Shopify is a world-renowned eCommerce platform that hosts more than 1.75 million merchants, serves hundreds of millions of shoppers worldwide, and pulls in revenue by the billions. However, it was not always like this. Its founder, Tobias Lütke, sought to create a shop on the internet, which evolved to become Shopify.
Today, Shopify is the biggest player in the eCommerce market.
Let’s take it back to the beginning.
The Snowdevil shop
In 2004, a group of friends started an online store to sell snowboard equipment. They named their online store, Snowdevil. Tobias Lütke and Scott Lake found out quickly that the existing platforms at the time were not very satisfactory.
Lutke, the programmer of the two, started building a platform that would power online commerce. It took two months of development before Snowdevil launched.
Two years later, in 2006, the platform Snowdevil was built on launched as Shopify, broadening the idea from a localized solution to something the wider world would adopt for their shops.
Pivoting from Snowdevil
Around 2004-2005 Lutke and Lake were trying to build Snowdevil using available tools when Lutke learned about Ruby on Rail. It was the turning point for the company, as Lutke began building a platform following the philosophy that tools should be fun and easy to use.
When the early Snowdevil site was up and running, the platform it was built on had been passed to colleagues in the Ruby on Rails community, which generated interest.
The founders put Snowdevil on ice to focus more on helping make eCommerce easier. They wanted to give merchants or anyone a way to build an online store.
Daniel Weinand, a programmer Lutke knew, joined the team to help Lutke and Lake turn their idea into a marketable product. The group set to work on tools for merchants.
Launching the tools
In 2006, the trio launched Shopify as a set of tools to help merchants build their own shops. The original product offered customizable store templates, helped track orders, automated inventory, and more. Some features, like image uploading, item tagging, and item grouping, continue playing a pivotal role today.
Shopify also allowed users to process payments via PayPal and integrated credit card processors. Now, people who had never hoped to set up an online shop could.
The founders had some growth and learning moments between the time Shopify launched and when the API and an app store came along. Some of the changes included changing how they charged merchants using the program.
Shopify transitioned from charging fees from a percentage of the sale by the merchant to a subscription-based plan with a small transaction fee that went down as the plan size ballooned. The new charging model was more favored and allowed more merchants to take advantage of what was offered.
The founders then shifted focus to developing features that helped merchants sell more and with ease, which added to Shopify’s success given the new charging model ensured it saw a cut from sales across the platform.
Shopify’s Third Birthday (An API and an app store)
In 2009, Shopify did something that many tools had failed to do- transition into a platform. Around this time and the years before the decade ended, many tools that made websites and the internet easier to use had cropped up. They included Flickr, Digg, Feedburner, and Delicious.
Many failed to expand themselves beyond their initial use as simplification tools and ended up being acquired and folded into companies that could afford to buy them.
On its third birthday, Shopify released an API platform and App Store to bring in developers who would populate the app store with tools for the merchant to use. The stores could now have a unique experience since every merchant could build a store specifically to their vision instead of relying on a rigid structure.
Shopify developers could now sell their apps, and merchants could buy functions, features, plugins, and other needed integrations.
The shift to mobile
In 2010, Shopify Mobile was released. The app was free and initially made for Apple devices. It allowed the merchants to manage their stores, customers, and orders from a phone. eCommerce was changing as more people started shopping online using smartphones.
Shopify saw the opportunity presented by the growing presence and use of smartphones, which prompted the app. The platform even launched a competition called ‘Build a Business’ challenging online shop operators to start a store over an 8-month timeline.
The most successful company was promised $100,000 and mentorship by celebrity business owners. Over 1000 new stores were started because of this, receiving media coverage and generating more than $3 million in revenue.
Shopify redefined the point of sale (POS) in 2013 when it launched Shopify Payments. Merchants no longer had any need for third-party payment solutions.
Just four years later, the point-of-sale system was introduced to brick-and-mortar store merchants to allow them to accept direct payments from debit and credit cards. Small businesses could now leverage a tool usually built for large-scale operations.
Even when Amazon’s Webstore, a merchant services host, closed down in 2017, it recommended Shopify as a preferred alternative, which saw Shopify shares rise in value.
In 2014 Shopify launched Shopify PLus for high volume enterprise stores. Initially there was little difference between a regular Shopify plan and the Plus plan aside from the pricing model which worked out more favourable for many merchants. Now the PLus offering has evolved to include dozens of features more suitable to enterprise merchants. read more about What is Shopify Plus here.
Shopify went public on May 20 2015 and is listed on the New York Stock Exchange Toronto Stock Exchange. The listing has allowed the company to accelerate growth and take a market leading position in ecommerce SAAS.
A journey of improvements
Ever since its founding, Shopify seems to have succeeded in doing one thing very well- adapting to change and evolving. As the company tells it, the philosophy is to make an ever more frictionless selling and buying experience continually.
For the merchants, it makes tools, features, and solutions intended to make selling easier; for developers, it continues to improve tools that allow the development of apps and solutions merchants can use to make their stores more unique, attractive, and efficient.
Finding success on Shopify
Shopify is a collection of everything an eCommerce business needs to succeed. So, why are there still failed ventures? Well, it all comes down to how a business/entrepreneur leverages what is offered to create an effective online store.
For that, you need specialized developers & marketing experts who understand the platform, its evolution, the tools it offers, and how they can be used to achieve your specific goals.