The Twenty Minute VCShopify CEO on How AI is a Scapegoat for Mass Layoffs & Trump Derangement Syndrome in Canada
EVERY SPOKEN WORD
80 min read · 16,348 words- 0:00 – 1:54
Intro
- TLTobi Lütke
People with fear of losing and people with fear of winning are clearly going to look at things much more short term. The world really needs to understand that the people who build companies are fundamentally crazy people.
- HSHarry Stebbings
Now, I've known Tobi Lütke for years. He's the founder and CEO of Shopify, $160 billion public company. This podcast is a Tobi you've never seen before. He was incredibly honest, very funny, and pretty controversial. Strap in, this is an absolute banger.
- TLTobi Lütke
All the aesthetics around what people believe to be good leadership comes from movies. I have this job so other people can have the jobs I wish I could have. None of the people who are doing jobs that are just tasks have good jobs. The more wealth and resources an entity or even individual has, the more deserving of scrutiny they are. What really sucks in the world is that we are prioritizing things that sound good over things that work. Giving money is not virtuous unless it causes the right things. I think great leaders must be exothermic and must be a heat source for the company. Many of our best engineers have not written code this year. Like December changed everything. Opus changed everything.
- HSHarry Stebbings
Does that excite you? Ready to go? [upbeat music] Tobi, I always so enjoy our discussions. I've been so looking forward to this. I have many, many questions-
- TLTobi Lütke
[laughs]
- HSHarry Stebbings
... printed out for us today. Thank you so much for joining me today first, dude.
- TLTobi Lütke
Yeah. It, um, I, I was looking forward to, uh, catching up again. I enjoyed our conversation last time. Uh, so let's, uh, yeah. I, um, and also, you know me, so therefore, um, you- this is, um, incredibly, um, ambitious of you to have lots of notes. [laughs] Like, uh, like let's try to get as much as we can. But like, uh, yes, um, chances are be- it's, um, the first question's gonna nut snare us into some kind of rabbit hole, but then hopefully winds up more interesting than expected, um.
- HSHarry Stebbings
The first question is not tell me how you started Shopify. I mean, Jesus, I love these, where they start with, and it's like have you heard my 1,000 other shows that I've done?
- TLTobi Lütke
Yeah.
- HSHarry Stebbings
Um,
- 1:54 – 7:02
Fear of Losing vs Hunger to Win
- HSHarry Stebbings
I, I do want to start there. I, I found with entrepreneurs that you can basically switch, put them into one of two buckets. One is motivat- motivated by the fear of losing, and another is inspired by that incredible hunger to win.
- TLTobi Lütke
Mm-hmm.
- HSHarry Stebbings
For me, in particular, I hate losing more than anything, and that's what drives me. What would it be for you, the fear of losing-
- TLTobi Lütke
My, my own answer to your question here is unsatisfactory to myself, partly because I'm s- I'm in the middle of trying to figure this out and, you know, if any, any thoughts would be helpful there. Um, but I, I, I do feel like there's a marked difference with this because people with f- fear of losing and people with fear of winning clearly going to look at things a l- much more short term. Um, it's like it's the next iteration matters the most, and I find that is a kind of... I think that's a limiting thing in a lot of cases, especially with partnerships, especially with, uh, like in, in, in business, especially with like working together, careers or so. It just makes... Y- Everything changes when you're taking a longer perspective. It starts, you know, sitting down with people and helping them like become the best version of themselves. Uh, you know, just like puzzling out something for them or, um, you know, giving them the hardest possible task that they could possibly manage, um, in order for them to grow. All these kind of things will have significantly more compound advantage if you, if you take a longer perspective because, you know, more of the benefits of these actions, um, will accrue to whatever it is you're building. And so I think, I think, I think it just, it really changes, um, um, like a, like a base framing you take to almost every challenge you encounter. And, um, um, it's funny because like, like I f- I think, I mean, this is what my, um, co- colleagues and friends here tell me is like, once you sort of understand that being the source of like energy that I'm tapping into, into building, like actually the rest of Shopify starts kind of clicking a little bit more in place. Like it, it just like, it's sort of a clarifying thing because you would... Like most people, like can... That I've worked with for a while, it's like they can sort of affect the how would Tobi think about this and then, but they say that that does, doing this actually m- makes things click in place, uh, and, and makes, uh, the next meeting with me a lot more predictable. So I'd say I think there's more, uh, um, orientations. It's just that many of those don't lend themselves to become executives in companies, right? Um, so it's, uh, I th- I think this is partly why, um, there's a winnowing effect that happens, um, as people are going through careers that discards people that come from, uh, you know, different motivational backgrounds.
- HSHarry Stebbings
Is that winnowing effect changing in a world of AI with different skills and different mindsets maybe required to progress than were required before?
- TLTobi Lütke
I think it's actually been changing in a v- in a, in a very recognizable way. Okay, so there's a thing called Enneagram, which is a reasonably, uh, like commonly used and, and, and quite good, um, um, uh. Unfortunately, I think it's sort of like it, it can woke and like change its terms and like, um, so you would have to find one, like a, a low background, uh, Enneagram test from t- uh, 2019, um, to, to get the real thing. But if you do it, like it sort of separates people into different, uh, you know, just propensities and, uh, whatnot. So, uh, this particular test, um, if I look through the executives I've worked with over the last 20 years, um, um, uh, you, you end up with mostly achievers. Basically, the people who have never seen a ladder not worth climbing. And, um, there's some, um, few fives who are like the people who go really, really, really deep. Um, that's often a CFO and, uh, you know, like so, um, you know, so there's some there. And in most companies, especially professionally managed companies, there's nothing else, uh, in their executive ranks. And, um, I'm an eight, which I almost already said by talking about my motivation source being, um, that I'm dissat- like this sort of dissatisfaction over sort of enshittification of everything, which I want to like fix at least in my little nook of, uh, nook of a world. Um, and so, um-Like, I don't think eights, like e- eights are basically, um, uh, conspired against in companies. They, because they are pain in the asses. They just say, they say a thing. They say, like, "This is, this is shit." [laughs] Like, if something, if the ... Our shit does not smell better than other people's shit. Therefore, um, this is just, like, exactly what it, it looks like, and we don't, any, any amount of fancy dressing doesn't change the, uh, what it is. Um, they are dangerous to everyone else's careers around them. Um, uh, they usually don't get the promotions, so they usually leave, right? What can happen is they start companies, because they do see, often see things, right? And so, um, so the effect and experiment, I think, that's been run ever since, I think, Apple brought Steve back, it just creates, created the, uh, boundary conditions for more financiers, capital boards to actually just give founders a, like, a longer run, right? Like, a long- longer run rate. And so, um, uh,
- 7:02 – 8:44
Why Builders Are "Eights" and Why Companies Conspire Against Them
- TLTobi Lütke
and then the results were pretty good because now you have diversity of executives. You have someone who no one can get rid of who just calls shit shit. [laughs] And that it just turns out to be really, really good for companies. And so, um, Shopify is remarkably high on eights because I really seek them. I, I, I, I, I fundamentally like this kind of discussion. And so, you know, that's just like, I, I mean, uh, apropos nothing. And, um, um, so I think this experiment is being run, and I think can be made to, um, uh, be a, a, you know, an active thing that people ... I think, I think this can be quite actionable. Um-
- HSHarry Stebbings
One of the most memorable statements I've heard on the show is from one of my best friends, Daniel Dines from UiPath, and he said to me, "A lot of people think they want to be me, but it's very lonely alone in my head." And [laughs] I was like-
- TLTobi Lütke
Yeah
- HSHarry Stebbings
... "Oh, I've never felt so seen in my life, and that's why I'm in therapy." When you hear that, how do you feel?
