Harley Finkelstein: President of Shopify

Episode 301

Harley Finkelstein believes that entrepreneurship is the greatest equalizer on the planet. And he should know! Not only has this serial entrepreneur helped to scale Shopify from its earliest days, but he has also witnessed many entrepreneurs who have worked to build and scale their businesses on the Shopify platform successfully. From Harley’s earliest days of running Store #137 on the Shopify platform to being the President of a public company and the world’s #1 ecommerce platform, the stories and the lessons shared are incredible. He also lets us all in on what is working for DTC retailers. Harley’s no nonsense, authentic spirit is sure to keep you wanting more. So much to get excited about on this episode of #TheKaraGoldinShow.

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Kara Goldin 0:00
I am unwilling to give up that I will start over from scratch as many times as it takes to get where I want to be I want to be, you just want to make sure you will get knocked down. But just make sure you don’t get knocked down knocked out. So your only choice should be go focus on what you can control control control. Hi, everyone and welcome to the Kara Goldin show. Join me each week for inspiring conversations with some of the world’s greatest leaders. We’ll talk with founders, entrepreneurs, CEOs, and really some of the most interesting people of our time. Can’t wait to get started. Let’s go. Let’s go. Hi, everyone. It’s Kara Goldin from the Kara Goldin show. And I am so so thrilled to have my next guest. Here we have Harley Finkelstein, who is the president of Shopify. And he’s also an amazing, amazing entrepreneur. He’s also an attorney. And in addition to being the president of Shopify, not acting attorney, I guess, but way back when. And he founded his first company at age 17, while a student at McGill, and then he went on to law school. And Harley is not the founder of Shopify, but join them super, super early. In fact, he was store 137 And soon joined the team at Shopify full time to help them build it into the world’s number one e commerce platform. And in 2021, the Shopify ecosystem generated AI through my research was 440 billion in economic value, is that correct? Crazy, crazy. And I can’t wait to hear more about his journey as an entrepreneur and really helping to scale Shopify to become what it is today. So welcome, Harley.

Harley Finkelstein 1:50
Thank you for having me. This is a real honor to be on your show. Well,

Kara Goldin 1:53
thank you. And as I mentioned to you, I’m such a huge fan of you. I’ve seen a few of your interviews, and I’m was really, really excited to get connected with you. And obviously, super excited about Shopify, we’ve hynt has been partnered with Shopify for quite some time. And prior to getting on Shopify, I was I sort of grew up and direct to consumer from my AOL days. So I’ve watched what you guys have built at Shopify, and been very, very excited by everything.

Harley Finkelstein 2:24
Thank you for saying that. It’s interesting, because obviously, you know, great Shopify merchant, but also, I think, at least in the early days of Hence, my recollection, is that one of your main demographics was, you know, tech entrepreneurs. Yeah, that there was like this. I don’t know if it was meant to be the case. But like tech entrepreneurs sort of embraced it. And, and I am curious, I mean, definitely, hopefully, we can talk with this. But like, wow, that even happen, because that is sort of like such an interesting demographic to have your product be loved by, I’ll tell

Kara Goldin 2:52
you really quickly, really, really short story. I mean, we ended up getting into Google very, very early, I think it was 2006. And they did not have beverages. They did not have refrigerators, or micro kitchens. And I was meeting with a guy on Meet cortizone, who was there. And I knew him from my previous role. And he worked with my husband actually at Netscape. And he thought it was super fun what we were doing, and we were starting a beverage company thought it was crazy. Like, why why are you guys doing this? You’re both in tech, why in the world? And he said, you know, we just hired chefs, because there’s not enough restaurants around our home office. And so maybe they need some water. So we got connected with Charlie and the chef and and the rest. And

Harley Finkelstein 3:39
then I guess, as every Google employee left, as they often do, to go do their own thing, or start new companies or go work at other companies. They obviously would request Hey, I’d like to get some more

Kara Goldin 3:48
water. Yeah. And I think like, I mean, this is sort of the lesson learned along the way, too. I think we said yes, more than No. So those employees would have their own startup, there’d be three people, they just wanted us to come and deliver. We didn’t have the minimums. And we just said, you know, sure, we’ll do it. And so sometimes they’d have me delivering it in my Grand Cherokee. Sometimes they’d have other people. And I’m sure you have moments like that too, in the early days of Shopify, where you just have to figure it out. And you have to get into the nitty gritty and just say yes, more than now. And that’s how you end up getting these relationships and building sort of the superstar companies.

Harley Finkelstein 4:30
Yeah. Although a lot of those yeses I find in the early days, at least you think they’re free, and then you find out much later, they’re not free because you’ve basically committed yourself to something that maybe you shouldn’t commit to yourself. And so I think every entrepreneur needs to say yes, a lot more than know when they’re just getting started, but at a certain point, there needs to be some, you know, some scaffolding or some, you know, some some barriers around kind of your your directions. Make sure you don’t go off course the amount of people that have asked us at Shopify to build, you know, restaurants Software, where to build software for the service industry is probably in the 1000s or 10s of 1000s requests. And so when you know enough people ask you to build like restaurant software, you begin to think about it. And then you begin to think, well, maybe maybe it’s just a small extension, Shopify, I think, had we started to build the restaurant software years ago, we probably would not be, you know, 10% of all ecommerce today, and be, you know, be as dominant as we are. So there’s sort of that that fine balance between say, yes, because you’re ambitious, and you want new opportunities, but also making sure you stick you stay somewhat focused.

