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If You Want to Start a Business in 2024, Watch This Interview

Alex Hormozi・2 minutes read

Starting a business today is more affordable, with Shopify founder Harley emphasizing entrepreneurship's accessibility and sharing his journey from selling t-shirts to a $100 billion company. Shopify's success stemmed from strategic partnerships, valuing merchants' needs, and fostering a culture of transparency and authenticity.

Insights

  • The cost of starting a business has significantly decreased, making entrepreneurship more accessible and less risky, as seen in Harley's journey from childhood business ideas to the founding of Shopify.
  • Shopify's success was driven by resourcefulness, adaptability, and a focus on creating a versatile solution for small and medium-sized businesses in e-commerce, leading to strategic collaborations and a strong emphasis on partnerships for growth.
  • Shopify's culture prioritizes transparency, founder-led leadership, and a merchant-obsessed mission, fostering an environment where employees act like owners, encouraging open disagreement, and focusing on serving merchants' needs above all else.

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Recent questions

  • How did Harley's entrepreneurial journey begin?

    Harley's entrepreneurial journey started with small business ideas as a child, supported by his father's encouragement. He began a DJ business at 13 and later started a t-shirt business in college to support his family after facing financial difficulties.

  • What inspired the creation of Shopify?

    Toby, a programmer, met Harley at a coffee shop for young entrepreneurs and shared his idea to start an online snowboard shop in 2005. This inspired the creation of Shopify, as Toby disliked renting customers from a Marketplace and lacked funds for Enterprise software, leading him to develop software using Ruby on Rails to sell snowboards.

  • How did Shopify evolve into a successful business?

    The software developed by Toby to sell snowboards evolved into a successful business, prompting Harley to use it for selling t-shirts during law school. In 2006, Harley became one of the first users of what would become Shopify, initially known as Jaded Pixel, running a direct-to-consumer t-shirt business.

  • What were some key growth strategies for Shopify?

    Shopify's growth strategies included referral partnerships, offering a 20% revenue share to agencies promoting the platform. Collaborating with influencers like Tim Ferriss helped Shopify gain visibility and credibility, enhancing its growth. Finding brand champions with existing distribution channels, like Tim Ferriss, proved crucial for Shopify's success.

  • How does Shopify foster a culture of transparency?

    Shopify fosters a culture of transparency by encouraging open disagreement to foster healthy debate and decision-making. The company practices open book financials to ensure transparency and alignment across the organization. Quarterly letters to the board are shared openly with all employees, emphasizing the importance of transparency within the company.

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Summary

00:00

"Harley's Journey: From T-Shirts to Shopify"

  • The cost of starting a business today is at its lowest, making entrepreneurship an exciting time.
  • Harley, a guest on a podcast, is the founder of Shopify, a company now valued at around $100 billion.
  • Harley's success in business is matched by his humility and willingness to share his expertise.
  • The podcast host and Harley discuss the accessibility of entrepreneurship and breaking down barriers for aspiring entrepreneurs.
  • Harley's entrepreneurial journey began with small business ideas as a child, supported by his father's encouragement.
  • He started a t-shirt business in college to support his family after financial difficulties.
  • Harley's entrepreneurial spirit led him to start a DJ business at 13 and a t-shirt business in college.
  • Mentors guided Harley to attend law school not to practice law but to enhance his entrepreneurial skills.
  • Harley met Toby, a programmer, at a coffee shop for young entrepreneurs, leading to the inception of Shopify.
  • Toby's idea to start an online snowboard shop in 2005 inspired the creation of Shopify, revolutionizing online product sales.

12:17

"From Snowboards to Shopify: Entrepreneurial Journey"

  • eBay was a first-party Marketplace for third-party sellers, with niche marketplaces like IBM, Oracle, and SAP offering eCommerce functionality for large enterprises.
  • Toby disliked renting customers from a Marketplace and lacked funds for Enterprise software, leading him to develop software using Ruby on Rails to sell snowboards.
  • The software evolved into a successful business, prompting the speaker to use it for selling t-shirts during law school.
  • In 2006, the speaker became one of the first users of what would become Shopify, initially known as Jaded Pixel, running a direct-to-consumer t-shirt business.
  • After law school, the speaker joined Shopify in 2009 as the first non-engineer, driven by a passion for entrepreneurship and a desire to expand opportunities for others.
  • Sharing entrepreneurial goals with others can lead to valuable idea generation, as seen in the speaker's experience with selling t-shirts to universities.
  • Entrepreneurship can be lonely, but connecting with mentors and peers can increase opportunities and luck surface area.
  • Resourcefulness is crucial in entrepreneurship, as seen in Toby writing code to sell snowboards and the speaker's diverse business ventures.
  • The cost of failure in starting a business has significantly decreased, with tools like Shopify making entrepreneurship more accessible and less risky.
  • Shopify was initially bootstrapped, with minimal angel investment, and the speaker played a versatile role in the company's early stages, handling various functions to support the development team.

