Shopify

Prepared for

Samsul Islam- Instructor for Principle of management

Northern Alberta Institute of Technology

Edmonton, Alberta

Prepared by

Gurkirat Kaur

MGMT 1120 section (O03)

Date- January 31,2024

 Table of Contents

 Introduction…………………………………………………………………….…….3

 Characteristics of Entrepreneurs……………………………………………………….3

 Reasons for not failing………………………………………………………………....5

 Shopify’s Life Cycle………………………………………………………………….7

 Financing……………………………………………………………………………...9

 Conclusion…………………………………………………………………………...10

 References…………………………………………………………………………...11
 Introduction

Shopify stands out as an established e-commerce platform in order helping enterprises

develop online shops and offer a wide variety of goods or services. Tobias Lutke, Daniel

Weinand, and Scott Lake built the platform in 2006, and it has since expanded rapidly, now

serving one million businesses internationally. Shopify features a complete range of products and

services geared at supporting entrepreneurs in establishing and managing their presence on the

internet. These include website design, payment processing, inventory management, and a

variety of marketing tools. Shopify, known for its easy-to-use interface and scalable features, has

quickly become a popular alternative for businesses of all kinds looking to enter the competitive

e-commerce landscape.

Characteristics of Entrepreneurs

Devotion to Embracing risk Enthusiasm and

Confidence in
seizing and navigating proactive
oneself
opportunities uncertainty mindset

Lutke's enthusiasm for tackling the problem of developing an online store was the motivating

reason behind the founding of Shopify. Recognising the possibilities, he was steadfast in seizing

the chance.
2.Lutke demonstrated fearlessness by quitting his job and devoting time and attention to

developing Shopify. He enjoyed the challenges and uncertainty that come with being an

entrepreneur.

3.Lutke exuded a strong feeling of self-assurance, confident in his ability to build a successful e-

commerce business. His confidence grew into unflinching faith in his vision and the decisions he

made.

4. Lutke's excitement for entrepreneurship, as well as his ability to put ideas into actual actions,

helped Shopify grow tremendously. His approach was marked by a proactive, action-oriented

philosophy.

Reasons of not Failing

1. Specialized concentration: Shopify positioned itself as a specialised e-commerce platform

catering to specific market sectors. This concentrated strategy allowed them to help

consumers with unique needs, enabling stability even during economic downturns. Rather

of providing a general solution, Shopify offered customised services and features to help

businesses succeed in their own industries.

2. Customer value proposition: Shopify provides businesses with an easy-to-use, scalable,

and cost-effective solution for launching online storefronts. This value offer remained

relevant and appealing to businesses, regardless of the economic situations.

3. Strong consumer relationships: Shopify has created solid client connections by offering

ongoing support, educational resources, and value-added services. These actions boosted

client loyalty and trustworthiness.

4. Adaptability and innovation: Shopify displayed agility and creativity by responding to

market developments and delivering new features and services. They adapted to changing

customer demands, staying ahead of the competition. This versatility enabled Shopify to

pivot and address new challenges and opportunities during the economic crisis, ensuring

that their platform remained relevant and valued.

Shopify’s life Cycle

Introduction
Growth stage
stage (2006-
(2008-2015)
2008)

Maturity Stage Revitalization

(2015-2020) stage (2020-
present)
1. Shopify was created as a modest e-commerce platform aimed at small enterprises and

individuals. Tobias Lutke and his co-founders saw an opportunity to offer a user-friendly

solution for developing online storefronts. Shopify acquired immediate traction and garnered

excellent comments from its early users, laying the groundwork for future expansion.

2. Shopify witnessed fast expansion during the growth stage. They acquired considerable

venture capital money to help them grow. During this time, Shopify concentrated on adding

clients and improving its platform's functionality to meet changing market demands.

According to case data, by 2010, Shopify has enabled transactions worth more over $100

million (Inc.com, 2020). Shopify's revenue grew from $105 million in 2014 to more than

$1.1 billion in 2019. This amazing revenue rise reflects the significant progress made by

Shopify during its development phase.

3. As the e-commerce market matures, Shopify emerges as a dominant force, serving to a

wide range of worldwide firms. The company continued to innovate and adapt to market

realities, providing new themes, templates, and features to improve the user experience and

maintain a competitive advantage. The platform's focus turned to keeping consumers,

improving support services, and cultivating long-term relationships with enterprises.

4. This is characterized by Shopify’s response to the COVID-19 pandemic. As the pandemic

forced physical retail to halt, businesses worldwide turned to e-commerce as a lifeline.

Shopify experienced a surge in demand as businesses rushed to establish their online

presence. The company adapted swiftly and launched initiatives like curbside pickup, local

delivery options, and virtual selling tools to meet changing consumer behaviors.

In 2020, Shopify's revenue grew by 86% year-on-year, reaching $2.9 billion.

 Financing

1. Introduction: During its early stages, the company depended heavily on bootstrapping

and self-financing, leveraging personal savings and revenue produced by early clients.

External financial sources played a modest impact at this time.

2. Growth: Shopify received investment from a number of venture capitalists and angel

investors throughout this period of development. Notably, they secured $7 million in a

Series A investment in 2008, followed by a $15 million Series B round in 2010, and a

significant $100 million Series C round in 2013 (source: Shopify - Crunchbase). These

fundraising rounds provided the funds required to grow the team, invest in technology,

and increase market penetration.

3. Maturity: As Shopify approached maturity, it reached a significant milestone with a

successful initial public offering (IPO) in 2015, which raised around $131 million in

funds.

4. Revitalization: During this stage, Shopify continued to capitalise on its foothold in public

marketplaces. Additional funding was generated through secondary offers, including a

public stock sale in 2020 that raised more over $2 billion. These monies were used to

boost product development, improve infrastructure, and grow their ecosystem, thereby

meeting increased demand and scaling operations.

 Conclusion

Tobias Lutke's entrepreneurial attributes, such as his drive for success, internal locus of control,

risk-taking tendencies, tolerance for ambiguity, and self-assurance, are responsible for Shopify's

success. Shopify thrived despite the economic downturn due to its creative goods, target market,

strong management team, adequate resources, and adaptability. The company has progressed

through the life cycle's introduction, growth, and maturity stages, constantly funding its

expansion plans through a variety of methods. Shopify's narrative demonstrates how

entrepreneurial leadership, strategic decision-making, and market adaption can lead to the

creation of a successful and resilient e-commerce platform.

References

"Shopify case study | Stripe."

https://stripe.com/en-ca/customers/shopify.

Wikipedia (26sep, 2023) Shopify

https://en.wikipedia.org/wiki/Shopify

santreal media (2022 Dec 9). What is shopify? Ecommerce business

Switch to Shopify - the leading e-commerce platform for entrepreneurs around the globe

(youtube.com)

"Use Stripe to sell online - Shopify Canada."

https://www.shopify.com/ca/stripe.