Kara Goldin 5:33
Yeah, no, absolutely. And I think it’s the one thing that I’ll add to that, is that having to tell people that we’re actually going to charge for delivery now, it’s like, wait, what, you know, that there’s definitely expectation

Harley Finkelstein 5:46
management is funny, like,

Kara Goldin 5:48
right, right, exactly. So let’s start at the beginning of your career, and just get some background on this. So I would imagine that you were always tinkering with entrepreneurship. And at 17, you started your first company, but give me a little taste of kind of what you were doing.

Harley Finkelstein 6:05
Yeah, I mean, I’d always been tinkering with entrepreneurship, but not for I think the reason that most people that I think most people start as entrepreneurs to solve some big problem, and that was my case, for me, I was just trying to solve my own problems. And it turned out that entrepreneurship, this tool called entrepreneurship was a really, really great tool for that. When I was 13 years old, I was living in Canada, which is where I was born, I moved to South Florida a little bit later, but grew up in Canada. And when you’re 13, and you’re Jewish, like I am, you end up going to a lot of barn Bar Mitzvahs. And every Friday or every Saturday night, I go to this bar mitzvahs. And by far, the coolest people, there were these DJs, who were getting the crowd to like, you know, do a conga line. And they were playing amazing music. And they were just, they were fundamentally modifying the energy of the room, almost on a every three minutes, energy would change. And they were doing it with their voice, and through music selection, and through lighting. And it just seemed like magic to me. And so I just, I really, really want to be a DJ, not because I cared about music. But because DJs to me seemed at that time like like magicians, and because I didn’t have any DJ skills when I was 13. And I looked like I was 10 years old. I want to be a DJ, no one would hire me. And so my dad had the suggestion that I should hire myself and start my own DJ company. And I ended up DJing like 500 bar and Bar Mitzvahs between ages 13 and 18, or 19. But we’re really the rubber really hit the road from and entrepreneurship was when I was 13. After that sort of Bar Mitzvah period, we moved down to South Florida and went to high school there. I came back to Canada to go to McGill in 2001 was 17, you had 911 happened, you had like this crazy market recent happen. And my parents lost everything. And I was sort of once again reminded that a great way for me to solve this problem, which was my parents have no money, I want to I want to support myself, I want to my dad had left for a while. And I want to support my mom and two much younger sisters, that I would use this tool called entrepreneurship one more time. And so I did a friend of mine told me that McGill University, I think the quote was, I think he said they’re like they buy about $25,000 a year worth of promotional T shirts that say McGill on the on the front. And I thought that was a cool business because Montreal iconically had been in historically had been a very, very good place to have had a very large apparel industry or schmatta business. And so ended up starting to make T shirts for McGill. And then that turned into McGill. And Concordia then eventually turned into another school in Halifax, another school in BC. And by the end of undergrad, my little business was making T shirts for like, you know, over 40 Canadian universities. And, and again, I wasn’t necessarily passionate about T shirts per se. But I did love the fact that this tool called entrepreneurship was a way to me to solve problems as they came about. And actually, my grandmother, who’s 90 years old, I had dinner with her this past weekend. She lives in Montreal, we live in Ontario, I did with my grandmother this past weekend. And she showed me a business card. And the business card says Harley Finkelstein, food critic, and I couldn’t remember why I would make business cards. It’s an food critic. And she told me that when I was 15, or 16 years old, I wanted to go to these restaurants that were like, you know, kind of fancy and they would never let me in because I looked like I was a kid and I’d have very much money. And so I created these like fake business cards that said I was a food critic, and I would go and give it to them. And I completely forgot about this. And my grandmother actually gave me the business card and just says it says best of the best food critic Harley Finkelstein so you got a meals and I actually I don’t I don’t even think I worked anywhere. But but there was a lot of cuts but audacity there from an early age but entrepreneurship for me was was this tool that I can pull out anytime I want to solve a problem. And the reason just to sort of we can go back a bit of time to the early days of Shopify, but just to fast forward till today. The reason that I feel so privileged and so excited and and grateful that I’m able to lead Shopify and have been doing I’ve been doing so for but a third of my life so far is that Shopify fundamentally, is the entrepreneurship company, the entire mission of the company is to increase the surface area of entrepreneurship around the world. And the reason that that is the Venn diagram overlap of like my personal mission and my professional mission are completely aligned in the overlap area that the Venn diagram overlap is Shopify, because I just I think entrepreneurship is the greatest equalizer.

Kara Goldin 10:24
So you went on to law school a few years later. So McGill and then law school. So the T Shirt Company was at age 17, right. And then after law school store 137 was what?

