#41 Tobi Lütke: The Trust Battery

The Knowledge Project with Shane Parrish

Farnam Street

Business, Investing, Entrepreneurship

4.7 • 2.9K Ratings

🗓️ 18 September 2018

⏱️ 106 minutes

🔗️ Recording | iTunes | RSS

🧾️ Download transcript

Summary

Today, I interview fellow Ottawan and the founder and CEO of Shopify, Tobi Lütke. In case you’re still new to the internet, Shopify is the largest ecommerce platform that allows people to easily set up online storefronts to sell everything from jewelry to surfing lessons.

Shopify began as a simple two man operation selling snowboards online, but it became clear rather quickly that it had the potential to grow into much more. Now Shopify employs more than 4,000 people and supports more than 600,000 businesses online. It’s a remarkable story, with a remarkable leader at the helm.

There was so much I wanted to talk to Tobi about that we hop around quite a bit. Here are a few of the topics we discuss:

Tobi’s thoughts on how video games helped him prepare to run a company
How selling snowboards online slowly transitioned to the creation of one of the biggest tech companies in the world
Why Tobi intentionally headquartered Shopify outside of Silicon Valley and how that fits into his overall growth strategy
One of the most underrated resources Tobi leans on to mine nuggets of wisdom when trying to get insight or solve a problem
The hard and valuable lessons Tobi learned as they scaled from a 2 employee company to a 4,000 employee company
What the “Tobi test” is, and how it helps Shopify team members become more adaptable, unified and prepared when things go haywire
How employees use the “trust battery” and how it fosters better teamwork, communication, and productivity throughout the company
The benefits of hiring employees in a “secondary market” as opposed to a “primary market” and how that contributes to the unique culture at Shopify
Tobi’s decision-making process and his philosophy on making quick vs analytic decisions
Tobi’s unusual morning routine that gets him in the right mindset to tackle the day
His optimistic view of AI and machine learning and how they will impact the way we do things in the future

And more…

Whether you’re building a business of your own, want to create a more dynamic and unified culture at work, or just like hearing entrepreneur war stories, this episode will not disappoint.

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Transcript

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0:00.0	Things going wrong is not actually this rare thing, but it's actually something that's not an ordinary thing that just does not cure every day.
0:18.0	Hello and welcome. I'm Shane Parish and this is the Knowledge Project, a podcast exploring the ideas, methods and mental models that help you learn from the best of what other people have already figured out.
0:30.0	To learn more about the show, access show notes or see previous guests go to fs.blog slash podcast.
0:37.0	My guest today is Toby Lutke, co-founder and CEO of Shopify, the marquee shopping cart system of the e-commerce industry.
0:46.0	Like me, Toby's based in Ottawa, Canada and while we had a lot of mutual friends, we had never met in person before recording this interview.
0:54.0	As you'll soon discover, Toby's incredibly well thought out on a wide range of subjects.
0:59.0	This in-depth conversation covers a lot of ground, everything from growing and scaling Shopify to the trust battery and other useful mental models.
1:08.0	Heck, we even talk about playing video games and how that helped prepare him to run one of the largest technology companies in the world.
1:15.0	I hope you enjoy this conversation as much as I did.
1:25.0	Before we get started, here's a quick word from our sponsor.
1:29.0	Farm Street is sponsored by a metal lab. For a decade, metal lab has helped some of the world's top companies and entrepreneurs build products that millions of people use every day.
1:38.0	You probably didn't realize it at the time, but odds are you've used an app that they've helped design or build.
1:44.0	Apps like Slack, Coinbase, Facebook Messenger, Oculus, Lonely Planet and so many more.
1:50.0	Metal lab wants to bring the unique design philosophy to your project.
1:54.0	Let them take your brainstorm and turn it into the next billion dollar app from idea sketched on the back of a napkin to a final ship product.
2:02.0	Check them out at metalab.co. That's metalab.co.
2:06.0	And when you get in touch, tell them Shane's saying it.
2:09.0	Toby, welcome to the show.
2:11.0	Thanks for the much for having me.
2:13.0	I thought we'd start with video games. I've been reading your Twitter feed and it seems like you have some strong opinions on video games, not only from why it's unfair to see them as a waste of time, but right up in to how they helped you run and scale an organization like Shopify.
2:29.0	Let's unpack this. Can you expand on these thoughts?
2:32.0	That's a funny because I'm pretty open about just playing video games a lot. I play video games with my kids.
	...

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