Uncapped #50 | Tobi Lütke from Shopify

Summary

Uncapped #50: Tobi Lütke from Shopify

Podcast: Uncapped with Jack Altman
Host: Alt Capital
Date: May 20, 2026
Guest: Tobias Lütke, CEO-founder of Shopify
Overview:
In this milestone 50th episode, Sarah Guo interviews Tobias (Tobi) Lütke, CEO and founder of Shopify. The conversation dives deep into founder psychology, building enduring and original companies, the impact of AI on work and entrepreneurship, Shopify’s culture and team philosophy, AI economics, and Lütke’s vision for the future of technology and society. Tobi’s unique brand of candor, nerdy enthusiasm, and product obsession shines throughout.

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Episode Overview

This episode centers on:

• Tobi Lütke’s 20-year journey leading Shopify, his motivations for enduring founder leadership, and what it takes to love your life’s work over decades.
• The philosophy behind great product companies and original thinking.
• How AI is transforming Shopify’s internal culture, software development, and customer proposition.
• Team structure and organizational change in the AI era.
• The evolving social contract of public companies.
• Predictions, philosophical musings on AI, abundance, and the importance of digital infrastructure.
• Tangents on reading habits and book recommendations.

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Key Discussion Points & Insights

1. Founder Longevity & Motivation

[01:31-04:24]

• Intrinsic Motivation: Tobi reflects on his difficulty learning things he isn’t personally invested in and his love of beautiful, hard problems:

  "Karl Popper said, one of the best things in life is to find a beautiful problem that might occupy you all your life trying to solve it. And if you do solve it, it will have plenty of delightful problem children." – Tobi [02:29]

• Lifelong Learning: He emphasizes the success recipe: find out the cost and be willing to pay it, mostly through time, discomfort, and commitment—not money.
• Origin Story: Starting Shopify was practical—no work permit after moving to Canada, so entrepreneurship was the next step.

2. Enduring Love for the Work & Avoiding Founder Burnout

[04:25-07:08]

• Shedding "Barnacles": Over time, CEOs accumulate “barnacles” (unwanted responsibilities, expectations, bureaucracy), making it easy to lose joy. Tobi warns about surrendering to external expectations, e.g., acting as a corporate statesman:

  "I can only call it an aesthetic because people say things like, this is what CEOs are... My life was miserable too." – Tobi [05:14]

• Product Philosophy: Inspired by the Kathy Sierra quote:

  "Don’t make better cameras, make better photographers." – Tobi [06:03]
  He aspires to make products that elevate customers.

3. Originality vs. Mimicry in Tech (and Valley Culture)

[10:13-14:34]

• Tobi argues for being "different"—building truly great things requires deviation from the norm.
• Failures as Learnings:

  "We have tried to eliminate the term Failure in Shopify and just call it the successful discovery of something that didn’t work." – Tobi [11:39]

• On Imitation: Problem with Silicon Valley:

  "Professionalization... all the talk about diversity was very much about eradicating kind of eccentricities and distinction... you just have fewer prearranged priors [outside the Valley]." – Tobi [14:08]

• More on Founder Impact:

  "In a way people are somewhat overestimating the founders of companies. And then they are really massively underestimating what you can do when the founder is still present and in charge." – Tobi [17:26]

4. AI at Shopify: Cultural Transformation & Talent

[15:47-23:11]

• Tobi’s famous internal memo: triple or quadruple AI adaptation speed.
• Social capital from the founder slot can be 'spent' by incumbents to drive change quickly:

  "I get to cash that in... to speed up something that would take years of small culture change or internal training with sometimes a memo." – Tobi [18:06–18:14]

• Unlimited Token Policy: Pushes experimentation by giving devs free rein with AI tools.
• On Tracking Token Consumption: Transparency over competition.

  "At some point we had a leaderboard... immediate, really bad, of course, effects." – Tobi [20:39–20:44]

• Evolving Team Structures: AI allows more skills per person—small teams become viable again.

  "Everyone is a 7 out of 10 on every skill now. That’s really helpful because it allows to make teams smaller." – Tobi [24:21]

• Pace, Parkinson’s Law & Cadence:
  Regular review cycles set a “pace floor.” Now exploring even shorter cycles due to AI-acceleration.

5. AI’s Impact on Entrepreneurship and the "Permanent Underclass" Narrative

[26:52-34:03]

• Shopify’s customers are living evidence of AI’s positive economic impact.
• Rejects "Doomer" Narrative:

  "What we hear from everyone is like hey, you guys fix computers?... We can talk to it and it just does the thing and it's incredible." – Tobi [29:02]

• Lowered Barriers for Entrepreneurs:

  "Every 36 seconds someone gets their first sale" [30:11]
  Removing "hurdles" with AI increases entrepreneurship and employment.

• Prompt-Building Businesses:

  "I think every AI should then do absolutely everything else... maybe the vessel for AI being the brain or the exoskeleton... so that if you show up with a product, you can start a business." – Tobi [32:46]

6. Digital Infrastructure and AI: Societal Impacts

[36:00-39:30]

• Lütke’s argument that while major advancements have all happened in digital infrastructure (browsers, iPhones, OSS), now this energy is turning towards robotics and the physical world.

  "All of the software we built was a bootstrapper for AI... now you can have basically a web browser, but the websites don’t even need to exist that you would like to see." – Tobi [39:33]

7. Leadership, Product Vision & Predicting the Future

[41:11-45:25]

• Tobi feels his main job is assembling a future-oriented view—he obsesses over data points and curve fitting:

  "To me is the most fun game in the world is have a pretty clear eyed view of what the future is like..." – Tobi [42:00]

• Product teams shouldn’t just build what customers ask for, but deeply grok their problems and build ideal solutions.
• Learning by doing (using your own product) trumps abstract lab research for insight.

8. What’s Overhyped and Underhyped in AI?

[45:25-48:13]

• Programming Productivity is Overhyped for generalization—AIs trained for code excel at programming tasks but don’t automatically transfer those skills elsewhere.
• Underhyped: AI’s actual company deployment—"No one’s using it enough... Most only use it to do what they’ve always done, just a bit better."
• First-principle redesigns with AI are needed.

9. Team & Talent in the AI Era

[48:13-51:17]

• Surprised that success isn’t wholly about youth/AI-nativeness—seasoned knowledge helps in prompting/steering AIs effectively:

  "Programming is so much not the typing task of typing. It’s really understanding the problem deeply. And... every program in the world massively underestimates how much they're doing when steering in AI." – Tobi [49:32]

• Strengthened internship pipeline for AI-native talent.
• Best recruiting strategy: "build a company worth looking for…the best people want to be around other impressive, mission-driven people." [51:17]

10. Going (and Staying) Public

[52:23-55:34]

• Lütke values the broader societal impact of public companies, giving many retail investors and employees skin in the game.

  "Money is how you vote for the world you want." – Tobi [53:04]
  "When Shopify IPO’d, it was like one and a half billion dollars valuation…100x in public is cool." [54:50]

11. Reading Habits, Book Recommendations, and Deep Work

[55:34-57:53]

• Loves short, condensed books (e.g., Parkinson’s Law, Lessons of History).
• Recently read: What is Intelligence? – Explores biology through lens of prediction.

  "It's a job of an author to make you keep reading... If you read a book and it doesn’t capture you, the author didn’t do what they set out to do." – Tobi [56:41]

• Advocates for a Kindle for focused, distraction-free reading.