Harley Finkelstein 10:39
So I moved from Montreal to Ottawa, to go to law school. The rationale or the objective of law school was not to become a lawyer, I know your husband’s a lawyer as well. But actually, I went to law school because I want to be a better entrepreneur. And a mentor of mine convinced me that one of the best things I can do to sharpen up some of my entrepreneurship skills, was law school. And he talked about the law school would do things for me, like it would help me write better. And it would help me with critical reasoning. And it helped me with debates. And it helped me, you know, be able to read a lot more but pull out the one or two sentences that is of critical value. And I thought that that was very compelling. I was 21 at the time when I finished undergrad, and I made this t shirt business that I had, it was making some money, but it wasn’t good. It wasn’t as world changing company. And so I ended up moving to Ottawa to go to law school. That’s where my mentor was teaching law at the time, and ended up meeting Toby, who is the founder of Shopify, he just moved here a year or two earlier from Germany couldn’t get a job because he was new immigrants. But he was able to start a business. And so when he moved here from Germany to Canada ended up selling snowboards on the on the internet, couldn’t find good software is a pretty well known story now but couldn’t find good software. So wrote his own piece of software to sell the snowboards. And then people started asking him if they can use the software to sell their own products. And I was one of those people in law school turned up the t shirt business that I built an undergrad and McGill wasn’t scaling very well, in undergrad, I didn’t have to go to class. And so I was able to show up face to face, you know, at the University of British Columbia, or Dalhousie University or University of Montreal, and I was able to sell them in person in undergrad, you know, showing up for the exam was all that really mattered in law school, it was quite different. Attendance mattered. And so I was actually forced to show up to class, which meant that I needed a different type of business model. I needed a business in law school that would run concurrently, while I was in class. And the wholesale, you know, sales cycle in person sales model just didn’t work for me, I really needed to build something that would run concurrently and would run virtually. And so after meeting Toby and hearing about his story of of building this great piece of software to sell things online, I ended up becoming one of the first users of it. And I built a direct to consumer licensed t shirt business. We sold Batman T shirts and Spider Man T shirts. And we didn’t have the global rights to because we couldn’t afford it. But we had limited rights. So we had rights to particular graphics, particular logos for particular geographies. And simply by leveraging Google AdWords and figuring out who the great bloggers were on the topics of comic book characters and, and superheroes, we were able to build a really great online business that most importantly made money while I was in class, and that was my introduction to Shopify in 2006.

Kara Goldin 13:27
So how did it come up? Or what drew you into actually joining Shopify then

Harley Finkelstein 13:32
I knew after law school, I went to Toronto to practice law for 10 months just to give it a shot just to see what it was like. And I hated it. It was the worst experience of my life. I wasn’t at some big fancy law firm. I wasn’t at a small law firm. It’s a sort of a midsize firm. It was a good firm. And they did good business. It was a sort of corporate commercial firm. But it just it was boring. And it was boring not because of the work itself, it was boring, because it felt that there was no room for ambition, it felt there was no room for creativity. The work was incredibly regimented. The work was very much, you know, connect the dots, step one, step two, step three, step four, you’re done. And the work allocated to you was proportionate to the amount of time you’ve been at the law firm, or your your years of call. So if you’re a third year lawyer, that were given to you was a third year lawyer. And it just what I always valued about entrepreneurship was this idea that it was more meritocratic than almost anything else, meaning, it didn’t matter. You know, who your mom or dad were, What’s your last name wasn’t matter how much money you had. What mattered fundamentally for entrepreneurship, to me, at least was, how much value are you adding. And if you were adding sufficient amount of value, you were going to be successful. That was not the case in law in the law firm environment. And so, but four months in, I started calling Toby and telling him that I really would love to join him. And at the time, there were just a handful of others, mostly engineers, and and helped build out this thing into a real business. And so I, you know, after, I guess harassing him enough, he said, you know, come join us and that was that was late 2009, early 2010.

Kara Goldin 15:07
And so when you joined, what was your role,

Harley Finkelstein 15:10
I was Jack of all, I mean, yeah, I was a sort of swiss army knife, I was, we didn’t have a CFO, we didn’t have a CMO, we didn’t really have much it was it was a bunch of really, really smart people who were building really elegant, very smart software. And my job was to drum up business. And it was to tell the world about what we were doing. And it was the kind of help on everything related to, you know, the commercial side of things. I was also the lawyer, because I was, by that point, I was officially, quote unquote, a lawyer, I was called to the bar. And so my job was like, just like entrepreneurship, find ways to add value. And, and I loved it, it was amazing. I mean, there was no, there were no KPIs, or MPOs, or whatever you want to call it there. No, you know, I didn’t necessarily have a particular thing to focus on. But what it gave me was a deep understanding of every aspect of the business, because when you play the role of a Swiss army knife, you have to spend time in every department. So I deeply understood what the designers wanted. And I understood the developers want and understand what the product people want. And I understood what the support reps wanted. And, and so it gave me this great foundation, which even today that I think I use, and I utilize every every hour of the day to understand how to make Shopify better. But in those days, there wasn’t, you know, the roles were add value. And, and the idea of swimlanes was ridiculous, because we were all kind of playing water polo together.

Kara Goldin 16:33
I love that story. Well, and I love talking to people who were at companies, whether they’re a founder, or not really early, because there’s a consistent thread amongst them that they just kind of did everything I shared the story, when I was in the early days of direct to consumer at America Online and, and wanted to get a bookseller and ended up going to Jeff Bezos, he was just this little guy was definitely in third, or maybe even fourth or fifth place amongst booksellers. And he’s told me, the only way he could meet with me is if I’d help them build bookshelves, and he had gotten the, you know, the poles, the plastic poles that you put together from Home Depot, and I said, Jeff, could probably still build a bookshelf. Amazing today. And I think, you know, what you’ve described as your curiosity allowed you to sort of be able to do everything in the company, or learn how to do everything in the company. And I think that that’s a really, really valuable thing to have around a company at every stage. But as you grow, to be able to really understand what these roles are. So So Shopify is a public company. And we mentioned this in the intro, but in 2021, the Shopify ecosystem generated 440 billion in economic value. Amazing, crazy, crazy. Obviously, Shopify benefited greatly from the pandemic, I felt like that was a time when everybody if they weren’t setting up their direct to consumer play, they were definitely behind the eight ball and probably trying to figure out does anyone know Harley? And can anyone help me? You know, figure this thing out? What are your predictions now for commerce direct to consumer overall, as people are starting to, hopefully go out and start getting some normalcy? I mean, do you think it’s going to slow What do you see out there right now?

