Ep. 03 – Building Shopify with Harley Finkelstein

Ep. 03 – Building Shopify with Harley Finkelstein

Harley Finkelstein, COO of Shopify joins us to talk about how he and Tobias Lütke worked together in building Shopify – a rapidly-growing commerce platform with over 500,000 online stores, 3,000 employees, and $46 billion in sales. Harley shares about the kind of culture they have in Shopify, as well as gives some tips about having a work-life balance. He talks about the benefits of getting a life coach, the importance of recalibration, practicing meditation, having good presence of mind, and more.

Building Shopify with Harley Finkelstein

Every year my job completely changes. Whether that is I got to get good at fundraising or I get good at building a sales award or I get good at hiring the most talented people and poaching them from the biggest companies on the planet. In 2015, I had to get good. I’ve taken a company public.

We’re talking with Harley Finkelstein. Harley is a Canadian businessman, entrepreneur, and public speaker. He’s also best known as the Chief Operating Officer for Shopify. He’s on the board of the C100 and an Advisor to both OMERS Ventures and Felicis Ventures. He’s also a dragon on CBC Dragon’s Den, which is the Canadian version of Shark Tank. In his early life, Harley was born and raised in Montreal, Canada. At seventeen, he founded a tee shirt company while attending McGill University. He later transferred to Concordia University and received his Bachelor’s Degree in Economics. He then attended the University of Ottawa where he founded the Law MBA Society and also the Canadian MBA Oath while working towards his law degree and his MBA.

After completing both his law degree and his MBA, Harley worked at a law firm in Toronto for a year. In 2009, he met Tobias who is the CEO of Shopify and they started talking about opportunities for the company. Harley was then hired soon after that and was named the Chief Platform Officer. In 2014, Harley was appointed as a member of the C100 board. The C100 is an organization that supports Canadian technology companies as a bridge between Canada and Silicon Valley. In 2016, Harley was named the COO of Shopify. That same year he was inducted into the Order of Ottawa by Mayor Jim Watson. Harley, welcome to the show.

Thanks for having me. I am glad to be here.

I’m looking forward to learning from you. To start us off, how did you grow in your COO role when you left law? Were you in law or your MBA when you met Tobias?

I was born in Montreal and lived there until I was about twelve years old. When I was twelve, my family moved to South Florida to a place called Boca Raton, which is a great place if you’re retired. It’s not a great place if you’re a young man and want to have some fun. After high school, I ended up moving back to Canada to go to McGill University. On my first year of McGill, I started business mostly out of necessity. I had to start supporting myself. I built a little tee shirt business and we started making tee shirts for universities across Canada and built a nice little company. When I finished undergrad, I had a bunch of great mentors in my life at that point. Most of them convinced me that tee shirt business I had had no competitive advantage. There was no moat around the business. Even if I was selling tens of thousands of tee shirts to all these universities, it was easy to disrupt me in the same way that I disrupted other incumbents.

One mentor, in particular, convinced me that to become a better entrepreneur, I may want to consider going to law school. He happened to be teaching law at the University of Ottawa in 2005. He said, “Why don’t you apply to the University of Ottawa and go to law school there?” I liked the business. I loved entrepreneurship. I knew I was going to be an entrepreneur for the rest of my life, but I wasn’t sure where I was going to go with entrepreneurship. The ability to learn more about the law around negotiation, around some complex corporate finance, understanding philosophies that I would get in law school was appealing to me.

In 2005, I moved from Montreal to Ottawa and I started law school. Although I enjoyed my first couple of weeks of school when I got here, I didn’t know anyone. I had no friends. I had no family in Ottawa. I had this one mentor who was teaching law. When I began to ask around where all the entrepreneurs hung out, I was pointed into a particular direction. On the side on that, one of the things I’ve done throughout my life whether it was something in Montreal then moving to Florida, moving back to Montreal then Ottawa. I always found that entrepreneurs in any city were typically where I’d find my tribe, likeminded people who I can develop good relationships with. I moved to Ottawa and asked where the entrepreneurs hang out. I was directed to a coffee shop in the Gilead, which is a small little area next to Ottawa. I was told that every Friday night a group of smart entrepreneurs hung out there. Without giving it any more thought, I showed up on one Friday night to that coffee shop and I met five or six entrepreneurs.

