Making It with Jon Davids - Episode 202 Summary
Title: Shopify President: "Here's what every business builder needs to know today"
Host: Jon Davids
Guest: Harley Finkelstein, President of Shopify
Release Date: July 22, 2025
Introduction to Shopify's Impact
In this engaging episode of Making It with Jon Davids, host Jon Davids welcomes Harley Finkelstein, President of Shopify, to delve into the transformative journey of Shopify from a dorm-room startup to a global e-commerce powerhouse worth $162 billion. With Shopify managing over half a million dollars in sales per minute across 5 million stores, Harley provides invaluable insights into the company's evolution, challenges, and the broader landscape of entrepreneurship.
The Evolution of Shopify: From Dorm Room to Industry Leader
Early Beginnings and Market Perception
Harley Finkelstein recounts Shopify's inception, emphasizing that the path to success was far from linear. In the early days, particularly around 2010, when approaching venture capitalists, investors doubted Shopify's potential, citing a limited Total Addressable Market (TAM). Harley challenges the traditional view of TAM, advocating for a "positive sum" approach where the market itself expands, enabling more entrepreneurs to build businesses.
Notable Quote:
"We never looked at TAM as a fixed pie. Instead, we focused on growing the pie itself by democratizing entrepreneurship."
[01:30]
Transition to Public Company
The transition from a private Canadian company to a publicly traded entity in 2015 marked a significant milestone. Harley discusses the complexities of maintaining Shopify's unique culture amidst the demands of institutional investors and the public market. This period required Shopify to balance scaling operations while preserving the entrepreneurial spirit that defined its early success.
Notable Quote:
"We wanted to remain Shopify, not just another publicly traded company. It was about creating a trusted public version of what we had been building privately."
[10:19]
Overcoming Challenges: Expanding Beyond E-Commerce
Adapting to a Dynamic Retail Landscape
Around 2012, Shopify recognized that e-commerce constituted a small fraction of total retail. This realization prompted a strategic pivot to integrate commerce into various platforms where consumers spend their time, such as Roblox, Spotify, and YouTube. Harley explains that "the future of retail is everywhere," necessitating Shopify's expansion beyond traditional online storefronts to encompass omnichannel selling.
Notable Quote:
"The future of retail is where consumers spend their time, whether that's online, in virtual spaces like Roblox, or in physical locations."
[07:10]
Scaling with Growing Businesses
As Shopify's merchants grew from small startups to billion-dollar enterprises, Shopify faced the challenge of ensuring that its platform could support businesses at every stage. Harley highlights the engineering and product difficulties in creating a scalable, user-friendly system that caters to both budding entrepreneurs and large, established brands.
Notable Quote:
"Building a piece of software that serves a mom-and-pop shop and a multi-billion-dollar company simultaneously is an incredibly difficult engineering challenge."
[08:00]
The Rise of D2C and Creator-Led Businesses
Revolutionizing Direct-to-Consumer (D2C) Models
Harley delves into the resurgence of direct-to-consumer (D2C) models, tracing their roots back to historical retail practices before the advent of wholesale intermediaries. He explains how the internet has reclaimed the D2C approach by enabling brands to sell directly to consumers globally without the need for traditional retail channels.
Notable Quote:
"Direct to consumer was always how retail was done. The internet simply democratized it, allowing anyone with a product to sell directly to anyone, everywhere."
[18:53]
Influencer and Celebrity Entrepreneurship
The episode explores how modern creators and celebrities, such as Kylie Jenner and Drake, leverage their direct relationship with audiences to build successful brands on Shopify. Harley emphasizes the importance of authenticity and niche targeting in these ventures, contrasting them with traditional endorsement deals that often failed to resonate meaningfully with consumers.
Notable Quote:
"Entrepreneurs today are not just selling products; they're selling a piece of their own story and authenticity, which is why brands like Kylie Cosmetics have thrived."
[24:53]
Shopify’s Strategic Evolution and Partnerships
Embracing Commerce Everywhere
Harley outlines Shopify's strategy to become the "world's retail operating system," integrating commerce into diverse platforms and environments. This approach includes partnerships with virtual worlds like Roblox and leveraging AI tools like Sidekick to empower entrepreneurs with capabilities that were previously inaccessible.
Notable Quote:
"Shopify’s mission is to make commerce easy everywhere, whether that's in virtual spaces, physical stores, or any new platform where consumers interact."
[42:37]
Leveraging Partnerships vs. Building In-House
Shopify strategically decides which services to develop internally and which to partner with specialized providers. For instance, while Shopify offers robust payment solutions through Shopify Payments powered by Stripe, it partners with leading fulfillment companies instead of building its own fulfillment network from scratch.
