Moment 130: Shopify's President: The 1 Skill You MUST Have To Thrive In Business: Harley Finkelstein

Oh, so this is going to be a long-winded way to get there, but I think it's important. When I was building that t-shirt business in college, a mentor of mine, his name is Philip Rhimer, he's a senior partner at a very prestigious law firm called Dentons. They're in the UK, they're everywhere. They're all over the world. He's had this incredible white-shoe law firm career. He basically convinced me to go to law school. And he convinced me to go to law school, not to become a lawyer. He said, 'The skill set that you need given what I think your ambitions are around business creation, business building, entrepreneurship, you are lacking some sophistication. You're always going to struggle with these sort of things.' He said, 'But I have this idea: go to law school, not to get good grades necessarily, not to become a lawyer, but to effectively selfishly disseminate all this information from your classes to make you a better entrepreneur.' And I think because I had a very clear view that I wasn't sure at that time. I was 21 when I started law school. I didn't know exactly what my spiky point was, but I knew it had to do with entrepreneurship. And so Phil, when you're 21, I didn't know very much at 21. I thought this t-shirt business would just be the thing I'd keep doing for many more years. But Phil had this idea that actually to sharpen your point, you should do something that is non-obvious. And in hindsight, it really feels like what Phil was helping me to figure out was finding more alpha in terms of entrepreneurship. Finding some arbitrage opportunity, something that exists that no one is looking at but that I can take advantage of.

Yes. Exactly. Something really unique. Hey, you're a good entrepreneur. You're not a great entrepreneur. You're not sophisticated. You don't understand all these different aspects of entrepreneurship. You should go to law school to not be a lawyer but to be a better entrepreneur. And you should be selfish in law school in your curriculum, deriving as much insight as possible so that when you leave law school, you can return to entrepreneurship in a much better version of yourself.

And that's why I say finding alpha or an arbitrage opportunity because it's something that is not obvious to most people. But now in hindsight, when you think about it, you're like, 'Well, that makes total sense.' I went to public high school and it was a good school, but I didn't learn how to write very well. And then I went to McGill for economics. I didn't learn how to write very well. I learned how to write really well in law school because all you're doing is writing facts and memos all day. I learned how to negotiate and how to do real critical debate and critical reasoning. I learned how to read 2,000 pages and pick out the one line that matters. All these things on their own don't seem like they would create the curriculum of a great long-term entrepreneur, but it did. And I think part of the reason why I allowed myself to go through that process of law school was I didn't know exactly what my spiky point was, but it felt like it's definitely in the realm of entrepreneurship. I didn't realize that I would help build a company that would create millions of new entrepreneurs, but I knew entrepreneurship was deeply personal to me because it helped me. It was my family story of survival. It just felt like this incredible tool that most people had not discovered yet. And so on that spiky point, I think the sooner you figure out that spiky point, you don't have to be precise. I didn't know I was going to run a software company, but I knew that entrepreneurship was deeply important to me. So as I made decisions starting at 21 years old, every decision was under the lens of: is this going to help sharpen my point? Is this going to make me a better entrepreneur? And I think if I would have realized that 10 or 15 years later, it still would have been fine, but it may not have happened the same way. And it may not have led me to join a group of a handful of really smart engineers building this crazy piece of software called Shopify 14 years ago. I think this is an exceptionally under-spoken about point, which is this idea of skill stacking, but stacking skills that are unobvious and rare within an industry. So if we take and I think we should go through this in a little bit more detail because I think it can really have a profound impact on people. I read about how the best people in the world, I think it's a mathematical equation where if you're the best at six skills in an industry that are unobvious, you actually are the best in a million people at that thing. So I mean, if there's a village of a million people and they showed this little graph, I remember seeing it and writing about it a little bit where if you're just in the top 10% at six complementary skills, you're the best in the village at that particular thing. Like Cristiano Ronaldo, the football player, he's not the fastest player in the world. He's not the best shooter in the world. He doesn't take the best free kicks in the world. Doesn't head the ball the best in the world. He's considered the best player in the world by many because he indexes high, the top 10% at various things. I think about Jack who records this podcast. Now, if Jack wanted to be a podcast director, what all podcast directors or producers do is they go learn how to do microphones and cameras. Now, interestingly, I don't think that's the place to be placing your time to become the best in the world. As we saw in the case of Steve Jobs, who went into typography and design and then made these beautiful devices, Jack should probably go and try and get an unobvious skill that would be in high demand and low supply in this industry. So, if Jack went and did theater, he would learn maybe about how to construct a story arc.