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Notable Quotes & Memorable Moments

• On Founder Influence:

  "You can speed up something that would take years of small culture change... with sometimes a memo." – Tobi [18:14]

• On Originality:

  "If you are building the same thing other people build, it can only be similarly good... If you want to build something great or much better, it has to be different." – Tobi [10:25]

• On Team Pacing:

  "One of the most important functions of a leader is to compress time windows." – Sarah [25:21]

• On Failure:

  "We have tried to eliminate the term Failure in Shopify and just call it the successful discovery of something that didn’t work." – Tobi [11:39]

• On Building for Customers:

  "It’s not our customer’s job to tell us what they need... But it’s our job to figure out the ideal way..." – Tobi [43:39]

• On Product Purpose:

  "Don't make better cameras, make better photographers." – Kathy Sierra via Tobi [06:03]

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Important Timestamps

• [01:38-04:24] – Tobi discusses motivation, learning, and his personal origin story as a founder.
• [06:03] – Quote about product philosophy from Kathy Sierra.
• [10:25-11:39] – On originality, risk, and learning from failure.
• [14:08-14:34] – On eccentricity, orthodoxy, and the loss of distinction in Silicon Valley.
• [17:26-19:18] – Founder’s role in driving change, social capital, and AI transformation at Shopify.
• [20:00-21:17] – Shopify’s approach to token tracking and experimentation with AI.
• [23:51-25:26] – Small, multi-skilled teams, Parkinson's Law on team pace and cadence.
• [29:40-31:05] – AI’s impact on small business formation and Shopify's entrepreneurial data.
• [39:33-41:11] – The digital infrastructure era as the foundation for the coming hardware/AI wave.
• [42:00-43:39] – Tobi’s view on the CEO’s job: predicting trajectories and future requirements.
• [45:32-48:13] – What’s over/underhyped in AI.
• [48:27-50:47] – The changing attributes of successful employees in the era of AI assistance.
• [53:04] – Money as votes for the world you want.
• [55:41-56:41] – Book recommendations and the art of reading deeply.

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Summary

This candid, far-ranging, and occasionally philosophical conversation with Tobi Lütke provides rare insight into the mindset of an enduring founder-CEO who remains as passionate and engaged as ever. Tobi argues that originality arises from going against the herd, that founder social capital is a powerful tool for culture change, and that AI is both an unprecedented accelerator and a great democratizer of opportunity—for software pros and business creators alike. He emphasizes learning by doing, the need to design for intrinsic motivation, and avoiding mediocrity born of consensus or process. Amid AI upheaval, Tobi sees small, patient teams and entrepreneurial ambition as the keys to thriving, and affirms his contrarian yet optimistic view on the trajectory of tech, business, and humanity.

For listeners seeking depth, vision, and some practical philosophy about founding, building, and leading great product companies in the age of AI, this episode is essential.

Transcript

[Tobias Lütke]

I think in a way, like, people

are somewhat overestimating the founders of companies, and then they are really massively underestimating what you can do when the founder is still present and in charge. It's my best way to help the mission.

Everyone gets to complain about the crazy founder, which is great. It's like, do whatever venting you want, and then you do very often some of the best work of your careers. That's why people actually flock to these type of companies, because you're surrounded by the other people that you can go on such crazy journeys with.

[Sarah Guo]

I am so excited to be here today with Toby, the CEO founder of Shopify. Toby, before we start, I will say, when I was running my company Lattice, and now, you were one of the founders that I sort of most looked up to. And so many things about the way you operate, the way you've run your company, the changes you've made over time, it's the top of the top for me, and so I feel super lucky to be doing this with you. Before we get into AI and Shopify, I want to, like, learn a little bit about you just and more like your psychology. You've been running Shopify for over 20 years, and from what I see about you, it seems like you love what you do, and it seems like you're as energized by it as ever. It seems like you are as passionate about the future as ever. And I think that's really hard. Like, I think having, like, life's work is sort of like this romantic dream for a lot of people. And I just think it's very hard to do in practice because people either fall out of love with their work, they get bored, they get tired. And on top of that, I think being a founder CEO of like a, you know, a big company is not even the easiest type of thing to have. Life's work, you know, like, my work now as a VC would be much easier to do for 30 years. So I guess I'm interested in how you are able to bring and seemingly grow sort of your love for what you're doing after two decades.

[Tobias Lütke]

That's such a wonderful question. Thanks so much for having me on the podcast. I'm super excited you get to get to do this.

Part of the reason why I wanted to start a company is because I have found before in my teens that I have an extraordinarily hard time learning things that I don't have.

Basically experience the problem that they solve.

It's just like the way in school how math was taught Basically, here's just sort of the steps I actually had to really go and figure out. Okay, well, what exactly is trigger number three useful for? And I just had to. I started with tricking myself into finding a useful, a problem that involved trigonometry, after which I felt I could learn it significantly faster than everyone else because I just was so motivated. Right. Like Karl Popper said, one of the joys of life and one of the best things in life is like to find a beautiful problem that might occupy you all of your life trying to solve it. And if you're so unlucky to at some point do solve it, that it

will have plenty of delightful problem children

that you can dig into.

Right.

First of all, I think that's a

beautiful way of thinking about lives, work.

But also it just works specifically well for me because I love learning things. I love challenging myself. I find myself to myself very, very interesting. I just like. Because they're almost. My favorite thing is when I want to do something and I can't because it just like you kind of find the limits and then you can have this conversation with yourself about what you know. Because there's a very simple recipe to success that everyone, I think, sort of intuits or knows, but maybe not spend too much time sort of following through on, which is success is really, really simple. It's just you have to figure out what it costs and then you have

to be willing to pay it.

Right? And very rarely this comes in the form of money. It usually comes in the form of time commitment and discomfort. Discomfort and these kind of things. So I seek problems. I love computers to statement. For example, trigonometry turns out the very early, you know, video games like Wolfenstein 3D are basically just trigonometry. Once you realize this and like play with these things, they become delightful and you learn the next thing and the next thing. So I wanted to start a company because I was just like, it's at the right time of my life. I just moved to Canada from Germany. I didn't have a work permit, so

I couldn't work for anyone.

I needed something to do. My wife had lots of, needed lots of time for her degree. And I'm like, like, this is a good time to try it and it's probably not going to work, but I

will learn a lot.

And so this has been just powerful

way for me to motivate.

[Sarah Guo]

I'm curious about, as you think about this, are there things that other people can do to more likely stick with and enjoy their life's? Work. I think there are a lot of people who enter a career, a profession, whatever, and they love what they're doing. And then as time goes on, barnacles kind of attached to the ship and cruft builds and responsibilities grow and your job evolves and you end up doing something that you didn't start doing. And so I think people sometimes don't know how to shed all of that weight. And obviously you, as much as probably anybody in the world, have the potential to have all of that around you. You're a public company CEO. You've got, you know, tons of employees. You've got all these responsibilities. So it's possible that you could be encumbered by all these things, but you somehow haven't been. So I'm curious if there's learnings for everybody, no matter how many or few barnacles they have, like, what can you do to keep loving what you do?

