Hey guys. Ready for a hot, humid summer? Better keep Paxlovid on hand.
When I spoke to Shopify CEO and founder Tobias Lütke earlier this month, I was the first to tell him about the unfortunate headline that just came up: “Is Shopify the next WeWork?” Lütke, alias Toby, spoke to me about a major rollout of new features for a platform that provides merchants with the tools to digitally sell their products directly to customers. He has turned the company into an e-commerce behemoth, somewhat unnoticed, running more than two million online stores, from literal family operations to Chipotle. You’ve almost certainly used it without knowing it, as its branding is subtle. His stature eventually baffled the collective radar, and late last year, the CEO’s shiny dome punishment graced the cover Bloomberg Businessweekwho christened him Anti-Bezos.
But this year, 16-year-old Shopify hit a wall due to supply chain shortages, a post-pandemic return to physical stores, and a looming recession. His shares collapsed, losing 73 percent its value. Even bloomberg the writer, my former colleague Brad Stone, was forced to take the irony of wondering cursed Lutke with your generous attention. The timing for all of this was particularly awkward as Shopify was about to split its shares — 10 shares for each current one. This is not what companies usually do when the price drops. Another corporate maneuver that suddenly seemed dubious was Lütke’s plan to change the firm’s rules on voting shares so that his control of the company would become virtually unchallenged. All this led to The outside asking that troubling question in his headline, which of course I mention to him during our conversation.
“Oh my God, I didn’t see that,” Lutke replies, his voice slightly accented by his German roots. (He moved to Canada in his early 20s and the company was based there until 2020, when he stated that after that be virtual.) Pause. “Yeah, okay, that’s funny,” he finally says, though he’s not laughing.
But he’s fighting and can’t wait to talk about the new features Shopify is implementing to become even more influential in global commerce. The fall in shares, he said, does not reflect the results or prospects of the business. “We told ourselves over and over again that when stocks went up 50 percent, we didn’t get 50 percent smarter in that time. So when it dropped by 50 percent, we didn’t get dumber.” Presumably, even a 73 percent dive does not indicate a lower IQ.
As for increasing his voting share, Lukte says he always intended to gain minority control, and the current change is for technical reasons, in part due to Canadian and US regulations. “It’s not really my vote,” he says. “It’s a defense mechanism against hostile takeovers.” Not all shareholders were happy with this move, as the measure was achieved in just a few minutes. 54 percent majority. Lukte also points out that the new power ends with him and cannot be transferred to his successor.
It’s all noise, he says. The signal is that Shopify is not only providing merchants with the tools for their own website, but is expanding the depth of their connections by becoming part of the larger Shopify merchant confederation. Lütke sees this as an alliance of rebels. After all, he is the anti-Bezos! “We see how Shopify connects millions of small merchants,” he says. “Cumulatively, the second largest retailer in the United States will be all Shopify stores, which is awesome.”
But ironically, some of the most enticing elements of the company’s new initiative called Shopify Editions include doubling down on partnerships with Empire itself. The theme is called C2C or Connect to Consumer, which means developing a deeper connection with customers, even if they just want to buy a blouse or a ceiling fan in a store. Inevitably, establishing these links requires agreements with gigantic services. Shopify is already closely associated with Instagram, TikTok, and Pinterest. There is now a deal with Twitter that hosts their stores on the platform and also allows sellers to connect with buyers directly through their profiles. Shopify is also strengthening its relationship with Google by “turning visitors into local shoppers,” aided by a feature that tells shoppers if a product is in stock at a nearby store. And in an attempt to expand Shopify’s reach into the real world, it will work with Stripe (and compete with Square) to make it easier to pay for iPhone on the spot. (There is also a scheme to bring merchants to the NFT bus, but I’ll refrain from doing so.) Lütke tells me these partnerships are nothing new—in fact, Shopify even works with Amazon, he says. “You’d be surprised how often when you buy something on Amazon, the order goes to the Shopify store,” he says.
Shopify also addresses a long-standing complaint that it doesn’t handle the business side. Last year, the company spent $2.1 billion on buy delivery service Deliverr. Ideally, Lütke jokes, teleportation would be invented, but “the current bottleneck here is physics.” A coincidence with Amazon’s massive shipping is also unlikely, but Shopify is hoping to eventually manage the last mile for merchants, perhaps even setting up warehouses where its customers can store some inventory. This would further tie merchants to Shopify.
