind of things. I don't see why I wouldn't publicly, frankly, there's nothing in there that I would be terribly self-conscious about. So maybe I should, maybe I will.
48:26 Patrick O'Shaughnessy? I would love to see it. I would endorse it. I think that the exercise itself of writing it, it would probably be useful for most people, even if they never shared it with another person. Forcing yourself to put stuff on paper can, can be powerful. Speaking of paper, I've seen you reference this book called The Guide to the Good Life. So in the books that I've seen you as a fan of, that was the only one I hadn't heard of. So I thought it'd be fun to ask you about it. Why is that book interesting to you and what did it teach you?
48:49 Speaker 03 I recommend it a lot. I like it as a one discovery which helped me a lot. I've had run ins with mental health and depression. And what helped me a lot, and you should read between the lines, is I probably had fairly minor cases because just reading about things helped me, like a little bit of therapy, but that was all that needed and now I'm much better. But what really, really helped me is that this concept of a life philosophy is something that I think is really needs to be talked about more. This book does a really good job of going back to ancient Rome and Greece where there was religion, there were deities, but of course there were Apollo and Zeus and so on. And maybe most, almost sometimes feels like when you read these stories that it's kind of more like slapstick comedy.
49:35 Speaker 03 And so the gods did not have interest in human affairs and didn't tell you how to live your life in any meaningful way. Therefore, there was sort of this Cambrian explosion of life philosophies, this sort of marketplace of ideas for this. And there was the Stoics and the cynics and pedants and so on. This book does a really good way of taking people back to this little bit of sort of forgotten history. To the time then people said, okay, well, I did not happen to grow up with a monotheistic religious idea that also backfills a life philosophy, which is the situation I think most of us in this sort of Protestant Christian world we're up in. I happen to be, don't have too much to do with that, so.
50:18 Speaker 03 Potentially, I was missing a life philosophy, even though I created sort of one based on my moral values and ethics for myself. Eventually, I figured out, hey, what I kind of created for myself is actually been significantly better explored by a group of people 2000 something years ago during the Roman Empire Republic era. And it's called, in this case, this just worked for me, is Stoicism. I wouldn't call myself a stoic, but just reading about that and then the reading all the works of the stoics and this sort of cohesive idea. And frankly, what psychology has done based on these ideas, this is really rooted in Zen Buddhism.
50:58 Speaker 03 And I think a lot of it has been improved on since by people like Alfred Adler. And just finding access to this was very meaningful for me. And the Guide to Good Life, I think, is an extremely well-written, here's a one book, take it, and I think you might find out you're missing something. Or you might find out there's a new direction for you to go, which is can be an incredible source of power and just a source of good thinking. Because that's what philosophy actually is. Philosophy is, a lot of modern philosophy is very abstract and very kind of interesting to me, but somewhat inconsequential to day-to-day life. That's a fairly recent thing, until there recently, maybe 100 something years ago.
51:44 Speaker 03 Philosophy was just how to think well.
51:47 Speaker 03 And what could be more useful than the study of how to think well? Of all the things that you could possibly study, isn't that the thing that we really, really should spend our time on? And no one explained this to me. I had to kind of come to this myself. And I think, again, I think this book, it's a book I recommend other people. I took a different path into this, but like, I just think it's a really, really good whirlwind tour of what I just described. And I think a lot of people can take a lot of way of it. And like, some of my friends also said it was one of the more meaning books they read. Derek Silva did, and I think Tim Ferriss as well mentioned it. So it's my go-to recommendation.
52:21 Patrick O'Shaughnessy? From Stoicism specifically, is the lesson in better thinking that you take away primarily this idea of sort of loving what is, accepting reality for what it is and working with that?
