Shopify President Harley Finkelstein on Celebrating Entrepreneurship & AI-Integrated Business

Harley, welcome to the podcast. Great to be here.

Thank you for having me, Erik.

So there's a number of things I want to talk to you about, Shopify-related, company-building-related, media-related. But first, I want to talk about If Trump said, hey, Harley, I want you on my council to give me advice on what policies would be most helpful for entrepreneurs and small businesses like the ones you work with every day, even just more broadly, you know, sort of blank slate, what would you advise him?

Oh man. So I would love to, I would love to do that. I'd love to do it for any politician or any elected representative on, on any side of the aisle in any country. If you actually go through step by step what it takes to start a business, Even now, where I believe in 2025, the cost of failure of starting a business has never been lower. And I think the complexity has never been better or easier. I think scale has never been more available. I think about these brands, the Vioris, the Allos, the Gymsharks of the world who started their mom's kitchen table only a few years ago, and they're now multi-billion dollar companies. I recently, I gave one of the keynotes at NRF, the National Retail Federation, a couple weeks ago. And I brought up Kat Cole with me, who's the CEO of AG1. And if you know AG1, Athletic Greens, great company. I mean, that's a $600 million company that's like 10 years old. That is one SKU. I mean, in the history of commerce, in the history of entrepreneurship, that wasn't possible. So as optimistic as I am about starting a business right now, if you go through the steps of business registration, getting a bank account, potentially getting money, capital, so you can build your business, incorporation documents, shareholders agreements, It's a lot. So if I were to have, you know, the Erik magic wand that you're sort of referring to, I would say that let's just streamline all this stuff. Let's make it as easy as ordering off Uber Eats or something like that. Like, I'm gonna incorporate here. I need this template. I need this bank account. It has to, it has to work with this particular, you know, this geography of customer and just make it easy. I'm not saying you have to gamify it, but I do believe that entrepreneurship is inherently difficult. Most businesses will not succeed. We know that. Let's not do anything that makes it even more difficult. Let's try to simplify things. And lawyers and accountants and banks and all these different parties are all trying to— they're all doing the right things, but I think there's way too much, way too many— there's way too many hills to climb to get to an already difficult hill eventually. Like, make the onboarding into entrepreneurship as easy as possible. Do for that aspect of incorporation what Shopify has done for e-commerce. Like, simplify it. Give small businesses the same tools as big companies have.

Yeah, that makes sense. And let's segue from that to talking about capital and funding, because that's often a bottleneck for entrepreneurs, or certainly something that would accelerate that. I mean, this is even separate from a government perspective. Because, you know, we've seen in venture capital, since that's a ready funding source, a lot of people have tried to shoehorn businesses that may not be fits for the traditional venture model, especially as venture is getting bigger and bigger, and the exits need to be bigger and bigger. But most businesses can be very meaningful and impactful without needing to be, you know, multi-billion dollar companies. And I think DDC was actually a type of company or commerce that venture capitalists were funding in the 2010s much more, but have now been doing more deep tech or hard tech because they've seen, hey, maybe it's not the perfect fit and content businesses as well. And yet they are good businesses and would benefit from other capital sources. And I know you guys have a big capital effort underway as well. So why don't you talk about what the funding landscape looks like and should look like for these kinds of businesses?

Well, first of all, I don't think every business needs to raise money. I'm sitting here drinking this delicious sencha tea, which is made by a little tea company called Firebelly that I started with my best friend during the pandemic. We are not funded. We were bootstrapped. The money that we spend on marketing and inventory is, is, you know, primarily based from sales. And so in order for us to get more money, we have to get more sales and to get more sales, we have to get resourceful. And so I don't think every company needs to be venture backed or to raise money. I do think though that at a particular scale, not a big scale, but at a particular scale of of and business journey, that there is an opportunity where math becomes a thing. Meaning you could spend a dollar here to make a dollar fifty on this side. The more dollars you have here, the more dollar fifties you have here. And one of the reasons that we started Shopify Capital was it seemed obvious to us that a lot of the traditional funding sources were not funding a lot of small businesses. Most you know, retail shops selling physical products, t-shirts, for example, can't walk into a bank and get money. But because of the amount of information that we have on our merchants, we were actually able to make really smart and very thoughtful underwriting decisions. And it's very simple. They get a little notification, their admin saying you qualify for Shopify Capital, click here. They click there. Within a couple of hours, the money gets deposited in their bank accounts and they pay it off, you know, as soon as they can. The idea wasn't necessarily that let's build a capital business. The idea was Let's use our size and scale and our unfair advantage that we have to actually do something that you know wouldn't organically happen for entrepreneurs. And the end result is that if you speak to entrepreneurs and merchants on Shopify that have received Shopify capital, some of them call it a lifeline. Some of them call it their you know like the thing that got them to the next level of growth. So I'm really proud of that, but I don't think every business needs to do so. Now you talked about something you you hinted at something that I think is worth discussing, which is sort of that this. There was a period of time where it felt like every direct-to-consumer company, like pen company, mattress company, sneaker company, hospital scrub company, toothbrush company, every one of these direct-to-consumer brands between like 2014 and like 2022 were getting massively funded. You had a bunch of IPOs come out of it. Some worked really well, some less well. But that was, I don't think we should necessarily take very many lessons from that. Just because everyone does something doesn't mean you should do it also. So I think I, like, I wouldn't, I wouldn't take too many false, you know, statements of fact in that. I do think that good companies that get well-funded, but with good investments and good investors are able to grow faster. But again, some of the most impressive companies on Shopify, MeUndies, for example, or Fashion Nova, for example. I mean, these are bootstrap companies that have built billion-dollar brands. Kith also would be a great example of a, you know, self-funded company. But then you have other companies like Figs, which, which has sort of revolutionized the hospital scrub business. Trina and Heather built this great company on Shopify. They took it public. It's a great trusted public company and the public markets have actually rewarded them for it, which has allowed them to invest more money in that business. But I don't think it's, it's one size fits all.