- TLTobi Lütke
I think there's no problem with that. I, I, I totally ... Like, look, I have lots of nice things. I, I have a really fun job. Um, I, I think that's perfectly natural that a lot of people want to be me. Like, they presumably do not want to spend the last, uh, um, you know, 22 years the way I did. [laughs] So, um, uh, you know, like, so I think that's a very natural thing. Um, um, I, I, yeah, like, yeah, look, I'm, I'm like, I'm, I'm a, I'm a glorious mess, right? Like, so it's just, like, I ... The world really needs to understand that the people who build companies are, like, are fundamentally crazy people, right? It's an unreasonable thing to do. Like, anyone re- like, so a tro- a trope of, like, uh, all change and all progress depends on one reasonable man because a reasonable man does not, does do things exactly the same way that everyone
- 8:44 – 9:49
People Who Build Companies Are Fundamentally Crazy
- TLTobi Lütke
else is doing. That is a reasonable thing to do in any kind of situation, right? Like, so, um, so you gotta, like, um, um, uh, um, you gotta, you gotta expect that. Um, and it's a package. It's, you know, high variance people. It's like, uh, all the, the aesthetics around what people believe to be good leadership is, uh, comes from movies, right? Like, um, or the very carefully publicly curated, um, sort of tip of icebergs of, um, how it actually worked. If you look at any biography of anything, it's like you realize, like, people are ... Like, it's, it's crazy people who, who, who, who cause this. Like, like, read about, uh, uh, uh, Watson, the founder of IBM. Like, it's, it's just like you, you, you think there's tyrants in, um, in, in, in business, uh, uh, in business right now? No. [laughs] Like, it's like, uh, you, you don't, don't know anything about how these things went, um, uh, back in the day. So, uh, absolute fireworks every meeting. Um, and so I have this job, so I cr- so other people can have the jobs I wish I could have, right? Like, uh, like I'm, I'm, I'm running interference.
- 9:49 – 11:00
Why Tobi Didn't Want to Be CEO
- TLTobi Lütke
I, I, I f- I didn't want to be CEO. I, I learned I had to become CEO because you can't be, you can't run a product-driven company without also being in control of a company. Like, because, uh, if you're, like, the, the, the needs of product and companies are extremely, um, divergent unless you're taking a perspective three years out, at which point they kind of become, to come to the same point and actually augment each other. Like, um, so basically every single day is like a marshmallow test, right? Like, are you, are you gonna eat the marshmallow now, or like, like, uh, you get two in the future. And like, frankly, which we know from the actual marshmallow tests, like, people don't usually wait for two marshmallows. Um, you know, it's, it's like, it's, it's just, like, not in human nature. It's like, like, everyone's discount rate is different, but, like, there's some sense to this. So, um, um, but if you want a great, great product, you have to take a very, like, this sort of long-term position, and you, long, taking a long-term position doesn't mean just, like, bring up, oh, like, numbers in three years. It means willing to, um, have bad numbers for a while if you, if you, if you think this is gonna lead to the right place. A- and that's, that's a, that's a hard choice to
- 11:00 – 35:26
The Luxury of Long-Term Thinking as a Public Company
- TLTobi Lütke
make. But it's-
- HSHarry Stebbings
Do, do you think you have the luxury to do that today being a public company, given the expectations that Wall Street puts on you?
- TLTobi Lütke
Oh, yeah, of course. Um, yeah, it's just big, dude, like it's, there's nothing better in the world than being a trusted public company. I mean, the second-best thing is being a trusted private company. Um, uh, it's much worse to be a untrusted public company than an untrusted public private company. So, like, as a stack ranking, it's like unfortunately people become a trusted, uh, private company by the investors and have to actually take a step down to being a untrusted public company by going public. This is why people don't go public. They, they just can't deal with that, which is funny because, like, it's actually required to then get to the best bl- spots in the end. Um, so which is literally the reason why we didn't, we, we, we did it 10 years ago when we were tiny because it just felt like, cool, like, let's go make the careers of public market investors who bet on us, and then we go and, um, they make lots of money, and then they become o- on our side and over trust us. So.
- HSHarry Stebbings
Do you think that chasm is harder from trusted to untrusted if you are much larger? We both know the Collisons, I'm sure. Like, that chasm for them seemingly will be much larger given their $150 billion price now.
- TLTobi Lütke
Yeah, yeah. I, I think, I mean, again, I think everythingE- like any approach works if you have a Collins & Brothers. So i- i- it like, I don't think it matters for them. Like, so, so they, they can just, like, decide. Um, I think they are really bad proxy for what you should be doing, um, because, uh, most people aren't. Um, so I, I, I think it's a much saner strategy to like do the flip to public as a minor financing. Like this is a, this is the thing, like again, 10 years ago, uh, more actually, 11, um, tw- twen- uh, 2015, Shopify's, um, revenue, I wanna say... I mean, I'm sure people are gonna laugh because I'm getting these numbers wrong, but like, I don't know, 200 or something n- million or whatever. Like, it's just like, um, I remember, man, like the valuation for first trade, you, you set the pricing to then like figure out who go- comes in the book right after the roadshow. It's like y- a high-stress meeting late at day after like spending a week just, you don't even know which city you are in. Um, uh, just like d- doing a presentation 100 times. Um, uh, and, uh, you, you, like, everyone's like, "Well, here's Fidelity. They, they did place this order. Here's like, you have a book, right?" And like, and so you have to figure out, okay, well, what is the price you set? You're literally arbitrary, um, that, that you do. Um, um, you as a CEO have to set that price and you get, um, all sorts of advice. Now, the advice comes from the investment bankers, um, and, um, you are not their customer. You, you, you're their crop. Uh, their customers are actually the people in the book, right? Like, so their job is to get everyone in the book the cheapest, um, possible, uh, deal. Um, but they, you know, that is of course beautifully obscured in the process that, uh, who is the customer of whom? And, um, uh, luckily I sort of studied the way the compensation packages work for ves- uh, for, for the investment bankers before I got went on the road. So this was all kind of pretty transparent. And so, um, uh, anyway, so, so-
- HSHarry Stebbings
I'm sure they were thrilled about that. [laughs]
- TLTobi Lütke
Yeah.
- HSHarry Stebbings
Well.
- TLTobi Lütke
Yeah, no, no, I don't, I don't think they liked it. I mean, but y- yeah. Anyway, um, I was also very clear about this. I was like, "Hey, I, I understand how you are going to get your bonus, so, um, I will... I like you, I want you to get your bonus, but like I'm becoming a public company CEO, so I'm gonna start my fiduciary duty, uh, T minus 10." [laughs] So I'm like, "I'm, I'm, I'm, I'm gonna optimize for the company n- for you." So anyway, uh, and then they, they totally expected that. Um, so, um, uh, in fact, the banker who took me public is my CFO right now, so like 10 years later, which is really funny. Um, so high-stress meeting, like picture 80th floor somewhere in Manhattan. Um, room, the biggest table you've ever seen, lots and lots of people, paper everywhere, prospectuses, calls, um, high tech, an iPad. [laughs] And, uh, with the, the, the, the order book, everyone looks at this thing, uh, people are making changes. Um, and you have to freeze at a certain point. You pick a price, and it, it just like everyone put a limit order in that's like, like caps out at 14 for the first trade. I just thought it was crazy. Like, um, everyone in the room, literally absolutely everyone's like, "No." It's like you gotta like, you, you gotta give allocations because most other people will stay in your stock and they're long-term, they don't immediately flip. Um, blah, blah, blah. I was just like, "Okay. Well, whatever." I, I, I, I raised it past the range be- because we had a lot of pickups. I knew where my growth was gonna come from. I was kind of unafraid, and I picked the knowledge I thought was, like a really good one. Fucking first trade was $10 higher or something. [laughs] I was just like, "Fucking hell." It's like, it's, it's, it's... So, uh, clearly I, um, I was, uh, uh, pr- pretty much really happy with my performance at this moment. Um, and I should have, uh, um, uh... The nice, the beautiful thing about markets is they actually, um, uh, they are, they are excellent, uh, sort of distributed brains, and they tell you, uh, what it really was. Anyway, the point was we went out at, I believe, $1.67 billion valuation, and I think we are... I mean, at various times, not right now, I think, but like, uh, I don't know, I don't check. Um, it's like 100 times higher now. So, um, uh, and, and as you can imagine, that makes a lot of careers, right? Like, it's like, like the people on the road who then didn't like fucking like not place an order for like a couple of dollars difference past their range for a good company, um, um, probably got their promotion at all of the places. They are the senior partners now, so they love Shopify.
- HSHarry Stebbings
Tobi, you're one of the most thoughtful CEOs that I know, and I've, I've interviewed a thousand, so, um, the catalog is quite wide at this point.
- TLTobi Lütke
[laughs]
- HSHarry Stebbings
When we think about today, how many people do you have in Shopify, a round number?
- TLTobi Lütke
Just, uh, like about 7,500, 8,000 people.
- HSHarry Stebbings
7,500, 8,000. How many people will you have in five years' time, do you think?
