Breaking the rules of growth: Why Shopify bans KPIs, optimizes for churn, prioritizes intuition, and builds toward a 100-year vision | Archie Abrams (VP Product, Head of Growth at Shopify)

Lenny's Podcast: Product | Growth | Career

Lenny Rachitsky

Technology, Business, Entrepreneurship

5 • 1.5K Ratings

🗓️ 7 November 2024

⏱️ 78 minutes

🔗️ Recording | iTunes | RSS

🧾️ Download transcript

Summary

Archie Abrams is the VP of Product and Head of Growth at Shopify, where he leads a 600+ person growth org across product, design, engineering, data, ops, and growth marketing. Shopify powers over 10% of e-commerce in the United States, with $235 billion in GMV in 2023 (roughly the size of Finland’s economy). He previously led Consumer product and growth at Lyft and was at Udemy for 8 years as SVP of Product having joined the company when it was 10 people. In our conversation, we discuss:

• Why Shopify optimizes for churn

• Why the core product team doesn’t use metrics-based goals

• Why they keep multi-year experiment holdouts

• How they structure their growth team

• The benefits of not having a CMO

• Lessons learned about integrating sales into a product-led growth model

• The power of discounting as a growth lever

• Much more

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Brought to you by:

• Explo—Embed customer-facing analytics in your product

• Dovetail—The customer insights hub for product teams

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Find the transcript at: https://www.lennysnewsletter.com/p/shopifys-growth-archie-abrams

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Where to find Archie Abrams:

• X: https://x.com/archieabrams

• LinkedIn: https://www.linkedin.com/in/archie-abrams-b6aa8b6/

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Where to find Lenny:

• Newsletter: https://www.lennysnewsletter.com

• X: https://twitter.com/lennysan

• LinkedIn: https://www.linkedin.com/in/lennyrachitsky/

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In this episode, we cover:

(00:00) Archie’s background

(02:30) Shopify’s impressive growth

(06:17) Shopify’s unique approach to churn and retention

(08:43) Monetization model and success metrics

(11:08) Long-term experimentation and metrics

(23:00) Examples of big wins that Archie’s team has shipped

(26:42) Monetary friction

(27:14) Metrics

(29:47) Shopify’s growth team structure

(33:03) Goal setting and forecasting

(37:10) Examples of long-term results within Shopify

(41:36) Shipping neutral experiments

(42:05) Building a hundred-year company

(48:04) Why Shopify doesn’t use KPIs

(51:30) Shopify’s “Get s**t done” framework

(54:30) Cross-team collaboration

(58:48) The importance of an opinionated founder

(01:01:12) Growth and sales integration

(01:06:42) Shopify’s marketing structure

(01:08:49) Insights on discounting from Udemy

(01:11:09) Lightning round

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Referenced:

• Shopify: https://www.shopify.com/

• Tobias Lütke on LinkedIn: https://www.linkedin.com/in/tobiaslutke

• Gross Merchandise Value: Calculation and Best Practices: https://www.shopify.com/retail/gross-merchandise-value

• Brian Chesky’s new playbook: https://www.lennysnewsletter.com/p/brian-cheskys-contrarian-approach

• Glen Coates on LinkedIn: https://www.linkedin.com/in/glcoates

• Harley Finkelstein on LinkedIn: https://www.linkedin.com/in/harleyf

• Udemy: https://www.udemy.com/

• Scientific Advertising: https://www.amazon.com/Scientific-Advertising-Original-Claude-Hopkins/dp/1640954252

• Four-Minute Mile: https://www.amazon.com/Four-Minute-Mile-Roger-Bannister/dp/1493038753/

• The Sopranos on HBO: https://www.hbo.com/the-sopranos

• Suno: https://suno.com/

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Production and marketing by https://penname.co/. For inquiries about sponsoring the podcast, email [email protected].

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Lenny may be an investor in the companies discussed.

Get full access to Lenny's Newsletter at www.lennysnewsletter.com/subscribe

Transcript

Click on a timestamp to play from that location

0:00.0	When you have teams naturally break up the world into different funnel stages or different points in the journey, it gets very seductive to look at my part of the funnel and what's my conversion rate through that part of the funnel, right? And then the team starts to optimize for that conversion rate as their North Star. But in practice, it's actually almost always easier to just
0:22.6	make it harder to do the thing right before your step in the funnel to increase your conversion
0:27.6	rate. Instead of I'm trying to convert a bunch of people, I just want more people to get activated.
0:32.4	And then once you start thinking that way, you realize actually the best way to get more people
0:36.4	to get to a step is
0:37.7	just get more people in the door in the first place.
0:40.3	That will always hurt your conversion rate, but it may actually give you more people on the outside.
0:48.6	Today, my guest is Archie Abrams. Archie is VPF product and head of growth at Shopify,
0:53.3	where he leads an org of over 600 people across product, design, engineering, data, ops, and growth marketing.
1:00.0	Shopify is both an incredibly unique and also an incredibly successful business, and they do things very differently.
1:07.0	And as a result, there's a lot that we can learn from how they approach building product and driving growth. Some examples include their priorities and product roadmap
1:15.5	are driven by a 100-year vision that comes from Toby, the CEO, and the core product teams
1:21.0	don't have metrics or KPIs. They're essentially banned, and instead decisions are made based on
1:26.0	taste and intuition and building towards this long-term vision.
1:29.3	Also, the growth team optimizes FORTURN, which is unlike any other company have ever come across.
1:36.3	Once you hear why this will make a lot of sense, also they keep long-term holdouts for every experiment they run,
1:42.3	and they automatically look at the impact these
1:44.6	experiments have had on the business a year later two years later and three
1:48.5	years later and then revisit these decisions down the road and in our
1:52.4	conversation we dig into all of this plus how Shopify organizes their growth
1:56.6	team how they run experiments how the growth team collaborates with the
2:00.2	product team how they measure impact plus how the growth team collaborates with the product team, how they
	...

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