Or if he went and did like, I don't know,

Yeah. Or DJing. If he went and learned to be a DJ, then he would learn about stems and music and whatever else or set design if he went and did theater. And that would make him be a really hard-to-find talent. It's funny because we can in industries like I always think this about coders and I don't hate to generalize here but it probably does sound like a generalization. It's sometimes hard to find someone who can code who's also an exceptional storyteller and visionary.

Often in companies, they're two separate roles, right? So if you're a coder, instead of becoming even better at coding, for example, going and doing those little public speaking sessions is probably an unbelievable hack because then you can build and sell.

Yeah. Yeah. Most people start companies with people that they would have been friends with in high school. I think that's a terrible idea. In fact, if you were in college right now listening or watching this and you're in the business program, commerce or you're in the engineering program, don't start a company with the person sitting next to you. Walk across the street, go to a different faculty. Go to the faculty of arts or go to the faculty of philosophy or go to the faculty of engineering and find someone there to start a company with. I think some of the best partnerships and relationships that I've seen that have built things that change the world from a company perspective, philanthropically, whatever they're trying to build, they're building with other people with complementary skill sets. In fact, I think you get a much richer set of stacking of skills. You mentioned DJing in terms of skill set. I never appreciated ever how important my experience DJing, DJing hundreds and hundreds of bar mitzvahs over my time, hundreds. I never appreciated what I learned from as a DJ and how I apply to running a large public company. But the truth is there's all these different things. For example, something I noticed early on, it's like 14 or 15 years old. If the pre-meeting went really well with the client, no matter how the party went, it was going to be a great result because I had a good relationship or good connection with the client, even if half the party didn't want to dance, the client knew me and knew enough about me and knew that I was going to try my best that even if half the party was dancing, they were happy about that.

And they were on my side. There was this immediate connection. And so now before I go into any serious negotiation, I try to get to know the person on the other side of the table. I try to find some common ground. We're both dads or both parents. We're both from the same place. That's the first thing. The second thing is read the room. One of the things about DJing you have to do is read the audience. And if the audience is clearly if you're playing disco and no one's dancing and you got to make a hard right into hip-hop or rap or something or top 40, you can see glimpses of that. You try one song, you see how people, you watch their faces. How do people resonate? Oh, they really like this song. Great. I'm going to go like Mo Money Mo Problems from Notorious B.I.G. and the whole crowd erupts. Things like that really do make a difference. Instead of asking people to get up from their chairs and come onto the dance floor which is an awkward thing to ask people to do after dinner, instead have something in the middle of the dance floor that people want to see. So maybe for example, one of the people that is hosting makes a speech and you say, 'Ladies and gentlemen, at this point, please get up in your chairs and take 10 steps forward because the father of the bride is going to say a few words.' And everyone gets up and comes off the dance floor. And then when that speech is done, everyone's already on the dance floor. Finding these hacks and these ways to not manipulate, but find better strategies for getting the thing accomplished. I learned all that in DJing and I can apply all that to running a large public company today. This, when we start businesses and stuff, going back to that point again, we tend to go deep on the subject matter but what I've heard from that is our hobbies and the things and the curiosity we have outside of the area that we're building in is equally important. If I'm building a mug for people to drink tea out of, much of my inspiration will come from all the other things I do. And the problem is we kind of deprioritize that part of our lives to focus on this thing. But taking a step away from the painting allows us to see the picture a bit clearer and also to create that picture a bit clearer, which I think is a conversation people don't have enough because they think their hobbies are again deductive.

Yeah. Yeah. Yeah. I totally agree. I mean, look, I mean this is what a polymath is. A polymath understands a lot of different areas of the world, or comprehensivist, understand a lot and pulls those different things in.