- TLTobi Lütke
I mean, my real hope is 7,500 to 8,000, right? Like, uh, at, um, 100 X productivity level, right? Like, um, I, I, I, I do think there's problems of scale. It would be sad to be in a company that is like opportunity limited, right? I, I actually might, maybe I shouldn't say this. Mo- most companies probably are opportunity limited. Um, they're probably not ambitious enough for, for... And I, I mean this in a product sense. Like, again, remember, like Shopify's, like Shopify has a fairly broad mission. We, we want to make entrepreneurship more common, right? Like, and, um, so, um, inside of this ambition, we can do a lot. I just think we're gonna go into golden age of entrepreneurship. It's the, by far the most AI-safe job. Um, it's by far the most AI-benefiting job. Like think about that combination here. Um, so everyone who has a plan B of like some kind of ambition of like, "Hey, I'm gonna make products," is gonna be like, "Yeah, let's fucking go." All priors don't matter anymore because like doesn't... You didn't need to come from a family of entrepreneurs and having like s- been at dad's, uh, office or, or your grandma's, uh, printing mash- uh, shop in my, my, my case, um, to understand that a business formation is something that real humans can do and, and, and, and, and that gives employment and these kind of things. You can actually... I mean, first of all, you learn that anyway, and then all the various tasks, your handy sidekick AI will, um, who, who acts as your co-founder will just tell you, right? So-
- HSHarry Stebbings
So when we l- So if we're staying flat in the hope, for all the layoffs that we see today, is that-efficiency gains from AI, or is that over-hiring in a COVID era?
- TLTobi Lütke
Yeah, it's over-hire-- Like AI will change the mix of jobs, no, no doubt. Um, what you see right now is not AI layoffs. Those are just, like, the companies that are really slow that, like, over-hire just like everyone else, um, um, do- doing it now. What you will see is, like, AI is gonna be blamed for absolutely everything, right? Like, because it's, like, it's the perfect scapegoat. It's the perfect Jeradian Sc- Scapegoat for everything, right? Like, it's like it can't fight back. [chuckles] It's like, um... In fact, um, you can beautifully, uh, find communities which I think are entirely wrong, but, like, they are around. There is people who are talking very eloquently, um, uh, about, uh, the dangers of AI in past jobs, and like, it's like, like, they're like, "Th- th- my industry has been gaslighting, uh, everyone into, like, uh, AI fear, and, like, sci-fi has done it for the 60 years before that too." And so it's like, like I don't even know who's, like, supposed to be on, on, on their, his, his side. That doesn't me- Like... But, like, it's just, like, incredible, [chuckles] right? It's like, it's, it objectively, like, mind-blowingly making my life better in, in every which way. Like, everything.
- HSHarry Stebbings
Do you think you have a utopian lens? When I look at what Claude can do when it comes to social media, design, I'm being blunt, uh, a lot of tasks which are not actually that difficult, but they are execution-oriented. Um, I know I've done them, so people can't be upset with me for it. [chuckles] Um, Claude does it very well now.
- TLTobi Lütke
Mm-hmm.
- HSHarry Stebbings
Like, uh, how do you keep that utopian mind with the recognition that most of these tasks are easily replaceable with agents?
- TLTobi Lütke
Look, because the, none of the people who are doing jobs that are just tasks for other people have good jobs. Like, those are not good jobs. Being a ta- a, like a, like a, an automated task queue is not a great job. Great jobs are, like, things where you have agency and can produce things and make things.
- HSHarry Stebbings
Do you think everyone can have a great job, though?
- TLTobi Lütke
Like, look, lots of people who are r- right now rich choose not to work, right? Like, this is a very, very common thing, right? So, uh, like I, I... Lots of my friends are telling me, like, "What the fuck are you doing, Tobi?" Um, uh, and I'm just like, "Hey, I'm, I'm, I'm, I'm born, bred, uh, for, for working." I, I, I'm like, I'm, I'm like, don't ask the, um, don't ask a rain cloud to do the job of the sun, right? Like, it's like I, I'm, I'm like, this is my task, and I, I, this is what I do. Um, and maybe some people aren't. Um, lots of people, what they do on a weekend or what they do, um, in the evening or for some extra dollar, like give guitar lessons or so, is va- vastly more productive for society [chuckles] re- but than, uh, the, the, the cashier job at the supermarket, right? Or the, um, uh, these kind of things. So, like, I think, I think people will get options. I, I, I think, uh, you know, products will get enormously cheap or purchasing power g- is gonna go up like crazy. Um, um, and, uh, people will be able to make choices. Uh, we will find no- new ways of, um, working together. We will, um, find much more liquid ways of moving money around for value, um, generated. You know, I, I know, uh, multiple people who have done, built companies, they sold the companies, uh, re- really, really well, and they became essentially gentleman scientists or gentleman programmers. Like, you know, most of us who use Cloud Code use it through Ghost- Ghoste, uh, on a Mac, or usually Ghoste is a, like a terminal application. It's just, like, perfect, right? Like s- Like, and it's like, it's such a weird thing to have spent your time doing this, but like, um, the offer chose to, uh, after he sold his company, to, by hand, make a piece, like a, like a perfectly crafted piece of software that he thought needed to exist, and now everyone agrees with him on that it needed to exist because he built, like, everything on it. Um, I have like 15 Ghoste terminals on my desktop all around you right now, [chuckles] like, so, um, which I'm, uh, uh, ignoring, uh, because we're having a fun conversation here. Um, but I wouldn't if, uh, you know, I would be on a phone call with, uh, some, uh, l- l- legal necessity, uh, uh-
- HSHarry Stebbings
[laughs]
- TLTobi Lütke
... just like, uh, uh, telling through Ghoste to my, uh, clankers what, uh, needs building at Shopify. And so, um, you know, that's the world we live in. So I, I, I, I think we are all gonna get figure out, figure out, like, um, remarkable ways. Like, like think about just how mu- how good we are at coming up with new jobs. We are incredible at this. Like, it will never stop being incredible at this. Like-
- HSHarry Stebbings
Of, of the top 10 best paid jobs today, eight did not exist 20 years ago.
- TLTobi Lütke
It's a brilliant stat, and that is going to be true in 10 years too, and 10 years after that. And so, um, like my favorite example of this is, like, again, a motorsport guy, is Formula 1. Like, Formula 1 is one of the biggest spectacles providing the best jobs. There's 800 people building an engine, um, uh, at, at Mercedes, and at every one of the engine manufacturers. 800 people are building, are living in the perpetual golden age of, of, of, of this type of industrial mechanical engineering. Everything matters. It's all skill. They're getting scorecard every weekend how they are doing compared to everyone else. They are basically in like, um, engineering world championship, and that's the same for aerodynamics team, the chassis team, and so on. And it's a sport named after a rule book. Think about this. Like, it's, it's like Formula 1 is literally the name. It's not, it's not the name of a sport. It's the name of a rule book. We just call it Formula 1 because the, uh, the s- the sport falls out of a rule book, and it's this thick. You can get it. It's actually... I have a printed version of it. It's absolutely fascinating. Um, and, uh, uh, uh, you know, like, um, so that's the 800 people. They are... Another 800 people, uh, work on the car, and then the drivers and all the... Like, we, this, we just made this up, right? Like, it's, it's like this, this is all, and all of our lives is richer because it exists, I think, b- um, because-
- HSHarry Stebbings
Do you know what my favorite thing about Formula 1 is actually, though? It's the importance of storytelling. I... If you followed Formula 1 for 10 years, you'll remember it was Bernie Ecclestone and, uh, Blundell, an aging sport withmiddle-aged to older man only liking it with a really decaying audience.
- TLTobi Lütke
Mm-hmm.
- HSHarry Stebbings
Drive to Survive saved the sport in many respects.
- 35:26 – 37:07
Why "Not-for-Profit" Should Make You Suspicious
- HSHarry Stebbings
I'd rather push on those-
- TLTobi Lütke
But who controls those two things? This is the thing. Like, it's like the world has... Like, we, we have too much charity dollars. The, the problem with charity dollars is they can't be given to anything that has, um, a, uh, a, a self-healing fitness function, like, which is very fancy way of saying the words for profit. Like, markets voting of if a thing should exist. And, uh, like, a not-for-profit, like the raw term, everyone should be deeply suspicious about because you basically said, oh, the best fitness function mechanism that planet Earth has ever invented, the thing that's has-- the o- only thing that's ever raised anyone out of poverty really, um, at, at scale, um, is the thing you're not participating in. So, so you, you're, you're documenting that you're opting out of markets, but you will not tell us what your actual, uh, uh, like, uh, fitness function is. And fitness function is just like how, uh, do you know if a game you're on is worth playing, uh, and continuing, right? Like, therefore, the fitness function is going to be just determined by anyone. It replaces merit of organization, um, with pool of individuals. Who is attracted to these places? The people who want to do something that, uh, for which you have to use, um-... yeah, pull. And, um, um, you know, the, the smoothest talkers, the people who... It's not the builders who are doing it. Um, they go and like then, uh, become, uh, you know, run these institutions. And by the way, this is not a bad faith take. This is a, like a, this is the system that's set up. It's fine. Like, and, you know, sometimes it works. And like, um, there are great charities.
