This is a transcript of a talk that Tobi, the CEO of Shopify, gave back in Ottawa in 2013. I revisit it often.
Air Jordan sneakers
When I was 13 in some middle school in the middle of Germany- became aware of what was going on around me. 2 groups of kids in the school- popular and not-popular. I thought I’d like to be popular. So I did what I usually do- analysed the situation, tried to figure out how I might be able to join the popular kids. The answer was that I needed Air Jordan sneakers. (Correlation =/causation).
School was the centre of my universe, my world. Realised that there was more to the world. Within my little world, within this school, the most obvious/profound thought I had was that I needed Air Jordan sneakers to be part of the popular kids.
That seems really silly from the perspective of adults. I was lucky- I got out of school (you can leave school after 10th grade in Germany- you can choose to do an apprenticeship with a company for a couple of years and then join University- really good system.)
Middle of the 90s, Germany realises computers are getting more important, and we have no clue how to educate computer programmers. Science faculties of universities? Or address in a more traditional, hands-on craftsman kinda route? Lucky- one of the first class of kids to join this kind of thing, then I joined Siemens, and met a really great mentor there.
First year they just try you out. Rite of passage, getting coffee, doing inventory, etc. I was lucky- understood what was going on, read the tea leaves right. Understood that if I wanted to be a part of the group I wanted to go to, I would have to work hard right now.
This old box of mine- the old school couldn’t explain this new place. More hierarchy, more players, more complex social networks, more performance management, lots of other things mattered. That was really powerful.
Mentor
I loved practicing and doing programming- just clicked for me, I still do. I got complicated projects from my mentor, always did fairly well.
Siemens- large company, tens of thousands of employees, Fortune 500 company. There’s a familiar and respectful form of vocab, and the familiar form was banned in Siemens.
My mentor- 50 year old guy- hells angels look, pony tail, pot belly, leather, BMW tuned loud and obnoxious. But everyone loved him, got a ton of respect, he really shouldn’t have, but just because he was so good. Whatever he said made a lot of sense.
Had this experience- I would for 3 weeks on something I was really proud of- some library or something- and after I would talk with him, I would realise that I could replace all of what I did with a line of code somewhere. Everything about him was like that. Something would happen in the news- some complicated political situation. He’d take it down to first principles- you know what, this is what’s happening, this is what’s going to happen.
Any sufficiently advanced technology is indistinguishable from magic- and whatever he was doing looked like magic. He spent an entire life being invested in personal growth. His box was so much larger than the totality of the world that I realised existed. Everything that I experienced fit within this blue company box (?). Extremely powerful thing to see this people, meet them, spend some time with them. Chamath is like that, obviously. Really interesting lesson in what happens. He managed to increase his box a lot.
What’s the goal? The pursuit of greatness, and I underline pursuit. Goals imply reachable states. I don’t like goals, they’re overrated. I like more fuzzy, directional things. Greatness is good for that. It’s an unreachable state, it’s not something you ever manage to do. Greatness because Goodness doesn’t sound good enough, but the point is the pursuit.
I’ve always thought about boxes.
What is my world. In which way is the box that I currently am in, constricting me? How is it stifling me, my thoughts, my ambitions? What thoughts would lead me out of this particular box?
Fundamentally, life is just this really interesting series of entering a box, seeing what it’s sort of made of, probing, analysing, seeing how things work, what way is gravity pushing you, and then sort of understanding it and feeling familiar. This is the nice part, everything you reach there it becomes very comfortable.
And then you might learn something that isn’t reconcilable with this world- some new thing exists and that is the thing that cracks it, and you find an exit, and you get in the next box, and you start it again. Again and again and again and again.
Let’s talk about companies.
So then you start a company- ideally you get a group of people together who are all kind of committed to what I just talked about- this sort of personal growth cycle.
Everyone hopefully is aware that this is going on, and everyone knows that this is true- but this is not something that people spend a lot of time thinking about- it seems automatic- and it’s true, there is some sort of automatic progress that people go through, but that’s not what I’m talking about. I’m talking about being extremely active in this- choosing to actively look for the wholes in the fabric of this particular box that you’re in, and shatter and it and get to the next.
The best way to start a company is to start with a bunch of other people who are all committed to the same thing- everyone’s going to be in a different box, that’s normal, it’s ok- everyone’s in a different box, different, find your own path. Everyone can help each other out, get everyone else into their next boxes. That’s what it’s about.
