
Shopify to raise $100M in Toronto, New York IPO - bhouston
http://www.cbc.ca/news/business/shopify-to-raise-100m-in-toronto-new-york-ipo-1.3033009
======
walterbell
CEO Profile, [http://www.theglobeandmail.com/report-on-business/rob-
magazi...](http://www.theglobeandmail.com/report-on-business/rob-
magazine/meet-our-ceo-of-the-year/article21734931/)

 _"..luck brought the sudden, coincidental appearance of a new framework for
using Ruby, called “Ruby on Rails,” devised by Danish programmer David
Heinemeier Hansson. ..because Ruby on Rails was so new, Lütke’s work gained
notice. He began sharing some of the software components he was creating with
the Rails community (a way to process credit cards, for example), and quickly
became one of a select group of core Rails developers.

..Lütke took the burden of this stress entirely on himself. He told no one at
the company. “I was sitting in meetings,” he remembers, “talking with my peers
about building things that would take us a year, when I knew we didn’t have
four weeks of money left. And I could not let anyone know that.” He knew the
minute he did, their focus would naturally shift to the short-term, to work on
things for immediate benefit. For Shopify to succeed, he needed them to keep
thinking long-term."_

~~~
xasos
Interesting. In Ben Horowitz's book _The Hard Thing about Hard Things_ , he
recalled doing the opposite at Opsware/Loudcloud. He made sure that all his
employees knew that they were in trouble.

For six months, Loudcloud employees worked long hours and were under constant
stress, but were able to stay afloat on less money (keeping them alive
longer). I think transparency trumps secrecy in most cases. Bad news spreads
quickly and good news spreads slowly.

~~~
walterbell
Horowitz also told that story in his Pando interview,
[https://www.youtube.com/watch?v=sqI7fa04atc](https://www.youtube.com/watch?v=sqI7fa04atc)

------
oisino
Not the sexiest stock but as someone who has built their company off Shopify I
cant say I have worked with a better product/ company in my life. The way they
handle third party developers, designers, and stores is exceptional. They
really get what it takes to build a platform. I have no doubt thats Tobi
vision of building the platform for all commerce will come true. As a
developer building off Shopify excited to see what they do next.

~~~
anotherview
I had a different experience. I played with Shopify, and canceled my account.

They kept charging me for years. I eventually noticed, and asked for a refund
on the completely empty, completely unused account which was being charged to
an expired and canceled card (something I didn't even know was possible until
this incident).

Support said no, and offered a discount if I wanted to use Shopify in the
future. I said I'd have to resort to a chargeback and I'd let my credit card
company see if they agreed with my interpretation of the situation or not. The
head of support literally yelled at me the moment I used the word chargeback,
revoked his previous offer, and said they had no need to return my money, even
though they hadn't earned it.

I wound up in touch with their VP Revenue who agreed that he didn't want to
take any money they hadn't earned. But instead of refunding my money, he just
dropped contact with me and never responded again.

If they were to respond to this publicly, they'd say I was angry with them.
And that's true. I became angry after their _head_ of support yelled at me. I
still can't believe that happened, it was the worst customer service
experience of my life. My blood pressure goes up a little just remembering how
I was treated.

So basically, I'm glad you're happy with them, but they stole a couple hundred
bucks from me and lied about their intention to give it back. My experience
makes me believe that anybody who had good experiences is, almost certainly,
just lucky. That or I'm in the .001% of supremely bad luck.

If I'm truly in the .001%, their vp revenue can circle back and give me the
money he promised (I'd be easy to identify on their side, since if they never
yell at customers, and never lie to customers, then it should be super-easy to
remember a time that they yelled at and then lied to a customer).

~~~
freejack
I'm aware that they are going through an overhaul of their customer service
systems, process and probably the people. Its tough to grow as fast as they
are, especially in this area. It is exceptionally hard to find great people,
maintain culture and values while still providing great support. I'm not
making excuses for them, except to say that I am certain they are aware of the
issues they have had had in this area and are working on getting better.

~~~
aikah
> I'm not making excuses for them

Yes you are. If the OP story is true, you just don't yell at your customer. It
doesn't make me want to try Shopify if they really use these kind of
practices. Only shady pornsites do that stuff.

~~~
mtrimpe
Have you ever actually worked as a customer service agent? Getting low-paid
employees to consistently be courteous to angry customers is actually _really_
hard to get right.

You probably aren't; but lots of customers are assholes. Lots of people become
utilitarians when they're dealing with customer support: when they want an
outcome all means to that end become justified. I can't tell you how many
insults I've had hurled at me during my few years as a support rep.