It was some people that some of your readers might know. It was Sam Zaid who at the time was building Getaround. He’s moved to San Francisco to build Getaround there. It was Paul Lem who built Spartan Bioscience. It was Luc Levesque who built TravelPod, who’s now a Senior Leader at Facebook. It was Tobi. The interesting part about Tobi was clearly both of us are polar opposites. He’s cerebral. He’s somewhat introverted. I speak too much and I’m far more extroverted than he is. Tobi and I connected at the weekly coffee meetups. Tobi at that point was transitioning out of selling snowboards online to the software company. As you probably know, he wrote this piece of software to sell these snowboards because he couldn’t find any great software on the market. He quickly realized selling snowboards maybe a good idea but selling the software behind the snowboard shop may be a great idea in that he can help entrepreneurs from all over the world build their own businesses.

When I met him and he transitioned away from snowboards into software, I was looking for a way to continue selling tee shirts while concurrently going to class. In undergrad, I was able to skip class and show up for the exams. In law school, using the Socratic method, which is basically yelling out your name randomly and you have an answer to the question, it didn’t work nearly as well. I needed a business that would run virtually. I ended up becoming one of Shopify’s first customers. I built an online tee shirt shop called Snooper with my best buddy in law school. We ran it concurrently with class and my course curriculum all throughout law school and then throughout business school, I did my MBA. That was about 2008 at that point.

In 2008, I decided that I want to get called to the bar. I wasn’t sure I want to be a lawyer. To be honest with you, law school for me was finishing school as an entrepreneur. It was like an etiquette school to be an entrepreneur, which was exciting to me. It had little to do with the law itself. It had to do with the way of thinking, a way of arguing, a way of negotiating. It taught me how to read 4,000 pages and to pick out the one line that mattered most. it taught me how to be a bit more articulate and how I express myself. I loved law school, but I knew I didn’t want to practice. I didn’t want to get called to the bar because I felt that was the last step in the process. In 2009, I moved out to Toronto and I worked for a large law firm and I articled for several months. I hated it. It was the worst several months of my life, unlike entrepreneurship which I felt was all about meritocracy.

I felt that the legal profession, not too dissimilar from things like the accounting profession, a lot of it was about legacy. It mattered how long you’d been there. It mattered who you knew. It didn’t feel right to me. I stayed for several months and one day longer, which was exactly the amount of time I needed to get called to the Ontario Bar. I called Tobi and I said, “I love Shopify. I love the product.” At that point, it was Tobi, Daniel and Cody who are the three co-founders of the company. They were all brilliant engineers and designers. I’d known them for a couple of years because I was an early merchant and an early customer of Shopify. These were three of the smartest people I’d ever met. What was cool was they had a great product. They were beginning to find product-market fit, but none of them self-identified necessarily as someone who was focused on the business side of a company. They were on the technical and the product side. I called Tobi in 2009 and said, “I’d like to move to Ottawa and help you, Cody and Daniel build out Shopify. I’d like to take on the business responsibilities of the company.” That was it. My girlfriend at the time who’s now my wife and the mother of my child, we moved to Ottawa in early 2010.

I remember asking Tobi, “What do you need me to do?” He basically said, “Whatever you can.” I remember thinking that my job was finding the things that they either didn’t want to do or didn’t know how to do. Making sure that this amazing product that they had built, which I felt was by far the best product on the market that we were able to commercialize it properly, sell it, market it, retain customers, build a business. I would say my first couple of years at Shopify was mostly being a Swiss Army knife. We raised our first round of financing in mid-2010 and we had no CFO. We had no GC. I help raise the round. I figured out what a cap table needed to look like. Along with Tobi we went ahead and raised $7 million and that was led by Bessemer.

That was my first introduction to being in a chief operating officer role or a second in command role, which was that my job isn’t necessarily this one thing and do only that one thing. It was figuring out what are the gaps of the company that we’re going to prevent us from getting to the next step, the next level that the other three were not tackling. The first couple of years was mostly around building a business around Shopify, building a partnerships team, building a business development team, figuring out what sales should look like. We didn’t have a CMO at that time. We’re closely trying to build out a marketing team. That was the first couple of years here. It was about being a Swiss Army knife and helping Tobi however I could.