If you start a company you might talk with investors and VCs. What do they usually ask you? What’s your market size? Really annoying question to get, I find. It’s a bad question. The reason why it’s asked so often is because when VCs look at successful companies, they think, all of them acted in a large market- but that’s the end state.
If you really kinda look at it, Apple was created to sell chip boards to hobbyists. Origin stories of every business is much much much smaller than the end state of what they ended up accomplishing. My own company Shopiy was incorporated to sell snowboards.
Let’s play through one of these scenarios- a skateboard shops on redo street(?). AN entrepreneur and his team think that this is a good location- Ottawa, Redo Street, good foot traffic. Entrepreneur learns how to put the store together, what it should look like, once people are in, how to deal with them, greet them, how to layout the store, floor plan, so on. There are lots of these interesting parts to retail. You learn about hiring people and shifts and delegation and trust. You build a business and after a while you say well you know, skateboards in Ottawa don’t tend to sell in winter, let’s sell other things too.
People come to you from Redo street but they also come from further away- people are talking to you, so they come from everywhere. You go on the radio, do some advertising, put some events together- that’s a good one. You increase the machine. You have a couple of guys working for you, growing with you. People you trust running the store when you’re not there. Maybe with them it makes sense to expand further. Multiple locations. You learn about supply chains, manufacture relations, a lot of learning to be done. But you’re still at your stores- you see what people look at. You start becoming unhappy with your suppliers because they don’t give you the product you want to sell. And then you start a web store and then you will be everywhere.
This is the Harvard Business Journal version of an actual company story- it never works out this way, it’s more like a jungle gym with ups and downs and lefts and rights, but it’s a useful story because what just happened- was this a story of a business? To most people it’s a story of a business. But it’s not. It’s still the same story that I started earlier. The story of a couple of individuals who committed to going from box to box. That’s a powerful thing, because personal growth- pursuit of greatness- are actually the things that make people successful. And make businesses successful. It explains why Apple computers would destroy itself by losing its founder and recover right after it gets him back.
So this company transitioned well from all these various points, because there were a team of people who committed to the same journey and were very aware of it. Seek out complicated things. Every time they got to a place that’s comfortable, they chose to take the next step and get uncomfortable.
Automatic churn in the infinite game
There’s a significant automatic churn in this infinite game, if you were. Every time it becomes comfortable, some people leave. Everyone has some uncle at some family reunion who left this process very early. If you are ambitious and deliberate about this you can accomplish very great things.
This is Accel Ottawa, so I should talk about this city. I’m a very firm believer that there is no right place to start companies. There is only a right place for you. And Ottawa is that city for me. It’s beautiful, vibrant, analytical and sane city. Which you can’t possibly imagine how important this might be.
What’s going on in primary cities like NYC and SF is not fully sustainable in my view- this is my keynote so I can say what I want, which is awesome. If you have a hundred great people come out of university- right now in SF, they’re going to work for 98 different companies all working on the earliest problems that a business might face, because it’s very in vogue to work in starting companies.
A year later, 50 of them are not going to be at the same companies anymore. When I meet a super promising bright student in Ottawa, and he or she decides to join my company, I can make the assumption that they’re still there 4-5 years later. SV has 30-40% turnover every year.
So what I can do here that they can’t- I can be really really serious in investing in everyone’s personal growth. There’s a lot of focus on this in my company. We hope that people come to us and spend some of the most exciting parts of their careers together, building something very very meaningful and very very big- that everyone can go through 10 years of career at once here (every year?)- because it’s possible. People are aware of the boxes, and they understand that not everyone is in the same box, and what the mechanism looks like to lift people up.
My goal here is to try to make everyone aware of this.
And although, again, I don’t think anyone largely disagrees with this, it’s maybe not on the forefront of everyone’s thought- but I think there’s a slot in the world- every area in a (this?) city that’s better at this than every other area in the world (?)- more conscious of growth and how it relates to everything else.
I would love to be a part of building this here because- I think this could be done. The kind of people who are here are these self-analytical people, who know this could be true.
Again, one of the best ways to traverse the boxes is to simply spend time with people who are already in the larger ones. But that only works to a certain point- because when you’re really committed to this, you leave that realm of readily available people who are just more experienced than you. At this point, the best way to keep going is to start building companies. And as a group, do it.
