Shopify President on Company Outlook

How did you manage to buck the trend here?,What is it that Shopify is doing that everyone else ain't?,Thanks, you have family. We are happy with how things came out.,I think the big thing that the big takeaway is that the role the child,plays playing in the lives of the millions of merchants is just not of a,typical software company. One of the things that I mentioned on,the call quite a bit was this merchant merchant services attach rate and that,is really the amount of services and value that we create for merchants.,I think the big difference here is we're not just the e-commerce provider anymore,or the retail partner for physical retail where their capital partner we've,given up now more than four billion dollars of cash advance in loans for,merchants where the logistiks partner and with audiences shopping audiences,,where now their advertising partner in some cases, too.,And so we saw a two point one four percent working solutions at Tatura in,Q3. That's up from one point ninety eight in,Q2. So that was really good on the revenue,side. Revenue came in one point four billion.,That's up 22 percent year on year and on a three year CAC fifty 52 percent.,But I also think what the street investors wanted to see was operating,discipline. And we saw adjusted gross profit of six,hundred and over six hundred eighty million dollars.,That's up 11 percent and a three year CAC of 46 percent.,So when they see that plus year on year declining operating expense growth and 5,billion dollars of cash on the balance sheet, I think they see that Shopify is,a long term durable company. Investors are looking at this as,potentially a sign that Shopify is the worst days are behind it, quote unquote.,It's been a tough year and you've had job cuts.,It's a very tough retail environment. Inflation is weighing on everyone.,Would you agree with that? Is is the worst over?,Look, I think Shopify was this incredible Covid, you know, story, March,20, 20, physical retail shuts down permanently and all these physical,retailers end up moving to needed to move online.,And most did so Shopify. I think what most people missed was that,the trust we built in the Covid period meant that now that stores are reopening,for some stores reopening, they're now using us to to replace their existing,point of sale systems as well. So that's one issue.,The second issue is that, you know, toking about sort of the macro trend of,the consumer, this idea of omni channel. We toked.,I toked to this on your show before. This is now steady state.,The best brands, most modern brands need to sell everywhere online, offline, on,social media, on marketplaces. And doing so with the retail operating,system like Shopify gives them the tools to do so.,So I don't know what's going to happen in terms of the larger economy in the,future. But certainly, you know, September was a,good month it from a consumer spend. It looks like October is pretty good,,too. But our are our our merchants and,millions merchants and shop are getting set up for a good holiday season and we,want to be there to support them on that.,You know, investors were not happy with Amazon's results.,Their holiday forecast was not great. You know, what's what's your read on,that and what it also could bode for Shopify.,I mean, we're certainly dealing with an inflationary economy right now.,There's no doubt about that. What I what I what I think is, is is,certain is that the direct to consumer business model, where brands manufacture,and sell direct to the consumer, where there are no intermediaries, there is,more margin there. There is more room for inflation.,And so I actually think that the direct to consumer model operates better in,this environment than, say, a third party reseller might who's already,operating on razor thin margins. But so far, I mean, you know, you look,at companies just this quarter, glossy, for example, or Spanx, for example, or,Aloe Yoga or VRC, for example, like these these brands on shop are doing,really, really well. And so, you know, we think that,consumers remain strong. But we'll see what the holiday season,comes from. Most important thing, though, is that,we're there to support them no matter what they want to do.,You had me, I have a Harley lover. Great brand buying.,Great show. Let's tok about your logistiks and,fulfillment network. Obviously, you've been developing that.,Where does development stand now and what are your ambitions there when it,comes to investing and potential acquisitions?,You know, we've been a lot of progress there.,I mean, the goal is to build an end to end logistiks networks.,So from the second year, product is made at the factory to to win.,Your consumer gets it. We want to base.,We want to handle that for for all of our merchants.,The key, though, is that we want to make it so that when you use Shopify,,Shutterfly film a network, we use our logistiks product.,You don't have to think about logistiks. But the key here is some that I,mentioned the earnings call today. It's called Shop Promise.,This idea that when you use our fulfillment product, you can provide an,antikipated delivery date with certainty to your consumer.,And in early testing of shop promise, we know that consumers will spend more.,They will convert higher when they know when to antikipate it.,So we're not trying to build out what Amazon did decide one day free shipping,thing. What we're trying to do is make it so,that our merchants, one don't have to think about logistiks.,It's not a problem for them. We'll take care of it.,And second, that they can provide and antikipate in antikipation of when the,product will get into the hands of consumers.,And we made a lot of progress there. So when, you know, we've disclosed a,partnership that we have with Flex Board on that first face, from factory to,port, from port to fulfillment, we acquired a company called the Liver that,does balancing better than, frankly, anyone on the planet.,And that third phase from the fulfillment center to the end