I’ve talked a lot of in the early days you need to get the true Jack of all trades, master of none, the people that can pick up anything that needs to get done and run with it. It sounds like that’s what you were. Tobi was the inward-facing, more cerebral, product-focused engineer and you are the outward-facing and culture. You didn’t say marketing PR guy but you were almost the face of the company in a lot of ways. Harvard wrote an article several years ago called The Misunderstood Role of the COO and there were seven distinct types of CEO’s in that article. You are one of those types whereas another one is more inward-facing and the CEO is the outward part of the brand. How does Tobi deal with the fact that you have such a strong personality around the brand? How does he get around that when many entrepreneurs and CEOs can’t let go of that?

In actuality, he enabled it. He’s great at seeing in people what they may not see in themselves. I was naturally always been extroverted because I organically always have been loud and out there. He was able to take those raw materials that I had and enabled me to be in many ways the face of the company. That was important for a couple of reasons. The first reason is there probably is no better product visionary on the planet than Tobi. He thinks about the product in a way that is unlike anything I’ve ever seen. At least in the early days in particular, his biggest value adds to the business was around making sure we had the best product in the world unequivocally.

Whatever I could do and whatever we can do as a team to allow him the time and the focus to do that was going to make Shopify much better. He also quickly identified that one of my strengths may be talking about the company, whether that’s in the context of media and PR or whether that’s in the context of things like building the Build a Business competition, which has become one of the largest competitions of its kind on the planet and having to get people like Richard Branson, Tony Robbins, Daymond John, Tim Ferriss, Marie Forleo, all these incredible superhero entrepreneurs to get involved with Shopify. In many ways, he enabled me to do those things and get out there.

What you said is interesting because historically, the CEO has always been the outward-facing, extroverted, business sales marketing type person. One of the things that have changed in the last couple of years and probably a lot has to do with the relationship that Mark and Cheryl have at Facebook, where you have founders that remained in the CEO role and technical, product-focused founders. In many ways, this COO role is a reflection of this new type of CEO role, which is highly technical, brilliant founders who should be the COO of these companies. I believe that someone like Mark should be running Facebook and someone like Tobi should be running and be the CEO of Shopify. That is the right role for them when you talk about highly technical companies like ours.

It is what Jim Collins talked about in Good to Great about level five leadership, that personal humility and that real drive to succeed. When they are humble enough not to let their ego get in the way and need to be the face of the company, they can allow someone who’s better at it to do it and the company does grow. I remember meeting you back in around 2010 when I came into an event you’re hosting there. I spoke at your office that you guys hosted an event I was speaking at, but it was with the guys and I thought you were the CEO at the time. I remember leaving going, “That’s amazing.” I don’t even know if I met the CEO, but it doesn’t matter because this guy Harley’s running the place. It was cool to see that part of the relationship. How do you and Tobi work on the marriage? I always talk about the yin and yang relationship between the CEO and the COO. It’s all almost like a marriage where you’ve got to have date nights and systems in place to make sure that the relationship stays strong. What do you do to keep your relationship strong and growing and to keep the trust high?

I get a lot of calls and emails from companies all over the world asking about my dynamic with Tobi. We talk a lot about being the yin and the yang. Unfortunately, it’s a little bit of a cop-out. It doesn’t provide much insight in terms of that dynamic. A couple of things had been important to us. He’s my boss. He’s also my mentor. He’s also one of my closest friends. We spend a lot of time together. We spend our weekends and think cases together. Our relationship extends well beyond the office. In terms of making sure our dynamic is as effective as possible, the onus is on me as the COO to check in with him to make sure he’s getting everything he needs from me.

SIC 03 | Shopify
Shopify: The CEO and the COO relationship is almost like a marriage where you’ve got to have date nights and systems in place to make sure that the relationship stays strong.

 

I checked in with that fairly often, in some cases, almost on a quarterly basis. I would say, “Here are the different areas of the business that I’m focused on. Are there any things that I’m not doing that you think I should be doing? Are there things that you’re doing that you do not want to be doing but I can pick up for you?” A lot of the problems that I hear from the CEO, COO relationships often stem from other misalignments in terms of expectation or the data or the perspective that they are working through is dated and things have changed.

