#118 with Harley Finkelstein (Shopify's President) - Why You Should Drop Out Of School and Start a Shopify Store

u yeah i feel like i could rule world i know i could be what i want to put at all in it like a days off on a travel never looking back alright we are here we're live harley what's going on sean how are you i'm doing great hey sean hey sam good too good to be here we're gonna get the intros in a second apologies if my internet is gonna suck i i'm recruiting this guy who lives in philly to be a writer at my company and i'm currently living in new york but like he was like you know i'm not sure so i just got in a car and i went and rented a hotel for two days and i just showed up at his house and i was like to recruit him and convince him to join my company and so that's kinda why i'm at hotel i used to do i i used to do fake trips by the way to seattle like just fate like i i i had to be seattle be in town yeah so i i'll just be in town and and actually the person that runs ecosystem is probably the greatest leader i've ever recruited came from one of those meetings where every year for like three years i would just happen to be in seattle and we'd happen at breakfast and eventually he's like i'm ready to jump ship so i get it yeah so i did one of those trips and i booked the hotel for two nights because i was like if you didn't say yes the first day i'm for sure here the second day so i'm gonna show up again totally so we're here the trick is if you can get the the partner a significant other out with you to the dinner it's you know it's a done deal because it i used to talk did that's what we did you do that yeah he's so i talked to scott harrison who's a he's a c cofounder of charity water and his big thing was he's like trying to recruit world class talent to come working in a profit and he's like how do you convince somebody to leave their you know million dollar job at at google and like you know come work for one tenth of that for me and like save the world and so i used to he'd always be in san francisco we'd catch up and i'd be like what are you in town for and it's always that he's like i'm taking you know the person i want and their husband or wife out to dinner and i'm gonna tell him you know to steve jobs line of like you know stop selling sugar water and let's you know come change the world and it's pretty effective i gotta say he was closing a lot of good people it works i mean the key to this whole model is is you have to be so long term right if you're gonna be at a company or you're gonna your business for only a year or two you can plant those type of seeds but when you sort of use a ten year or to be honest do i i use a hundred year horizon on most stuff we do a shopify most stuff do personally which i know sounds extreme but it's a good lens to use you begin to say it doesn't matter if don't close this person or get this person for a year or two or three at some point this may work itself out and and and it it it it always does and so we should explain so harley you are the big dog over at at shopify i think that's the official job title that some people call you the coo how long have you been there so you said you're taking a long term view when did you join shopify yeah so i joined shopify eleven years ago i was one of shopify first merchants i i was born in montreal in canada grew up in south florida and moved to montreal to go to mcgill when i was seventeen that was two thousand one frankly the world you know went sideways in september two thousand one mark stock markets crash and my parents lost everything and i sort of became an accidental entrepreneur through that process i wanna support myself and want to help my parents and sort of shirt business started making teachers universities a mentor of my convinced me to go to law school not to become a lawyer but to become a better entrepreneur he his hypothesis was that it would provide me he'd be like finishing school for entrepreneurship teach me to write how to think how to be more articulate and he happened to be teaching a law at the university of ottawa in two thousand and five and so i applied to one single law school who was ottawa and moved to the university of ottawa and had no friends or family here in town started to look for the entrepreneurs hung out met toby he was transitioning from being a snow board entrepreneur to being a software entrepreneur and i ended up opening one of the first stores on shopify in two thousand six and that was a t shirt shop i a t shirt shop yeah licensed t shirt shop and i finished law school i made made some money with a teacher shop helped my mom and sisters and support of my family and then in two thousand nine i was practicing law in toronto for all of ten months and hated it that was the worst thing ever and i called toby and i asked him if i can come join him and and and a couple others mostly engineers and sort of was the first non engineer at the company and i'm i'm now actually the the president of shopify and has been it's been like like seven days ago like a second ago yeah just just congratulations changes thank you and it's been it's been the ride of of a lifetime and frankly it's what's needed and i'm sure i know you guys talk a lot about this but my my my mission my personal mission and my sort of professional mission are exactly the same i think entrepreneurship is the greatest tool for freedom and for independence in the world and it was out of touch for for most people for very very long time and shopify if i tries to level the playing field so anyone can do it and on a personal level my wife and i are both entrepreneurs we also try to do that as well so it is it's it's it's truly my life's work what what how how into the is it toby right that's the founder name yeah toby how into how far along was he into the business when you worked we started with them full time about three or four years do you know how and like in terms of in terms of employees any number you can get sub sub fifteen or you know certainly sub twenty and it was mostly the the the interesting story was so toby had moved to canada because hem met a girl a good reason to move from germany to canada and when you move to canada i think it's the same the us as a new immigrant you can't just get a job you don't have any working papers there's you're missing the the the documents to actually get a get hired a real job get hired but someone had told him that okay you can't get a job but you can totally start your own business and so being in canada he decided he was sort of snow shop and this is two thousand four in two thousand four there were two ways to sell something on the internet the first way was you put her on a marketplace like an ebay or a an sc etsy or amazon i don't know if amazon was doing third party sellers at that point but you can use another person's marketplace and it was very inexpensive to do that but you effectively rented customers from those marketplaces so you didn't really build your own brand you're own business the other way was you'd go to gs commerce you ever those companies or high or company like at g mag gen you go to these big enterprise companies and for like a million bucks you'd build an online store he didn't have that kind of money but he was also one of the ruby core members building ruby rails with people like d and some others and he ended up falling in love with reuben rails and deciding to build a piece of software to sell these snow boards and that was two thousand and four and by two thousand six it was clear as a clear day that the snow business was a good idea but the software business was a great idea and that's around the time where i met him and he started enabling or allowing others to use the software to be start their own businesses and and i joined a couple years after that and when you when you joined like an early company like that oftentimes there's like not like a clearly defined role especially if you're in a non engineer it's like hey there's a bunch of shit that we need done and it's a little bit of this and a little bit of that what is that how was at that time was it kind of i i actually the the advice or the the insight i give to folks who are thinking of starting early stage company who don't necessarily have we're not an engineer or a designer or product manager or something like