- HSHarry Stebbings
Uh, do you believe in government intervention? I'm in Europe, where we have a lot of government intervention.
- 37:07 – 41:04
Tobi's Take on Government Intervention & the Prussian School of Economics
- TLTobi Lütke
No, not really. Um, I, uh, well, I mean, okay, so let, let me rephrase this. Yes, um, in... I am a fan of Friedrich List, who is a Prussian. Long before James Hunt and Niki Lauda's rivalry, it was, um, Adam Smith, laissez-faire, and, and, and Friedrich List, and the Prussian School of, um-
- HSHarry Stebbings
[laughs]
- TLTobi Lütke
... uh, uh, uh, like, uh, uh, economics. And so, um, I... What the Prussian School says differently to laissez-faire is that, um, the role of government is very simple. It's to define games that have, as externalities, um, uh, societal, uh, thriving. And, uh, then completely get out of a game, uh, to then, um, uh, let the players in this game c- cause through com- through means of competition, um, extremely positive externalities to accrue to society. Which, you know, again, ha- happens automatically, like, um, in, uh, uh, profit-seeking markets because, again, what a company does is it takes, um, the potentiali- potren- uh, potential value that exists, which is infinite, absolutely infinite, coalesces into products that other people then vote for. And again, the voting mechanism causes then a, a larger supply chain and more of a supply o- of these products coming into society, and then, um, that creates a wealth, and then the wealth is, uh, part of a society. And any dollar that's created, um, from in, in a, in a place that brings new dollars into the system cycles seven times for, uh, uh, for society, um, um, and, and, uh, in a, in a local way. So do- dollar flowing into like a community, so this is why it's important to have local, uh, businesses, um, then cycles seven times through the payroll of people in there. Like, uh, again, into a company, then into, um, um, through, through, um, payroll out, and then to the barista's, uh, salary at the, at the Star- local Starbucks, and so on, so and so on. So, um, m- money itself is amplifying. Um, th- this, this is through the mech- through mechanisms of trade and, uh, also through, um, uh, uh, debt creation by banks. Um, so am I for government interventions? Governments are extremely bad at what they do. Uh, e- everyone needs to know that, like the moment a government takes over anything, it'll cost 10 times as much, which is really, really, really bad because it just like, you literally can... Like, the, the second someone says, "Let's run grocery stores," um, uh, as a government, um, there's gonna just be like a couple hundred people like me have to go and, uh, like, uh, build companies to make up the wealth that just simply evaporates in this moment, right? Like, so one, one of the most inspiring things that humanity's ever done is outsource, uh, uh, violence to, uh, governments, um, because, uh, that is causing... You know, just like that creates the environment in which personal property can exist, and personal property is the boundary condition and, and foundation of everything else I'm talking about.
- HSHarry Stebbings
We, we mentioned kind of fears or concerns or w- where our society's worrying. One thing that worries me is bluntly Europe falling into this kind of chasm of irrelevance. It's why I started Project Europe, which you kindly supported. Um, you've got US and Canada, and you also have Asia. What would your advice be? Or if I placed you in charge of Europe for the future, what would you do to encourage growth and innovation in a relatively stagnating economy?
- TLTobi Lütke
I have lots of thoughts on this, of course. Canada has, uh, all resources that Canada needs for literally everything, uh, uh, everything that we are going to do for the next 20 years. Um, it's, it's, uh, it's purely a choice. Like, like Canada ought to be the richest country on planet Earth. Um, um, so it can, it can become that every moment it wants. It's, it's actually quite easy. Um, uh, uh, it just has to be willing to build some mines, right? Like, um, so which, which somehow is controversial, uh, which, um, I never-
- HSHarry Stebbings
Are you proud of Connie's pushback on Trump? I've had him on the show multiple times. I-
- TLTobi Lütke
Mm.
- HSHarry Stebbings
Would like to think he's a friend.
- TLTobi Lütke
Yeah, I love the interview. It was a very good interview you did. Uh, uh, I think I watched the second one with, um, Connie.
- HSHarry Stebbings
Are you proud of him as a Canadian for like bluntly standing up in an elegant and independent way?
- 41:04 – 44:18
Canada's "Trump Derangement Syndrome"
- TLTobi Lütke
I can't say I'm proud of him for that. I, I, it's the greatest... It's one of the greatest speeches I ever heard. I don't think it's a full credible witness to the reality on the ground. I, I, I just like... I, I, I also love a speech that is an ambition for, for, for a country. I personally disagree with, uh, uh, the stance to the United States. I, um, I think Canadians are massively overfit to, um, n- niceness. Like, it's kind of a best thing and a worst thing, uh, in a country is like to, to, to prioritize niceness, um, because it's like, I mean, it's certainly pleasant, but the problem is it leads to, it leads to, uh, unkind lies, right? Like, it's like, it's, it's means like you're lying by omission. You're lying, um, by saying things are fine when they aren't, right? Like, it's, it's like this is, this is a, you know, can you speak the truth is a much more important test. So unfortunately, the way that intermeshes with the Trump administration is, is, is really brutal because it creates this sort of positive feedback loop inside of Canada, which is... Because he is so unbelievably not nice, um, [chuckles] in, in any which way you look at. There's a Trump, Trump Derangement Syndrome in Canada that is just stunning. 60% of people, more than 60, I think the numbers have gone up since, people think that the United States is the largest risk to, uh, Canada, uh, like much larger than like Russia or China would be. And, um-
- HSHarry Stebbings
And you think that's wrong?
- TLTobi Lütke
Of course, it's wrong. It's because Canada is like... C- C- Canada is, Canada is a small economy attached to a, um, hegemon. There's been one winning strategy in Canada's h- history, um, uh, which is, um, win by helping America win, and that's like Connie is saying that it's over. Like everything he's doing I'm agreeing with. Like it's like, "Hey, let's diversify the economy."Bang idea. Let's, uh, get closer to Europe. Perfect. Let's go. Um, Asia, let's go. Um, like I, I, I'm pro all the things. I, I just really don't think we need to choose. Like, it's like, like the, the obvious way for, for prosperity here is to, um, build the shit out of, uh, pipelines, build the shit of our industry, like get resources that everyone needs, fucking starting to actually refine the stuff ourselves because like we have the high- the most educated, uh, um, workforce on planet Earth here, and, uh, we, we can literally do everything. It's just the problem is, I don't know, you think- are you still in London? Like we-
- HSHarry Stebbings
Yeah
- TLTobi Lütke
... Canada, Canada started, um, uh, for, um, trapping beaver pelts, sending to London, getting them turned into hats, and then buying them back, right? Like it's just like this is the Canadian sad story is we get the resources, other people make the money, and so we've never changed from that. Make end products, uh, uh, usually, and so therefore, uh, it's very, it's very, very rare that Canada does anything. It's like Canada Goose, Lululemon, Shopify, maybe Miller Lite. Like it's like that-- what, what other products exist from Canada?
- HSHarry Stebbings
You, you, you mentioned that like we over exaggerate the, the concern there around the US or the threat that they pose. The thing that I think we're all like not talking about is how every great American company is using frontier American models and then going, "Well, that's too expensive, so let's use open source Chinese models to get as close as we can to the benchmark set by US frontier models."
- TLTobi Lütke
Mm-hmm.
- HSHarry Stebbings
And it's like these CCP-funded models are basically powering a lot of the US startup ecosystem in many ways. Do you think the Chinese threat is
- 44:18 – 47:13
The Real Chinese Threat
- HSHarry Stebbings
underestimated?