I, um, we'll come back to Shopify, but I do want to also introduce and segue to your great podcast that you started with, with your friend David called Big Shot. Where you interview Jewish entrepreneurs and to learn their stories. Why don't you talk about some of the biggest learning or surprise that you had interviewing these Jewish entrepreneurs?

Well, let me first kind of set the tone as to why I would do this. So first, I don't really watch sports on weekends. I know, you know, I have friends that sit around watching football or, you know, baseball games. I'm just not a sports guy. And actually, when I was a kid, this may sound really weird, but rather than having posters on my wall of, you know, the famous Michael Jordan with his arms extended poster that I felt like every every kid born in the '80s had, or some celebrity or some, I don't know, artist or rapper or musician. I didn't have any of that on my walls. What the posters that I had on my walls were actually not posters at all. They were newspaper clippings of entrepreneurs, of really impressive entrepreneurs that I just found to be remarkable. And I was, as I mentioned, or I may have mentioned, I was born in Montreal, but I grew up in South Florida. And Montreal is very much an immigrant city. My grandparents are Holocaust survivors. My father was an immigrant to Montreal, to Canada. And so entrepreneurship was kind of always around me, but not in sort of the glamorous way that like, you know, I got a hustle or a side hustle or like it's my life's work or passion. All the great stuff that you and I get to think about, that wasn't the case for most of these immigrants. Entrepreneurship was by necessity. It was, it was, they hadn't, they had no other choice. No one was gonna give them the job. So I was always fascinated by entrepreneurs and I started my first company when I was 13. I had a DJ company and I started a t-shirt business. I was the way that I met Tobi and Shopify was I was one of the first merchants to use Shopify in 2005. So I've always been truly, I guess, entrepreneur obsessed and certainly intrigued by entrepreneurs and they sort of acted as role models to me. But I realized that a lot of the best entrepreneurs that I knew, that I learned about, They weren't really like well-known famous people. I mean, you know, everyone knows the Four Seasons Hotel, or most people do, but most, no one knows Izzy Sharp. You know, people know Fiji Water, but nobody knows Linda Resnick. People know Activision Blizzard, but they may not know Bobby Kotick. So there were all these people and Larry Silverstein. I mean, this guy built Manhattan, but most people have no idea who Larry Silverstein is. And so I started asking these incredible Jewish titans, many of them in their 60s, 70s, 80s, and even 90s, if they would mind sitting down with me and telling me their story. And the idea of Big Shot was really to create this archive of the greatest stories of the greatest Jewish entrepreneurs of the last century or so. And I started with Charles Bronfman, who created— helped his family create Seagram's. He brought Major League Baseball to Canada. Aldo Bensadoun, you know, Izzy Sharp that I mentioned, people like Mickey Drexler that was, you know, basically built The Gap. He created Old Navy, was on the board of Apple with Steve Jobs for 2 decades. These really interesting people that I just thought had incredible stories to tell. And I really built Big Shot really for myself. It was, it was a labor of love. And I started packaging it and putting on YouTube and Apple Podcasts and stuff. And by like, by like the second season, you know, maybe by 10 or 11 interviews, all these different people started telling me that like, this is incredible content, that they love these stories of these, these people. And, and a lot of them because, you know, In the case of Izzy Sharp or Charles Bronfman, who are in their 80s and 90s, or Leo Cooperman, who created Omega, these are people that because they're kind of at a later stage in life, they have no—they're not trying to keep secrets. They're not trying to protect their own egos. They just want to convey and explain, and they want to tell their stories. And and we've done about 16 episodes now. The next episode that's coming out will be Mike Milken, obviously, you know, junk bond king, but. One of the greatest humans to ever build a business in finance. We just had Linda Resnick, who did Fiji Water and Palm Pomegranate Juice. 75% of all pistachios in the US, weird stat, are sold by her company, wonderful company. And we've packaged these things and we called it Big Shot. And it's this amazing thing. And, you know, it's, as Kevin Kelly would say, it's a 1,000 true fans type of project, meaning, you know, there's 1,000 people or maybe 10,000 people that know it, but those 10,000 people love it. And the stories, I would say that the biggest aha or takeaway from these stories across all these titans, these billionaires, and remember, these are not people that grew up with money. I mean, Eddie Sunshine, who created the modern-day REIT, the real estate investment trust concept, and built a company called RioCan, multibillionaire, incredible man. I mean, he was born in Bergen-Belsen in a displaced persons camp. His father, when they immigrated to Canada from Eastern Europe, hid a tiny little jewel in his boot. And that's what helped them sort of get started in business. And these are not rich people, but I would say the thing that's most remarkable about these stories is that almost to a T, they all talk about the influence and the value of their spouse. If you were to ask Izzy Sharp, how'd you create the Four Seasons Hotel with the golden rule and attention to detail and luxury and service? He'd say, Rosalie. And if you ask Bobbi Brown, the cosmetics queen, one of the greatest cosmetics entrepreneurs on the planet, tell us about how you made that deal with Estée Lauder. She'll say, my husband helped me. Every one of them almost across the board. I can't think of one that didn't. I mean, Linda Resnick certainly says this, but Stuart Resnick, her husband, they all attribute a huge chunk of their success to the relationship they have with their spouse. And as I've been married for 13 years, I'm very much in love with my wife. We have 2 incredible incredible daughters together, Zoe and Bailey. I think a lot about that, about my own journey and about how Lindsay has played a huge role in Shopify's story. And I think Toby would say that about Fiona, his wife. So it's stuff like that. It isn't like, you know, some interesting strategy about leveraged buyouts or about a way to invest or a way to analyze real estate values relative to the cap rate. The real stories that come out are the relationships with their, with their families. And I, I love that.

