TIVP021: Shopify (SHOP): The Battle For The Future of E-Commerce w/ Shawn O’Malley & Daniel Mahncke

The Intrinsic Value Podcast - The Investor’s Podcast Network

The Investor's Podcast Network

Investing, Education, Business

4.6 • 593 Ratings

🗓️ 25 May 2025

⏱️ 85 minutes

🔗️ Recording | iTunes | RSS

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Summary

Shawn O’Malley and Daniel Mahncke break down Shopify (ticker: SHOP), a leading e-commerce platform company enabling e-commerce merchants across the world to seamlessly manage nearly every part of their business in one place. Shopify has been locked in a power struggle with Amazon, as the two present distinct visions for the future of e-commerce: Amazon tries to pull merchants to its marketplace and to conform with its standardized shopping experience, while Shopify empowers merchants to manage their own websites that go direct-to-consumer. In this episode, you’ll learn how Shopify started humbly as a snowboard website, what makes Shopify such a killer app, how Shopify and Amazon compete but also have found ways to strategically co-exist, why Shopify may have multiple moats working to its advantage, and whether Shopify is attractively valued given its compelling growth prospects, plus so much more! Prefer to watch? Click ⁠⁠⁠⁠here⁠⁠⁠⁠ to watch this episode on YouTube. IN THIS EPISODE, YOU’LL LEARN 00:00 - Intro 05:30 - Why the enterprise software market was ripe for disruption. 10:50 - Shopify’s origin story as a simple snowboard website in Canada. 14:47 - How Shopify’s value proposition differs from Amazon. 36:42 - Why Shopify abandoned its logistics business just one year after making a major acquisition. 42:42 - How Shopify has responded to Amazon encroaching on its turf. 01:01:38 - What to make of Shopify’s share split and ownership structure. 01:12:28 - Why Shopify’s growth story may only be just beginning. 01:16:32 - Whether Shawn & Daniel add SHOP to The Intrinsic Value Portfolio. And much, much more! *Disclaimer: Slight timestamp discrepancies may occur due to podcast platform differences. BOOKS AND RESOURCES Get smarter about valuing businesses in just a few minutes each week through our newsletter, ⁠⁠⁠⁠The Intrinsic Value Newsletter⁠⁠⁠⁠. Business Breakdowns podcast on Shopify. Quartr’s overview of Shopify. Clayton Christensen's The Innovator’s Dilemma. Check out our previous Intrinsic Value breakdowns: ⁠⁠⁠⁠Nintendo⁠⁠⁠⁠, ⁠⁠⁠⁠Airbnb⁠⁠⁠⁠, ⁠⁠⁠⁠AutoZone⁠⁠⁠⁠, ⁠⁠⁠⁠Alphabet⁠⁠⁠⁠, ⁠⁠⁠⁠Ulta⁠⁠⁠⁠, ⁠⁠⁠⁠John Deere⁠⁠⁠⁠, and ⁠⁠⁠⁠Madison Square Garden Sports⁠⁠⁠⁠. Check out the books mentioned in the podcast ⁠⁠⁠⁠here⁠⁠⁠⁠. Enjoy ad-free episodes when you subscribe to our ⁠⁠⁠⁠Premium Feed⁠⁠⁠⁠. NEW TO THE SHOW? Follow our official social media accounts: ⁠⁠⁠⁠X (Twitter)⁠⁠⁠⁠ | ⁠⁠⁠⁠LinkedIn⁠⁠⁠⁠ | ⁠⁠⁠⁠Instagram⁠⁠⁠⁠ | ⁠⁠⁠⁠Facebook⁠⁠⁠⁠ | ⁠⁠⁠⁠TikTok⁠⁠⁠⁠. Browse through all our episodes (complete with transcripts) ⁠⁠⁠⁠here⁠⁠⁠⁠. Try Shawn's favorite tool for picking stock winners and managing our portfolios: ⁠⁠⁠⁠TIP Finance⁠⁠⁠⁠. Enjoy exclusive perks from our ⁠⁠⁠⁠favorite Apps and Services⁠⁠⁠⁠. Learn how to better start, manage, and grow your business with the ⁠⁠⁠⁠best business podcasts⁠⁠⁠⁠. SPONSORS Support our free podcast by supporting our ⁠sponsors⁠: CFI Education Airbnb Connect with Shawn: ⁠⁠⁠⁠Twitter⁠⁠⁠⁠ | ⁠⁠⁠⁠LinkedIn⁠⁠⁠⁠ | ⁠⁠⁠⁠Email⁠⁠⁠⁠ Connect with Daniel: ⁠⁠⁠⁠Twitter⁠⁠⁠⁠ | ⁠⁠⁠⁠LinkedIn⁠⁠⁠⁠ | ⁠⁠⁠⁠Email⁠⁠⁠⁠ HELP US OUT! Help us reach new listeners by leaving us a ⁠⁠⁠⁠rating and review⁠⁠⁠⁠ on ⁠⁠⁠⁠Spotify⁠⁠⁠⁠! It takes less than 30 seconds and really helps our show grow, which allows us to bring on even better guests for you all! Thank you – we really appreciate it! Learn more about your ad choices. Visit megaphone.fm/adchoices Support our show by becoming a premium member! https://theinvestorspodcastnetwork.supportingcast.fm

Transcript

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0:00.0	Payments is a thorny issue for many small businesses, or at least it used to be, and Shopify has made the process so much easier for them.
0:09.9	And just to hit on it again, because whenever we talk about software companies, especially something as boring as enterprise software, it can all feel a bit abstract if you've never used the services yourself, which I haven't.
0:22.5	But in short, Shopify is a platform designed for anyone to sell anything, anywhere, giving
0:29.5	entrepreneurs the resources that for many years were only really reserved for larger corporations.
0:36.3	And since IPOing in 2015, Shopify has shown just how powerful its platform is by growing gross
0:43.6	merchandise volume revenue by over 50x.
0:53.3	To start today's episode, let's put on our Star Wars fancaps for a moment.
0:58.4	If Amazon is the evil galactic empire, then Shopify is the rebels fighting back in the war
1:04.4	for e-commerce. Amazon is this massive third-party marketplace for just about everything you could
1:10.3	ever need to purchase
1:11.4	with unrivaled convenience and deals.
1:14.3	Yet it forces merchants to sacrifice a lot of their brand autonomy to conform to Amazon's
1:20.0	standardized checkout process and also to accept Amazon's high fees for using its ecosystem,
1:25.7	which are even higher when you consider that
1:28.6	merchants typically have to pay to advertise on Amazon if they want to get any kind of meaningful
1:34.4	visibility. Amazon helps brands with order fulfillment and gives them reach they may otherwise
1:40.4	never have dreamed of. But in return, Amazon tries to turn them into commodities for the sake of making prices
1:47.6	as low as possible.
1:49.6	Given that something like two-fifth of all e-commerce in the US touches Amazon, you can
1:54.7	see why some referred to them as being this empire that dominates the universe.
2:00.1	Yet Shopify enables any small business anywhere
2:03.3	in the world to have its own all-in-one platform for managing operations and professionally overseeing
	...

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