consumer.,That's really where shop life fulfillment and work takes really ramps,up. And we have partners all over the U.S.,right now that are using our software, our robotiks tiknology from Six River,System. And we are creating this this logistiks,network and we've get a lot of progress. We'll continue to do so.,But the key really is the shop promise to give everyone every small business,the same tools that, frankly, Amazon has with things like, you know, Amazon,Prime. And we think we can do that.,That said, in person, shopping is back and I can imagine back even bigger this,holiday season. How is Shopify prepared to adapt to,that? And what are you planning for?,Yeah. So if you're correct, it is back.,It is. I mean, it went away obviously during,the pandemic. But, you know, we always believed the,future retail is going to retail everywhere it'll be.,But consumer choice. The consumer may want to buy online or,offline or on Instagram or SNAP or tik tok or, you know, in person.,So those are the tools that we've been building.,What you saw in this past quarter was we saw a 35 percent increase year on year,of GMV on point of sale. At the same time, we're seeing larger,merchants replace their entire point of sale systems with Shopify, whether it's,aloe yoga or it's James Perse, my favorite brand.,But also this quarter alone, more than eight to eight retailers with more than,25 locations replace their existing traditional point of sale system with,Shopify. We actually won Merchant of Rs, who,replaced us in 175 locations. So we really are scaling up around shop.,If I would call point of sale pro to help larger retail for lots of stores,really replace and modernize their their in-store experience.,But the idea is this if you are a consumer and you buy something online,,then you go into a store a week later, they should have the same information.,It's one set of information, one set of customer data, one set of inventory that,this I like the idea of omni ch

Shopify President Harley Finkelstein on Catalyzing Entrepreneurship

foreign,[Music],thanks for joining there's a pretty good,mix of folks in this room across kind of,brand Founders,e-commerce infrastructure Founders B2B,Commerce some stuff at web3 and thanks,to Harley for joining us and kind of,entertaining us through questions from,the group and some topics I've prepared,on this I thought what would be,interesting,um uh to go into is really,um to start kind of thinking a little,bit about how you approach,entrepreneurship in general I think,Shopify is a you know essentially a,platform for enabling entrepreneurship,and I've always admired how steadfast,and the mission you've been and so I,want to spend a few minutes on that uh,tok more deeply about some of this,stuff going on on platform and kind of,efforts from the Vantage Point Shopify,has kind of what the future of Congress,looks like from your end a big theme it,seems through your life and career has,been entrepreneurship and enabling it,was there a moment in your life or when,was the moment when you kind of decided,that this was your calling this is what,you're going to dedicate your life to a,quick show of hands how many of you had,sort of small little side hustle,businesses when you were like eight to,ten years old in the room,yeah I mean my people,um that that was it I mean like growing,up um I wasn't really into sports I,wasn't really into like you know I don't,know like hobbies in the way most kids,were I was kind of into this idea of,like starting little businesses and and,I like the idea of collecting you know,sports cards not because I thought it,was cool to have like some like Michael,Jordan rookie card I thought it was cool,to sell it for more money to my neighbor,I thought that was a great thing to,hustle my neighbor and to pay me all of,his allowance,um my first real I mean some of you know,the story uh but my first real kind of,entrepreneurial thing was,um I was 13 years old,um I'm Jewish my background I went to a,lot of our Mitzvahs as I think a bunch,of you did,um and I wanted to be a DJ nobody would,hire me because I was like this big and,didn't want to DJ and so I started my,own DJ company and hired myself,and I after that that year was the same,year we moved from Canada to South,Florida and I ended up DJing like,something in the neighborhood no,exaggeration like like 500 bar and butt,mitzvahs,and while even in high school all my,friends were like going out you know,getting drunk and and doing whatever you,do in high school,um I was DJing bar mitzvahs which at the,time like seemed really cool now I say,it out loud seemed super lame but um but,that's kind of what I what I was into I,was into this idea of and it wasn't even,about the music or about like the,entertainment I just like the idea that,I was able to deliver some value and,somebody would pay me for it and I think,a lot of it had to do with this idea of,like Independence that I can do whatever,I wanted because I was able to make my,own living,where this got really serious for me was,in 2001 I moved from South Florida to,Montreal to go to McGill I was born in,Montreal it's my hometown,um went to Mcgill and things got really,rough with my family my dad was no,longer around,um my my mom and younger sisters had,basically there was no money,and so a friend of mine was a student,council at McGill University and he told,me that McGill at the time was spending,somewhere somewhere in the neighborhood,of 25 000 per semester on orientation or,frosh apparel the stuff you got the,first day of school,Montreal if I don't know if any of you,know about Montreal but it has a rich,history of the shmatza business the,clothing business kind of like New York,City and the reason is in fact if you,you could it's a really interesting uh,um thought which is if you look at,cities that have that have a,disproportionate amount of immigrants,you will often see a massive textile,trade schemata trade apparel trade,because the Barrett entry is very very,low and I started selling T-shirts to,Mcgill and then eventually