Harley Finkelstein 18:32
Yeah, well, a couple things that, you know, when the pandemic hit, call it March 2020, or so, suddenly, a neighborhood of like 12 to 14% of all retail was done online, the rest was done offline. And overnight with, you know, shelter in place orders and stay at home orders, every physical retail had to be shut down. And so those that were prepared, those retailers, those brands, those merchants that had an online component, they simply activated that, and the next day was, you know, it was still difficult for them, but they had a new channel to sell to those that didn’t have an online store, in many cases rushed to Shopify, just to open up that online store, and they really focused on it. Well, now that things are reopening, again, I think what you’re seeing is you’re sort of seeing a rebalancing of everything. But there is one big change, the big change is that those that opened up online stores during the pandemic, now that the pandemic is, you know, towards the end of it, I think, I think most would agree on that. They’re not shutting down their online stores. Now they have two channels, they are by their very nature, a multi channel business, and that gives them a huge opportunity. And so, you know, many people talk about whether or not the pandemic you know, created 10 years or two years or one year worth of acceleration in in in E commerce over three months. I think it’s the wrong the wrong lens to view this app with the pandemic fundamentally did was it reminded every business that They need to be able to serve customers, however, and wherever those customers want to make the purchase. So every single surface area where consumers are spending their time, and if this was 300 years ago, you know, the place where every retailer, every merchant sold was the town square, because that’s where consumers spent their time. Whereas now, sort of in the end of the pandemic, period, consumers are in store, they’re online or in person. They’re on social media platforms are on marketplaces, they’re at farmer’s markets are everywhere. And so the brands I think that want that are going to be the most successful, will one have a deep understanding of who their customers are deep empathy for my customer looks like this, my future customer may look like that. And I’m going to make sure, however, and wherever they want to buy, there is an easy way for them to make the purchase. That’s the first thing. The second thing is, I think this concept of direct to consumer, which, frankly, you’ve been talking about longer than anyone has. It is not a fat anymore. It is now stay state, it is the way retail used to be done. Going back to my example, the town square 300 years ago, the baker sold their own bread, the cobbler sold their own shoes. There was no intermediation, it was only until 1876 or so. When watermakers department stores John Wanamaker opened up his store in Philadelphia, where he began to put a bunch of different brands from different manufacturers under one roof. And so began the era of intermediaries or intermediation. And that’s where you sort of have these department stores all blow up and, and get big. And, frankly, for the last, you know, 150 years, that’s kind of what retail is done. But then in the early 90s, you began to see this reemergence of direct to consumer with the advent of E commerce and and online shopping, and then people were skeptical, are we gonna go back to E commerce or we’re gonna or is it gonna be DTC? Is there space for retail and resellers. And fundamentally, one, I think direct to consumer will will be steady state, you’ll see more and more brands decide that that’s how they want to transact with their end consumer. But the second thing is, there’s also going to be room for wonderful retailers who curate who sell other people’s products, but they have to add value. So a great example is my favorite hoodie is blue salt. Blue salts is amazing. I think they make them the nicest, sort of machine washable, sort of cashmere stuff. They’re awesome. Great. Lindsey Benson is the founder and CEO mazing entrepreneur, I buy my stuff directly from Lindy directly from Blue sock because their online store is amazing. But if she were to sell her product, at a third party retailer, at a Neiman Marcus or a Nordstrom or a Barney’s or a Bergdorf or something, if I walked in there, and I saw it, but that particular clerk at that store, that particular store started showing me you know, some sort of like this hoodie versus that one. Maybe they introduced me to new versions of this hoodie, they showed me new product extensions, if you bought this hoodie, look at this t shirt as well, if that retailer that was reselling blue salt on Linda’s behalf was adding more value than I would be getting if I went direct on the online store. I’d be okay with that, too. What I’m not okay with however, is going to one of these, you know, third party websites where they’re selling blue salt, and buying blue salt, at the same level of or at the same or less level of engagement and service because I prefer to give all of the money directly to the maker. So that’s a long answer short question. If future retail one is retail everywhere, I think the brands that understand this will be most successful. And you’re seeing me even you know, the folks over at Joey and Tim over and Allbirds great entrepreneurs Allbirds is massive success story built entirely on Shopify, by the way, like just really exceptional story, great direct to consumer, but they’re also selling Nordstroms now, and that’s a great thing for them, because it means that they can introduce Allbirds to people that might not otherwise walk into their store in Soho, or stumble on their online store. So I think retail everywhere is going to happen. I think more and more of these brands are going to be omni channel and I think eventually, we will stop talking about omni channel because it’s gonna be like talking about the color television, every business that is successful will fundamentally be omni channel and it may be two channels may be online and in store or maybe nine channels and they may be selling on Spotify, they may be selling also on Tik Tok, maybe something also on Google Shopping. And maybe at the back of an Uber at some point, we put a screen and that turns into a virtual shopping mall to we’re gonna be more channel agnostic. And we’re going to be far less concerned of how to buy as consumers we’re just going to buy however is most convenient for us.

