Shopify to raise $100M in Toronto, New York IPO
cbc.ca
cbc.ca
"..luck brought the sudden, coincidental appearance of a new framework for using Ruby, called “Ruby on Rails,” devised by Danish programmer David Heinemeier Hansson. ..because Ruby on Rails was so new, Lütke’s work gained notice. He began sharing some of the software components he was creating with the Rails community (a way to process credit cards, for example), and quickly became one of a select group of core Rails developers.
..Lütke took the burden of this stress entirely on himself. He told no one at the company. “I was sitting in meetings,” he remembers, “talking with my peers about building things that would take us a year, when I knew we didn’t have four weeks of money left. And I could not let anyone know that.” He knew the minute he did, their focus would naturally shift to the short-term, to work on things for immediate benefit. For Shopify to succeed, he needed them to keep thinking long-term."
For six months, Loudcloud employees worked long hours and were under constant stress, but were able to stay afloat on less money (keeping them alive longer). I think transparency trumps secrecy in most cases. Bad news spreads quickly and good news spreads slowly.
They kept charging me for years. I eventually noticed, and asked for a refund on the completely empty, completely unused account which was being charged to an expired and canceled card (something I didn't even know was possible until this incident).
Support said no, and offered a discount if I wanted to use Shopify in the future. I said I'd have to resort to a chargeback and I'd let my credit card company see if they agreed with my interpretation of the situation or not. The head of support literally yelled at me the moment I used the word chargeback, revoked his previous offer, and said they had no need to return my money, even though they hadn't earned it.
I wound up in touch with their VP Revenue who agreed that he didn't want to take any money they hadn't earned. But instead of refunding my money, he just dropped contact with me and never responded again.
If they were to respond to this publicly, they'd say I was angry with them. And that's true. I became angry after their head of support yelled at me. I still can't believe that happened, it was the worst customer service experience of my life. My blood pressure goes up a little just remembering how I was treated.
So basically, I'm glad you're happy with them, but they stole a couple hundred bucks from me and lied about their intention to give it back. My experience makes me believe that anybody who had good experiences is, almost certainly, just lucky. That or I'm in the .001% of supremely bad luck.
If I'm truly in the .001%, their vp revenue can circle back and give me the money he promised (I'd be easy to identify on their side, since if they never yell at customers, and never lie to customers, then it should be super-easy to remember a time that they yelled at and then lied to a customer).
If I'm truly an outlier, I'd welcome outreach from them (in the form of the refund they promised me long ago). But I don't expect it.
Running a startup is crazy hard... but establishing cultural norms like 'don't yell at customers' and 'don't lie to customers' isn't hard. That's easy. And either I had a wicked outlier experience, or they failed to do that.
If that was the case the chances are this 'cultural norm' might've been limited to two neighbouring support reps going off book.
The whole situation made me wonder how much revenue would Shopify lose if they stopped charging expired credit cards. It must be material if they're willing to engage in a billing practice that essentially no upstanding SaaS company engages in. Or at least it must've been material at the time.
Yes you are. If the OP story is true, you just don't yell at your customer. It doesn't make me want to try Shopify if they really use these kind of practices. Only shady pornsites do that stuff.
You probably aren't; but lots of customers are assholes. Lots of people become utilitarians when they're dealing with customer support: when they want an outcome all means to that end become justified. I can't tell you how many insults I've had hurled at me during my few years as a support rep.
And as far as this customer is concerned; my guess is that he never got the chance to speak to the 'head of customer support.' He got pissed off at one employee; asked for the supervisor and was transferred to the support rep sitting next to him.
That shit happens all the time; heck I've been the 'supervisor' several times and had it work. Call it a 'social hack' support reps often use.
Now the guy should never have yelled and the VP should've followed up on his promise but downvoting someone who politely advocates cutting Spotify some slack based on a single report isn't fair either.
/ex-customer-support-rep-rant
So I agree wholeheartedly that Shopify simply gets it. The way they promote designer and developer usage is off the charts. I could go on and on. They nail it on all levels.
Congratulations to Shopify.
https://www.sec.gov/Archives/edgar/data/1594805/000119312515...
FY2014
Sales and Marketing - 45,929
RD - 25,915
Admin - 11,566
And the Canadian Gov't is also part of this round through a few levels of indirection:
http://www.techvibes.com/blog/canadian-tech-sector-poised-fo...
[0] http://www.nytimes.com/2015/04/08/business/dealbook/informat...
In Canada, if it makes money, the pension plans are in on it. It's not political - just business.
"Its total revenues have doubled from $23.7 million in 2012, to $50.3 million in 2013 and to $105 million in 2014. However, it experienced net losses each year, losing $22.3 million in 2014"
I looked in the F-1 form and saw:
"We had net losses of $1.2 million in 2012, $4.8 million in 2013, $22.3 million in 2014"
The losses quadrupled in 2012-2013, while revenue doubled, and increased almost fivefold in 2013-2014, while revenues only doubled.
Culture and Employees
If you have ambitious goals, you need an equally ambitious team. Shopify is composed of hundreds of highly talented, deeply caring individuals all working on making commerce better for everyone. Our culture is continuously being redefined with every person that joins our company, but, at our core, we value people who:
• Get shit done
• Build for the long-term
• Focus on simple solutions
• Act like owners
• Thrive on changehttp://tobi.lutke.com/blogs/news/11280301-the-apprentice-pro...