sold to a lot,of other universities across Canada and,again I wasn't really into t-shirts per,se I was into the fact that this tool,called entrepreneurship that I pulled,out of my pocket for DJing and also for,apparel it solved the problem the,problem when I was 13 was I want to DJ,no one would hire me the problem when I,was 17 or 18 was my mom and sisters,needed money and I needed to pay tuition,I ended up moving to Ottawa in 2005,because a really good Mentor of mine,um convinced me that law school would be,like finishing school for,entrepreneurship that I would learn,certain skills and certain tools in sort,of that in the in that three-year period,that would be very valuable to me as an,aspiring you know bigger entrepreneur,moved to Ottawa had no friends or family,there I never been to Otto before and so,like many of you when many of you have,moved to New cities I'm certain I would,ask where are the entrepreneurs where,the entrepreneurs hang out and I was,directed to a small coffee shop in,Ottawa and that's where I met Toby and,Toby had just moved to Canada,um,a year or two earlier,he met a girl he was from Germany met a,girl who lived in Canada he moved there,couldn't get a job because he was new,immigrants,so like you know a good uh you know,aspiring entrepreneur he started a,company selling snowboards on the,internet,and in 2004 there were really two ways,to sell a product online there was you,either use a Marketplace or you,paid a million dollars for some,ridiculous,um you know IBM web sphere stack and so,he was really into this this new,language called Ruby on Rails he was a,core developer with a few other people,like dhh and there were a few companies,that were really thinking about a few,people in the world thinking about Ruby,on Rails and how we would build scalable,software at a much faster pace and he,was one of them and so we wrote a piece,of software to sell these snowboards and,very quickly realize that other people,may want to use a software for their own,products and I was one of those people I,became one of the First Merchants on,Shopify and I turned my sort of,wholesale t-shirt business into a direct,to Consumer retail business and I spent,the rest of law school and business,school selling T-shirts went to practike,law for all of 10 months in uh in,Toronto um always and I toked to this,yesterday like just the worst experience,of my entire life the law firm,environment you were a good lawyer I,think I was a really really bad lawyer,and I just I hated the environment I,hated the fact that it wasn't about how,much value you added it was about who,you were who your last what your last,name was how long you've been there it,just it wasn't for me and so I called,Toby in 2009 and said I would love to,join you and a small group of others and,help build this company called Shopify,and the fundamental reason for that was,I thought Shopify was the greatest,Catalyst I'd ever experienced as an,entrepreneur I toked about that tool I,pulled out,Shopify it felt like it gave me,superpowers that I was able to use that,tool called entrepreneurship and and,wrap it with this the superpower and I,can build things faster and at much much,larger scale and you know 13 years later,we have millions of stores on the,platform we've helped millions of stores,start scale and grow their businesses,and today we're about 10 of all,e-commerce in the US and and in other,countries even even higher than that,yeah amazing I mean I want to come back,to your personal story,um a bit I think one of the um topics,that I think a lot of people here are,interested in that kind of ties to uh,the early vision for Shopify is the,platform piece and I think what's really,notable I mean there's a bunch of people,I'm looking at here in the room today,who have built significant at scale,businesses on the platform,um uh can you raise your hand if you,built a scale business with platform,yeah great yeah cool um I wonder who,would be nice to,yea

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Harley Finkelstein, the 'power extrovert' head of Shopify, has some thoughts on the future of retail

first of all welcome thank you so much,for doing this thank you for having me,it's uh it's a real honor i'm really,glad to be here if someone landed from,mars and they didn't know what shopify,was,how would you explain it to them,i think the best way to explain shopify,is,it really it just makes it easy to turn,an idea into a business,it is this tool this piece of software,that i mean we we hope that it makes it,a magical experience but fundamentally,if you want to sell something to,somebody else anywhere around the world,on any surface area you can do so with,shopify and one of the things that i,think gets missed about it uh because we,we you know we we're trying to become,the entrepreneurship company,is that if you if you sort of pretend,for a second that shopify was,a single retailer and you were to,aggregate all our stores,we'd be the second largest online,retailer in america after amazon and the,reason i say that is because the cool,part about doing that is when you set up,for shopify today the payment rates and,the shipping rates and the functionality,and tiknologies you get these are these,are things that unfortunately were out,of out of the hands of small businesses,pretty much until you know a couple of,years ago and so now starting a business,it's a lot easier you're able to scale,it a lot better and it sort of reduces,the barrier to success um but you still,have an independent business where,they're your customers and you're not,renting them from some big marketplace,so um i think shopify is a sort of,entrepreneurial magic wand shopify,really provides,the infrastructure for a small business,and kind of soup to nuts let's say i,decide i want to sell katie's sweaters,you know so many people have uh these,ideas in the showers in the morning,they're just like you know what i would,love to do,and and by the way a lot a lot of great,yeah exactly a lot of great ideas come,in the shower in