that is just make yourself as valuable as possible forget everything you think you are just find ways to add volumes yeah and i was i was technically a lawyer i had built a number of of businesses both online and offline and i we didn't have a cfo then we had no cmo then i remember within a couple of months of joining we raised our first our series a it was from be best light it was a seven million dollar round and i think it was a twenty five million dollar per year post i can't remember but i was like look i'm gonna figure out a way to like help raise this series i'm gonna figure out what what what that means how what that takes i was you know furiously you know looking up what is a liquidation preference it turns out it's a pretty important thing to know what what it is but that was it was it was really it was just add as much value as possibly could and it was only much later when we hired you know cfo and a chief marketing officer that it became clear where i want to spend my time which really was both on the storytelling side of shop like make sure the world knows what that shopify exists so on the growth side on the on on the you know p side of things but also internally focus on a commercialization which is for me now and things like our growth team our sales team and got to build a shopify platform which is cool on shopify plus and i've just got to do some really neat things so i i the other day i was reading because be who invested they have this memo that they put out they put out a bunch of the historical memos of like what they said at the time they invested and these are read is something that sean's obsessed with he'll go back and read like the yeah the founding letter of ebay or something like he love or like i'm like an but like instead of dinosaurs its businesses idea about this like marketplace what do you think right so so i dug up the fossils here they you know they put it out there which is pretty easy but it's there's really interesting things i wanted do to ask your opinion on so so like you said they invested you know the series a and they put this little chart on their memo if you wanna say it just go to b p dot com slash memos and they say you know what are the possible exit scenarios so they'll say like you know it could be a zero you know if they burn through cash and they manage it and they can't return you know the money they gave it a twelve percent chance of of a zero outcome and then they gave it you know a twenty eight percent chance of a fifty million dollar outcome and at the top of the range they had was a four hundred million dollar exit they thought would take six years and they thought there's a three percent chance that they can that they can reach this mark and you know looking at it right now shopify market cap is one hundred and twenty what basically hundred and thirty billion dollars and so exceeded you know even the their grand scenario was four hundred million a a hundred thirty billion is sort of like out of the you know it's out of this world compared to what they were expecting and i think this goes to show that even really smart savvy investors who have seen many many deals those are some of the best guys in the business right best the best team those like that's the next level team exactly and so you know our ability to forecast and project these category leaders in growing markets is is so so poor and in fact in some ways what you did i think was a much better way to guide your intuition right to just follow your intuition which is like hey i've had this problem before i use this thing i think more people are gonna have this problem let me jump right in and just see with how much value we can create it out of this and that that was for me sort of my own sort of holy shit moment when i when i when i realized a shopify if i was something much more than a software company was when i moved from undergrad when when i moved from from montreal to auto would go to law school undergrad as you all know you don't have to show for class right you can just check for the exam you passed all good and that worked great for me because i was know i running a t shirt business and i spent all my waking hours running this little this little business law school uses this graphic method and you're required to actually be there so the t shirt business the wholesale business just in scale properly and so i needed a way to make money concurrently while in class without having a lead class and the the the moment where i i had some relationships in the teacher industry because of the the wholesale business and i set up this little online stores called sm which was a nickname of of a law school buddy of mine this was sort of in the zappos days where we all sort of people were creating business names and brands that were kind of random words that really meant nothing so smoother seemed fitting and i remember sitting in tax law class and i wasn't an engineer i had very little experience at that point in in digital retailer retail in general and i was able to build a store and my biggest competitor after a couple of weeks was walmart canada and it was great i made some money i was able to pay tuition and my my might you know help help the family but the fact that i as a twenty one year old lawsuit student was able to build a company sitting in class that competed against the largest one of the largest retailers on the planet at that that that time that felt incredibly different that felt like giving people with ambition these incredible superpower these magical tools in which they can go and take their to their ambition and turn in something really really big and if i was able to do that and i was able to create independence freedom quote success for myself wouldn't it be great if we can do this at scale for at that point thinking of a million merchants which we have now we wear a million merchants that would have been crazy but i thought hey if we get us to ten thousand people this would be so unbelievable and what would happen if anyone who had a product or an idea or a craft or a hobby was able to commercial that thing and take it to a global audience what what would that look like and i don't think the the be letter memo was was wrong by any means but at that point the total addressable market for people that needed an online store was very small that's the first thing second of all the shopify product was fundamentally an online store builder we were effectively cms with a check we had some bells and whistles but it was it was mostly just you know an online store builder and if you sort of fast forward till today the relationship that shopify has with the million or more brands on shopify some are you know a lot of small brands but also some really big ones the gym sharks and all birds and ba and tommy me john underwear of the world and sc bicycles and nestle and and and pro and gamble the relationship we have with them is is that of we are their work when someone says they're going to work in the morning and they're on shopify what they mean is they open up the shopify dashboard and the relationship we have with them today is we've given out over a billion dollars of capital so we're their banks in some cases we have we help them with shipping and fulfillment we help them with payments we help them with physical commerce as as as well as online commerce and so there was no way to predict where shopify was going unless you were inside a shopify where you were able to visualize or extrapolate oh wait a second we can be more than just online commerce we can be a retail operating system we can also help with capital and shipping and fulfillment also the addressable market is gonna be more than just the people currently looking for online stores it's anyone that has ambition or it's anyone that wants to wants a piece of software that makes more money than it costs and i think for that reason it'd be very difficult to to predict something like shopify ten years ago well how big did you like let's say five years into your journey you you joined in two thousand nine you said two thousand ten yeah two thousand ten two thousand thirteen do you remember your there let's say your thirty year in your fourth year in do you remember your revenue i don't it's not not off offhand i mean it was it was sub probably hundred million at that point