52:32 Speaker 03 I think that's a useful idea, but not ends up being the really valuable bit, although that's a sort of well-publicized part of Stoicism. And I think by some people have a little bit of a diminished understanding of the total corpus of idea. I think much more important thing in Stoicism is this idea of area of influence. Aurelius goes further than most on this, which is really just, he very, very, this book Meditations, which is just his diary, remember, he was the most powerful person potentially who ever lived, because Roman emperors, at no point in history has anyone been as influential globally as the Roman emperors were during those times. In this book, he literally meditates on the concept of what he has influence on,
53:14 Speaker 03 which is again, interesting, just because literally he can change anything. And his conclusion really is, only thing I influence is my own brain. And then what he talks about a lot is, if someone comes and insults me, I can't be insulted because of that, it's impossible. If I am insulted after someone insults me, then it's because I, in my brain, made a decision to implant into my memory and my thoughts the idea of being insulted by that person, but I did that under my own volition, that was my own choice. My brain has assigned the power to this other person to make me feel insulted, and I chose to go along with that. And it's almost impossible for me to kind of work through this topic with anyone,
53:59 Speaker 03 like in any meaningful way, I'm not a philosopher. This is not the kind of idea that you can bring up, like, hey, everyone should have a blueprint. I think that's, that should be properly viral and good idea. But this idea of separation of tasks, which Adler, I think, did the best work on, what is the things that you actually control and what are the other things you control? And when do you actually have power to other people? And what is actually asked of you? It's just so incredibly relevant as a part of a life philosophy to the modern times in a way that I don't think many things are. I see this every day. Everyone who goes on Twitter gets has more than probably everyone who has more than one follower probably has one person following them who doesn't like them. So it's relevant in even the example I
54:44 Speaker 03 mentioned, it's almost more relevant in thinking about how to do the best job you can because it's like, what is my job? My job is to do the best job I can. My job is not to make someone else think I did the best job I can. My job is not to make my company think I did the best job I can. My job is not to make the market think that Shopify is a valuable company. That's actually totally not my job. My job is just to do the best job I can. And that's it. And that sounds like again incredibly easy, but following this thought and just sort of exposing yourself to this kind of thinking and trying to make it your own and leads to that as a downstream conclusion, you end up concluding the same things I think Aurelius concludes
55:24 Speaker 03 in his writings. And I find this unbelievably liberating. I would say this is probably the best idea anyone's ever had, maybe after Darwin's discovery of origins of species. So at least the best idea I've ever found. I would love to share more people, but unfortunately, the only thing you can tell people is there's a world of books and ideas and everyone has to chart their own path based on their own interests. Don't actually go read the book I recommend. Read something that looks interesting and then read the next book that's interesting and puzzle together a more cohesive version of your own homebrew life philosophy. And that's powerful. Yes, there are even business results, I think, in the end of come from it. And it's not the reason why anyone should be doing that. But again, I think it all helps.
56:09 Patrick O'Shaughnessy? We're in such an interesting time where those of us with kids, I know you're a proud dad like I am, are facing a very unique situation. And I think forced to confront how our kids are growing up and being educated and shown examples in unique new ways. Any thoughts about this? Any realizations being a dad in sort of the COVID era that you think are interesting and worth sharing?
56:34 Speaker 03 Can I just do a shout out to other parents? It's kind of unbelievable how everyone's pulling this off. Like imagine we could send back in time a message just six months ago, right? And say, hey, six months from now, everyone's in the house. No kid goes to school. Every plane is on the ground. No one can cross the border. All stores are closed. Experimenting with concepts, utopia and far field as universal basic income from every direction of politics. For the first time in the history of this planet, every person, like everyone who is on this planet currently, so has the same problem, is in kind of the same battle.
57:14 Speaker 03 And it happened really, really fast, sort of, but still at a kind of speed that we're all, I think, against the thing that actually is going on. We're all a little bit like, you know that old saying about how to boil a frog? You can't put them directly in the hot water, but you slowly, please don't actually try this, but if you put them in the water and slowly heat it up, they won't jump out. They won't notice, yes. Exactly. We are all that frog, literally all of us. And there are so many areas you can look at, which are kind of insanely futuristic and crazy. Like, I mean, one thing I say within Shopify is 2030 happened a decade early. We've all been committed down this path we knew the world would be going in terms of digitalization. We jumped forward 10 years.
57:59 Speaker 03 We are on video conferencing now. I've talked with an acquaintance who just had his first management meeting in the history of 120-year-old mining business together. And he said, you know what, like this technology stuff has actually come a really far. He's like, yeah. And by the way, also now we are living in a world where literally every single person in the world has a functioning understanding of what it looks like to run a, to be part of or run a company, or at least can reason about it, just even from communicating with a family, what it is like to be part of a business world in a completely digital way. So that's just the downstream implications of that alone are just massive for what's changing. So for parenting.
58:43 Speaker 03 I am tough. I have three little kids, five, seven and nine. They are also stressed, like they feel it. They're kind of fine because they play on their iPads the way they did before when they get to. And the school world is completely different and some of it works and some of it isn't. They miss their friends and what inspires me is how incredibly adaptable they are. Because so much has changed in their lives now, that is kind of hard to understand. But yeah, like the parents and pulling this off the insane experiment in e-learning that we've all committed ourselves to. I really would love to see what this does for the way we think about schools. Because I think everyone has always reasoned, I think correctly, or at least most people did,
59:26 Speaker 03 that school is a certain mix of daycare and education. And I mean, I think you can put people on this sort of spectrum from hundred percent on one side to hundred percent on the other. And I think you can almost find someone arguing every single point of the spectrum. I think due to what's happening, I think we all kind of are homing in on part of this spectrum, which seems more realistic based on our observations. And there are certain downstream implications of that, which I think all of education has to think about a little bit. What about you? Like, how are you guys coping with that?