the morning but most,people when they think about those,things the the second thought after they,have the idea is well it's too,complicated or it's too expensive or i'm,not an entrepreneur i don't really know,how to do this and we we actually think,that those shower ideas those when,you're an aspirational entrepreneur,those are often some of the best ideas,when you look across some of shopify's,biggest stores they started as ideas in,the shower and so the next step you,would do is you would just go to,shopify.com and for 29,we would walk you through the entire,process of building a business and if,you know how to use email you can,effectively build a store on shopify,within you know an hour or two and that,we think is not only incredibly,democratizing but is incredibly fun as,well one of the coolest parts about,being an entrepreneur now in sort of,modern times is not only is the cost of,failure as close to zero as it's ever,been not only is it as easy as it's ever,been and inexpensive but also,there's a term called dtc direct to,consumer and it's it's sort of a,business model whereby you as the brand,can connect directly with the the end,the end consumer i don't think that's a,fad i actually think that's the way,that's where retail is going and if you,think about you know 20 or 200 years ago,the baker sold their bread to the end,consumer the cobbler sold their shoes to,the end consumer and and so i think,we're going back in many ways to having,this really authentik interesting,relationship between the brand the,entrepreneur and the person buying from,them tell me a little bit about,shopify's origin story how did it come,to be,about 16 years ago uh we were trying to,sell snowboards on the internet,um and,we live in canada uh toby our our,founder had moved to canada uh from,germany met a girl and it's not it's not,easy for a new immigrant to get a job,but one of the opportunities as a new,immigrant in canada is you could start a,business even though you can't seek,employment and so he's in canada he,likes a snowboard he decides that uh he,wants to sell snowboards on the internet,and back in 2004 or so 2005,the the there were two ways to sell a,product on the internet,the first way,was to sell on a marketplace so you go,to you know some large marketplace ebay,for example or etsy or something like,that and you would sell your products on,the marketplace and that was a very,inexpensive way to sell a product online,the only problem with that model was,you effectively are renting customers,from that marketplace,you don't have a direct relationship,with the the person buying your,snowboards and so it's very difficult,for you to build your own brand because,pretty much every one of those you know,uh those snowboard pages kind of look,the same there's no way for you to stand,out so that was one option the other,option was,you would pay some very large software,company uh like an ibm type company,a million dollars or more and they would,help you build your own custom online,store and that's sort of what you know,the walmarts of the world did or some of,the big retailers did they would go and,pay some big software company,and so toby was frustrated that there,wasn't a great way to build a beautiful,scalable easy to use online store to,sell the snowboards and so being a,computer programmer by trade he decides,to write a piece of software to allow,him to sell these these snowboards,and around that time um,and so by the snow where business does,well it's called snow devil it says a,lot of snowboards but people begin to,ask him uh hey can i use the software to,sell,my products can i can i use the software,to sell whatever products is more,meaningful to me my version they're my,my athletik where that's right yeah and,so he realizes wait a second the,snowboard business is a good idea but,maybe the software behind the snowboard,business that enables more people to,partikipate in entrepreneurship and,small business maybe that's a great idea,and so he stopped selling snowboards and,starts focusing on the software and um i,had met him around that time this is,2005.,and i moved to canada to go to school i,grew up in the us and moved to canada to,go to mcgill first and then i moved to,ottawa canada where i lived now to go to,law school to,funny enough not to become a lawyer but,become a better entrepreneur and i,needed to support myself in school my,parents weren't around anymore and i,didn't have any money and so i became,one of the first merchants to use,shopify and i started selling t-shirts,licensed t-shirts and i put myself,through law school and business school,selling t-shirts on shopify,and after i finished school i called,toby back uh in in 2009 and i said i,think this piece of software is,effectively super powers for anyone that,has ambition than anyone that has an,idea is toby still selling snowboards on,shopify,so toby and i each have our own,businesses um,and part of it is we want to we want to,know what it's like to start a business,in in in 2021 we know what it's like to,use shopify and so toby has a sock,business on shopify that he never toks,about because uh he's a little more uh,he just doesn't tok about a sock,business but,during the pandemic uh funny enough i,drink well i drink coffee in the morning,but i found my um my anxiety levels were,actually increasing during the pandemic,we moved to a fully remote setup here so,shopify is now work from anywhere and as,a power extrovert um i felt my anxiety,levels had had escalated and i felt that,drinking coffee in the afternoon was,making me wasn't helping with that and a,really good friend of mine um who's a,sort of a tea you know connoisseur,started suggesting some green teas to me,and he started curating the best green,tea on the planet uh and dropping them,off my house and saying hey try this to,you and so at some point i said you know,i really want to know what it's like to,start a business on shopify in 2021,during the pandemic and i think we,should do tea and so uh david and i,started this tea company called fire,b

