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20VC: Shopify Founder Tobi Lütke on Why Micromanagement is Good | Why You Will Learn More From Studying World of Warcraft Guilds Than You Will Companies | Why Happiness is BS; Lessons on Marriage, Fatherhood & Decision-Making Quality

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Apr 3, 2023

Tobi Lütke, Co-founder and CEO of Shopify, shares invaluable insights from his journey in e-commerce. He argues that micromanagement can sometimes be beneficial, especially in critical situations. Tobi explores how lessons from World of Warcraft guilds can teach teamwork better than traditional companies. He emphasizes that constraints drive creativity and the importance of in-person collaboration over remote work. Additionally, he reflects on the pursuit of true contentment versus fleeting happiness, discussing personal growth and decision-making quality.

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INSIGHT

CEO Success

Tobi Lütke argues that the best CEOs have an accurate world model and communicate it effectively.
Resource allocation is a consequence, not the cause, of their success.

ANECDOTE

Remote Shift

Tobi Lütke initially valued in-person work but shifted Shopify to remote during COVID.
He still believes proximity is ideal for small teams but acknowledges other factors.

ADVICE

Remote vs. In-Person

When deciding on remote vs. in-person, consider talent pool size versus productivity.
A larger talent pool might offset potential productivity losses from remote work.

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Tobi Lütke is the CEO and Co-Founder of Shopify, the powerhouse company allowing anyone to start and grow their e-commerce business. Over an incredible 18 years, Tobi has scaled Shopify to 10% of total US e-commerce, millions of merchants in over 170 countries, and a market cap today of over $60BN. Huge thanks to Harley Finkelstein for making this happen.

In Today's Episode with Tobi Lütke We Discuss:

1. From a Small German Town to One of the World's Most Powerful CEOs:

What did Tobi want to be when he was growing up?
Who did Tobi learn most from in his younger years? How does Tobi think about the importance of mentorship in learning?
What does Tobi know now that he wishes he had known when he started Shopify?

2. You Can Learn More from World of Warcraft Than You Can Companies:

Why does Tobi believe you can learn more from World of Warcraft than you can from studying companies?
Why does Tobi believe that humans are terrible at company building? What are the most obvious ways we can improve the quality of the companies we build?
Why does Tobi believe that in-person is far superior to remote working? What are the nuances?

3. The Best Companies Operate with Many Constraints:

Why does Tobi believe in all cases, constraints produce creativity?
What is the difference between an enforced constraint and an artificial constraint?
How can leaders create and enforce artificial constraints when they are not real?
How do the best leaders use constraints to ensure their companies move faster and faster?

4. Inside the Mind of Tobi Lütke: Decision-Making & Prioritisation:

How does Tobi reflect on his own decision-making process? How has it changed?
Why does Tobi believe that sunk cost fallacy is BS and only leads to your outsourcing approval to someone else?
Why does Tobi hate "black boxes"? How does he remove them from the org entirely?
How does Tobi decide what to learn? What is his learning process once he has made this decision?
How does Tobi decide what to prioritise in terms of strategic initiatives for Shopify?