Kara Goldin 24:35
Yeah, definitely. Well, I think there’s a couple of things that you said, first of all, I think the consumer since the pandemic is more in control of where they’re going to purchase things. So if you’re not online, I think everybody woke up and said, Oh, wait, I I’m out of stock and stores stores are closed and so therefore I can’t sell anything. And so that really sort of opened up a whole A topic that I’ve been talking about for years that they’ll just forget about you, and they’ll walk away because they’re not going into those stores. But then I think that the other piece that you mentioned is the data. And I think that that’s the piece that so many people are not really digging into. They’re figuring out, okay, I’m doing pretty well. I’m spending, you know, X in order to do this and it’s working or it’s not working. But what we figured out at him was that we have Hinton, lots of retailers, big box, you know, club, all of that. But they’re buying from our direct to consumer store, but then they’re also going into Costco. As long as we have a different item

Harley Finkelstein 25:44
and a Costco you’ll have different items. You’ll also have, you’ll have bulk. Yep. Right, you will have to buy more quantity. There was a reason for me to buy hint in Costco versus online direct. And the data piece is really important. I’ll give you I don’t know if I should be sharing this, but I will anyway, my anniversary is next week, October 13. My ninth year wedding anniversary is coming up. Congrats. Thank you. I love my wife very much. She is the greatest thing in my life, or along with my children, I should say. And her favorite jewelry brand is called Stephanie Gottlieb. Stephanie Gottlieb is an amazing jewelry designer. She’s on Instagram, but she has a beautiful online store. I think she also has a physical location, New York City I’ve never been every year around this time, I get an email from Stephanie Gottlieb. And it says, hey, don’t forget your anniversary is coming up. I told her that one time, six years ago. And I look like the husband of the year every year because I mean, one like I like one, Stephanie tells me what Lindsey has purchased or what I bought for Lindsay in the past. She also knows what else Lindsay has purchased. So once she’s reminding me that it’s my anniversary, because she has the information, it’s easily available to she knows what I bought last year, she also knows my wife has purchased. So she gives me a product recommendation that is so rich, and so interesting that it makes it easy for me to be like to buy the best gift ever. As long as Stephanie Gottlieb and her team continue to do that I’m gonna continue to buy from them. And what we’re talking about here is not difficult. The information is all in her CRM, which is built into Shopify, you know, it’s like, it’s free for $29 a month to get that information. And all she’s doing is being more proactive about it. In the sort of intro of this call, before we started recording, you talked about my little T side hustle, which is Firebelly t, what I started doing is, every time I get a notification that I have a return customer from the Shopify admin, I just send them an email and say thank you, I noticed that you’ve you’ve purchased multiple times. Now, I don’t ask for anything in return. I don’t I don’t sell them anything. There’s no coupon code, I just say thank you. And I’m able to do that in literally a matter of seconds. Because Shopify already feeds it to me, often that email that I send out, turns my relationship from one of transactional from a brand to a consumer into more of like, oh, my, this is like, like, it’s cool that the the owner, the founder of the store, messaged me, and it’s one line, thank you for buying multiple times, if you bought once great if you bought more than once, I know you liked my product. And that means so much to me. And the amount of low hanging fruit that exists in retail and commerce and entrepreneurship, doing the exact same thing that I’m doing and Stephanie Gottlieb is doing, and you obviously been doing for a long time. That is incredible.

Kara Goldin 28:24
Totally. I mean, it’s hard for people who don’t own their own store, like if you’re selling to a Costco, for example. But I think what you’re talking about too, is getting that relationship with the consumer and trying to tie that together and measure it. And it definitely is happening right now. That’s my prediction for the future. I think more and more people will be focusing on the data even more so than they are now. So we’re coming up on Black Friday, Cyber Monday, what are some of the key things that you see that people should be getting ready to do?