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Shopify COO Harley Finkelstein on Q2 earnings

harley thanks so much for joining us,thanks for having me appreciate it uh,clearly very very strong numbers this,morning and uh the share price uh,reflects that today,and uh of late to to what extent is that,a long-term,structural shift that you've been,enjoying over the last couple of years,as compared to a quarterly effect,because of covid,well look we've uh our mission from day,one has always been to help,small businesses and to level the,playing field and frankly it feels like,now,uh small business entrepreneurs need,that more than ever and so this is a,story i think of of of great independent,small business entrepreneurs,finally um being able to connect with,consumers,finally be able to have the tiknology,they need to compete with the biggest,companies in the world,and so it feels like the year 2030 in,terms of what retail would have looked,like then,has been pulled back in the year 2020,and the success of shopify is really the,success of independent businesses all,over the world,and i think we're starting to see that,small businesses will be the driving,force,and will be the ones that we will be,rebuilding our economy um after the,pandemic,um but in terms of how it's going to,continue we went from about five percent,of total retail sales being e-commerce,ten years ago to close to fifteen,percent uh in the last couple of years,now we're close to 30 percent so i think,some of these uh new trends the fact,that this digitalization is happening,that will stik around and within that,uh your data is saying this morning,of u.s online retail sales that you are,six percent,uh amazon 37 where would you like that,number to be in five years time well the,most important part of that i think,is that if you were to pretend for a,moment that shopify,is a single retailer we're not a,retailer but if you were to pretend that,we were,we would be the second largest online,retailer in america and what we get with,that is,massive economies of scale whether it's,things like payments or capital or,shipping,all these things that we now get,leveraged with we can distribute these,those economies of scale,and further level that playing field so,there isn't a percentage uh necessarily,we're trying to achieve in terms of,total retail but what we are seeing,though is consumers,are now voting with their wallets uh to,support independent brands and retailers,and that is why i think we've had we've,seen so,so much great success of incredible,small businesses in the last couple of,months,today harley that the magnitude and,duration of the future impact remain,uncertain and of course the likelihood,of a deeper recession and didn't give,guidance why don't you feel confident in,some of these trends continuing,well there's no way to predict exactly,what's going to happen there was no way,we could have seen e-commerce,grow from 15 of retail to 30 in the last,you know three or four months or so what,we are trying to do is make sure that,any small business that,wants to compete that wants to enter and,and actually be resilient,has the tools to do so i think a lot of,people for a long time,just assume shopify was an e-commerce,platform for small businesses,what we're now seeing is companies like,chipotle and snickers and,and molson course are also beginning to,act entrepreneurial and using our,tiknology,but as a product we're going well beyond,just e-commerce we're now helping people,sell in physical stores as well,helping them with capital we've given,out more than 1.2 billion dollars of,capital to small businesses,these are things they couldn't have done,on their own and so really we are the,entrepreneurship company i think that's,beginning to be understood,harley i guess this is a a great problem,to have but uh do you regret in any way,uh how you've priced the product a flat,fee for most customers,as they cross a certain mark you start,to take a percentage of their sales but,that percentage,is limited by a maximum dollar amount,per month i believe i'm right in all of,those points,do you wish you had more of a share in,the sales as some of these companies,grow and grow faster as opposed to there,being those arbitrary dollar limits,well to be clear we make it really easy,to get started if you want to start a,business on shopify it's 29,but as you grow to become one of the,leaders in your category whether it's in,all birds or it's a fashion nova type,company or it's a bombus,or any companies that have grown to be,category leaders we do share on their,upside and we do share in that,in in their gmv which is why i think,you've seen gmv grow,almost 120 uh year over year as we,announced this morning,do you think harley amazon is,anti-competitive,to the topic of the the hearing we've,been watching all day today,and and how big of a competitor are they,to you yeah we don't compete with with,amazon our merchants do compete with,amazon,but we think for the future of commerce,to not only survive but thrive,it needs to be in the hands of the many,not the few and so we,like a future of retail that looks like,many many many small businesses,not single hegemonic companies um when,we consider the themes,of the of 2020 partikularly because of,uh covid do you think you've seen such,fast growth because,just typical shoppers have gone online,or because you've also seen,people who may be forced into a,situation have decided to start a new,business,all together in a way that if they'd,stayed in the safety of their their old,job or whatever they they may never have,taken that risk,certainly entrepreneurship is on the,rise as i mentioned earlier i think that,entrepreneurs and small businesses,will be one of the catalyzing factors to,to get the economy back,on track but that being said i think,there has been increased demand from,consumers and consumer,preferences have changed they do want to,buy direct from the brands we've seen,that direct to consumer as sort of a,trend,has been around for a while