A polymath is someone who knows a lot about a lot of different things.

Okay. Now there are two things that I've done that were hobbies that ended up being hugely valuable. One is my wife started an ice cream company in 2016 after we had our first daughter. After our first child, my wife really wanted to start an ice cream shop in our neighborhood. There was an ice cream shop and so it was clear it was her business not mine. She was very clear about that, she wanted independence. But even just helping her on things like accounting or accounts payable, accounts receivable, or helping her procure ice cream from the ice cream makers. That was super valuable because one, it built huge empathy for the people that are starting out. The second thing I did was during the pandemic, I was all by myself. I'm an extrovert as you probably can tell. My anxiety had increased to a degree that I had not felt in many many years. And what I realized was I was drinking so much more coffee when I was by myself at home. Way more, like double or even triple the consumption. And my best friend, who's a tea guy, loves tea, said to me, 'I'm going to actually get you to stop drinking coffee in the afternoon. I'm going to replace your coffee with really great green tea.' I wasn't really a tea drinker. And so David started to bring me this great tea. And at some point I was like, 'David, I want to actually experiment with more of the features on Shopify. And I think this tea thing, I think most people's experience with tea was like someone gets a gift basket and it was some bunch of crappy tea in there. I was like, people don't know about this really great tea. They don't know how to make it. They don't know what to use it for, when to drink it.' And so we created this little tea business called Firebelly. And both those things were sort of hobbies in my life. They were sort of Sunday afternoon activities. I don't really watch sports on Sunday afternoons. I like to tinker and try different business ideas. Both those things have made me as a leader at Shopify so much more valuable. I understand pretty much every feature and functionality that Shopify has because I tried it for myself. And initially when I told people that I was starting a little tea business, the answer was, 'I don't like why are you doing that? That seems silly. You're not going to change your life financially. It feels like a distraction.' And I would say that's one of the greatest tools, one of the greatest things that I've ever done that has made me a better leader at Shopify. And it's just a hobby.

Most people on Shopify don't register their business until weeks after they sign up for Shopify. So most people don't even assume they're going to need to register a business. And that's okay. And it's not to say that every idea you have in the shower needs to be commercialized, needs to see the light of day. But if there's an idea you have in the shower and you're having it a couple days in a row, try it out. I mean this isn't a pitch for Shopify, but it's less than a couple Starbucks coffees to go start a business today. And if you fail, the cost of failure is as close to zero as it's ever been. You don't have to take a loan out. You don't have to mortgage your house. You don't have to take food off the table hopefully. And if it works, you try it. And if it doesn't work, you try something different. But this idea that there's a barrier to getting started. And I think one of the reasons that I think one of the best times to start your entrepreneurial career or your entrepreneurial business is in school. The reason I think is because when you're in school as a student, there's very few expectations on you that this is going to be a huge success. So it's kind of the perfect time to get started. Whether you're in high school like with my DJ business or in college with my t-shirt business, there was very little expectation of me. No one thought I was going to be successful anyway.

The amount of people shop right now is about 10% of all e-commerce in the United States. In a place like Australia, it's even way more than that. I know most of our largest merchants because I'm obsessed with this stuff. I love it. Most of the businesses on Shopify that are really successful, the homegrown success stories, they were accidental. It was Heather and Trina sitting at a coffee shop not too far from here with a friend of theirs that was a doctor who was wearing these hospital scrubs that just looked like [ __ ]. They're like, 'We can do this better.' And that's how Figs was born. It was Ben Francis who said, 'Why is there no clothes for just regular gym people? Either it's like gym rat stuff like bodybuilders or it's yoga.' And that was how Gymshark came to the world. Or it's Tim and Joey at Allbirds saying, 'Why is there no really great sustainable sneaker that feels good, that's washable, that costs this amount of money?' That was how Allbirds got started. So most no one had this massive 80-page business plan and then got started. That's not how businesses are created in modern times. They're created based on this nugget of an idea and they're explored and you get curious about it and you try this other stuff and that's how you build companies that are long-lasting that change the [ __ ] world.