- TLTobi Lütke
I mean, I think it's both underestimated and overestimated, but like, uh, you know, I think the much more bigger threat is that, uh, uh, in a lot of countries, I think this happened in, uh, Spain already, and I think even in the United States, social media aside, like the moment the government has ability to, uh, decide at which age, uh, children can use, uh, uh, technologies, they will, um, it like this goes like taxes, right? Like it's just like AI has so many naysayers, like we are gonna tell kids they can't use AI. Kids will not st-stop using AI. What they will do is they will download Chinese models, and you will never, ever, ever get another high school essay about Tiananmen Square [chuckles] as a consequence of that. So, um, is that truly w-what we want to create here where, um, uh, children are, um, incentivized to, uh, get a monoculture of... Like because models are trained, uh, um, and, uh, RLHF'd into, um, a perspective. Chinese models are, es- I mean, especially if you switch them to Chinese and then a-ask something else to translate, it's, it's a very collectivist worldview, which makes sense because a collectivist country. I, I mean, this is the predominant fight. Like all, all politics is just collectivism versus individualism, right? Like it's, it's, it's everything else is, uh, people, um, smoke screening this stuff. Um-
- HSHarry Stebbings
Do you let your kids have social media? I was gonna ask this of one of the biggest technology leaders I can tell you after the show.
- TLTobi Lütke
So it's really weird-
- HSHarry Stebbings
And his team was like, "That's the one question we won't let you ask." [chuckles]
- TLTobi Lütke
This is gonna be super, super unsatisfying to people because I, I feel people hope that I would have a very strong opinion of this that's actionable, and I don't because for the craziest coincidence, my kids are totally uninterested in social media. Um, like they just don't, they completely don't give a shit. They follow links to, uh, uh, social media sometimes, but they have no interest of being, having accounts, and they don't have phones. They, they've never asked for them. It's like it's bizarre. Um, I taught them when they were very small. So I-- they have PCs, right? Like we-- because we, we, we make-- we do video games, uh, as a family. And, um, I once, I probably just ran my mouth. I, I, I-- When, when, when phones came up, it's like I think Tristan, my oldest, said that, um, like a bunch of kids, uh, in his class are starting to get phones and they're just super distracted. Um, um, and it's cutting into their book reading time, which, uh, f- I mean, tells you a lot about Tristan. Um, and then I said, "Yeah, like I mean, at some point you will ask me for a phone and I'm gonna-- you will have to cash in your PC because you can only have one of those two things." And somehow that became the meme in the house, and they're just like so into their PCs that like it just never comes up. So honestly, I, I, I can't add much to this, uh, uh, c-conversation. I also have three boys, which I think, um, is a very important, uh, uh, sort of data point there because I think the situation with social media, if f- for what it is, is like very different there, um, for genders. Has a different effect on them.
- HSHarry Stebbings
Going back to our question, I'm making you the new president of Europe, which is a brilliantly American title, um, which doesn't exist obviously, as I'm aware, for anyone who's about to chastise me in the comments. What would you do to ensure Europe remains on a global
- 47:13 – 50:49
What Tobi Would Do to Fix Europe
- HSHarry Stebbings
stage?
- TLTobi Lütke
Well, you have to get rid of, uh, uh, uh, the, uh, climate cult, first of all, um, because it's just like in- like I mean, it's one of the most evil things that's been wrought on, uh, on, on, on population. Um, yeah, like-
- HSHarry Stebbings
So when you say the climate cult, you mean what?
- TLTobi Lütke
Like r- random green parties like having as part of their founding myth that somehow nuclear power plants are bad and shit like this, but like it's everywhere, right? Like, like, like we can't build, um, incredibly important infrastructure factories because some fucking frog breeds once in some fucking creek on the perimeter and like this shit, right? Like, like what the fuck is... Like this, this, you know, if, if we would be in a saner world, um, and, uh, someone would go and like write a, uh, sort of sci-fi book about the future and describe the shit that you actually have to do to do something on this planet, it-- everyone-- the book would go nowhere because everyone's like, "This is just like completely made up." Um, so, um, uh, uh, but actually we all live in a world where just like there's people do not understand that there's very few people who are, have a capability to truly build things, um, and they need to be enabled by, uh, um, the village, um, uh, to, to build those things, and then they also have to be held accountable by the village. Again, I f- I think Europe, especially now that UK has left the European Union, needs to double down on Prussian, uh, uh, economic theory, uh, of Friedrich List and his, uh, co-conspirators and just define excellent games that create internal markets. You know, a country is defined by its, uh, you know, s- like sort of internal, uh, um, again, government services of, you know, like security, safety, f- uh, property rights, uh, body of law, um, um, policing and, um-Uh, these kind of things. Um, governments have no money. Uh, they, they can't make money. Uh, uh, like, um, they can only take money by compulsion, right? Like from people, uh, who, who create things or, or, or, um, uh, work. So, which is fine because that is a funding mechanism by which when, um, um, um, uh, they are doing these services that we deem valuable and build infrastructure and so on. And I mean, in the, the, the infrastructure is a really interesting case because infrastructure has... It's probably the most profitable thing that exists and ever has been existed. Like just building highways, like, changes everything and, uh, uh, building an airport. Everyone's about how much an airport costs. Every airport ever built, um, uh, like that- that's actually, like, connected into the sort of hub and spoke system on planet Earth is, is probably is like, I mean, especially the older ones are probably running trillions of dollars of profits in societal to, uh, value creation. Um, so infrastructure is, like, one of those things that businesses are really bad at making, and it sucks that we're committing businesses to have to build infrastructure of this thing because it just doesn't actually fit into the timescales. Like even the long-term focused businesses can't really build infrastructure very well. So, um, you know, you have odd SpaceXs that can start a new city in a swamp, um, but that's gonna be just like, it's not the way to do it. Um, so infrastructure building is very good and, uh, in the end, you define games, um, uh, and, uh, you are therefore getting an economy that's growing. And by the way, there's no speed limit, right? Like, um, uh, for, for that. And, um, then afterwards, you can have a discussion about, like, how do you take the riches from this economy, like the, the, the, the additional profits, um, and then sculpt the economy that you want. And this has been like ever since Enlightenment, this has been the path by which all, you know, progress happened.
- HSHarry Stebbings
What were you wrong on that cost
- 50:49 – 52:25
Shopify's Biggest Mistake
- HSHarry Stebbings
you the most?
- TLTobi Lütke
Very often, um, uh, most of the things you're wrong about are like the, the paths not traveled, um, and, uh, sort of, uh, where you f- many years later understand that the counterfactual would be, like, a better position. Um, there's, I mean, lots and lots of deals. I think my most public mistake was, um, going into, um, full-on logistics and, uh, uh, physical warehouse, um, um, uh, uh, building just before AI got really good and not... Like, and we didn't have ability to, uh, you know, do both of those things at the same time. So we, we actually had to, like, abandon this thing. I still think the initial decision was right, so which is actually how I evaluate my, um, uh, performance. Um, but, um, um, actually, I think I've-- This is actually starting to be harder to make that case because I now know about information I could have had and would have been available to me back then that, uh, would have discredited this path. So I probably just actually got it wrong and maybe just admit this. Um, that one sucked because it just, it affected people's lives with employment and so on. Um, uh, but, um, but you know, I'm wrong all the time. I've been wrong more times than most people will ever be wrong. I, I, I, I, because I do a lot of reps on, on, on it. I make falsifiable statements because I want people to falsify them. I, I, I'm, I'm unafraid of a conversation. I'm unafraid of... I, I'd also just... I don't care that much about what people think about me, honestly. It's just like it doesn't-
- HSHarry Stebbings
Do you know why that with the weight of your decisions and the weight of your voice, when you speak, seven thousand people follow you, and with the frequency of your wrongness, that could be very costly [chuckles] ? I think you said before your job as a CEO is to, like, inject chaos into an organization.