24:45

Shopify's Success: From Lease to Expansion

  • Negotiating the lease and figuring out payments, particularly with Rackspace and PayPal, was crucial in the early days of Shopify.
  • The Swiss army knife model, emphasizing a great product matched with sales and commercialization skills, was integral to Shopify's success.
  • Shopify's product was considered superior to competitors like Yahoo stores, focusing on being a versatile solution for SMBs in e-commerce.
  • Acting as a Swiss army knife, being adaptable and adding value wherever possible, helped build trust within the company.
  • Shopify's early success led to a $7 million investment from Bessemer, marking a turning point in realizing the company's potential.
  • The focus on SMBs and e-commerce initially shifted to understanding individual strengths within the team for better efficiency.
  • Hiring key roles like CFO, CMO, and sales personnel was crucial after raising capital, ensuring a well-rounded team.
  • Expanding channels and creating the Shopify app store were pivotal in reaching a wider audience and providing tailored solutions.
  • The app store ecosystem allowed for unique business needs to be met by third-party developers, enhancing Shopify's core offerings.
  • Key growth levers included the app store ecosystem, the Build a Business competition, and understanding Shopify's central role in users' daily routines.

37:52

Shopify's Strategic Partnerships Drive Growth

  • Shopify, if aggregated as a single retailer in the US, would be the second largest online retailer after Amazon.
  • Leveraging this scale, Shopify negotiated better rates with payment gateways and shipping companies, passing on the benefits to merchants.
  • Shopify's growth strategies included referral partnerships, offering a 20% revenue share to agencies promoting the platform.
  • A competitive promotion strategy, like the one with Tim Ferriss, generated significant interest and engagement.
  • Collaborating with influencers like Tim Ferriss helped Shopify gain visibility and credibility, enhancing its growth.
  • Finding brand champions with existing distribution channels, like Tim Ferriss, proved crucial for Shopify's success.
  • Economies of scale allowed Shopify to negotiate better rates with payment gateways, benefiting all merchants on the platform.
  • Shopify's partnership with Flexport for end-to-end logistics highlighted the value of strategic collaborations.
  • Emphasizing the importance of partnerships, Shopify showcased the benefits of mutually beneficial relationships for growth.
  • Utilizing partnerships and affiliate relationships, like offering free adjustments with smoothie purchases, proved effective in generating leads and revenue.

49:49

"Effective Referral Partnerships for Business Success"

  • Doctors recommend other doctors if they can't help, creating a closed loop circuit of referrals.
  • Creating an affiliate program within your customer base can be highly effective.
  • Over-delivering in referrals can lead to increased leverage and reciprocity.
  • Give potential partners customers first to establish trust and interest.
  • Be generous in referral partnerships, offering at least the cost to acquire a customer.
  • Focus on creating mutual success rather than fixating on individual gains in partnerships.
  • Interviewing successful entrepreneurs reveals a common theme of making partners rich.
  • Positive-sum thinking and optimism are crucial in business success.
  • Shopify's approach of growing the market rather than just taking a slice led to significant success.
  • Reciprocity and sharing wealth with partners can lead to long-term success and loyalty.

01:01:45

"Shopify's Culture Fosters Passion and Transparency"

  • Finding your passion at any stage in life, not just in old age, is a valuable gift.
  • Shopify operates as a founder-led company, with employees embodying a founder's mentality.
  • Shopify encourages employees to act like owners, rejecting conventional practices that hinder efficiency.
  • The company fosters a culture of crafters and founders, allowing acquired companies' founders to thrive within Shopify.
  • Shopify offers multiple career tracks, including individual contributor tracks, to retain talent and expertise.
  • Open disagreement is encouraged at Shopify to foster healthy debate and decision-making.
  • Transparency is key at Shopify, with quarterly letters to the board shared openly with all employees.
  • Open book financials are practiced at Shopify to ensure transparency and alignment across the company.
  • Embracing flaws and weaknesses openly can lead to better communication and understanding within a team.
  • Shopify's mission is merchant-obsessed, guiding all decisions to prioritize merchants' needs over other considerations.

01:14:01

"Global Entrepreneurship: Serving Merchants and Customers Seamlessly"

  • The disagreement in frameworks is not about doing customer or merchant but about what best serves the merchant.
  • Entrepreneurship is now globally default, transcending physical borders into the digital world.
  • Modern retailers are geographically and channel agnostic, focusing on serving customers seamlessly.
  • Retailers aim to make transactions easy across all digital and physical platforms.
  • Business is becoming personal at all sizes, blending personal and business brands seamlessly.
  • Authenticity is crucial in business, with consumers quickly discerning insincerity.
  • Being authentic means behaving as if you could not be punished, allowing uniqueness to shine.
  • Successful brands view everyone globally as potential customers, focusing on customer treatment.
  • Embracing personal identity in business leads to stronger connections and communities.
  • Entrepreneurship offers a path to success for those starting from scratch, focusing on solving personal problems.

01:26:27

Choosing Compatible Partners for Success

  • Finding a compatible partner in business is crucial, often more successful when collaborating with individuals who have different strengths and perspectives, leading to the creation of more successful ventures, even if they may not have been friends in high school.
  • Selecting an exceptional life partner is deemed one of the most significant decisions one can make, with the strength of the relationship directly impacting personal well-being, emphasizing the importance of thoughtful consideration in this choice.
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