Tobias Lütke

Tobias Lütke is the founder and CEO of Shopify, an e-commerce platform that enables businesses to sell products online and in person. Channeling his background as a self-taught programmer, he built Shopify out of a need for e-commerce solutions while running an online snowboard shop. Under Lütke’s leadership, the company, founded in 2006, opened its platform to third-party developers in 2009, went public in 2015, and has grown to support millions of merchants worldwide. Beyond tech, Lütke is also a racing enthusiast, currently competing in the 2025 IMSA SportsCar Championship as a full-season driver for Era Motorsport. ------ Thank you to the sponsors that fuel our podcast and our team: Squarespace https://Squarespace.com/tetra Use code 'TETRA' ------ LMNT Electrolytes https://DrinkLMNT.com/tetra Use code 'TETRA' ------ Athletic Nicotine https://www. AthleticNicotine.com/tetra Use code 'TETRA' ------ Sign up to receive Tetragrammaton Transmissions https://www.tetragrammaton.com/join-newsletter

Speaker names marked ? are inferred from speaking time and the show’s known hosts — they are not voice-verified.

• 0:25Speaker 00

  I'm a kid in school that I love technology, I love computers, so exactly as nerdy as you would imagine. But I was also a kid that always ended up figuring out what everyone else was into. So I would buy a lot of, I don't know, Magic Eye books or something, and then sell them to my classmates. So I like technology, and to be able to do more with technology, I need money. And to make money, I sell something for profit. And so this was a full line to my childhood.

• 0:54Rick Rubin?

  Business was to support your technology habits?

• 0:56Speaker 00

  Exactly. Jensen Huang was the founder of Nvidia, who's now one of the biggest companies. I got to meet him at some point a few years ago. And then I told him that to buy his first product, when I was in my teens, I actually literally went to the hospital in Germany. They pay you to donate blood, and I have O positive, which apparently they were very excited about. And so that was my first product market fit.

• 1:23Speaker 00

  I have a blood for his product, is what I told him. And he looks at me and says, "You'd be surprised how often I hear stories like this." I'm like, "Wow, you know you have a great product." So anyway, so I needed money. So many years later, beginning of Shopify. So this is the end, like in 2004, I moved to Canada with my now wonderful wife.

• 1:43Rick Rubin?

  How did you decide to move to Canada?

• 1:45Speaker 00

  So she's, my wife is Canadian. So as soon as I quit, I left school. I finished 10th grade, and then I was 16. I started an apprenticeship at a company called Siemens.

• 1:56Speaker 00

  Germany has this wonderful vocational education system, where you can apprentice as a computer programmer. So I actually, I left school. Four days of a week, we would be working in a company. And one day of a week, we would go to trade school. And like I had a Meister who I worked for, who took me on a spring. It's like wonderful, 200 pound, long gray hair and a ponytail, like coming into work on his BMW motorcycle every day. And like everyone else wearing suits. And he was like, he was so competent that no one could impose any kind of dress code on him. So a huge inspiration for me. And so I was studying under him and learned the ropes

• 2:38Speaker 00

  and learned programming like essentially a blue collar craftsmanship. I actually think this is a beautiful way to learn about technology and worked wonderfully for me. So now I meet my wife. We lived in Germany for a year and then she went to Canada to finish her studies. And I decided to move with her because at this point I heard about Silicon Valley and California. I knew where it was on a map at least. I had never been there. But in Canada, it was closer to Silicon Valley than Germany. So I'm like, that seems like the right direction. Let's go. And like, I sort of imagined I would end up in San Francisco, but then Shopify happened and like that got me busy.

• 3:12Rick Rubin?

  Did you have any ideas yet about starting a business or anything, or you just know that you're a programmer?

• 3:18Speaker 00

  Yeah, I love the craft of programming things. And I was looking for a programming job and I got people to offer me jobs. But then I found out that, I mean, I was there on a visitor's visa. Turns out they don't allow you to work when you're on a visitor's visa. I tried to figure out how to get a work permit. And then that seemed really hard. The lawyer, then I talked with a lawyer friend. And what he sort of taught me on the way out, because I was, you know, was dismayed. I guess I can't do any work. And he said, well, you could start your own company. It just sort of as a throwaway.

• 3:50Rick Rubin?

  So had it not been for the visa, you might not have started a company. You would have gotten a job.

• 3:54Speaker 00

  I think so. I, I, I'd like to think I might have seized another opportunity at some point, but like not this one. And this ended up being a really good idea. And I kind of love that. Yeah, my, my, my wife Fiona is like was a wonderful person, rock of my life. It's, she was working 14 hours a day studying, right? She, she was doing her degrees. And I just told her, you know what, I think we must just start something. And she said like, hey, this is the perfect time for us to do this. Let's jump. And so it was fairly modest. I started a business selling snowboards, like an online store. I'm like, I understand the internet. Seems like that's where things are going. I did not know that, you know, that in 2001, there was a big dot com crash.

• 4:37Speaker 00

  Like pets dot com, like, like all the companies that died were like that bad. Like ordering pets dot com, ordering pet food over internet. All these things were like went up, became worth a huge amount and then crashed because, because they crashed. So it was nuclear winter in technology. Everyone was like, clearly the internet didn't work or e-commerce. All these things that crashed in dot com, the e-commerce stores. I didn't know this. Anyway, I built this little snowboard business called Snow Devil. Up until then, like all the other stores I saw were just sort of a grid of products. And there was like no context. And I wanted to tell a story, right? Like the, the god snowboards, you could buy them. There was a buy button, this kind of thing and a checkout and all these things. These are sort of associated with internet now.

• 5:22Speaker 00

  But the description of a product was like basically me and my co-founders, like friends, telling a story of like, here's what happened the day we took this one out. You know, like this is new snow. It means Canada is like snows for half a year or something like this. So new snow, we took this snowboard for these reasons. And then we went like out in the mountain and Bob got hurt and we spent most of the day in hospital, like literally just like we just like chronicled. It's like, it almost ended up not being about a product, but what people liked is just that this are real stories, right?

• 5:54Rick Rubin?

  And it was like a diary.

• 5:55Speaker 00

  Exactly. Because it's, it's just like, a lot of times people end up purchasing products because they actually, they fell in love with the thing it stands for, what's behind it, you know, like the people it supports and so on. It's like almost a vote for something that they find valuable, even beyond the product that they end up getting. So that was fun.

• 6:12Rick Rubin?

  You also become a trusted source when you're telling these stories. People trust you. You're telling them personal stories about yourself.

• 6:20Speaker 00

  It's just.

• 6:21Rick Rubin?

  Not all good stories.

• 6:22Speaker 00

  Exactly. It's like, it's the day didn't work, we didn't get. Get to use a snowboard even if we really wanted to. It's like actually also really interesting. It's authentic, it's a real story.

• 6:31Rick Rubin?

  Yeah, like a friend.

• 6:33Speaker 00

  Exactly.

• 6:33Rick Rubin?

  Like talking to a friend.

• 6:34Speaker 00

  And and so again, we're talking in internet years, two thousand and four is another world. It's like it's like it might as well be a hundred years ago, right? The most fun thing that was going on from the perspective of us techies was we were exploring this new medium. But this is like we now connected all the computers. Every day more people would be using this. But we we haven't found out how to communicate. Like, what are the patterns? What is the what is the language? What's the aesthetic of this medium? So just contributing something different ended up being just like fun. And so people noticed and, you know, I didn't use an Office Chef software. I just I just built the software I wanted. And at some point, some gentleman from Pennsylvania ordered a snowboard.

• 7:18Speaker 00

  And it's like, this is gonna sound silly, but like what my software did is send an email that someone placed an order. Now, at some point in the month before, I wrote that email, right? It's just I wrote the software. I had to write the email that it would send. So I knew exactly what the email would say if it would arrive at some point. But then it would arrive in my inbox and it just like, I remember everything about that day. Right, it's just like, it's had like the day where I went from being a like a builder to an entrepreneur, right? Like someone else saw value in the thing I built.

• 7:53Rick Rubin?

  One person. One person engaged.

• 7:55Speaker 00

  Yes.

• 7:56Rick Rubin?

  How long had you been doing it at this point?

• 7:58Speaker 00

  Like, I started four months earlier.

• 8:00Rick Rubin?

  So for four months, there's no feedback?

• 8:02Speaker 00

  No feedback.

• 8:03Rick Rubin?

  And then you get one customer?

• 8:05Speaker 00

  One customer.

• 8:06Rick Rubin?

  And it's proof of concept?

• 8:07Speaker 00

  It's proof of concept and it's just like someone, like people do not want to share money. Then they do use their money for something. It is a huge, like it's a vote for everything behind this this thing they are doing. They want the product, yes, but they also deem the story valuable. In a very real way, people do vote for more of that in the future. I think you're deeming the entire enterprise as something that you would like to see more of in the future, although we don't think about it like this. And so it is a profound experience.

• 8:37Rick Rubin?

  Thinking about it that way?

• 8:39Speaker 00

  It was a couple of years later, like I think like maybe ten years in or so. I I was like, OK, I built this. What do I want to do next? I sat down and was like, why am I doing this? And I I just realized. Like that moment I've had about becoming an entrepreneur, that's the thing I built afterwards. And then, you know, Shopify is now has millions of businesses. I can have other people have had same experience. I just think, like, I want to vote for where more people are entrepreneurs, I think.

• 9:09Rick Rubin?

  So you realized the business wasn't selling the snowboards. It was providing

• 9:15Speaker 00

  Yeah.

• 9:16Rick Rubin?

  the system so that anyone could do what you just did.

• 9:19Speaker 00

  Exactly. I wanted, I wanted to share this. I had such a good experience with this and I realized, you know what, yes, there was other software for ecommerce, but no one has sat down and built software for new entrepreneurs. And that's a very different thing. Up until this point, all the retailers who were on the internet, they're already rich companies that were established and they worked with some service provider and they got a version of whatever they were doing online and paid many millions of dollars. I want to make it so that like for a couple bucks, everyone can just go and like give it a try. I want, I want people to like reach for their own independence during the lunch breaks.

• 9:56Rick Rubin?

  So it's for the do it yourself community, really?

• 9:59Speaker 00

  Exactly. Like the mission of Shopify is cause more entrepreneurship in the world. And, and you do this by lowering the friction. Like if, if, if it's required that you happen to have spent your entirety of your teenage years in dark rooms cultivating the craftsmanship involved in, in computer programming, then that is a completely ridiculous barrier that you put in front of people who actually have something to contribute, some product to share with the world, right?

• 10:23Rick Rubin?

  Yes.

• 10:23Speaker 00

  That's an unreasonable ask. And so lowering the barrier for entry actually causes more consumption, causes more people to do it.

• 10:31Rick Rubin?

  So in a way, you're like a collaborator with the people who make things.

• 10:35Speaker 00

  That's right.

• 10:36Rick Rubin?

  You're their technical collaborator.

• 10:38Speaker 00

  Yeah.

• 10:38Rick Rubin?

  And you provide them the service if they don't have the skill set to do it and make it really easy.

• 10:43Speaker 00

  Exactly. And importantly, we are not the thing. We are actually just pushed from behind.

• 10:48Rick Rubin?

  Shopify is invisible.

• 10:49Speaker 00

  Exactly. It's invisible. It's, it's in fact, I'd like to think it has significant positive impact on the story, but it's not written in the story. It's, it's your superpower. You don't go to Shopify to use Shopify. If you've bought anything on the internet and it wasn't on Amazon, it was probably a Shopify store. Like Shopify is all the other small boutiques and, and some of, I mean, to be fair, some of the customers got really, really large and they, they started on Shopify and are now massive businesses. But like, we would like people to be more successful. I mean, we're reasonably big now and The best thing we can do to grow our own business is to make our customers more successful. So we are just on the same side of the table and that makes the mission so much simpler.

• 11:31Rick Rubin?

  It was the first non-snowboard business that got to work through this system.

• 11:37Speaker 00

  So, I mean, to be fair, after launching, it was a wonderful, this is 2006, it's been Shopify launched. I'll say for the first year or so, it was like amazing good platform for our people who wanted to also build snowboard stores and nothing else. Like I hoped it was generic enough for other people to use it and it really, really took more, a lot more work to make it work for other industries.

