This installment of the Founder to CEO series shares conversations with Tobi from Shopify. Tobi and the Shopify team have been building a truly special, market-leading company. Originally from Germany, Tobi moved to Canada after being active in many open source projects, most notably as a core team member of the Ruby on Rails framework. Tobi is arguably among the most brilliant high school dropouts.
Entrepreneurial Origins
Like many, Tobi learns by trying. He had “trouble” in school, but computers fascinated him early. He learned arbitrage to earn money to buy computers. While still in Germany, he was able to do co-op work terms instead of spending time in the classroom. An early co-op term sparked his interest in retail.
Never Set Out to Build a Business
Tobi likes programming for “artistic purposes,” just for the sake of it. He and his partners started an online snowboard store that became Shopify “just to create a good job for myself.”
A Reluctant Leader
Tobi was not the first CEO at Shopify. By his own admission, he had paid no attention to the business side before his original co-founder left. Even after that, his first reaction was to find a replacement CEO. Still, he wanted to build a product- and tech-centric company and believed that “the person who runs the product should run the business.”
On Being CEO
- Ignorance is bliss: “Ignorance is the single biggest driver of entrepreneurship. It was two years before it ever occurred to me that this might not work.”
- Self-awareness and introspection are key: “I perceive my days as if there is a camera behind me. I can replay my day and learn from it.” “Introspection is all you’ve got. You’re not going to get a lot of feedback as CEO.”
- Meditation helps train the mind for introspection, especially for startup leaders whose minds are always going.
- As CEO of a growing market leader, Tobi lives in the future, thinking years ahead. Sharing everything he is thinking about can defocus the team, so he is careful not to distract from short-term execution.
- It takes a village: An early angel investor continues to play a strong mentorship role. Benchmark’s Peter Fenton helped him put together his first investor deck, even though he never took money from him.
- Coaching matters: “Everyone that is serious about their performance should have a coach.” He and most of his exec team have one.
- Accountability: “When you are the CEO, you never get to blame anyone ever again.” Everything that goes wrong is your fault.
- Authentic leadership: Tobi likes Oscar Wilde’s approach—“Be yourself. Every other personality is taken.” “Companies are manifestations of their founders. Shopify is good at all the things I am good at and bad at all the things I am bad at.” Design the CEO role around strengths and passions.
- Founder-market fit: Build for a problem you have. “This allows you to do high bandwidth customer development with yourself giving you an unfair advantage.”
Tips & Tricks
- 30-day trial: Frame new initiatives as trials to make it easy to try and fail without the pressure of formal programs.
- Weekly accountability: Receive a list of key accomplishments and planned objectives every Monday from team members.
- Bottom-up process design: “Only the people who use a process are allowed to come up with a process.” Avoid top-down imposition.
- Perspective: “I truly care about macro and micro things but nothing in between. I can zoom in on tiny details and zoom out to big vision.” Tobi is a lot like Mark Zuckerberg in this respect. Great CEOs must be able to context shift.
- Work on the business: Weekends and offsites are better for working on the business rather than in it.
- Be special: From the office to perks that include free housekeeping, Shopify focuses on creating a special experience for team members.
- Learn from VCs: “Speaking to VCs was one of the best ways to learn about my business.”
- Energy management: As an introvert, Tobi learned to “act extrovert.” “Learning to act is a tremendously useful skill but it takes its toll. I have to unplug to recharge myself.”
Culture
It is no surprise that Tobi and the team think deeply about culture. One of the founders, Daniel, assumed the role of Chief Culture Officer. Culture at Shopify means:
- Design, product, and technology hold supreme importance.
- Elite individual performance expectations.
- Long hours are not equated with high performance.
- No one “owns” something internally. “We all own everything that everyone else made.” Everyone is empowered to fix what is broken, regardless of who made it.
- Retraining: “First six weeks are designed to get people to accept that there is a completely alternative way here.”
- Complete transparency: Tobi is the first to admit if he does not understand something.
Delivering Results
Begin with the end in mind: Always have the best tools for the job to make the job simple. The Shopify team took a year to change Rails to make it “perfect for Shopify.” “Make the right thing easy. This is a metaphor for building businesses that work well.” This approach to building the company comes right from the Rails framework.
Performance is not about winning: “There are only two kinds of teams: ones that get better every day and ones that get worse.” “We have to get better on average every day. If we do this every day eventually we will be unstoppable.” This thinking leads to getting a coach. “You’d be crazy to go without one.”
Final Thoughts from Tobi
“Don’t read too much. Ignorance is so important.”
“Let’s build a company we won’t be embarrassed about 50 years from now.”