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Okay, Harley Finkelstein, president of Shopify. Here we go.

This transcript has been lightly edited for clarity.

Harley Finkelstein, you’re the president of Shopify, welcome to Decoder.

Thank you for having me. It’s a great pleasure to be here.

It’s a great time to talk to you. You just had earnings, which were great. Shopify is doing great as a company. We are also talking at the end of a quarter where every other major tech company announced their earnings. The economy is moving online. Shopify enables a bunch of that to happen. There’s also a giant antitrust trial starting off next week about the control Apple has over its platform, and all of the transactions you can make on that platform.

So I feel like you have a lot of insight into a lot of different things that are happening all at once. But let’s start at the start. Give people a rundown of what Shopify does, and importantly, how you all make money.

So the history of the company was, about 16 years ago, we wanted to do something very simple. We wanted to sell snowboards on the internet. And back in 2005 or so, there were really two ways to sell something online. You either listed it on a marketplace. At the time, eBay was a big one. There were a couple others, but a marketplace was really the place you sold something. And the advantages of that, of course, were that it was inexpensive, it was fairly easy to get up and running. But you were pretty much renting customers from that marketplace. You were not really building your own brand and you were not building your own business.

The other way, of course, was to spend, I think at the time, it was a couple of hundred grand or $1 million to have one of these large scale, enterprise e-commerce builds. You think about— Oracle had one, SAP had one, ATG, and Hybris, and IBM WebSphere, they were very expensive and very difficult to operate. So we didn’t like either of those options, and so we wrote this piece of software to sell our own snowboards.

And within a year, by 2006 or so, it became obvious that while the snowboard business was a good idea, the software behind the snowboard business was a great idea. And so I would say, the first six or seven years or so, we were focused on building the best, the easiest, the most scalable way for anyone with a product to build a beautiful, scalable online store.

 

 

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