Harley Finkelstein 28:55
First of all, I think it’s starting. I mean, I feel like every year we say this, but it just keeps starting earlier and earlier. And that’s a good thing. What it means is you can build up real momentum. And the brands that I watch carefully, who I think do Black Friday, Cyber Monday really well. Brands like Jim shark, for example, brands like Bombus Tommy, John underwear, these are the brands that I watched because I think they’re just like, they’re so good at this stuff. Yeah, you know, our mutual friend Nick Sharma, for example. He’s he built festivals for Mr. For Mr. Beast, who’s like the biggest YouTuber on the planet. Watching brands like that. See what they’re doing is always so inspiring. And so, you know, one of the things that Jim shark did, I think a year or two ago is during Black Friday, their store went black, you couldn’t buy anything. And you’re like, Well, why would they do that? Like, that’s so weird. They wouldn’t take advantage. Well, what they were doing is they were just building up this anticipation, and then the Tuesday or the Saturday they opened it up again, this again, this is not for everyone. But going back to what I said earlier, this is where it’s really important to have a deep understanding who you’re selling to, and for the job I’m sure our customers, they love this type of gimmicks. They love those types of marketing deployments. So one is I think, you know, look at a bunch of stores you admire and see what they’re doing. You have to take their ideas, but you may be influenced or you may be inspired by what they’re doing. That’s first. Second is, as I said, starting much, much earlier, what are you going to do in anticipation of this holiday season? The third thing is people are become rather obsessed with shipping and logistics and delivery, I think as consumers. And we actually have a we have Shopify logistics now, which which we want to make it so that merchants on Shopify never have to think about logistics, it just, it’s done really easily. Where we’re most people I think, get it wrong, however, is that they assume that what every consumer is looking for is one day, free shipping. And that is just not the case, the numbers do not support that. What consumers really want is they want to be able to properly anticipate when the product is coming to them. They want to know if I work today, is it going to be here before the weekend, it’s Monday today is going to be here before the week is I want to use it on the weekend, that matters more than whether I get it in 24 hours. Now, if you’re you know, Instacart or DoorDash, timing probably does matter if I need, you know, toothpaste and around a toothpaste I probably need to get within the hour. But other than that, if you’re talking about products, a lot of the products we’re talking about on this on this episode, anticipation matters more than speed. And I think that’s something that a lot of brands don’t get. Maybe the last one I would say is this idea of like cross border, I think that a lot of brands don’t have a really good way of this Batman back to the empathy piece of understanding who their customers are from their national perspective. There are way way too many businesses and brands who have a one size fits all, when it comes to selling. And we actually we have a product called Shopify markets, which which helps with this, which is if you’re selling to, if you’re a Canadian Tea Company, and you want to sell to Germany, of course, it has to be translated, that’s obvious. But also the way that most Germans purchase is different. For example, the payment options, you have to you should have a debit card option simply because the proclivity to use debit cards is much higher there than it would be in a place like the US where credit cards are dominant. If you want to sell to India, cash on delivery is gonna be a lot more prevalent. So understanding not just who you are as a brand, your mission, your culture, but also understanding who you’re selling to, and how they want to purchase is also really important. Those are some of the things that sort of in anticipation of Black Friday, Cyber Monday, I would be thinking that as entrepreneur, from a from a macro perspective, I think for the last year or so you saw shift the reason that I think, you know, Costco and some of the discount retailers, that’s such a big, you know, really 2022 From a business perspective, sales perspective, was consumers sort of shifted back to more staples and necessities, things I need. And I think now, one of things you’re seeing whether it’s with the airlines, or with travel and hotels, the hotels, you’re seeing a shift back to a healthier balance, when what do I need? What do I want. And I think this Black Friday, Cyber Monday will be the first official, healthy Black Friday, Cyber Monday, in the last three years since pandemic started. And I think you’re going to see more people buying things they really love and really care about, as opposed to what I think we saw last year, which was mostly staples. Are you

Kara Goldin 33:22
seeing any categories in particular that are way down?

Harley Finkelstein 33:26
I know everyone sort of thinks the home office setup was big last year and down now I’m not seeing that as well. So that that’s not the case. I mean, I think athleisure had a really, really big moment during Black Friday, Cyber Monday. But I think now that people are not working at home anymore, because they want to be out of the house. They’re working out in gyms and yoga studios, that’s still working really well. It feels like some of the items like during the pandemic, you know, we’re all sort of building up our home offices here. I bought a bunch of like, bare bricks, and there’s some cars over there, building up these things in our in our, in our space and art that we love. And I think there was sort of an inclination that maybe that was gonna go away as people left and went back to offices, and I still think those are doing really, really well. I think that people like we’re introduced to new artists and new art to new forms of decoration to the pandemic. And I think that’s long lasting. What do I mean, Cosmetics has always done very well this time of year, I think it’ll do exceptionally well, apparel. You know, we see brands, for example, that like qith some of these collaborations are getting so interesting. I mean, Kitt is one of my favorite brands on the planet. And a week or two ago, they did a collaboration with Jerry Seinfeld. I mean, Jerry Seinfeld has done two collaborations. His entire life. The first one was very famously American Express where they created the blocker this interion card for him. I think he made a joke stories like he made a joke about it and they made it. His second one is with Kith this week kids is doing a collaboration with BMW. There’s sort of this interesting Daniel Arsham is doing when my favorite artists is doing collaboration with cars. Hold on, which makes like sinks like, like sinks and toilets. Yeah, there’s this really interesting collision right now between content and commerce and brand. And I think I’m here for it. I think it’s, it’s from a consumer perspective, it’s a really interesting time to observe these things. In fact, going back to John Wanamaker in 1876, I think that retail got really boring for a long, long time. You know, in the last 10 years, the most exciting thing was like every retailer, physical retailer, brought in a DJ, some of them that was a good idea. Most of them had no business bringing in a DJ, it didn’t fit their brand. Every other retailer brought in a coffee shop, some should have coffee shops, most should not it doesn’t fit their brand. But now it feels like there’s a return to a uniqueness and a deep understanding of my identity. Mike, my brand speaks for this. Therefore, here’s what I’m going to do. And you know, Palace skateboard, when I favorite brands, in their stores, they have halfpipe because it skateboard brand, they should have a half pipe. But the gap or Old Navy should not have half pipe, they should have something different. They should have, you know, like a play structure for kids, because a lot of parents go there with their children. So understanding that stuff, I think is going to make for a richer retail experience.