• 12:01Rick Rubin?

  How did people know about it?

• 12:03Speaker 00

  It really was very word of mouth in a sense that like because of Snowdevil and because it was so different, people kept sending me emails about can I license the software? I want to do something similar. And this is actually how the idea really was born. And so what I then was doing was actually continuing telling the story of while I was building it and the decisions we made, like I was making about how I wanted to work and I just tried to teach what I have learned. That sort of created an initial group of people who were all ready to go, like they tried something. Some of those businesses are still active. This was now, oh man, that is like, that's a long time ago, like 2006. So we are almost 20 years ago, you know? I mean, there's really big business like Fashion Nova is a great customer, Allo Yoga,

• 12:47Speaker 00

  and Allbirds is a company that started on Shopify and then Public is a company, Fix are here in L.A. It's just wonderful.

• 12:54Rick Rubin?

  Have any companies that already had their own sales technology shut theirs down to use Shopify?

• 13:03Speaker 00

  Not for a very long time. So this is when we're talking chronologically, like 2006 was launch and then it wasn't a good business, partly because, well, it turns out, there's a reason why no one's built software for new entrepreneurs. Because new entrepreneurs, well, they don't yet know really what they're doing. They might not have their product, they probably have no money, they really require a lot of customer support. So Shopify would have lost every single business plan and competition that was ever created. Like it's like, it's actually kind of a bad idea from this sort of traditional business perspective. And the big business, they're just not trusting some like two, three guys up in Canada. Like we, we ask people to trust us with their livelihoods, right?

• 13:44Speaker 00

  Like it's like, yeah, no, like if Chevron falls down, the business is not operating, right? That's a huge responsibility, which we were asking for a lot.

• 13:53Rick Rubin?

  Did you feel that responsibility right from the beginning?

• 13:55Speaker 00

  Like right from beginning, every day since. It's, it's a huge responsibility. It's super motivating too. I mean, beginning was tough, like costs were super low. We were living with my parents in love, with, um, in my, um, in my wife's, uh, childhood room, which he could use rent free. And so that, that was very helpful. And the thing that changed was my wonderful father-in-law, he's a bureaucrat. He worked for government, uh, on a government salary. Like I, we were running out of money, of course, and I, I couldn't meet payroll and it was getting very close. And then our evening conversation, he just wrote me a cheque to, to, to pay payroll. And he kept doing this for almost a year because like I was just married with Fiona.

• 14:40Speaker 00

  We were living in their house. So it was like, I, I just like will never forget this like incredible. I, I found out he took a remiss mortgage on the houses for, for doing this. Um, in, in the end, it's like.

• 14:51Rick Rubin?

  Without telling you.

• 14:52Speaker 00

  I was aware how much of my family was like invested in this company, uh, already. And I still didn't know, I only found out years later how real that really was. So I had incredibly generous people helping along the way. I was in Silicon Valley, uh, which Chevron finally made it to, uh, just for, on a visit. And, um, the way this was set up in 2008 was all these fantastical storied investments. How's Benchmark and Excel and Sequoia, they were all on one street, right? Like this central road, um, which is like, again, for a European, like that's surprising. I would have imagined that all happening downtown. So I, I, I was staying at a hostel somewhere close by and I bought a bicycle off Craigslist. Like I had a meeting.

• 15:38Speaker 00

  The first meeting, I couldn't answer a single question because I had no idea. I I I built software. I was like cosplaying, being a business person, basically. Right, like, so he had lots of patience with me, the venture capitalist. He asked me all these questions. I I had no idea how to answer them, but I did write down all the terms. He was asking me and then later on, I used the neighbor's wifi to look up on Wikipedia what this actually is. And then I like I figured out, I I I looked into the data and could answer one more question in the next meeting. Right. So it's like went like this one step at a time.

• 16:09Rick Rubin?

  Yeah.

• 16:10Speaker 00

  Then I was there and then right when I was sort of actually got into some interest. One firm gave me a term sheet, but it was conditional on moving to Silicon Valley, which I don't like when people tell me what to do. It's like it's this very, very natural. I would rather do the opposite kind of.

• 16:29Rick Rubin?

  It's funny because you moved to Canada because it was closer to Silicon Valley.

• 16:34Speaker 00

  Yes.

• 16:34Rick Rubin?

  And you're it sounded like your dream was to someday get to live in Silicon Valley.

• 16:39Speaker 00

  Right, so so.

• 16:40Rick Rubin?

  But when they said you have to, you said no.

• 16:42Speaker 00

  I I think my wife is very wise at using this against me. Like if she really doesn't want me to do something, then she tell you, she she she understands the reverse psychology perspective. And someone sort of accidentally tripped over it. But it it also was an interesting experience because so I I was meeting with the partners at this firm. This is sort of a thing you practice for, I suppose. That was a day when Lehman Brothers was collapsing, Bear Stearns. It's like all this, another financial crisis, almost like this dot com period. Again, this is sort of odd business history events kind of thing. And they were basically saying, yeah, so that sounds nice, but like, yeah, no one is gonna have money. We we're gonna go in a bad time, recession, everyone's probably gonna go out of business.

• 17:28Speaker 00

  So I flew back and I thought we were dead. And something really funny happened. I'd like suddenly just more people started signing up.

• 17:38Rick Rubin?

  Why do you think that is? What changed?

• 17:40Speaker 00

  I think because it turns out that more people.

• 17:44Speaker 00

  Dream or want to be entrepreneurs than when we think. It's kind of in the back of everyone's mind, their plan B for their career. And then when times went tough and people lost their jobs in finance, plan B becomes plan A. And like people said, okay, well, I lost my job. I'm gonna go try building this business I always wanted to build. And so at this point, we were ready for this. And this is what we trained for and like help people build the business or take the business that's now struggling locally, your parents' artisanal leather belt business and just like maybe see if there's an audience of people who want this kind of thing online, right? And so.

• 18:25Rick Rubin?

  So in some ways, the crash may have helped you.

• 18:29Speaker 00

  It absolutely did. It made the company.

• 18:30Rick Rubin?

  That's really interesting.

• 18:32Speaker 00

  It's just like it was there at the right moment. And suddenly, I think we made a profit for first time. And this, I'm talking, I didn't take a salary.

• 18:42Rick Rubin?

  Yeah, yeah, yeah.

• 18:42Speaker 00

  Ever. And so it's a very virtual profit. But making a profit ever means that it's viable business and that changes everything. Right? So so that's the sort of early days about it. And so it's just been, it's kind of a blur.

• 18:57Rick Rubin?

  Let's keep going from there. Like, what would be the next breakthrough moment after 2008?

• 19:04Speaker 00

  So at this point, we were like, we were at the end of a financial crisis. Let's put this to 2010, just to pick a round number.

• 19:11Rick Rubin?

  Okay.

• 19:12Speaker 00

  And we were, I'd say, 20, 25 people.

• 19:17Rick Rubin?

  What would those 25 people do?

• 19:19Speaker 00

  Mostly programmers. Actually, my co-founder, Daniel, he was our chief design officer. And he's a brilliant designer, right? Like, he really had a role figuring out how to make internet software work. It was a key thing about Shopify, to make everything so as approachable as possible. Because we find.

• 19:37Rick Rubin?

  When you say designer.

• 19:39Speaker 00

  Yeah.

• 19:40Rick Rubin?

  I think of designer as a graphic designer.

• 19:42Speaker 00

  Yes.

• 19:42Rick Rubin?

  You don't mean that.

• 19:43Speaker 00

  Yeah, I do. We used to call it user experience is maybe a good term for it. Like, it's like, not just what it looks like.

• 19:50Rick Rubin?

  It's a technical job.

• 19:51Speaker 00

  It's a technical job. It's a technical job that involves, well, a lot, you live in Photoshop in these times as well. You create the user interfaces that are approachable. If you put yourself into a mind of our users, again, you are reaching for independence, which is by way, an enormous act of courage. Like, putting yourself out there, you will know more about this than like probably anyone I ever talked to, is frightening.

• 20:16Rick Rubin?

  Absolutely.

• 20:17Speaker 00

  Because you are creating something that is there for world to judge, right? And at least in our world, it's like entrepreneurs usually told their family or their friends that they're doing it, right? So there's a sort of sense of public failure that people act under. So they're already frightened doing this thing, but hopeful. That's the mindset that most people use our software in during their early days. Are you able to figure out how to do this? Because if it's convoluted or complex, or like, if a software is in a way of that, well, it will make you feel dumb. That is never your fault. Like, people should never feel dumb because they can't figure out something.

• 20:59Speaker 00

  The software's always the software's fault, at least our belief. So we tried to figure out how to make things just more approachable for the uninitiated. But so, because every single time we did, more people ended up using it. The venture capitalists in Silicon Valley that passed on Shopify in 2007, 8, the reason why they passed on Shopify is because they said they did market analysis and there were only 40,000 online stores in the world during that time.

• 21:30Speaker 00

  They said, well, even if you get half of them, I mean, that's first of all, really hard to do. And then second, it's still, that's a good business, but maybe not a great business. But what they missed is the reason why there was forty thousand online stores is just because it was too hard.

• 21:43Rick Rubin?

  How hard it was to do.

• 21:44Speaker 00

  Exactly.

• 21:44Rick Rubin?

  Yeah, the point of entry was too much. And would you provide only the online experience? Or would you help with shipping or any of the other things?

• 21:54Speaker 00

  Yeah, so we did, we give you an online store to begin with. I mean, today Shopify does so much more with point of sale and like all these kind of things. You can buy products through ChatGPT right now, it's like as of last week. So, but we also have the shipping, buying with shipping labels, figuring out how to do this, helping you. Like, most of what Shopify really does is integrate you into whatever you want to use. You work with a warehouse, it integrates into Shopify, the products will just leave the warehouse for you when they're being ordered. So how to professionalize, quote unquote, the business is all these things.

• 22:26Rick Rubin?

  I have a question. If I have a business and if I'm selling my things on Amazon, person would buy it from Amazon and then it would ship from the Amazon warehouse to them. With Shopify, it would be on my own store instead of Amazon. But the backend would work in a similar way. Is that correct?

• 22:51Speaker 00

  Yeah, it, most people start by either self-shipping of a product. Like, I had my snowboards in the garage, I had like a garage full of snowboards and I saw it through them. That's not that common anymore because the infrastructure has gotten good. There's like this warehouse you can go to and you give them the products and then they ship them and that all integrates. So for most people, it would be very similar to Amazon.

• 23:12Rick Rubin?

  So it's more, do you want to have something in someone else's brand? Or whether you want to have your own storefront brand?

• 23:18Speaker 00

  Yeah, yeah, exactly.

• 23:19Rick Rubin?

  Would that be the main difference, would you say?

• 23:20Speaker 00

  That's the main decision you're making, exactly. And then the difference is how much money do you make when you sell? Because when you sell for a marketplace, when like the fees are like a tax, it's often like fifteen percent or something, that's just razor thin. But many. Categories that can't operate even at Amazon's numbers. So it's very much higher. But your store is your own thing. It's sovereignty. There's only two things you can own in the internet. It's like your own domain and your mailing list. Everything else is leased, right? And so Shopify is the thing you put on your own domain. It's your design. You make the full margin and you can place advertising or you can, this case can be your company's homepage. And all these kind of things are possible. So it plays a role. I'm going to complicate things a little bit because they often

• 24:03Speaker 00

  when they buy something from Amazon, that order flows into a Shopify store and then Shopify says Amazon to send it out. So this is all, there's like a lot of these components. If you buy something off Instagram, it's a lot of crossover. It's, the software is complicated. It's never quite like this one thing it does. The thing you get when you use Shopify is that you can then plan to expand your business however you like, but you always keep sovereignty over decisions, right? Like we don't impose on you limitations. In fact, we have 3,000 engineers that like basically integrate every single bit of the global world of commerce into the software and then hide that feature until you need it. If you need it, make it so that it's easy to make the decision of if that's something you should be doing.

• 24:46Rick Rubin?

  It's not just North America.

• 24:47Speaker 00

  Yeah, 175 countries or so we have customers in, yeah.

• 24:50Rick Rubin?

  When did it expand to the world?