[Tobias Lütke]

Look, I certainly collected barnacles around certain times in my career too, where just, like, I sort of fell into the, you know, trap of, like, trying to live to, like, people had particular expectations. Not really like, more like in the department of aesthetics. Like, I can only call it an aesthetic because people say things like, this is what CEOs are. Like, this is like the behavior that a CEO should display. You're supposed to be a statesman. You should travel and kiss babies and whatnot. I'm like, well, that sounds pretty inefficient from my perspective. But, like, I guess at some point, you know, you just sort of get whittled down and like, you try all these kind of things. My life was miserable too. Again, this is a junk science a little bit. But, like, what I'm in pursuing here is trying to make a beautiful product. I just think we need to create products that are just joyful. And one of my favorite quotes is a quote by Kathy Sierra of don't make better cameras, make better photographers. And it's just very deep to my psyche. I feel through beautiful tools and for beautiful, you can just inspire people to

be the best version of themselves, actually

become like, induce more ambition, induce more skill, or at least induce more ambition

for yourself to develop skill beyond what

you otherwise would do. And so I think that I want this to exist. And that's just like sort of my guiding post here. And it throws off all these problem children which are interesting, which then challenge me. You're talking a little bit about sort of calm. I'm not a terribly calm person either, but I actually don't want to Dial down my calmness. I just want to channel it into building something. And so I've just found that almost all the mediocre products in the world, they remind me of room temperature. Right? It's just like, it's sort of middle temperature of like, this. Sort of what you get when no one.

[Sarah Guo]

Like when no one really cares.

[Tobias Lütke]

Yeah, exactly. It's a default setting of a thermostat. Almost every great product is forged in some kind of furnace and some kind of temperature and like, you got it put up into heavy energy source to. To produce that kind of heat.

[Sarah Guo]

Do you think that that basically has to start from, like, love for the customer?

[Tobias Lütke]

I don't know. I don't know.

[Sarah Guo]

Because you seem to love your customer.

[Tobias Lütke]

The greatest gift. People make great products. Like, I think without that crutch. I think if you have it, it should be an incredible boon.

[Sarah Guo]

You think you can be a great CEO and not love your customer?

[Tobias Lütke]

That depends on what great CEO. I don't know. I'm an engineer. I read lots and lots of books about how to make great software. And you know what? Many of these books, it's really funny, are like when you actually check what was a project that they all worked on when they figured out the design patterns of modern software. It's like the Pennsylvania payroll system. It's just not the most inspiring project. But it turns out I think just work is what you make out of it. And I think you can, like, if you just default to, like, hey, let's actually build something that's like, really, really meaningful. And we all learn a lot about. I think it can be done in any way. I have a massive benefit and really one of the greatest things. And I tell people this when, you know, in interviews, when people are thinking about coming to Shopify, I point this out. It's like one of the greatest gifts that this company has is all of our customers are inspiring. They are just like remarkable people. On doing an incredibly courageous act of starting a company themselves. The people who flock to then come to work for Shopify are the people who actually have experience starting a company or have maybe a family member or at least a deep appreciation or in fact, yeah, in many cases, there's just something wonderful also about, you know, Shopify feels hopefully very, very fresh as a company. And there's no, like, three rings that you can sort of read about its age, but, like, it has been around. And so therefore, when we do our annual summit or so where we all get together in Toronto for a week, there's going to be people who work at Shopify, work who weren't born when I started the company. And it's just like, holy hell, this has been little, especially institutional.

[Sarah Guo]

Kids are so capable at young ages of being productive.

[Tobias Lütke]

Absolutely. I think finding the challenges is useful and tapping into. I found it doesn't work when I'm trying to be different. But what definitely works is if I take the energy that I have, I have such a discontent with bad products and software and so on. And I can, I can like want to solve this problem. I want to like you. You worked for a long time on HR software. We built HR software inside of Shopify because then we can't find the one that we want to use and because we see ourselves at toolmakers and we solve these type of problems. And so that comes like that also means I'm going to spend half a year learning everything there is about how to build this type of software so I can work with a small team on the side to try to make something better.

[Sarah Guo]

And I imagine now to do so much more of that with.

[Tobias Lütke]

Yeah, and now it's like crazy.

[Sarah Guo]

One last thing here that, you know, you talk about wanting to build great products, but you've also spoken about like wanting to be original probably to a degree where I imagine you'd rather be original and good rather than mimicking and great.

[Tobias Lütke]

I mean, no. And in fact, what's even better is

like be different because like again, axiomatically, if you are building the same thing other people build, it can only be similarly good. It can't be actually much better. It can maybe make slightly look nicer, but like you're bounded a couple percentage points either direction. If you want to build something great or much better, it has to be different. Now if it's so, this has to be your starting position. If it then either converges on the same thing, you have learned something potentially from first principles about why the solution is the one that everyone has converged on. If it gets worse, you actually learn something more important. Because now you know, hey, you're theory here was wrong. Something about the world. You had an assumption which now hasn't been validated, that learning is the thing from which you're going to pull so much value in every other realm now. Because, hey, you now have a clearer idea about how things actually work. I think the null results in science are massively underrated. And so ideally then you don't ship it because the world needs better not. And I think that's actually.

We have tried to eliminate the term Failure in Shopify and just call it the successful discovery of something that didn't work.

[Sarah Guo]

I'm curious if you've experienced this. You haven't lived. I mean you obviously spent a lot of time in the Bay Area. But I wonder if it's different for you being in Canada. But for me, over the last 13 or 14 years in the Bay Area I have definitely felt a trend towards herd mentality. I think there was more originality in 2013 when I moved than there is now. I imagine there was more in 2003. I bet you there was more in 1995. Like I would feels like the trend line is professionalization of the industry and the mindset. I'm curious if you experience it the same way. And I'm curious if there are things that people can cultivate to free themselves from the sort of mimicry shackles.

[Tobias Lütke]

I mean like look, you can't help but be affected by what you see around you.

And if like it's the best and the worst about the Valley is that everyone's work on interesting things. But of course that causes priors to be pre installed when you start on a project. What's amazing is when you see children interact with things like AI and they will use it so different from how you imagine. It's worth aspiring to having this free mindset of just try to take orthodoxy or the obvious path of the table when you start. Because the forces of especially teamwork will always cause a convergence on the safest path. Right. I think it is an advantage to be outside of rally. You just have fewer prearranged priors. In fact, a really funny effect was when I went to Valley as a visitor and met with people and over coffee and we were talking about I was trying to figure out how a company should work and I asked questions and then I went home and I had the entire flight to make my notes and I again have sort of a bias towards do it differently. So I take what I hear and try to figure out, okay, well what would a Shopify version look like and what would be better of this system and sort of make it different because I felt that it's what you have to do.

But then I realized only very late

in my career that like I never actually got the real story from everyone about how they work internally. I got everyone's ambition or highlight reel. Right. Like because that's what they really share. That plus the ability to then make edits to try to improve it further. Like meant that very often we actually found ourselves doing the things that we thought someone else invented actually they might never actually have implemented it. Maybe that was just the thing that they just had the most previous meeting over. And so I think that helps a little bit. Distance.

I mean, additionally, I should say, I

think the world fundamentally, Silicon Valley specifically has now for a decade and a bit declared war on any kind of distinction. All the talk about diversity was very much about eradicating kind of eccentricities and

distinction and just like, like people are

not allowed to be just quirky or funny with off colored humor.

So I think we're in a rest of world that is a little bit

more intact and you just kind of encounter characters and there's often more appreciation of like, you know, so and so is just a little bit crazy. And you know what, that's really good. I think that's coming back again a bit. And so that's going to, I think, help a lot.

