This is a transcript excerpt of a 2018 YouTube interview where Toby (founder of Shopify) recounts how Shopify began. In 2004 he launched a snowboarding e-commerce site called Snow Devil while in Canada, built custom storefront software because existing shopping-cart systems did not suit first-time online entrepreneurs, and later evolved that software into Shopify after others asked to license it.
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How's everyone doing? Awesome.
Well, we're happy to be here and happy to see all of you. Thanks for coming. Toby, you've founded a remarkable company, and if I'm not mistaken, it's valued at about $15 billion. And as I understand, it also has pretty humble origins that you began by trying to start a snowboarding business and somehow ended up starting Shopify. Could you just take us through that, by the way? I was driven here today by a guy who uses Shopify. He's got a new business. He's selling a product that's supposed to help athletes recover faster. So he had all kinds of good things to say about Shopify.
That's awesome.
So tell us. Just tell us a little bit about how it all happened. How did you start with a small idea that became a really big company.
Yeah, it's a story of taking one step at a time. So it's true. This was in 2004. I just moved to Canada and I was spending my, you know, the winters. I'm from Germany. Winters are a lot longer than I used to from Germany, it turns out. Surprise to no one in North America, but news to me. And so I ended up spending a lot of time snowboarding. I needed something to do. I did not yet have a work permit, so I tried to get a job, but then people told me that you do actually need a work permit for this. And luckily someone pointed out at some point to me that you don't actually need a work permit to start your own business because you're not technically working until it's working, and probably presuming that it would go nowhere anyways, and at.
Least that I couldn't understand that.
What was that? I think the person was presuming that my business wouldn't go anywhere and therefore I would never have to register it, and therefore it would be perfectly legal. So I ended up combining my background as a computer programmer, my. My technical abilities with snowboards. I built an online store called Snow Devil. Sold a good deal of snowboards in the wonderful environment of 2004. I was the only person advertising on the names of all the ski resorts on Google. I think I paid 20 cents per click. It was wonderful. And. But the interesting story was I tried to build a business using existing software that was essentially impossible, given what I wanted to do. And I ended up building the software along the way. And after a successful season, we ended up realizing that people stopped buying snowboards in the summer, it turns out. So we either needed to sell skateboards, but at this point, A few people asked me if I could license the software I wrote. And so the idea for Shopify really came from that. People wanted this software and spent about another two years working on it and then started selling it as Shopify.
And specifically, what about the software was unique? Why did you have to develop your own software and why did people want to use it?
Yeah, so. So it turns out this was unclear to me in the beginning, but then I figured it out later. It is true that there was software. I mean, there was multiple systems which are shopping cart software, but all of them were built for existing businesses that wanted to also sell online. Because that was the world. Right? Everyone needed an online Strategy. In early 2000s, there wasn't anyone who built software that was specifically to support people who start new businesses online, which is a very different challenge. Suddenly things like how difficult is it really, really matter? Because these are not veterans of the retail industry attempting these kind of things. I certainly wasn't. It was people who used their lunch breaks to make a reach for independence. These are people who, and I think this is a large group of people in the world for who often the kindergarten to school to college to corporate job thing is not the right way to go or would at least attempt to build something themselves and engage in this wonderful thing of entrepreneurship. And so I needed to build Shopify for those reasons. There was also a couple of other reasons. One is this was really the dawn of what was called Web 2.0, which we sort of make fun of now. But Web 2.0 was really the technology industry raising its hand and saying, we figured out how to make Internet software. We didn't figure it out in the 90s. We pretended we did, but we didn't actually do it. Now we know how to make Internet software.