For example, I was the general counsel up until 2014 or so. I wasn’t a good general counsel. I was the only lawyer here. I’ve played that role. Tobi and I always knew that was not going to be the thing I was going to focus on. We needed to hire a great general counsel and we only needed it as we began to think about our IPO, which happened in 2015. It was easy for me to take that off my plate because that wasn’t something that I felt that I was a little class at. It was not something I enjoyed doing and it was not something that I believe that I could do better than anybody else.

It was obvious to have that off my plate. It was the same thing in 2011. We hired Russ who’s our CFO. I understood the corporate finance side of running a business. I understood how to raise money because of my business background and going to business school, but I was not a good quasi-CFO. Ensuring that there is realignment almost on a quarterly basis, maybe it’s a different cadence for others. Maybe it’s a monthly basis and saying, “This is what I’m focused on because I can be world class at this. This is how it can have the biggest impact. This is something I enjoy doing.” Using those three vectors, you end up with a good dynamic between the CEO and the COO, especially if you continuously check in to make sure those things haven’t changed.

A couple of years ago, Tobi walked into my office and said, “We got to build an enterprise product. We have to think about how we help much larger.” What had happened was the background here was some merchants had started on Shopify and they were small, at their mom’s kitchen table. A lot of them were to be $100 million a year businesses. They didn’t leave Shopify. They weren’t graduating off our platform which is fairly unique in the SMB software market. He came in and said, “We got to build this.” We needed a sales team, but that wasn’t something I was especially good at. I have no experience building out a massive sales org. It was clear that I needed to create some scaffolding.

I have to create a foundation to make sure we did have some product market fit, to make sure we did test some assumptions and that there was some momentum there. The second we were able to check those boxes, we have product-market fit, we have momentum and we have scaffolding. I went ahead and brought in more Loren Padelford our VP of Sales and plus to run this operation and scale it. The reason I bring up that example was Tobi wanted me to get that started because that’s what I’m good at. At a certain point, my ability to scale that had diminishing marginal returns and it was time to bring in someone else.

If the COO and the CEO are not connecting on a regular basis to align and ensure that we both have an understanding of what the most impactful things that I should be doing are, there are tension and confusion. All this bad stuff comes from that. Tobi and I meet every single week for a one-on-one. It’s my one-on-one. I bring to him the questions, the insight, the information I require from him in order to better do my job. Whether it’s every month or every quarter, I’ll use that one-hour one-on-one to ask him. “Here’s where I’m focused. Are there any things I’m not focused on that you think I should be? Is there something on your plate that you think I should take off your plate?” By being candid, transparent and honest with each other, we’ve been able to cultivate what is one of the best relationships I’ve ever had. He would say the same.

I’ve always found that one-on-one meetings are critical. Do you hold them with your direct reports as well?

I do. One-on-ones at Shopify are fairly sacred. We don’t care if you have big group meetings or you have massive team-wide summits. Those are great and we encourage that. The important part of the one-on-one is that the manager should know that it’s not their one-on-one, it’s their reports’ one-on-one. Where managers create problems is when they start treating one-on-one as if it’s their own. My one-on-one with Tobi is my opportunity to get what I need from him to have a bigger impact and better do my job. That’s what we look at it. Back to your original question in terms of that dynamic, that dynamic has been cultivated over a long period of time. It has gotten a lot better over time because both of us are self-improvement junkies. We’re both introspective. One of the things I had been working in the last couple of years is having a much higher degree of self-awareness. As him and I both mature individually, our relationship and our dynamic have also matured in a great way.

You’re both self-improvement junkies. What are you focusing on in terms of working on your skill set?

I’ve seen a coach since 2011 or so. Coaching has been such a huge part of my professional life that we ended up hiring all our coaches and bringing them in house. Shopify has about twelve full-time coaches on staff. Most of our leaders and most people that manage more than two or three people see a coach here at Shopify. I would say that over time, the stuff I work on changes. It’s the same reason that there’s a good chance that I may be at Shopify for the rest of my life. The cool part about a company like ours is that the requirements on me, the task that it’s given to me constantly changes. I brought up in the early days raising money and I brought up having to do some legal stuff and building out a business team in a business group.