Really really great companies can’t be build in a year. It just doesn’t work. Sometimes you’ll hear a story about billion dollar companies being created in a year or two in SV. Yeah, those are lottery winners. Don’t take this as input, data. Some people happen to be exactly in the right place at the right time and they happen to have the right thing that some people want to spend this amount of money for. It’s unlikely that the founding team has managed to get through this process. It would be a world record in personal growth to really create a sustainable thing. Building really great companies just takes a while, and it’s good to not try to do it too fast. Really good to be ambitious, obviously, but not that great to be too hasty.
From perspective of a city (?), the smallest geographical unit that exists is a continent. Cities don’t exist, provinces don’t exist, countries don’t exist. They are legacy constructs for an entire company (?). So if you started a pizza parlour, maybe the city is a valid geographical constraint for you. The thing you would do- you still want to build the best pizza parlour in the world, otherwise you’re just not going to survive.
But what is your world? Your world is your box.
You accomplish this- within your box, you build the best pizza parlour. And then you enter into the new box- and there’s new opportunities and there’s new things that you could potentially do from this point on. That is the process, that is the infinite game.
So what are the largest boxes that are out there? Where can you see this kind of thing in action? I think Chamath is a good example of that. Colonising space as an answer to unemployment seems kind of crazy- but you know what, 200 years from now it may turn out that he was right. So there are great thinkers like this- people who are truly committed to this and have done this for a very long time. It’s worth figuring out who they are.
Elon Musk is clearly- likely the person with the largest box on the planet right now. When he thinks that he can’t drive to work without burning fossil fuels, he builds an electric car company. That is not a rational thing to do if that’s your problem(?), but he does that. He really wanted to put some satellite space so he built an entire rocket company. He wanted to be able to exchange money over the internet, so paypal came about. If your box is that large, the kinds of stuff you do just seems outlandish- like magic, right?
Someone else who had a very large box is Carl Sagan.
And I’m going to show you a video afterwards which is very very important to me. But before that I’d just like to try to tie this all together again. Because- everyone has been playing this infinite game all your lives. Everyone understands this. You care about Air Jordans at some point (or some equivalent), you probably don’t anymore. You go box, box, box, larger box. You do it with people who surround you. You find other people who are willing to do this journey. And together you can build really, really great things.
I think that’s beautiful, I think that’s symmetrical, and I think that’s the first principle of this sort of terribly complex topic, that is, how come some people just build this companies with just work (?). It’s not the companies. The companies are just the current manifestation of the capabilities of the group of people who are building this business. Not just management, the entire business. Everything that the business comprises of. All the people, all the hiring, all the goals, all the ambitions.
I think we can make this area the best in the world at building companies. Step #1 is realise this, restructure to figure out how we can help people, truly, in this process. Pave forward for the people who’e already accomplished it, mix more all good things.
Back to Carl Sagan. Everytime I put my personal process and progress, I think it’s likely that I’m at the first 5% of this journey. I hope we’re only 5% into Shopify’s story. There are a lot more boxes- which are completely stifled by whatever box I’m in. And every time I realise this, every time I feel comfortable, there is one video I watch- it reminds me that Sagan’s box was so much larger than anything I can ever accomplish, that it’s worth continuing on the road at least to try to make a bad imitation of his journey. I wanna play this for you now.
Earth: The Pale Blue Dot
“We were hunters and foragers. The frontier was everywhere. We were bounded only by the Earth, and the ocean, and the sky. The open road still softly calls. Our little terraquious globe as the madhouse of those hundred thousand millions of worlds. We, who cannot even put our own planetary home in order, riven with rivalries and hatreds; Are we to venture out into space?
By the time we’re ready to settle even the nearest of other planetary systems, we will have changed. The simple passage of so many generations will have changed us. Necessity will have changed us. We’re… an adaptable species. It will not be we who reach Alpha Centauri and the other nearby stars. It will be a species very like us, but with more of our strengths, and fewer of our weaknesses. More confident, farseeing, capable, and prudent. For all our failings, despite our limitations and fallibilities, we humans are capable of greatness.
What new wonders, undreamed of in our time, will we have wrought in another generation? And another? How far will our nomadic species have wandered by the end of the next century? And the next millennium? Our remote descendants, safely arrayed on many worlds through the solar system and beyond, will be unified by their common heritage, by their regard for their home planet, and by the knowledge that whatever other life there may be, the only humans in all the universe come from Earth.
They will gaze up, and strain to find the blue dot in their skies. They will marvel at how vulnerable the repository of raw potential once was. How perilous, our infancy. How humble, our beginnings. How many rivers we had to cross before we found our way.”