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🏂 Snowboards to $160 billion biz

Chris Hladczuk
Chris Hladczuk
Shopify is a $160 billion business.
But it all started with Tobi Lutke selling snowboards online.
Here’s a story about solving your own problems and the power of incentives👇

Tobi Lutke loved computers. 
He gets his first one at age 6. 
Starts programming at 12. 
And drops out of high school at 16. 
Why?
“Computers were so much more interesting.”
He immediately takes an apprenticeship in his hometown in Germany for a subsidiary of Siemens.
And works for a wild man named Jurgen.
But he taught Tobi a decade’s worth of learnings in a single year…
“Jürgen created an environment where we moved through 10 years of career development every year. 
It is a method and an environment which I fiercely try to replicate at Shopify.”
Tobi stays at Siemens for 7 years but burns out and wants something new.
In 2004, Tobi moves to Canada. 
And he decides to start an e-commerce store selling snowboards. 
The name?
Snowdevil. 
Tobi tries to use platforms like Miva, OSCommerce and Yahoo Stores for his store. 
The problem is they are awful. 
So he builds his own.  
And uses a new programming language called Ruby on Rails.
Immediately he falls in love with Ruby and disappears for 2 months to build Snowdevil. 
That winter of 2004, Snowdevil has a great season of sales! 
They even make a profit. 
But he realizes that there was a much bigger problem.
Software for e-commerce stores.
So Tobi and his co-founder Scott Lake start building software store owners can use to sell their products. 
And they officially launch in2006. 
Their slogan?
“A Shop in minutes, a business for life.”
A slow 2007 changed Shopify. 
Shopify originally made money by taking a small percent of each transaction. 
But this was a bad incentive.
The more product you sell, the more merchants pay in fees! 
It pushes merchants to sell outside of Shopify. 
So they make a change: 
Store owners pay a monthly subscription and a transaction fee that decreases as you sell more product. 
It is a win win. 
And they take off.
Today, Shopify has 1.75 million merchants from over 175 countries. 
Lessons:
1) When you start building, you find problems to solve you don’t know you had. 
Without Snowdevil, there would be no Shopify. 
2) You can’t fight incentives. Instead, learn how to use them. 
That’s all I got for this week!
Keep crushing it,
Chris
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Chris Hladczuk
Chris Hladczuk @chrishlad

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