Shopify unveils new Montreal office with huge Open House event


Media, techies and others flocked to Shopify‘s luxurious Montreal office Thursday evening for a celebration of sorts. A fireside chat with CEO Tobias Lutke was the evening’s main attraction, but its main purpose was to showcase the public company’s new Montreal location, which can house up to 200 employees.

In fact, the company plans to hire around 150 employees over the next few months, and Thursday’s Open House also served as a recruitment day.

It’s not the first location in Montreal for Shopify, the online store builder that boasts over 200,000 businesses world-wide as its users, including Procter & Gamble, Red Bull and Tesla Motors. It’s first office in Montreal was opened in 2013.

Still, there was reason to celebrate, as the office at 490 de la Gauchetière Ouest is both inspiring and spacious. When employees aren’t working in one of many different areas designed for both collaboration or independent thinking, they can grab a spot in the main hall and munch on breakfast or lunch from the delicious company-provided buffet.

“We’ve built a lot of offices (in Ottawa we have five), and each one was better than the previous,” Lutke told MTLinTech.”We’ve found a really good way of organizing ourselves, for introverts and extroverts. There’s a lot of common areas, a lot of peer rooms and individual spaces, so we’ve found this formula that works well for highly-creative work.”

Shopify

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Lutke mentioned that while most big companies perform the most important task at main headquarters, assigning everything else to satellite offices. At Shopfy’s busy Montreal space, it’s quite the opposite.

“The Montreal office has been working on check-out and store fronts, which is the stuff people are most excited about,” said Lutke. “We’ve found that cities align culturally with the work people want to do, so here in Montreal there’s a lot of experience building consumer websites, especially super high-performance ones that are being used by hundreds of millions of people every month.”

Shopify also has offices in Toronto and Waterloo.

As for the glamour of the Montreal office – one feels they’re in a modern tech palace rather than a simple office space – there’s a simple reason why the company chose to invest so much into a nice place, according to SVP of engineering, Jean-Michel Lemieux.

“We’re in the business of storefronts, and people are building their identity and telling a story. Our office kinda tells a story about who we are, too.”

Shopify

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Over 243,000 online stores are selling products through Shopify’s technology, amounting to more than $1 billion in sales every month. Overall, Shopify’s group of online stores have earned more than $14.3 billion in sales, and its estimated that just over 45 per cent of those sales are coming from mobile every month. Seventy per cent of stores are from the United States, while Canadian-based stores make up seven per cent.

The year 2015 ended up being a massive year for Lutke and company. Shopify went public in May, raising $131 million. In September it announced partnerships with both Twitter and Facebook, allowing merchants to sell on the social media platforms. A partnership with Amazon brought Amazon Services to its arsenal of tools, and also in September, the company began accepting Apple Pay, Android Pay, and chip credit and debit cards, using Shopify POS.

To put it lightly, the company has done a lot to allow the little guy to flourish. Lutke’s own personal story as a small-business owner flows logically into the present-day one Shopify continues to add chapters to.

The computer-programming native of Koblenz, Germany followed his Canadian wife back to Canada in 2002, where he started a business selling snowboards, called SnowDevil. He thought building the online portion of it would be an easy, week-long project, but existing software at the time was, frankly, really bad.

“All the software was built at the end of the 90’s, and not by anyone with experience in retail,” said Lutke. “They were using the wrong terms, there was no user interface and it was almost like you were editing a database.”

Creating a payment gateway turned out to be a pain, as well. It took him three months, because he had to fax a copy of his passport to a place in Utah.

Shopify

Tobias Lutke – www.cindyboycephoto.com

Lutke solved the problem by simply building his own store. Soon enough he earned his first sale, which was the “coolest feeling in the world.”

“Then we decided that maybe the purpose of this company was to help way more people experience this feeling, and that’s what lead to Shopify. The same code that ran my snowboard store is at the foundation of Shopify, and it slowly, truly built out the company. It took about a decade and it was suddenly an overnight success,” said Lutke.

Today, Shopify employs more than half of it’s team to help out entrepreneurs with the roadblocks that Lutke endured while building his own shop all those years ago. Shopify calls them the “Guru team,” a 24/7 group in both Ottawa and Ireland that helps merchants via phone, chat and email. The team made over 1.6 million interactions with merchants in 2015.

Humans fear failure. Failing is not actually that bad, but it’s the fear of being able to fail. They don’t like exposing themselves to opportunities or failure, so, in a way, you actually have to inspire people to the point where they’ll say, “I’m here and I’m going to try this, even though I could fail.” And then you have to keep up that motivation.

-Tobias Lutke, CEO, Shopify

News that Shopify’s stock soared nine per cent Wednesday seemed to be the talk of the town.

For the full year, Shopify’s revenue was $205.2 million US, up 95 per cent from 2014, while it estimated that 2016 revenue will be in a range of $320 million US to $350 million. All of the revenue numbers were above analyst estimates. For the full year, its net loss was $18.8 million, and 2016’s predicted loss will be in a range of $36 million to $42 million.

Simply put, Lutke isn’t worried about any of that. In fact, it’s all fine and dandy.

The company’s operating line, he says, is “really positive,” and the reason Shopify won’t hit profitability until an expected late 2017 date is because it’s simply been investing heavily in both people and hardware.

“If you look at why we’re posting a loss, so to speak, it’s because we’re building data centres because we have so much traffic. We build them once, and they exist, and then they run. If we wanted to be profitable, we just wouldn’t build a data centre, but then we’d be in big trouble next year.”

Lutke added that, in fact, his largest cost is headcount. Shopify has invested heavily in finding the right people, and as the evening implied, that mindset will only continue in 2016.

“We had been profitable in the past, and we liked it a lot,” said Lutke. “But we went into a growth mode because there’s so much opportunity, which means we’re spending money. We’ll be back [to profitability] soon and I don’t think anyones too worried about it.”

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