- 52:25 – 55:19
Great Leaders Must Be a Heat Source
- TLTobi Lütke
It's... I, I prefer to, uh, call it, uh, temperature these days, um, just because it's, like, chaos probably is too negatively connotated. I think, like, w- I mean, what is heat? Heat is atoms that jiggle, right? Um, uh, and with enough heat, these, these atoms, uh, I mean, they usually come in the form of molecules, and, uh, with enough heat, molecules refuse into something maybe worth having more. Um, that's what all of chemistry does. Um, so, uh, you know, like, I think it's very hard to f- forge anything new at room temperature. So, like, I, I, I think great leaders must be exothermic and must be a heat source for the company. Um, uh, it, it's very different opinion than the custodial, uh, um, idea of leadership, which is also a valid position to take. Um, um, I do not need to inject heat into any area that has heat, right? Like, so, um, that's not needed. Like, there are some areas that are so red hot because everyone's just, like, so into just chasing innovation or, like, just incredible, uh, vision or whatever that, like, just, like, I, uh, my services are not needed here. Um, um, uh, and, um, I get to get to play a completely different role in these areas. Um, but the... Those are usually not the ones I'd spend my time on because I spend my time on everything that's wrong. Like, just again, bright people should not overestimate how good these jobs are because you, you literally... I, I, I have a folder. So, um, uh, one of my concessions to potentially, uh, may- maybe call it vanity. Uh, I don't know if it's quite vanity, but like, um, like maybe call it, uh, motivational, uh, plumbing is, uh, like, just like I have a part of my Obsidian folders that are just, like, people that I respect who said things about things I built, um, uh, that are, um, meaningful to me. Little jolts of, uh, positivity and, uh, uh, um, mini accomplishments, um, 'cause every once in a while, like, just, like, especially you, you can... I, I can handle a couple of days of this, but, like, once it gets weeks where I only heard things that are going extraordinarily poorly or, uh, people making life decisions which, like, have incredible... Like, I mean, just like, I mean, retire maybe, or like do mojitos on beach because, uh, kind of fig- somehow figure that's a good idea. Um, um, then, uh, you know, just like, and there's like deep consequences, like months of work to figure out how to, you know, create continuity of an area that otherwise was go- going great or whatever, or much worse, um, any of these kind of things. Um, um, you get a lot of, you know, people's health issues, like, you know, just like it's all affects companies, right? So, so sometimes you just get into these, like, really, really dark places, and then it's just, like, a nice pick me up. So, like, I'm not completely, um, detached emotionally from this. In fact, I'm actually enormously emotionally attached to Shopify. I think that's actually a common thing with founders too. It's, uh-You know, emotion is-
- HSHarry Stebbings
Which is why I'm surprised when you said earlier you don't look at the ticker.
- TLTobi Lütke
I have a ticker.
- HSHarry Stebbings
Every public company CEO I meet is
- 55:19 – 58:09
Why Tobi Never Looks at the Stock Price
- HSHarry Stebbings
like-
- TLTobi Lütke
No, it's not. The ticker has nothing to do with the company I'm building. The ticker is a, um, is guessing at the fair market value of a company. I work on a fair market value of a company. I, I, I... Like the ticker is just other people's game to make trades based on their fu- assumptions of a future, uh, uh, compounding fair market value.
- HSHarry Stebbings
When has the ticker been most wrong?
- TLTobi Lütke
At the beginning of COVID, we, um... I think the ticker went up, I, I wanna say like, I, I don't even know, like a lot, uh, 100% something more. I like-- And, um, we did not get 100% smart at that moment. This is a- as a founder, uh, especially again as a someone who's lived with the ticker for 10, 11 years, this is really not sup- surprising or confusing. I, I, um, have not looked at, uh, the ticker in April. Like I, I, I can, I know this for a fact. Um, um, so, um, it's probably much longer than that, but I definitely know I haven't looked in the last, uh, 23 days since when we record this, um-
- HSHarry Stebbings
Which by the way makes you a complete anomaly. I pretty much only interview public company CEOs now, and I've never met one like you.
- TLTobi Lütke
Again, it depends on where you are, it depends on what kind of company you run. In some companies it also has more relevancy, right? Like, I mean, if you run a gold mine for like, you, you, you have a s- like you have no differentiation in the product. You might have differentiation in the amount of mining rights. Um, um, I talked with a goldmine guy. This is why this is my example here. I just thought it was funny. Um, for them, technology is actually, uh, investor relations. If, if, if you are the CEO, like your job is to, uh, you know, be everywhere and take off with everyone and, uh, you know, um, you know, just like, uh, be extremely charismatic because like if you can somehow finagle your multiple to be slightly higher than other gold mines, you just buy other gold mines, right? Like, it's like this goes very quick. So you consolidate, like it's, it's actually your product is not the gold, your product is actually your IR, [chuckles] so, uh, investor relations. Um, so, um, yeah, like, I mean that sounds like not an environment in which I would thrive. Sure. [chuckles] But, uh, um, uh, I, I don't-
- HSHarry Stebbings
Now I know why you're not a venture capitalist, Tobi. [laughs]
- TLTobi Lütke
Yeah, I, I... So it's funny. Uh, yeah, I, I, I, I think it would be very bad, uh, um, uh, uh, venture capitalist, I imagine. I, I don't, I don't know. I think I, I tend to think I can onboard to anything. I, it, it wouldn't come natural to me and, uh, therefore probably not what I would do. Um, and, uh, I'm just like too interested in making things. I, I'm, I'm, I'm just, I'm, I have a book every day of my life.
- HSHarry Stebbings
Tobi, I'm gonna do a quick fire round with you. So I say a short statement, you give me your immediate thoughts. What have you changed your mind on most in the last 12
- 58:09 – 59:46
Senior Engineers Don't Write Code Anymore
- HSHarry Stebbings
months?
- TLTobi Lütke
One thing I'm wrestling with is I had to change my mind. I, I thought, um, straight out of school, uh, uh, engineers would have a really big advantage with no priors and like immediately sort of being AI native and, uh, many of them are exceptional and are speed running their careers in ways. And there's like even younger people at universities, like we had an intern who was 13 from Waterloo, which is like still blows my mind. Um, and he was not even in his first semester and, um, his mom has to accompany him for all classes, which is like, like I love this and, and by the way, he's very good. [chuckles] Like it's just unbelievable. Um, so, um, you know, we, we are seeing like incredible, uh, like sort of career trajectory, uh, increases that I think are coming here. Um, but, um, I had to change my mind here because it, uh, because like initially I thought just having no priors would be better because we had to reinvent everything. Turns out the way, uh, I think agentic programming actually works, you give an initial prompt, you give a task, it might come from a ticket. Afterwards, an engineer like constantly talks with, um, uh, the AI to like steer it in the right direction. Um, all engineers are massively underestimating how important the steering is. It's, um, it's, it's, it's incredibly important. It's actually that-- It's, it's just the same as programming. It's just very high level. Um, and it turns out that, uh, just having s- having done a lot of, lot of reps and having seen a lot of those just means senior engineers just steer these things in such a way that like they can accomplish incredible feats, uh, in very little time. So I don't know what that means exactly, but it's something I had to change my mind on.
- HSHarry Stebbings
What role does not exist today that will be incredibly common in five years' time?
- 59:46 – 1:02:00
The New Role That Will Dominate in 5 Years
- TLTobi Lütke
Um, there's something about this context engineering, which I had a hand in, uh, popularizing term of, um, uh, I think that will become more recognizably a s- like a role in companies that will potentially subsume, um, a bunch of other more specialized roles right now. Honestly, uh, it, it turns out I think people who have done, uh, uh, like engineering management and management in general are actually excellent AI programmers because they actually have been prompting intelligent agents for much longer than, uh, Claude Code existed. And, um, uh, they're just good at communicating. So that's a, that's... But like now I think in- increasingly their best, uh, work is to, uh, you know, prompt other people and AIs directly as sort of part of the same team. So I think, I think there's gonna be, there's, there's gonna be something that like maybe some ascension path job that you can get into from product, from, uh, uh, design or from engineering, um, that's like something like a product builder role that's like, it, it just involves like the coordination of intelligent actors, um, uh, to, to, to build products. It won't sound or look or be described as what I say, but like, uh, that sort of directionality here. I mean, honestly, people who are good communicators are usually good thinkers because like good communication usually is like distillation of complex thoughts into unambiguous words. I, I mean, even when I say this, it just sounds like context engineering, doesn't it? Right, like, um, um... So it's, I think that is becoming-A very, very, very important role. Like, if you, if you're building a large-scale AI system, um, like we have one which we think called River, which, um, lives in, uh, Slack, um, and, uh, does some ludicrous amount of Shopify's engineering now. People just talk to it over Slack and, uh, it's called River because our Shopify is, has a, has a very big monorepo. Um, a monorepo is called World, and River's shape of World, so, uh, I think that's very poetic. Um, River named herself. [laughs] Like, we first built her, then asked her what, uh, what name she wants, and she came up with that. Uh, and, uh, that's kind of crazy. So River sits on Slack, does a lot of Shopify's engineering with people steering her to public, um, Slack channels, which is awesome because then everyone learns from everyone else.
- 1:02:00 – 1:02:05
"River" Shopify's AI Engineer That Named Herself
- HSHarry Stebbings
What percent of code today at Shopify is AI-generated? We just had Ali on, said it's a-
- TLTobi Lütke
It's
- 1:02:05 – 1:04:48
Over 50% of Shopify's Code Is Now AI-Generated
- TLTobi Lütke
a f- fair deal over 50%. It's, it's, it's, it's converting to much higher numbers. I don't think we've updated, uh, public numbers there, but, like, it's, uh, it's, um... Many of our best engineers have not written code this year, um, ever since December. Like, December changed everything. Like, uh, almost changed everything.