Prior to going public, we decided to go public in early 2015 and ended up ringing the bell in the New York Stock Exchange in May 2015. That was nothing. I had never done that before. I’ve never taken a company public. I’ve never built a company of any size over a small tee shirt business. What was interesting about the opportunity that I’ve always felt I’ve had here is that every year my job completely changes. Whether that’s, “I got to get good at fundraising. I got to get good at building a sales org,” or “I get good at hiring the most talented people and coaching them from the biggest companies on the planet.”

In June 2015, I had to get good at taking a company public. I don’t mean the roadshow and an investor pitch, but even in terms of how do you make sure the company is excited by it. How do you make sure that the stock price does not become something that people focus on because in the long run, the stock price does reflect by the company? In the short run, there’s a lot of volatility. What I love most about my role here is the versatility in the task in front of me. I’ve been clear with Tobi that that’s one of the things I value most here is that my job is always quite different and it’s a reflection of what the company needs most from me. If you have that you can find that in your career, you got it made.

How do you protect your confidence along the way? How do you work on your confidence? Are you naturally confident?

I’m not sure I’m naturally confident, although I always spoke with a lot of conviction, which maybe tricks people into thinking that I’m more confident than I am. I have been an entrepreneur for so long. I got good at dealing with ambiguity. I’ve been able to get comfortable with being uncomfortable. I’ve almost taught myself that to the extent that now I seek out being uncomfortable. When things are going a little bit too good and things are a little bit too smooth, that’s typical what I worry most. When I find a problem, it is a great opportunity because I now know I have a problem, now I can go and fix it. Part of it is I have people like Tobi around me that believe in me and are constantly pushing me into this next level of understanding and this next level of operationalizing this company and running the business.

I also have what I consider to be one of the most incredible groups of mentors. The term mentor is loaded for a lot of your audience. Most people confuse the term, but I have five mentors in my life at any one given time. These are five people who come from all different backgrounds. One of them is one of the largest real estate developers in Canada. Another one is someone who owns one of the large fashion companies on the planet. These are people that have committed to giving me one hour a month of their time often in person, but sometimes on a Google Hangout or a Skype call. I rotate that.

For example, prior to becoming a dad to having our daughter, I knew nothing with parenthood. I spent a lot more time with people that I thought were exceptional parents and they were my mentors. I don’t think I’ve got the hang of being a dad yet, but if I feel like I know the basics of being a dad. That is obviously a little bit less important, whereas for me, Shopify now has more than 3,000 people. We’re going to be at 5,000 people in the next couple of years. I am looking to talk to great leaders around the world who are running companies with thousands of people because this is a new thing for me. By surrounding myself with people that are better, smarter and more experienced, it’s not only humbling, but it also provides with confidence that none of them knew what they were doing when they got started and yet they figured it out. That provides you with a little bit of an understanding and a little bit of confidence that I could do this myself too.

Do you have a typical day that you follow currently? I know that would change as your role changes over time, but do you have any routines that help you?

Years ago, I read Paul Graham‘s post Managers Versus Maker Schedules. I haven’t read that article in probably a few years. Effectively, what Paul Graham talks about in that is he was dividing his time between a maker’s schedule, which is basically four-hour chunks of time versus a manager’s schedule, which is a half-hour, one-hour chunks of time. I do subscribe to that. That works well. Most of my one-on-ones are on Tuesdays and Thursdays. Monday, Wednesdays and Fridays are typically longer chunks of time where I can either do strategy or I can do a much deeper dive, whiteboarding sessions with different teams. I could spend a lot more time being proactive and figuring out where we’re going as opposed to simply answering a bunch of questions that are coming up in a reactive sense.

I have found dividing my weekend to those chunks of time, different days, have different chunks has been helpful. It’s been pretty consistent. Beyond that, I go in different rhythms. I try to get to the gym most days after work around 6:00. This way I’m home for dinner with my wife and daughter at 7:00. I do that less about staying in shape. I do that because I find it’s a great way for me to clear my head before I go home and I’m able to leave a lot of the work stuff in the gym and go home with a bit of a clear mind. Probably the thing that’s most cliché, but it’s been something that’s been helpful to me is I try to do a ten-minute meditation or mindfulness practice every day. I usually use something like Insight Timer. I used to use Headspace. I try to do that first thing when I get into the office and in one of the small phone booths. I’ll go in there for ten minutes and do some breathing exercises. That stuff helps.

