eStore Insights from Shopify’s Founder Tobias Lütke

Anyone who has ever worked with me knows I’m not platform-loyal. I’ve learned to build eStores on all the major platforms and know enough to work on some of the small ones too. I recommend platforms based on my client’s needs and there are sweet spots for each system. Shopify is the best for people who want to run their eStore without much help and maintenance from a developer. Why? It was built with entrepreneurs in mind. You’re supposed to be able to start a store on it quickly — with all the basic store management tools already in place.

In the Shopify episode of How I Built This with Guy Raz, founder Tobias Lütke explains that he created Shopify because he created an online shop. And that’s the core principle behind the company today.

How Shopify Started

Tobias Lütke was a German software developer with a passion for snowboarding that led him to North America. It’s where he met his wife and when he decided to move to Canada to be with her, he found he couldn’t get a job at a Canadian company while he was still in the process of getting his status. So, he decided to open up an online store selling snowboards with a friend — with his role being website development. But, at the time, he found a lot of limitations with the available software. So, he decided to build his own site, Snow Devil, from scratch.

It took him about 2 months to build and launch the site in 2004. After launch, it took some time for his first order to come in. He talked about where he was (a coffee shop) and where it was from (Pennsylvania). In the episode, he mentions that this is a question he likes to ask Shopify customers, “Where were you when you got your first order?”

Their initial marketing involved some traditional methods (like flyers) and the newly available Google ads. As the snowboard sales slowed in the offseason, Lütke craved more programming projects. He was enjoying improving his software and the experience on his site.

At the same time, other online store owners were reaching out to him about licensing the software for Snow Devil’s site. Lütke decided to build Shopify as a software that would allow people to build online stores easily. He was very passionate about showing these entrepreneurs their selling journey on the backend tools.

They shut down Snow Devil after that first summer and Lütke went all in on Shopify.

Why Shopify Thrives Today

Some of the biggest e-commerce stores (e.g. Kylie Cosmetics) run on Shopify. The key features that attracted eStore owners to the website were that it was modern, fast, and easy to set up. It democratized selling online. Then, after the recession in 2008 and 2009, the many people who were laid off from their jobs resulted in a huge demand for his software. People started their own businesses to supplement their income or have control over their career.

In the episode, he talks about the statistic that makes him most proud, “… every 52 seconds someone is getting their first sale.” As simple as that sounds, a lot of platforms (and marketing agencies) lose site of the fact that eStore owners are trying to sell things. And if their eStore isn’t facilitating the sales well, it’s not a good fit for them.

To this day, he operates a “secret” store where he sells “socks” but he wouldn’t reveal the name of the site in the episode. (Let me know if you think you found it.)

Listen to the Episode

Hear everything Lütke has to say in the episode on Spotify. It’s a great listen with great tips for online stores.