[Sarah Guo]

Yeah, I mean there was a big moment there. All tech leaders had to sort of go through the sort of political back and forth and sort of what are we talking about at work? And are we focused on work? Are we focused on other things? That was not easy for anybody. I think it was easy for employees. It was hard for everybody.

[Tobias Lütke]

I think it was hard because everyone,

like literally everyone wanted to do the right thing. And we generally all agreed, even on the sort of identified problems, but just not the solutions that they've had are

just like, they just caused distraction and also like erosion of this thing. A company I think should resemble like

an island of misfit toys much more than sort of a convergence on one sort of preordained truth. I think it's totally worth exploring any alternative on this idea on the spectrum and then I think the results will just tell us what works best. I just didn't like when people were saying, hey, we are deciding for you if we can have distinction in this company. And that didn't work for me.

[Sarah Guo]

You've gone through another sort of employee mindset change in the last couple years with AI from at least what I recall. You were one of the first sort of CEOs to sort of say everybody, we need to like, however hard you think you're adapting, like triple it, quadruple it. I'm curious, like that journey, how did, how did that go? Is it still going on? Like, do you have it where it needs to be? Is there an end to how AI pilled we should be?

[Tobias Lütke]

I'm actually really proud of Shopify with this. I think this booked extremely well. I mean, I made A choice. There's a type of situation that you get in running companies and I think any large group where something becomes clearly true and then you need to make

a decision on first of all, do you act on it? And sometimes people are just already failing bad. In fact, very often people fail. Figure out what's true. Part I'm sure BlackBerry thought they were doing really, really. I think they had the best year of sales ever when the year iPhone was released and thought they were pretty safe.

[Sarah Guo]

And sometime it's not that people are just not smart enough to see it. Sometimes they don't want to believe it or want to see it.

[Tobias Lütke]

Exactly.

[Sarah Guo]

You know, the implications are they're not

[Tobias Lütke]

predisposed for it and they kind of

maybe through no fault of their own, created an organization. They're like sort of every layer inside of a conversation, like just sort of prioritizes, kind lies over hard truths.

Often because people just.

Sometimes because there's a culture of everyone being nice to each other.

[Sarah Guo]

There's also, when you have a big enough organization, you talked about this with sort of like teams, you know, make originality difficult. I also think big groups of people, it's hard to get everybody to agree to go through an uncomfortable change.

[Tobias Lütke]

I think in a way people are somewhat overestimating the founders of companies. And then they are really massively underestimating what you can do when the founder is still present and in charge. It's not so much about the individual as in about almost the piece of infrastructure, the slot of having the founder slot filled. And it's a broad distinction, but it's actually as a founder, you get so much social credit as having started the company, but like you can just invest, it's a bank. And it's just like every day, every time someone onboards like they hear how the company was created and that just deposits a little bit of credibility tokens,

I suppose, into a virtual bank account

that is hard to reason about but sort of virtually exist. And then I get to cash that in.

[Sarah Guo]

You can spend it on big important changes and change management.

[Tobias Lütke]

Right. Like, it's like that's one of the best ways I can, I can speed up something that would take years of small culture change or internal training with sometimes a memo. And so in this case I take that really seriously. It's not the easiest thing. It just leads to just more work or sometimes unpleasantness. I just find that is what I owe the company. It's my best way to help the mission.

And so when something like the AI

thing becomes true and we are saying, hey, we have two people, they're both equally good programmers 15 minutes ago, but one of them has just spent like completely onto the AI train and just like has sort of. Back when I wrote this, it was really hard to actually get real value out of AI. It was more like the premise of AI was like, what do we do in performance reviews? And we just like, the moment we said we can't, it's impact. It's called like Net Impact reviews. They caught with Shopify. So, like, what's your Net impact on a company and a mission? And so it's just like very demonstrably true that one of the people was more of more impact.

And the moment that that is said,

it feels like an incredibly unkind to not tell people. So just like, hey, let's write it out and send it to everyone.

[Sarah Guo]

It's like unfair if you're like, this person has an exoskeleton on. And I'm not going to point out, hey, that exoskeleton being.

[Tobias Lütke]

Yeah, if we act on this thing,

we should tell people. And so we did. And like, I included a bunch of other things that are true. Like, I've invested lots in making sure that everyone has everything they need. They have an unlimited token policy that I'm sure your brother is thrilled.

Yeah, exactly.

And so.

And so, you know, like, we want

people to tinker, we want people to play with this, we want people to use it much.

And it's super good.

It skyrocketed the second this message came along. What Shopify did with this, the speed of diffusion of this tooth was like, remarkable. And I think Shopify is like. I'd like to think Shopify is like, predisposed for this. We have. Thriving on change is one of our

core values and we really mean it.

[Sarah Guo]

It's good that you talked about Net impact. I think one of the sort of blunter instruments that's getting used a lot right now is just like tracking token consumption. And people are like, I want to see token consumption go up 20% a month. I think there's founders that say that, which is. It's not an obvious terrible idea. In the same way that judging people by lines of code, like, we could debate, is there anything to it? Probably something, but I think it's fine.

[Tobias Lütke]

I mean, at some point we had a leaderboard and so on.

[Sarah Guo]

Of token.

[Tobias Lütke]

Yeah, yeah. And of course that leads to immediate,

really bad, of course, effects. And we don't have that on. Vault is our internal system intranet. It's probably Not a term that anyone's ever heard, but internal wiki and everything. And on your profile it shows you what your token usage and which percentile you are in your department and group and so on. Just because that's interesting. I think again also because we are tracking it, we have to be because we have to actually. I mean at some point we have to allocate finances to opex and whatnot and so just therefore we show it to people somewhere.

[Sarah Guo]

Right now this is probably different numbers because you're at such scale, but there are private companies whose token spend as a percentage of revenue is going into pretty wild places right now. I kind of think that's fine if you're an earlier stage company and you're just trying to win the market at all costs. But I am curious how this might play out. I'm sure even you're seeing token spend at numbers that are probably not a huge deal relative to your revenue but

[Tobias Lütke]

are it's a huge deal compared to revenue. It's like, it's, it's unbelievable.

[Sarah Guo]

It's like many percentage points, it's extremely high. It's many tens of percentage points for some of these private companies. And so I'm, I, I am a little curious. You know, right now we're in that part of the journey with AI coding where it's just so valuable that people are just like I have no choice but to spend because it's too productive. I do think that that won't, we can't spend 70% of revenue on AI tokens forever. I mean have valuable companies. So how do you think this might go?

[Tobias Lütke]

It's complex in a way that I'm very, very grateful for the stage Shopify is at because we are a profitable public trusted company. And right now it's just like we really, really, really like the tokens we are buying. They're incredibly valuable and we are doing incredible things with them. It accelerates us in roadmap and therefore ambition and I think it just causes

[Sarah Guo]

so much leverage on your spend.

[Tobias Lütke]

It just like it's like it's a no brainer. I have very, very high opinion of market. Extremely good. They will figure out what the correct clearing price for these tokens is. And right now there's few providers and maybe there'll be more in the future. And there's all sorts of interesting moves around distillation and so on. Like I think companies will know how to wield these tools within their budgets. We are actually doing a good deal of this kind of thing as well. But we are still just like charging ahead because frankly we like the tokens we are buying. It's like it's that simple.

[Sarah Guo]

I agree and my instinct is a it should go down. But there are possible worlds where it goes up or price goes up.

