Shopify

A venture capitalist at Bessemer invested in Shopify and then emailed the CEO to say he hoped the company might one day be acquired for $500million.Hethoughtthiswasaspirational.Shopifyisnowworthover$140 billion. The investor’s own memo about the investment is preserved as a monument to how difficult it is to imagine the scale of a company that is still becoming what it will be (5 Startups That Looked Dumb Until They Didn’t).

On My First Million, Shopify occupies the same structural role that the printing press occupies in histories of the Renaissance. It is not the story itself. It is the thing that made all the other stories possible. Every DTC brand the show discusses, every e-commerce operator they interview, every side hustle that involves selling physical products online — Shopify is the platform underneath.

The Bessemer Memo

The investment memo is worth studying not for its incorrectness but for what it reveals about the limits of intelligent analysis.

As Sam recounted, the Bessemer partner who wrote the memo was not a fool. He was a professional investor at one of the oldest and most respected venture firms in the world. He had done the diligence. He understood the business. He just could not conceive of a world in which a tool for building online stores would be worth more than most of the stores built on it.

“He wrote in the memo, ‘A few months after we invested, Oracle had acquired one of Shopify’s competitors for $500 million. And I remember emailing Tobi, who’s the CEO of Shopify, about how great it would be if someday maybe we could achieve that outcome. But I thought it was just a little bit too aspirational.’”

The punchline writes itself. But the lesson is not about one investor’s failure of imagination. It is about a structural bias in how markets evaluate platform companies. A store that sells shoes is valued on its revenue and margins. A platform that enables thousands of stores to sell shoes is valued on the aggregate economic activity it facilitates. The math is categorically different, and the Bessemer memo shows how even sophisticated investors can apply the wrong category.

Tobi Lutke and the Snowboard Shop

Shopify exists because Tobi Lutke wanted to sell snowboards online and discovered that the existing tools for building an online store were terrible. Rather than suffering through them, he built his own. Rather than keeping it for himself, he turned it into a product.

This origin story — founder builds tool to solve own problem, realizes others have the same problem, sells the tool — is one of the most reliable patterns in the MFM universe. It appears in the HubSpot Story, in the Zapier origin, in dozens of the service businesses the show covers. The pattern works because the founder’s empathy for the customer is genuine rather than researched. Tobi did not conduct market research to identify that e-commerce tools were bad. He experienced it firsthand while trying to sell snowboards.

The show discusses Tobi’s background with particular attention to his immigrant story. An Austrian-German software developer who moved to Canada, he represents a type that MFM finds inspiring: the technical founder from outside the Silicon Valley ecosystem who builds something the insiders missed. Shopify was not born in a Stanford dorm room. It was born in an Ottawa apartment because a guy who liked snowboarding could not find a decent way to sell them online.

Korean Convenience Store Energy

Sam has a phrase for the pragmatic, no-overthinking approach to e-commerce that Shopify enables: “Korean convenience store owner energy.” The idea is simple. You look at what people are buying. You sell that. You do not write a 40-page business plan. You do not raise venture capital. You do not agonize over brand positioning. You stock the shelves with what moves and you optimize from there.

“There’s not too much overthinking it,” Sam explained during a conversation about winning in e-commerce. “It was like, ‘Well, you guys are all wearing this. I’ll just sell that’” (How to Win in Ecom in 2025).

This energy — pragmatic, fast, instinct-driven — is what Shopify enables at scale. The platform reduced the barrier to opening an online store from months of development work to an afternoon of clicking through templates. This is not a small thing. The difference between “I could sell this online” and “I am selling this online” is often just friction. Shopify’s entire value proposition is removing that friction.

WooCommerce and the Platform War

Matt Mullenweg, the founder of WordPress, described the moment he realized he needed a commerce layer: “What’s our Microsoft Office? And that ended up being WooCommerce” (I Was Offered $200M at 24 and Turned It Down).