or maybe close to that oh well that's great yeah it'll be we we we i mean i certainly knew we're onto to something i i sort of always had the you know the twinkle in my eye that hey there this is something really really special with you guys were doing a hundred million in revenue in year four it's probably it's probably less than i know the exact average but so one cool thing with this memo is it has it for those earlier years so o nine o eight zero nine basically and it looks like o eight was like a million dollars sales revenue o nine two and a half million and then twenty ten predicted was five million at that yeah so it's definitely sub hundred million so i'm not even close to that point but but you guys weren't struggling right we we struggling i mean i did not know i mean i i thought there was huge potential to this thing but like any early stage start there is a sense of is this thing gonna completely did you sell along the way not much no i i mean i i may have done very small secondary just to be able to afford a house when i got married yeah but beyond that no amazing and and i think that is a great question to ask because it does show sort of the confidence you have the business so yes there was some traction and yes we began to see the people were being successful but it was actually watching stores that started on shopify around their mom's kitchen table that grew to be i remember there's a company out of san francisco called do case do you guys remember dod it was like this beautiful leather bound ipad case and they started with us early you know at some point in twenty ten and then obama took a photo of of of him holding his ipad with a dod case and i remember thinking like this is a company they make a great product but what we have done is we've even we've enabled them to distribute it at scale and and and including to the president united states and i remember thinking that this is real now it is real that it it's not just a place to sell a product for a limited period of time or some sort of promotional product but this actually enables more people to try their hand an entrepreneurship and again it wasn't like you couldn't do it you could sell on an ebay or you can sell a product you know you can build a start magenta but it was just out of reach for so many people so then the amount of people back in two thousand thirteen who self identified as entrepreneurs was so damn low and it wasn't because they weren't ambitious it was because they're just the tools just did not exist sam there's this dope quote that i think toby said that i think is like one of the you know like does it involve brussels yes you you've heard this one so i was gonna say the exact same thing i'm not gonna steal your thunder but let me preface by saying harley got this like beautiful pc inspirational way of describing like we're gonna empower these people the best description of shopify was described exactly how sean's is about to explain it which i i thought you guys wouldn't want like to it but it is the best way i thought it amazing basically he's there's a quote that he said where he was like you know amazon wants to build a giant empire and at shopify we wanna arm the rebels which is basically like you know give give each of the individual merchants the tools and abilities to to sell and have great shops on their own rather than become the one big mega shop of the world and i thought that way would be would be really boring right i i think it's consumers you know one of the major things that i'm i'm seeing now in retail sort of in in kind of a a pandemic is one the obvious the obvious thing which is that we've had like eight or ten years worth of acceleration in digital commerce as a percentage of total commerce in the last like six months so we've gone from like fifteen percent of of commerce to total retail to like twenty five percent okay that's cool that's neat but the bigger thing that i'm watching is consumers globally have unequivocally began to vote with their wallets to buy from independent businesses whenever possible and that's those are the rebels and it's not that those rebels didn't exist it's that now if you are a business you you know let's say you make the beautiful jewelry for your family and you decide this morning in the shower i'm gonna start a business today and sell this jewelry the fact that you can give consumers the same one click check would experience at amazon does you can offer really affordable shipping for two day shipping you can get pricing on payments and late shipping labels that is similar to what the big guys are getting that is only happening because of this arming the rebels thing and and what really has happened is that shopify if you pretend for a second that we are a retailer we're not pretend for second are we are the second largest retailer online retailer in america after amazon the difference is that number three number four number five that's like walmart dot com target all these other retailers they take those economies to scale and keeping them for themselves whereas because we're a platform and because we're trying to arm the rebels we actually can distribute all those economies of scale to entrepreneurs so that today starting on shopify you effectively get the same rates on all these things you need on your business that the big companies were able to afford and you get a day one and that is the idea of army in the rebels that is how you leveled the playing field ultimately were you guys just sitting around hanging out brainstorming and you came up with that stick or did someone break it to or did you read it that's a beautiful is that like an ad agency you know hundred million dollar retainer by no no we're we are we you're so we are so not that company we don't believe in in ad agencies i i i don't know where where it came from but it certainly is resonating and sticking and the truth is the the rebels are winning like i think i think the greatest you know workout gear right now is jim shark i think the most comfortable pair of shoes i have is all birds i think maybe two information the best underwear is tommy john like the stuff that i love not because they're on shopify but because i think as a consumer i like high quality products they're all independent businesses aka rebels so it isn't like i'm i'm supporting them from this philanthropic charitable angle i'm supporting them and i'm buying them because they have the best stuff and i think that is that is really great so let's let's actually go down that path and you mentioned something earlier about sc bikes i like sc bikes because it's like a classic american brand one of my favorite entrepreneurs sam z bought it and i don't actually know if he still owns it but he's a real estate guy and it's super interesting if you had fifty million dollars to buy a brand right now and and and put them on shopify what would you do who would you buy or invest in if you can what about day mh so i'm speaking personally now right yeah you harley i'm trying to think of some of the worst experiences i've ever had online shopping so here's the cool part of the sc story to to your point about a but sam or you know whoever owns it now sam i i think the reason i love the sc story is because sc bicycles is a great brand it's like iconic people that have sc bicycles loves from bicycles but it took you know decades to convince them to go direct to consumer it took them it took a pandemic to convince them to finally decide to create a beautiful direct to consumer online store on shopify in the first week of covid hitting i remember hines ketchup up set up a store in shopify to do direct to consumer in home condiments insight i think it's called hines at home lynn chocolate did the same thing snickers did the same thing as well i think pepsi did it too yeah i mean pep we've had pepsi c pepsi c brands on shopify for a while la potato chips i think you guys did like a snacks dot com or something similar that yeah i remember exactly what what what the domain was but the idea that these brands are are now going to direct to consumer is great and also kinda weird why have they not been direct to consumer go back two hundred and fifty years think about the way that consumers purchased first of all as a consumer the way the place you went to buy was the place where people congregate so