Tobi Lütke did not set out to build one of the most important technology companies in the world.
He set out to sell snowboards.
He was a 22-year-old German programmer living in his girlfriend’s parents’ house in Ottawa, couldn’t get a work permit, and decided the only logical move was to build an online store from scratch. When he couldn’t find software that did what he needed, he wrote it himself. When other people started asking if they could use it, he and his co-founder looked at each other and said: skateboards or software?
They picked software. Today, more than a trillion dollars in sales have flowed through Shopify.
I talked to Tobi a few years ago on How I Built This, and here are a few things I learned from our conversation:
Tobi needed an online store for snowboards. The software to build one didn’t really exist in 2004, at least not in any form that matched what he had in mind. He wanted to tell stories around products, wrap good writing around the things he was selling, break away from what he called “the Sears catalog metaphor.” So he built it himself, in a programming language he loved, working sixteen hours a day out of Ottawa coffee shops.
Within a season, other people were emailing him asking if they could license the software for their own stores. They had seen Snow Devil and wanted whatever was powering it. Tobi had built something for a problem he personally understood, which meant he’d built it right. The snowboard business was the vehicle. The software was the destination. He just didn’t know it yet.
Tobi moved to Canada for Fiona. He couldn’t get a work permit. A lawyer told him he could start a business, but he couldn’t take a job. That narrow legal window, which at the time felt like a frustration, turned out to be the thing that put him on the right road. If he had been able to take the job he was offered, he almost certainly would have. The snowboard business, and everything that followed, would never have happened.
He talks about this without romanticizing it. He was anxious. He knew he had valuable skills as a programmer and was hoping, in his words, that he kind of didn’t have to use them for a big company. The constraint gave him the push he needed. Most of us spend our energy trying to eliminate constraints. Tobi’s story is a useful reminder that the walls we run into sometimes point us toward the door.
Tobi described the experience of running Shopify as existing in two states: total confidence that the company was going to be unstoppable, and complete dread that it was dead by morning. He said those states never went away entirely. What changed was the frequency. Early on, he might spend a month in one state, then a month in the other. Eventually it compressed to a week, then a day. By the time I talked to him, he told me it could flip three times before breakfast.
That is a more honest description of what it feels like to build a company than almost anything I’ve heard on this show. Most founders perform confidence in public. Tobi just described the actual experience, which is that the dread is always there, the confidence is always there, and your job is to keep moving regardless of which one is louder that morning.
When Lehman Brothers collapsed in 2008, Tobi had just returned from Silicon Valley with term sheets that were worth less than the paper they were printed on. Every VC who had been interested pulled back. He was running out of money. He thought the company was finished.
Instead, Shopify’s user numbers started climbing. People who had just lost their jobs reached for the one thing they could control: starting something of their own. The financial crisis, which had killed the investment pipeline, had simultaneously created an enormous wave of first-time entrepreneurs who needed exactly what Shopify provided. Tobi had not predicted this. He had been preparing to figure out how to tell his team he couldn’t make payroll. By 2009, the company hit cash-flow neutral for the first time. The recession that was supposed to end Shopify turned out to be its inflection point.
When Tobi arrived in Silicon Valley in 2008 on a used bicycle he’d bought on Craigslist, staying in a youth hostel bunk bed, he had no deck, no financial model, and no idea what terms like CAC ratio or lifetime value meant. When VCs asked him questions he couldn’t answer, he wrote down the terms, went back to his hostel, looked them up, pulled the data from Shopify’s database, did the math, and came back to the next meeting with the answer.
He told his investors the same thing from the beginning: I’m not going to pretend I know things I don’t know. That honesty, combined with his obvious willingness to learn quickly, turned out to be more compelling than a polished pitch from someone who had rehearsed all the right answers. Benchmark and Sequoia both offered him term sheets. He credits the relationship he built with his investors partly to that early transparency. They were all, as he put it, on the same side of the table.
Tobi Lütke raised his first outside money from his father-in-law, who was a government bureaucrat putting his life savings into what Tobi himself described as a money bonfire. He lived in his in-laws’ house for thirteen years, long after Shopify had raised $100 million in venture capital. He was paying himself minimum wage while building one of the most consequential technology companies of the last two decades.