Yeah, no, it's fascinating. We actually just started a podcast on our network called Modern Relationships that interviews couples on advice they would have for other couples or how to find someone great. So—

Amazing. Well, I have a whole book of notes on that. And if you'd ever, you know, if you ever would have me and Lindsay, my wife, we'd love to come on and we'd love to tell you about— so actually funny, I know, you know, one of the things you and I share is our deep love and respect of this, of the mentor concept, the mentor model. One thing that Lindsay and I have done since we've been married is rather than have one mentor that we emulate, we actually have a series of mentors, almost like, it's gonna sound super lame, but like vertical-specific mentors. We have, like, I have a mentor in my life who I think is one of the greatest fathers, truly like a great dad. His relationship to his children are unbelievable. And he's like my dad mentor. But I also have like a, you know, I run a large public company. So I have like a large public company mentor. And Lindsay and I have like couple mentors, like a a couple that we really like, you know, they're 10, 15 years older than us, but we really love how they, their relationship and their chemistry together. And so we've really, we kind of look around for these mentors in different aspects of our lives that we want to improve. And rather than pick one that helps us with everything, we pick one per vertical or one per problem.

Yeah, that's fascinating. I mean, and that makes a lot of sense to me. I think, you know, when you're, when people are younger, they have these big role models. But as you get older, and you start to meet a lot of people, you realize that, you know, no one's perfect, that some people may be amazing in one area of their life. But the fact that they're so amazing at it sometimes means they have to compromise in other areas, or just no one's great at everything. And so it makes sense that you would have a collection of people who excel in certain things so you can learn from them in different areas.

Yeah, it's really cool.

Well, we'll put a pin in that for, for a potential future podcast episode. You guys are certainly invited.

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On the Jewish topic, I want to ask you about how October 7th has influenced either yourself or the Jews that you talk about, because I'm Israeli, you know, and I'm in Silicon Valley. And it seems like there's definitely been a big shift, though it's not homogenous, in terms of not just awareness, but almost like a new political consciousness of, hey, I have to start being way more pro-Israel, and that might mean supporting certain things or certain people or being aware of— like, Bill Ackman had this sort of political or sort of activism revival, particularly as it relates to universities, right? And so I'm curious if anything had, besides sort of needing to care more, if anything has shifted for you specifically or the influential Jewish entrepreneurs that you're talking to.

We started Big Shot before October 7th, but once that happened, David and I were like, we got to do more of this. We got to capture more of these stories. These people are like, especially the ones in their 80s and 90s, like they're not going to be around for 20, 30 years. We have to capture these stories. Lindsay and I, we were living in Ottawa for 2 decades. It's the capital of Canada. Parliament, which is sort of our version of, I guess, the White House or Pennsylvania Avenue in DC, G7 capital, had no synagogue. And so Lindsay and I decided we would go and build the Finkelstein Jewish Center there. These were all things that we had sort of started to plant seeds in previous to October 7th, but there was this renewed sort of this catalyst This energy that we're like, no, we have to do this right now. I said this earlier, but I mean, I am the grandchild of Holocaust survivors. And historically, I did not experience a lot of antisemitism in my life. I mean, I grew up in Montreal, which is a very Jewish city. I then moved to Boca Raton, which probably even more of a Jewish city. I went to McGill University. I went to Ottawa U for law school and business school. I just wasn't exposed. I never had that sort of thing. And All of a sudden, I started feeling this in a way that I hadn't previously. And I'm— I say this loudly. I mean, I was on CNBC this morning talking about our 4th quarter results. And towards the end, we started to talk about Kanye Store, which Shopify delisted earlier today. And I made a point to Sarah Izen, who interviewed me, to say, just to be clear, I'm a very proud Jewish entrepreneur, and Judaism is a huge part of my identity. So I think that For a lot of us that didn't necessarily have a deep connection, maybe we did on the periphery. It has sort of renewed that a little bit, and it did. You know, I think we're like 15 million Jews on the planet, some crazy number like that. It it never sort of felt like that we were this small and this maybe alone up until very recently, and I think that has created incredible momentum and change, very positive, constructive. And, and frankly, it's, it's lovely. Like, it's, I like that my children, my daughters are now watching Lindsay and I, you know, we're not religious, but we have Shabbat dinner every Friday. My kids and I, and Lindsay, if you look at my Instagram feed, almost every Friday night we say Shabbat Shalom to the world. It's very simple. My eldest daughter says, we hope you had a great week. My youngest daughter says, we hope you have a great weekend. And together, the 4 of us say Shabbat Shalom. Whether or not you are religious or you're Jewish or you're not, it's simply our way of wishing everyone well. It's wishing everyone a great weekend. We hope you had a great week. And, but I think there, there's some beautiful, I don't know, there's something beautiful about that.