[Tobias Lütke]

Honestly, no one knows it really no one knows. We are certainly, I think we are 10xing the amount of tokens we want every year right now and I'm sure that's going to go up and we have 3xing the amount of GPUs that we are putting into the world. So that is those lines are not converging anywhere good at price savings.

[Sarah Guo]

So given that AI coding is dominating so much, what are the biggest changes to team design? There used to be this EPD triad and it worked a certain way and there were certain ways that roadmaps were built and reviews happened and people would go out and talk to the customers and bring that back. And what is it now? What is the most fundamental molecule?

[Tobias Lütke]

Yeah, I think the small team is my bet. It's the 3, 4, 5 people team which actually is funnily enough has always been Shopify's bias. This is quite gratifying to like. The reason why we had to very often go past it now is because you just need a lot of specialized skills, at least for certain moments on the teams. Your example is a great one. Talk to the customers. It's just like having someone who's like actually does the customer research and just talks with people or what we always did is for located people from the support org were looking at. We routed them all the tickets and put them on the teams which was an amazing way to do it. Now just like the sort of agentic harness around our teams is actually routing really, really good summarizations of what our customers say automatically basically back and so that's now available to everyone and then everyone can do more skill. Like again everyone is a 7 out of 10 on every skill now. So that's really, really helpful because it allows to make teams smaller. The thing that we are working the most and thinking the most around at Shopify is that I'm big on pace. Like pace has to be induced otherwise it's received. Parkinson's Law is one of my most recommended books and I have a 1970s 60s copy of it that I give to everyone, my executives, I own many of them of the original run because it's so meaningful work expense to the time allocated to it. If a book is 60 pages and full of these kind of wisdoms, this

[Sarah Guo]

is the Most important one, basically one of the most important functions functions of a leader is to just compress time windows.

[Tobias Lütke]

Yeah. To the plausible. It's not that you just skip any deadline and anything happens, but if this is why it's really, really helpful to be very technical and understand all the sort of tasks and skills you can ask for something that has a 50 percentile chance of being the right chip date, then everyone gets to complain about the crazy founder, which is great. It's like do whatever venting you want and then you do very often some of the best work of your careers. And that's why people like think FL to these type of companies because you're surrounded by the other people that you can go on such crazy journeys with. The main point here is like I run the company by the six week review cycle where we go for all the projects and spend time with engineers and champions and PMs that existed to set a pace, like a pace. Ceiling, I suppose. Ceiling. Floor. Floor of sig by 6cycle which was faster than we instituted it. Because if you don't do it, you are run by a quarter. Sometimes you see the moment. You see In a PowerPoint, first of all, first flag, second flag is someone uses the word H2 or H1 which means first, second half, you're actually fucked. You actually really have to do something drastic. Yeah, exactly. So you do this and now I think actually 6 figureview is actually way too limiting. It's just like we can do so much more and we are trying to figure out how to what is replacing this.

[Sarah Guo]

I want to talk about sort of your customers and what AI means for them. We were talking a little bit earlier about how there's a lot of young people right now who have sort of fears of permanent underclass and how I think basically the idea being like you're just entering the workforce, you don't have any accumulated skills or credibility yet, and now you've got this AI thing which in some ways is empowering. In some ways seems scary. The net is that there's become this meme of, you know, people are afraid of, you know, ascending through sort of the career and financial heights that they want to. And you sort of talked about how like that's not necessarily the experience that your customers are feeling.

[Tobias Lütke]

No, and again, our customers are wonderful and they're entrepreneurs, they're courageous people. We're putting this out there. They build businesses, they create employment. And it's like in one way it's like a. It's clearly like a particular slice of people who would do this? But it's actually much bigger than people think. First of all, it's incredibly diverse. It's just like, it's like really you put Shopify's customers go exactly with a population map. It's like great businesses in the smallest communities. It's like well it's a point of sale stores in the town center of tiny, tiny little townships as well as alo yoga. And so it's incredibly different and it's cosmopolitan. It's big business, billion dollars of business. It's the people who are trying to build a thing in the lunch breaks to make ends meet or actually because they have an ambition that they want to become entrepreneurs. So what's so funny with the way the AI conversation is projected, how it's reported and sort of what you see on social media and so on is like it just doesn't like we can't access it anywhere, like in anywhere where we look.

[Sarah Guo]

You're saying Shopify's data and experience cannot reproduce it.

[Tobias Lütke]

Doomer stuff. It absolutely doesn't. What we hear from everyone is like hey, you guys fix computers? It's like they, they, they like you techies talked about computers being these incredible things that can do anything and just like.

[Sarah Guo]

And it was so complicated and so,

[Tobias Lütke]

and then we try this and they like I don't know what, you guys just sound unhinged. And now we have, we can talk to it and it just does the thing and it's incredible. It's like just works with me. It's like I've like like expanded my business and I've like hired all these people now like to just like and, and, and so I mean it fits into Shopify's vision because we want lots and lots and companies and by the way, 60, 70, 80% depending on country of people in the economy vote for small businesses. They are incredibly precious and important.

[Sarah Guo]

So what should AI mean? If you're a small business owner, you're starting a new small company. Logically, what should the change be as a result of AI from 2023 versus 2029? What's the fundamental change?

[Tobias Lütke]

I think you should sign up for more. You can follow your ambition further. I think our customers are like if you would pull the thing. I think they, they believe in a permanent upper class. I think they are just going to, I think we're going to get to a point where just many, many, many people can self actualize. There's two pieces of data that I just find incredibly meaningful. One is like every 36 seconds someone has gets their first sale. Which I just think is while we are talking here, think about what that means for how many people just became entrepreneurs. The other one is more like a higher level observation. But every single time we ship something where we know it meaningfully changes something about the early journey, the sign up, the kind of complexities, the questions, the friction in the business, each of them can be best thought of as a hurdle that someone has to jump over. And every single time we manage to make the hurdle slightly less high because we made something just vastly better. We now let you register domains or whatever or easily transfer them or in fact these days have an AI that like you can share your browser tab and it helps you set up godaddy right. Every single time you do this more actual business come out of it and provide employment and so on. It's people churn out early in process if something happens that ends up being a governor for them and then they null out, they give up and they stop and then the entire business doesn't exist. AI is just there never ever has there been such a thing that it can take people. So be so supportive.

[Sarah Guo]

It occurs to me that last year on this podcast I asked somebody this question that you know, they were a fine person to ask, but you're probably the number one person in the world to ask this to. And it's something that I've been thinking a lot about which is what has to be true for us to be in a place where you can like prompt build me a business. Like how far are we from Hey, I made this widget. Please go make me a million dollars. Thanks.

[Tobias Lütke]

I mean it's my favorite replacement like idea as a replacement for a Turing Test which we of course sailed past without oddly very little notice.

[Sarah Guo]

I think it is crazy.

[Tobias Lütke]

I think acting in the real world, starting a business and that people find meaningful enough to vote for to the

[Sarah Guo]

tune of a million dollars, marketing it correctly, getting the right source, It's a wonderful, wonderful test. Knowing what things to prioritize the shipping matter.

[Tobias Lütke]

I think we are actually getting there. I want to be in duo proviso role. You can obviously use Shopify without having products. We help you find manufacturers. If that's what you want, we help you. There's an entire thing called collective that manufacturers offer their products that you can then use to in your Shopify store. So if your particular skill set is the marketing, you can come to Shopify and you can try your hand on entrepreneurship. And again, very often I think about half of Shopify stores end up Being created by people who have done an online store, at least a business before. So people are just try and build things. People should have a product that the world wants. Ideally come up with some unique take on something and there's so much white space out there.

