Silicon Valley didn't take Shopify seriously, so they built a talent ecosystem elsewhere. Now, they're 10x harder to get into than Harvard.
Getting into Shopify today is 10x as hard as getting into Harvard. Their hiring rate is as low as 0.3%. Their CEO, Tobias Lütke, says “We literally only want the best people in the world.”
But that’s not the main reason ex-employees are very proud to be Shopify alum.
Shopify has established a strong and unique culture that values authenticity, innovation, and personal growth.
And they’ve done it outside of Silicon Valley, after Bay Area VCs failed to understand Shopify’s value in a time when commerce was dominated by Amazon and Ebay.
Shopify is known for the Canadian talent ecosystem they fostered over 15 years. They’re 100% remote now, but have strived to retain the organizational culture they started with. When we dig deeper, some of their talent principles may seem controversial. But they seem to attract exactly the kind of person they’re looking for. Here’s how they did it.
Building a talent ecosystem in Canada.
When Lütke started Shopify, he saw that Silicon Valley created a virtuous talent cycle: the best companies attracted top-tier talent and build the best products, which draws more talent, who start more companies, and so on.
But he didn’t see how he could win there. (By 2015, Shopify had over 160,000 merchants. But most of Silicon Valley still didn’t even know what it was.)
At the time, Google and Facebook were growing very fast — he didn’t think Shopify would lure top talent away from them. Instead, he thought, “I can do this in Canada.”
He decided to establish his HQ in Ottawa on his own terms. And Shopify’s ability to build outside the Bay Area tech ecosystem contributed heavily to its success.
In Silicon Valley, it’s normal for the people who build early companies to move on quickly, even prior 2015; Facebook and Google Series A hires rarely stay until IPO. But in Ottawa and Toronto, the average tenure of people at companies was higher.
“When I hire someone, the chance of us working together in five years or 10 years is massive in Ottawa and Toronto.... [while] the average tenure of engineering in Silicon Valley is 18 months at this point. And that means I can invest completely differently into people. Right? And which means that I can build a learner’s organization.
This learner’s organization starts with close consideration of the human joining it.
Shopify wants to know your entire life story.
Recruiters aren’t ever going to ask, “walk me through your resume”. Instead, expect to go over your entire life story.
Shopify wants to understand the themes of your career, the lessons you've learned, and the impact you’ve made along the way.
“We're interested in the trophies and the bruises: the problems you solved, the challenges you encountered... the hits and misses, the pivotal points, your proudest moments, and the hardest projects.”
They’re looking for a growth mindset and problem-solving abilities. Even for paths that aren’t linear (and careers rarely are), there should be themes of growth and development. As Holly Fortier, Recruitment Lead for Shopify UX, puts it:
“We’re really looking to get to know the person that we’re talking to, and through that interview, we’re looking for specific qualities around self-awareness, indications of impact and engagement in people’s past roles… those kinds of non-tangible skills that will kind of predict if we think someone’s going to be successful with Shopify.”
The interview is supposed to be a genuine, two-sided conversation. It’s a stark contrast to the increasing automation in hiring processes elsewhere. While it may be stressful for those who prefer to let their skills speak for themselves, it allows Shopify to assess how people, not just resumes, can contribute to the team.
Introducing human-first compensation systems.
The Life Story interview makes candidates feel valued for their whole selves, not just their technical chops. But their compensation model is surprisingly human too: Their Shopify Flex Comp system allows employees to choose their own mix of cash and equity rewards.
You can even change this balance throughout the year as your priorities do. This flexibility acknowledges that different people have different needs, which can change over time.
A culture based on the open-source model.
In the Masters of Scale podcast with Reid Hoffman, Lütke shares that he took organizational inspiration from the open-source community. He aimed to build organizational systems where people can be highly independent and autonomous to produce great work, yet collaborate effectively. Hoffman summarizes:
He engineered Shopify’s culture to be open internally – and this created a virtuous cycle of its own. New ideas could surface easily, then rapidly gain traction. This stimulated more new ideas, in a chain reaction that let Shopify punch above its weight.
This internal culture also influenced Shopify’s open platform model, attracting merchants who attracted developers who attracted merchants who attracted customers, and so forth.
Lütke has been very intentional about crafting an open culture that leads to high performance. But one thing Shopify is not, despite longer employee tenures and human-focused compensation principles, is a family.
Not a family, but a high-performing team.
Like Netflix’s Reed Hastings, Lütke is clear: “Shopify is a team, not a family.” This philosophy sets Shopify apart from many tech companies that promote a family-like atmosphere. Lütke argues:
“The very idea is preposterous. You are born into a family. You never choose it, and they can't un-family you...The dangers of 'family thinking' are that it becomes incredibly hard to let poor performers go.”
His stance might seem harsh, but it's part of what keeps Shopify's talent bar so high.
This April, the company implemented a new employee ranking system that assigns numerical scores to skill levels. People can boost their scores by improving their expertise; Shopify only allows raises for employees whose scores increase in a review period.
This system could be rooted in a desire to provide greater context to employees about their performance; Lütke as has previously stated having everything out in the open creates ways for people to help themselves grow and do great work. There’s been pushback because the system can negatively affect team dynamics and employee stress levels, but Shopify hopes that it’ll help employees improve their skills and reach their full potential.
How to build great teams, according to Shopify
Though they have some non-conventional hiring principles, Shopify’s talent philosophy is actually quite simple. It comes down to this: Get to know people as humans beyond their function, acknowledge they may have different or changing priorities, and challenge them to excel to the best of their ability. Invest in people as individuals, and in your talent ecosystem as a whole.
All of this sounds incredibly basic. But consistently applying these basic principles over time is how Shopify attracts, retains, and develops top talent.
Shopify’s success isn't magic — it’s due to their commitment to doing the simple things right, year after year.
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