Tobi Lütke, co-founder and CEO of Shopify, shares his journey from a coder in Germany to leading an e-commerce powerhouse. He discusses the vital differences between founders and professional managers and how he navigates market volatility with a clear 'North Star.' Lütke explores balancing innovation with structure, the evolution of productivity through programming, and the media's role in shaping societal perceptions. He emphasizes decision-making that values long-term impact over short-term gains and the importance of maintaining well-being, especially in the pandemic era.
The importance of personal experiences and skills in individual value.
The significance of innovation and adaptation in the growth of Shopify as a company.
Challenges faced by leaders in decision-making and maintaining focus during uncertain times.
The effectiveness of Cognitive Behavioral Therapy for Insomnia (CBT-I) in improving sleep quality.
The need to differentiate between finite and infinite games for long-term decision making.
Deep dives
The value of personal experience and skills in self-worth
Your personal experiences and skills contribute to your value as an individual.
Identifying oneself as a person
There is a need to understand how to identify oneself as an individual.
The importance of innovation and adaptation in a company
Toby Luteke discusses the significance of innovation and adaptation in the growth of Shopify as a company.
Challenges of leadership and decision-making during uncertain times
Toby Luteke talks about the challenges faced by leaders, including decision-making and maintaining focus during uncertain times.
Fixing Sleep with Cognitive Behavioral Therapy for Insomnia
The speaker shares their experience of fixing their sleep using Cognitive Behavioral Therapy for Insomnia (CBT-I). They initially relied on sleeping pills due to intense work demands during the pandemic. However, they decided to find a long-term solution and discovered the effectiveness of CBT-I. They researched the topic, read books, and found helpful apps to guide them through the therapy. By challenging their misconceptions about sleep and implementing proper sleep hygiene, such as avoiding screens before bed and having a consistent bedtime routine, they were able to quickly improve their sleep quality and duration.
Replacing Travel as a Time-consuming Activity
The speaker reflects on the time wasted on excessive travel before the pandemic. While acknowledging the value of spending time with people, they see travel as a tax on meaningful interactions. They believe that travel was often seen as a requirement to prove sincerity in meetings, but now recognizes it as a waste of time that compromises personal and family time. They advocate for more deliberate time spent with people without the excessive burden of travel.
The Value of Infinite Game Thinking in Decision-making
The speaker emphasizes the importance of adopting an infinite game mindset when making decisions. They explain that being fixated on short-term popularity and immediate benefits can lead to future pain and compromise the long-term vision of a company. Instead, they encourage decision-makers to envision what choices the company would wish they had made in ten years. By considering the primary, secondary, and tertiary effects of decisions, as well as their alignment with personal infinite goals, there can be a synergistic harmony that leads to unmatched success.
Importance of Good Decision Making
Making good decisions is crucial, especially in times of crisis. It is important to have good heuristics and strategies in place to steer towards the best long-term decisions. Strategic decisions should consider long-term benefits and predictable effects. For example, the value of a product like Shop Pay is high, and not having it could be a strategic mistake. Companies should strive to make decisions that align with their long-term goals and reputation.
Understanding Finite and Infinite Games
Finite games have a defined goal and winning condition, like a tennis match. On the other hand, infinite games have no specific goal and keep playing without an endpoint. It is important to differentiate between the two and focus on infinite games for long-term decision making. In the education system, where the goal is acquiring knowledge and wisdom, too much emphasis on finite games like grades and tests can hinder the pursuit of the infinite game. Companies should be deliberate in their alignment with different types of players, such as conformists and aggressive conformists, to foster innovation and make decisions that support their infinite game.
My guest today is Shopify co-founder and CEO Tobi Lütke. We discuss the differences between founders and professional managers, how he’s scaled with Shopify, the constant fight against bureaucracy, how he thinks about innovation in a large company, and how he manages to keep his head when everyone else is losing theirs.
A coder at heart who emigrated from Germany to Canada two decades ago, Lütke co-founded the e-commerce giant Shopify in Ottawa in 2006. The Globe and Mail named Lütke "CEO of the Year" in November 2014, and in May 2021 the company reported that it had more than 1.7 million businesses in approximately 175 countries using its platform. As of July 2022, Shopify is among the top 20 largest publicly traded Canadian companies by market capitalization, and the company’s total revenue for 2021 was $4.611 billion. Lütke previously appeared on Episode 41 of The Knowledge Project.
--
Want even more? Supporting Members get early access, hand-edited transcripts, member-only episodes, and so much more. Learn more.
Every Sunday, our Brain Food newsletter gives you a mental edge in 5 minutes with timeless insights you can use. Add it to your inbox.