[Sarah Guo]

But you think AI could do everything else?

[Tobias Lütke]

I think every AI should then do absolutely everything else. In fact, it's actually literally what our product's ambition is to be maybe the vessel for AI being the brain or the exoskeleton around the model to basically conspire to just do absolutely everything so that if you show up with a product, you can start a business.

[Sarah Guo]

Just to extend the idea a little bit more. Not to go into like too crazy of a sci fi place. Is it possible that it could also do the make a product? Like let's say I wanted to say, hey, just go make me a million dollars.

[Tobias Lütke]

I think the. I mean anything in a. Digital products. Yeah.

[Sarah Guo]

Like make me some ebooks.

[Tobias Lütke]

Exactly. You know, actually books, you know, best print on demand for books, for T shirts. Like honestly, additive manufacturing is getting extraordinarily good now and there' lots and lots of great contact manufacturers for this kind of thing like CNC and 3D printing. And then we are like looking at humanoid robotics which kind of. There's a lot of tailwinds here to the fact that like making the products is going to become lots more tractable.

[Sarah Guo]

This will probably be 10 years till I'm asking guests this. But the prompt like build me a house and then the robots just go dig up what they need and then put it all together.

[Tobias Lütke]

I think it's a word we're looking at. Like, I think. I don't see how it couldn't get there.

Right.

Like. And I just think this is like, like this is what I dislike about the doomer conversation or the permanent underclass or whatever people want to.

[Sarah Guo]

How are we not headed to a world of abundance?

[Tobias Lütke]

Exactly. It's like. And frankly. And that then goes into this sort of. We eliminated all the jobs. It's like, you know how good we are at making up jobs. There's so many examples of things that are just delightful. I have friends who like openclaw came around, which we didn't need. We need, which we didn't think we needed. And then it ended up being one of the most compelling things and like one thing led another. And now have a. Like they have a warehouse full of 3D printers and things. Because it's just like, like suddenly you have a Jarvis that you can say, I Would like to do this project and I have this.

[Sarah Guo]

I bought this crazy 3D I know.

[Tobias Lütke]

Scanner from Facebook Marketplace and I just put it there. I don't even have a software for it. Just, you just go hack it and you figure out how to help me. And it's just like, like, I know. Holy crap.

[Sarah Guo]

I asked Kyle Vogt from Botco. I was like, will we get to a place where like I can just like text my robot to like order instacart, like get the steak, you know, prepared, like serve it, you know, slice it up. He's like, put clean it all up. He's like, yeah, that'll happen. At Benchmark, I spend probably 3/4 of my time in software land, but sometimes I do step back and I think, okay to actually like, you know, and this is maybe a little easier for me when I'm like, not in San Francisco and I'm like touching grass in some other city or something. I'm like, okay, what's actually going to happen? Raise the standard of living for everybody in the world. It's things like we need more and better houses, we need better transportation, we need better food, we need like better healthcare, we need good education. It's like all these things that aren't software. And then sometimes I think about like some alien watching us all and we're just like sitting behind our little boxes typing. Everything's going better in typing land and it's all bopping about in software land. But we do really need it to get into the physical world to like. Because the standard of living, it is all on some level physical.

[Tobias Lütke]

Absolutely, it completely is. And I think this is actually the missing ingredient, right? Because I mean people talk about looking at the incredible infrastructure we used to build in the 60s. It's like, well just even before that there's a Hoover Dam and this kind of stuff. Lots of individual stories about these infrastructure projects. How quickly we built subways and now it takes forever. And so on basis an observed degradation. Like a lot of these kind of projects in this it's multifactorial. There's not one reason behind it, but one of them that really is true is because we are building the modern wonders that are no less impressive entirely. Software, like the web browser, Linux, all these kind of things are like projects at a scale beyond what the pyramids are. And so easily and without compulsion and just by volunteers. Sometimes people who have never met each other in the open source world or at companies building these, I mean like something like Google or social networks, it's like they're incredibly, incredibly impressive pieces. If they would have physical manifestations, they

[Sarah Guo]

would be the most pressed in the world.

[Tobias Lütke]

You would again, you go to something like a refinery or so and you see the pipes and so on. It's so impressive. It's not even in basis points territory in terms of complexity compared to a browser.

[Sarah Guo]

Compared to like a browser.

[Tobias Lütke]

Exactly. And just so we don't appreciate that and so neither. That's not our problem.

[Sarah Guo]

I don't think I appreciate a browser is a browser near the top of complexity.

[Tobias Lütke]

I would put it under. It's one of the wonders of a world. I mean for so many reasons. Like it could never ever be introduced today.

[Sarah Guo]

Can you give a small flavor? I'm sure it's hard to even explain why it's so complicated, but what can you give a flavor of? What makes it such an unbelievable thing

[Tobias Lütke]

in so many ways? We just like, okay, you go to a website, it's like we don't trust that website. We just run code. But also just like it's like actually your computer in front of you magically reconfiguring itself into someone else's vision for what should be there and without limits. It's actually like you download software that then just exists for this one moment to do literally everything and it's self responsible. Shopify is over $100 billion market cap hosting like millions and millions bills of business that might otherwise not exist. And all of this just happened because anyone can just put a server online, gets an IP address like automatically and then just like it's like.

[Sarah Guo]

And then it all hangs together. It all doesn't come down more. Why doesn't it not all crash?

[Tobias Lütke]

It's like it's the most reliable thing. It's just. And no app store on planet earth would allow the web browser if it would be introduced today day if it didn't exist. Right. It's just like no one would allow this because it just doesn't even sound like it sounds like an insane pitch yet it exists and you just don't think about it. And so it's just also like the font rendering alone is one of the most complex. Font rendering alone is a true incomplete system that just because we want to be able to read text slightly more better than our displays can allow them and it just keeps going, going. And it's like I can go full nerdcore on this. But the larger points actually following we have not stopped as humanity building incredibly impressive infrastructure. What's had changed is the infrastructure that needed building over the last 30 years. And the reason why other infrastructure didn't happen is because the people who could.

[Sarah Guo]

It's just so much went into this.

[Tobias Lütke]

What planet Earth needed for us was a digital infrastructure.

[Sarah Guo]

And it's like if all those people worked on robotics.

[Tobias Lütke]

And this is happening now, right? And it's like, this is happening with AI. We are happening with AI. All the software we built was a bootstrapper for AI. Software becomes, due to this achievement, something that can become personal again and become like, now you can have basically a web browser, but the websites don't even need to exist that you would like

[Sarah Guo]

to see the browsers. It's so true when you say it like that. The easiest to identify with example for most of us probably is like an iPhone. We've probably all just randomly one day look at your iPhone. You're like, how does this thing exist? It's crazy.

[Tobias Lütke]

As beautiful as it is and as reliable as it is. And it's like it's personal as it is. And so I think the iPhone is a lucky exception in that you can appreciate it as a physical because it's not the fault of like, everyone is right when they say, why is everything just like kind of standing still or not getting better around me? Because from the perspective and from the ability for us to observe, it is like, because all the infrastructure digital. But we are almost done with this. We are at the end of the opening chapters of all this. And so now I think we will see vastly more impactful.

[Sarah Guo]

We put all of our energy against this thing because it was the foundation. But now all these people will in some sense be free to not write software.

