Shopify Engineering Shakeup Shows Tobi Resetting Shopify In Last Year

Recent reporting suggests that CTO Allan Leiwand has left for "personal" reasons after one year. Sure, it's possible but not likely. That wouldn't explain why two of first hires Allan made are also departing around the same time.

I'm sure Tobi personally wanted them gone! How's that for a personal reason?

Just look at the recent moves since September 2022:

* New COO

* New CFO

* Cancelling meetings and pineapple on pizza slack

* Departed new CTO and his top recent hires

In June 2022, Tobi got his "get out of jail free" card from the Board with his Founder shares (and affiliates) controlling 40% of the company, which gives him more latitude to again remake the company in his image.

But back to the Engineering changes. Tobi is the CTO of Shopify, regardless of who else calls themselves CTO. If you are a seasoned CTO, you don't want to walk into this situation anyway.

In October 2021, Tobi was perhaps convinced the company would grow past his scope and decided to bring in more experienced management. In early 2023, with the pandemic hyper-growth receding and Shopify innovation wobbling, Tobi reasserted control over his primary domain: technology and innovation.

Primarily this leaves the "Shopify core" in charge of most things. And I believe you will see improvements from this approach.

However, while the Shopify core can be trusted to execute the current playbook, it's unclear if that same core can be trusted to execute on two other massive Shopify initiatives:

* Shopify Fulfillment Network.

Has Shopify Fulfillment Network become the "Amazon Pay" of Shopify? It's unclear the growth rate here, but it isn't making much progress. Any way you slice it, that's an expensive bet for a software company to make. It's hard to believe that Deliverr was acquired less than a year ago, and 6 River Systems was acquired in 2019.

What's the next move here? Personally, I kept waiting for Harish Abbott to take over fulfillment, but it was somewhat telling he took the cash instead of the shares. Perhaps Tobi will reconsider and back the Brinks truck up for Harish.

Who else could they find to execute the Deliverr vision at Shopify better than the founder of Deliverr? The big problem right now is he is not the "single-threaded leader" of this group.

* Shopify Components.

Enterprise software is another place that Shopify could have trouble, despite its recent announcements and intentions.

The Shopify DNA is fast, multi-tenant SaaS, product-led growth, limited support, and disruption. Enterprise software is about security controls, legacy, vendor consolidation, marketing and sales-led growth, premium support, and risk avoidance.

Doesn't seem like there is a culture fit here at the moment. Much more will need to change to make this successful.