• 24:53Speaker 00

  So it would be around these times. So like, so here's what happened in 2010. Until this day, I was like programming all day long. It's been pure 16 hour days and I loved it, right? Like it was just like incredible time. I need to start doing a little bit more, like just figuring out business and then setting all these kind of things up. I had hopes that I would find a CEO for a company because I really wanted to look after technology. But eventually someone told me just like, you will never find someone who gets as much shit about this as you do. And you have to run this. And so I'm like, okay, I take this more seriously and I learn some of the skills. I love actually being bad at stuff. I find learning the entire point of it. So I started focusing a little bit more on this.

• 25:38Speaker 00

  We had some money saved and said, okay, let's do some. Marketing programs. We just actually didn't really do marketing until this point. We didn't have money for it. I separated out in like five different programs. We did five different tests to see if any of them would help us grow the business. And then it turns out all five worked. And I'm like, okay, clearly we need more money. And so when I started talking with venture capitalists, we did, we started doing, going this route. We were actually a six-year-old profitable company going for venture capital, which is like totally the wrong way around. But it became clear to me that this was not, I thought of Shopify a bit as a lifestyle business, like as in like they'll make profit and then we just tinker on it and it's going to be reasonably small affair.

• 26:19Speaker 00

  But like it became so important to so many people so quickly that it was very clear that I had to support it differently. Okay, all of a sudden it's like I went again back to venture capitalists. We raised money and then things just went very, very, very quickly. And five years later.

• 26:34Rick Rubin?

  What did you do different when you got the influx of venture capital money?

• 26:38Speaker 00

  I think maybe money in general, but definitely venture capital money is an amplification of everything that's already there. Basically, what I think what VCs do is they, they accelerate the process of revealing everything that's actually would have happened otherwise. And, and I think in a way I'm super thankful that we went this very winding and non-standard way because we were just a very good business at this point. Really, we made every dollar count. Like we're just like, we really were very, very good at being effective. Once we had the money, we were like, wow, that's a lot of money. I mean, a couple of million dollars is an incredible amount of money. And let's invest that just as wisely, even though it was a bigger sums, into these marketing programs we were sort of setting up. And, and it just like turned out there was just this incredible, like this was just a time where

• 27:23Speaker 00

  the internet was clearly there, everyone had broadband, everywhere, e-commerce. I mean, there's no one confused about this, the iPhone. You know, like there was just a lot of happening at the same time. Yeah, the growth just went totally into a different gear. And so learned how to put an executive team together, although lots of our wonderful people like, because we just sort of prioritized learning as a, you know, thriving on change, learn things quickly. I mean, funnily enough, no one of us ever worked in a public company. If you didn't even really, like, I kind of had to figure out what that even really is. But like we figured that was a good thing for us to do. So, so in like 2015, we went public.

• 28:04Rick Rubin?

  How was that experience?

• 28:07Speaker 00

  Profound, actually. And I'm not super sentimental, but like, you know, writing the first line of code for something and then like, about 10 years later, like just ring the bell at New York Stock Exchange. Like this is like, man, that is a

• 28:21Rick Rubin?

  Surreal.

• 28:22Speaker 00

  Surreal experience.

• 28:23Rick Rubin?

  Yeah.

• 28:24Speaker 00

  This is a significant percentage of what's possible to do in the world of capitalism, really, right? Like, it's just like

• 28:33Rick Rubin?

  And not what you set out to do.

• 28:35Speaker 00

  No, no.

• 28:35Rick Rubin?

  It happened.

• 28:36Speaker 00

  I call it, this is not a fortune cookie. It doesn't sound very good, but it feels like a collaborative inquiry into a question. And the question is, what would the world look like if entrepreneurship would just be significantly simpler? Would people do it more? The beautiful thing is that question is, like I said, resounding yes as an answer. And the degree of a yes was not absolutely unclear to me.

• 29:03Rick Rubin?

  Did you find that the functional aspects of the technology of an online store is pretty similar from company to company? The thing that makes it different is the story you're telling within that technology. Is that right?

• 29:17Speaker 00

  You're spot on. It's exactly that. It's the first 80% are the same for everyone, which you can give them right off the bat and just set them up well. The next 20% are different for absolutely everyone. It's the creativity, it's the storytelling, it's the narrative, it's the explaining the reason why you exist. Even if you go to Shopify.com today, because this is what we tell our customers. On the top, there's a video that's linked, which says, why do we exist? Which is actually like, just what was not there that needed to be there? And why this product had to be created? And the best entrepreneurs tell that story. It's like, we live in Toronto, we go to vacation with my three boys and we go to Caribbean.

• 30:00Speaker 00

  So it's like, has this sort of pirate quality to it, right? And we like playing poker. So I, for whatever reason, I found a Shopify store that sells pirate-themed poker sets.

• 30:12Speaker 00

  I'm like, I don't know how many people there are that really, really want this to exist, but I am so excited to play with like golden duplex poker in the Caribbean with my boy. It's just like this is, it's like my, my life is not a hundred times better because of it, but it's like that vacation is 10% better and that's so worth it, right?

• 30:30Rick Rubin?

  And it's because it's the thing that you want that probably no one else wants.

• 30:33Speaker 00

  Exactly.

• 30:34Rick Rubin?

  All of the niches that are interesting to somebody now have a place to live.

• 30:39Speaker 00

  Exactly. Someone's aesthetic said this is a thing that should exist. And there's like a thousand true fans in the world for, for this maybe. Maybe that's all there is, but like you can make a living with it. And it turns out winter is so big that if you have a thousand true friends, you have a lot more because the difference between someone who appreciates something and someone who is utterly excited about something is like me right now telling you about this. Like it's like there's a virality to just good ideas. And in the traditional world of retail, that wasn't allowed because a lot of retail before the internet was dictated by merchandising executives. If you made a product, you had meetings with the merchandising executives at Walmart,

• 31:22Speaker 00

  Target and other places, and they had limited chair space. And they were making cost benefit analysis, like how much profit margin does your product have? How much space do I have? Where can I put it? Does it, you know? So the channel by which products could be sold was one which optimized away everything that was interesting for some, but made it appealing to the most.

• 31:46Rick Rubin?

  Yes.

• 31:47Speaker 00

  And I think a lot of the consumerism that people sort of verify is not because people love stuff too much, it's because people hate the stuff they get, right? The quality is not there. And so what's actually intact, again, because of the wonders of a distributed internet and this sort of global brainstorm about what are the things that ought to be existing? And the voting for dollars is that. Fully intact great products can be created and can be marketed and can be found. And then there's these incredible systems like, I mean, Facebook's advertising engine which says, hey, you can actually probably find people who like pirate theme and poker. It's like, this is like possible now. You can connect to people who are utterly delighted. And so this is the engine which is driving it all.

• 32:30Rick Rubin?

  So the idea that if a thousand people in the world are interested, that could be a good business, whereas in the old model, if there were a thousand people in the world, there would be no way to ever, nobody would ever know.

• 32:40Speaker 00

  Exactly.

• 32:41Rick Rubin?

  And it wouldn't make sense to do it where you are, because where you are, you might be the only person interested.

• 32:47Speaker 00

  Yes.

• 32:47Rick Rubin?

  And there was no avenue to get to the others.

• 32:49Speaker 00

  That's exactly right. If that would have remained the case, I think the world would feel very muted compared to what it is. There's just like a vibrancy that doesn't exist, because again, products matter. People love the things they buy. Like, people buy wonderful objects for all sorts of reasons, because they want to feel connected to the people who created it, because they love the story. One of our incredible success stories very early was Kylie Jenner with her lipstick brand. And just like it went incredibly big, because when I grew up in Germany, sort of the star, the first star was like Michael Schumer, Formula One driver. And so you would see him on television all the time, and he was making advertising for toothpaste. And it's just like, even to a nine-year-old, that felt dissonant.

• 33:34Speaker 00

  It's like, very much by doing this, he's sort of using his sort of reputation, like he's drawing against the bank account of reputation he built, right? Like, he's sort of using it to benefit the colgate or whoever. Now, like with Kylie's lipstick, like that's so her. That's like every transaction is actually additive, like people have a stronger connection to her. And I think it's just very pure. It's a, this is why I'm so excited. Like, I hope to do this my entire life, right? So because I just like, I love this space.

• 34:06Rick Rubin?

  How difficult was it to scale along with the interest?

• 34:10Speaker 00

  We were a public company for a few years, learned how to be a public company. Growth was like very, very good. And then COVID started, right? And so we were under shelter in place, orders basically for a year and a half in Canada. So it was extremely tweaked towards the overburdenance of caution. It's always difficult for a company. Of course, when you work for a large small business, and again, we have millions of small businesses on Shopify. I mean, they are the lifeblood of our economies, right? Like eighty percent of people, sixty to eighty percent of people in every country work for small businesses. But they're fragmented. If you're, I don't know, any of the large companies, you can sort of represent the interests of the entire company really well to like politicians.

• 34:55Speaker 00

  So we need to know about your needs or whatnot. The small businesses have very little representation in this way. One thing that always happens during every time of crisis, and certainly during, you know, dot com and financial downturn that I've encountered is that the small businesses really, really suffer. A lot of them go out of business very quickly. They have no credit, they don't have inventory, they can't absorb a downturn of spend. So like I went in front of company and said, look, all of us made life decisions. We made decisions to not become doctors, we made decisions to not become nurses. Like we can't help the health crisis here. But the thing that we can do as our mission is just make more small businesses get to the other side of this than otherwise would.

• 35:39Speaker 00

  Like, let's try everything we could. So we figured out overnight how to extend credit to people and promote a balance sheet and like all these kind of things. And this wasn't clear to us initially, but maybe should have given the patterns. Well, if no one can leave their house, e-commerce starts playing a completely different role in the world. So we just chucked out all the plans, the roadmap, all the work that we did, ended up being pointed at like a thing that just gets businesses to the other side without having to lay off everyone. And it worked really, really well. We doubled in a year. We actually had the craziest insane things inside of a company.

• 36:18Speaker 00

  We had to like be on call with all internet providers who were running auctions on server capacity. Because like the world couldn't produce more chips anymore. So all the ones, the computers that made up the internet, with all the computers we've had for a while. And it's like, you all had to kind of ration, basically. There's so many stories there, but like from a corporate way, Shopify exploded and ended up being very much talked about. And I'm super proud of what we did internally. Basically, almost fell apart. It was just such a stressful time and so difficult to manage. And so many people decided they're just like, they've had enough, this is too hard. And I had to do like live two different lives externally and internally and try to sort of,

• 37:03Speaker 00

  I felt like I kept a bomb from exploding by just like trying to wrap it from all directions and get my arms around it. So it was a really, really trying time, but also just kind of, I think that really, really tested us.

• 37:15Rick Rubin?

  How much customization can a store get through Shopify?

• 37:20Speaker 00

  You should not be able to tell that you're interacting with a Shopify store. Like they look completely different. Again, sovereignty is a word I use a lot. It's like if you don't have ability to make, you know, the design or the look of it feel anything like your vision, then I would feel as a failure as Shopify, even if you continue using us, because our job is never to constrain you.

• 37:42Rick Rubin?

  Not to limit the seller.

• 37:43Speaker 00

  The thing that's under our control is that we want to go and make it so that you can be as creative as you can.

• 37:48Rick Rubin?

  Do you have competitors?

• 37:51Speaker 00

  I mean, for a while, people made a lot of Shopify and Amazon being competitors and.

• 37:56Rick Rubin?

  Do you think of Amazon as a competitor?

• 37:57Speaker 00

  No, I never did. I once ran my mouth because I was starting to get annoyed with the question. I said that Amazon is trying to build an empire and Shopify is arming rebels. And apparently turns out Jeff Bezos is a very, very big Star Wars fan and never saw himself as Darth Vader. So like this turns out to be a really, really unbecoming analogy. So, so, and then like it got quoted a lot. And so anyway, no, I think of Amazon as a extremely worthy rival. I think competition always feels like someone's dying in the end, but a rivalry is a wonderful thing because you get to inspire each other to be better. These days, we actually work super closely together on many things. So it's hard to even make the rivalry.

• 38:38Rick Rubin?

  If one of your stores, let's say one of your biggest accounts had great success selling a product, would you then ever manufacture the same product to try to compete with the person?

