Tobi Lütke’s leadership playbook: Playing infinite games, operating from first principles, and maximizing human potential (founder and CEO of Shopify)

Lenny's Podcast: Product | Growth | Career

Lenny Rachitsky

Technology, Business, Entrepreneurship

5 • 1.5K Ratings

🗓️ 2 February 2025

⏱️ 102 minutes

🔗️ Recording | iTunes | RSS

🧾️ Download transcript

Summary

Tobi Lütke is the founder and CEO of Shopify, a $130 billion business that powers over 10% of all U.S. e-commerce. Starting as a snowboard shop in 2004, Shopify has become the leading commerce platform by consistently approaching problems differently. Tobi remains deeply technical, frequently coding alongside his team, and is known for his unique approach to leadership, product development, and company building. In our conversation, we discuss:

• Why complexity kills entrepreneurship

• How to develop and leverage your unique talent stack

• How specifically Tobi approaches thinking from first principles

• The importance of focusing on unquantifiable qualities like joy and delight

• Why Tobi works backward from a 100-year vision

• Why metrics should support decisions, not make them

• The power of following your curiosity

• What Tobi believes it takes to be a great product leader

• Much more

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Find the transcript at: https://www.lennysnewsletter.com/p/tobi-lutkes-leadership-playbook

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Where to find Tobi Lütke:

• X: https://x.com/tobi

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

• Website: https://tobi.lutke.com/

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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) Welcome and introduction

(04:17) The Tobi tornado

(07:10) Maximizing human potential

(11:05) Education and personal growth

(16:47) Operating without KPIs

(25:00) First-principles thinking

(40:04) Remote work

(45:59) Why Tobi never stopped coding

(54:46) Embracing disagreement

(01:01:27) The 100-year vision

(01:09:29) Balancing tactics and positioning

(01:17:15) Encouraging entrepreneurship

(01:19:34) The power of good UX

(01:28:42) The talent stack and unique opportunities

(01:34:30) The role of passion in product development

(01:36:39) Final thoughts and farewell

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Referenced:

• How Shopify builds a high-intensity culture | Farhan Thawar (VP and Head of Eng): https://www.lennysnewsletter.com/p/how-shopify-builds-a-high-intensity-culture-farhan-thawar

• 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): https://www.lennysnewsletter.com/p/shopifys-growth-archie-abrams

• The ultimate guide to performance marketing | Timothy Davis (Shopify): https://www.lennysnewsletter.com/p/performance-marketing-timothy-davis

• Brandon Chu on building product at Shopify, how writing changed the trajectory of his career, the habits that make you a great PM, pros and cons of being a platform PM, how Shopify got through Covid: https://www.lennysnewsletter.com/p/brandon-chu-on-what-its-like-to-build

• IRC: https://en.wikipedia.org/wiki/IRC

• Goodhart’s law: https://en.wikipedia.org/wiki/Goodhart%27s_law

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

• How Shopify builds product: https://www.lennysnewsletter.com/p/how-shopify-builds-product

• The Last Dance on Netflix: https://www.netflix.com/title/80203144

• Autoregressive Models for Natural Language Processing: https://medium.com/@zaiinn440/autoregressive-models-for-natural-language-processing-b95e5f933e1f

• Archimedean property: https://en.wikipedia.org/wiki/Archimedean_property

• Tabula rasa: https://en.wikipedia.org/wiki/Tabula_rasa

• Daniel Weinand on LinkedIn: https://www.linkedin.com/in/danielweinand/

• World of Warcraft: https://worldofwarcraft.blizzard.com

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

• Monorepo: https://en.wikipedia.org/wiki/Monorepo

• The Sarbanes Oxley Act: https://sarbanes-oxley-act.com/

• Shopify builds Shopify Balance with Stripe to give small businesses an easier way to manage money: https://stripe.com/customers/shopify

• Stanford marshmallow experiment: https://en.wikipedia.org/wiki/Stanford_marshmallow_experiment

• Brian Armstrong on LinkedIn: https://www.linkedin.com/in/barmstrong/

• We are the Web: https://link.wired.com/public/32945405

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Recommended books:

• Finite and Infinite Games: https://www.amazon.com/Finite-Infinite-Games-James-Carse/dp/1476731713

• The Infinite Game: https://www.amazon.com/Infinite-Game-Simon-Sinek/dp/073521350X/

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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	Your podcast is a podcast by a builder for other builders.
0:04.3	Here's the most interesting question I think people can ask builders.
0:08.1	What is your energy source?
0:10.4	My energy source is dissatisfaction with status quo.
0:13.5	Like, so many books are about technology leading to dystopia.
0:16.6	Like, no one who really thinks about this would want to be born into the world 20 years before today.
0:21.6	I think today is the dystopia of the future.
0:23.6	It behooves us to try to build the kinds of powers that lead in towards progress.
0:27.6	There's a couple quotes along these lines I've seen that describe the way you think about this stuff.
0:31.6	If most people are doing it a certain way, I by default don't want to do it that way.
0:34.6	There's an aesthetic in the world that exists, which is that business people dress in
0:39.4	suit and tie.
0:40.6	They are speaking much more sophisticated than I do, usually without an accent.
0:44.7	They usually have a stick and show dramatically at the chart that is behind them.
0:48.8	How much is that aesthetic overlap with outperformance?
0:53.0	Passimism sounds extremely sophisticated.
0:55.7	Optimism always sounds dumb, or at least naive.
0:58.4	The most powerful, unquantifiable things in the world of business are fun and delight.
1:04.6	I don't know of any other company that operates where the founder has this 100-year vision
1:08.8	of where the product needs to go and working backwards from that. I talk about look in the future and then think backwards a lot, right? Like,
1:15.3	it's like, what would we want to have done 20 years ago on this? We have very long-term plans. At 100
1:21.6	years, you can't talk about this of software product, but you can't talk about the mission itself.
	...

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