Yeah. Well, I wanna, it was earnings day, so I wanna segue to, to, to, to Shopify. But first let me ask a broader question, which also relates to the podcast 'cause it's on entrepreneurship. Why don't you talk briefly about how you see sort of the evolution of, of entrepreneurship or how you see it going forward?

I think that there are a lot of people who have things in their lives that give them great joy, great pleasure. Maybe it's your workshop. You go and you make beautiful toys for your nieces and nephews. Maybe it's in your kitchen where you make delicious lasagna for your neighbors or bake cupcakes or muffins. Maybe it's something that you— I don't know. It's a particular piece of clothing that you make around the holidays for your friends and family. I'm not suggesting everyone should commercialize their hobby, but I do think there's a lot of people out there who have a thing in their life, but for some reason or another, usually because they either think they have no experience or it's too expensive or too complicated, they do not cross the chasm from aspiring entrepreneur to entrepreneur. And I think that with the cost of failure being lower than it's ever been with technology, and this isn't a Shopify pitch, but Shopify certainly I think has done A lot of this with technology making it easier to get started and to ramp and to scale and to be more successful with, again, lower costs of failure. I think in the future you'll see more people try their hand at entrepreneurship. I think that's an amazing thing. Part of the reason that, so I, as I said, I've been living in Ottawa for 20 years and then about a year ago, my wife and I and our children, we moved to Montreal. Part of the reason we moved to Montreal was because Lindsay and I both went to college at McGill, which is a great school here in Canada, in Montreal. And we both always felt this weird connection to Montreal because of its entrepreneurial spirit. What I mean by that is, this is where like Montreal is full of artists and chefs and DJs and musicians. And like, you know, if you go down any of the busy streets, there's no chain stores. It's small business after small business after small business. And if you talk about heroes of the city, You hear stories of Guy Laliberté, who created Cirque du Soleil, Alain, who created a company called Couche-Tard, which owns— it's sort of like the Circle, which is like 7-Eleven in the US. Or you hear stories of the Bronfmans or Izzy Sharpe. These, these, like, the people that are celebrated in Montreal are all entrepreneurs. And we always sort of felt this deep connection to the city here. But back to your original, your question, I think where entrepreneurship is going is that it'll be more accessible to more people and more people will start Connecting, like, I think the definition of life's work is where your personal mission and your professional mission or your employment mission are matched, where they get married. That's Shopify for me. I, I've always been entrepreneur obsessed. Shopify is a company that I believe is increasing the amount of entrepreneurship on the planet. Working at Shopify to me is my life's work because the 2 things are just beautifully fused together. There's this incredible collision of personal and professional. I think more people will find that because of the vehicle called entrepreneurship.

It's fascinating, you know, in San Francisco, there has been a lot of sort of criticisms of entrepreneurs in the sense that, you know, Zuck, for example, donated a lot of money to this hospital and then the people got mad that he did that. And, you know, Elon was pushed out or left, however you want to describe it. And so there is, In the last few years, it hasn't been the best relationship between sort of the tech sector at large and sort of, you know, the government or sort of perception of it. And people are hoping that with this new administration, there's a lot more entrepreneurs and tech leaders getting into government. I'm unfamiliar with sort of Canada's sort of perception towards entrepreneurs or sort of what's happening there politically, you know, what's happening in the US. Elon is trying to influence it in some places in Europe as well. I know you're primarily, you're a business person first and foremost. Politics obviously affects business too. So how can you, or what can you tell us, an audience that's not super familiar with what's happening in Canada or what you expect to happen in Canada in terms of as it relates to perhaps some of the vibe shifts that are happening in the US and maybe other places?