• 38:49Speaker 00

  We would never. Ever manufacture product, that would be incredible.

• 38:53Rick Rubin?

  So that's the difference between you and Amazon, for example.

• 38:56Speaker 00

  I think even, I don't know how much this is actually cultural for Amazon even, but it's just a consequence of being a marketplace. Because again, the internet of the nineties, sorry to go back there, but like, there's a bunch of idealism encoded here in the way Shopify works. Because in the nineties, again, I grew up in a very small city, nothing terribly interesting happened ever. I think Julius Caesar founded it. That was probably the most interesting thing that ever happened there, so 2000 years ago. At some point, the internet came to town and then you sort of explored it. It was this new thing, it was fantastic. For the first time, you could interact with people without having to call into a radio show or something, with people who were like everywhere in the world. And that was like incredibly liberating. You could serve a website to everyone and like, it's up to you.

• 39:40Speaker 00

  Like, there's no license. Like, I needed no license to start Shopify. I just had a machine started to respond to requests and it's an incredibly liberating affair. So it was promising, an incredible decentralization of power and of opportunity. And so unfortunately, a lot of aspects of the modern internet are actually quite centralized, right? Like, so it's, we wound up with one search engine and maybe two or three social media networks, all sort of kind of different, there's one in every category. And the everything store, literally, right? And so they're obviously super convenient because when there's a search box, you can type in exactly the widget you want, you'll get it and you purchase it.

• 40:24Speaker 00

  And like, that makes perfect sense and maybe even is ideal. But I come at it from another perspective. I'm like, well, what if we take the ideals of the nineties? Everyone has their own site and everyone has their own server and individual and really explore that, would it work? And it turns out in ecommerce, it's actually really, really valuable. It works as well. And so it's almost a bit of a clash of visions for how the internet works. And now people would argue Shopify itself is one big piece of software that hosts all of them. Maybe that's also not exactly the spirit of the early internet, but fair enough. I think it's an implementation of the same ideals.

• 41:01Rick Rubin?

  Tell me about your relationship to coding.

• 41:04Speaker 00

  I love coding. I mean, I sit down on a Saturday night when I have time and I just like. Put headphones on and I always have like a couple of things that I want to get done. It's like it's my craft.

• 41:18Rick Rubin?

  What are the type of things you like to get done?

• 41:19Speaker 00

  Sometimes I make games. There's these things called game jams or jams in general. They're like just people decide from this time to this time, we are making a game and everyone should share it. It's almost, it's not even, there's no prizes. It's just like a convenient excuse for creating constraints. Like creativity must have constraints. So I love the artistry of it. Like the only way to be a good programmer is to be a very, very good learner. Because you have to understand the problem domain that you're trying to solve so well that you can actually write software against it. Like there's so much wonderful things about it. It fits my brain in a way that like I almost can't access this sort of creativity in any other way. So anyway, I think it's deeply creative.

• 42:04Speaker 00

  It's deeply interesting and it's like it's a wonderful craft by itself. I personally use a Japanese programming language, which I found in 2004 when I could make all choices. Like I, you know, my own company, I can now use really, really weird things that I could never use. And then this programming language out of Japan called Ruby. That's what I built Shopify in. And again, because it felt like when I was using other programming language, it always felt like I wanted to paint, like let's say an oil painting, but someone giving me crayons. It just, there was a mismatch. And then I found Ruby and it's just like, I found that my brain ran on Ruby even before I knew of it. Right? So I'm using this language because it really feels like it connects with me at that level.

• 42:48Rick Rubin?

  How has AI impacted Shopify?

• 42:51Speaker 00

  I consider myself so incredibly lucky here because like again, I saw technology kind of grow up. And I've been part of this industry long enough that I've seen when a new platform came out, like we connected all computers through internet and then the phones came out, which was another platform and it made things so interesting. I didn't expect to have another one of those. I think this is the best. I always thought Shopify was a company that sort of is a bridge between the real world and the sort of world of the internet and technology. Because really the software I make is so that other people can help themselves to everything that technology has to offer for their own pursuits. But like software was always pretty autistic. It doesn't understand the meaning behind anything or so.

• 43:36Speaker 00

  It's just like it blindly follows. And I think AI is increasingly allowing people to have collaboration around intent, actually conversations that lead to more creativity. And so with like, you know, chatbots or conversationalist or so like we see this. It's deeply integrated in our software. We are super excited about it. So I think it's an incredible privilege to actually have to reinvent all software again. It's certainly.

• 44:04Rick Rubin?

  It's not daunting to you?

• 44:06Speaker 00

  No, I love it.

• 44:07Rick Rubin?

  It's an opportunity.

• 44:08Speaker 00

  Yeah, I don't like stasis. I don't know this for sure, but I would have probably retired now if it wouldn't have happened for AI. But AI gives me like, I again, I love the task I've gotten myself in life, which is I really deeply care about round windows on Shopify and this kind of idea. So I found my gifts early like with programming. I cultivated them to be hopefully very good at them. And then through Shopify, I managed to give them away, which is, I think, really the meaning in life is to share the gift that you have cultivated. And so the technology capabilities coming, there's so much more we can do for people. We used to do a survey and I wish we would have done it more. And in this survey, we had lots of questions and one of them sort of added on a whim was,

• 44:52Speaker 00

  do you know someone who within 24 hours would respond to an email or a text message about an entrepreneurial question? And the amount of people who said yes was something of something like 70 something percent. Then initially I was super impressed by this because I would have imagined this would have been much, much lower. Right? So then we had the idea of let's try this in general population. And it turns out it was like nine percent. And we're like, okay, well, what's happening here? Very simple. What's happening here is that. Only the people who know someone who has done entrepreneurship actually try to build businesses. Because otherwise, it just seems like impossible.

• 45:32Rick Rubin?

  So the model, having the model.

• 45:34Speaker 00

  Having someone having demonstrated that's possible. Having someone, when you run out of options, answer the question like, it's so hard. Like, how do you incorporate something? It like, who knows? It's different depending on where you like, you can't even read a book about it. So now you sign up for Shopify, you have like a thing called Sidekick. You can have a conversation with it like infinitely patient, super intelligent, knows everything about entrepreneurship, can tell you how your business is really doing. And do all sorts of tasks for you and you you you you start out with a co-founder, right? Like, which is really beautiful and costs like no equity. It's like it's just like there to push you. And so I I love all that.

• 46:10Rick Rubin?

  Is there any advantage or disadvantage to being based in Canada?

• 46:15Speaker 00

  Canada had the perfect culture for doing something like this when I started. And I if I would have been in Germany, it would probably been too much. It would be too friction for you would have to like, you have to like, you need to start with fifty thousand dollars, which I didn't have before you can incorporate anything. So I call Canada basically America for Europeans. Like, because it's just like, it's such a, it's such a fun mix of the two. So it made it very easy. Then we started and built there and always found good people.

• 46:43Speaker 00

  I think there was advantage of not being in Silicon Valley. In fact, for commerce specifically. In many ways, it made it harder, but like Silicon Valley really committed itself to making money for advertising. And it's such a good business model to make money for advertising that if you do anything else, you're running out of time too quickly. You can't make money fast enough. It's it's so much slower to build something that you charge money for, like monthly, like Shopify. So I think there were some advantages there and, you know, they did this funny thing. I don't know if it's how real it is, but like, I only realized this years later. I'm curious what you think about this. I would travel to Silicon Valley and then I would have meetings with people and I would ask them millions of questions about how to build companies because I was trying to figure it out.

• 47:26Speaker 00

  And then I would write everything down and try to figure out of which of this makes sense. And then I would localize it if it's a good idea to Shopify and I would implement it. And it took me a long time to figure out that in this conversation, I didn't actually hear the real answers to what other people are doing. I usually got the highlight reel or actually the ambitions. Often I got the ideas they have that they wish would be true and they're currently working on. And I compared that to my average. So I compared the highlight reel that I got from Silicon Valley to what actually was going on in the company. Then I implemented some of those things. I ended up with like sometimes a better version much earlier than anyone else on this kind of matters. And in a way, it actually almost had faked Shopify into being a better company than it could otherwise been.

• 48:10Speaker 00

  Because if it would actually been closer to everyone, we would have a much better model for what the companies around us actually like.

• 48:16Rick Rubin?

  It would have made it more ordinary.

• 48:18Speaker 00

  Exactly. It allowed us to just be, in a way, extraordinary and different, right? Like there's value indifference of like sameness is conversal.

• 48:27Rick Rubin?

  Absolutely. Yeah, if it's the same, why do it?

• 48:30Speaker 00

  Yes, exactly. Yeah, but like it is an axiom that if you want to be better, you must be different. Because if you're the same, you end up being the same. This is the way the sentence continues. And just finding different constraints that like mean that you end up different means that you have a chance at being better, because otherwise you don't. So distance actually is more valuable than people think.

• 48:52Rick Rubin?

  How do you think growing up in Germany impacted you?

• 48:56Speaker 00

  I think Germany initializes your acceptable minimum quality higher. And I think that's a good thing and a bad thing in a lot of ways. Like, I remember going to the MoMA at some point, I think the one in San Francisco, and there was like a Dieter Rams exhibit. He's a designer of this wonderful products for Brown. And I loved it, but it looked like my house growing up. It's just like this, all these beautiful objects were like that's literally the LP player and the coffee machine and the razor my dad used. So I think it's harder to create a product in Germany and get market acceptance because the minimum quality bar that people accept is higher. Like you cultivate taste, I think, in a way that I think is also important.

• 49:39Speaker 00

  And then coming to North America and working in Canada where people are much more.

• 49:44Speaker 00

  Hey, let's put an MVP out. The confluence of those two things is like, yes, but is it good? Yes, it can be minimum viable. I push people to call it minimum lovable product. Like, what's something that actually someone might actually love if it turns out to be good? And I think that ended up making a difference. How do you think about that?

• 50:03Rick Rubin?

  That sounds good. I think we can know what the bar is for us, but it's very hard to know what the bar is for someone else.

• 50:07Speaker 00

  Yeah. But you cultivated an incredibly well-refined taste. Something passing your quality bar is an acid test that it's high enough in the market. If it is high enough for you, it's probably high enough for everyone. That doesn't mean it's going to be successful.

• 50:24Rick Rubin?

  No, and also, and the opposite is like, often I would miss things that ended up being very successful just because that looked similar to something I saw when I was younger and didn't seem so revolutionary now. And but to the people at that time, it was revolutionary.

• 50:39Speaker 00

  Yes, yeah.

• 50:45Rick Rubin?

  How many employees do you have now?

• 50:46Speaker 00

  Shopify is 8,000 people, about half, half in Canada and the United States. Yeah, public company, $120 billion mark cap kind of thing.

• 50:56Rick Rubin?

  How did the business change when it went public?

• 51:02Speaker 00

  I think it just got better. Like, we went public so early. This is another one of us, like, everyone's second value was always telling me, go public as late as possible, and I just couldn't find it. Like, I tried to get people to argue from first principles for this idea. And it seemed very derivative. It's like, oh, other people are going public later, is what I heard. And that's.

• 51:21Rick Rubin?

  What does that have to do with you?

• 51:22Speaker 00

  Like, that is the worst reason, right?

• 51:24Rick Rubin?

  Exactly.

• 51:25Speaker 00

  So I was like, again, I felt a certain just deference, like the institution of being public. Again, I want to share, right? Like, I like develop your gifts and then cultivated them and then shared widely. Like, I had wonderful investors and they all fully trusted me, right? Like, 100% trust. I could not build more if I tried. It's like, battery doesn't charge past 100%. I can get a new set of private investors, but like, I think what's much better is. Become a public company, have some people, hopefully early in their career, make bets on you. And then we grow the company together, that's gonna work well, they are going to be successful. And there's gonna be a kinship or like a relationship that's being developed and it worked perfectly this way.

• 52:07Rick Rubin?

  For some reason, some people have the experience of going public and feeling shackled by the experience. But you didn't have that experience.

