Shopify

“Now, for those of you that look at the public filings of Shopify another proud Bessemer alumni portfolio company, they're trading at ten billion dollars plus. And over half of their revenue today is from this emerging category of payments.”

“What was interesting is that the yearly churn is 80% for Shopify. It's pretty frightening, because at the end of the year, there's only going to be 20% of the stores that work here at the beginning of the year that will still be around and still be your custom…”

“Well, if you take a look at Shopify, they were twelve million ARR in year one, and grew to twenty four million ARR in year two. And so they had an increase of twelve million in net new ARR, but only burned two million to do it. And so they had a six X BVP effi…”

“One example I'll give of one of the best companies out there on this metric was Shopify, which is a company that in around 2011 had about twelve million of ARR. Over the next 12 months, they added Another twelve million of ARR, and it cost them two million to …”

“Three in the Bessemer portfolio alone, we had Twilio, Shopify, and Pinterest were all, you know, seed and series A investments coming out of that O eight crisis.”

“You know, it's interesting with Shopify and Amazon. I mean, these are our customers, you know, Amazon runs the tens of billions they managed through Coupa.”

“The other thing I found interesting is whenever I've had a really robust internship program, I find that it's easier to hire full times. And I think that's a combination of things, whether it's greater, a better sense of how to onboard, or even thinking throug…”

“Interviews are not that good at predictor performance. Actually, it's on the slide. and it's really just a way for you to figure out if somebody might be a fit for you. And so the shorter you can make that process, like I wouldn't recommend hours or hours lon…”

“Shopify has a, has an interesting program called dev degree. And what dev degree is, it's a program in conjunction with a few schools whereby you get your university paid for and you do your internships all at Shopify.”

“You have to think of them as your full times, and if you think of them as your full times, you should be taking their suggestions and feedback. You should be unblocking them. They should have the same level of access as everybody else.”

“In 2020, it actually grew an incredible 80% In the new normal to almost three billion of revenue.”

“Our thesis internally is that those horizons and the growth rates of those markets are starting to pull back, and that you see a changing of the guard. And it's really the cloud basket, and we pulled out six names in particular with Microsoft, Twilio, Shopify,…”

“Shopify had almost three billion in revenue in 2020. And over twelve billion is what Shopify partners generated for themselves through the Shopify partner program that same year.”

“42,000 partners in their community referred at least one new customer to Shopify that same year.”

“So for us, we sell mostly to Shopify stores. There are about two million of them. I think there's about like 700 K of them that are on our TAM.”

“We focus on Shopify right now. It's about like, 95% of our business, and we're starting to go on Magento and e-commerce and build those partnerships there.”

“Remote first is what Coinbase and Shopify and Brex are doing, where they run the entire company remotely from asynchronization to all hands done remotely, but they have hubs where you can, almost like a cafe, where you can go in and visit colleagues or even do…”

“And so when I see VCs on Twitter talking about how they're looking at buying some shares of Shopify, honestly, I think they're losers.”

“Klaviyo, which was the only IPO of this year is marketing just for e-commerce. In fact, Klaviyo really is just marketing only for Shopify customers. 70% of Klaviyo's almost one billion in revenue only not only comes from e-commerce, it only comes from Shopify”

“There's these day one high attached vendors that make these applications blow up and the rest struggle, which doesn't mean you shouldn't do them, but it does mean it probably can't be everything for you.”

“Two thirds of Shopify revenue comes from payments and financial services, not from software, right?”

“Initially it started to automate seven percent of tickets. It's gotten up to 18% today. They think within the next six to 12 months they'll be able to automate 50% of the back and forth interactions between e-commerce merchants and their end customers.”

“There, that gap between what I want to mathematically measure, which is how the machine is going to learn based on that error and what my actual product result is. Really matters.”

“Having that strong culture to back up the performance of your model before you go into release is probably one of the biggest issues in terms of having a strong ML culture when you're, as it gets easier and easier for non-experts to start leveraging these tool…”

“And maybe what you would want to do is have one metric that shows for direct relevance and another that shows complementary relevance, right? And then it is somewhat a product decision of how much you want to balance these, but it's also something that you can…”

“If I search for boots and I show a Christmas tree, that's not gonna, the model's not gonna learn much from saying, oh, that was wrong, right? It's gonna learn a lot more by showing its sneakers or by showing its sandals and saying that's because it's closer to…”

“Maybe you buy your own infrastructure, which is also a cheaper answer. If you have, if you already have an infrastructure, an on-prem infrastructure system, that's really going to depend on what your AI training expectations are anticipated.”

“And if you pay a commodity LLM, which right now does usually beat out open source LLMs, you're going to end up paying per token and you can't scalably, if you have the right size of a business, do this for every query or every kind of use case.”

“You need to have engineering for serving. You need to have your ML scientists and engineers, and you need to have product. You need to have product every year in the trenches with your ML builders.”

“Klaviyo owns marketing. About almost 70% of everyone on Shopify uses Klaviyo.”

“First is I think you definitely want to build, I think it's a good idea to build, you know, your underlying tech so that it's kind of agnostic, right? So there's a level of indirection in between what you solve for and the other folks that today and tomorrow c…”

“When you look at partner ecosystems and we could flip it around and talk about Klaviyo's partner ecosystem too, it's almost always a long tail distribution. You could have a thousand apps on Shopify or Salesforce, but it's probably 10 that get half the install…”

“And again, I give Shopify a lot of credit for it. They, I think we're early to this game of realizing developers and building ecosystem mattered. I think a lot of folks have now tried to rinse and repeat their playbook.”

“I'm on the board of a company called gorgeous. Which is the largest contact center in e-commerce. And they've got about 16,000 Shopify customers coming up on a hundred million in revenue.”

“The average enterprise deal in e-com at that time in history, you had Salesforce doing deals at eight, 900,000 dollars a year that we could do at 50.”

“It took forever, but as a result, you've got, you have, like, 80% gross margins. Shopify is like 50, toast is 30.”

“They have probably 60% market share in the Shopify ecosystem.”

“What they don't realize with SMBs is that like agencies and dev shops, They just pick one. They don't have time to learn for email marketing partners. They don't care if something's better than Shopify. I don't care. Shopify is number one.”

“So for Stripe in that first camp, this was back in 2017 that we started our foray into enterprise, and it was the Shopify's, the Lyft's, Squarespace's were all growing up, bringing in adult CFO's, contemplating IPOs, and so they had a bunch of demands.”

“Shopify yesterday announced they crossed eleven billion dollar run rate, eleven billion dollars from Shopify. And It's accelerating. It's growing to 31% at 11.2 billion. That's even better than it sounds because that means it's added over three billion of new …”

“Whether it's Databricks or Snowflake, whether it's Shopify, whether it's BigQuery, whether it's All S three, all the places where you're storing data through your company, all of that needs to be one consistent data layer for that agent to be able to really be…”

“When Rory invested in box with Aaron, when Rory's invested in HubSpot, those are pretty good ones. Shopify. These guys all IPO'd around a hundred million in revenue growing really fast off in 50, 60, 80% at like eight hundred million valuations.”

“Toast and Shopify is, if they were just software, they're pretty mediocre businesses, but they figured out how to add merchant services and payments and payrolls, and all the vertical SaaS companies are doing that.”

“The twenty-twenty-one buying boom didn't end until Q one or Q two of twenty-twenty-two, but that's because they're a lag. If you go back and look, for example, at Shopify data and Shopify was very public. Shopify said in the summer of twenty-twenty, this is ov…”