And as far as this customer is concerned; my guess is that he never got the
chance to speak to the 'head of customer support.' He got pissed off at one
employee; asked for the supervisor and was transferred to the support rep
sitting next to him.

That shit happens all the time; heck I've been the 'supervisor' several times
and had it work. Call it a 'social hack' support reps often use.

Now the guy should never have yelled and the VP should've followed up on his
promise but downvoting someone who politely advocates cutting Spotify some
slack based on a single report isn't fair either.

/ex-customer-support-rep-rant

------
kepano
I've been a Shopify customer for about 5 years. What impresses me most is how
much they've ramped up product development in the past 18 months. They're
building new features at an aggressive pace and continuing to maintain a high
degree of polish and ease of use.

------
bhouston
The F-1 filing with the SEC is here:

[https://www.sec.gov/Archives/edgar/data/1594805/000119312515...](https://www.sec.gov/Archives/edgar/data/1594805/000119312515129273/d863202df1.htm)

~~~
mmastrac
Interesting: OMERS Ventures is one of the bigger shareholders in Shopify, to
the tune of 6%. They are run as part of massive pension fund in Canada.

And the Canadian Gov't is also part of this round through a few levels of
indirection:

[http://www.techvibes.com/blog/canadian-tech-sector-poised-
fo...](http://www.techvibes.com/blog/canadian-tech-sector-poised-for-increase-
in-ipo-activity-2015-01-19)

~~~
hentrep
I know nothing about the investment world, but find this government-driven
investment interesting. Last week the Canadian Pension Plan Investment Board,
in participation with Permira, agreed to take Informatica private [0]. Two
large tech investments by Canadian pension funds, and likely many more to
which I'm unaware. Is this a proactive move to mitigate future pension crises
[1], or just the way most governments operate? I suppose I'm not accustomed to
thinking of governments investing in this manner.

[0]
[http://www.nytimes.com/2015/04/08/business/dealbook/informat...](http://www.nytimes.com/2015/04/08/business/dealbook/informatica-
agrees-to-5-3-billion-buyout.html?_r=0)

[1]
[http://en.wikipedia.org/wiki/Pensions_crisis](http://en.wikipedia.org/wiki/Pensions_crisis)

~~~
eigenvector
CPPIB and OMERS are at arms-length from the government. They have a free hand
to invest in anything that meets their objectives and at least for CPPIB, any
implication that the government had meddled in investment decisions for
political reasons would be a huge scandal. Until recently, the Ontario
Teachers' Pension Plan owned the Toronto Maple Leafs, one of the most
profitable pro sports teams in the world.

In Canada, if it makes money, the pension plans are in on it. It's not
political - just business.

------
guiomie
Glad to see a Canadian tech company going public, but has an investor, I'm not
thrilled by the following:

"Its total revenues have doubled from $23.7 million in 2012, to $50.3 million
in 2013 and to $105 million in 2014. However, it experienced net losses each
year, losing $22.3 million in 2014"

I looked in the F-1 form and saw:

"We had net losses of $1.2 million in 2012, $4.8 million in 2013, $22.3
million in 2014"

The losses quadrupled in 2012-2013, while revenue doubled, and increased
almost fivefold in 2013-2014, while revenues only doubled.

------
bedhead
This is straight from the prospectus. The first bullet alone makes me want to
buy shares.

Culture and Employees

If you have ambitious goals, you need an equally ambitious team. Shopify is
composed of hundreds of highly talented, deeply caring individuals all working
on making commerce better for everyone. Our culture is continuously being
redefined with every person that joins our company, but, at our core, we value
people who:

    
    
     	•	 	Get shit done
     
     	•	 	Build for the long-term
     
     	•	 	Focus on simple solutions
     
     	•	 	Act like owners
     
     	•	 	Thrive on change

------
lamosty
Here is a nice article written by Lütke himself about how he got into
computers and how his then boss Jürgen was probably the most important thing
that happened to him in his professional life.

[http://tobi.lutke.com/blogs/news/11280301-the-apprentice-
pro...](http://tobi.lutke.com/blogs/news/11280301-the-apprentice-programmer)

Really enjoyed reading this piece. I can partly see myself in his story except
all the achievements. We'll see.

------
sireat
I looked at their pricing page and it looks like their $29 offering does have
unlimited products now. I could have sworn it was much more limited about 2
years ago.

I keep looking for an inexpensive shopping cart solution for a friend who owns
a handmade crafts retail store and not finding a good one. Meanwhile he keeps
paying $50 a month for a proprietary shopping cart and gets maybe 20 online
sales a year.

~~~
Agustus
Get them onto Shopify, the untold story of Shopify is the ease a layperson can
work with the back-end. He can adjust all sorts of things, upload pictures,
and edit text without having to contact you.