• 52:16Speaker 00

  I mean, I also, like, I mean, to be fair, I should say that I I just retained control in a way that that that helped. I I started a company, I think Shopify, at least while I'm there, would do very poorly. If my job would be have to become to be like sort of consensus builder, right? Like it's just because to me, the consensus always finds the least objectionable option, right? What I wanna do with building, I wanna build world-class things. To me, that comes from a really big piece of software like Shopify, feeling like it's written by a single author in the end, right? Like it's not, it isn't, it's thousands of people working on it. But like, there gotta be one consistent narrative style.

• 53:00Speaker 00

  You can't switch perspective all of a sudden, no writing styles in from one screen to the next. And so in the same thing with a company, again, even investing in a company is a vote. If you're voting with your investment money for a company and you want to participate in in the value. And that is a company run by their founder. I think what you want is that founder to be in control of a company. Because that's what you don't want, you you will need to someone very different. Like, let's let's call them founder-run companies and managerial-run companies. Managerial-run companies, the job of CEO is totally different. The job is to create a plan, like the the the CEO doesn't actually have a legitimacy to decide exactly what the company does. People think so, but it's not actually like that.

• 53:45Speaker 00

  The legitimacy is a is is a thing that's built. And what the CEO does, it creates with stakeholders a plan and then creates legitimacy in the plan. And the plan is then followed by everyone, like it's it's the plan that has the authority. The CEO just has ability to influence the plan heavily. That also makes these companies very, very hard to adjust, right? Like, so if you want to pivot or something, you need to make a new plan and explain why you didn't screw up with the last plan, right? So this is why large companies very often have a hard time incorporating AI quickly or something like this during COVID. Found around companies are different. The fact that the slot is filled, that the person is there who has all, in my case, for twenty, almost twenty-one years of being there for every decision.

• 54:29Rick Rubin?

  Every step.

• 54:30Speaker 00

  Every step. I can talk with great authority to what the Shopify way is about something, what, like, how to make this. And therefore, when COVID happens, the day that happened, or when AI comes out, I'm actually not beholden to the roadmap. Because the roadmap exists because it comes from figuring out what the exact best things are to work on right now. But if reality has changed, that is clearly now something different, because otherwise, reality didn't actually change. I think they are underappreciated how different they are, founder-run companies and managerial-run companies, and neither is better than the other. Like, in fact, in most business sectors, I think founder-run companies are a mess.

• 55:09Speaker 00

  Like, they're a hot mess of chaos and hard to predict, and they're harder to work for, and like, things change on a dime. For the right people, this is the best. They love this energy. They love the ability to creatively impact the entire thing. Like, just ideas matter in the best cases. Like, the best idea wins, doesn't matter who said it. But if everyone disagrees, there's someone who can just say, we are gonna go with the best idea, and this is it, based on this kind of thing, rather than highest-paid person said so.

• 55:38Rick Rubin?

  Would you say you trust your instincts?

• 55:40Speaker 00

  Yes. I, I think instincts are your entire life's experiences rolled up and ready for instant decision-making. I think people should trust them more. It's just you have to cultivate your instincts. You also have to learn a lot and, like, sometimes people end up trusting all the instincts, and that can go poorly. But like, I think for like, engineering and for, for, for business and strategy entrepreneurship, I swear, yes, I trust my instincts.

• 56:04Rick Rubin?

  Do you question yourself? If you have an idea, do you question, is this gonna work? How will it work?

• 56:09Speaker 00

  All the time. I never am as hard on anyone else's ideas as, as on my own. I actually. Discount my ideas significantly because I just like the conversation. I have worked with absolutely incredible people and the worst thing that you can ever do as a leader is like just like constrain the upside. Right? Like I wanna raise the floor by just navigating us around just bad things that have been tried, don't work or won't work in this case. Because I can spot those, but I don't want to cap the upside.

• 56:37Rick Rubin?

  How difficult is it to recruit people?

• 56:40Speaker 00

  I mean, the moment you have like a bunch of like twenty people in a company, you're really in a people business, right? Like it's like you're drafting the team, you're finding great people. I've hired people who I've worked on for fifteen years like before and is it hard? It's it's super hard. The thing I found that makes it really, really easy is just be very, very clear about who you want and who you don't want. I think people are not ready enough to like. I almost talk people out of coming to Shopify. Sometimes I just explain, look, this is again founder and company. Therefore, if you come from Siemens and you're very, very used to everything being just like operationally fantastic. Then none of that stuff happens here, right? We are just like, we are company, we are like we try our very best, but every once in a while, someone, people have to put on their cape and be heroes.

• 57:23Rick Rubin?

  Yeah.

• 57:23Speaker 00

  And that's the way it works.

• 57:24Rick Rubin?

  Yeah, yeah.

• 57:25Speaker 00

  So.

• 57:25Rick Rubin?

  What are your reading habits?

• 57:27Speaker 00

  My wife is in a completely different cicada cycle for to me like I'm an, I would be a night owl if I would let me so. And she's a light sleeper, so we're both in bed at ten and I read till one. So it's gives me wonderful time. I have my Kindle, which doesn't cause too much light, so she doesn't wake up and. I mean, I read sometimes fantasy. I make it so that every, every third book has to be a book that I think I will disagree with. This is one of my things which has been a fun habit. I tend to read books that are older at this point. Actually, Mark and Tracy has gotten me on this, just like I was like, I read too many current issue books, but you're always saying book in the end.

• 58:08Speaker 00

  And I was complaining to him and he said, just like, just read books that people recommend that are more than forty years old. And then you only read the books that stood the test of time. So that's been, that's been actually a wonderful habit for past recent years.

• 58:23Rick Rubin?

  What are the kind of things you'd like to learn about?

• 58:26Speaker 00

  I think everything's interesting. I've never found anything that's not interesting. I teach this to my kids. No one of my kids is allowed to say that anything is uninteresting. They can only say this isn't interesting to me yet. So which is actually a wonderful way to do it. I mean, obviously, I study excellence. Like, I just love reading about excellence in every other field. I love biographies. I also try on different hobbies. Like, if someone I really admire has a hobby which sounds surprising to me, I try it on. I really, really, really got into motorsports, which has just been so incredible. Like, I call it Zen Buddhism at 200 mile per hour. It like, it just focuses me in a way nothing else seems to be able to do. Like, I do endurance racing.

• 59:09Rick Rubin?

  Endurance racing, driving?

• 59:11Speaker 00

  Driving, yes. So.

• 59:12Rick Rubin?

  What's an endurance race driving? How long is that?

• 59:15Speaker 00

  Like, the most famous race is the 24 Hours of Le Mans. And you do that with a team of three people. I'm training for doing it next year. This year, I've done a 24-hour race at Daytona with a team. It's the hardest thing I've ever done. I was delirious, driving at like 2:00 a.m. After already having driven for like four hours with 61 other cars. So it's one of the most beautiful things about motorsport is that you do it like amateurs and pros together. There's no tournaments where you can play with the best tennis players, right? Like, as well, because it's too much of a weak link. But in motorsport, you, one of the three drivers is an amateur. So if you're a fast amateur, you can go find fantastic pros who you can then learn from.

• 59:59Speaker 00

  And there's always so much to learn. And yeah, I just love doing difficult things with interesting people. So with the through line in my life, so it's a wonderful.

• 1:00:08Rick Rubin?

  Does the fact that the consequences are dire play a big role?

• 1:00:11Speaker 00

  I think so. I didn't even have a driving license in Canada, right? So I just had one in Germany and then it expired. I never drove. It just like, I don't even know if I truly love cars. But like, I got invited to like a track day and friends just pulled me with them. It's like, and then they put us in these cars and sort of gave us some instructions. And they let us go on a track and.

• 1:00:37Speaker 00

  Then they immediately pulled me in on like two laps later. And I thought I did something wrong. But then they showed that they told me my tank of gas was empty. It was forty minutes later. I'm like, how is that possible?

• 1:00:50Rick Rubin?

  You like lost time?

• 1:00:51Speaker 00

  I I lost like this has never happened. Like it like was just incredible in this way.

• 1:00:57Rick Rubin?

  You were so concentrated in what you were doing. Time stopped essentially.

• 1:01:00Speaker 00

  Yeah, because what I realized is like racing is there's a perfect lap time out there. Right like it's it's physically possible to calculate this, I imagine. And the actual lap time you get is the sum total of like all your inadequacies as a driver. Right like so it's like you're competing against yourself, competing against a truck. The other cars are actually obstacles to to this. But you get this immediate feedback after every turn, you know, like you just you feel it. You you connect it for your ass to the car, to the ground, to feeling all the movements in the car. You're you get the lap time at the end and you just know if you did well. And you you know that you're getting better and you're connected to the ground at the bottom of the tires. Like it's basically four playing cards of contact patches.

• 1:01:45Speaker 00

  That's all. And from them, you ask, you can ask up to a hundred percent. If you ask anymore, it's bad. You don't want to. You're trying to get this close to ninety nine point nine nine nine percent of what the grip can do. And then you invest it either in going straight or into turns. And so it's like it's immediate feedback, visceral, high adrenaline, skill building. So that's wonderful. So I love it.

• 1:02:08Rick Rubin?

  Do you feel like every lap you're aiming to get the perfect lap over and over again?

• 1:02:13Speaker 00

  You're chasing something, right? So you're you're chasing this thing that's like just elusive. And again, you have to accept that you cannot drive perfectly. It's I find that very motivating. And I I have never been externally motivated oddly. If I was been internally motivated, I I I just believe we meet the the person we could have been at the end of our lives.

• 1:02:34Rick Rubin?

  Yeah.

• 1:02:35Speaker 00

  And and and the point is to try to minimize the difference, right? Like so like this is kind of why what else is there? That is you cultivate your sets of skills and then along the way you share them again.

• 1:02:45Rick Rubin?

  Would you say you spend most of your time in your head or in your body?

• 1:02:50Speaker 00

  In my head, to me, self is sort of camera at abstractor, like analyzing the day, the situation, like again, how can I show up better tomorrow? It's the types of books I am drawn to, other ones that talk about these kind of things. It's growth is good.

• 1:03:08Rick Rubin?

  How does being an engineer impact you as a CEO?

• 1:03:13Speaker 00

  I think engineering is a great preparation for it. Good companies are complex adaptive systems. There's a good deal of game theory in incentive system design. Engineering is like how to get a large system to end up doing the thing that it is supposed to do. Right? Like, it's like, that's basically what you get computers to do. Especially the kind of engineers, like I did a lot of like sort of internet and network engineering. They're like, this might be too much in the weeds, but like for a moment, there's a network cable. You don't know if a thing that you send on a wire will arrive on the other side. So you actually have to build the system with like, in such a way that's self-healing. Right? Like you have to build a system that like, if something is out of order, if a packet doesn't arrive, but it can recover from that. I think

• 1:03:58Speaker 00

  that's sort of really odd, esoteric way of talking about it. But I think knowing how to build complex systems that orchestrate together and to run like a global e-commerce platform that heal themselves in with unforeseen, hard to predict problems actually is kind of pretty amazing preparation for building companies because they happen to also be very non-deterministic. So it's pretty good.

• 1:04:30Rick Rubin?

  Tell me about efficiency. When do we benefit from efficiency and when is efficiency not a good thing?

• 1:04:37Speaker 00

  I used to talk a lot about efficiency and I think it's still the right way to get at it because people are more familiar. But I'm actually more very against waste and it's actually a different thing. Like to me, like wasting things is just like, it's a crutch for your craft. Like I think great craftsmen like make the most out of what they got. Yes, those things can also be described as being inefficient, but it's actually not the inefficiency that's offensive to me. It's just like actually the waste that's produced because that ends up being like, especially it usually accumulates and then has very high interest. I mean, I think the ideal thing to do, to build, is something that's beautiful all the way through, including the processes and therefore which aren't wasteful. And efficiency is almost a secondary property of that.

• 1:05:23Speaker 00

  And then there's times where you just need to be just a step out of this because you're doing something that's only needed once and then it just like kind of doesn't matter, right? Like sometimes you just need to do really unscalable things to do it. Action causes information and instead of going and building an entire like piece of software, just pretending that it exists is like a really good thing. Like startups learn this, right? Like they're just like put something in the market, which might just be a landing page. And they only build it and people are actually interested in it. I got so lucky, I built all of Shopify before I told anyone. Imagine it would be wrong. I mean, it kind of was. I sort of like ended up like doggedly pursuing it and eventually making it good. But yeah, so what's your relationship with efficiency?