Kara Goldin 36:08
Well, and I think you also touched on the limited editions and scarcity is okay, we’ve seen it with lots of different brands, but when they run out, you know, you’ve got a land grab, right that goes on. I mean, we’ve definitely seen it with smash ups on with hints where we’ll throw two flavors together. And we say when it’s gone, it’s gone. And I mean, we can literally calculate when that’s going to happen. So I think that that is, that’s definitely a trend that I think is here to stay you touch on logistics, because I think Logistics is such a hot button for people. And definitely during the pandemic, you as a merchant, you thought that you were getting stuff delivered in the next couple of days. And then I don’t know it’d be lost in some UPS or FedEx warehouse somewhere, and you wouldn’t get it for a couple of weeks. What do you see happening with like, last mile delivery, and obviously, Amazon’s gotten into that business. But do you think that that’s something that you guys might get into or

Harley Finkelstein 37:10
our version, our version has been different, we don’t think we need to do everything ourselves. So for example, we have as part of logistics, we have something called SFM Shopify fulfillment network, where we have these distribution centers, fulfillment centers all over the US, the vast majority of we don’t own their third parties. What we do own is we build software in which to put them all on a network. So you as a consumer, you as a merchant, you can place your products anywhere, and every time an order comes in on your Shopify store, it triggers that logistics center to ship out your products on your behalf. Our goal, our vision for logistics, is not to go after this like one day free shipping, it’s to make it so that every small business and every medium sized business can offer the same type of anticipation of package delivery that the large companies provide. We don’t have to own it ourselves. We think by partnering with them. And using software, we can make it so that you as a merchant, you as a brand, you just don’t have to think about it. Yeah. And that is actually we think the real value to our entire logistics, you know, solution. It’s not to sort of compete with one, you know, one logistics company versus other. It’s so that when you use Shopify, you don’t have to think about that in the same way that we do Shopify, you don’t have to think about you know, whether or not you know, you don’t think about negotiating your rates on credit card trend payments, or your merchant account will do that on your behalf. You don’t have to think about capital if you need capital, after certain amount of sales go through we can we can pretty much underwrite you on our own. And we can give you capital, you don’t have to think about moving from online store an offline store, you can just activate the point of sale channel, more and more. Running a business, whether it’s a beverage company or a tea company or software company, we all get cut off and having to do a lot of things that isn’t really in our core competencies. And so more and more or trying to do is if you make amazing mugs, like my friends at Ember, which make this amazing month, it’s always at 148 degrees, I believe, which is like my favorite temperature to drink coffee and tape. Focus on making the best mugs that stay warm or stay cold, depending on what you’re drinking. Let us focus on everything else. And we think we can do a really good job of that. But we don’t need to own it all ourselves, we can do so in a way that is very much asset light, but leverages technology.

Kara Goldin 39:21
People always think that successful entrepreneurs just wave their magic wand and it all just kind of happened. I mean, Harley knew exactly what was gonna happen here. And everything turned out perfect. No hard times no failures along the way. But we all know that that really isn’t true. So I always ask when was a time when you just really felt like I’m in trouble. We’ve got some hard stuff going on. It’s gonna be really hard to dig our way out of it and what lessons did you learn from the experience?

Harley Finkelstein 39:55
You’re You’re right. I mean, Kara, every great entrepreneur that I know we come on these shows and And these podcasts and do these media things, and we talk about our successes, but we often don’t talk about the failures. And it’s great that you actually ask these questions. After when I was an undergrad after the teacher business or to do well, I began to think that like, I could do no harm that I was a really great entrepreneur. And turns out, I was not. I mean, I was okay entrepreneur, and I’ve gotten better over the years, but I had a slipper company that failed miserably. And I had a poker chip company that failed miserably, and I had a watch Winder company, it failed miserably. A lot of what the failures teach us is it becomes the asset on the things that are successful. One that’s a little more personal for me is, you know, before when, when we, when Lindsey and I, my wife, and I had our first child, we used to go on walks around her neighborhood here in Ottawa, and there was no ice cream shop. And we always just go for coffee and look next to the coffee shop and say, We wish there’s an ice cream shop here. And there wasn’t. So eventually, Lindsay, and my wife and I decided that we should think about starting an ice cream business, and it was her business, I shouldn’t take any credit for she decided she was gonna start, I’m just gonna kind of help her out. And I remember when the ice cream business started to take off, I was like, Hey, we should open up two and three shops. And I was like, we should do maybe five shops or franchises thing. And I remember she said to me, like, I just want to have this one ice cream shop. And the reason I raised this is because what I had to understand was, everyone’s motivation for starting something is very, very different. For me, Shopify is a very personal pursuit, even though it’s a big, you know, multibillion dollar company with a tent with 10,000 people that work with us. It’s very personal to me. For her the ice cream shop was also very personal. But it wasn’t personal from a scale perspective, or an ambition perspective is personal, because she wanted to gift this coffee shop business to the community see this ice cream shop business to the community, she wanted people to have ice cream, delicious ice cream, and they went on walks. And it just reminded me that one, we should talk about our failures more often because it allows us allows other people to learn from those failures. And, and, and there should be more commentary about the things that that didn’t work out. But to even in terms of my own marriage, where I’ve where I have failed is where I thought I was helping Lindsay and expanding her ice cream business. And it turned out I wasn’t I was causing her far more stress. And actually, during the pandemic, we shut down the ice cream shop. And it was everything was getting shut down. And then as things began to reopen, she basically she’s like, Look, she’s a psychotherapist, by trade, she’s like, I want to go back to being a psychotherapist. And I want to focus on children and, and help children with therapy. And, and so one of the things I’m trying to get better at is one, thinking about as I’ve gone through my journey, what have been the things that have helped me one of the things that I’ve that have hurt me, and a lot of things that have helped me along my journey has been a lot of those failures. But the second thing is, there are times where people start these things, because they’re ambitious, and because they they’re hungry, and they want more and they want to make money or they want to build a and they’re oftentimes where the pursuit of that entrepreneurial venture is simply about a gift to the community for a period of time. And I hope that even you know, Shopify is obviously has been amazing and has changed my life and change my family’s life, my wife and I’s life. However, we still like to take risks, the reason why we start these tea companies, and it’s the reason why, you know, we’ve invested a bunch of beverage companies that we love, and are these are entities beverage companies going to be, you know, as big as hint, probably not. However, it is our way of voting with our wallets, that we want this these things to exist in the world, we want to it’s our way of voting and saying we want more of these entrepreneurs to start and to scale. And we’re fortunate that we can do that now. But, you know, my path has certainly been paved with way more failures than success. And that goes both for the business that I’ve created. But also even in terms of the way that I show up as a husband.

