October 14, 2016 by Speakers' Spotlight
Entrepreneurship, Family and The Future of Retail with Shopify COO Harley Finkelstein
Harley Finkelstein started from the ground up. To put himself through law school, he sold t-shirts using Shopify—an e-commerce platform that was relatively unknown at the time. That decision in 2005 ultimately led him to become Shopify’s Chief Operating Officer, where he helped transform the company into a global industry leader. Dubbed “Newsmaker of the Year” in 2013 for his success as an entrepreneur, and named in 2015 as a new “Dragon” for CBC’s Next Gen Den, Harley lives by his personal entrepreneurial philosophy of “the hustle”: go hard, go fast, build the best, and execute. TechVibes caught up with Harley for a Q&A:
Shopify is a cloud-based commerce platform designed for both startup entrepreneurs and mega-sized merchants like Tesla and Google. Since launching in 2006 Shopify has grown from a humble online snowboard shop to a publicly traded corporation valued in the billions.
In 2006 Harley Finkelstein was in law school selling t-shirts to support himself when he became one of Shopify’s first customers. Four years later CEO and cofounder Tobias Lütke brought Harley into the C-suite to help build Shopify where he still resides as the company’s Chief Operating Officer.
Shopify went public on both the Toronto and New York Stock exchange in March 2015 initially raising $131 million. The company has since grown with 1500 employees in Ottawa, Toronto, Montreal, Waterloo and San Francisco, valued most recently at more than $3 billion.
You represent a new kind of successful entrepreneur who is working for a big company. What is it like having that spirit while working for someone else?
I think there are two types of people that work at companies: Those who come to help build a great company and those who come to be a part of a great company. The assumption is that once the company is big enough, everyone will be there to be part of a great company, but I don’t think that’s the case. At Shopify with 1,500 people, a multi-billion dollar publicly traded company, the people who start today are still coming to help us build a great company.
We talk a lot about this idea of acting like an owner. It’s one of our core tenets. It’s not just something that we put on the wall, we really believe it. I want every employee at Shopify to feel like they own the company (and technically they do because they have stock options).
Each of us have our own superpowers but when we come together we get this one plus one equals three impact. Most of the people that I work with on a daily basis have run or could run their own companies, but they chose to thrown in with our group and they feel like they are the CEO of their own company. We hired the best people we remove all the red tape in front of them but it’s up to them, and that sense of autonomy is unique.
This place is a collection of entrepreneurs that are doing it altogether and I think that’s what makes Shopify special.
You are quite active in the public eye between speaking engagements, TV interviews and Next-Gen Den. What is it about these public platforms that is so important to you?
I was born in the eighties when everyone I knew wanted to be a skateboarder. In the nineties everyone wanted to be in a grunge band and in the early 2000’s everyone wanted to be a DJ, and now I think people want to be entrepreneurs. There is this new round of interest in entrepreneurship.
When I got to Shopify I felt we had the tools to help inspire entrepreneurship but we were being very polite Canadians. We were quiet. We weren’t evangelizing the concept of entrepreneurship. We were building what I thought was the best tool for entrepreneurship but we weren’t actually motivating or encouraging the spread of entrepreneurship.
There was still this connotation that entrepreneurship was either too complicated or too expensive and I wanted to change that. Over the years the soap box that I had to stand on kept getting bigger and bigger. Over time I realized that I have this amazing responsibility but also this great opportunity that more people actually wanted to talk about entrepreneurship and I could facilitate that at a higher cadence and higher efficacy than I could do in the earlier days.
I’m just taking all the opportunities I can to spread it whether it’s Dragons’ Den or speaking or the Build a Business competition. I love this stuff and I’m lucky I get to do it–and it also happens to be really good for our business.
How does your Law degree play into your world now?
Luckily for Shopify we have an amazing legal team because I don’t think I was an especially good lawyer, though I was Shopify’s first general counsel.
We didn’t have a CFO when we raised our first round of financing–we did it on our own. I think that background gave me some of the tools that I needed to get that done in an appropriate amount of time and do it really well.
I was also starting to build out the business groups of Shopify partnerships in sales and business development and I was able to negotiate and think about the legal issues on the fly. When the people I was negotiating with had to go back and check on legal, I was able to do things in real-time. That gave me this incredible efficacy of negotiation that no one else had, so that really did help.
Today obviously it’s a little less relevant but in many ways for me law school was entrepreneurship finishing school. It taught me how to be articulate, how to write really well, it taught me how to read 4000 pages and pick out the one sentence that matters most.
I think there is something that you learn and it’s not necessarily the textbook learning–it’s sort of the hallways of law school that make you a really good entrepreneur. You have to assess situations very quickly. The same reason I was class president in high school and was on the debate team–that I can take away but the process of debating, the process of running for class president as a new kid with no friends and as the short kid (I still am), all those things helped give me these building blocks of becoming a better entrepreneur.
You have have an MBA and Law Degree but we are now seeing an increase in new-school education. Where do you see the future of traditional education going?
I’ll say something that will be a bit controversial. I have a newborn daughter now and I do not believe she will go to university. I don’t think she will drive a car either.
Being a protective Dad I just think autonomous cars are going to be a thing when she’s sixteen years old. And I think by the time she’s 18 years old the traditional education system is just not going to be where it is right now.
My Dad came here in 1956 during the Hungarian revolution. My Grandfather had to sell eggs and my dad has to sell clothing. Those weren’t choices they made, they were entrepreneurs out of necessity.
The next generation used education as a stepping stone to a safe career, and I think fundamentally today people don’t want safe careers. In fact, if you do a Google Trends search for fulfilling career versus safe career, you can see fulfilling is going up and safe is going down. I think we as North Americans, or even most of the world, are not looking for a safe career.