- HSHarry Stebbings
Does that excite you, as someone who loves the craft?
- TLTobi Lütke
Oh, I love it. It's so wonderful because I, I just, like, I love the craft and I can... The craft is not lost. Like, I also love mechanical watches which, that make no sense, right? Like, but, like, they are, like, they're selling more than ever, right? Because... So, like, people always overestimate... Again, this is what it, this is what growth is. Growth is not, um, subtraction of things or replacement. It is just adding. There's more in the world, right? Like, um, so we now have AI as well on, onto all the other wonderful products we can consume. So anyway, um, I, I can sit down and write code when I want to do this. Sometimes I do want to do this. Um, often it's part of a steering, right? Like, I write the part of a code that concerns itself with the data structures and how the data is persisted on disk, which unfortunately, that's sort of a German school of engineering, um, which is different from the computer science-y world of, uh, North America. Um, I think North America is wrong. Um, I think you should think about how data is persisted on, on, on disk above everything e- else in your databases or so, and then you sh- you, you, you, you can plan the system with this. I, I, I still follow this and, um, I, uh, so work on this either by describing or by literally just, like, making the sort of data access layer. Everything else can be vibe coded on top because, uh, I, I, I know the result will be excellent, uh, as long as the data structures are, um, uh, have, um, are, are used right. Um, and maybe that changes in the next couple of months. Um, um, but that's an area where I can definitely, uh, um, steer the AIs to get better results than, uh, they can do themselves, um, um, for a little while longer, and then afterwards I'll do something else. Uh, and maybe I'm gonna do it just for kicking it old school. But, like, what, what my engineering ability allows me to do is reason about these systems, right? Like, uh, in a way that, like, I can be a partner and a co-worker with AI because I can ask it very specific questions to go chase down, and I have those same questions all my life. In every meeting, I'm like, "Really wonder what the data structure is here," um, uh, or like, um, h- how we're persisting this, or what we save, or what we discard, or what we rederive in, uh, uh, the data warehouse instead of actually just, like, writing it down in the first place. Um, um, uh, and uh, you know, I have my laptop open and my, uh, um, uh, River, uh, open, and then I can ask a question and I get a result. Um, because again, River can use the entire monorepo and just, like, goes chase down whatever I'm asking her.
- HSHarry Stebbings
Sorry, random one. Would you encourage your children to go to university?
- 1:04:48 – 1:20:19
Would He Encourage His Kids to Go to University?
- TLTobi Lütke
So they seem uninterested right now. I think my oldest is probably gonna make a play for it. I definitely would not encourage them to go to university for being part of university. I would definitely encourage them to go get a degree, especially one that's hard to get into, because then you're surrounded by people who also got into it. Um, I, I think, um, figure- figuring out how to get in the room with people who really, really want to be in the room on s- uh, uh, with a topic of something you care about is actually the chief code for a, a, any career. Um-
- HSHarry Stebbings
Would joining a Stripe of the Day not be better?
- TLTobi Lütke
So my bias would be that, uh, if you, if you can be of value to a small company, that, that's the thing, right? Like you have to have the skills to actually be of value, and the company agrees with you and sees that value, you should do it. But that's, like, that's actually a wonderful test for both sides. Like, an interview is a test. Is, is, it like, both sides interview each other, right? Like, that's what you should try, and then I think it's better than, uh, the alternative. Um, because again, it's much harder to get in a company worth working for than it is, uh, to get into university.
- HSHarry Stebbings
Do you believe in nepotism, Tobi? Like respectfully, if, if one of your kids applied for a startup job, the surname is [laughs] relatively obvious.
- TLTobi Lütke
Remember, my, my kids have the genes of my wife and me. They probably don't, like... I, I think nepotism comes in if you, if, if someone needs a little bit of help, and I think so, but, like, they're fine. I just like... Do I believe in nepotism? I think actually nepotism has a bad rep, frankly. I, I, I, I, I'm, it's annoying, but, like, I've... starting to understand also, I mean, nepotism is probably just actually bad. I'm a, I'm a very big fan, this probably you can discern this from what I'm saying here, of Thomas Sowell. Um, and, uh, Thomas Sowell just like, I mean, basically everything he's ever said is in- is incredibly smart. Um, um, amongst the many, uh, things worth quoting, I think in a book he wrote when he was already in his 80s, is that, um, uh, one of his, uh, regrets about society is that, uh, we have, uh, spent the last 50 years replacing things with, that work with things that sound good. [laughs] So, um, you know, I, so, so, uh, ever since reading this, I'm like, don't have a knee-jerk in- reaction anymore against basically anything that I'm hearing about that, uh, that sounds terrible because I, I, I just try to get to figuring out what is the redeeming value of nepotism. I think the answer is none. So, um, uh, merit double blind is, uh, the gold standard. Unfortunately, merit double blind is not the standard, right? Like this is, like, very, very rare. So I think nepotism might be better than some of the-Crazy shit people are doing to decide, um, uh, who, uh, who, who, who should be, uh, appointed into, especially in academia. Like, in Canada, we have a big thing with, like, um, basically all the job postings for any kind of, uh, uh, like aca- academic seats are now sort of full on intersectionality, uh, uh, uh, like, uh, um, a fever dream, right? Like, um, find exactly a description that fits one person in terms of all the disadvantages they had in life. Um, and, you know, which I, I mean, always comes from a good place and, uh, maybe also ends up, uh, you know, having some... Maybe it's an arbitrage sometimes because if, you know, actually there's all these, like, countervailing forces there that, uh, prevented them from getting the jobs they ought to, and then on day one, they, the person you do find is, uh, a, a complete banger in the job. And, like, hats off, um, to you, uh, that, that you, you just, like, play the system perfectly. In any other case, you just made a choice of prioritizing things that are not merit, right? Like, and which is again, goes against, uh, enlightenment values that, uh, literally everything that anyone likes about Plato, uh, in, in, in Western society and that's the foundation of all the countries that essentially have net mi- um, net m- immigration, um, uh, de- uh, depending on in a load-bearing way. So, uh, and I think we should probably keep to some of those.
- HSHarry Stebbings
Final one for you. What is the best piece of advice you've ever been given? My, mine is you're never wrong to do the right thing, and the right thing is often the hard thing.
- TLTobi Lütke
I think the best advice I've been given, but I haven't been giving it, but, like, it's, it's like sort of a rallying cry, I think, that is just like... I, I, I kind of want to coalesce on that sentence just because it's memorable, and I think people can't hear it enough, is you can just do things. It's just like at any point of time, the system is, exists to try to get to good outcomes. If you know what good outcomes are, you can step out of system and give it a go. It's the, the, the cost is lower than ever, and, um, action causes information. And again, one of the best things that can possibly happen is, uh, you figure out something that, um, there's actually a lot of reason why the system discourages it. Um, now, the, there's limits to this, of course. Um, there can't be, um, th- this needs to be a completely victimless, uh, um, endeavor. Like, you can't have someone suffering for you trying a thing. Um, uh, that, that's, that's, that's very important. Um, um, no, no, people can't have negative consequences of, of, of these kind of things because then you're just, like, actually being an asshole by, because you're dividing people and pr- uh, pri- prioritizing your own gain over other people, and fundamentally, you're engaging in a zero-sum thing. And in zero-sum environments, you should probably not run experiments. What you should do, if you are in a zero-sum environment, you should figure out how to get a positive sum, and that's m- much more often possible than people imagine.
- HSHarry Stebbings
Tobi, I'm not sure I've ever had quite such a broad-ranging discussion. I'm not sure if most of your interviews quite cover the future of climate [laughs] Trump and Canada's relationship, the future of developers in organizations, but I've so enjoyed this, so thank you for being so brilliant.
