SC

Strategy Canon

Shopify: sourced choices

36 product and go-to-market choices, oldest first. Back to the case study

  1. 2004Product · Origin Lütke wrote his own store software for the Snowdevil snowboard shop after trying Miva, OsCommerce and Yahoo Stores. SH1
  2. 2006Product · Hosting Shopify hosted every store instead of releasing open-source software for merchants to run; a fix on its servers reached every merchant. SH25
  3. 2006-06Product · Launch Shopify launched publicly as a hosted store service in June 2006. SH11
  4. 2006-06Product · Payment gateways Active Merchant, a payment library extracted from Shopify and in production since June 2006, connected stores to many outside gateways through one interface. SH45
  5. 2007Go_To_Market · Pricing Shopify replaced a flat percentage of sales with a monthly subscription and a much lower transaction fee, dropped on the highest plans. SH25
  6. 2008-03Product · Theme language Liquid, the template language Lütke wrote for Shopify themes, reached version 1.9.0 by March 2008; it lets users edit templates without running code on the server. SH46
  7. 2009Go_To_Market · Design contest Shopify ran a store design contest voted on Twitter, with a couple of iPods as prizes. SH25
  8. 2009-06Product · API and App Store The API and App Store launched on June 2, 2009, letting developers build and sell apps to Shopify’s 5,000 merchants, with Shopify managing App Store transactions. SH9
  9. 2010Product · Feature boundary Lütke tested every feature against what most customers need most of the time and sent specialised needs to third-party apps. SH1
  10. 2010Go_To_Market · Early acquisition Lütke credited the Ruby on Rails community for early signups and said about 60 percent of signups came from people searching for Shopify. SH25
  11. 2010Go_To_Market · Referral partners Design firms and others that brought a merchant received 20 percent of that account’s revenue for as long as it stayed. SH1
  12. 2010Go_To_Market · Developer recruiting Finkelstein phoned developers who built for other websites to ask them to build for Shopify. SH34
  13. 2010Go_To_Market · Contest terms About 1,300 contestants entered in 2010; Ferriss had argued for $100,000 instead of the $10,000 first planned, payable only at the end. SH40
  14. 2010-01Go_To_Market · Build a Business Shopify and Tim Ferriss launched a $100,000 prize for the new Shopify store with the highest sales over six months. SH36
  15. 2010-04Product · Theme Store The Theme Store launched in April 2010 with themes from $80, against custom designs that typically cost over $1,500. SH37
  16. 2010-10Product · Store setup A non-technical merchant could take orders within a few hours of signup, switch themes without code and edit HTML or CSS directly. SH12
  17. 2010-10Product · App adoption About two thirds of customers used at least one of 54 apps a year after the App Store opened. SH12
  18. 2010-10Go_To_Market · Channel mix About 65 to 70 percent of signups came by word of mouth and about 20 percent from web design firm referrals; a new data warehouse had revealed the design-firm channel, and a full-time hire was cultivating it. SH12
  19. 2010-10Go_To_Market · App contests With few customers to attract developers, Shopify ran contests for the best third-party app, following Twilio’s example. SH12
  20. 2010-12Go_To_Market · Series A Bessemer led a $7 million Series A and Alex Ferrara joined the board; the uses included developer tools to attract app creators. SH38
  21. 2011-10Go_To_Market · Shopify Fund The $15 million Series B set aside a $1 million Shopify Fund to finance developers building apps. SH39
  22. 2013-08Product · Shopify Payments Shopify Payments launched on Stripe technology with automatic setup for new stores, order-synced payments, payout tracking and generated chargeback responses. SH30
  23. 2013-08Go_To_Market · Payments pricing Shopify Payments came at no added cost on existing plans, at 2.9% plus 30 cents on Starter and 2.25% plus 30 cents on Unlimited. SH30
  24. 2014Go_To_Market · Plus sales team Plus ran as a separate team in Kitchener-Waterloo; its first five sales reps, new graduates, called existing merchants at risk of leaving. SH48
  25. 2014-02Product · Shopify Plus Shopify Plus launched for high-volume merchants and growing existing customers. SH14
  26. 2015Go_To_Market · Referral scale More than 8,500 partners referred at least one merchant in 2015, up 48 percent from the year before. SH3
  27. 2015-08Go_To_Market · Outside processor fee Shopify charged a transaction fee on plans whose merchants did not use Shopify Payments. SH33
  28. 2017Go_To_Market · Partner earnings Partners earned about $800 million in 2017 against Shopify’s $673 million in revenue; Shopify took 20 percent of app revenue and offered $5,000 loans for new apps. SH42
  29. 2018Go_To_Market · Platform test Lütke says partners’ earnings passed Shopify’s in 2018, meeting Bill Gates’s test for a platform. SH35
  30. 2018-09Go_To_Market · App review A small team vetted early app submissions by phone; the App Store held about 100 apps in 2013 and over 2,000 by 2018. SH41
  31. 2019-06Product · Fulfillment network Shopify announced the Shopify Fulfillment Network in June 2019. SH50
  32. 2019-09Product · Warehouse robotics Shopify agreed to buy 6 River Systems, a warehouse robotics company, for about $450 million. SH50
  33. 2021-06Go_To_Market · App revenue share From August 2021 Shopify took no commission on a developer’s first $1 million of annual revenue and 15 percent above it, down from 20 percent. SH43
  34. 2022-05Product · Deliverr Shopify agreed to acquire Deliverr for about $2.1 billion to extend two-day delivery across US sales channels. SH51
  35. 2023-05Product · Logistics exit Shopify agreed to sell its logistics business to Flexport and reduced its workforce by about 20 percent. SH6
  36. 2023-06Product · Shop Pay Shop Pay recognized returning shoppers across participating stores; Shopify reported more than 100 million users and announced access for enterprise retailers on other platforms. SH20