I like Shopify, they are going to have customer service growing pains as they
ramp up to handle customer loads, but going public means it is sink or swim
time.

------
Loque
A friend of mine pointed out: 68% growth in # of merchants using the service
last year, yet losses doubled. Could this mean their VCs actually want some
money back?

Aside: I have used Shopify to develop e-commerce sites and its lack of local
development frustrated me a huge amount. Saying that, I also appreciate what
they are trying to do and have a lot of respect for them as a company.

------
nvk
Nice to see more TSX listings!

------
oimaz
As a developer, does it make sense to build shopify apps? Curious to hear
about shopify apps and its ecosystem

~~~
alanfalcon
As a one-time Shopify user, I'd think so. The default model is recurring
billing and Shopify's features are super bare bones with the "there's an app
for that" fallback that keeps the platform viable. The apps on offer are very
hit or miss and many are simply poorly designed or thought out, and there
seems to be room (in conjunction with some marketing) to carve out a good
space there for quality interoperable apps.

------
Tiktaalik
Who is their main competition?

In this the online store and retail POS space I'm aware there are other
operators, but Shopify is the only one I can name.

Square I guess in the POS space?

~~~
bhouston
Some competitors:

Magento / Magento Go oscommerce woocommerce etsy squarespace prestashop
opencart Wordpress has shopping chart as well.

There are a ton of existing POS providers for stores, more than one can name.

~~~
girvo
Magneto and OSCommerce are nowhere near competitors IMO, at least in terms of
using them as a developer. I still get fever dreams about Magento...

------
adammcnamara
Congrats to the Shopify team.

------
aioprisan
it's good to see the founder still own 14% of the business

------
grandalf
Does this make Shopify the largest Ruby IPO to date?

~~~
myth_drannon
I don't know about an IPO but I was talking to a Shopify employee at Pycon and
he said it's the largest Rails app in the world.

~~~
pushrax
Definitely one of the oldest - Shopify is on Rails 4 now, initial commit was
on the release day of Rails 0.5!

------
bkmorimoto
Refresh?

------
ditonal
I'm not a financial expert so I'm really not sure, but I'm extremely
distrustful of this JOBS Act and "IPO-Lites." Not Shopify specifically, but
it's going to open the door to a lot of smaller companies that have a lot less
scrutiny on them to IPO and I worry that it will allow VCs to dump their
weaker companies on the public, and turn a potential private equity bubble
into something bigger.

I worked for a startup that I know is in shaky grounds. While I hope they
recover and do great, they also suddenly have freelance "journalists" writing
positive things about them in the press, and I'm 99% sure it's paid PR via VC
connections (especially given that I know for a fact the publication -
TheStreet.com - has ties to the NYC VC community). Meanwhile, because it's not
a super well known company, there's not a lot of opinions out there one way or
the other on it so when you Google its name you just read these few very
positive pieces about it. Now, this may be just paranoia, but we as an
industry should be vigilant that VCs don't try to run pump-and-dumps on their
weaker holdings. It will benefit nobody but bad VCs and will harm the public
and the industry's reputation, and due to lockups it's unlikely it will
benefit the typical employee with common shares anyway.

I read an article about these mini-IPOs in the WSJ and it's saying "Democrats
like it because it empowers the little guy, Republicans like it because it
removes regulation." They also tried to spin it as "VCs HATE this! Average
investors can take over instead now!" I don't trust Wall Street and I don't
trust the SEC's ability to regulate them, so when the rules change I assume
that Wall St is getting their way rather than the reverse. If the Republicans,
Democrats, and Wall St all love a new piece of regulation, I assume the
public's about to get screwed.

~~~
AYBABTME
Shopify is not a shaky company at all. It's a top notch company, top place to
work, top product. It's like a recipe of everything done well.

So I don't really understand why you say that.

~~~
ditonal
I am not talking about Shopify specifically, the reason it's relevant is
because they are IPOing using a new set of rules based on the JOBS act. This
IPO would not have been possible even two months ago. Read the filing and read
more about the JOBS act and "IPO-lites." Even if Shopify is not a bad
investment, the point stands that smaller companies under less scrutiny being
sold to the public opens up big avenues for fraud and pump-and-dumps.

~~~
walterbell
Could you provide a pointer to the section of their filing which identifies
the new rules?

~~~
ditonal
Just search for JOBS in the filing itself, I've quoted it a few times in other
comments.

Here's a link talking about the regulatory change:

[http://ww2.cfo.com/regulation/2015/03/sec-approves-new-
rules...](http://ww2.cfo.com/regulation/2015/03/sec-approves-new-rules-for-
ipo-lite-offerings-regulation-a/)