- TLTobi Lütke
I mean, I mean, it's like the things I, I wrestle with. Like, if you get me on a different time, I'll talk about different things. I, I just like, look, a- again, what would be awesome if there's, like, some people who, like, really disagreed with everything I said, but, like, like, are still listening at this point, right? Like, um, because that's, like, just... It's all I want. Like, it's all we all, anyone wants. Like, we just, like, let's get back to, like, having conversations. Allow people to be wrong. Like, I'm wrong all the time. Like, doesn't, doesn't matter to you. Like, so, um, I think that's, this is fine. Um, and, um, like, we can lower the temperature. We can realize there's some priors in society. Some, some things were load-bearing. We've placed some things which worked. I've made very, very few comments on what we ought to be doing. Um, I, I, I, I mostly talked about, um, creating the boundary, uh, conditions in which people can just do things, right? That's, like, the genius of the world thing. The genius of the world we inherited that, like, our ancestors created ever since the Enlightenment for us, uh, is just that they created a, uh, like a, like a sandbox in which people can, um, uh, do things. They take responsibility for doing things. They are personally accountable. Um, they take personal accountability for the outcomes of, uh, like, of this. Um, they go to jail if they do something bad. They go, uh... But, uh, they are allowed to have property if they are, uh, like, if they're right. Um, the people, everyone who builds something is making an, just, like, an incredible Faustian bargain of a society here in, in a world that is, discriminates against, um, builders in a way, um, just on account of their products having worked. Um, I own 6% of Shopify. That makes me incredibly wealthy, yes, but it also means, uh, 94% of it are owned by other pe- other people. That's all of those people made a lot of money with the company, and that's not even talking about the customers, and all the people employed by the customers of, uh, of ours. Like, there's, uh, there's, there's probably 10 million people working day-to-day, um, on Shopify. Like, that is their, their job is to do the thing that Shopify, uh, uh, ask them to do, like send out the products, like deal with customer relations, all these kind of things, build new, uh, uh, websites, and so on. Like, that was always there, and Shopify has brought it into existence in, in an actual way so it can be consumed. And, like, we are not the only company. Many do it, and people vote, uh, right now, uh, and hopefully for a long time, uh, every month by paying the, uh, subscription that Shopify's instantiation of, of, of, of this idea that needed to, uh, be pursued is the one that, uh, um, um, is valuable to them. And, you know, there's such a, there is a belief in society that when there's a good thing, there must be a counteraction. Um, it's some kind of misap- um, application of Newtonian laws. Um, and to, you know, some things are just good. Like, some things are just, like, super fucking good, and the downsides might even be describableAnd they just don't, don't pale in the face of all the good that comes, you know? So, uh-
- HSHarry Stebbings
It's like we said earlier, though, which is like the demonization of wealth. A lot of people you see in America think that to, to gain and to have a billionaire, they must have stolen from someone who doesn't have money.
- TLTobi Lütke
Yeah. Sure. Like, it's, it's show me one. Like, uh, you can't get to a billion dollars by stealing, uh, like, [laughs] like money. I mean, maybe you can, maybe there are some instantiations, but then to talk about those specifically, y- like the people who get their wealth by building companies have not stolen anything. They have created a product that people have voted for. It's actually the most democratic thing that exists. It's vastly more democratic than any of our elections that we actually go doing ballots at. Um, people shape the world around them by the f- the way they allocate their, um, uh, uh, money, uh, to products. Every time you buy something from a local shop, you're voting for the, um, welfare and the future and the thriving of local shops in your area, not just the product that you purchase. And so, and, and there's nothing bad about that shopkeeper because they are putting themselves out there. They're working extremely hard. It's an irrational act to start a company. You're working extremely hard for yourself instead of working less hard for someone else. Um, but you're actually creating, uh, an- another thing, and other people get to have employment there, uh, and have, have the jobs that, uh, work according to their lifestyle. And so it's so weird that we are, like, putting this on a, uh... In, in contempt, and again, I'm, I'm very, very pro constructive criticism, but like constructive criticism is itself something that someone builds, right? Like, there are people who can c- who create excellent cons- constructive criticism, and I learn a lot from them. I, I, I, I'm, I'm fortunate in that I get a lot of constructive criticism as even just as a public company CEO, like you have some people write incredible memos, uh, externally that are really, really worth reading because they give you a new perspective you didn't have, and that's, that, that, that's them building up a picture in, uh, in the public mind about some- how to think about something. But there's also lazy and bad faith criticism or just like hot takes and this kind of stuff. That is actually incredibly corrosive and should be had in incredible contempt by people, um, uh, and, and, and we don't. But it's like how many times does, um, uh, do, do people who are saying something incredibly wrong, like look through the entire, uh, all the things people have published during the COVID times, um, or even just like climate, uh, um, uh, you know, uh, panic, uh, uh, pieces. Um, how many times have you actually posted revisions to, to, to this, right? Um, it's very rare, and so you, you realize it wasn't about truth, right? Otherwise they would do it, um, uh, because that's the correct thing to do if, if, if, if you were wrong. The ice caps did not melt, in fact, um, um, uh, in, at, at the time frame. We are at the, we are in the years that they told us that ice caps would be gone, right? Um, a- a- a- and so just like, uh, that doesn't mean there is no cli- climate change. Cl- climate changes all the time, just like, um, it's not that, um, um, uh, it's inducing panic. Like you, you're not allowed... Like, I'm a very pro free speech. Free speech is a mechanism of self-healing for everything else related to property and, uh, to, to, to, to, um, um, classical liberalism. Uh, and so it's, this is why it's worth protecting. But there is no absolute free speech, right? Like you can't scream fire in a, in a cinema, uh, in almost any place like that, you, you, you're going to the precinct afterwards, right? Like, um, but somehow you can do it in media. [laughs] Uh, somehow you can do it in, uh, in, in all sorts of... Like if the timeframe is long, and then it's fine.
- HSHarry Stebbings
Do you worry about that moving forwards when the most common response on Twitter is @Grok, is this true?
- TLTobi Lütke
No, I think this is my bull- why I'm so bullish about the future. There was an effort misbalance, uh, m- mismatch in terms of bad faith acting. Like it's like really easy to do. It's like one assertation, right? Like there's famously, it's like a, it's a Stalinist kind of thing. It's like for every man, there's w- there's a combination of words that will undo him. Um, and so, um, it doesn't need to be true, but it just exists. Um, there's some accusation that's just plausible enough that, uh, the person disappears afterwards. Um, uh, um, especially, I mean, I think this was specifically a case in the Soviet Union. It's, it's, it's, it's a, it's always true when, uh, there's, uh, a lot of collectivism around, um, uh, which is really just centralization of power of the state. Now, the fact-checking is very, very hard. It's, it's an asynchronous warfare. It's a, it's, it's, it's a sort of information terrorism to take a very absurdist, uh, position on it. Um, like unproving th- that it's not true is a lot more work than, um, saying the thing, um, is, uh, uh, uh, like is. And so you can assum- like there's not that many bad faith actors. It's, it's actually a small number, but they can be incredibly prolific and, you know, seed all the kind of, uh, um, important, um, um, things. So, uh, uh, you know, like I think AI is just gonna... AI is moving the power back to, uh, the good guys, I believe. Um, or not even, like that's actually wrong framing. It's not, there's no, no one, like there's no good and bad. It's like everyone's like good in their own local system and some people have a wrong system and this is why we need conversations to, um, like arc them to the, uh, valuable ones in society. Um, and, uh, um-
- HSHarry Stebbings
I mean this in the nicest way, Tobi. [clears throat] You can't actually believe that. Like there are malicious bad actors who will use AI to exploit systems-
- TLTobi Lütke
Oh, oh, so I didn't say this. I am saying b- but they had a lot of, uh, interest in... No, no, l- you, you're completely right. There's also, um, especially, so there's always a societal level and an individual level. On an individual level, which is the one we document, right? Um, it's like, um, on an individual level, there's gonna be so much shit happening, like voice cloning, like, uh, just like the hacking, uh, stuff. All software turns out to probably not be good enough in terms of security. That's gonna be like a whole lot of bullshit we will have to deal with. Absolutely. Um, however, the same models can also write fixes for these kind of things. In fact, the, um, like being able to apply as much, uh, intelligence in a form of artificial intelligence to the side of preventing fraud, I think will shift, like the balance will shift here. I think, I think we are actually gonna get in a, in a much, much, but better way. Even like claim testing, like is the, is a statement true? Is a thing that can be done by a council of models, especially like Chinese trained model, Germany's trained, France trained model. Like let's get all everyone's opinion on something and just give a different perspective and syn- synthesis. Look, building the thing I just said, I can do by just going to one of those ghosty terminals, taking the transcript of what I, of, of just the words and, uh, like two, three more steers, and I can put this on the internet and it will work. I will, I would have to pay for it, um, because the tokens are expensive right now, but like suddenly we have a new institution, which is like, "Well, let's see what everyone would think. What's the council saying about this claim?" And do some research. So we are, we're going a world where I think less of airwaves will be dominated by the bored people who act in bad faith because I think the other side has, uh, ability to, uh, push back. The @Claude, uh, Groq thing is sort of the primordial version of this, is what I'm saying.
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