the town square in a small town if you bought bread you bought bread from the baker and if you bought shoes you bought from the cobb there was no intermediary there and then in eighteen seventy six in philadelphia a guy named john wanna maker created this concept called a department store just called wanna maker's department store and it was the first time that a bunch of different brands and a bunch of different products were all sold in the same roof and it was a big store in philadelphia which is i think where you are right now right yeah and i'm i'm sure there's some wanna make her street there as well as the wanna make her mile you know the one that's probably where wanna make her store was and after that happened after wanna make her department store launched you you effectively had this period of something in neighborhood like a hundred and thirty years of incredible inter mediation where you had reseller of all other people's products and i think the reason you had that was because distribution was difficult so if you were do you guys have know boosted board skateboard company were boosted board and you wanted to get your hands into your products into the hands of of consumers you had to put that into a store like a best buy because best buy had stores all over the country all over the world and that's saved you did distribution but then as the late nineties and early two thousand came around the internet completely democrat and comm distribution everyone had distribution and so you would have expected very quickly everyone that was being sold through an intermediary would have very quickly moved towards direct to consumer and for the most part a lot of them did but but there were so many lag and some of our favorite brands the brands that frankly are iconic just did not take that road quick enough so the fact that sc did that now and the fact that others have followed its suit that to me is is amazing i just i i wish that happened more a lot more quickly and now what happens when i see brands that are so am going to direct to consumer but i know that i wanna purchase particularly a fourteen or fifteen hundred dollar bicycle let me buy the thing how could it be so difficult to buy for me to spend a fifteen hundred dollars bike let me think the brands that i think are okay my favorite my my my favorite t shirt in the world and is he's a friend so he's probably gonna hear this but my favorite t shirt in in the world is james purse i think james makes the greatest t shirts ever and you can buy it off james purse dot com and it's okay experience i think it could be ten times better if they were on shopify they don't have accelerated check it they don't allow me to use shop pay which you've ever used shop pay it's like the greatest way to purchase something online or apple pay they don't allow me to do three d or ar fit fittings that is a brand personally that i would i would put money into and if james needed my money i would put money into there that would be one a second one would be i i think there's incredible direct i think there's incredible amount of of demand right now especially for high end wine online and it is almost impossible some because of regulation but some just because of frankly laziness for these great wine brands to go direct to consumer i don't know why that's taking so damn long probably the next one i would say would be i i think buying apple's is one thing but buying electronics online i don't know where to buy it from i don't know exactly where i'm gonna get the breast price or value i don't know who's gonna send to me fastest that to me creates confusion amongst consumers confusion is bad which which which category of electronics well i mean we talked earlier but my my setup if i wanna buy a new dslr sony camera right now i would love to just go to sony and buy it but i can't i i can't go to sony i have to go to all these different stores and all of them at different pricing and all of them are gonna ship at different rates but as a consumer it creates a lot of it it creates a lot of confusion and frankly i may just end up not buying it at all and that to me is is is is quite ridiculous yeah i like that there's there's this theory of business that's like you know business goes to two trends it's bundling and un and so and what you described about like shopping there's basically that where it was you know initially un bundled got bundled into a department store has begun has begun to become un bundled on on the internet again as you know the retailers basically have to direct relations with their customers but then there's also you know still at the same time there's amazon right and i think that one of the key trends here was being able to reach your customers through essentially facebook ads and and and draw them to your website otherwise you know how the hell will they know that you exist and so i mean that was kind of a key can give me your favorite retail experience right physical online physical retail experience my favorite physical retail experiences is when i walk into a store and walking in they know my size they know that i'm walking in they have things ready for me doesn't have be high end even it can even the low end store that just has you know cool socks and knows that these are the socks i always love one of the reasons that i'm not surprised to see massive closures from big physical retailers especially those that did not have their own brands is because i stopped adding value why do i have to walk into barney to buy a james per shirt when i can buy it directly from james purse i would do it and i would allow barney to share in the profit margin if they're adding some additional value to me so maybe it's education maybe they've curated something that i wouldn't have seen before maybe they help me you know find products and brands i would otherwise see but if they're just gonna sell the same thing i can get directly from the brand itself they don't deserve the profit margin and i think consumers have voted against that which is why we see so many iconic department stores closed down the company jim shark is fascinating to me and and everything that we're gonna say the cool thing about british companies is even if they're private they have to reveal the revenue if they do above twenty million dollars i think in revenue like you can go to companies house dot com or something like that and look at australia yeah and it's it's great and jim shark was like crazy profitable given how fast they're were growing and that they were like selling hard goods which is is rare besides jim sharp which companies have you seen where you're like oh my gosh and if i wasn't doing this or if i had like a young friend and i wanted to tell to go and start this business where you've just seen the margins and you're like wow this is this is shocking how good this is yeah so first of all i think i think so ben francis is the founder of is as as a friend and i'm i i know that story well because like i i i remember when ben started that business and i've watched it grow i've had a a a very close view to that business and the truth is the reason that business is so great is because one they have high quality products and two they have a deep understanding with their customer bases they're not if you if you look at jim sc influencer program and you look at another company's you know a bigger company that's more established influencer program it's totally different one feels transactional and one feels like a real relationship and you can see that i mean even inside a jim shark the ratio from influencer reps to the influencer is very very small because there's intimate relationship and so anyone that is promoting gyms shark on social media has a deep connection to gyms shark they know ben they've spoken to ben they've talked about products that are coming out and and i think they've done it in in a much better way you know one company that doesn't get a lot of doesn't get enough attention but it's an amazing business is fashion nova if you know that that that business yep so richard sort of fashion nova at of los angeles fashion nova has done such a great job to the extent that if you look at fashion right now and you go there tomorrow the inventory turnover is massive it's mostly made in in los angeles and the way that they've created