Notable Quote:
"We focus on being the best at what we do and partner with others when it makes sense, ensuring that our merchants have access to top-tier services without overextending our own resources."
[46:42]
Advice for Entrepreneurs: Building and Scaling Successful Businesses
Embracing Failure and Authenticity
Harley shares key traits of successful entrepreneurs on Shopify, highlighting resilience and authenticity. Many top Shopify stores are not the first attempts by their founders; they often iterate multiple times before achieving significant success. Authenticity in branding and product development ensures that businesses resonate deeply with their target audiences.
Notable Quote:
"Successful entrepreneurs have an appetite to innovate and view failure as a learning opportunity rather than a setback."
[28:51]
Finding and Narrowing Your Niche
Harley stresses the importance of identifying a specific niche and understanding it deeply. By catering to a well-defined audience, entrepreneurs can create products that truly meet the needs and desires of their customers, even in traditionally "boring" markets like water bottles or shampoo.
Notable Quote:
"Focusing on a specific niche and genuinely understanding your community can transform mundane products into billion-dollar opportunities."
[48:54]
Leveraging Advanced Tools and AI
With the advent of AI tools like Shopify’s Sidekick, entrepreneurs now have access to resources that can mimic the roles of seasoned professionals. These tools assist with everything from marketing to data analysis, democratizing expertise and enabling small businesses to scale effectively.
Notable Quote:
"AI tools like Sidekick are like having the greatest co-founder by your side, providing expertise that was previously only available to large companies."
[51:08]
Harley Finkelstein’s Personal Journey and Leadership Philosophy
From Entrepreneur to Leader
Harley shares his personal journey, including starting as one of Shopify’s first merchants in 2006 and later joining the company to help scale its extraordinary potential. His background in law and early entrepreneurial ventures provided a unique perspective that contributed to Shopify’s strategic direction.
Notable Quote:
"My focus is on storytelling and ensuring that everyone knows about Shopify's incredible products and capabilities."
[54:21]
Cultivating a Complementary Team
Harley emphasizes the importance of building a team with diverse skill sets. By surrounding himself with individuals who complement his strengths, he ensures that Shopify can tackle a wide array of challenges effectively.
Notable Quote:
"Finding people with complementary skills and diverse perspectives has been crucial in building a company that can adapt and thrive in a constantly changing environment."
[54:21]
The Future of E-Commerce and Shopify’s Vision
AI and the Next Wave of Entrepreneurship
Looking ahead, Harley envisions AI as a pivotal force in further lowering barriers to entrepreneurship. Tools like Sidekick will empower solopreneurs to build and scale businesses with unprecedented ease and efficiency, potentially leading to a surge in billion-dollar companies led by individual entrepreneurs.
Notable Quote:
"AI is going to hit the reset button for e-commerce, making it even easier for anyone with an idea to launch and grow a successful business."
[51:27]
Commerce Everywhere
Shopify continues to innovate by integrating commerce into new and emerging platforms. This strategy ensures that merchants can reach consumers wherever they choose to spend their time, from traditional online stores to immersive virtual environments.
Notable Quote:
"We believe that commerce should be ubiquitous, seamlessly integrated into every facet of consumer interaction, whether online, in virtual worlds, or in physical spaces."
[42:37]
Conclusion: Embracing Entrepreneurship with Shopify
Harley Finkelstein’s conversation with Jon Davids offers a comprehensive look into Shopify’s remarkable journey, the evolving landscape of e-commerce, and the essential qualities that drive entrepreneurial success. From overcoming early skepticism to embracing modern trends like D2C and influencer-led businesses, Shopify exemplifies how innovation and resilience can transform a startup into a global leader. For aspiring entrepreneurs, Harley’s insights underscore the importance of authenticity, niche focus, and leveraging advanced tools to build meaningful and scalable businesses.
Key Takeaways:
- Growth Mindset: Focus on expanding the market rather than just capturing a slice of it.
- Adaptability: Constantly evolve to meet the changing needs of the retail landscape.
- Authenticity and Niche Targeting: Build brands that genuinely resonate with specific audiences.
- Leveraging Technology: Utilize advanced tools and AI to scale operations efficiently.
- Diverse and Complementary Teams: Cultivate a team with varied skill sets to drive innovation and problem-solving.
For entrepreneurs looking to scale their businesses, Harley Finkelstein’s experiences and Shopify’s strategic approaches offer a roadmap to navigating challenges and capitalizing on emerging opportunities in the ever-evolving world of e-commerce.