• 1:06:05Rick Rubin?

  Well, I too don't like waste, but I understand that in the process to get where you're going to get to the best, sometimes the time aspect of it's not near control.

• 1:06:16Speaker 00

  That's right.

• 1:06:17Rick Rubin?

  And sometimes the number of iterations it takes to get it right is not really near control.

• 1:06:22Speaker 00

  Totally.

• 1:06:22Rick Rubin?

  So it's not inefficient to do a hundred versions.

• 1:06:26Speaker 00

  Yeah.

• 1:06:26Rick Rubin?

  If you're hunting for this thing, that's world class.

• 1:06:31Speaker 00

  It is very, it gets tricky, but even talking about efficiency, right? So like I can tell you, the way I loved to write code with my colleagues early, like my philosophy on code is like for every problem, there's probably a hundred lines of code that solve it extremely elegantly and no one in the world is smart enough to find those. So we end up needing 5,000 lines of code to do actually like given skills issues and maybe to make it readable enough to other humans who will end up having to make changes to the future. And sometimes people do hundreds, thousands or millions of lines of code for something like this. And that's inefficient. In order to find those, what we've done is we set ourselves constraints. We just love these constraints where we said, okay, we are gonna build this feature.

• 1:07:16Speaker 00

  And we start in the morning and we pair program two people in front of computer, the keyboard back and forth. And at the end of the day, we would throw away our code. And we would ship the feature the day where we could implement all of it in the day. And it would fully work all the way to the end. And that just meant we ended up like really learning about the problem domain. So this is similar to what you say. To me, that's incredibly efficient because I want the efficiency in the product. I don't, I think the process, people should not talk about efficiency to find the serendipity that leads to the best possible insight and.

• 1:07:50Rick Rubin?

  Because you can't know.

• 1:07:51Speaker 00

  Like sometimes you're just a vessel for the right idea coming, right? Like you can help serendipity, but just like really deeply understanding the problem which you explore through code.

• 1:08:01Rick Rubin?

  Well, sometimes or not understanding it at all.

• 1:08:03Speaker 00

  Yeah, that's true.

• 1:08:04Rick Rubin?

  Is the other way. Because sometimes coming at it from.

• 1:08:07Speaker 00

  That's true.

• 1:08:07Rick Rubin?

  Not knowing what's possible allows you to do things.

• 1:08:10Speaker 00

  Yeah, yeah. I did not know that the world hated e-commerce. Like everyone lost a lot of money doing dot com. No one was gonna invest into like e-commerce software, right? Like I just, I just didn't know. I also didn't know that it's usually like a couple hundred people working on it. I just tried it and I used a better programming language than everyone else, at least one that fit me. And then it worked, right?

• 1:08:27Rick Rubin?

  It happened. Tell me the difference between hiring someone who's very experienced versus smart beginners.

• 1:08:35Speaker 00

  Okay, so there are two kinds of intelligences, I think. Yeah, there's like fluid intelligence and then there's a crystallized intelligence, right? Like so it's.

• 1:08:43Rick Rubin?

  Describe the two.

• 1:08:45Speaker 00

  Fluid intelligence is essentially the sort of curiosity driven, like I wanna figure this out. It's just like, how quickly can you pick something up? How, how are you, like, do you like playing with ideas? Like I, in my interviews with people, I try to find a thing that they're very passionate about. And then ask them about, I make changes to what they're passionate about in such a way that they have to like reimagine something. Like if someone is like really into soccer, for instance, I'm like, okay. We all wake up, this crazy thing happens, Earth's core stopped rotating quite as quickly and gravity is now point seven, point seven of a G, so thirty percent less. Which positions in the game of soccer end up being more important, right? Like so, and I have no idea what right answer is.

• 1:09:30Rick Rubin?

  Yeah, yeah.

• 1:09:30Speaker 00

  But I want to play with ideas, right? That's that's fluid intelligence in this moment.

• 1:09:35Rick Rubin?

  I love that.

• 1:09:36Speaker 00

  Then there's crystallized experience, which really is wisdom. If you've been programming for a long time, you've picked up a lot of patterns. You know what not to do. In so many situations, you can say the words, oh, this is another one of those. And already have an idea for how to solve it because you've accounted for the problem before. I'm making this distinction because this distinction is actually invisible in a very, very, very profound way. Day to day, when you work with your colleagues, it's like your colleagues are incredibly helpful to have on a project, but you don't know what side it's coming from.

• 1:10:12Speaker 00

  What happens though is that, again, in the world of AI, like just AI comes and suddenly everything is new. Suddenly the patterns end up not actually mattering so much. And I had these incredibly interesting experiences where like some of our best engineers, we put on the project that really, really, really need to succeed. And we put them on really, really, really need to succeed AI projects and they kind of didn't contribute. And we're like, but hold on, why is that happening? And then we put an intern on it and it just, everything just goes incredibly well. And so I think what's the magic is for people who end up just doing both. Because unfortunately, what I've observed in these 20 years of building Shopify is that

• 1:10:53Speaker 00

  some people are okay with the overall amount of intelligence they bring to bear to be the same. And slowly it's all converting from fluid to crystallized. They are day to day just as helpful, but they've stopped cultivating their skills, right? They just stopped reading the books, they stopped tinkering with new technologies. And you just don't know. And then everything changes and suddenly you find out very quickly. But some people keep it and then they compound. And that's like, when that happens, it's just magic, right? Like people who are like deeply curious, but also know a lot are just like, there's no better thing than, it's intoxicating working with people on new problems like this. And so also the people I'm incredibly drawn to.

• 1:11:36Rick Rubin?

  What is chaos engineering?

• 1:11:41Speaker 00

  Well, that's a solve for things being too derivative, too static. Like, I think stasis is death. When things are static, that means you're not advancing. And if you're not advancing, that means you're sliding soon, right? Like backwards, usually. And so, okay, what's chaos engineering? Well, chaos engineering has a fun history. Like, there, you know, again, this incredible thing that like so many millions of people trust us with their livelihood is very real. And then there's downtime because some piece of hardware failed. And everyone is going, well, look, a piece of hardware failed. It's an act of God, so to speak. It just happens. I'm like, well, if it happens, then that means we have to engineer around it, right? Like, so we have to build the redundancies to make that not affect the system.

• 1:12:27Speaker 00

  And, you know, what I hear back is like that it's just hard to test because it happens rarely. I'm like, cool.

• 1:12:32Rick Rubin?

  So you can make up potential failures?

• 1:12:35Speaker 00

  Yeah, so I log into our server farm and turn off my servers. And like, I just started doing that. And this is better than doing it when something fails. It usually is at night and then pages sometimes are slapped through and then suddenly you have a real problem. So let's make this actually happen more frequently because if failure is more common, it's actually easier to reason about. It's actually bad that failure is rare. If it's a real part of a system, you want it to be frequent. So initially, this was, I did this manually and then...

• 1:13:03Rick Rubin?

  And you get good at solving the problem.

• 1:13:04Speaker 00

  Exactly. You just know.

• 1:13:06Rick Rubin?

  You build that muscle.

• 1:13:07Speaker 00

  Years later, actually, Sim Taleb wrote a fantastic book on this exact thing called anti-fragile. He's a coined name about for this kind of thing. He said like, hey, after you break a bone, after it heals, that part of the bone is the strongest part of the bone, right? Like, which is, and no language on planet Earth actually has a word for that kind of thing. No, no culture has discovered that certain things get better by breaking them or disrupting them, even though the concept is clearly all around us. So... Piers Engineering, so, so, I mean, very quickly, the operations people figured out that we can just set alerts on me logging into servers. So, so they, they had plenty of warning and then that, so, but we'd be encoded into

• 1:13:48Speaker 00

  the system, we ended up like building a random thing that something failed more frequently. It became a thing. And then eventually, I, I kind of loved it so much as a thing, but I wanted it in company because I also don't want things to be too static.

• 1:14:00Rick Rubin?

  Yeah.

• 1:14:01Speaker 00

  Right? So you don't want every day to be the same because that's like.

• 1:14:06Rick Rubin?

  Boring.

• 1:14:07Speaker 00

  Boring.

• 1:14:07Rick Rubin?

  Yeah.

• 1:14:08Speaker 00

  Like, I mean, so like we just come up with annoying stuff to do. Like, it's like, we had like, um, use, uh, your mouse with your non-dominant hand days. Like, just like, I, it's just like, it's such a bullshit move not to fix.

• 1:14:22Rick Rubin?

  It's like challenges.

• 1:14:23Speaker 00

  Yeah, yeah, just like today, you have to put your mouse on the other side of a keyboard and just like, uh, like you just have to make do. Like, it's that, that's, by, by the end of the day, everyone's quite good at it, right?

• 1:14:32Rick Rubin?

  Yeah, yeah, yeah. What are some other ones besides left-handed mouse day?

• 1:14:35Speaker 00

  So the best thing we did, and, and this is like, I, I, I feel extremely lucky that this happened. We were in a negotiation with, we had some possible landlord. Eventually, he threatened us to, to just kick us out, uh, out of like, uh, our, our office, right? Like, and, um, we were already starting to, you know, we were gonna bu- build another office because we were outgoing this one and, um, we were kind of getting pretty tired of finding him passed out every night and on some couch somewhere. This is like this entire thing, like, so this kind of, the situation with our landlord did not work for either side. Then we were like, what would we actually do if we would be kicked out, right? Like, and, and, um, Dan, my co-founder, said, well, we should really have a plan B for this, like, we should know what to do, let's think about this.

• 1:15:19Speaker 00

  And we sort of said, okay, let's have a session, let's think about what we actually do. And by the end of the session, we were like, you know, let's make that plan A. Like, so we sent everyone an email the next weekend that Forbes wouldn't work in the office for the next month and we all work remotely now, like to build some empathy with the few people who work remotely to us. We just shut down the office. This was in two thousand sixteen. I mean, day one was no one got anything done. Turns out, man, some people didn't even have, actually, a reasonable internet, so we went to each other. Our interns, we used to serve lunch, so some of our interns were completely dependent on this and almost starved. So, um, we had, we had one cook in the company, he. Ask if you can buy a taco truck, an old one, and just like drive sandwiches to people.

• 1:16:02Speaker 00

  So everyone can, and then some people met in coffee shops. Everyone kind of made it work, like buy day free, they were cracking. So that was really cool and a cool experience. And then a couple of years later, COVID happened. And we were like, fuck, we trained for this.

• 1:16:15Rick Rubin?

  You know how to do this.

• 1:16:16Speaker 00

  We trained for this. We knew, we, we, we had, our systems were so well set up for this eventually. Because we figured out how to have a culture that actually understands etiquettes about like video calls and like, we, we had this all kind of figured out.

• 1:16:30Rick Rubin?

  Yeah.

• 1:16:30Speaker 00

  And so some of these things ended up being really, really, really load bearing for our culture. Another good thing is we randomly delete meetings. We're occurring meetings, we often delete all of them every year and a half or so. Just like, we, we figured the good ones come back and the bad ones, no one wants to tell the person who started it that's a bad meeting. So it's just like, it's like a garbage collection thing.

• 1:16:50Rick Rubin?

  No meetings.

• 1:16:51Speaker 00

  Just like delete them all.

• 1:16:53Rick Rubin?

  Yeah.

• 1:16:53Speaker 00

  And I mean, if it's a meeting with an external person, it stays, of course. But like, all internal meetings get deleted and, and people hated it. Now, it's like, people cheer, like they're so happy. It's like, it's like completely unstructured time for actually doing their craft, right?

• 1:17:10Rick Rubin?

  What are some of the requests you've made of your team that would likely not have come from other CEOs?

• 1:17:16Speaker 00

  I mean, like, I, I really tried basically everything at some point. Like when we started a company, I, I, again, I didn't take a salary for a long time, but everyone who got salary earned the same amount of money. Like we, we started basically straight up communism. So it's funny to think about this now. But like, I think deriving some of the capitalism values from first principles is also a good thing, good exercise. And then I read a book, actually a paper at some point called The Tyranny of Structuralism. It was fascinating. I think it was like about the 1960s feminism movement. But basically, like the thing they analyzed wasn't important. What it basically said is, a hierarchy always exists, is what it said. The only choice you have is are you documenting it or not documenting it? And then it made the case that documenting it was way better for everyone.

