Shopify's Operating Principles, As Outlined By Tobi Lutke At a Recent Public Event

Imagine my surprise when my friend Vicki Bodwell sent me a link to an interview with Tobi Lutke by the "besties" of the All-in podcast.

I'm an on-again, off-again fan of the All-In podcast. Sometimes I think it's the most brilliant thing I ever heard, sometimes, I can't get through 5 minutes of it. The fact that I find it good about 60% of the time is good enough to keep it on my feed.

I took a few things from it, but I wanted to outline a few core operating principles that he articulated for Shopify at the end of the event.

Shopify Operating Principles

1 - Be great for crafters. 🔨

Anyone who has read more than a paragraph from Tobi understands that he sees himself first and foremost as a crafter, understands that without them there is no value to promote. So the top priority always needs to be to retain the talent of the builders.

Bill Gates had a famous quote I remember. I can never find it.... but... even after Microsoft had over 100k employees: "If the top 100 quality people at Microsoft ever leave, we would be a completely different company."

That always stuck with me.

2 - Anti-Status Quo Bias ⏲

The goal is to be less terrible than all the other companies. Anyone who has evaluated an eCommerce platform understands that sometimes this is what you are doing 😄 🤣

If you aren't unhappy with the status quo and constantly improving customers' lives, you don't deserve to keep their money.

3 - Subtraction ➖

Tobi has a theory that only founders can subtract from a company's offering because they are the only ones with the social capital to make those kinds of tough decisions. Everyone else gums up the works with more people, features, and everything customers eventually stop valuing. (think about what Steve Jobs did when he returned to Apple - a core principle was that all the products should fit on one table.)

This last subtraction point is also a core element of Clayton Christensen's theory of low-end disruption [the incumbent never knows when to stop building], and is also a kind of agile principle generally (YAGNI - you aren't going to need it)

If you ask me who these principles are most like, I would say a combination of Bill Gates, Jeff Bezos, and Steve Jobs. The emphasis on the craft from Bill Gates, the divinely discontent focus on customers from Bezos, and the subtraction capability of Steve Jobs.

I've always admired that Lutke is a student of previous great entrepreneurs and this interview really crystallized this as well.