With what started out as an idea to sell snowboards online, Shopify has grown into a multi-billion dollar platform that over 1.7 million businesses use globally to sell their products. In 2021 alone, it processed just under $80 billion in order value with 5.6 million online stores registered on the Shopify platform.

But how exactly did Shopify evolve from a simple tool to an incredibly successful platform? And what initially motivated its founder, Tobias Lütke, to create Shopify in the first place?

Without further ado, let’s dive in to find out.

Shopify’s Founder: High School Dropout to Billionaire

It was the year 1981. Nasa launched its very first space shuttle mission, the popular movie “Raiders of the Lost Ark” makes its debut in theaters, and Tobias Lükte is born.

Born and raised in Koblenz, West Germany at the time, Tobias (also known as Tobi) was introduced to computers when his parents gifted him one at the young age of six. It was a Schneider CPC that quickly sparked his passion for coding.

Tobi quickly fell in love with computers and at the age of 12, unbeknownst to him, he began coding as a hobby. He would regularly rewrite the code for video games he played and was far more interested in his computer than anything school had to offer.

Dropping Out of High School to Pursue His Passion

Tobi left high school at the age of 16 and, like many billionaires, did not go to university. With his sights firmly set, he set out to become a programmer. As he described in his own words:

“To me, it was magic. By the time I was 12, I wanted to know the secrets behind the wizardry, and that started my journey toward computer programming. This was the early 1990s, when computers weren't built for the mass market.”

Tobi went on to enroll in a computer programming apprenticeship at the Koblenzer Carl Benz School. With a deep hunger and drive to learn, Tobi picked up valuable coding skills at a time when programming was quickly becoming in hot demand.

Moving to Canada in 2002

It was during a snowboarding trip in Canada where Tobi would meet his then future wife and former Canadian diplomat, Fiona McKean.

The two quickly fell in love and later on in their relationship, Tobias moved to Ottawa to live with Fiona. It was his love for snowboarding, moving to Canada, and programming skills that would soon combine to set the stage for his great success.

The Year 2004: Where It All Started

Long before remote work became a trend, Tobi was working remotely as a software developer for a German startup while he resided in Ottawa. He disliked remote work and found it isolating, not to mention that his programming tasks were primarily in financial backend software, which he described as “the driest of the dry kind of stuff.”

It was at this time Tobi was drawn to retail and its potential margins in the right niches. Leveraging his technical expertise, Tobi began building his first online shop and was quickly able to spot plenty of room for improvement in the online retail space.

The Founder-Problem Fit

Although Tobi loved programming, he was burned out from working with programming languages that were boring and uninspiring. Using several systems available at the time such as Miva, OsCommerce, and Yahoo Stores, Tobi was able to start building his online store Snowdevils with the goal to sell snowboards.

Building his store with these platforms was incredibly frustrating for Tobi, to the degree that he could barely change the background colors on his site due to the limited customizability.

It was here where the founder-problem fit was manifested in Tobi, a term coined by investor and Sequoia Capital partner Roelof Botha that describes a situation where a founder encounters a problem that they become fully committed to solving.

Renewed Passion

In the midst of his frustration, Tobi received a message from his friend about the open-source web application framework Ruby on Rails that had just been released. After downloading it, he instantly fell in love with its tools and gained newfound enthusiasm for programming.

In the next two months, Tobi began fully developing the software behind his store Snowdevil. That year he was able to turn a profit from his online snowboard sales but inside he still had a burning desire to solve the broken eCommerce industry.

2019 – 2021: New Launches, Remote Work, and Acquisitions

From new product launches to company acquisitions, 2019 was a busy year for Shopify. Despite the negative effects of the global COVID-19 pandemic on many businesses, Shopify’s stock actually rose due to the pandemic.

In May 2020, Shopify announced it would be going fully remote in response to the rapid spread of the Coronavirus. Over 5000 employees began working from home, and the company continued to announce new hires throughout the year.

Between 2019 to 2021, Shopify announced acquisitions of several companies such as wholesale B2B platform Handshake, warehouse robotics firm 6 River Systems, and augmented reality app Primer.

The Future of Shopify

In 2022, Shopify announced several new acquisitions and partnerships with major platforms like Twitter, JD.com, and Klaviyo. However, like many major corporations in 2022, the company has lost nearly 80% of its stock value year-to-date (YTD) but is still worth nearly $35 billion as of the fourth quarter of 2022.

In July 2022, Shoify announced a series of layoffs totaling around 10% of the platform’s workforce, with Tobi explaining they made a “wrong” bet about the pandemic online shopping boom.

So what does the future hold for Shopify?

Only time will tell, but despite the economic downturn of 2022, the platform continues to grow and push the boundaries of what’s possible in the eCommerce space. Therefore, so long as eCommerce continues to grow (and it certainly is) it’s safe to say Shopify will likely not be leaving anytime soon in the foreseeable future.