"Since he started Shopify 15 years ago, the company has sold software that allows about 2 million merchants worldwide to run websites—free from the complicated embrace of Shopify’s chief rival, Amazon.com Inc. For $30 to $2,000 a month, Shopify offers sellers more than a dozen services to run an online store, from the actual e-commerce website to inventory management to payment processing."

"But when businesses everywhere had to close en masse, Shopify armed them with the tools to become instantaneous online stores."

"In a sense, Lütke and his colleagues are the opposite of Jeff Bezos’ army of techno-capitalists. Amazon, which has enjoyed its own Covid-fueled boom, celebrates the almighty customer. It will happily risk alienating small businesses by knocking off their products or soliciting new competition, if it means lowering prices and accelerating shipping times."

"Shopify, on the other hand, has a romantic view of the merchant—its executives rapturously extol the virtues of “democratizing commerce” and “making entrepreneurship cool.” If Amazon’s devotion to customers and an infinite selection earned it the nickname “the everything store,” Shopify, as its new dateline suggests, wants to be the everywhere store."

"His current fixations include the concept of the Trust Battery, which is how he gauges his confidence in employees, along with the hypothetical that one of the most critical pieces of technology, the web browser, couldn’t be introduced today because Apple Inc., Google, and other app store owners wouldn’t allow it."

"Up until that spring, Lütke had been reticent about raising money."

"He flew to Silicon Valley a few times during Shopify’s early days, sleeping in hostels and biking to visit venture capital firms. Not a lot had changed since those first few fundraising attempts."

"When Lütke and Finkelstein, then the chief operating officer, started making the rounds on Wall Street, few prospective investors had heard of Shopify. “We just said, ‘If you bought something on the internet and it wasn’t on Amazon but the experience was good, it was a Shopify store,’ ” Lütke recalls."

"An even more critical event came a few months after the IPO."

"Amazon also operated a service that let independent merchants run their websites, called Webstore. Bang & Olufsen, Fruit of the Loom, and Lacoste were among the 80,000 or so companies that used it to run their online shops."

"If he wanted to, Bezos surely had the resources and engineering prowess to crush Shopify and steal its momentum."

"But Amazon execs from that time admit that the Webstore service wasn’t very good, and its sales were dwarfed by all the rich opportunities the company was seeing in its global marketplace, where customers shop on Amazon.com, not on merchant websites."

"At the time, the company was also developing house brands such as Amazon Basics, and Webstore sellers had to get comfortable with the possibility that the tech giant might see their success and knock off their best products."

"In late 2015, in one of Bezos’ periodic purges of underachieving businesses, he agreed to close Webstore. Then, in a rare strategic mistake that’s likely to go down in the annals of corporate blunders, Amazon sent its customers to Shopify and proclaimed publicly that the Canadian company was its preferred partner for the Webstore diaspora."

"In exchange, Shopify agreed to offer Amazon Pay to its merchants and let them easily list their products on Amazon’s marketplace. Shopify also paid Amazon $1 million—a financial arrangement that’s never been previously reported."

"Only later would Amazon realize its mistake and view Shopify—and the incipient trend of brands selling directly to consumers—as a critical threat to its dominance."

"In 2016, Shopify introduced a lending service to help small companies that otherwise wouldn’t get the time of day from a traditional bank. The program, like one that Jack Dorsey’s Square (now called Block) had started two years earlier, lets vendors start their companies by buying inventory and hiring employees."

"In return, borrowers pay a percentage of their sales to Shopify until they pay off the principal and related fees. In November the company said Shopify Capital had lent a total of $2.7 billion to merchants since inception."

"Shopify did that, but now many sellers are again in distress. With supply chain problems plaguing the global economy, even the largest retailers are having trouble getting merchandise from manufacturers to customers’ homes in anything resembling a timely manner."

"Amazon, of course, has an advantage here: a well-honed logistics network devoted to ferrying products across oceans and among about 930 warehouses around the world, then delivering packages right to people’s doorsteps."

"For years, Lütke toyed with the idea of getting into the gritty business of fulfillment. In 2019 the company introduced what it called the Shopify Fulfillment Network, which connects merchants with privately owned fulfillment centers offering Amazon Prime-level reliability, as well as shippers including United Parcel Service Inc. and FedEx Corp."

"Lütke says logistics “is a tough nut to crack for byte companies”—meaning firms that have gotten comfortable writing software, with none of the headaches of employee injuries and high-profile union campaigns. If a ruthless, Amazon-style efficiency is required to run such a network, Lütke says, “then I don’t think we’re going to succeed."

"“Over time, if someone delivers you a product within a day, and someone doesn’t, you will go with the solution that gets you the product in a day. I think that will be a big challenge to Shopify.”"

"With Apple changing the rules around data tracking and user privacy on iPhones, Facebook ads have become more expensive and less effective, squeezing small businesses. Because of the switch, Supply’s Coddou says, his company was unprofitable this summer for the first time in its six-year history."

"“If they knock it out of the park and make it super easy to start new businesses on it, then I’m like, I actually accomplished my mission.”"