• 1:18:01Speaker 00

  You know, it just really, really changed my mind on, on, on some of these things. And so I, I don't even know if it was that interesting. But what I really loved was this idea of some things are simply true and the choice that you make is are you documenting it or not? And I, I, I found I document. Sometimes that means I have to tell people inconvenient things. But I it's just more honest, right? Like so recently, like I this is a memo which a bunch of people have read uh on online. But we just like, they just said like, look, using AI reflexively to solve problems is a baseline expectation now. You like two and a half, three years in, AI tools around. Just play with them and and try them.

• 1:18:42Speaker 00

  And if you find they can help you with some with something that's valuable to you, then that's good. And you know, there's always early adopters like me, we're just like, try it, right? Like that's but then some people.

• 1:18:53Rick Rubin?

  Really resistant.

• 1:18:54Speaker 00

  Some people are like, well, I'll wait and see. And I think that's actually, that's pretty optimal. I I actually don't think it's terribly efficient to like try absolutely everything. That's a lot of work. Like in the same way, I'm now reading books that are thirty years old, right? Like, let's let's do the things that stand the test of time. But I think in performance, if we have someone who uses AI a lot and well, and someone who's just at good at their craft but doesn't, the person who's using AI, for instance, in engineering is just like significantly more productive. How do we think about this in terms of performance management? And like the only correct answer here is, well, that affects things. Like so that person who isn't, we need to tell them

• 1:19:40Speaker 00

  that that's what they compete with now, right? Like, because if if no one says, hey, this our expectation is set now, then suddenly their career goes away or or isn't going as well as it should based on their skill. And that's unfair. So anyway, send send a memo about this and just like explain this. And apparently that captured the imagination. So interesting.

• 1:19:59Rick Rubin?

  How was it received?

• 1:20:02Speaker 00

  I mean, yeah, like internally, everyone's like, oh, that's cool. And I I I mean, it has some language about before you ask for grow headcount, try it with AI first. And you know, so the media did an entire construction out of this about this being a layoff notice, which it really wasn't. I just want people to have instances of playing with AI. We create a lot of internal tools, just sort of activism. We we teach, we have channels, we have get together, there's an evening AI tinkering fest now that people have put together. Just like, it's actually our non engineers who have. Taken the call the most, the just incredible things coming out of the sales team. So it's like it was an unmitigated success inside of a company because it

• 1:20:45Speaker 00

  shared the excitement with AI because, well, if it's expected, I should predict it on this. And turns out, you know, the funny thing about AI, or at least the large language models is fundamentally, you communicate with them, right? You write to them, be quite a prompt, but really it's like it's a document, a conversation, you tell them to do something and you provide context. You know who isn't very good at communicating? It's usually for engineers, right? So in a lot of ways, it's actually a wonderfully democratizing.

• 1:21:12Rick Rubin?

  Like a life skill.

• 1:21:13Speaker 00

  Yeah, like there's a lot of fantastic communicators in every group of a company and they are really having a moment to shine because they can just like describe how to be helpful for this thing and then it is.

• 1:21:26Rick Rubin?

  Have you experimented with vibe coding?

• 1:21:27Speaker 00

  Yes, I love the name, actually. I am now aspiring to cause by entrepreneurship or by business growing or whatever. It's not as catchy. You know, you've been, you've become like a spirit animal to the vibe coding movement.

• 1:21:42Rick Rubin?

  It's so ridiculous.

• 1:21:43Speaker 00

  Yeah, the picture is so perfect with like the headphones. It's fantastic.

• 1:21:49Speaker 00

  Yeah, vibe coding is real. It's funny, right? Like programming is very much early in this, right? Like, and I love programming. I also love programming with AI. It's like feels exactly like back in the day when I was working with friends, two people in front of a monitor. Now I have like someone who has always time and we can do it together and have a second person looking, quote unquote, person looking over my shoulder. Some programming is also just toiled some. It's like, it's just a lot of, like, reading a lot of documents and learning an API. I just like, it just knows it. It's wonderful. So.

• 1:22:21Rick Rubin?

  So you gave an example of writing that note to the staff and then the media misrepresenting it.

• 1:22:27Speaker 00

  Yeah.

• 1:22:28Rick Rubin?

  And have you been misrepresented in any other ways?

• 1:22:30Speaker 00

  Oh, yeah. I mean, like, there's lots of history there. Like Shopify is a platform, the like white tent, we had like, you know, 2016, we had the, it was Elizabeth Warren, it was Hillary Clinton and Donald Trump campaign stores on Shopify, right? Like in every, and a lot of internal consternation with that, like people. Wanted us to commit to being a tutor site and I thought it was quite ridiculous. But like I didn't think there should be a sort of a liberal Shopify and a conservative Shopify. That seems ridiculous.

• 1:23:02Rick Rubin?

  Other than by law, are there any censorship rules that you have of what you won't put on Shopify?

• 1:23:08Speaker 00

  Yeah, there are. There's an acceptable use policy, which is, I think, sort of the conclusion that a lot of industry has gotten to. These are living documents. They have to change because divisiveness or edginess, maybe. Edginess on a spectrum, like my pirate poker set is probably like, it's probably not zero because poker might be seen as gambling. So like, let's put it like 0.1% on edginess, right? So this has always been something, it has to be a living document. You have to create acceptable use policy, but you do also have to have a big tent and some intestinal fortitude to deal with this.

• 1:23:43Speaker 00

  Because these are usually valuable societal conversation as long as there's no harm implied at which point it's like, like the laws are very clear and we act super fast. This is another area where AI is so fantastic. We can hold very sort of complex cases up to policies and decide super quickly. So the internet is just kind of really getting much better because AI was insanely difficult to institutionalize these things because these platforms are so big.

• 1:24:13Rick Rubin?

  You're a service provider, but you're not a content creator.

• 1:24:16Speaker 00

  That's right. We don't provide amplification, right? So we don't make an editorial decision. So we host. Now, if people purchase, then like there's economic value accruing to it. And a lot of some, like a lot of people, some people anyway, make the case that that's like an act of direct support. That is a hard case to make in my mind.

• 1:24:37Rick Rubin?

  Well, you don't support any of the things that are on the platform.

• 1:24:39Speaker 00

  Right, exactly. We are a hosting provider. We're like a street. Like we are not terribly unlike the streets that are used by the FedEx truck or the FedEx truck itself, right? Like it's just like, it's infrastructure. So anyway, at least this is the way we see it.

• 1:24:53Speaker 00

  Smart people can disagree about these things. There's no perfect answer to this. It's so we do our best.

• 1:25:00Rick Rubin?

  Yeah, but it seems like if it's against the law, that's a fair.

• 1:25:04Speaker 00

  Oh, yeah, yeah, that's easy.

• 1:25:05Rick Rubin?

  That's a clear line.

• 1:25:06Speaker 00

  Yeah.

• 1:25:06Rick Rubin?

  But anything beyond that seems difficult.

• 1:25:08Speaker 00

  This is what we like. I think society should make this choice. I think that's the right process because, yeah, like it should be well debated. And what you look for is to find the best set of trade offs.

• 1:25:18Rick Rubin?

  What are some accepted assumptions you've questioned when building something new?

• 1:25:25Speaker 00

  I love just invalidating assumptions. You know, just again, we started off with one single salary and that became pretty untenable very quickly. So there's a long history about it. I I I used to think that I can convince people to just like, when something went wrong, my first reaction initially was that I would talk to people about why this went wrong and like, but just sort of like try to get them to like, do things differently. And like, I mean, there's some of that, but like, I actually think, like, there's, there's almost two different visions for you. Like, it's like that we are like perfectible and that we are like not. And if you, if you accept that we are not, what it does is that you, you get inspired to just find for best set of trade offs when building a company.

• 1:26:10Speaker 00

  And just like, it's like, I really had to change my mind on this, but now I really, really love it. I I'm like, look, I think everyone's allowed to be an intelligent actor in a local incentive system. If my comp plan is stupid and there's an activity that like over pays, even though it doesn't like, I'm like, good for you. You hack the system, let's go, right? Like, it's my job to make a system that's good. And that's an interesting game, right? Like, that's much more interesting. So I used to think that people had figured out how to build good companies. I definitely no longer think so. I think all companies are terrible, including mine. I think we will figure out in the next 20 years how to build good companies. But we are all going to be terribly embarrassed by the companies we used to run in the 2020s. And and I now see it as my goal in life to be slightly less embarrassed by my company when everyone else was retiring with me at the same time.

• 1:26:55Speaker 00

  So I just think companies are understudied and underappreciated. Like, what else exists that allows just a ton of fascinating?

• 1:27:05Speaker 00

  Deeply caring, inspiring people to just get to spend their day together working on worthwhile things that when, in our case, we make tools, so those tools help others. And it's just like, it's great. It's like, it's, companies are technology themselves. And we are all, we should all be glad that they, I know they have a bad rap at times. And because sometimes, you know, they do dumb stuff. But I just like, I love companies. I think, I think they're so cool. So I think universities are only other thing that's socially acceptable for you to just like, go all in on like, researching something, right? Like, and if it wasn't for university and for companies, how do you actually channel your craft into something over a very long period of time, aligning incentives so well?

• 1:27:51Rick Rubin?

  Tell me some of the things you've changed your mind about over the course of your life.

• 1:27:56Speaker 00

  Oh, man. Like, that would be fun to prepare for. That's, I would love to think more about that. Things I changed my mind on. Like, I mean, I used to think business is bullshit. Now I have to, like, maybe it is, but like, now I'm invested enough that, it's like, I can no longer claim that. I have lots of strong opinions that I attempt to hold weekly. I, I, I actually really, really love when people change my mind. I, for instance, like, we were perfectly office-centric culture. We built amazing offices. My co-founder designed floor space. We're open source them. They, they ended up being like, template for many tech companies building their places. And just like, we designed everything for like, serendipity and people just like, drawing people through work, building and like, just

• 1:28:40Speaker 00

  making, all these kind of things. So I was like, totally against remote work. And then COVID happened. And I committed a company to just only remote work, right? Like, so we're probably the largest remote company in the world. And people got real whiplash from this. But like, I mean-

• 1:28:56Rick Rubin?

  Is it still remote now?

• 1:28:57Speaker 00

  It's still remote.

• 1:28:58Rick Rubin?

  So since COVID, you've gone remote?

• 1:29:01Speaker 00

  We, we have gone remote. We, um-

• 1:29:03Rick Rubin?

  Tell me advantages and disadvantages.

• 1:29:05Speaker 00

  Okay. Right off a bat, it's verse.

• 1:29:10Speaker 00

  This is like, I think, I mean, it's probably surprising to hear from someone who's committed for it. It's worse because it's like, the office does so much for us.

• 1:29:17Rick Rubin?

  The community.

• 1:29:17Speaker 00

  It's a community. It's like, you ship something, you do something. You walk to the water cooler, someone gives you a fist bump. The afterglow of that lasts weeks, right? Someone sends you a fist bump emoji on Slack, you forgot about it in a nanosecond. It just doesn't hit you. So it feels muted to do remote work in these, or at least the bland version of it. So it's harder. It's a little bit like training for marathon at altitude, I suppose. I haven't done that, but that's what people, people say that's really hard. I believe them. So why do you do it? Well, there are significant advantages as well. And it's a, it's a set of trade-offs that is, is worth doing for some companies in some cases. In our case, the problem was we, like, we started in Ottawa, Canada.

• 1:30:02Speaker 00

  That was our biggest office. We relocated lots and lots of people there. But it's a small city, it's a million people, end up having a lot of great technology people, but never as deep as like another city would be. We had offices in Toronto, in Montreal, New York. So we had this situation where like, everyone in the offices ended up like going to rooms and usually talking to other offices on the screen, no one there, like so often.

• 1:30:25Rick Rubin?

  Already.