this sort of hyper hyper fast fashion is remarkable and fashion nova is a company that frankly is is is as as prominent as any the major fashion houses and and richard just started it in a very different compelling way i think a lot of the influencers that end up starting businesses whether it's kylie cosmetics or it's jeffrey star who both started you know had had lives before their shopify stores what people don't understand is actually how great of a business those folks have they are not selling promotional products drake o store it's not a promotional product the yee store is not a promotional product and i think the the public in general views a lot of these kylie cosmetic things is oh it's just a brand extension no it's not it's someone that deeply understands who deeply understands that space in her case it's cosmetics or a jeff star he was doing makeup jo for you know for years on youtube and decided i can make a better product than i'm currently using from sephora and then they go ahead and they produce it they manufacture they design they sell themselves and so i i they i i find a lot of those types of businesses they get some attention they're on the front page of fortune people really think it's cool but i think once you actually go a level a level deeper it's incredibly impressive what they've done and then you can keep going you can look at you know what tom has done with with tommy john underwear or the all bird store what joey is done at all birds i mean these are companies that if if let's actually it's a a good place to to pause in this if michael jordan started the jordan brand today he would own a hundred percent of it just like yee does just like drake owns o just like kylie owns own kylie cosmetics but because the jordan brand started in the mid eighties he was a l or of his brand to nike he received a royalty the royalty was was was substantial but he had no choice but to work with nike on this deal because fundamentally nike had the means of manufacturing and the means of distribution that would that would be my answer to your question sam of where would i put the fifty billion is i would go to you know zion williamson or luca don or something you know the next nba star and i would say hey we're gonna you know we're gonna don't don't just sign with nike own your business own your brand i will put up the money and let's let's go direct to consumer let's own the relationship with it with with your customers and rather than just licensing your face and your name and just someone else right who then controls it indefinitely and then they can cut you when you hurt your knee you know and but that's not like new that's not like new like isn't that what o media oprah what you know what's her thing called oh something i mean that's not that's not crazy that isn't new except for the fact that this the scale that they're at right now is new the amount i mean that we've never seen a scale right so i had i i i this is cool i'm not trying to name drop but it's it's it's a really neat story drop i have a relationship with guy marshall lynch beast mode yeah and so i i get to spend some time with him was a really cool dude and and he's done amazing things for his community in oakland but he's also a great entrepreneur when we talk we do not talk about the the nfl contract which i think was you know ninety million dollars or something we talk about beast mode apparel which is a shopify store and he is as excited mean especially now that he's not playing anymore with beast mode as he was with his other life and the reason was beast mode won he owned a hundred percent of he was not at the beck call or at the helm of the nfl or of the team he was able to employ a ton of people in his community and his family what i think is unique about these businesses and having this this idea of a hundred percent ownership is that it moves the power imbalance from the big company to the actual person behind it to the brand behind it and you're right you know sam that this is not necessarily new as a concept oprah has been doing it and others have been doing for for a while but no one has done at the scale so that you know drake for example may have a bunch of hits coming up or he may not have any more hits but o apparel is its own thing now that it is tied indirectly to him having hits at him being a great brand but you know the collaboration are with canada goose i mean one of the most well you know one most popular winter jackets is the o jacket who would have thought the drake kid from toronto would be making one of the most popular winter jackets and that that brand is not a one time thing but has incredible longevity and when you contrast that with like going into a concert when we were thirteen years old and you went to whatever concert you went to and you bought you know a t shirt at the stand it was like a gil kinda crappy t shirt with the toilet on the back we have gone so far from that and that means i think that all that to be said actually that i think what we're seeing is everyone is now turning into an entrepreneur and that i think is really cool sean do you know anything about it this so our audience harley it's like i actually think it's eighty five percent male it's probably all do like me and sean so they probably don't know too much about fashion nova sean do you know anything about fashion nova i i've i've studied it a little bit but go ahead you it sounds like you have something good so for the guys out there listening fashion nova if you're a fool and have live underneath rock it's basically i don't know how to describe it it's like fast fashion it's almost like h and m or something like that or forever twenty one online born on instagram basically it feels like born on instagram but the guy i'm here the guy who started it i think he's a an iranian immigrant or i forget where he's from somewhere the middle east his parents started yeah persian his parents started like a one of those like just kinda boring shops in the corner nothing special that sold clothing and he goes no no no can make this a little bit better so he started doing any sponsors basically cardi b was like his big sponsors and he sponsors tons of people just like cardi b and it's like it's like the world hip hop what's it or what's hip hop what's it start hip hop world star hip hop crowd which i love and i follow and it's like that save crowd and here's how i knew he was crushing it he owns one hundred percent of the business and about three years ago when they still were small i read in tmz that he bought a twenty million dollar mansion in la if vic he he bought a says yes and the best way to find out the easiest way to find out if a private company is crazy profitable is by looking at the real estate holdings of the owner it's hands down the best thing but like is the best way if you don't know anything maybe you you don't know you don't know how is you you don't have the economics but actually one the things you said at it's super so let's take cardi b so cardi now is like you know it's huge and and everyone would wish that they had a partnership or a brand affiliation with cardi b richard the genus of richard is that he discovered cardi before anyone even talked about it and he he planted these seeds these small investments with people that he thought had the potential to be the next biggest pops in the world and because of that what you end up with is a relationship between fashion nova and cardi b that is unlike any other the relationship from any other brand because richard was part of cardi story he was there when and and gave her money and he gave her assistance and support when no one else would and i think that's that's me is is is is one of the traits of an amazing entrepreneur they see something that no one else did now pepsi you can come in today and just over pay but cardi is never going to give the same type of attention care love and promotion to pepsi as she's going to give to fashion to richard and i i love that i think i think that is is that's really the is it crazy to say that fashion would i be at i don't know how to ask this because i know you're not able to say but i imagine fashion nova in the five hundred is between five hundred million and a billion in revenue i i can't can't give out individual merchants revenue because it's not my revenues it's