I do some other stuff that’s helped me. A couple of things that Tobi and I have tried to do from day one are always home for dinner with our wives and our kids. We try never to travel on weekends whenever possible. That’s been helpful. Even during the IPO roadshow, we did 93 meetings all over the world. We made sure we were home Friday evening or Friday nights. We can spend Saturday with our families and then get back on the road Sunday evening and fly out to New York, Memphis, San Francisco or wherever we’re going to continue the roadshow. That’s also been something that has been helpful.

SIC 03 | Shopify
Shopify: Surround yourself with people that are better, smarter, and more experienced.

 

I also know what my ripcords are. In order for me to be truly focused and present on a Monday morning, in the summertime I need to be at the cottage or on the boat. In the winter time, I need to be on the ski hill during the weekends. I now know what I need. In order for me to be focusing on Monday morning, Friday night is probably spent with my wife at an amazing restaurant. We get a great bottle of wine. My wife’s a food blogger. She has a radio show in Canada which talks about all the best restaurants. Over time, with some practice and some reflection, I’ve spent a lot of my time trying to figure out what are the things I require in order to be fully present, fully focused on Monday morning. It’s certainly not anything that’s been easy. I’ve been able to cultivate the good dynamic there.

I’m a big foodie as well. What’s your wife’s food blog?

Most of it’s done through Instagram. It’s @Modern_Hostess. She’s on a CFRA every Thursday with Evan Solomon at 4:00 in Ottawa and syndicated elsewhere. She’s a first-time entrepreneur. She opened up an ice cream shop in Ottawa called Sundae School. She opened up Sundae School and it’s the most adorable little ice cream shop you’ve ever seen. Helping her with her first entrepreneurial venture has been a real thrill for me.

Where’s her ice cream shop?

It’s on Beechwood. It’s in the New Edinburgh area where we live.

I went to school in Ottawa. I did my undergraduate degree in law. I was similar to you. I was sitting on a plane one day reading a French franchise agreement. It was written in French. It was following the French civil code. I’m reading this franchise agreement on the plane going, “What am I doing? I’m not a lawyer. I don’t speak French well. There’s no way I should be reading this thing.” It brought back some fond memories to Ottawa. One of my first mentors built a company called College Pro Painters. He was the Founder and CEO of College Pro. He said, “True leadership is saying no more often than we say yes.” I’m curious how you guys say no at the size you’re getting to with all the pressures and demands on your time.

It’s gotten a lot easier, not more difficult, mostly because we have a focused view of who we want to be and what are the things we want to do and what we don’t want to do. The fact that our merchants got big, they pulled us upmarket. We haven’t shifted upmarket where our focus is still on entrepreneurs and SMEs that are getting started. Our merchants on their own pulled us upmarket because some of them got big. We realized that it was an opportunity for us. There was the right time for us to introduce us to the world and there would be a wrong time. People always ask us if we’re going to go help restaurants for example. That would be a distraction to us.

Fundamentally, we want to focus on entrepreneurs and people that sell physical products. That may change eventually, but by well articulating who we are, what we want to be and where we want to go, it means every one of the 3,000 people that work at Shopify has their own litmus test or has their own set of vectors. They can go ahead and figure out, “How do I make a decision? How do I decide what I want to do and what I should do, what I shouldn’t do?” When someone misses it, we explain why that was the wrong area to go into. We remind the entire company once again, “This is what we care about. This is what we value. This is where we want to go.”

It’s gotten easier with time, not more difficult, even though we have a lot more people. Part of it is that we as a company have grown up, but also we as leaders of the company have grown up. In the early days, at least for me, I would say yes to everything because I didn’t know where we were going. I wasn’t sure what was going to work and wasn’t going to work. We were throwing a lot of stuff at the wall and see what stuck. Now, we know what works and what doesn’t. By articulating a clear vision to the company of this is who we are and who we want to be, it makes it easier for people on their own without even asking, “Is this something we want to do?” That’s been great.

The one on one meetings you have and how critical they are, it sounds like you’ve got great systems for those. One of my books was called Meetings Suck and I wrote it because I wanted people to not complain about meetings. I want them to understand how to run effective meetings, how do attend meetings and what meetings to have. Tell me a couple of tips that you guys use internally related to meetings that are working well for you.

