Shopify grows Q3 revenue 93% | Hacker News Reader

Shopify grows Q3 revenue 93%

internetretailer.com

92 pointsOatseller30 comments

Developers that always wanted to have their own side business, take note. This is the kind of opportunity you should always be looking for: a rapidly growing platform, full of small businesses with money to spend if you can help them, and a developer-friendly interface for you to do so. Shopify has a highly trafficked app store that makes your additions to stores plug-and-play, and they'll even take care of billing for you.

You're saying help small businesses build presence on Shopify?

Thousands of people built very successful businesses selling services, plugins and themes for WordPress users. Shopify as a platform shares many of the same qualities -- it's developer-friendly, with lots of small business users, and the opportunity to sell everything from custom development to prepackaged apps and themes. The user base, your potential market, is growing rapidly, and it's still young enough that there are thousands of niches to fill.

you must work for shopify, si? Volusion is pretty good too.

I'm sure it's just a good example of a potential app store. Bigcommerce has a similar one.

I take it you have not developed plugins for both. In my experience, Volusion is not in the same league as Shopify with respect to ease/flexibility/features of integration.

Asides from the general warning against building a (long-term) business on someone else's platform, I'd caution against developing for Shopify in particular.

Vague, inconsistent and non-obvious guidelines with regards to themes and apps and sudden (and unannounced) changes in policy have bitten my company in the past. I wouldn't go as far as to say that Shopify are hostile to developers, and some are clearly very successful, but I now approach the Shopify platform by being constantly ready to write off any time invested in building for it.

To be fair, you can say precisely the same about building for Apple's App Store and the Google Play Store, and others. But Shopify is certainly equally capricious.

(Throwaway, because I still have apps and themes in the ecosystem.)

Not a native speaker so I may have missed the nuances here but I don't see why parent comment was flagged to death.

I'm curious to know as I'm not knowledgable about how Shopify has messed with developers in the past. What kind of tactics or things have Shopify done that has been developer unfriendly?

I personally had shopify sit on the 'approval' process for my app for a month.

The day before they rejected it, they added similar functionality to my own.

I think they were waiting for their own update to drop. I don't believe they 'stole my idea' but its still kinda shitty.

If you don't mind my asking (and for the benefit for other developers here), what kind of functionality was it?

Shopify is build through and through for the developer ecosystem. We very intentionally leave lots of profitable space in the ecosystem so that others can build companies on top of our platform.

We also sweat over every API addition, often launching new features API first before we even put UI into the product to use the same features.

The developer platform is really core to us even if it sometimes doesn't strictly make economical sense to divert so much potential revenue to others. Yet, that's the long term game we are playing and it's working.

The reason is simple: Commerce is really different business to business. There is no way to build a single (good) product that solves all requirements.

Our philosophy is pretty simple: Shopify adds whatever most people need most of the time. This changes over time - towards the end of the last decade people sold mobile optimized themes. This was something we had to build into the platform because everyone needed that. Things that only some people need some of the time ( or similar variations on the theme ) should be supplied by the app store.

If you find inconsistencies between what's happening and what I'm saying here, please email me at tobi@shopify.com

As someone who has built a comfortably profitable business focused purely on Shopify-related products and services, I agree that it's a great market to be in.

I understand and can relate to some of the hardships the sibling throwaway comment is referring to, but I feel you're going to face challenges whatever you do when building a business, and this is simply one that I'm comfortable with choosing.

Shopify's app platform is pretty crowded compared to other ecommerce platforms. This is good for shopify users and bad for shopify app developers.

An ecommerce platform that has very little support by developers but a ton of uptake by users is Magento. They desperately need functionality that is given away as free apps for shopify users.

Of course, Magento is a php platform so it's not nearly as sexy to developers (me included).

As someone who's briefly worked on Magento themes and plugins, there's a reason it has little developer support.

Shopify is a great Canadian success story.

However their stock is currently taking a beating. It has lost 21% on the TSX over the past month.

They aren't making any profits (loss of $4.7 million last quarter). Revenue does not equal profit.

Do you know, were they ever profitable?

I don't understand how can they not be. I mean, compared to stuff like Snapchat or whatever which has dubious monetization schemes, Shopify is solidly built and offers a service that so many are willing to actually pay for. Maybe it's the costs of building things in the beginning? I really think they'll be fine... until at least Amazon or some other big player gets in their turf.

I think they're simply ploughing all their revenue back into growth through sales/marketing. If they wanted to they could turn down the customer acquisition spend and ride their recurring revenue to a tidy profit.

That depends. In the case of shopify probably yes, but you'd have to look very closely at the life-time value of those customers. There is a small possibility that if they turned down the rate of acquisition that the retention would be just poor enough that they would not make it to profitability, or alternatively that they would be profitable only for a short while.

This can be quite hard to establish, especially for companies that have raised significant capital (Shopify raised $120M+), they can keep that from happening for a long long time.

For companies that have not raised significant capital, if they're able to finance their growth out of their income stream then yes, they can convert to profitable overnight.

I believe their financials show they have yet to be profitable. That doesn't mean they couldn't be but as of now they are spending more than they bring in

Yea 2008 to 2010ish. It would be silly to not invest into our growth right now given the opportunity at hand. We liked being profitable very much though and promised to be back at some point :-)

Why would you raise $120 million on the public stock market and then go on and post a profit?

The financial statement is way more interesting of the article...

They are spending ~10M for developing the platform and ~18M for sales and marketing.

If they had completely shut down the the marketing side they would have bring around ~14M of profit this quarter.

They have around ~150M in the bank, so they can keep growing like this for other 3 years.

So you are saying the marketing resulted in no revenue?

Hummm... No...

I am just exposing fact that weren't so obvious at first sight...

If they had shut down the marketing side they might be heading for bankruptcy. Customers don't just line up at your door because you created a product.

You don't "grow" revenue. You don't exist a new service. You don't die germs.

You use transitive verbs when you want to direct them at an object.

"Grow" is both transitive and intransitive.

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