their revenue but but they've done incredibly well and and more importantly though it's they have longevity they're staying power to this thing this isn't a one and done type of thing that's the reason why i love talking about the a story so much because frankly they only have three or four skews but there is the staying power of it but what is the what is the common denominator across all of these great d brands that i think are are are leading in their categories in some cases have become the incumbents is that they're using modern retail techniques if you ask joey from all birds whether or not they're online or off offline and he's like who cares if you go to my store and you're trying to pair shoes and you complete the purchase in store or online it doesn't matter to me it's all just retail the future of retail is about consumer choice so however a consumer wants to buy is okay for them you you talked to the best buy ceo and you asked them about their channel conflicts which is a real thing inside of best buy they will talk about the fact that online commerce hurts offline commerce excuse me like what offline commerce aren't it's all just commerce if i decide to go into if i was the ceo of best buy i would shrink all my stores down and make them almost like fa shorts playground playgrounds i'd play with the stuff i'd try the cameras out i'd you know do use use the products and then i go home and buy buy the products on my ipad that's the way i wanna purchase but best buy because they use a more traditional view of retail which is there's online there's offline unfortunately it doesn't lend itself well to consumer preference in twenty twenty so what are okay give me let's play a little game called overrated underrated so i i can tell from from from what you what you talked about it a second ago i would say that maybe underrated is a trend where influential people owning their own brands and going direct to consumer right beast mode you know with this only reason find rate is because i think a lot of people think it's just a marketing ploy or some sort of like promotion product i would say it's equally rated it's it's perfectly rated properly the tread in our crowd it's rated properly now but i would say and and main it's still not the mainstream behavior let's put it that way right you you don't see them raising money you see very few ipo and they're like they're like there is a it is a tough time if they actually do wanna access the public markets unless they back so so so there's and there's different categories right so like it's happening it happened in alcohol like right conor mcgregor with his whiskey george clooney with his whatever and then there's beauty where rihanna is doing it kylie doing it etcetera their shoes that we're talking about where you know whether it's yee or what i saying which is like kind of like athletes not not going with the behemoth and maybe doing their own thing kinda like what la ball tried to do but like if that actually worked and so if there's more categories so let's say that's underrated with trend gonna continue and it's gonna grow and it's gonna go into more categories right like maybe richard branson should have his own wine and he should create his own direct to consumer wine brand and that should be a great thing you know billionaire wines and what's overrated so maybe i don't know like what's your take on drop shipping or like some of the other trends you're seeing in online reach guide yeah online where you think maybe the hype has exceeded what you think is the true value or longevity of of it i actually think it's gonna be controversial maybe for you and for your listeners but i think drop shipping is being completely misunderstood completely misunderstood drop shipping is a process improvement for retail that is all it is and i think the fact that there's so many videos about drop shipping courses and we're all inundated with advertising to think about drop shipping and the courses thing is is you know you see it everywhere but drop shipping do you guys know that the the the brand movement watches yeah but i'm good buddy the jake you know okay so i i know jake really well too and kramer and they're they're amazing i've known them since almost almost day one they actually won one of our build to business competition years ago your first big hit your first big success right i wouldn't say first big certainly ones that got a lot of attention because they got bought by mo auto and they were sort of whole story to it they started with a drop shipping business originally and it was only once they figured out wait a second there's a market for this thing that they then began to design manufacture and and more and vertically integrate would they be here today had the console drop should not exist no because they've never they were there as you know us sam they were in their dorm room there was no way for them to actually produce these products without a drop shipping model drop shipping allowed them to access entrepreneurship in a capital light way and then they were able to expand to it there's a there's a soccer store that i forget the name right now but the guy started it was a soccer blog and he had a really good following is talking about basically you know champions league soccer and ended up just as an experiment going on ob which is drop shipping app that that that we we we purchased a couple years ago and he found a bunch of soccer balls in ob burrow and he just started posting them and and within like three weeks you realized wait a second these people that are reading my blog also wanna purchase products and so he he changed his business model just away from blog blog became secondary thing the retail thing became the the main business and he started manufacturing his own soccer balls and it's a huge success now so i actually think drop shipping is probably is on the other side of the category which it just misunderstood is there too many drop shipping courses probably i i i don't know i have no data on that and know objectively edge speaking it feels like there's a lot of drop shipping courses but as a as a business model it's very very effective and i think that so i think that's one i i actually one that is over overrated is is making masks i think that there's enough masks out there if you're making a a new unique mask or you're making you know unique hand sanitizer that's probably you that has its own positioning and it's different i can see it you know doing well but i think there's a lot of masks out there right now i think somebody underrated is people taking a skill set they currently have and that they're really good at something mean that's unique to them and actually selling a course around that skill set or selling summit that helps people acquire that skill set i remember looking at like do you guys are justin a guitar from youtube like amazing way to learn a guitar there is a a a grandmother in in in italy who has a shopify store and we put this in the show notes if you guys do that continue the link that she was doing courses when tourists came to her little village in italy she would teach them how to make homemade delicious pasta stuff that was really cool and worked really well but covid hit italy got hit first she had to pivot and she ended up starting a shopify store where she sells lessons on how to make pasta i think that so many people are sitting around trying to figure out ways to commercial their hobby or try to make some money supplement their income and they actually don't realize that the thing that they couldn't make money with is this is the is the skill that they already have i think that's completely underrated right now you mentioned buying an app i meant i i did you make is what you were implying was like a shopify plugin in yeah does that what you guys call you go you call apps yep you know our good friend andrew who is on the show all the time i think he started this thing called weak commerce and it's all about buying those businesses i have a i know another know of another guy named sai sai sai that does that as well who owns he does it for wordpress and shopify what apps don't exist that should exist or the shopify ecosystem the neat part of about the ecosystem is that because we have so many we have more than million stores and we have so many different verticals