Born and raised in Koblenz, Germany, Tobi Lütke faced learning disabilities like ADHD and dyslexia. Despite these challenges, his intelligence was evident. After finishing 10th grade, he joined a German apprenticeship program to learn software engineering. At 17, Tobi began programming for a subsidiary of Siemens, where he discovered his passion for computer programming. He also developed a love for snowboarding and eventually moved to Canada to be with his future wife, Fiona.

In Canada, Tobi worked remotely for a German startup, but the venture was unsuccessful. Unable to obtain a work permit for a local job, he learned he could start a business instead. Combining his technical skills and passion for snowboarding, Tobi decided to create an online store for selling snowboards.

The Birth of Snow Devil

Tobi Lütke's entrepreneurial journey began in Ottawa, where he met family friend and future co-founder Scott Lake. Bonding over their love for snowboarding, they decided to start a business together. Scott handled the business side, while Tobi took care of technology. Their first venture was an online snowboard store called Snow Devil. With the goal of eventually opening a physical store, they each invested 20,000 Canadian dollars and worked out of coffee shops to keep costs low. Tobi spent two and a half months building the software for the business using Ruby on Rails.

Acquiring the First Customer

Their first customer came from Pennsylvania, a milestone Tobi fondly remembers. To acquire customers, they tried various promotional tactics, such as handing out flyers. However, their primary marketing strategy was using Google ads. Bidding on relevant search terms for as low as 20 cents per click allowed them to effectively reach potential customers interested in purchasing snowboards.

The business quickly took off, recouping their initial investment in a short amount of time. Tobi and Scott managed all aspects of the business themselves, including shipping out snowboards to customers. The story of Snow Devil demonstrates the importance of leveraging one's skills, staying lean, and finding effective marketing strategies for a successful business endeavour.

The Genesis of Shopify

As Snow Devil's sales slowed down during the spring, Tobi and Scott pondered whether to expand their product range or pivot to something else. Tobi's custom software for Snow Devil caught the attention of others who wanted to license the platform for their own businesses. Realising that this software could help countless other entrepreneurs, they decided to shift their focus from selling snowboards to creating a user-friendly e-commerce platform.

With the help of Tobi's best friend from Germany, Daniel Weinand, the trio spent a year and a half transforming their software into a robust e-commerce solution. They coined the name "Shopify" to reflect the platform's mission: making it easy for people to open e-commerce sites and manage the complexities of running a business.

Launching and Growing Shopify

Tobi and his team at Snowdevil started building Shopify by sharing their experiences in a blog and collecting emails through a landing page. By the time they launched in 2006, they had gathered about 4,000 to 5,000 emails. They initially offered Shopify for free, using a commission-based model, but switched to a subscription-based model in 2007.

As the platform grew, they started running out of money, but an angel investor named John Phillips invested $400,000 in 2007, which saved the company. By this time, there were a couple of thousand accounts on Shopify, with about 100 active users. One key event that helped the company grow was when the Indianapolis team won the Super Bowl, and a local newspaper used Shopify to sell T-shirts, generating hundreds of thousands of dollars in sales. This showed the potential of Shopify to transform simple ideas into significant economic events.

The global financial crisis in 2008 initially seemed like a challenge for Shopify but turned out to be a catalyst for growth. As many people lost their jobs, they turned to entrepreneurship and started their own online stores using Shopify. This led to a measurable increase in users and subscribers, helping the company gain traction and grow into the successful platform it is today.

Turning Point for Shopify

The turning point for Shopify occurred between 2009 and 2010 when Tobi Lütke, the company's CEO, faced a critical decision: would Shopify remain a lifestyle business, or would it transform into a venture aiming for a larger market? Lütke intentionally slowed the company's growth to make it more manageable and set aside money to try five different marketing programs. Remarkably, every single marketing idea they tried worked, making it clear that Shopify needed to engage in marketing to reach its full potential.

With this newfound understanding, Lütke reached out to venture capitalists and managed to secure $7 million in funding. The investment allowed Shopify to double down on marketing, attracting a wide range of businesses to the platform. The company's growth continued to be constrained by funding, but a venture capital firm recognized its potential and invested an additional $15 million. This vote of confidence, coupled with the success of their marketing efforts, allowed Shopify to grow even faster than before. By the end of 2013, the company had 80,000 customers and 300 employees, yet remained relatively unknown to the public.

In 2014, Lütke was named CEO of the Year by the Globe and Mail, one of the biggest newspapers in Canada. It was at this point that people began to take notice of both Lütke and Shopify. Despite their successes, Lütke remained humble, attributing much of the company's accomplishments to luck and the right timing.

Shopify's IPO and Continued Success

In 2015, Shopify went public, a decision that was made to set up the company as an independent public entity. Lütke understood the implications of taking on venture capital and the need to either go public or be acquired. Today, there are more than 4,000,000 Shopify merchants worldwide, making it highly likely that anyone who has purchased something online has done so through a Shopify-powered site.

The story of Tobi Lütke and Shopify demonstrates the importance of making strategic decisions, investing in marketing, and learning from failures. For businesses, understanding the potential of their ideas and the necessity of taking risks can lead to exponential growth and success.

Shopify's journey is a testament to the power of innovation, perseverance, and the right timing. From its humble beginnings as a snowboard shop to becoming a global e-commerce platform with over 4,000,000 merchants, Shopify has transformed the way entrepreneurs build and run their businesses. Co-founder and CEO Tobi Lütke attributes much of the company's success to luck, but it's also clear that his passion for programming and problem-solving played a significant role.

As a result, Shopify continues to thrive and contribute to the creation of more businesses worldwide. Interestingly, Lütke himself is still involved in the entrepreneurial spirit, running a secret Shopify store selling socks, thus staying connected to the core of what makes Shopify so transformative for many entrepreneurs.