Lenny's Podcast: Product | Growth | Career

Tobi Lütke’s leadership playbook: Playing infinite games, operating from first principles, and maximizing human potential (founder and CEO of Shopify)

Feb 2, 2025

Tobi Lütke, Founder and CEO of Shopify, shares his unique approach to leadership and entrepreneurship. He emphasizes why complexity can hinder growth and the importance of first principles thinking. Tobi discusses how to approach metrics and decision-making, advocating for joy and qualitative factors over traditional statistics. He also highlights the significance of coding in leadership, encouraging collaboration and curiosity within teams. The conversation delves into the idea of long-term vision and its role in empowering human potential and successful product leadership.

01:41:42

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Tobi Lütke

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Quick takeaways

Dissatisfaction with the status quo drives innovation, motivating entrepreneurs to pursue meaningful change rather than settling for mediocrity.

A long-term vision of planning for a century shapes decision-making, encouraging leaders to think backward from future goals for impactful strategies.

Emphasizing unquantifiable elements like joy and delight in product development leads to better outcomes than focusing solely on traditional metrics.

Deep dives

Energy Source: Dissatisfaction with the Status Quo

Dissatisfaction with the current state of affairs serves as a powerful motivator for builders and innovators. The speaker emphasizes that many technological narratives portray a dystopian future, suggesting that today's conditions may be viewed as the dystopia of tomorrow. This dissatisfaction compels builders to strive for meaningful progress, moving away from conformist norms in pursuit of better solutions. The desire to instigate change and improve the world, rather than settling for mediocrity, is presented as a vital energy source for entrepreneurship.

To Create Great Products, Care is Key

00:52

Intro

2min

Exploring Digital Communication and Leadership Principles

4min

Decisive Leadership in Project Management

7min

Rethinking Success in Education and Business

27min

Navigating the Shift to Remote Work: Challenges and Opportunities

5min

The Role of Coding in Effective Leadership

5min

Empowering Decision-Making Through First Principles

26min

Exploring the Profound Insights of 'Finite and Infinite Games'

2min

Empowering Entrepreneurship through User Experience

24min

Tobi Lütke is the founder and CEO of Shopify, a $130 billion business that powers over 10% of all U.S. e-commerce. Starting as a snowboard shop in 2004, Shopify has become the leading commerce platform by consistently approaching problems differently. Tobi remains deeply technical, frequently coding alongside his team, and is known for his unique approach to leadership, product development, and company building. In our conversation, we discuss:

• Why complexity kills entrepreneurship

• How to develop and leverage your unique talent stack

• How specifically Tobi approaches thinking from first principles

• The importance of focusing on unquantifiable qualities like joy and delight

• Why Tobi works backward from a 100-year vision

• Why metrics should support decisions, not make them

• The power of following your curiosity

• What Tobi believes it takes to be a great product leader

• Much more

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Find the transcript at: https://www.lennysnewsletter.com/p/tobi-lutkes-leadership-playbook

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Where to find Tobi Lütke:

• X: https://x.com/tobi

• LinkedIn: https://www.linkedin.com/in/tobiaslutke/

• Website: https://tobi.lutke.com/

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Where to find Lenny:

• Newsletter: https://www.lennysnewsletter.com

• X: https://twitter.com/lennysan

• LinkedIn: https://www.linkedin.com/in/lennyrachitsky/

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In this episode, we cover:

(00:00) Welcome and introduction

(04:17) The Tobi tornado

(07:10) Maximizing human potential

(11:05) Education and personal growth

(16:47) Operating without KPIs

(25:00) First-principles thinking

(40:04) Remote work

(45:59) Why Tobi never stopped coding

(54:46) Embracing disagreement

(01:01:27) The 100-year vision

(01:09:29) Balancing tactics and positioning

(01:17:15) Encouraging entrepreneurship

(01:19:34) The power of good UX

(01:28:42) The talent stack and unique opportunities

(01:34:30) The role of passion in product development

(01:36:39) Final thoughts and farewell

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Referenced:

• How Shopify builds a high-intensity culture | Farhan Thawar (VP and Head of Eng): https://www.lennysnewsletter.com/p/how-shopify-builds-a-high-intensity-culture-farhan-thawar

• Breaking the rules of growth: Why Shopify bans KPIs, optimizes for churn, prioritizes intuition, and builds toward a 100-year vision | Archie Abrams (VP Product, Head of Growth at Shopify): https://www.lennysnewsletter.com/p/shopifys-growth-archie-abrams

• The ultimate guide to performance marketing | Timothy Davis (Shopify): https://www.lennysnewsletter.com/p/performance-marketing-timothy-davis

• Brandon Chu on building product at Shopify, how writing changed the trajectory of his career, the habits that make you a great PM, pros and cons of being a platform PM, how Shopify got through Covid: https://www.lennysnewsletter.com/p/brandon-chu-on-what-its-like-to-build

• IRC: https://en.wikipedia.org/wiki/IRC

• Goodhart’s law: https://en.wikipedia.org/wiki/Goodhart%27s_law

• Glen Coates on LinkedIn: https://www.linkedin.com/in/glcoates/

• How Shopify builds product: https://www.lennysnewsletter.com/p/how-shopify-builds-product

• The Last Dance on Netflix: https://www.netflix.com/title/80203144

• Autoregressive Models for Natural Language Processing: https://medium.com/@zaiinn440/autoregressive-models-for-natural-language-processing-b95e5f933e1f

• Archimedean property: https://en.wikipedia.org/wiki/Archimedean_property

• Tabula rasa: https://en.wikipedia.org/wiki/Tabula_rasa

• Daniel Weinand on LinkedIn: https://www.linkedin.com/in/danielweinand/

• World of Warcraft: https://worldofwarcraft.blizzard.com

• Harley Finkelstein on LinkedIn: https://www.linkedin.com/in/harleyf/

• Monorepo: https://en.wikipedia.org/wiki/Monorepo