Shopify 2025: The Entrepeneur, the Rulemaker and the Bridge-Builder

On a podcast a few months back, Tobi called Shopify a genetically diverse island which does not want to build bridges to the "mainland" lest it become contaminated. Despite this seeming protest, that doesn't appear to be the approach.

In the past, Shopify has described itself as the rebel alliance fighting the evil empires, helping the little guys succeed against the big guys. This vision has evolved as well.

Finally, Tobi has in the past also called process itself something like a defect in a company. Now that Shopify is so large, however, processes and rules have sprung up everywhere to manage the business, and are evolving all the time.

So what is Shopify then? I see Shopify as being governed by three forces.

1 - The Rulemakers.

2 - The Enterpreneurs.

3 - The Bridge-builders.

The rulemakers are governed by the office of the CFO - ultimately, the company has to be a certain shape and size, have a certain amount of controls and compliance to achieve results. It also has certain masters, namely financial investors which demand tribute. When Shopify overservices the rulemakers, things like Deliverr and 6 River Systems happen. Tobi called it something like “ZIRP flu.”

The entrepreneurs are the traditional heart of Shopify, governed by Tobi and Harley. If Shopify overservices the entrepreneur, the company churns off its best customers as they expand.

The bridge-builders are the next generation of GTM team being built out by Bobby Morrison and the gang. After all, despite not wanting to understand Enterprises, if you don't speak their language then your sales team doesn't hit many quota. Which seems to offend those pesky rule-builders.

If Shopify builds too many bridges to old-school Enterprises, it could also lose that innovative spirit which defines it -- seeking to replicate requirements for old-school companies.

See how these forces keep each other in balance?

Now for the Risks. The risks to Shopify aren't the typical company risks, given the company's "Founder Mode" bias. However, risks do indeed exist:

1 - 3 Forces Imbalance. If any of these forces becomes too powerful, then Shopify itself becomes a different place or can get off track, as you can see above.

2 - Business model. Shopify's relationship with Stripe is currently a defining characteristic of the firm and a primary monetization avenue. Which necessitates a percentage of sales model. Similar to Demandware before it, there is an entire low-margin segment of B2C and B2B eCommerce (below 25% gross margin) which is a challenge for this model.

3 - Hubris. Getting too self-satisfied, resting on their laurels, raising prices too high, all these things could happen to any of these forces which govern Shopify.

Hubris is probably the biggest and most important risk and is a natural challenge for any successful company. 2025 will test Shopify yet again.