[Tobias Lütke]

That's exactly right. And so I think we will have a huge influx of the brightest and most creative and driven people to make things which are going to be much easier to relate to and have much more direct impact on people's lives. Lives.

[Sarah Guo]

How important for you is it, as CEO of Shopify, to have an opinion on where AI will be in two years? There's one worldview you could probably take, which is this is so unpredictable. I'm going to take it as it comes. I'm going to try to know six months ahead, but I'm going to do what I can do. And then there would be another, which is now I'm actually going to spend a lot of time with the labs and I'm going to try to have an understanding of two, three years out and try to care about the farthest out I can see. What do you think is the right position?

[Tobias Lütke]

Yeah, I mean if my friends would listen to this question, they would laugh.

Just because it's my predominant obsession is

to try to have as many data points on as many people which I then can try to match to the right superlinear or linear or sublinear curves and just figure out how they all

connect and what sort of therefore will

happen in the future. To me is the most fun game

in the world is have a pretty clear eyed view of what the future

[Sarah Guo]

is like and what in particular are you trying to figure out?

[Tobias Lütke]

I mean the AI memo is like a good example because again it was probably slightly too early to write it, but if you read it now it says nothing that would be surprising. So being able to give my company the gift of a head start, that's what we are trying to do. Because the moment then I can tell everyone something that is not quite clearly true now about the importance of these systems and we can rebuild our systems to really reinforce this and support everyone in their own tinkering exploration. That means that that our view of the future is going to be more accurate in things we are building because you're always building for future point software is getting faster to build, but you still have to aim at a future point of value. It's not our customer's job to tell us what they need. It's our customer's job to tell us what the problems are that they're experiencing and we fall in love with those problems or adopt those problems as our own and just solve them in an ideal way. But that's our job to figure out what the ideal way is that comes into contact with the customers and they give us further feedback for refinement. But in my mind it's a complete application to just build what your customers ask you for. It's an application of product responsibility. And so it's hugely important. And it's kind of like almost everything. Every decision I make I try to make on an understanding of like I try to live in everyone else's relative future. So I do a lot of it interesting. While it's incredibly fun and helpful to talk with the labs and sometimes there's some really important information that you can get from this. What I found and we sort of touched on it earlier is one of my favorite things, especially for product teams and so on and then engineering is to hire people who actually know shopify really well from outside, people who are merchants, some of my best product managers because they actually understand what the software feels like when it's being used. And same with people who Build apps on the Shopify platform to help help come to Shopify and help make the app platform better. I actually don't even think being in a lab is actually the best position. It's actually being using everything and paying a lot of attention of how everyone else uses what the sort of gifts that the labs release and then being in the sort of conversation which usually happens on X, on what everyone's figuring out, maybe actually building something and seeing everyone finds it useful. I think think this sort of learning by doing is just that's actually how to get the most clear view of how everything works.

[Sarah Guo]

Does that give you a clear view on the present or does it also give you a clear view on what's coming in a year or two?

[Tobias Lütke]

If you do it over a while, you get trajectory, you get trajectories and the trajectories are the point. If you are exactly on the state of art meta of the best thought on stuff and you have other data points. It's just the future gets very simpler to predict now. It's the hardest time ever to do it because right now the time horizons are so short. I did this very same thing throughout my entire life and it used to be that the future was absolutely trivial to predict. I mean, you just looked at the first couple numbers on mobile browser usage and you just knew what's happening on a cell phone and that we needed to make mobile websites, which just sounds insane now, but yeah, that was at some point people didn't believe that.

[Sarah Guo]

So are there parts of AI right now that you think are underhyped in terms of capabilities and are there parts that you think are overhyped?

[Tobias Lütke]

So obviously the labs really care about programming because that's the problem they need to solve for themselves since again, it's always easier to build and for various reasons. So OPUS is unbelievably good at programming and right now it's easy to go from that and then just assume it's equally competent in everything else. And quite often it isn't. If you want to discuss how to do a public talk or something. It just doesn't have great theoretical routing of this and why. I mean, it knows about all the different sort of ways to construct tension and so on, but it's not able to then look at something and make it meaningful better, where even an incredibly well optimized piece of code often finds abilities to go and do better. What is happening a lot is that we are bringing more more types of problems in the domain of programming, which is really what OpenClaw is, if you really think about it, it's like make it a file system, give it tools like a programmer uses and make a couple of files in the files, just tell it the soul and the memory and so on. And then it uses the normal programming tools to interrogate this. And because it stays a little bit in domain programming it now actually is remarkably better at this other out of domain thing, which is really, really funny. I think we should assume though that we are going through the entire radio chart of things that are valuable and bring them to the same point of honed programming. So I think there's a bit of overhype in having to work so hard on bringing things in programming domain because all of this is just going to get much more natural and easier as the models appear. Where it's underhyped is just in deployment in companies, I think and just what role it should play. There's a huge. I mean no one's using it enough. No one's using it enough. Partly because everyone just starts with like, hey, let's help me do the things that I've been doing all along. Slightly better or actually vastly better, which is valuable obviously. But if you do the more first principle things like hey, if AI would have been around ever since Alan Turing first wrote about it and would just have looked and we are just in the presence of these super intelligence all the time and we would just invent the job up we are thinking about right now like how would we do it? Just invert the whole thing and then it's so much more fun to have those conversations and I think it'll be like, I mean I'm exceptionally excited about this because I think it will create the environments that the most creative and best people will really, really appreciate. Because everything just around them happens at the speed that they want to work. And that has never been true for any company that required some bureaucracy for doing stuff.

[Sarah Guo]

On the point of talent. Have you changed anything about the types of people you're looking for? Like pre post AI are the same people who were successful before? Are those still the same most successful people? Or is there any attribute that you are scanning for in a different weighting than you used to?

[Tobias Lütke]

It's fascinating. So this is actually really changing all the time. And actually I've had to change my mind a couple of times. But I think the best distinction point is, you know, Shopify is 20 years old. I think average age of Shopify is somewhere like late 30s, which is I think still pretty good. But like, I mean like this is one thing you have to look at out for like as a company. There's some companies that just age themselves 12 months every year and for various reasons. And you know, that's probably a problem at some point when a lot of new things happen. So like just like massively restarting the internship program has been really helpful. Right. Like just like we take a thousand interns a year from close to Waterloo and Waterloo. So it's great and just making sure that the, the interns are not just the students now, but also the teachers because again they are just so AI in native that it was really, really helpful. It's also interesting because initially I had the thought that there's fluid intelligence and crystallized intelligence, basically knowledge and curiosity driven willingness to learn. And often early in your career you have no knowledge, therefore you're all fluid. And then AI was sort of super new. We're also the first people who just flocked to it, right like and immediately got value out of it. That's super, super exciting. We had the thought that maybe that really tilts into their direction. But then as we started like the more of the system sort of got firmed around the coding harnesses, cloud code, PI and all these kind of things really programming is so much not the type of typing, like typing task of typing. It's really understanding the problem deeply. And I think every program in the world massively underestimates how much they're doing when steering in AI right now and how much that is really them being creative and actually just it's uniquely biased what they're coming up with. They are just having seen the movie before, you can sort of spot the AI just going the wrong path and you just like one, two words can completely just change everything. There's a very, very long answer to say I kind of don't know. But I actually just think good people are good. There's a of variance how quickly people adopted the tools but once they did it's like everyone just like yeah falls back onto there.