I mean, I actually think it's somewhat apolitical, at least in Canada, although obviously we're in the midst, we have a prime minister that recently resigned. We currently have no prime minister in Canada. There's going to be an election soon. I think the Overton window has shifted. You know, there's that great meme where you have this person standing here and saying, I'm centrist. And then over time, everything shifts around that person. So like now somehow he's on the right or somehow he's on the left or she's on the left or right. But that person actually hasn't moved, but the Overton window shifted. I actually think it's fairly apolitical. I think Canada's issue, which is not too— I actually think it's quite different than in the US. And I really admire the US for this. Is that there is a deep inherent celebration of success in the US. Obviously, you're giving a great counterargument in San Francisco with Zuck in the hospital. But generally, I think that entrepreneurship and if you are successful in the US, it's a badge of honor. I think there is this term that is often referred in sort of the Commonwealth countries, Canada, UK, Australia, New Zealand, called the tall poppy syndrome. Are you familiar with that? And effectively, for those that don't know, it's when the poppy, which is effectively a flower, grows too tall, you chop off its head, meaning grow, but don't grow too much. Be successful, but don't be too successful. And I think that is a very dangerous thing. I think it is a very dangerous thing. And in capitalism, there's lots of faults with it, but ultimately, I think it is the best system humans have discovered that has been Proven time and time again. Again, I'm not saying it's perfect, but it is the least amount of trade-offs relative to all other potential systems governing systems. So I, I like this idea of, and I don't know, I can't speak for US politics. You know much more about that than I do, but anything that makes entrepreneurship more accessible, that reduces the amount of red tape and regulation, that celebrates more, that make, you know, at Shopify we refer to failure as a sort of a cultural value of ours, but failure is the successful discovery Of something that did not work. I love that because what it means is people at Shopify take big risks, calculated risks, smart risks, but risks, and they learn from that risk and then they apply it to the next their next you know endeavor. I I I wish not just for U.S. or Canada, but I wish for the world that we celebrated you know tries and tries at bat shots taken but not scored in a different way. I don't think it should be a failure, and and you know I I. I'm going to sort of may sound pejorative a little bit, but you know when I was in law school, I did not go to law school to become a lawyer. I went to law school to become a better entrepreneur, and I remember feeling out of place. I remember feeling spoken down to. People kind of laughed at me and and thought it was kind of a silly thing that oh you're not going to go work at a big fancy white shoe law firm. You're not going to take the big salary and get a briefcase and get a suit and go to some big tower every day. Like you're going to be an entrepreneur selling t-shirts. Like it was. It wasn't a cool thing when I was in high school. It wasn't a cool thing. And I don't necessarily need to be cool, but I, I do think though that the celebration of entrepreneurship, and that's part of why Shopify, you know, is, is the entrepreneurship company. We tell so many stories about our successful entrepreneurs and, and how they've built these incredible companies. It's also why Big Shot is important to me because I wanna celebrate these stories of unlikely success. Because I think entrepreneurship is not just a great way to make a living or to put food on your table. It's a great way for humans to self-actualize, to find their thing.

Yeah. What we make high status is, is what we're going to encourage and get more of. So that, that makes a ton of sense. As someone, you know, who's less familiar with, with that culture, is, is it because they have more of a, you guys more of an emphasis on kind of egalitarianism?

I think it's like, it's, it's, it's parliamentary. It's probably has something to do with sort of the, the aristocracy that comes from the Commonwealth from the UK. I'm not really sure why, why it's the case. You know, obviously there's certainly in Canada, at least a bit of a social socialism bend. We have socialized medicine. We have a welfare state. There's unemployment, you know, income if you don't have a job. So some of it, I think probably has to do with that. But I mean, just look at the worst graph I recently saw was if you look at the top 5 US companies by market cap, it's Apple, Nvidia, Microsoft. I don't know what the other Meta. Google, some of those, they've all been created in the last 30 years. If you look at the same top 5 in Canada, other than number 2, which is Shopify, it's the Royal Bank, Shopify, I think it's TD Bank, and I think it's 2 other banks as well. Of the top 5, 4 out of the 5 were created, I think, 100 years ago. That's unbelievable. And actually, one of the things that I think a lot about for Canada is how do we become a country of, like, I don't want to be a country of acquirees. I want to be a country of acquirers. Shopify is an independent, large-scale publicly traded company. I'm very proud of that. When I went on the roadshow to take the company public with Toby in 2015, we did 93 meetings. I remember meeting with actually near you on Sand Hill Road at the Rosewood Hotel, which is where a lot of, a lot of the crossover funds that do private and public in, in Silicon Valley like to meet. I remember meeting some of them and then telling us that the last time I saw a Canadian company go public, it didn't work out so well. It was RIM. BlackBerry, and it was Nortel. And if you sort of look at the landscape of publicly traded companies here in Canada, there's very few. There's not very many publicly traded companies. So some of that is role modeling. Part of what I hope Shopify does as its legacy is that we encourage more great founders, great companies to think about, let's be the best company on the planet, but let's happen to do it from Canada, as opposed to let's be the best company in Canada or the best vertical company in our area.

That, that, that makes a lot of sense.

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Let's, let's segue into Shopify. So, so it was earnings day. What can you talk about in terms of reflecting on 2024, the things you, you got right or the, the biggest innovations? What can you share with our audience?

I think 2024 was probably Shopify's strongest year in our 20-year history. I think our market position has gotten really strong. We had this amazing operating model where We're not just growing our top line revenue, we're also growing profitability or free cash flow margin. I think this is Shopify operating as best as we have yet, which I love. If you look at GMV, which is really a proxy for how our merchants did, we did nearly $300 billion in GMV this year in 2024. And we did about $9 billion in revenue for the year. So that's roughly like, that's 2.5x GMV and 3x more revenue than just 5 years ago. We also had operating income that surpassed $1 billion. That is 4 times more than our previous peak, which is in 2021. And then if you look at sort of the big COVID crazy time for Shopify, our operating income this in 2024 was 12x more than it was then. So I think those are really, those metrics are good. And I'm really happy we can grow the top line. We can grow our business. Also, we can be profitable. What I also, I'm really, I'm really pleased and very proud of is like this consistency. We've had 7 consecutive quarters over 25% revenue growth. We've had That's 6 consecutive quarters of double-digit free cash flow margin. That type of predictability, I think, really matters. If you look at also the types of people that are coming to Shopify, this is where it gets really interesting. Again, Shopify historically was small business e-commerce in the US, but now in just in the last quarter alone, we've had Warner Music come to Shopify, Champion, GameStop, uh, Karl Lagerfeld, Goop, Crocs, Aldo, David's Bridal, Hunter Douglas, FC Barcelona. And I think what's interesting is that there isn't just one on-ramp into Shopify, which is e-commerce. We see like, you know, point of sale, for example, our physical retail is having an incredible year. We did $588 million in 2024 in revenue from point of sale, from physical retail. That's up 33% from the year before. We have B2B, which is our wholesale product, which is also doing well. And then international. I mean, again, going back to that historic thing I said, it was mostly North America. Today, 50% of our base are actually international merchants. You know, this is, this is my 15th year at Shopify. We took the company public 10 years ago. We're almost at the 10-year anniversary since the IPO. So I've done 39 earnings calls. One thing that I think we've done well and we will continue to do well is we don't just look at the next quarter. Like we are, we are dedicated to building this like durable company for 100 years and to make sure that the business model that we've cultivated is, it's amazing because unlike most companies that there's sort of this tension between their customer success and their success, they want to make more. They want to charge the customer. Customers more. That's not the case at Shopify. Our entire business model is predicated on our merchants doing well. The better they do, which is, you know, GMV, the better we do. And if we do, if we do everything we can to make them successful, we become successful. That I think is remarkable.

