In Toby's Words

Toby Lutke is the CEO of Shopify. Shopify is the world leader in creating platforms and tools for e-commerce merchants. In the last few days, Toby sent a memo to the organization. This memo has been reported on widely in the mainstream media. When Toby realized that the memo had been leaked, he posted it in it entirety on his twitter feed. When news reporters report on a story, they’re adding their own narrative and interpretation. I want you to hear Toby’s words directly, without interpretation.

The memo speaks to Shopify's adoption of AI in all of their systems and work flows. It's a wake up call to all businesses.

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Episode Transcript

(00:01):
Welcome to the Real Estate Especial podcast, your morning
shot of what's new in the world of real estate investing.
I'm your host, Victor Minash. I happen to live in Ottawa,
Canada, home to Shopify. Many people in my community work
at Shopify. On today's show, I'm going to
read the entire text of a memo with Toby Lutka, the CEO Shopify
sent to his staff. Company employs a little over

(00:22):
8000 people. They made the transition from an
in office environment to completely virtual during the
pandemic, and they have not reverted to an office
environment ever since. This memo has been reported on
widely in the mainstream media, and when Toby realized that the
memo had been leaked, he posted it in its entirety on his
Twitter feed. When news reporters report on a

(00:42):
story, they're often adding their own narrative and
interpretation. I want you to hear Toby's words
directly without interpretation,so here we go.
He says we are entering a time when more merchants and
entrepreneurs could be created than any other in history.
We often talk about bringing down the complexity curve to
allow more people to choose thisas a career.
Each step along the entrepreneurial path is rife

(01:05):
with decisions requiring skill, judgement and knowledge.
Having AI alongside the journey and increasingly doing not just
the consultation but also doing the work for our merchants is a
mind blowing step. Function change here.
Our task here, Shopify, is to make our software unquestionably
the best canvas on which to develop the best businesses of
the future. We do this by keeping everyone

(01:26):
cutting edge and bringing all the best tools to bear so our
merchants can be more successfulthan they themselves used to
imagine. For that, we need to be
absolutely ahead. Reflexive AI usage is now a
baseline expectation of Shopify.Maybe you're already there and
find this memo puzzling. In that case, you already use AI
as a thought partner, deep researcher, critic, tutor, or

(01:49):
pair programmer. I use it all the time, but I
even feel I'm only scratching the surface.
It's the most rapid shift to howwork is done I've seen in my
career, and I've been pretty clear about my enthusiasm for
it. You've heard me talk about AI in
weekly videos, podcasts, town halls, and summit.
Last year, I used agents to create my talk and presented

(02:09):
about that. I did this as a call to action
and invitation for everyone to tinker with AI to dispel any
skepticism or confusion that this matters at all levels.
Many of you took up a call, and all of us who did have been in
absolute awe of the new capabilities and tools that AI
can deliver to augment our skills, crafts, and fill our

(02:30):
gaps. What we've learned so far is
that using AI well is a skill that needs to be carefully
learned by using it a lot. It's just too unlike everything
else. The call to tinker with it was
the right one, but it was too much of A suggestion.
This is what I need to change here today.
We also learned that, as opposedto most tools, AI acts as a

(02:51):
multiplier. We're all lucky to work with
some amazing colleagues, the kind who contribute 10X of what
was previously thought possible.It's my favorite thing about
this company. And what's even more amazing is
that for the first time, we see the tools becoming 10X
themselves. I've seen many of these people
approach implausible tasks, oneswe wouldn't have even chosen to

(03:12):
tackle before, with reflexive and brilliant usage of AI to get
100 X the work done. In my own leadership memo years
ago, I described Shopify as a Red Queen race based on the
Alice in Wonderland story. You have to keep running just to
stay still. In a company growing 20 to 40%
year over year, you must improveby at least that every year just
to re qualify. This goes for me as well as

(03:34):
everyone else. This sounds daunting, but given
the nature of the tools, this doesn't even sound terribly
ambitious to me anymore. It's also exactly the kind of
environment that our top performers tell us they want.
Learning together, surrounded bypeople who are always on their
own journey of personal growth and working on worthwhile,
meaningful and hard problems is precisely the environment

(03:54):
Shopify was created to provide. This represents both an
opportunity and a requirement deeply connected to our core
values of being a constant learner and thrive on change.
These aren't just aspirational phrases, they're fundamental
expectations that come with being part of a world class
team. This is what we founders wanted
and this is what we built. So what does this mean #1?

(04:16):
Using AI is now a fundamental expectation for everyone at
Shopify. It's a tool of all trades today
and will only grow in importance.
Frankly, I don't think it's feasible to opt out of learning
the skill of applying AI in yourcraft.
You're welcome to try, but I want to be honest, I cannot see
this working out today and definitely not tomorrow.
Stagnation is almost certain, and stagnation is slow motion

(04:38):
failure. If you're not climbing, you're
sliding #2 AI must be part of your GSD prototype phase.
The prototype phase of any GSD project should be dominated by
AI exploration. Prototypes are meant for
learning and creating information.
AI dramatically accelerates thisprocess.
You can learn to produce something that other teammates

(04:59):
can look at, use, and reason about in a fraction of the time
it used to take #3 We will add AI usage questions to our
performance in peer review questionnaire.
Learning to use AI well is an unobvious skill.
My sense is that a lot of peoplegive up after writing a prompt
and not getting the ideal thing back immediately.
Learning to prompt and load context is important and getting

(05:22):
peers to provide feedback on howthis is going will be valuable
#4 learning is self-directed butshare what you learned.
You have access to as much of the cutting edge AI tools as
possible. There is chat dot Shopify dot IO
which we've had for years now. Developers have proxy, copilot,
cursor, Claude code. All pre tooled and ready to go.

(05:43):
We'll learn and adapt together as a team.
We'll be sharing WS and LS with each other as we experiment with
new AI capabilities, and we'll dedicate time to AI integration
in our monthly business reviews and product development cycles.
Slack and Vault have lots of places where people share
prompts that they've developed #5 before asking for more head
counted resources. Teams must demonstrate why they

(06:04):
cannot get what they want done using AI.
What would this area look like if autonomous AI agents were
already part of the team? This question can lead to really
fun discussions and projects. And number six, everyone means
everyone. This applies to all of us,
including me and the executive team.
So the path forward AI will totally change Shopify, our

(06:25):
work, and the rest of our lives.We're all in on this.
I couldn't think of a better place to be part of this truly
unprecedented change than being here.
You don't just get a front row seat that are surrounded by a
whole company learning and pushing things forward together.
Our job is to figure out what entrepreneurship looks like in a
world where AI is universally available, and I intend for us

(06:45):
to do the best possible job of that.
To do that, I need everyone's help.
I already laid out a lot of the AI projects in the themes this
year. Our road map is clear and our
product will better match our mission.
What we need to succeed is our collective sum, total skill and
ambition at applying our craft multiplied by AI for the benefit
of our merchants. Signed, Toby.

(07:06):
Well, this is the text of the memo in its entirety.
This is one of those moments when the realization hits that
if it can be done, it will be done.
It's just a matter of who's going to do it.
This is a game of eat or be eaten.
This memo raises a lot of questions.
Questions like how many other boardrooms in America's is this
discussion happening in? Who are the leaders and who are

(07:27):
the laggards? Well, some businesses just think
that this does not apply to them.
As you think about that, have anawesome rest of your day.
Go make some great things happen.
We'll talk if you get them off.