Can Shopify use platform mojo without resorting to the dubious tactics of Big Tech villain leaders? Is Lütke’s vote a mere power grab? The CEO insists that the answers be yes and no respectively. And as we speak, it becomes clear that his confidence comes mainly from areas that really have nothing to do with business tactics.
It’s about his soul. You see, Lütke agrees to be the CEO of a (formerly) $100 billion company, but actually sees himself as a programmer who shares the righteous values of open systems. He chose me as the only journalist he will speak to this month because I wrote book tHe described the idealistic ethics of the early hackers. Lutke told me that growing up as an outsider, he was drawn to the welcoming atmosphere of open source and how the digital world is changing the rules to challenge the rigid way people do business. Shopify itself grew out of Lütke’s efforts to internetize his small snowboarding business. “The idea that people improve on each other’s ideas is wonderful; it’s idealistic, he says. “So when I started the company, I wanted something in common so that everyone could bring their best stuff, what they love.” Besides, he still insists on getting into coding. “In order not to rust,” he says, “I just like it.”
“I’m a builder,” he adds. “I don’t think about it in terms of dominance. I think of it in terms of: Wouldn’t it be great if it were the most accessible and widespread way for people to achieve independence?”
Shopify is power for people. But not its shareholders.
In 1999, online shopping was just becoming mainstream. AT Newsweek story in that year on the business models of Amazon, eBay, and Jay Walker’s digital enterprises (including Priceline), I charted the rise of Jeff Bezos.
Amazon.com and its model have quickly become the standard, and competition is everywhere, from catalog sellers to B&M retailers. But the conventional wisdom is that there will only be two or three big winners in any given category of cyber retail. Instead of competing with a giant, competitors have to specialize, and even then it’s a struggle. “On the web,” says Chris MacAskill, CEO of tech book specialist Fatbrain.com, “you are across the street. [from your competition]whether you like it or not.”
Bezos believes the entire economy will benefit from the ripple effect of e-commerce. In the not-too-distant future, vans carrying hardcover best-sellers, CDs, and groceries will roam the suburbs. Within a few hours of registering your order on the website, the van will pick up the loot. Or maybe the order will be registered from a PDA or mobile phone.
The direct selling model is still evolving, but it is the backbone of e-commerce. “All this is due to the fact that the balance of power is shifting from companies to consumers,” says Bezos.
Andy writes: “There is a very simple answer to the question of whether AI chatbots are intelligent: require them to name their source. Alexa already does this by saying “according to x” when you ask her a question. What do you think?”
Thanks Andy That’s what I think. I received many comments from readers about potentially intelligent AI. Most, if not all, of our current chatbots make gaffes that indicate they are repeating human speech rather than generating it the way a human would. While Blake Lemoine says he is convinced that LaMDA is reasonable, most of us look at, for example, a chatbot’s statement that it likes to spend time with friends and family as a sign that something is not right here. which friends and family?
However, LaMDA’s responses show a sophistication that goes beyond the mere association between a remark and one or even a few sources. An advanced chatbot’s “understanding” of our world is a computationally intensive product of machine learning, making it impossible to extract many comments from sentences and sentiments found elsewhere. When it describes topics in a book, the AI may not parrot the CliffsNotes summary, but rather extract the important points from its own analysis of the text.
You and I cannot attribute everything we say to one source. Thus, we expect a sentient bot to express itself in the same way – influenced and taught by what it sees, hears and reads, rather than simply repeating these things. However, even if a chatbot does this, it does not mean that it is intelligent. This is a much more complex definition.
You can send questions to [email protected]. Write ASK FOR A FEE in the subject of the email.
Okay, it’s summer. But 37 degrees Celsius… in Winnipeg? It’s 98.6 Fahrenheit. And that’s not okay.
My interview with Blake Lemoine, a Google researcher who insists that AI can have a soul. It was like talking to a real person!
Hi sunshine. You’re going to kill us?
Fight for life extension Mars Helicopter.
Tired of too many Zoom meetings? Wait until you’re at 10 Slack Huddles day.
Next week Plaintext goes to celebrate independence. See you in July.
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