WooCommerce, a WordPress plugin that started as a theme company called WooThemes in South Africa, became the open-source alternative to Shopify. The competition between the two platforms mirrors a debate that runs through MFM: closed platform versus open ecosystem. Shopify is easier to use but locks you into their infrastructure. WooCommerce is harder to set up but gives you complete control.

For the MFM audience, the choice is usually Shopify. Entrepreneurs optimizing for speed-to-market and simplicity do not want to configure a WordPress installation. They want to upload product photos, set prices, and start selling. Shopify wins on time-to-first-sale, which is the metric that matters most when you are testing whether a product idea has demand.

The Supplement Distribution Shift

Robert Oliver, a supplement entrepreneur, described on the show how distribution channels in his industry transformed in a way that perfectly illustrates Shopify’s impact. “The supplement game worked where you had GNC or these retail stores. If you wanted to win in supplements, you had to win in retail. Then Amazon came around and changed the game because now you have this online retailer and suddenly new supplement brands could win there” (The TikTok Strategy That’s Printing Money).

The next shift, which Oliver was riding, was TikTok Shop plus Shopify — selling direct to consumer through content rather than through retail shelf space or Amazon search results. Each shift in distribution created a new class of winners. GNC dominated the retail era. Amazon brands dominated the search era. Shopify-powered DTC brands, fueled by social media content, are dominating the current era.

This distribution evolution is one of the most important frameworks in the MFM universe. The product does not change. Creatine is creatine. What changes is the distribution channel, and each new channel creates a window where new entrants can compete with incumbents. Shopify is the common denominator — the platform that lets entrepreneurs exploit each new channel without rebuilding their entire technology stack.

Shopify in the AI Era

The AI wave has added a new dimension to the Shopify story. As AI tools become capable of generating product descriptions, optimizing pricing, creating marketing copy, and even designing storefronts, the barrier to launching an e-commerce business drops further. Shopify is positioned to benefit from this in the same way it benefited from every previous drop in barriers: more stores on the platform means more transaction volume means more revenue.

Sam and Shaan have discussed AI-powered commerce in several episodes, with Shopify always hovering in the background as the platform where these experiments would actually run. The AI does not replace Shopify. It makes Shopify more useful to a larger number of people (The App That’ll Be Bigger Than TikTok).

What Shopify Teaches

1. The tool-maker usually outperforms the tool-user. Shopify is worth more than the vast majority of stores built on it. The platform captures value from every success story without bearing the risk of any individual store’s failure.

2. Simplicity creates markets. Before Shopify, starting an online store required technical skill. After Shopify, it required an afternoon. The number of people willing to try selling online expanded dramatically, and Shopify captured most of that expansion.

3. Distribution shifts create windows. Every time a new sales channel emerges — Amazon, Instagram, TikTok Shop — Shopify merchants get first-mover access. The platform is a perpetual distribution arbitrage machine.

4. Underestimate immigrant technical founders at your peril. The Bessemer memo is a reminder that the biggest companies often come from founders and geographies that the consensus considers peripheral.

Sources

• 5 Startups That Looked Dumb Until They Didn’t — Bessemer’s $140B misjudgment
• How to Win in Ecom in 2025 — Korean convenience store energy, pragmatic DTC approach
• I Was Offered $200M at 24 and Turned It Down ft. Matt Mullenweg — WooCommerce as Shopify competitor
• The TikTok Strategy That’s Printing Money — Supplement distribution shift
• The App That’ll Be Bigger Than TikTok — Shopify in the AI era

See Also

• Stripe — The infrastructure beneath Shopify’s infrastructure
• Airbnb — Parallel platform-vs-operator story
• Boring Businesses — Shopify enables the “boring but profitable” DTC model
• Content to Commerce — The social-to-store pipeline Shopify facilitates
• OpenAI — AI tools amplifying Shopify’s accessibility
• Real Estate Investing — Physical-world parallel to platform economics