but it,should have been steady state,the issue was a lot of independent,brands didn't have the tools the,tiknology the access,to sell direct to the end consumer now,they can but then you also have those,brick and mortar businesses which is a,big part of shopify's,business and our our product offering,who we're going to digitalize,but what the pandemic did was it forced,the digitalization to happen right now,and we were there with great software,and great tiknology,to make that really easy for them,you've got a fan jim cramer has liked,the stok and he also is a fan of yours,writing into the show harley,just investors always uh,love the tam total addressable markets,very sexy term how do you think about,what that is for you in terms of how big,this could get,look we started 15 years ago just,helping very small companies set up,beautiful scalable,online stores and now we really are,becoming the world's first retail,operating system,we've seen small businesses that started,their mom's kitchen table again going,back to those,uh gym sharks of the world who've become,category leaders,but we've also with shopify plus began,to see some of the largest brands on the,planet,procter gamble unilever brands also,setting up shop on shopify,and so we really do believe our tam is a,lot bigger than anyone really expected,and fundamentally as retail shifts more,and more online,we seem to be the best place we are the,best place and best tiknology for it,but we think that businesses simply,um they need something that's nimble,they need something that's quick to,access,they want to access the ability to sell,on social media or they want to be able,to have,things like accelerated checkup that all,comes standard in shopify and so,we really do make it easy for them do,you think on the payment side you're,going to be able to cut out traditional,players,in the future as well i'm not sure we,have a fairly large payments business,with,with shopify payments and shop and and,now more uh,shop pay as well we're introducing,things like installments

Harley Finkelstein from Shopify on Why E-Commerce is the Future of Business

what's up man hey damon how you doing,i'm well hey i like the look i like the,look,it's only because i can't get a haircut,right now i got no choice yeah you guys,do like me just shave it all off baby,yeah you know,i don't have that confidence i don't,have your swag,so what's up harley how are you doing,first of all how's your family how's,everything going over there,family's doing well um you know one of,the um,i guess glimmers of of light through,this whole thing is that i'm getting to,spend a lot more time with my two,daughters i know you have a daughter as,well,um and i have a one-year-old and a,four-year-old and frankly,i don't think i've ever spent more,quality time with them um so that's been,really great family's healthy,and we're just you know we now have over,a million entrepreneurs a million stores,on shopify and we're trying to,help as many of them as possible and,help get more stores,that were just offline to come online,and help ride,uh you know ride what is going on right,now during the crisis tok about the day,i think,just one second are you a dad like me,like you know you know at three years,old and four and,one they're so damn yummy so when,uh they come off i play with them and,then you know when they're acting bad or,they're annoying me i tell them go to,their mother and then as soon as uh you,know,their mother yells at them i come over,there and i hug them and,then i send them back to your mother do,you do that at all do you discipline,them as well yes no i,i do that too um and and this is kind of,a weird time in my home right now,because,obviously uh i'm i'm trying to you know,manage shopify make sure everything's,going well and help entrepreneurs my,wife's also an entrepreneur she's an ice,cream entrepreneur,and so we're both trying to balance,being entrepreneurs with obviously,having a one-year-old and a,four-year-old running around and um,it's it's challenging but actually one,of the things that i think has been made,it better is we're just scheduling,everything i mean,we literally schedule like a walk uh,it's in the kids in the google calendar,and stuff,and i found that to be a really,effective way to make sure that i'm not,um neglecting any of my responsibilities,on either the family side,or on the shopify side i find the same,thing i walk every day either at five or,six i have uh you know pretty much that,but everything else is like listen we're,doing our interviews i knock out my,interviews and then i knock out my,behind-the-scenes filming,and then i knock out whatever research,i'm doing and you know whatever the case,is and,uh yeah so i try to do my walking,between five to six and i finish at,eight go,have dinner put the baby down watch some,uh watch a movie or something with my,significant other so that we do spend,that time together and repeat it all,over again the next morning at uh you,know six or seven a.m,right and starting to follow the market,so um i already told people a little bit,about you,and and and i told them why i believe,that this is an extremely valuable,conversation i mean you're stuck,i mean i keep harley i keep just trying,to wait for it to dial back a little to,get more of it it's not going anywhere i,mean this thing is like a rocket ship i,mean when the,i i mean and i think that the reason why,i'm i'm trying you know because like all,stok just wants to wait the two steps,forward once the bike seems to pick up,more,they come back that's what warren,buffett says you know they're always a,great investment,something like yours is not a flip,something like yours is an absolute uh,hold because i think that stok is going,to go with you and i tok we said 1500,but i think it's going to go to 2000.,and why do i why do i think that or more,right,why is that important for everybody,right now i think that first of all we,can um,we can invest in geniuses like you if,that we do not have,uh we don't want to do that tell me a,little