Every 52 seconds, somewhere in the world, someone gets their first sale through Shopify. Tobi says that number is the company’s north star, the thing that tells him whether the work is still worth doing.
He remembered the day he got his first order. He had to walk home from the coffee shop to tell his co-founder because he didn’t have a cell phone. He still talks about it like it happened last week.
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German programmer Tobias Lütke just wanted to sell snowboards online. But every piece of available software was either clunky, expensive, or… both.
So Tobias did what programmers do: he built his own solution from scratch.
The snowboard business was fine, but something unexpected started happening. Other online merchants kept asking about his e-commerce platform – could they license it for their own stores?
And in that moment, Tobias realized he had accidentally solved a much bigger problem than snowboard retail…
So, in 2006 they made the pivot that would define their careers: they launched Shopify and got out of the snowboard business entirely.
What started as a side project to sell winter gear became the foundation for millions of online stores worldwide.
Today, Shopify is a publicly-traded company with thousands of employees and billions in revenue, powering everyone from small artisans to major brands.
Revisit this incredible episode on the latest How I Built This!
This week on the Advice Line, I’m joined by Christina Tosi, founder of Milk Bar. Christina recently stepped down as CEO to focus on the creative side. Her take: the biggest opportunity for Milk Bar is showing up in unexpected places, and growing the brand’s spirit matters more than just driving revenue.
First up, Whitney: How do I close a funding gap when investors aren’t biting?
Whitney’s Beau Collective is a fitness hub where locals exercise, socialize, and shop. She’s been running it for 10 years, and now has ambitions to expand. She’s trying to complete a bridge round… but struggling to align with investors. Christina and I both pushed back on the premise: there might be more creative paths to growth that don’t involve institutional capital at all.
Next, Chloe: When your product serves three different markets, which one do you build around?
Chloe’s Cotton Clara makes beginner-friendly craft kits, and is on track for $1.2M this year. The brand appeals to crafters, gift-buyers, and the wellness crowd, but Chloe isn’t sure which persona to prioritize. Christina offered a reframe: when you’re stuck between two options… find a third door.
Finally, Christy: How do you turn a one-time gift into a repeat customer?
Christy’s Vashon Island Coffee Dust makes ultra-fine spice blends you dust on your coffee, a clean alternative to syrups and sweeteners. Many customers discover the product as a gift, then start buying for themselves. We zeroed in on the gifting experience itself… and whether the unboxing moment is doing enough work.
Christina leaves us with this: By year three to five, you know your business better than anyone.
Stay open and curious, but don’t shortchange what you inherently know.
If you would like to be featured on an upcoming episode, call and leave a 1-minute message at 1-800-433-1298 or send a voice memo to hibt@id.wondery.com
What happens when the world’s greatest tag player learns his secret moves from a FISH?!
In this episode, we become sports commentators for the World Series of Tag, where reigning champion “The Trumpeteer” uses an incredible technique called “the stalking horse” to sneak up on his opponents!
But here’s the bonkerballs part… this move is based on real science from trumpet fish, who are super long and skinny and would totally scare away their prey if they approached head-on. So instead, these clever fish hide behind bigger parrotfish, sneak up close, then POP out and pounce on their dinner!
Tune in to discover how underwater hunting tactics became the ultimate tag championship strategy!
Christina Tosi had trained at culinary school and honed her pastry skills in high-end New York restaurants… but she was tired of making precious desserts for precious diners.
What she really wanted was to recreate the unfussy, nostalgic treats from her childhood. The kind of desserts that made people smile before they even took a bite.
So in 2008, Christina opened the first Milk Bar in the East Village.
Her creations were wonderfully weird: cereal milk soft serve, compost cookies loaded with potato chips and pretzels, and birthday cake truffles that tasted like childhood celebrations.
These weren’t refined French pastries, they were playful, messy, and unapologetically American.
The response was immediate and intense. People started calling from around the country, begging for her gooey crack pies and confetti birthday cakes.
What Christina had tapped into wasn’t just nostalgia, it was permission to enjoy desserts that were fun rather than sophisticated.
What do you want more or less of?
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