59:58 Patrick O'Shaughnessy? I guess my observation, maybe unfortunately, I'm trending more towards the daycare part than I had been before on my point on the spectrum. The magical thing I'm finding is that the more unstructured time for the kids, both of mine are quite creative, they're six and four. And the things that they're building with blocks and magnet tiles and the games that they're coming up with and their coordination, because they're outside more and playing more games that they've also made up, is really making me, maybe worry is the right word, about them having enough of that time when everything goes back to normal. I went to Montessori school as a young kid and then transferred to a regular school by first grade. I just think that there's something deeply wise about some of that Montessori thinking of less
1:00:40 Patrick O'Shaughnessy? structure. You just said it right. You shouldn't read the books I tell you to read. You should find something you're interested in and then pull on that thread. And I worry that traditional school is not nearly enough, the pulling on your own thread. That would be my, my high level observation, but I don't know how to, I can't affect the whole system. So I don't know what to do. I don't know what we'll do. It's hard.
1:01:00 Speaker 03 At the very least, we will have a cohort of children that has gone through some completely different experience to like any other group before. I think we'll learn so much from that. I couldn't agree more on this is a choose your own adventure world and we are dangerously believing in fallacies such as cause and effect. And even just whenever I have a new sort of onboarding class, especially for interns, one of the things I end up spending a good deal of time on is talking about personal growth. And there's such a fundamentally induced fallacy around the speed by which personal growth can happen, which is completely induced by school. Again, I'd spent through one way or another, just about 10 years in school. Most of the people
1:01:45 Speaker 03 who end up at Shopify end up having about twice that amount. And so maybe have lessons that have schooling greens a little bit more deeply rooted. And so people do think about personal growth a lot in years and why? Just because of a happenstance of the calendar. Like it just happens to be that that's the amount of time it takes for this planet to travel around the sun. And somehow you can only assign one major topic to each of those times that travels around the sun, which is silly. And so I have seen so many times in my Shopify history that people have spent what would outside of Shopify amount to 10 years of career advancement in a single calendar year, partly because the student was ready and then the teachers appeared in the right moment.
1:02:29 Speaker 03 There is no speed limit to personal growth. It depends on your interest and it depends on, again, the environment. And so I hope every company is built to be a great environment for people who are ready to grow as fast as they want and can, and challenge them to do that. And so even that one thing, that's sort of like, how many years does it take? Or how many years does someone have to have an experience before we can hire them? Or is so prevalent and it's so clearly an inefficiency. But if you just walk away from this one thing, suddenly you can hire completely differently. And you can just do one little edit to the general idea about progress.
1:03:14 Speaker 03 You can suddenly do better than a lot of other companies might do. It feels almost too easy. And so education is one of those things we clearly have to just have a good look at. I'm actually rather optimistic about it. I think there's a lot of teachers who know this. I think it's a majority of them. They were just captured in a system that allowed no changes. Those are the teachers that now are doing really well. And I think those will be the teachers that people will look to, to figure out how to improve the education system over the next while. And I think that's going to be really, really good for the planet.
1:03:48 Patrick O'Shaughnessy? I can't think of a better place to end than this notion of there's no speed limit to personal growth. And so it inspires me to jump to my same closing question for everybody, which is to ask for the kindest thing that anyone's ever done for you.
1:04:00 Speaker 03 Lots of things come to mind, but I've had some really, really, really, really dark days at Shopify where my own personal philosophy just wasn't equal to the task of what I needed around. And one particular moment came in my, to mind when it sort of looked like the entire world was telling me that I'm someone I'm not. And a couple of people in the, in the company got together and just recorded really, really quick videos about, hey, how Shopify changed their life and the fact that it exists and what it meant to me. And it's, it's one of those videos I have on my phone. And I have gotten back to this so many times at the right moments, like when I just needed something. And that just still is kind of mind blowing that people would spend their time making a video of the four recipient of one. And that's the first thing that comes to my mind.
1:04:45 Patrick O'Shaughnessy? I love it. And I'll close where I started, which is to say a thank you for teaching me a lot about how to think about company building, the appropriate ingredients for company building in 2020, maybe 2030 now. We pulled ourselves forward a decade. It's been an inspiration. So I thank you for not just that, but also for your time today. This has been a blast.
1:05:04 Speaker 03 Thank you so much for having me.
1:05:07 Patrick O'Shaughnessy? Hey everyone, Patrick here again. To find more episodes of Invest Like the Best, go to investorfieldguide.com/podcast. If you're a book lover, you can also sign up for my book club at investorfieldguide.com/bookclub. After you sign up, you'll receive a full investor curriculum right away, and then three to four suggestions of new books every month. You can also follow me on Twitter @Patrick_OShag. If you enjoy the show, please leave a quick review for us on iTunes, which will help more people discover Invest Like the Best. Thanks so much for listening.
Previous Ali Hamed – An Update on Private Credit - [Invest Like the Best, EP.172] Next Hamilton Helmer – Power + Business - [Invest Like the Best, EP.174] Page updated October 26, 2026 · transcript and summary are machine-generated
