Case Study : Shopify (Chapter 5, page 134)

Shopify is a Canadian ecommerce company located in Ottawa and is widely recognized as one of Canadas recent start-up successes. Shopify develops Web-based software that makes it easier for retailers to launch and manage an ecommerce site. As of 2016, over 325 000 businesses had paid Shopify a monthly subscription to sell more than $24 billion in online retail goods, and the company is primed to change the entire global ecommerce industry. Shopifys rise can be seen as an unlikely story. In 2004, Tobi Ltke and Scott Lake wanted to start Snowdevil, a niche ecommerce that sold snowboards. When looking for software for Snowdevil, Ltke realized there were few good options for building an ecommerce site, so he developed his own platform. He soon realized that the custom software he developed was more valuable than the Snowdevil business, so in 2006 he and Lake convinced 10 friends and family members to stake them a starting fund of $200 000. In 2006 the founders launched the Shopify product, and though Lake left soon after, by 2008 Ltke had managed to grow the business to one with 10 employees and $60 000 a month in revenue. As the company continued to grow, Ltke quickly had to adapt to the role of CEO, though he preferred to continue working exclusively on product development and believed he should hire a new CEO to replace him. However, John Phillips, one of Shopifys angel investors, persuaded Ltke to remain as CEO because of his unique personality and leadership qualities. For Phillips, this proved to be a very wise decision. Shopify grew under Ltkes leadership, and by 2011 the company had processed over $100 million in revenue for customers, had over 15 000 active stores on its platform, and had attracted over $22 million in start-up financing. In 2012, Profit Magazine named Shopify Canadas Smartest Company, and the business had grown to host 40 000 stores. By 2014, Shopify had over 100 000 stores and 500 employees and was estimated to be worth over $1 billion. Looking back at the past 10 years, Ltke believes Shopifys continuing culture of entrepreneurship and innovation helped set the company apart from its competitors and fuel this growth. When we start new interns in our R&D team, we make sure that within their first week they actually make a change to Shopify that impacts our customers. Minutes after they send the code over, it is going to be in front of a hundred million shoppers.

Questions from Case Study

1. In your opinion, how important was it that Ltke remained the CEO of the company? Do you think companies can grow if the founding team leaves?

2. As a manager at Shopify, what would you need to do to keep the firm adaptable in the future?