Shopify needs to understand what it wants to do when it grows up

Shopify needs to understand what it wants to do when it grows up

When I spoke to Shopify founder and CEO Tobias Lütke earlier this month, I was the first to bring to his attention an unflattering headline about an article that had just been published: "Is Shopify the Next WeWork?" "[in reference to the coworking company protagonist of a great rise and a subsequent collapse, ed]. Lütke, who goes by the name Tobi, was telling me about the new features introduced on the platform, which provides merchants with the tools to sell their products directly to customers online. Lütke has grown the company a little under the radar, turning it into an e-commerce giant and creating more than two million online stores, from small businesses to large chains. You have most likely used the platform without knowing it. The company's growth ended up attracting collective attention and late last year its CEO made it onto the cover of Bloomberg Businessweek, which he called the anti-Bezos.

Shopify's delicate moment This year, however, the growth of Shopify, which has been in existence for 16 years, has been halted due to supply chain problems, the return of customers to physical stores after the pandemic and looming recession. Its shares plummeted, losing 73 percent of their value. The timing with which these obstacles arose was not ideal, to put it mildly, as Shopify was on the verge of doing a stock split, at a ten-to-one ratio. Normally, this is not a choice that companies make when the stock price is falling. Another move that suddenly seemed questionable was Lütke's plan to change the company's rules on stock-related voting rights to make sure his control over the company was virtually unassailable. All this led the financial site The Street to ask the question I reported to Lütke.

WiredLeaks, how to send us an anonymous report "Oh, Jesus, I didn't see it", Lütke replies referring to the news, with an Englishman who slightly betrayed his German origins (shortly after his twenties, Lütke moved to Canada, where Shopify established his headquarters until 2020, when he announced that it would be virtual from then on). Pause: "Yes, ok, that's fun," he finally admits, but doesn't laugh.

Lütke, however, is combative and wants to talk about the new features Shopify is introducing to further increase its influence in international trade. . The decline in shares, explains the founder, does not reflect the company's performance or prospects: "We told ourselves internally, over and over again, that when the shares rose 50 percent we hadn't become 50 percent smarter. . When they dropped by 50 percent, then, we didn't get any more stupid. " Presumably, not even a 73 percent decline is a symptom of a lower IQ. minority control and that the change is due to technical reasons, partly caused by Canadian and US regulations. "In reality it is not my vote - he underlines -, but a defensive mechanism to counter, for example, hostile takeovers". Lükte adds that his new powers end with him and cannot be transferred to his successor.

It's all about noise, says Lükte. The facts are that Shopify not only provides merchants with the tools for their own website, but also expands their links to join the larger confederation of Shopify sellers. Lütke sees it as a kind of rebel alliance. After all, it is the anti-Bezos. "Shopify is uniting millions of small merchants," he explains. Collectively, the second largest retailer in the United States would be all Shopify stores, which is fantastic. "

The new initiative Ironically, though, some of the most interesting elements of the new initiative of the company, called Shopify Editions, foresee a strengthening of the partnerships with the big platforms. The central point is the so-called C2C (Connect to Consumer), or the development of a deeper relationship with customers. Inevitably, the creation of these links involves agreements with major technology services. Shopify already collaborates with Instagram, TikTok and Pinterest. Now the company has struck a deal with Twitter to place its stores on the platform and allow sellers to reach customers directly through their profiles. The company is also stepping up its ties with Google, "turning users into local shoppers" with a feature that tells customers if an item is available in their neighborhood store. In an effort to expand Shopify's reach to the world of stores, the company will partner with internet payment company Stripe to facilitate on-site iPhone payments, while in Italy it has already launched its Pos system. Lütke argues that these collaborations are nothing new, but that Shopify even collaborates with Amazon: "You'd be surprised how often when you buy something on Amazon, the order flows into a Shopify store."

See more Subscribe to Gadgetland and other Wired newsletters! Arrow Shopify is also looking to take action on logistics, an aspect that has long been the subject of criticism. Last month, the company invested $ 2.1 billion to purchase the Deliverr shipping service. The ideal, says Lütke jokingly, would be to be able to invent teleportation, but "in this case the obstacle is physics". While it is unlikely that it will be able to match Amazon's capacity in the shipping industry, Shopify hopes to be able to manage the final phase of the buying process for merchants sooner or later, perhaps creating warehouses where customers can store stock, a service that would tie sellers to Shopify even more deeply.

Will Shopify be able to harness the appeal of a platform without adopting the questionable tactics of Big Tech leaders? Is Lütke's move on voting rights attached to shares an attempt to gain more power? The CEO insists the answers are yes and no respectively. And as we speak, it is evident that his trust largely comes from aspects that have nothing to do with business tactics.

Lütke acknowledges that he is the CEO of a company that had come to be 100 billion dollars, but in reality he considers himself a programmer who is faithful to the values ​​of open systems. He chose me as the only journalist to talk to this month because I wrote a book describing the idealist ethics of early hackers. Lütke told me that, having grown up as an outsider, he was drawn to the welcoming atmosphere of open source and the way the digital world changes the rules and questioned the ways people did business. Shopify itself was born out of Lütke's attempt to network his small snowboard business: "The concept that people improve other people's ideas is wonderful, but it's idealistic - he explains -. When I started a company, I wanted something participatory, where everyone could bring their best things, the things they love ". He also tells us that he still dedicates himself to programming: "Just so as not to get too rusty - he says -. It's something I love".

"I'm a builder - he adds -. I don't think from the point of view of domination. point of view is: 'Wouldn't it be nice if this were the most available and well-distributed way for people to achieve independence?' ". Shopify's core concept is empowering people, but not its shareholders.

This article is from Steven Levy's newsletter on US.

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