there isn't one you know like there isn't one particular thing that everyone needs so the way we view we view the app ecosystem is as follows shopify core offering will we give to everybody is what most people need most of the time it satisfies the majority of people's product market requirements but every single business has particular needs that are not like anyone else else's so you may have a sneaker store to us based sneaker store but your primary market is europe and so would you bet would you may require is some sort of application that there's a very quick conversion from us sizes to italian or european shoe sizes we probably would not build them into shopify because it's a niche market but that is where the opportunity exists for someone to come in and build that for that particular vertical sometimes when and and that's a dynamic definition of most things is most of the time for a long time email marketing was something that we left to the app so we had almost every email marketing app in the ecosystem and and a lot of them did really really well at a particular point we realized that email marketing is is so important that it now qualifies its cross threshold for most people most the time and now shopify has email marketing built in now what we do in those cases we go to the app developers and we're very clear that hey we're gonna be building this thing because it now fits our definition of what should be in the shopify a core offering but here's the room that you have to continue to build on top of and i think because of that because we have that type of relationship with our ecosystem it means there's always room for more people to make money but there isn't one thing that you can go to you can say well you know right now there is meal kits or groceries becoming a real niche for us well grocery was never a vertical for shopify like it is now there's probably ten things that grocery stores need to run a really successful shopify store that shopify is not providing and that's where that's what you should build on and actually that's one of the reasons why looking at the shopify user communities are forums being on social media and asking shopify merchants what they need to make their business better is a really great way to figure out what you should build next for shopify and and we we don't often buy those app because we we believe in in an in an independent app because ecosystem but every now and then with someone like ob or kit there's a couple others as well or handshake it feels like bringing them into the fold is the right thing for us to do i have a very selfish question so the at the hustle we've got close to two million subscribers and it's so cool it's cool and people have asked us a self stuff i don't know i'm like it's is it's so this such a big pain in the ass i don't wanna do this because not our business our business content but earlier you said something where like yeah this these people switch from content to commerce and it worked out quite well what should the hustle sell it's a great idea it's great question i don't i i i i know you you know i know your audience is not only incredibly engaged but they also like to talk about the hustle i mean that's how i found out about about it than what you guys are doing with with the podcast i would actually ask your audience what is the thing that that they need the most and then work from there so at the beginning sort of before we started rolling and we talked about a video and and audio you and i are both using the sm smb seven mics these sure mics they are clearly the best microphones to use for interviews like this or anything anything with that that requires digital voice maybe you put together a package because a lot of your are people that watch the hustle are probably running their own businesses they're probably startup up entrepreneurs and they probably are on video hangouts aids all day long and if there is a way for you to put together a package for two hundred fifty dollars that comes with a better camera a better microphone and a better setup that may be something that works really really well alternatively you may actually decide that you want a physical book like actual trees actual paper book with one thing or ten things that everyone said on the podcast that you think could be very compelling one of the things we talked about is you know sean me if you talked about overrated and underrated maybe there's something that you have that you know it's it's a beautiful notebook that has ideas that are overrated and underrated and so as an entrepreneur thinking concerning new business you start to write down all your ideas and dia them that's the cool part of what i think what you should not do is take a shitty t shirt and write the hustle on it because that to me is comm i think what you should do is think about wait a second who are the people that are using either listening to us that love the hustle okay great they're all sending for a computer all they want maybe the av kit is what we should be doing but i think that is how more folks should be thinking about how they take a content brand and commercial it into more physical product and i don't necessarily think there's there's something that i i don't think you can do that in the wrong way i i've been loving my em mug i never thought i'd like an em mug but actually sitting on a computer like that the em mug is amazing my coffee is always warm like maybe it's a collaboration in the hustle and amber and actually maybe this particular em mug you came convince to have a double battery because people that listen to this podcast are just you know they go hard and they're always in front of their computer and they don't want it to that battered it to die that's the type of stuff i would think about goddamn maybe you just made me some money i hope so that's why it came i came on to to to to try to convince the hustle to become a retailer and a merchant and and that's actually the cool part about worsening around covid that grandmother i talked about in italy she became a merchant these restaurants in new york city you know you probably see tons of them sam that have become merchants they weren't merchants they were restaurants we had a guy advertised with us it was oh mister holmes bakery or something or mister holmes bakery in san francisco i know if you saw but they made bakery stuff and then like they were the first ones you're like we're gonna sell banana bread mix and they jumped on that right away and create a shopify if store and they advertise with us and we told we saw they shit ton of that for like like maybe thousands of kits and they were the first people to hop on that banana bread train and which is because they knew who their audience was they had a deep understanding of the people that like their agree all the types of people that would like to make their own products make their own bread that is you know if you just put out some said hey like here are three ideas of things we're thinking of making tell me what you want i will i will help you build the shopify play store myself if you'd like because i just think the stuff is so damn cool but that's the type of stuff that's that i think works i think where people get it wrong is they just create promotional product and that is trash for the most part so let me ask you a question five years from now seven years ten years something like that will we still be shopping like the way we do today where we you know we see some ads on social media or we get an email about a product we go click there's a website with a bunch of pictures of as a grid and you scroll scroll scroll you click to checkout out and then you you know you either one click checkout or you type in your shit is that what shopping looks like seven years from now ten years from now no i i mean you're you're gonna have elements of that but that's the neat part about modern retail or modern commerce right now is that so right now from shopify you set up a shopify store you can build your beautiful online store you can take our point of sell product and sell in a physical store but you can also push products to amazon through shopify you can push it to walmart through shopify you can push it through ebay to pinterest to house more and more people are using augmented reality on shopify which which