This may be common sense and obvious, but if there are more than five or six people in a meeting, it’s not a meeting, it’s a presentation. There was no way to have a great discussion with that many people. We tend to avoid what I call room meets, random people that are there because I don’t think that’s a good use of time. I remember years ago someone used to bring in their stopwatch to a meeting and calculate how much the meeting was costing and you’d see the dollars go up and up. I didn’t think that was effective. That was a cute thing to do. Generally, we’ve explained and reiterated over and over again that good meetings are obvious. There’s a clear objective of what you want to accomplish. There’s a clear view of who should be there.

Beyond that, we want people to act like adults and use their best judgments. That being said, when we see a meeting and we feel it’s not productive, it’s not effective, there are way too many people there, we will call it out. What we’ve done is we’ve put the onus on everyone that works here to police these meetings on their own. The onus is on every single person in every single meeting to say, “Should this be happening? Are the right people in the room? Is there a clear objective?” I’ve been in meetings where without even saying a word, the meeting was halted after a couple of minutes because it was clear that the wrong people were in the room. There was no clear objective of what we wanted to do. It could have easily been settled with an email or a Slack conversation. There are no rules of engagement in terms of meetings at Shopify.

There are no commandments of how many should run. We hire people that are highly intelligent, incredibly ambitious. Most people at Shopify would self-identify as entrepreneurs. By giving them the freedom but also the onus to ensure our meetings are effective, we’ve been able to cut down on superfluous meetings, which frankly I hate. It doesn’t have to happen. I’ve read your book and you make a lot of great points there. For a lot of people, they consider meetings to be doing the work and then I don’t believe that. The meetings can set the context. The meetings could help get the work done in a more efficient or effective manner. Having a meeting itself should not be a checkbox next to a to-do list. That is ineffective.

You guys at Shopify have become the culture company in all of Canada to work for and certainly rank amongst the best of the best in the world. I talk to companies that are based in Toronto and based in Ottawa. I’ll tell you that virtually every company in Toronto is scared of Shopify in terms of the war on talent and getting good people. I don’t think it’s the perks and I don’t think it’s necessarily your office space. What is it that you’re doing that has turned Shopify into this magnet for great talent?

It’s obviously not perks. It’s funny how often people confuse perks with culture. We have some cool perks here. We have fulltime chefs in every office that cook delicious healthy food. Every person at Shopify gets maid service at their home that we pay for. We send cleaning staff to their homes to clean their houses twice a month. All that stuff is great, but it’s there to make their lives a little bit better. That is not a reason to work here. Those are things that we think make our team’s lives a bit better. The culture here has been organically developed over time. For the most part, most people at Shopify can have their own companies. They can be the COOs of their own companies, but we believe we can come together.

It’s like the Avengers. We’re unstoppable. We’ve created a place where founder types, founders, entrepreneurs and people that are self-starters that typically would be doing their own thing, they can not only come to this place but they can thrive in this place. That’s one area that is important. We have a policy here which is default to open. Even during the IPO process, there were some things that we couldn’t disclose the whole company. That was difficult for us. Most other companies that would be no problem, but it was for securities regulation laws. There were some things that we had kept to a much smaller group of stakeholders. That was tough for us because we are default open culture.

Once a week or in some cases once every two weeks, we do an AMA, an Ask Me Anything, where anyone from the company can ask the exact team or the leaders of the company any question they want. They can do anonymously or they can add their name to it. That ability to put ourselves in a vulnerable situation where people can ask anything they want but also get an answer that they feel they’re being treated like a sophisticated adult makes us a great place be. Lastly, most people at Shopify are here are doing their life’s work. That is unique. For most of us, it’s not a job. This is what we want to do. This is how we want to spend our time and with the people that we want to spend our time with.

A lot of the companies that maybe you’re talking about potentially are looking for a shortcut to how to cultivate culture. If you put a gun to me and said, “What is culture?” I would say that culture is probably what people do when no one is looking. What happens when no one’s around and people are left to their own devices? What do they do? If they do the right things and you probably have a great culture. If they do the wrong things, you don’t have a great culture. No matter how great your hoodies are or how great your chefs are, none of that matters.