Kara Goldin 43:53
I love that. And it’s very much in sync with what I tell people as well that I know many people who have one store, and they’re quite happy, right? Or they just do one thing. They’ve never raised money, they make plenty of money. And they want to know if they should expand, right? They want to we need

Harley Finkelstein 44:12
to celebrate that as much as we celebrate the IPO totally. And

Kara Goldin 44:16
I think more and more, you’re giving people an opportunity to be able to expand but also expand in their comfort zone when they just want to be living in that world but also maybe a little bit uncomfortable, but something that is manageable for them that they aren’t going to be the happiest.

Harley Finkelstein 44:36
I’ll finish with this Kara, one of the happiest entrepreneurs I know. And there are more than 2 million stores on Shopify. So I know I don’t know all 2 million but I know a lot of them. The happiest entrepreneurs I know his name is Mike D. He makes Mike DS barbecue sauce. Anyone that loves barbecue sauce, you should look it up and he makes the world’s best barbecue sauce out of North Carolina. And the reason he’s so happy is because his small barbecue sauce company has allowed him to quit a job he didn’t like to focus on something he loves, which is sharing his incredible Mike these barbecue sauce with the world. And he is truly as thoughtful and mindful and happy and content and whatever adjective you want to use, there he is doing his life’s work selling barbecue sauce. And if he sells more one year, great, if he doesn’t, that’s okay, too. Because fundamentally, what he’s trying to do is he wants to be able to put food on his table in a way that makes him truly happy. And making barbecue sauce and sharing with the world is the way to do and that goes back to sort of we talked at the beginning of the of this conversation, which is the reason I think entrepreneurship is so amazing. It’s not because, you know, it’s a great way to make lots of money, although it can do that, too, are a great way to, you know, share something with everyone in the world, which can do that, too. It’s because it’s it’s one of the best ways for human beings to self actualize. And there and there are, this is a very contemporary idea, because if you think about entrepreneurship, 20 years ago, 40 years ago, 60 years ago, most people couldn’t become entrepreneurs, because simply it was too expensive. And the one thing that we’ve done in the last 10 years, 15 years, not just because of Shopify, although you know, we’ve played a bit of a role in that. But others, we’ve made it so that entrepreneurship, maybe for the first time ever is actually accessible. And that accessibility of entrepreneurship means that more people can participate. And I think that’s an amazing thing.

Kara Goldin 46:25
No, absolutely. Well, I could talk to you for another hour. I mean, there’s so much good stuff they can do. We’ll have to have you back for sure. Thank you again, and we will have lots of links in the show notes as well that share a little bit more about some of the brands that Harley mentioned too. So we’d love to have them on as well.

Harley Finkelstein 46:46
I’d love that to be I’m sure they’d love it. Thank you, Carrie, this is this is great. And thank you for being such an incredible proponent and supporter of entrepreneurs around the world it is we need more people doing this and you’re doing it so well.

Kara Goldin 46:57
Thanks all for listening to this episode. We hope you enjoyed it. And I want to thank all of our guests and our sponsors. And finally, our listeners keep the great comments coming in. And one final plug if you have not read or listened to my book undaunted, please do so you will hear all about my journey, including founding, scaling and building the company that I founded. Hint we are here every Monday, Wednesday and Friday. Thanks everyone for listening and goodbye for now. Before we sign off, I want to talk to you about fear. People like to talk about fearless leaders. But achieving big goals isn’t about fearlessness. Successful leaders recognize their fears and decide to deal with them head on in order to move forward. This is where my new book undaunted comes in. This book is designed for anyone who wants to succeed in the face of fear, overcome doubts and live a little undaunted. Order your copy today at undaunted, the book.com and learn how to look your doubts and doubters in the eye and achieve your dreams. For a limited time. You’ll also receive a free case of hint water. Do you have a question for me or want to nominate an innovator to spotlight send me a tweet at Kara Goldin and let me know. And if you liked what you heard, please leave me a review on Apple podcasts. You can also follow along with me on Facebook, Instagram, Twitter and LinkedIn at Kara Goldin. Thanks for listening