[Sarah Guo]

So that I guess that's the sort of like what do you like side of the question I guess to flip it to what do candidates like? Have you felt any change in competing for talent in this market? And you know, maybe it's, you know, you've got a lot of variables at play here that you know, you're public, you know, many of your sort of competing for talent companies are probably private. You're you know, in Canada and not in Silicon Belt. You know, there's all these different factors but I'M curious, how does the sort of like, AI wave change sort of what you do to sort of attract and retain the very best people?

[Tobias Lütke]

Yeah. I mean, I think the best way to deal with recruiting is to build a company worth looking for, for the best. Right. Like, so I think people are, like, thinking about it too much as selling and not enough as marketing in a way, or at least even just, like, information.

[Sarah Guo]

Yeah. It's like, how do I look? How do I look? Super healthy. Like, well, you could, like, you know, you could use this. You could turn this angle. You could do. It's like, well, you can also just try to be healthy.

[Tobias Lütke]

Exactly. So sometimes it's just like, things are just simpler sometimes than they seem.

[Sarah Guo]

So what goes into that then? I mean, obviously there's like, you know, being a good business.

[Tobias Lütke]

Yeah. Just don't mire people in bureaucracy don't like, give people the space that, like to be creative and have them, like, allow them to, you know, fall in love the mission, actually, and have them understand what problems people care about and what impact the book has. I think Shopify has a lot of intrinsic advantages here, but the best way to attract talent is make it so that when people sort of try on the idea of maybe coming to Shopify, that they come by, they meet everyone they will work with and also really, really impressive people that they will work with together.

[Sarah Guo]

As a CEO, have a public company for, I think over 10 years, how do you feel about companies being private for so long? Like, obviously it's like, more possible than ever. Venture markets are a lot bigger than they were back when you were going public. But I don't know, like, what do you think?

[Tobias Lütke]

I find it a little bit sad from a perspective of I totally understand why the individual companies do it. I just find it like, man, I'm so glad that so many people end

[Sarah Guo]

up, like, buying Shopify for them.

[Tobias Lütke]

Exactly. It's just like, I.

[Sarah Guo]

A lot of retail investors have done really well with it.

[Tobias Lütke]

Exactly. It's just like, it's remarkable. I can go basically anywhere, like, and just meet people and they tell me that, like, they. They just like, bought some shares at some point and just like, it was really, really important to them. And it's like, it's cool.

I just want.

I want people to make money with Shopify because I'm like, very much not like, with a sort of one vote, one chair kind of thing, one share, one. Not like, sort of the influence part. I'm like, totally. That's what the fuck is that all about? Like, just like, like founder shares. Let's go. But like, I think they are tickets to participate in something you believe in. Like, I, I mean, look, my, my view of money is. Money is how you vote for the world you want. And when you buy a product, you're voting for that product and everything that caused that product to exist. And that works with shares too. If you want to hop on a company because it does things that you agree with, then you can buy them and you can go to another company if someone has. Captures imagination better. And I think that's a wonderful institution. So I just also, I feel like it came from a meme, I think, because I have lived the other side of this that's kind of easy to go public.

[Sarah Guo]

You're saying the, the state, private, it's much better.

[Tobias Lütke]

It's just like, I don't, I mean, what is there?

[Sarah Guo]

I mean, the arguments you don't have, the quarterly public scrutiny. Not everybody can see all your financials all the time.

[Tobias Lütke]

Yeah.

[Sarah Guo]

Your employees aren't seeing their stock move up and down.

[Tobias Lütke]

Fair enough. I just never really saw these things as bad things. They are like, they, they, they induce like a diligence and a data drivenness and kind of a little bit of, you know, a set of responsibilities which I think are worth having because you are, are. You're responsible for thousands of people's jobs and an important product. Right.

[Sarah Guo]

So what are the other benefits that like, you know, you just shared one about sort of the joy of, you know, a lot of people getting to share your success.

[Tobias Lütke]

But it helped us in a way that maybe is not always the case. Like, and especially as a Canadian company listing on. In New York, we were just very small. Like when Shopify IPO, it was like one and a half billion dollars valuation. Right.

[Sarah Guo]

So you've had 100x in the public.

[Tobias Lütke]

Yeah. And. Right.

That's cool.

And therefore I find lots of people who tell me that was a good investment for them. Right.

[Sarah Guo]

Yeah.

[Tobias Lütke]

It gave us, like, legitimacy to then go into like, you know, we, we never wanted to go upmarket, but we always wanted to have a product that can work well for people at all Parts of the scale. That just sounds like just words is about 100x harder from building a product. Right. Building a product that's like actually scales across the entire thing is insanely difficult to do and has been one of the most fun challenges to pursue. And so bigger customers just like, yeah, you're a public company. That's cool. That's different. And then frankly, there's really, really really

good people who would only work for public company.

So that's also helpful.

[Sarah Guo]

Makes sense. My last question is, I know you have at least been a big reader. Do you still have time to read a lot?

[Tobias Lütke]

Yeah, yeah.

[Sarah Guo]

You got any books I should read?

[Tobias Lütke]

There's so many books I love. I mean obviously like I'm a huge fan of sort of short incredible books like Pakistan's Law and Lessons of History. It's just like then people distill all of their knowledge into under 100 pages and I think that's great. I recently read a really good book on. It's called what is Intelligence? It re explains basically all of biology from a perspective of how important prediction is and how it properly emerged just in the sequence. I'm like, this is like, like felt existentially profound in a way that like I don't quite know if that was because it felt all this part was just to support an argument later that wasn't actually that important to make I think. So this is kind of interesting.

[Sarah Guo]

I think others have felt this too. But I struggle. I've been struggling more to read. Partially it's a stage of life thing, but partially I think like the Internet is making my brain lives too short and partially I think I am in a headspace where I want every minute to be productive. And so it's hard for me to read a book for joy and I need to figure out how to get through that.

[Tobias Lütke]

That.

[Sarah Guo]

But you seem to have figured out how to.

[Tobias Lütke]

It's, it's, it's. It's a. It's a job of an author to make you keep reading. Like this is important like mental switch. Right. Like if you read a book and it just like doesn't capture you, it's like it's. That's not because you're broken. It's because the author didn't manage to do the thing that I want set out to do. Right. Like I sort of have an advantage. Disadvantage. I probably advantage at this point like offer being out of cycle with my wife who also as a light sleeper. So like I just like go to bed than she wants, which is like way too early. Usually like a 10 or whatever. Something crazy. I'm like a night old so I don't need a lot of sleep luckily. So yeah, I just have like hours of reading time and that's like, you know, the Kindle is not that bright, doesn't wake up and therefore I have a couple hours of reading time and

[Sarah Guo]

you're not doom scrolling on Twitter like the rest of us here.

[Tobias Lütke]

Yeah, yeah. It's important to like using like this. I really, really am a huge fan of a candidate just because. Not because it's great, but because it is. Right? Because it's like it's such a limited but actually single purpose device. So yeah, like I find that. Yeah, I find that wonderful. I just, I just, I find books just to be so remarkable.

[Sarah Guo]

And they're like going to the gym. It's like when you read a book. I'm like, I gotta be reading more books. Life just pulls us off.

[Tobias Lütke]

It's best to have some ritual or some dedicated time for it. If you can pull it off, that just at least works for me.

[Sarah Guo]

Yeah. Well, Toby, this was an absolute pleasure. Thank you for making time for this.

[Tobias Lütke]

This was really fun. Thanks so much for having me.