Tobi Lütke: From Passionate Coder and Snowboarder to Shopify CEO

Tobias “Tobi” Lütke was born on July 16, 1981, in Koblenz, Germany, and is best known as the co-founder and CEO of e-commerce giant Shopify. His modern style of leadership has earned him numerous awards, including being named “CEO of the Year” by The Globe and Mail in 2014 and receiving the Meritorious Service Cross in 2018. A self-taught coder and visionary entrepreneur, Lütkes path to becoming the leader of a multi-billion dollar tech enterprise provides lessons for entrepreneurs, investors, and technology enthusiasts alike. Let’s find out more about him, and how he got to where he is today.

• From tech expertise to entrepreneurship: Lütke’s journey showcases his evolution from a passionate coder to the founder of Shopify, an e-commerce giant.

• Path to e-commerce: Frustrated with existing options, Lütke’s creation of Shopify revolutionized the e-commerce industry, starting from an online snowboard shop.

• Modern leadership: Lütke is known for his unique leadership, focusing on customer needs and high-quality standards, which has been pivotal in Shopify’s success.

• Personal growth and philosophy: Lütke values continuous learning, adapting to reality, and developing a personal life philosophy, contributing to his professional success and personal development.

Tobi Lütke was already in his early life very interested in programming and technology, something that likely started when he got his first computer at the age of six. By the time he was 11 or 12, he was already rewriting the code of games he played and modifying computer hardware as a hobby.

At the age of 17, Lütke dropped out of high school and got his first professional programming experience during an apprenticeship at Siemens. This further solidified his love for programming, and as he states in a talk at Business of Software, it was “the one thing and the only thing [he] would be doing for the rest of his life,” something he was totally okay with.

In 2002, 22-year old Tobi Lütke moved from Germany to Canada to be closer to his future wife, whom he met there during a snowboarding trip. Having no formal degree, he found it challenging to secure a job in his new home country, eventually leading him to start his own business. Combining his newfound hobby of snowboarding with his interest in e-commerce, he started an online snowboard shop. But lacking knowledge and capital he needed help, and luckily met Scott Lake at a family event, who had experience of startups.

When Lütke and Lake co-founded what would later become Shopify in 2004, the one grandiose mission was: sell a bunch of snowboards that they already had in their garages. And despite the unwillingness of the time to start online stores – coming out of the dot-com crash – Snowdevil, as the company was called, set up shop.

Lütke, dissatisfied with the existing e-commerce solutions, decided to build his own platform using the server-side web application framework, Ruby on Rails. After one season of online sales, it became evident that the e-commerce software he’d built had more potential than the snowboard brand itself. Lütke realized that aiding others in building their own stores could be more lucrative than selling snowboards. In the following year, he expanded his team, gradually transforming the humble snowboard shop into the e-commerce giant we today know as Shopify.

However, as this article is about the man behind Shopify, let’s try getting to know Tobi on a deeper level. He participated in the Invest Like the Best podcast in May 2020, through which we can get valuable insights about what drives him, his leadership, and life philosophies.

In the podcast episode, Tobi touches on the importance of focus, and in a Bezos-like fashion he emphasizes the importance of focusing on the end customers:

“I think focus of audience ends up being, amongst all the things that you could have focused on, one of the most significant predictors of the success of a company because it’s very, very easy to get diffused between different stakeholders that you're building something for.”

We also get insights into how Tobi is as a person, and he describes himself as very detail-oriented, having a very high minimum bar for quality. Something he’s trying to reflect on his colleagues. On the other hand, he also acknowledges that this can be a problem, and that a common case in the Germanic region, Austria and Switzerland included, is that people and companies ship products too slowly. This, while the culture in the U.S. and China tend to be more leaned towards launching fast and adjusting along the way.

There’s obviously not any one-sided answers to this question, although a balance between the two can often be beneficial.

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Another interesting part of the conversation is when Tobi is speaking about video games being a great source of learning for him, and how he actually learnt programming because he wanted to make changes to the video games he was playing as a teenager.

Here’s what he believes is the real lesson we can learn from video games:

“But the real lesson, I think that you learn from these games is not even this sort of fluidity of resource allocation and multiple stakeholders and then quick reaction and short-term, long-term thinking, it’s actually just recognizing that; even though a game simulates an economy, there’s another resource that is way more limited and is way more important, which is your attention. It’s really, a real-time strategy game, especially played at a very high level one-on-one, is really a test of how good are you at paying attention to what’s going on? How well are you investing your attention?

And in fact, at the later levels, it gets to a point where you will actively do things to your opponent, which are designed to just drain their well of attention. You make stuff they have to pay attention to so that they can’t actually do as good a job as they would otherwise do on their normal game. And the subtlety that comes from all this, is all present in the world of business, but is not really understood.”

So, how good are you at paying attention to what’s going on, and how well are you investing your attention? It’s definitely a question worth asking oneself.

The most notable topic however, and something we all should embrace in our own unique way, is the concept of crafting our own life philosophies. When speaking about this, Tobi states that the idea of accepting reality for what it is probably is the best idea anyone’s ever had after Darwin’s discovery of the origins of species. He says:

“I would say, this is probably the best idea anyone’s ever had maybe after Darwin’s discovery of origins of species. At least the best idea I’ve ever found. I would love to share it with more people, but unfortunately, the only thing you can tell people is that there’s a world of books and ideas and everyone has to chart their own path based on their own interests. Don't actually go read the book I recommend. Read something that looks interesting and then read the next book that's interesting and puzzle together a more cohesive version of your own home-grown, life philosophy. That’s powerful. Yes, even business results I think in the end have come from it but that's not the reason why anyone should be doing it. Although, I think it all helps.”

Still owning about 7% of Shopify and being one of the company’s largest shareholders, most of Lütke’s wealth is tied to the company’s stock performance. As of 2024 however, Forbes estimated his net worth to be little more than $7 billion, placing him among the richest people in Canada.

Tobi’s rise from being a passionate programmer to a successful CEO exemplifies the power of embracing one’s strengths, staying focused on customer needs, and being open to continuous learning. His career up until now underlines the importance of adapting to changing circumstances and leveraging opportunities, making him a source of inspiration for aspiring entrepreneurs and tech enthusiasts.