bit,i know it but tell everybody a little,bit of how you started it because you're,not just some corporate guy who decided,you know i'm going to go on be an m a,guy,and a merger acquisition you created,something you created something,for a need yeah i mean the story of,shopify is pretty simple um we want to,sell,snowboards on the internet uh this is,maybe 16 years ago,and there was only two ways to do so in,2004.,one way was to spend like a million,bucks in some enterprise,you know complicated clunky software,system,or you had to sell on a marketplace like,you know uh ebay or an etsy or an amazon,which although those were inexpensive it,didn't really allow to build your own,brand,and so we wrote a piece of software to,sell these snowboards and very quickly,realize that while the snowboards uh the,business of the snowboards was a good,idea,the software business behind the,snowboard store was a great idea and,that,uh potentially millions of other people,around the world may also,want to use our software to create their,own business,and uh fast forward to today we have,more than a million stores on shopify,some of your favorite some i mean people,that are watching right now,um if you go to a great beautiful online,store,a direct consumer brand whether it's,bombus or all birds or fashion nova or,kylie cosmetiks,or a million others those are all,powered by shopify,and so um you know if anyone watching,right now,has a product that they want to get into,the hands of customers they have an idea,that they want to figure out whether or,not there's product market fit,uh for 29 you can use shopify and you,can build a business which is,uh can become you know a category leader,this morning i did an ig live,with um ben francis who you know from,from gymshark,i mean ben started in 2012 actually he,was mentored by,you through shopify uh and he started,you know at his mom's kitchen table,and now jim sharp is one of the largest,most uh significant,and and um profitable uh athletik wear,companies on the planet,and and they are taking a they're taking,market share away from all the big guys,like nike and adidas,um and so it's it's the company is,really all about entrepreneurship,and um right now where small businesses,are kind of going through a rough time,right now,we feel like our mission to help,entrepreneurs has never been more,important,and i agree and you helped me because,what we the way we started was you know,when,food when shark tank came out,we we the websites were crashing because,everybody was just you know they were,hitting the sites and then ted you know,obviously as a younger,uh smarter person who's the president of,my company said why don't we find the,company that can deal with the bandwidth,and we started using shopify,i think in 2010 was it,or yeah just around the time where shark,tank started to take off,that's right everything all the sites,were crashing and so uh we began to do,that and then actually we did something,really,um really meaningful together that i,think has had a massive impact that i,bet you most people watching have no,idea,which is that we helped to co-develop,this thing called build a business,and to build a business competition was,um as far as i as like i haven't figured,out i haven't seen anything bigger than,that but it was the biggest,entrepreneurship competition ever,and what we did was we realized that so,many people wanted to become,entrepreneurs,so many people want to start businesses,but there was this strange,hesitation to do so they thought it was,either complicated or too expensive,and you and i disagree with that we,think it's never been a better time to,become an entrepreneur,and certainly that was the case even,eight years ago and so we created the,competition and,you know goldieblox gymshark knicks wear,movement watches,like these are some of the biggest dtc,brands on the planet and they were all,started,uh because of the real kick in the butt,that uh that you'd given them,and and we'd supported so that is pretty,pretty damn cool,yeah no it's cool i

Harley Finkelstein: "Retail's New Paradigms" | BoF VOICES 2021

[Music],harley,can you hear me hey there i hear you,thanks so much for having me of course,this is harley finkelstein,uh president of shopify are you in,ottawa today harley are you somewhere,else i'm i'm actually in toronto and i,want to say just before we jump into,this um voices is one of my most,favorite events i was there at the last,time we were together in person and i,brought my wife it was amazing,unfortunately this week is our sort of,it's black friday cyber monday week and,so it's sort of our super bowl for our,1.7 million stores so i'm basically,bouncing between toronto and ottawa all,week but i wish i was there with all of,you,i heard black friday,was an absolute blockbuster for shopify,this year can you give us some of the,metrics around that,yeah black friday was there was a lot of,tok initially that black friday,and cyber monday for that matter what,what is now sort of referred to as a,cyber five from thursday of thanksgiving,to the monday,that because,the weekend was really turning into a,season that we weren't going to see the,same amount of,of of gmv but actually we saw total,global sales on friday alone uh about,2.9 billion dollars which is a 21,increase from 2020 and more than double,2019.,the reason by the way that's important,for those of you that are that are,watching this is you know it's not just,a sort of cool shopify flex shopify,really is a proxy for independent retail,and we came out with these numbers we,did about 6.3 billion for the entire,four-day weekend but 23 year-on-year,growth when you compare that to numbers,that came out pretty much the same day,on monday from adobe which really,measures more of the big box retailers,you saw flat numbers and so you know we,we tok about shopify we're trying to,arm the rebels the independents the,entrepreneurs the you know the people,consumers favorite direct consumer,brands and it looks like this bfcm,weekend uh they were the