Tobi did an apprenticeship at Siemens–that to me can be a lot more beneficial. When I first came to work at Shopify I didn’t really know much about software development, so I was able to take a Khan Academy course and Stanford CS 101 (which is free and amazing). I was able to take all these things and all of a sudden I have a background or context into technology.
To think that you’re going to go to law school and get a $150,000 per year job on Bay Street right away and work there the rest of your life–first of all if you want that I feel sorry for you–but I just don’t think that’s the case anymore.
You could say I have the luxury of finding a career that my grandfather didn’t, and that would be 100% accurate. He didn’t have the luxury of doing something that he was truly passionate about because he was forced to put food on the table. Many of us now don’t have to worry about that anymore—like Maslow’s hierarchy of human needs. We can now do something that is fulfilling and I don’t think schools really do that well.
Also, I’m not even sure you can teach entrepreneurship. I think you can teach business, accounting, HR, marketing, all these different tenants of business but I’m not sure you can teach someone how to be an entrepreneur.
So is that what the Partner Accelerator and Build a Business programs are about? Trying to teach things that are not accessible through alternative means?
The reason the Build A Business competition is so impactful and so meaningful, personally but also to the company, is that we want to create experiences that give entrepreneurs an incentive that they couldn’t buy themselves. This summer we spent a week with Richard Branson then rang the bell at the stock exchange, and then spent a week with Tony Robins, Russel Simmons and all these amazing people.
That is what my mission and is also Shopify’s mission: I want to encourage more people to be entrepreneurs. I want the guy who is working at Bell nine-to-five who goes home at night and builds rocking chairs in his garage to stop working at Bell and just build an incredible business making rocking chairs. And I want that girl who is creating that toy to inspire female engineers to quit her job and focus on that toy that’s going to change the lives of all the little girls who play with it and want to become engineers one day.
I think that is my life’s work.
You are an entrepreneur with a new baby. How is the work/life balance going?
I don’t half-ass things. If I’m going to do something, I’m going to do it really well and if I’m not good at it I’m going to find people in the world who can help me. I’ve had mentors my entire life since I was fifteen years old and every few years I find a new mentor. Some mentors help me run the company and others are just some of the world’s best husbands and fathers and that’s who I want to get mentorship from.
The juxtaposition of running a multi-billion dollar company and being a new dad is certainly difficult, but it’s difficult because I want to be a phenomenal manager and a phenomenal father. I think I can do that–you just need to make time for it.
On weekends my wife and I are at the cottage with the baby and that’s important – its non-negotiable. I’m home for dinner every night and that is also non-negotiable. I think there is enough hours in the day where you can do both sort of things. I just ensure that the stuff I’m working on is the highest impact stuff; the stuff that I love doing that I’m world-class at, and everything else I’m going to find people who are better at it than I am.
The problem is that I’m someone who is also fairly hands on and with a new baby there’s not really much I can do, and so to be honest I feel very vulnerable right now at home because I feel helpless. I get home, my wife feeds the baby and so I’m there to support my wife and do whatever I can but there is very little I can do and that really is frustrating. I know that will change soon and I can’t wait because I kind of sit there and twiddle my thumbs.
I’m not there yet thought; I think I’m a good manager–want to be a great manager. I think I’m a newbie dad–I want to be a great dad, I want to be a great husband.
The things that are important to me are my family, my friends, and this business – there is no half-assing it for me.
What trends are you most excited about right now?
For the first time in history, brands like P&G are going direct to consumer (on Shopify). Oreo has a store on Shopify and they are going direct to consumer. That’s never happened before. For the first time in history these brands across all of retail are going direct to consumer and they are having a one-to-one relationship as opposed to working through a wholesaler or retailer.
I’m excited about that for a couple reasons: The brand makes more money because they keep all the margin. The consumer pays less money and the consumer has a better experience.
When I buy a Boosted Board through Shopify versus Best Buy I get a better deal, Boosted Board makes more money and if I have any questions I have the live chat to tell me what are the wheels made out of.
Secondly, the biggest trend across entrepreneurship is that the cost of failure is trending towards zero–anyone now who has an idea can commercialize it very quickly. If they need to use funding they use crowdfunding platforms. If they need prototyping they use a 3D printer. If they need to distribute their products and get it in front of people all around the world they can use Shopify. All those things were not possible five or ten years ago.
Technology is now bringing the barrier to entry so low and that is really exciting. The flip side is that if everyone can do it, how do you separate yourself? That’s where the ones that are going to win are going to be products, companies, and businesses that are truly unique, that have a competitive advantage.
What can you tell me about Shopify’s next big move?
If you were to walk out into King & Spadina and ask what does Shopify do today, they would say we help build you online stores. What I hope they are going to say in three years from now is that we help people sell. Full stop.
We’ve been talking about these channels with Facebook, Pinterest, Amazon. Forget the channels for a second. The future of retail is going to be retail everywhere. If you want to buy a new notebook, you should be able to buy it any way you want, whether that’s on Facebook, Snapchat or through virtual reality, it shouldn’t matter. And the notebook company shouldn’t care how you buy it either, as long as you buy it.
So that’s really what we are trying to change. It’s not just creating more channels at Shopify from a product perspective, which we are doing, but it’s also changing retail. Retailers and consumers will begin to realize that I can buy anything I want, how I want, and that is very different than the last thousand years when the retailer said to the consumer “you need to buy it this way.”
I like the fact that consumers are going to say to the retailers “No, I am going to buy it this way because that is the most convenient way for me. And If you are selling to my grandmother you better have a great in-store experience, and if you are selling to my little sister, you probably need to be selling on Facebook.”
That’s my big dream for Shopify.