Yeah. Wow. Fascinating. What more can you say more broadly about just how people are shopping or what trends are you seeing in e-commerce?

So sort of macro level, I mean, you know, the question I got today on CNBC was the state of the consumer. How is the consumer doing? The consumer is doing really well and buying from brands they really love. That's the state of the consumer. There is no, like consumers are not randomly buying t-shirts that they don't really care about. They are, if they can afford, you know, a True Classic tee at $30 or they can afford a $700 James Purse tee, they're buying stuff that actually is meaningful to them. They're voting with their wallets for those brands to exist in the world. Why has Viore had this huge meteoric rise or Alo or On Running, all these Shopify stores, because On Running, if you wear them, they're incredible sneakers. They don't just feel good and look good. They like the brand of it. The whole thing is incredible. So, you know, for the brands that consumers love, which are mostly on Shopify, we're seeing incredible strength with the consumer and a lot of resiliency in terms of how consumers are shopping. That's where it gets really interesting. So at NRF, I I did a keynote early January, a couple weeks ago, and I brought up two merchants with me. I brought up Kat Cole from AG1, from Athletic Greens, and I brought up Sarah Foster from Favorite Daughter. And the Favorite Daughter story is insanely cool. I mean, Sarah and Aaron Foster are two of the greatest entrepreneurs I've ever met. So they have this brand called Favorite Daughter. They also have a podcast called The World's First Podcast. They also have a hit Netflix show called Nobody Wants This. Okay, those are 3 things. They don't look at those as 3 things. There is this insanely tight connection between all these, these 3 things. So on the podcast, they talk about the TV show, and on the TV show, everyone's wearing Favorite Daughter, and the clothing is also promoted on the podcast. And like, you don't know where one channel starts and one channel ends. You don't know what is marketing, what is content, and what is entertainment, and what is commerce. It's all kind of blended together. That's what I think the future of retail is. It is, initially it was single point solution. I sell online or I sell offline. Then it became, I sell online and I sell offline. Then it became omnichannel. I sell everywhere. This is sort of a new thing, which I don't have a better term other than to say post-omnichannel. I need a better name for that, is I don't sell everywhere. I sell in the places that matter most to my consumers. And if my consumers are spending time, we've, we announced a partnership earlier in 2024 with Roblox. Why would Shopify power commerce on Roblox? We have millions of stores. Most of those stores are not gonna do anything on Roblox, but some of those stores, some of the time will find incredible customers, new customers and existing customers in the Roblox universe. Therefore, the ability to conduct business there. Is amazing. We have a Spotify integration also. If you are, you know, if you're Beyoncé and you have a huge artist profile on Spotify, but you also have a brand on Shopify, a lot of FIs called Sacred. Now you can sell Sacred on your Spotify artist profile. That's like, again, not everyone should do that, but for Drake selling OVO or Beyoncé selling Sacred, that makes sense. And so we're trying to make it so that when you come to Shopify, Every surface area where transactions can happen, you can do that. I don't think you should activate every one of those. I think you should activate the right ones at the right time based on precisely who you're selling to.

Yeah, it's interesting. I just spent a few days at MrBeast's sort of sort of setup in North Carolina.

Yeah, yeah. Amazing. I know, I know, I know the team. I know Jimmy and I know Jeff, his CEO. It's an amazing team. We do a lot with MrBeast, as you probably know.

Yeah, yeah. No, 100%. And yeah, it's it's amazing what What he's built from, from not just his content, obviously, but his sort of chocolate business and just the whole, the whole empire and a lot of—

Built on Shopify.

Yeah. Amazing. Yeah. Incredible. And a lot of creators are saying, hey, wait, you know, I haven't just built this media thing. I also want to build, you know, something similar to what Jimmy has done. And then, yeah. And then the reverse, if, yeah, if you've got this great sort of product, you want to own your own channels. And so, yeah, it just seems like they're, fusion of those, of commerce and content is just accelerating increasingly.