I heard a story that over Christmas time, a physical retailer in Toronto, their Shopify point of sales system, their card swiper had broken. They put it in their pocket and had sat there. They crushed their card swiper. They simply put out a tweet and said, “Shopify, we would love to get a new card swiper. We’re about to have a massive Boxing Day sale.” An hour later, that person sent me a note saying, “I don’t know if you know this, but someone had someone from Shopify during the holidays got on their bicycle and biked over to my store to give me a new card reader.” Culture is what happens when no one tells you what to do and people do the right thing. We’ve made it easier here to do the right thing.

Last question I’ll leave you with, I’d like you to do address directly to the second in commands. Anyone who’s reading who is a CEO, VP ops, general manager, director of ops, whatever your title is but you’re the second in command to the CEO. What would you give them as the top three tips for them to excel in their role and also for them to help the company grow?

SIC 03 | Shopify
Shopify: Have a pretty focused view of who you want to be and of things you want to do and don’t want to do.

 

I talked about recalibration. As a COO, make sure that you continuously recalibrate your role, your responsibilities and your area of focus with your CEO. Just because your CEO told you, “Here’s what you should do,” it doesn’t mean he or she hasn’t changed their mind. CEOs are busy. The onus is on you as a COO to recalibrate and reconfirm, “Is this still the most impactful thing I can be doing?” That’s probably the first. The second thing and this is probably the most important one of all is when I first started to look into the CEO role, I read at the Harvard Business Review article with the different types. I also read the book Riding Shotgun, which is a book about COOs and how that works.

I also ask my board of directors for a list of their top COOs that they’d ever encountered without saying specific names. It’s the COOs of all the major technology companies that were listed and I got a chance to talk to most of them. Can I ask some simple questions? What is your role? How has it changed? What do you like most about it? What are some things you wish you would’ve known when you first took on the role that you now know having spent years in the role? One major take away from that process of talking to some of those iconic chief operating officers on the planet was that none of them have the same job. Every single one of them has a different job.

The Harvard Business Review article was interesting because it showed that there are six different archetypes of what a chief operating officer is. Where it missed the mark is that there’s not six, it’s probably 600. You’re almost like a mirror image of your CEO. The onus is on you as a COO to figure out what is your CEO the best at? Where his or her time is best spent? Figure out a way to get everything else off their plate and make things easier for them. That’s a great place to be. Don’t follow one rubric because Harley’s Shopify COO role looks like this and he looks after these groups. It doesn’t mean you should because it all depends on what the dynamic is with your CEO.

I would say probably the last one is to know when to get out of the way. I was able to help raise our first round of financing. I was able to do a lot of our contract negotiations in the early days. I was able to put the initial scaffolding around our sales organization at least. It’s a large sales org. It has its own office in Waterloo out of Toronto. There is no way that I could be running that sales org at that level of sophistication. Getting good at knowing when to get out of the way versus when to put your head down and dive deep, that is important. I would say those are three things that have been quite helpful and valuable to me.

Harley, thank you very much. What you’ve done with Shopify, what you’re doing with the C100 and part of the maple syrup mafia building, all these great companies up here in Canada. You guys are building a bleeding edge company worldwide and it’s fun to watch you do it. Thank you so much for sharing everything you do with us. I appreciate it.

Thank you so much. I’m fortunate I get to do this. Thanks for having me on your show.

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About Harley Finkelstein

SIC 03 | ShopifyHarley Finkelstein is an entrepreneur, lawyer, and the Chief Operating Officer (COO) of Shopify.

He founded his first company at age 17 while a student at McGill. Harley completed his law degree as well as his MBA at the University of Ottawa, where he co-founded the JD/MBA Student Society and the Canadian MBA Oath. Harley is an Advisor to Felicis Ventures & Omers Ventures and is one of the “Dragons” on CBC’s Next Gen-Den.

In 2016, Harley was inducted into the Order of Ottawa, and in 2017 he received the Canadian Angel Investor of the Year Award as well as Canada’s Top 40 Under 40 Award. From 2014 to 2017, Harley was on the Board of the C100, and in December 2017 he was appointed for a 5-year term to the Board of Directors of the Canadian Broadcasting Corporation (CBC).

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