It was the summer of 2006. Harley Finkelstein was a law student at the University of Ottawa. He went to law school on the advice of a mentor who said he should treat law school like a finishing school for business and entrepreneurship. And he did. During one of his tax law classes, Finkelstein hit the launch button on his Shopify store.
About 20 years later, Finkelstein is now president at Shopify, but was one of the first merchants to start selling on this very platform. He recalls it was an “aha moment” that pretty much changed his life. “That was the magic of Shopify,” he said. “When you take someone with ambition and you mix it with this magical software, you end up with a life-changing opportunity,” Finkelstein said in an interview with Retail Brew.
Shopify launched in 2006 with its first ever store called Snowdevil. But it wasn’t until 2009 that the Canadian software giant found its groove. The launch of its app store essentially opened up Shopify’s ecosystem to third-party developers. Today, that same app store is a sheet of 16,000 apps. This marked the beginning of Shopify’s evolution from a basic tech company to a major e-commerce platform. Other key milestones include the 2014 launch of Shopify Plus, an advanced e-commerce platform for larger merchants, and the 2017 introduction of its checkout feature Shopify Pay.
Overall, Shopify has hit several others—it went public, moved into physical retail, payments, merchant solutions, and more. Today, the platform accounts for 12% of all e-commerce in the US. It provides merchants with multiple services to operate an online store, from e-commerce website hosting and inventory management to payment processing. But it was the Covid-19 pandemic that turbocharged Shopify’s growth and made it a true story of the 21st century.
Covid chapter: Shopify, in many ways, became the pandemic lifeline for small businesses across the country, much like Zoom was for big business in the US. Mark William Lewis, founder of e-commerce agency Netallico, which helps brands set up on Shopify, told Retail Brew, that a lot of brick-and-mortar stores with zero online presence began to set up online stores via Shopify.
“I remember hearing stories of even a store just selling gift cards online to make ends meet through Covid,” Lewis said.
“The pandemic was this really interesting time for the company. There’s that famous quote, ‘Everybody wants to be in the arena until they realize you have to get bloody,’” Shopify’s Finkelstein said. “We basically tore up the road map for the entire 2020 year and just focused on what we can do right now to help.”
In 2020, Shopify released a new point-of-sale system so merchants could fulfill curbside pickup orders. It also gave merchants the ability to let customers buy now, pay later, and tip.
“It gave us this opportunity to show that we actually are the entrepreneurship company. We got shit done,” he said.
The surge in Shopify’s demand during the pandemic brought its own set of challenges, Lewis noted. “At the early points, [Shopify] were so overwhelmed—in terms of even support capacity,” he said. “Getting an answer on live chat took 20–30 minutes. It was just the growth, which was so fast, but they couldn’t really keep up with it.”
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During peak Covid-19, Shopify’s then-chief product officer, Craig Miller, acknowledged that, “it almost became 2030 overnight.” That’s when Shopify hired more staff and eventually purged 10% of its workforce when the height of the pandemic waned.
Keep it simple: Shopify’s early merchants were primarily small businesses, and really aspirational entrepreneurs. Finkelstein said building for those mom-and-pop stores over the years laid its foundation for success: “One of the best parts of starting with that set market segment is you are forced to build software that is very simple to use. That focus and obsession of simplicity is really important.”
Finkelstein added that if Shopify had started with bigger merchants that it works with now, like Mattel or Victoria’s Secret, it wouldn’t have been built the same way: “Even today, the cool part of Shopify is that it’s easy to get started. As you build, the complexity reveals itself.”
Shopify vs. Magento 2: Rival platform Magento 2, now known as Adobe Commerce, dropped toward the end of 2015, recalled Lewis, “and that was like a crack and an opportunity for Shopify to come in and say—‘Hey, you have to migrate from Magento 1 to Magento 2. You might as well consider Shopify.’”
When Magento 1 was phasing out, Lewis felt that Magento 2 wasn’t ideal for many of his clients and identified Shopify as the best alternative. “Magento was getting more complex and because of that, more expensive,” he recalled. “And then at the same time, Shopify’s capabilities were getting to the point of—they couldn’t do everything Magento could do, but it was good enough for 80%–90% of the merchants. So, our philosophy became: Look at Shopify first.”
Ongoing quest: Despite all the success, some users gripe that Shopify is painful to migrate, meaning the time it takes to get a brand’s store from one platform to another. On Shopify’s part, however, Finkelstein said, “migration is getting easier.”
He cited the example, without sharing names, of one of Shopify’s large enterprise merchants which had to migrate 40,000 SKUs to Shopify. “Historically, that would have taken a couple days to import those SKUs. I think it took a matter of minutes now with our new importer tool,” he said.
Another point of criticism that keeps following Shopify is that it cannibalizes existing tech features and apps from smaller companies by creating “me-too” versions.
Lewis said Shopify viewed agencies and developers as almost like competition in its early days: “So, I don’t think a lot of people felt particularly safe in even developing on the platform…There was a sense of slight mistrust at that point.”
And that feeling persists even now, but it’s less potent. “They end up competing with their own developers and apps,” Lewis said.
In Shopify’s defense, Finkelstein said, it focuses on creating essential and adaptable solutions that evolve with merchant needs: “Shopify’s core offering is we build what most people need most of the time. That definition is dynamic. It’s going to change as new channels come up and consumer trends change.”
“However, our responsibility is if it’s something that works most of the time, we’re going to build it into the core,” he added.