winners,wow okay so from black friday let's take,a look into the future you know harley,this session's called tok to me about,the future so i want to get your,perspectives we worked on these amazing,retail forms which i know you were able,to be a part of,tok to me about supply chain,what have you learned you know everyone,you know yesterday here on stage we're,toking about like supply chain issues,you know coming from our state of,fashion report with mckinsey but,for the entrepreneurs and rebels and you,know all those people building,businesses using shopify as a platform,how should they be thinking about supply,chain,in the future,yeah,a couple things look i think that supply,chain complexity uh is putting pressure,on every single business but i think,that consumers still want to buy from,independence as much as possible,one of the things that i think uh folks,and frankly the industry is getting,completely wrong is that there's this,assumption that the larger retailers,home depot walmart for example,because they have,uh larger gmv because they're larger,businesses that they can,charter their own boats and and create,their their own containers and it may,look on the surface like big box,retailers actually have can fare better,than independence we have not seen that,in fact i think the missing part of them,of the,supply chain story is that a lot of,direct-to-consumer brands have much,stronger margins than the larger,retailers who in some cases like costco,are operating at around 12,margin,so because these direct consumer brands,these these independents have larger,margins i think they can absorb things a,lot easier whether it's supply chain or,it's even things like you know labor,shortages or inflation better that is a,story that's not being told and again i,don't i don't think supply chain is,going to be an issue,long term i think it's going to be it is,a short-term issue and so that,absorption will happen the other thing,that we saw was in 2020 we saw cyber,monday black friday shopping start about,19 days ahead of black friday and this,year it started about 28 days ahead so,we really did we did see the consumers,because they had transparency with the,brands they knew what to expect they,really did did start shopping much,earlier then probably finally i would,say on supply chain is that we saw this,massive increase in these warehouse,management app downloads so we leading,up to bfcm so we saw 26 growth in these,warehouse management apps uh being,downloaded by our merchant which,indicates that these merchants were,looking for ways to to do faster,shipping whether it's by using,third-party fulfillment warehouses by,using tiknology partners flexport,obviously is coming up a lot right now,but in the end we didn't necessarily see,massive declines in sales based on,supply chain issues for these 1.7,million independent stores on shopify,we had a presentation earlier this,morning,uh harley i don't know if you were,watching it was uh by some of our,friends at the future laboratory and,they were toking about the word,flexibility,and agility,as being absolutely critikal as we think,about the future in your,experience you know working with the,merchants and you know entrepreneurs on,shopify what does that mean for these,smaller companies that maybe you know we,think they can all be more nimble and,more agile is that true,yeah it's actually one of the things we,toked a lot about over the summertime,when you and i were hosting these forums,about this idea of consumer choice and,this idea of retail being everywhere you,know if you just look at the last couple,of integrations or partnerships we've,announced uh you know from tiktok to,instagram more recently spotify so now,uh artists on spotify can easily connect,to their merch store um through shopify,i know that's a little bit confusing but,part of that is not because we think the,future of retail is going to be on,spotify or on tiktok or instagram i i,think the the the best brands that that,i've spoken to and many of them have,come from introductions from you uh and,i'm grateful for that,they really understand that there's no,silo between digital and physical that,it's all just retail and i think we're,seeing these these incredible merchants,using brick and mortar locations to,better invest in things like showrooming,we're actually watching a lot of the,in-person,retail experience turning sales people,uh people that work in the store into,consultants into,concierges where they're doing training,and they're creating these really great,experiences and and so,one i think brick and mortar locations,are becoming fulfillment centers and,online stores are also becoming sort of,catalogues so there's sort of this weird,blending happening which i think is very,which is a good thing also reimagining,the roles of employees store employees,acting more like experienced hosts as i,mentioned where brands give them tools,to better serve customers i think that's,certainly happening but i also think,that,ensuring that consumers have a very,consistent experience across these,channels is still something that needs,to be worked on for a lot of the more,traditional brands that are beginning to,think about like i said this on the,summer and i think you laughed at me and,sent me a text message after but i said,to you i said to the group um i think,that omnichannel or multi-channel,commerce toking about that,will be like toking about a color tv in,the future no one really says color tv,every tv is of course color tv i think,that's what we're going to see when it,comes to retail every single successful,retailer will not look at these,different channels as different,businesses with different p ls but,rather just a seamless experience and i,think consumers want that,okay,last quick question,mobile commerce you know you know,everyone's now basically just shopping,from their phones all the time,what are you advising young emerging,companies or like big dtc companies on,their strategy for mobile commerce,yeah i think that this idea of mobile is,is is