• 1:30:26Speaker 00

  So it was like this really weird form of hybrid that just like felt worse than all other options. And so what we ended up saying, okay, we are gonna be remote by default now. And we get really, really good at this. And this required just like complete, like, I said, don't port the office online, port the internet to the company, right? Like, because on the internet, there's like communities of excellence that are all remote. Like, a lot of the big open source software of our world has been written by people who actually never met. To make an even more geeky analogy, like, do you know what World of Warcraft is? It's a video game that.

• 1:31:07Rick Rubin?

  I've heard of it, but I don't play games.

• 1:31:09Speaker 00

  Like, lots of people playing together, doing very complicated things. Or like, forty people going, doing something very difficult, requires a lot of coordination. There's real excellence, there's people doing something. First time in the world and there's like cultures of excellence that form online with people who have never met each other. Funny enough, my wife is actually a ren and world of work of guilt like like.

• 1:31:28Rick Rubin?

  Wow.

• 1:31:29Speaker 00

  So she ended up having more experience how to run a remote culture than I did. And so I learned from her. And so they were like, OK, well, it's been done, therefore it's something we can figure out. And I think we did. And so now the people who work for a company can engage in like a really amazing lifestyle design. Like some people just choose to move downtown, some people choose to move to out to the cottage. And it's just like talent is incredibly well distributed. And so it's actually worked really, really well for us. And I still wouldn't recommend it for everyone, and I would never recommend it to a new company, like especially these sort of early days.

• 1:32:06Rick Rubin?

  Finding itself.

• 1:32:07Speaker 00

  Finding itself.

• 1:32:08Rick Rubin?

  Yeah.

• 1:32:09Speaker 00

  Like we have lots of rituals, such as, I mean, once a year, like next month, we get everyone for a week to Toronto, including from Japan and everywhere in the world. Like just like for a week, we just work on a big industrial hall and we have like a big creativity and like just events. And because building relationships is very hard remotely. But if you're doing it deliberately, you can also make up for a lot of time by just, I mean, this is my conferences are great.

• 1:32:34Rick Rubin?

  How is your company structured different than other companies?

• 1:32:39Speaker 00

  It's very functional. I believe in craft. You can be the best paid person in a company as a craftsperson. Like when I use craftsperson, that means not manager. So we think most companies have too many managers, too many layers. All our managers were hired as programmers, designers first and then like because we think it's it works best to work for people that.

• 1:33:01Rick Rubin?

  Who know the job.

• 1:33:02Speaker 00

  Full appreciation of the crafts that you are yourself trying to cultivate. This is just like not usually done in industry and I just find it's, I don't understand how this works.

• 1:33:14Rick Rubin?

  What size teams do you have?

• 1:33:15Speaker 00

  We love a team of four. This is our favorite, like we start almost everything as a team of four.

• 1:33:21Rick Rubin?

  And what would the four team members be?

• 1:33:23Speaker 00

  Ideally, we talk about T-shaped people, it's. Basically, people have a very wide set of skills and one significant specialization in the middle. It's like programmers who also have, hopefully, good taste, but also know enough about design, point of, like, you know, how the intent works. Just like, like, sometimes people have a law degree because they went later to the world of engineering or so. We put teams together, hopefully, everyone has functioning understanding of everyone else's job, but also therefore have deference to their specialization. Like, we love teams that fall in love with the problems. We just like, I want them to go and like, if you're building a point of sale software, I want them to ideally build it in someone's store.

• 1:34:07Speaker 00

  So we will send messages to our customers and say, this is weird, but like, can we rent space in one of your stores? Like, can you just put like, like an office in there and where people can just talk to you about what you need and work with you on these kind of things? So, action causes information. We love to just go and like, just start building and ideally throw away what you build as you understand the problem better, just like we discussed earlier. And then if a team has to become bigger, after about eight or so, we split it into a sub-task. And then we have a, we have a system that also makes the remote thing work, but it's called GSD, which literally stands for Get Shit Done. And where every team is like, has a page of project and they do updates and they can

• 1:34:52Speaker 00

  do that, so they don't have to have meetings with other people about informing them how it's going. It's just like, everyone knows they can go on GSD and, and read and you can follow projects and you have eyes now making briefs about all the projects in one area. So, you know, just like avoiding all this kind of things that distract people who build things.

• 1:35:12Rick Rubin?

  So it's easy to find out what's going on?

• 1:35:14Speaker 00

  Yes, like, it's an active process. You're not like, you can't sit there and expect like, the operations team to book a meeting and then brief you on everything that's going on. It's at your fingertips, right? So.

• 1:35:25Rick Rubin?

  Yeah, it's all available.

• 1:35:26Speaker 00

  Yeah, yeah. I try to not do this sort of corporate baby-proofing that is like exists in a lot of companies, right? I've always found that especially the companies that call themselves to be the professional companies, when you look at They look like when you go to visit people who just had their first baby, right? Like it's like every electrical outlet has like these things in them and like all the corners around it. And there's like baby gates everywhere. It's like they're not moving for 10 months, by the way. Like it's just like they can't even get to these, but like it's funny because I know why it happened. But then if you go to a professional company, they have a dress code. You know, like that's like, what is that? You can't even trust your people to dress. It's like, it's amazing, right?

• 1:36:05Rick Rubin?

  It's wild.

• 1:36:06Speaker 00

  We try to have not too much guidance, but a huge amount of tools.

• 1:36:10Rick Rubin?

  How would you describe the company culture?

• 1:36:14Speaker 00

  I mean, odd, like an island of misfit toys. It's like, it's a random assortment of people that are all united in that they're giving a shit. I think when you make a product, people will feel it at some level other than subconscious. If the people who created it give a shit and there's nothing that allows you to fake that. And so that's the thing that I think unites us. The beautiful thing about Shopify is again, we're making a product that helps really inspiring people, right? Like our customers are incredible. And it's like, I worked with a banker at some point and just like, I was so dismayed because I got the sense that they treat their customers not as their customers, but rather as their crop.

• 1:36:59Speaker 00

  There was like fees to be harvested and that's like an adversarial relationship with your customers. It's like, what the hell? That's terrible. So best thing we can do for becoming a bigger company, growing tomorrow, is to make our customers today more successful. Right? Like this is like, we're on the same side of the table. And I don't need to go around and tell everyone, hey, you need to talk with our customers. They want to do that anyway. It's like, it is really fun to have a meeting about ecommerce with Kardashians. It's just like really, like it's also, by the way, they're incredibly good entrepreneurs. Like immediately, like five minutes into a meeting, you will learn, of course, you've been incredibly successful because you're insanely smart and you just understand this stuff at an intuitive level.

• 1:37:40Speaker 00

  And the way you do anything is how you do everything. Therefore, your ecommerce strategy is absolutely mint. And that's a wonderful thing you find out.

• 1:37:47Rick Rubin?

  How has the scale of your business positively impacted the business?

• 1:37:54Speaker 00

  Like again, I love the small teams. I preach for small teams, we form small teams. I would have imagined that I'm gonna grow Shopify to its size and then I'm gonna stop doing this and then go work with a small team afterwards because it seems consistent. I no longer think so, partly because we figured out how to scale. I think Shopify is often described as the largest small company imaginable. And I think that works quite well. The awesome thing about scale is it is such a gift to be able to be focused on more than one thing. Because focus is super important. And usually, up to a certain size, it's either focused or unfocused. After a certain size, you can actually be focused on multiple things.

• 1:38:38Speaker 00

  And that's just, it's such an amazing accelerant for everything.

• 1:38:42Rick Rubin?

  And then you don't burn out. Because the burnout comes from too much focus on one thing.

• 1:38:46Speaker 00

  Agreed. And like our eternal theory of how to have the best eternal career with Shopify, again, you can be an individual contributor for life. We call them mastery levels. You can just climb the mastery levels and it gives you more compensation and career advancement. What we really celebrate is when people, like we call it do the jungle gym. Like just go from one area, like follow down some zip line to a completely different area. Like I have an intern, Anna, and she's like, at some point she ran HR and now when she did mergers and acquisitions and then she joined product teams to work on point of sale. And now, and eventually, like currently she runs real estate for us. She's like, Toby, why do you do this to me? Like, why, I was like, well, you're competent.

• 1:39:30Speaker 00

  You're just like, I have problems. You like solving problems. Let's go.

• 1:39:34Rick Rubin?

  Great.

• 1:39:34Speaker 00

  And like for 15 minutes after Anna takes over real estate, it sounds boring, but you know, we have some cool real estate. We have, suddenly, everything is going well because she has this perspective of all these parts of a company. And it's like, that's also contrary to how people think about their career, right? So. The beautiful thing is when you get to build a company and you're as lucky to like have it be a success is you can try the counterfactuals. Like there's multiple forms of failure. And failure is of course, when the worst thing is like financially a failure and like let's clear that bar. But there's actually almost a more profound failure of like at 10 years or so, you wake up and you're like, you build a company you wouldn't want to work for.

• 1:40:19Speaker 00

  That feels pretty dystopian, right? Like in a way, because like there's so many companies I would not want to work for. Why did I add one? Why was my life work to add one more to the stack? Let's actually build a company that's working for. Like let's focus on craft and giving a shit. It's fine that this stuff isn't quantifiable. It's fine that that sounds dumb when you say it, but it's true. And like maybe eventually it'll sound smart when people figure out that it's actually working.

• 1:40:45Rick Rubin?

  Would you say you have a basic philosophy or is everything up for grabs?

• 1:40:49Speaker 00

  No, I think I have a basic philosophy about quality. Like I fundamentally believe no one operates on their full potential. Like I think we all underperform our hardware. But I think helping people get more out of whatever they got is like, that's what tools do, right? The difference between modernity and 30,000 years ago is not genetics. It's like the tools we have, we can build houses, airplanes, get to space. We have the internet. We're too big as a species, right? So I think the best tools in the world make people end up having been more ambitious than they actually thought they were.

• 1:41:26Rick Rubin?

  Because you see a possibility that you didn't know was possible.

• 1:41:29Speaker 00

  Exactly. We take it one step at a time. I think we make too much about this sort of, like people need courage. People should emphasize courage more than ambition, I think. And they are very different things. Ambition is an outcome. Like it's like this measured based on actually a goal. People should emphasize the courage and the habit to support getting to the goal.

• 1:41:48Rick Rubin?

  And to try first. Swing.

• 1:41:50Speaker 00

  Yes. Like a bias towards action, right? Like it's like just do something and have a courage to put something out there, make something. If you don't make something in life, you can only be, end up being defined by the things you consume. And I think that's a different existence.

• 1:42:03Rick Rubin?

  That's very interesting.

• 1:42:04Speaker 00

  So we want more makers. That is my philosophy. So causing bad is a thing. Shopify really is a mission-based company. Some of our customers become many multi-billion dollar businesses in sales a year. One of our customers got two billion dollars of revenue before us did. Like we raised them and they won, which is like the coolest thing ever. And so, and they started on Jumping. So the heart is like all in causing entrepreneurship and that just overrides all other priorities. And it turns out over time, that actually arcs to the right business outcomes too.

• 1:42:35Rick Rubin?

  Yes.

• 1:42:36Speaker 00

  And if it wouldn't, that would be okay. Right? Like it's like, because that's prime directive.

• 1:42:40Rick Rubin?

  It does.

• 1:42:41Speaker 00

  But it happens to.

• 1:42:42Rick Rubin?

  It happens to do it.

• 1:42:43Speaker 00

  Yeah, which is like, I mean, that's the, like, I, this is why I feel so lucky. Right? Like, because again, I would have insisted on it anyway.

• 1:43:31Speaker 02

  What may fall within the sphere of Tetragrammatin? Counter culture? Tetragrammatin. Sacred geometry? Tetragrammatin. The avant-garde? Tetragrammatin. Generative art? Tetragrammatin. The tarot? Tetragrammatin. Out-of-print music? Tetragrammatin. Biodynamics? Tetragrammatin. Graphic design? Tetragrammatin. Mythology and magic? Tetragrammatin. Obscure film? Tetragrammatin. Beach culture? Tetragrammatin. Esoteric lectures? Tetragrammatin. Off-the-grid living? Tetragrammatin. Alt spirituality? Tetragrammatin. The canon of fine objects? Tetragrammatin. Muscle cars? Tetragrammatin. Ancient wisdom for a new age.

• 1:44:18Speaker 02

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• 1:44:23Speaker 02

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