Really enjoyed reading this piece. I can partly see myself in his story except all the achievements. We'll see.
I keep looking for an inexpensive shopping cart solution for a friend who owns a handmade crafts retail store and not finding a good one. Meanwhile he keeps paying $50 a month for a proprietary shopping cart and gets maybe 20 online sales a year.
I like Shopify, they are going to have customer service growing pains as they ramp up to handle customer loads, but going public means it is sink or swim time.
Aside: I have used Shopify to develop e-commerce sites and its lack of local development frustrated me a huge amount. Saying that, I also appreciate what they are trying to do and have a lot of respect for them as a company.
It's a nice way to make passive income, but I wouldn't try to make a business out of it. Remember you are still on somebody else's platform, playing by their rules. It's fairly easy to have the rug pulled out from under you, so don't put all your eggs in that basket.
In this the online store and retail POS space I'm aware there are other operators, but Shopify is the only one I can name.
Square I guess in the POS space?
Magento / Magento Go oscommerce woocommerce etsy squarespace prestashop opencart Wordpress has shopping chart as well.
There are a ton of existing POS providers for stores, more than one can name.
Shopify's POS is more of an add-on for an online store, competing with the likes of Square, Lightspeed and Shopkeep.
But I think Zendesk ended up with a higher valuation on their IPO opening day. Their market cap is now $1.8B.
I worked for a startup that I know is in shaky grounds. While I hope they recover and do great, they also suddenly have freelance "journalists" writing positive things about them in the press, and I'm 99% sure it's paid PR via VC connections (especially given that I know for a fact the publication - TheStreet.com - has ties to the NYC VC community). Meanwhile, because it's not a super well known company, there's not a lot of opinions out there one way or the other on it so when you Google its name you just read these few very positive pieces about it. Now, this may be just paranoia, but we as an industry should be vigilant that VCs don't try to run pump-and-dumps on their weaker holdings. It will benefit nobody but bad VCs and will harm the public and the industry's reputation, and due to lockups it's unlikely it will benefit the typical employee with common shares anyway.
I read an article about these mini-IPOs in the WSJ and it's saying "Democrats like it because it empowers the little guy, Republicans like it because it removes regulation." They also tried to spin it as "VCs HATE this! Average investors can take over instead now!" I don't trust Wall Street and I don't trust the SEC's ability to regulate them, so when the rules change I assume that Wall St is getting their way rather than the reverse. If the Republicans, Democrats, and Wall St all love a new piece of regulation, I assume the public's about to get screwed.
https://www.crunchbase.com/organization/shopify
These investors include VC firms like First Mark Capital, which are NYC based - and oh yeah, the exact same VC firm that was the biggest investor in the startup I worked at that I said is in freefall but now getting positive financial press. It's not about whether the VCs are running operations, it's about whether the VCs are worried they won't get their money back without an IPO, which seems like a genuine concern for an operation that's losing money.
As to your second point of confusion, your pointing out its a Canadian company as if what I'm saying doesn't apply:
"We qualify as an “emerging growth company” pursuant to the Jumpstart Our Business Startups Act of 2012, or the JOBS Act. An emerging growth company may take advantage of specified exemptions from various requirements that are otherwise applicable generally to public companies in the United States. These provisions include:"
They are IPOing on the NYSE so they are still regulated by the SEC, and if you actually read the filing you will note that they are using the new JOBS act in order to IPO. What I'm saying is not unrelated to anything, Shopify is one of the first companies to take advantage of these new changes in regulation. Maybe Shopify specifically isn't a shaky company, but I do think the doors have been opened for shaky companies without much scrutiny to be sold to a public that has been misled by PR.
My bad. You gave the impression (to me, at least) that this was some sort of shaky, small situation when it was anything, but. If anything, there are way too few IPOs these days. The only people making money on new company creation are venture investors.
Also, something like 85% of the IPOs in the last 2 years have used the new JOBS rules, so it's not really "one of the first". The threshold is $1b in revenues, after all, quite a rarity at the IPO stage.
I think my offer is tough but fair.
So I don't really understand why you say that.
Here's a link talking about the regulatory change:
http://ww2.cfo.com/regulation/2015/03/sec-approves-new-rules...
All these small company IPOs are on a separate exchange (the TSX Venture exchange), and if the company gets big enough, they 'graduate' to the main exchange. This works because the regulatory overhead of being public is a lot less in Canada on the TSX Venture exchange - No Sarbanes Oxley!
London has something similar with the AIM.
I think it is a better system than the US model, because it allows anyone to invest in the small companies, not just venture capitalists or people who participate in specialist schemes to buy private company shares.
http://ww2.cfo.com/regulation/2015/03/sec-approves-new-rules...
https://www.sec.gov/Archives/edgar/data/1594805/000119312515...
"We qualify as an “emerging growth company” pursuant to the Jumpstart Our Business Startups Act of 2012, or the JOBS Act. An emerging growth company may take advantage of specified exemptions from various requirements that are otherwise applicable generally to public companies in the United States. These provisions include:"
And yes the advantage is that you open up emerging companies to retail investors. The problem is the tech industry's history with small companies and retail investors is not so great, I would say the danger outweights the benefits.