Today we announced that Shopify has achieved a huge milestone: Our clients have surpassed $10M in total sales from all of our Shopify stores. This is a massive achievement, not just for the team at Jaded Pixel but also for our customers: we wouldn’t have a market if you didn’t have products to sell. And selling you are: From t-shirts to beauty products, from shoes to organizers, from funky art to vile masks, Shopify stores are selling almost anything a purchaser could ever want to buy. You’re in dozens of countries around the world, using currencies from Dollars to Pounds to ¥en, and breaking new ground in ecommerce software every single day. Congratulations to everyone, and onwards and upwards to the next $10M!
In honour of this achievement, I sat down with Tobias Lütke, co-founder of Jaded Pixel along with Scott Lake, to take us back over the origins of Shopify as well as some of the challenges and surprises that Shopify has come up with over its brief but brilliant history.
Q: Tell me about the origins of Shopify and how it got from an idea to $10 Million.
A: We didn’t set out with Shopify as you see it today in mind. We were originally building Snowdevil. We were a couple of guys who wanted to sell cool designer snowboards, not create an ecommerce application for thousands of customers. We had looked at lots of ecommerce packages, but nothing was good enough for what we wanted to do. I was kind of off programming at the time and wasn’t crazy about the idea of building something from scratch, but we had requirements that just weren’t there in existing programs. We wanted it to look cool. We wanted it to be easy to use. And if the idea took off we wanted to be able to change the store with the seasons, and we didn’t want to be tied to a product that couldn’t handle it. So I jumped back in to programming and started to build something we could use to jumpstart that business. And we ended up with something completely unexpected. We sold snowboards all that winter, but when spring came and business slowed down we realized that the shop, not the snowboards, was the real opportunity. Only when we built Snowdevil did we realize it was the basis of something good enough to allow thousands of people to run their own shops.
Q: What about it made you realize you had something really good on your hands?
A: We realized we’d already done a lot of the hard work. In going through the process of building an online store, there were so many pieces of the process that were cumbersome and seemed unnecessary. For example, Snowdevil needed some basic PCI stuff tested, but we hadn’t built it yet – but we couldn’t build it until we had other parts built that relied on the original part. Everything was needed in a certain order and it was frustrating. We knew other people would be going through this process too and thought, why not turn this into a product and make it easy for everyone else to do this?
Q: How long did the product take to build?
A: It took about 2 or 3 months to write Snowdevil, but it took about a year and a half to take Snowdevil and turn it in to Shopify. Originally I was coding in coffee shops, then after about a year we got office space which we’ve now outgrown.
Q: Why did you decide to build Shopify in Ruby on Rails?
A: On the day Rails was released a friend of mine linked to it, so I checked it out. I had started to build Snowdevil in PHP, but as soon as I found rails I knew it was the technology to bet the company on. It’s not something that techies usually decide in a day, but we did. At that time, Rails was as close to the proverbial silver bullet as anything else in technology I’ve ever seen.
Q: What’s been the biggest surprise that’s come out of working on Shopify?
A: The thing that surprises me the most is how crafty and technical our customers are, especially those on the forums. I am used to out-geeking everyone around me, and I’m constantly surprised by what people can do with Shopify. When you program a lot, you end up with x-ray vision for code – you see something and know how it was done. Once in a while, though, you can’t tell, and you look at the code and find some new innovative way to do something, and every time that happens it’s a great surprise.
From a less geeky perspective, I’m also always pleasantly surprised by the quality of the Shopify stores out there. One of my favourite surprises is to find a cool store highlighted on Digg or somewhere and not realize it is a Shopify store until I actually look it up.
- Tobi Lütke, interviewed by Shannon McKarney
Happy St. Paddy’s! It’s been a while since you’ve seen one of these.. blame conferences and holidays! Here’s all the interesting ecommerce tidbits the Internet came up with for the last couple of weeks.
- At Vunet, "interesting survey results" highlight a big missed opportunity for small businesses to reach into the ecommerce market – thus leading to a great marketing opportunity for ecommerce providers and designers. In a survey conducted in 2007, “The company discovered that 23 per cent of websites looked at had not been updated since their launch, making much of their content inaccurate or obsolete. The average age of a website was four years.
But perhaps the most revealing figure, given the huge growth in consumers using the internet to buy goods and services, was that a mere eight per cent of respondents had an ecommerce element on their sites.
“We were completely staggered by the tiny percentage of small business owners who were actively using their websites to generate sales,” said Jon Beal, managing director of Netflare.”
- eMarketer has an interesting article on the current percentage of internet users who buy online, and where the increase in ecommerce sales will come from: ””Most analysts including eMarketer say that online sales growth has more to do with incumbent online buyers increasing their ecommerce spending rather than increasing new online buyers,” said Jeffrey Grau, senior analyst at eMarketer.” They also talk about the shift in attitude by online purchasers: “buying without a human became an asset rather than a liability.”
- Check out the recap of the Effective Merchandising: What sells? webinar put on by Get Elastic ecommerce. I missed this session, so I’m particularly grateful for the chance to see the recap online. Read about Merchandising based on Intent, Smart Cross-Sell and Up-Sell Strategies, SEOandizing and more.
- Reuters’ article Indie Labels take ecommerce into their own hands shows an example of a new market opportunity for musicians: Selling their music directly to the consumer. Not only does this take the middle man out of the equation, it also gives the band the opportunity to give their fans access to music as well as merchandise. Designers, looking for clients? Try approaching your local indie rock band and see if they’re up for selling online.
- Over at Ecommerce Times, they’re talking about the increasing fickleness of online consumers, and how to increase customer loyalty by using personalized services.
- Fiinally, MSNBC posted an interesting article on "Transforming your website into a sales powerhouse". It’s full of tips on design, traffic conversion and using tools such as video and blogging. Check it out!
Got any interesting ecommerce tips? We’ll blog about ‘em.. just email me at shannon [at] jadedpixel [dot] com.
The CEO of Zappos gave a presentation on the Top 10 Lessons they've Learned about eCommerce. Zappos is one of the largest online retailers around, with gross merchandise sales of over $800M in 2007 and currently stocks more than 3 million shoes, handbags, clothing items and accessories from over 1,100 brands (from Zappos.com). Click through for a few of the lessons they've learned...
I’ve found a few upcoming events that could be worthwhile for folks in ecommerce to attend. At PayPal, there are several PayPal/Jupiter Research events in March about "how to grow your business in what appears to be a slowing economy". They will be visiting five US cities and will have a large retailer present in each city to discuss ecommerce strategies for growth.
Also, over at Sitebrand, they are hosting a Webinar on Thursday, March 6th entitled Jon Stewart or Oprah: What’s your Online Store’s Personality?. The webinar is free and will cover topics including:
- the 4 types of people browsing your site
- how to adjust your design to speak to each type appropriately
- what type of messaging and incentives optimize conversion
- what features will trigger action for each type
- creative ways retailers speak their language
If anyone attends these events, we’d love to hear your feedback. Post a comment here or talk about it in the ecommerce forums.