Jun 8, 2026 · 58m · how-i-built-this
Shopify: Tobias Lütke. How a snowboarder built a $150 billion business (2019)
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gold bands on the timeline = statements, start to end. Hover to read, click to jump. CC turns on captions
In this episode of 'How I Built This,' Tobias Lütke recounts how his attempt to build an online snowboard store in Ottawa led to the creation of Shopify, a global e-commerce infrastructure powerhouse. Lütke shares candid insights on overcoming personal learning challenges, transitioning from a coder into a CEO, and scaling an empire dedicated to empowering independent entrepreneurs.
How this conversation actually went
Every chapter scored 0–10 on four independent dynamics. Hover any point for the reasoning behind the score. Guy holds 31.9% of the talking time here. How this is scored →
Guy as informed peer 3.2 Guest teaching 3.7 Guest disagreement 0.6 Guy pushing back 1.1
speaking balance: gold is Guy, purple is the guest (3 minute bins)
Sharpest disagreement ▶ 57:50 Tobi playfully refuses to name his secret shop
When Guy Raz probes Tobias about the identity of his personal Shopify side store, Tobias firmly stonewalls him with 'I'm not telling you.'
Hardest push from Guy ▶ 48:48 Guy challenges Tobi on holding back growthGuy presses Tobias on why he was freaking out with anxiety even after knowing Bessemer and the market would support massive expansion.
Biggest teaching moment ▶ 36:15 Tobi on computing VC metrics on the flyTobias explains how he navigated venture pitch meetings by jotting down unfamiliar financial acronyms, looking up their mathematical formulas, and querying his database that evening.
Guy holds their own ▶ 23:41 Guy draws parallel to Squarespace's originGuy Raz demonstrates broad industry knowledge by linking Tobias's DIY software pivot to the exact founding trajectory of Squarespace.
the scores for every segment, with the reasoning behind each
| Chapter | Topic | Guy as informed peer | Guest teaching | Guest disagreement | Guy pushing back | Why |
|---|---|---|---|---|---|---|
| Childhood, Learning Challenges, and Programming Apprenticeship | 3 | 4 | 1 | 1 | Guy Raz prompts Tobias about his childhood struggles, and Tobias explains the systemic mismatch between German educational methods and his ADHD/dyslexia before finding his passion in a Siemens apprenticeship. | |
| Whistler Snowboarding Trip and Moving to Canada | 3 | 2 | 0 | 1 | Guy asks playful questions about Tobias's trip to Whistler and how he met his wife Fiona, leading to an easygoing, narrative exchange. | |
| Immigration Roadblocks and Founding Snowdevil | 3 | 4 | 2 | 2 | Guy jokingly pushes Tobias on Ottawa's long winters and asks whether he was working illegally, prompting Tobias to correct him on Canadian immigration status and how legal limitations forced him into entrepreneurship. | |
| Partnering with Scott Lake and Family Support | 3 | 3 | 0 | 1 | Guy explores Tobias's living arrangement with his in-laws and how he partnered with Scott Lake, with Tobias warmly explaining how instrumental family support was. | |
| The Flaws of 2004 E-Commerce Software | 4 | 5 | 1 | 1 | Guy attempts to relate by mentioning Amazon in 2004, prompting Tobias to detail how primitive off-the-shelf e-commerce and payment software were back then. | |
| Building the Platform with Ruby on Rails | 4 | 6 | 1 | 1 | Guy asks about Ruby on Rails, and Tobias delivers an insightful explanation using an artistic metaphor about how programming languages shape cognition and problem solving. | |
| The First Order and Snowdevil's Early Run | 3 | 3 | 0 | 1 | Tobias shares the memorable experience of receiving his first online order from Pennsylvania and how early Google AdWords arbitrage drove profitability. | |
| Recognizing the Software Opportunity | 5 | 3 | 0 | 1 | Guy draws an apt parallel between Tobias's pivot to software and the founding story of Squarespace, which Tobias validates. | |
| Mid-Episode Break: Sand Hill Road Teaser | 0 | 0 | 0 | 0 | Mid-episode break and recap monologue by Guy Raz introducing the Sand Hill Road fundraising pitch. | |
| Seed Funding and the 2006 Public Launch | 3 | 3 | 0 | 1 | Tobias explains raising $200k from friends and family and launching in 2006 to a waiting list of 4,000 to 5,000 email subscribers. | |
| Pricing Adjustments and the Super Bowl Surge | 4 | 5 | 1 | 1 | Tobias describes the failure of their initial percentage-per-transaction model and switching to subscriptions the night before his wedding, followed by a Super Bowl viral moment that validated the platform. | |
| Angel Support, Scott's Exit, and Seeking a CEO | 4 | 4 | 0 | 1 | Guy inquires about the company's precarious financial position and Scott Lake's departure, leading Tobias to explain why he looked for a replacement CEO. | |
| Silicon Valley VC Pitches and the 2008 Collapse | 4 | 6 | 1 | 1 | Tobias details riding a bicycle to Sand Hill Road pitch meetings, learning SaaS metrics in real time between meetings, receiving term sheets, and then having them pulled during the 2008 Lehman crash. | |
| Mid-Episode Break: The Recession Opportunity | 0 | 0 | 0 | 0 | Mid-episode break monologue describing how the financial crisis unexpectedly opened a door for Shopify. | |
| The Psychological Burdens of Leadership | 3 | 4 | 0 | 1 | Tobias speaks candidly about the crushing psychological burden of leadership, admitting he held the company back because he felt unprepared to manage people. | |
| Testing Marketing and Securing Series A Funding | 4 | 4 | 0 | 1 | Tobias explains how testing five marketing channels proved high return on investment, enabling him to raise a $7 million Series A based on concrete data. | |
| Rapid Scaling, White-Label Ethics, and Public Recognition | 4 | 5 | 1 | 2 | Guy presses Tobias on why he remained anxious despite rapid revenue growth, and Tobias explains the deliberate choice to keep Shopify white-labeled behind merchants. | |
| The 2015 IPO and Lowering Barriers to Business | 3 | 6 | 1 | 1 | Guy asks why Shopify went public in 2015, and Tobias reframes Shopify's core purpose as flattening technical barriers so more entrepreneurs can make their first sale. | |
| Reflecting on Fortune, Timing, and a Secret Side Shop | 4 | 4 | 2 | 2 | Guy asks Tobias to quantify skill versus luck, to which Tobias attributes 90% to luck and jokingly refuses to reveal the name of his secret sock shop. |
Statements from this episode (24)
Lütke felt Siemens' strict dress codes reflected a mistrusting corporate culture
“Working for Siemens has been probably one of the most important things I've ever done in my life because it kind of taught me what I don't want. It was, In so many ways, a strange company culture in the way that it felt exceptionally mistrusting of everyone, r…”
Lütke: Entrepreneurship inevitably pulls everyone around the founder into the journey
“Even if you make the choice yourself to embark in entrepreneurship, kind of everyone around you is coming onto the trip. There's a lot of people who end up mattering a lot and I clearly was naive about it.”