That's exactly right. I think it's this weird thing because since the invention of commerce, which is about as old as currency, you first started with a product and then you found an audience. For the first time ever, you start with an audience in some cases and then build a product. It's remarkable. It's so cool. It's so cool. And if you do it well in content, I mean, you have MrBeast and Feastables. You have Emma Chamberlain and Chamberlain's Coffee. You know, we host Kim Kardashian with Skims, for example, Drake and OVO. Like there are these incredible brands that are real brands that will be around for a very long time where they started with an audience, they had a deep understanding and empathy for that audience. And then from there, they expanded, they created a product that, that, that audience loves, like not loves, but like it's beloved to them.

That is amazing. Let's talk about AI. How are you guys using AI internally? Or how has it transformed your company? Slash, how are you thinking about it as it relates to, to your overall product and business?

We are not a hand-wavy AI company. Let's only talk about AI. And partially, we actually find that to be completely, you know, useless. We try to be very practical when it comes to AI. I mean, you know, both Toby and then our new CTO, Mikhail, who came from Microsoft, you know, are people that have studied You know, when I'm hanging with my kids on Saturday afternoon, Toby's reading white papers about new large language models. So Shopify is a very, very technical company and we sort of look at AI from both commerce first, meaning like Shopify is the expert in commerce and our AI needs to also be an expert in commerce, but also innovation first, like have the most visionary AI leaders, the best team to find practical ways to use the newest and most advanced models. So what does that actually mean at the ground? Well, from a merchant perspective, If you Shopify today, you have Shopify magic not in one spot but embedded across the entire platform. So for example, like suggested replies for Shopify Inbox, which are AI-generated replies that enable quicker sales resolutions or can answer customer questions in Shopify Inbox, or the media editor, which creates most beautiful AI image generations across all surfaces in the admin, whether it's product, you know, product photography or new logos. We have Sidekick, which effectively acts as a bit of like, you know, your, your, like, it's your sidekick. It's your, it's the entrepreneur sidekick, which acts as merchants' most trusted Shopify expert, which can tackle, you know, time-consuming tasks, can, you know, do things like give you advice and say, you can say, I'm not getting any sales. Like, why not? Well, it would say, well, did you know your traffic is coming from Pinterest? Have you activated the Pinterest channel? Like, it's your business coach. And then, you know, for our developers that are using Shopify, we call Developer Assistant, which is like boost focus on innovation and, and, and using these incredible LLM-powered tools for developers. So that's on like the merchant side internally in terms of how we make Shopify better. There's a lot of really cool implementations of that. Probably the most obvious 2 are one, our developers are just being able to like build stuff faster, more effectively. And second of all, our support organization. There are sort of 2 types of support conversations. You have high-quality conversations, low-quality conversations. A high-quality conversation is business coaching, where to spend money, how to build your store, you know, how to find a great, you know, new channel, you know, pricing, promotion. A low-quality conversation is configuring your domain name, your CNAME, or I'm, you know, I need my— I'm locked out of my account. I need a, you know, username and password issue. So by adding AI across our support organizations, it means that our team can actually focus more on these high-quality conversations. And less than low-quality conversations. And that is unbelievable. So I actually think that although we may not talk about AI as much as a lot of other Silicon Valley companies do on their earnings calls, we actually are probably leveraging it more than any of them in some ways. And we're probably on the highest receiving end of any company that can benefit from AI, I think, in tech.

Totally. Another thing you guys implemented or moved to is this Crafter-manager model. Why don't you explain what that means to you guys and what that means for career paths?

It's interesting because at most companies, the obvious route for promotion is to become a manager. So you kind of just graduate up. And what happens is you end up— let's say you're a designer or you're a salesperson. If you're the best salesperson, you may want to be a manager. You also may just want to be a salesperson or a great UX designer. But companies are not set up for it. Promotions typically are locked for managerial positions. You go from individual contributor to manager, and that didn't feel right to us. It sort of felt like we have some people who simply want to be craft experts. And so we created a program called Mastery, which means that you can get promotions, you can make more money, you can get more titles, you can get all the things you want. And more responsibility, but you can do so from the auspices or from the— in sort of the category of being an individual contributor, that you can continue to perfect and master your craft and get promoted without requiring you to leave your craft itself. And that's— and it's created these 2 tracks, manager track and an IC track or a crafter's track. And it's, it's amazing because not only are we finding people that are at Shopify really love it, but people are also coming to Shopify that tell us, I really like, this is the place where I feel like I can actually be the best at the thing that I do. And it's, it's, it's been great for us. It's been great for people that work here and for new people to come. But it's kind of shocking that, that, that is even something that someone would ask about because it seems so obvious. Like, why would you pull your best, you know, crafter at this particular area off doing the craft to go manage other people. Some people are great managers, but some people are actually like just the very best of crafters. And we want to sort of change that. We want to change the model of how typically that's done.

And does this mean you're looking for more crafters? Oh, for sure.

I mean, we're always looking for people to come join Shopify. And so if anyone's listening and you're at a company now which is forcing you to become a manager and you don't want to because you think you can be the best in the world or You know, become one of the best in the world at your craft. Please gimme a chef.

Yeah. No, I, I feel like this, this makes a ton of sense and you guys are gonna be pioneers in sort of encouraging other companies to, to, to follow suit.

Yeah. It's just in most companies, people can only advance by climbing the corporate ladder and that often forces them into these roles and steers them away from their true passion. And I think Mastery, as we call it, is really a system that truly prioritizes and rewards people that work at Shopify who are on this continuous journey of improvement. And, you know, manager track and craft track, they're held separately. And being a manager has, you know, like it shouldn't affect your compensation. Employees, like it's people at most companies feel like they have to go on a certain track, but this has unlimited growth potential for crafters.

