Lessons from Tobi Lütke, founder of Shopify

On Entrepreneurship and Building a Business

On the nature of entrepreneurship: "I think the best trick to pull off in life is to find your calling early and hone it into a craft, and then share it in some way." [1][2]
On the motivation to start: "The act of creating is sort of a conversion of energy...like passion for a field...or emotions such as anger or dissatisfaction. You take those and you channel them into making something." [2]
On the reality of starting a business: "Statistically, [entrepreneurship is] a very bad way to make money...you might actually lose money." [2]
On solving your own problems: "It is incredibly powerful if you solve the problem you actually have yourself." [3][4]
On finding opportunities: "At some point in life, you realize that everything around us is made by people who are no smarter or more talented than us." [2][5]
On the evolution of entrepreneurship: "Today, when you take your keyboard and you roll your face over it...someone else is bidding against you...it's very, very competitive now. It's a different world." [2]
On the importance of focus: "I think focus of audience ends up being, amongst all the things that you could have focused on, one of the most significant predictors of the success of a company." [6]
On long-term value over short-term revenue: "Something that potential investors must understand: we do not chase revenue as the primary driver of our business. Shopify has been about empowering merchants since it was founded, and we have always prioritized long-term value over short-term revenue opportunities." [7]
On the power of subtraction: "The best thing founders can do is subtraction. It's much, much, much easier to add things than it is to remove things." [8]
On competition: "If you want to do something world-class, you can't do it like everyone else." [9]

On Company Culture and Leadership

On building a great company: "To me, a great company starts with a great product and ends with a great product." [3]
On the importance of culture: "Change has to be fundamental to a company's culture, or there is no way it can survive." [3][4]
On creating a learning environment: "I work under the assumption that we have no idea how to build companies yet, and that 50 years from now people will look back at the companies of today and they will seem like the black-and-white footage of the first hockey games." [7]
On hiring: "It's a much better idea to hire for future potential rather than for current skill." [10]
On feedback: "Feedback is a gift." [11]
On radical candor (Crocker's Rule): "Give me the raw feedback without the shit sandwich. If I'm insulted it's because my brain made a decision to implant in my memory & thoughts the idea of being insulted by that person. I did that of my own volition." [12]
On the "Trust Battery": Lütke uses the metaphor of a "trust battery" to describe the level of trust between colleagues. It can be charged through consistent, reliable behavior and depleted by letting people down. [10]
On micromanagement: "If you're being micromanaged it's probably because you either don't have the skills or trust of your manager to produce the desired result." [13]
On empowering teams: "You really want a company that's full of people from all these different backgrounds and then allow them to be creative as possible, come together, and come up with great ideas." [3]
On the role of a CEO: "I actually looked for a CEO for a long time...It was one of my early investors who at some point took me aside and said, 'Tobi, you are the CEO.'" [14]

On Product Development and Innovation

On innovation: "Innovation is actually much more blue-collar, it's much more vocational, it's the frequent incremental improvement of the things that we care about." [1][5]
On simplicity: "At Shopify, we are trying to make things as simple as possible, but for the business owner, it's not unlike starting your own little shop along Main Street somewhere." [3][4]
On first-principles thinking: "You have to derive it from first principles...how would we solve this problem given every...building block that we have available right now." [9]
On avoiding the status quo: "I just don't see value in doing the same thing as everyone else does." [8]
On the role of AI: "Using AI effectively is now a fundamental expectation of everyone at Shopify." [6][15]
On the future of retail: "Commerce is going to change significantly. It's going to be nothing like it is right now." [16]
On the unquantifiable: "The overlap of most valuable things you can do with a product and the things that happen to be fully quantifiable is like maybe 20%." [9]
On the importance of design: "A well-designed interface doesn't just make a product easier to use—it can literally make the difference between success and failure." [17]
On the speed of discovery: "The rapid discovery that there's no product-market fit is actually good because then you can move on to the next thing." [2]
On making things better: "It's making better shoes. Better shoes that just last longer. It's making the tables that you need anyway, more beautiful." [1][5]

On Learning and Personal Growth

On continuous learning: "I have to requalify for my job every year." [18]
On the goal of personal growth: "The goal is to be embarrassed by who you were last year and do this every year!" [18]
On learning from mistakes: "We eliminated the talk of a term failure...we call it the successful discovery of something that did not work." [14]
On the power of books: "Books are probably the closest to finding cheat codes for life!" [18]
On video games as learning tools: "Video games are distilled environments to learn in." [12]
On developing a "Talent Stack": Lütke advocates for building a diverse set of skills based on one's curiosity. [12]
On self-awareness: "I am an immigrant to the human condition." [14]
On decision-making: "You earn your job not by knowing what to do. You earn your job by making great decisions when you don't know what to do." [19][20]
On the quality of information: "Your skill in decision-making is directly proportional to your quality of information acquisition." [21]
On embracing reality: "Accepting reality for what it is probably is the best idea anyone's ever had after Darwin's discovery of the origins of species." [6]

On Life Philosophy and a Broader Worldview

On money: "Literally the only time in the last year where I've thought about this is when I read The Globe and Mail, talking about my net worth. It is not something that motivates me." [7]
On purpose: "I care about working on interesting problems, and Shopify is this gift that keeps on giving for working on interesting problems with amazing people." [7]
On long-term vision: "I want Shopify to be a company that sees the next century." [20]
On climate change: "We've collectively procrastinated so long that the only way to solve this problem is to get carbon out of the air, not just prevent more from going in." [20]
On the power of commerce for change: "Using the market forces of supply and demand to further worthy causes is one of the most potent recipes for progress." [20]
On human potential: "I just think everyone is like way, way, way, way better than they think." [9]
On the present moment: "Today is the dystopia of the future." [9]
On authenticity: "Be your authentic self, not as a sanitized, or cardboard piece, a clone, a guarded version." [18]
On systems thinking: "The world does not run on cause and effect, the world is loopy." [18]
On his legacy: "I want my product to cause people to be more successful than they thought they could." [9]

Learn more:

Lessons from Tobi Lütke, founder of Shopify

On Entrepreneurship and Building a Business

On Company Culture and Leadership

On Product Development and Innovation

On Learning and Personal Growth

On Life Philosophy and a Broader Worldview

Written by Antoine Buteau

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