we have which we have built into the product but this was five years ago or ten years ago we'd probably have a myspace integration too to to enable you to push to myspace as well and obviously having a myspace integration that would be completely useless that i think is is the way to think of a modern retail is that wherever consumers are that's where you need to sell and so right now consumers are on social media and consumers when it's on a pandemic or in physical stores and they're certainly peru cruising online and that's where you should sell but if you are we've an integration with a company called reverb which is out of chicago i believe it's a it's a used musical instrument marketplace if you're selling musical instruments on shopify you should activate the reverb channel because that's where your consumers are purchasing and if you are ship on joanna gaines who have magnolia shop on shopify they got that that that big tv show fixer rubber they sell a lot of their products using shopify shopify augmented reality because people don't wanna go to waco texas but they wanna know whether or not the couch is going to fit in their house and so very simply from their shopify store on your mobile device you can easily natively from native from the native browser you can see how that stuff fits that is the neat part so now there probably eight or ten channels that are primary channels online being the biggest physical retail being the second and then all the other channels there's probably you know i don't know five to ten primary channels my hypothesis my belief is that in ten years from now there's gonna be a bunch of whole other channels that we have not even thought about right now and i think that is the retailers and the brands that are going to be relevant then as they are now will be agnostic to those channels they don't they won't care that this channels is better than the other channel because they're gonna sell wherever the consumers are whereas the old school retailers in certain the department stores they cannot get over the fact that no one wants to come into their physical location and so that they lament they they they they they're mad about that and that's just not the way to run retail in the future it isn't think about how you you all used to buy video games and you were a kid you'd walk into a store at a particular time you'd line up at the cash you get the video game to go home and that's because the retailer was dictating to you sean and you sam how to buy the the product but now you're like i'm a buy now way i'm gonna buy however i want i'm gonna buy in my couch on my ipad or i'm gonna buy at a pop up store i'm gonna buy an instagram or facebook that is the future retail it isn't one channel over the other channel websites are going to be less by it's none of that stuff it's just about where consumer choices and if we wanna be the most relevant company in retail in the future as i i think we are now we have to enable merchants to sell anywhere that where they have customers last question from me i know we gotta go do you i think that running a public company and going public sounds like the worst thing on earth like it's just held to me you gotta report to people your everything's out the open blink twice if sam's correct do we know you can't say i i i actually i mean i i can i i've it's been it's actually been really interesting experience i think it's been for me on a personal level i've actually really enjoyed it the road roadshow was one of the most interesting two weeks of my entire life we met you know a hundred different investors around the world and i got to tell my favorite story which is at a shopify i find the the investors we currently have understand you know for the most part the long term vision of shopify i think the fact that we can easily raise money to do all types of cool things that's gotten easier as well i i i know that there is particularly as i talk to private company entrepreneurs and and founders that there's this hesitation to go public and i i i i'd love to spend more time talking about being a public company because i actually think that there's a lot of advantages to it and if you have the ambition that certainly i have and i know toby definitely has it that we wanna build a hundred year independent business being a public company is a much easier way to do that and it's a much more effective way to do that harley i just gotta say thank you this is our our shopify store much today yeah shop something my wife shop the store you you made her a thousand bucks today thank you very much i didn't anything this she made a thousand dollars we just made it accessible what does she sell she sells i can't talk about it on the prod on the on the podcast but i'll i'll dm you about it cool that'd be awesome no i'm really curious what she sells but i mean so the type of who listen to this show our badass ass and they're gonna if they heard what sean was make it they would go it's spin up something exactly you like it on shopify and probably make more money than he's making exactly that's why i i i have this rule which is before something's working when it's just an idea phase oh i tell the whole world about everything all my ideas we have a podcast where we giveaway ideas for free but once something starts to work you know i zip it and so yeah that that's my rule well thank you harley by the way i would have normally said this from the beginning but your name is awesome oh thank you you've got like one of the cooler names when i first heard about it you like years ago whenever you guys were going public like i was like see what this guy looks like and you not look at all like i thought you were gonna or are you picturing yeah i i think scene is sort of an old jewish kinda name yeah like an old guy with like a beard definitely like jewish beard like but like kind of fat like i think of like a like a like a harry i don't know harvey weinstein this is good this is so i mean i think this is a compliment i i doesn't feel like one right now but i i think you're saying yeah yeah thank you you i'll i'll take that i'll take that you're good looking and like hip you look out like what looks like a fancy cashmere hoodie on you look badass ass is a cool job this is this is called blue salt and it's like the most comfortable hoodies ever it's inside of california shopify store and it these are the most comfortable church ever so shelley just experienced a sam compliment where he starts off being like you're awesome and then he's like i thought you were gonna totally suck and be fair harry no i know what it is i know what it is it's the guy from community he's the guy who has the the the the perfume business his name's similar to yours you don't talk about no we're not gonna sorry parks and rec parks and rec okay no i don't know but i'm gonna go look that up right now but thank you for for lucky my name it and honestly i think anything that encourages inspires more people to think about entrepreneurship and starting businesses and and and hustling is a really really good thing and so i'm grateful that you help people think about this i fact you give away business ideas and frankly most ideas you give away are probably million dollar companies that is really cool so thanks for doing that that's that's that's that's awesome alright just wanna come podcast guess we talked about how much how popular the genre of erotic fiction is and how women loved read you know fifty shades of gray and a little bit worse and a a listener took that idea built a erotic newsletter for black lesbian and started just sold it i think i don't know hundred hundred grand you know three months later and so as that's my favorite success story there's much bigger success stories from but that's my favorite for all the reasons you can probably guess well that's cool i know i'm i'm look i i'd love all those all your listeners to do their start their hustle and businesses on shopify but frankly more entrepreneurs in the world is is a really good thing we i think entrepreneurs entrepreneurship is the greatest form of self expression alright kids drop out of school start to shopify store you heard it here first well thank you again this is awesome and we appreciate you're gonna have to come back again yeah right great it's been a great honor thank you thanks harley