Lenny's Podcast: Breaking the rules of growth: Why Shopify bans KPIs, optimizes for churn, prioritizes intuition, and builds toward a 100-year vision

☑ It’s about absolute numbers, not conversion rates.
▪️ Instead of focusing on converting higher percentages within a single stage, Shopify optimises the total number of merchants who make it through the entire journey.
▪️ A bigger funnel can mean lower conversion rates at each step — but a higher volume of successful users overall.
▪️ With a long-term view, Shopify’s teams aren’t afraid to look at numbers that might look "bad" if it ultimately grows their base of successful merchants.

☑ Shopify optimises for long-term impact over short-term lift.
▪️ Every team can move quickly — they’re constantly running tests and experiments.
▪️ However, Shopify holds itself accountable by revisiting experiments a year or more later to see if they truly impacted growth long-term.
▪️ This long feedback loop prevents short-term "wins" from wasting time and resources and encourages bets that align with their 100-year vision.

☑ They prioritise taste, intuition, and quality in product decisions.
▪️ Tobi Lütke, Shopify’s CEO, believes that for a 100-year company, the how (technical and experience design) matters even more than the what.
▪️ Core product decisions are driven by taste and a mission to make entrepreneurship easy, rather than just metrics.
▪️ Shopify uses a ‘no KPI’ policy for core teams, meaning they’re not driven by a number but by a shared conviction of what’s best for merchants in the long run.

When you have teams naturally break up the world into different funnel stages or different points in the journey, it gets very seductive to look at my part of the funnel, and what's my conversion rate through that part of the funnel? And then the team starts to optimize for that conversion rate as their north star over a longer time period. I'm going to try to move my conversion rate from 10 to 12% or what have you. But in practice, it's actually almost always easier to just make it harder to do the thing right before your step in the funnel to increase your conversion rate.

The way we look at it is can we lower the barriers to getting started and get as many people in the door trying their hand at entrepreneurship? If we do that, again, many of those businesses... will maybe on their first attempt not be as successful, but we're going to have a set of merchants who go on to become extremely big businesses

Because we focus on that long-term GMV, number of merchants who are successful, orienting every team to think about the total number of people, not the rate, but the total number of people who got to the end of their part of the journey is a very powerful way to incentivize people to do the right thing