Lütke and co-founder Scott Lake launched Snowdevil with $20,000 CAD each
“I think we both took 20,000 Canadian dollars and put, that's the capital we had.”
Ruby documentation was exclusively in Japanese when Lütke first learned it
“Open source Japanese. There's only Japanese documentation around this time for it. I learned the language by looking at the source code.”
Lütke believes making a first sale is what truly defines an entrepreneur
“I think that's what makes you an entrepreneur. Like, the first time you sell something, or first time someone hires you for, when the phone rings, or something like this. Because until then, you're just someone who builds something, which is already great, but…”
Snowdevil converted $500 snowboards on 20-cent minimum Google AdWords clicks
“It turns out that the minimum bid for an ad for click is 20 cents, and we paid minimum bid for almost every search, which ended up converting on a 500 dollar snowboard.”
Lütke: If one entrepreneur needs a tool, thousands more will too
“And I'm not that different from other people. Like, if I needed this at some point, there's gonna be at least a couple thousand people who also need this.”
Co-founder Scott Lake coined 'Shopify' by combining 'shop' and 'simplify'
“It was Scott's idea. It was we talked about what we wanted it, and putting shop and simplify together was pretty straightforward, and then we went to I think on GoDaddy and registered with .com.”
Shopify collected 4,000 to 5,000 emails before its 2006 launch
“By the time we launched in 2006, I think we had four or 5000 emails, so it's not, but that seemed like a lot.”
Merchants from Shopify's 2006 launch day are still running on the platform
“And, frankly, there are still business running on Shopify. That, that actually started on that day, which is remarkable.”
Shopify's original transaction fee model repelled high-volume merchants
“And the model was, I think we charged like three and a half or 3.75% per, per sale. It was a complete failure of a business model because what basically everyone who didn't expect to have sales thought it was amazing and people who expect to sell a lot would T…”
Angel investor John Phillips saved Shopify with a $400,000 investment in 2007
“We luckily met an angel investor who ended up putting, I think, 400,000 dollars around 2007, and that saved us as an individual by the name of John Phillips.”
All 2008 Silicon Valley term sheets required Shopify to relocate from Ottawa
“But all the offers were always conditional on moving the company to Silicon Valley.”
VCs rescinded Shopify's term sheets during the 2008 financial crisis
“So basically, I got this around this time, notice that term sheets will no longer be honored, because everyone needs to tighten bells, and so on.”
Shopify's user numbers accelerated rather than dropped during the 2008 crisis
“We thought the numbers would fall off a cliff, and what they actually did is they started climbing and accelerating.”
Shopify hit cash flow neutrality for the first time in 2009
“In 2009, the company now hit first time sort of cash flow neutral.”
Lütke intentionally slowed Shopify's growth in 2009 to keep it manageable
“At this point, I intentionally slowed down the growth of the company a little bit just because I needed it to be manageable for me.”
Early Shopify payroll was funded by Lütke's family and father-in-law
“Like, up till this point, it was really just, you know, money from John Phillips, from my family, and then for the last year, from my father-in-law, who gave me Money for, to meet payroll.”
Bessemer preempted fundraising by quadrupling Shopify's valuation 10 months post-Series A
“10 months after the Series A, Jeremy and Trevor from Bessemer came to me and said, you are still massively constrained by money. How about, instead of you spending a bunch of months on fundraising, we'll just Quadruple the valuation of the company and put much…”
Shopify deliberately excluded its branding from storefronts to highlight its merchants
“Our job is to make our merchants look good. Like, this is why we exist. So, we wouldn't put Shopify on the merchant stores.”
Lütke: Raising venture capital forces a race to either IPO or sell
“I took the investments knowing that I'm going to be raising the clock to either go public or get sold. That was the duality of outcome. And by the way, this is true for every person who sells shares in their company.”
A merchant makes their first Shopify sale every 52 seconds
“Every 52 seconds, someone has that experience of getting a first sale.”
Lütke believes Shopify would have failed if founded two years later
“Like, this is not a kind of company that could have been started even two years later, right? It needed to be started right then, and it needed to be ready and good by the time the opportunity around the financial crisis came around.”