Yeah. Fascinating. Speaking of sort of different company sort of trends, let's talk about in-person and remote because a few years ago during COVID there was this sort of thing around like, hey, You know, everything's gonna be remote, or in more nuance was like, people would be like, hey, if you're gonna be remote, be all remote. But if you're gonna be in person, be in person. Basically people were railing against the hybrid norm. And it feels like hybrid has, if not become the norm, starting to become a sort of accepted norm, even though a lot of people were worried about it. Why don't you share how you guys have evolved on this topic and where you're at now?

So I'm in the Montreal port today. We have a bunch of ports, sort of offices around the world. I'm in the Montreal one. It's earnings day, so I'm here. Jeff, our CFO, is literally right next door to me. He flew into Montreal from New York City for today for the earnings call. So I think ultimately what is most important is to, to create some like really good scaffolding around whatever you choose. If you choose to be remote, create a program around that. Be very clear about that. If you choose to be in person, do that. If you choose to be sort of a version of 2, that's okay too. Shopify is what we call digital by design. Which means that we default to digital. So we work digitally most of the time for most things in most roles. However, we come together a lot. So we come together in real life for things like, you know, intentional moments, internships, onboarding. We do bursts, which are basically like on-sites or off-sites for Shopify Summit. We drop in when we want to. And that means that anyone in any of these cities where there are ports, and there's ports in New York and Montreal and Toronto and, and lots of other places. You can just drop in anytime you want and just work from there. So I, I don't know exactly, like, I don't think there's any perfect model. I think there are a bunch of trade-offs for each model. We've picked the model that works best for us, which we call digital by design. And I, it's sort of like work from anywhere, but the asterisk on that whole thing is we want people to get together a lot. And, and so we, we've made space to make that happen. And then once a year we do a massive Shopify summit. The whole team gets together. It's magic. It's wonderful. But it's, it's, it's been working for us and, and, and especially for Shopify, which has been, you know, we've been built out of Canada. We, you know, for the first 15 years of our company, basically until COVID, if you want to be a leader at Shopify, you kind of had to move to Canada. Whereas now our CFO is in New York, our general counsel, Jess Hertz, is in DC, our CRO is in Texas, our CTO Mikhail is in Seattle, Toby's in Toronto, I'm in Montreal, and it works.

Yeah. Yeah. It's fascinating. It's the, you know, you've been doing this for 15 years. You said your company's been public for 10 years. You know, you must have had, you know, employees at Shopify who've been there for quite a long time. How are you, how do you think about building a culture where people want to spend a long time? Or, or how do you think about retaining sort of talent at that level? Or is it some combination of actually you are going to turn over your team every, you know, every few years? Or how do you think about just longevity? Because it's not something that, you know, many entrepreneurs, you know, get to, but they hope they get to. And so we want to plan for a little bit.

I think that a couple of things on that. One is we have a concept called tours of duty at Shopify, which is 3 years. And effectively every 3 years you're in a new tour of duty. You can do a tour of duty twice, but there is a moment in time where you get to talk to the person you're reporting to and you can say, look, for this next tour, I'm going to continue on this journey or I'm going to try something different. So one, it gives this obvious demarcation timestamp every 3 years to have that conversation. That's really helpful. The second thing is, as best as I can tell, the most Impressive, impactful people I know want to be around other impressive, impactful people. Like those that optimize for learning and growth tend to be the most impactful people at the certainly at Shopify, but I assume at every company. So that's all good. But what is the requirement? Well, the requirement is you know there's that there's a law of ecology. I think it's law number two of ecology, which is that for a species to survive in any environment, the species needs to grow at a greater or equal rate of change to the environment itself. Otherwise, it goes extinct. I think companies are a little bit like that also, whereby in order for me to remain the president of Shopify, I have to requalify for my job every year at a rate of change equal to or greater than Shopify's change. And if I don't, I should make room for someone else. But if I do, maybe that entitles me to, or at least gives me the opportunity, probably not entitlement, but it gives me the opportunity to reapply. And I think that type of like thoughtfulness and philosophy really, really is helpful. And I feel that, I feel that every single year that, okay, like Shopify is growing top line, say, you know, 20-something percent year on year. Am I growing 20-something percent, you know, year on year? Am I keeping up to it? And I think when you talk about things like requalifying for your job and you think about, you know, focusing on growth and learning as being the key metric. You tend to recruit great people. Maybe the only other thing I'd say is like, I don't think you'd find a company that has more, a more concentration, higher concentration of founders than Shopify. You know, and we do a lot of these sort of tuck-in acquisitions, a lot of amazing, you know, founder-led technology companies we acquire. And most founders are running large pieces of Shopify today. And, you know, and then this is very much a company that builds software for founders. But we ourselves are founders at Shopify. Most people at Shopify either self-identify as an entrepreneur or are entrepreneurs themselves. And I think this is like a founder's— it's a crafter's paradise, but it's also like a founder's paradise.

Well, that's a great note to end on. I wanna be mindful of time. Harley, it's been a fantastic conversation on all things Shopify, company building, and the state and future of entrepreneurship. Thank you so much for sharing your wisdom with us.

Thank you, Erik.

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