#152 Tobi Lütke: Calm Progress
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You are valuable because of the brain you've got. You're valuable because you make choices. You're valuable because as a front-end designer, not just that you are actually engineering, that you can program, but also that you have an aptitude to work on, build systems that are great and easy to use for people that are resilient to random, people do very random stuff with user interfaces and you build something that they're paying now.

it's your experience it's your skill it's your actual like it's it's your life story grown up is your is your intuition is is is your ability to make great decisions quickly

Welcome to The Knowledge Project. I'm your host, Shane Parish. This podcast is about mastering the best of what other people have already figured out so you can apply their insights to your life. If you're listening to this, you're missing out. If you'd like access to the podcast before public release, private episodes that only appear in your feed, hand-edited transcripts, and more, you can join at fs.blog.com. Check out the show notes for a link.

My guest today is Toby Lütke, co-founder and CEO of Shopify. Toby is a friend, listener of The Knowledge Project, and has had perhaps one of the hardest jobs in the world for the past few years. I'll warn you now, this conversation is wide and deep. We cover the differences between founders and CEOs, how his job has changed as Shopify has grown, fighting bureaucracy, and how he thinks about innovation in a large company.

We also explore how he thinks about compensation, what businesses can learn from programming, and how he keeps his head when everyone around him is losing theirs. We also discuss ideas that have left a formative impact on him, including Paul Graham's essay on conformism and the idea of the infinite game. But that's not all. We also cover the technologies he's most excited about, what he used to spend time on that he now sees as a waste, and how he fixed his sleep.

Long-time listeners will note this is the second time Toby has appeared on the show. The first time was episode 41, which I think was like five years ago, which feels like generations ago. It's time to listen and learn. ♪♪♪

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How do you lead through such a period of volatility? I mean, it was... I don't know if I did a very good job of it, but I certainly did it. I certainly had to deal with volatility, that's true. I think Shopify has captured the imagination of everyone in this massive swing towards digital services. And MarketBeater...

caused Shopify to be extremely exposed and like just, you know, on everyone's mind. And then the pullback was equally drastic, which was a fascinating experience internally, right? Like there's lots of discussions you get, everyone's getting messages from their parents on a boat like, "Hey, what's going on?" I mean, I've never thought that companies and their stock have that much to do with each other, right? Like it's

It's related, but no one in a company works on the stock if things are going well. I think if people start working on stock, that should be a sign that things are going pretty poorly in the company. And so it's been a challenging time for leadership because you never knew what kind of puzzle box Platt would drop onto your desk in the morning. And I think...

Well, the things that are important during that time, the things that are important during our times, which is the most important thing is to keep the most important thing, the most important thing. And the most important thing in our case is like make a product that's really appreciated by entrepreneurs and can deal with not just the current, but also the next sets of problems.

We adjusted quickly, we shipped a bunch, like a lot of products that had in the early days with like curbside pickup and so on, and then we just took it from there. How do you do that though? Like how do you keep the most important thing the most important thing when the world around you is sort of going crazy? Yeah, I would say like when you dig into the nuances of what the most important thing is, it's usually not...

like the current tactic, but it's actually the overall strategy and the North Star is the thing that you need to protect. The end result of the reason why a company exists is the thing that needs to be protected. And in our case, this is very much like we love entrepreneurship, we think entrepreneurship should be simpler, we think entrepreneurship should be simpler on the internet than it has been in the past physical world.

And we want to build software to make entrepreneurship just easier. Like at least make it so that the technology side and the internet side and all these things are not something you have to worry about. We take care of all of them and you make great products and find your market. To a degree that we can have the help of us as well, but like basically show up with something people want and we will do whatever we can to make you reach your audience.

Because if that is your North Star, just because suddenly there's shelter in place and no one can reach stores and these things, you know, that's an obstacle which no one could see coming. But if you know in which direction you want to go, then you just know, okay, well, clearly we have to get around this obstacle. So, like, as long as we keep going in the same direction, it's all fine. Right now, no one can reach retail stores, so make sure that we have the retail stores open

We get the catalog online and these clips I pick up, these kind of things. So you can run this constant, given what's going on right now, what's the best thing we can do? And you run this over and over and over like this. I actually think even concepts like roadmaps and just generally plants are actually overrated. I think...

uh like a road the best possible roadmap is have a very clear guide view of what matters to your merchants have a super um strong model of your own capabilities um um as a company and then run rerun the function of like deciding what is the very best thing you can work on every moment you have teams ready to pick the next task instead of

everyone's doggedly working off a thing that, of course, gets interrupted by reality. Okay, so this is how you do it. Now, how this looks in actual practice is you look at everything that is being done in a company and you put things into categories, helpful, not helpful right now, because reality changed. And I think we ended up stopping to work on canceling or not yeting

60% of our fix we were working on, which I think everyone was ready for because it was very obvious in first half of 2022 that we are going into very different times, right? So everyone was looking to see like how can we be most helpful? And I think everyone really wanted

to, you know, all of us made life decisions. We were not doctors, we were not frontline workers, we were not essential workers, but we worked in a technology industry. The technology industry was probably amongst the least affected from a productivity perspective. We had home setups and so, you know, given us being able to be helpful with the primary objective that everyone had, which is health related,

we could at least nail it on what we could do. And so that's-- everyone rallied around this, and we got cracking on that. I imagine it pulled you all together, too, because all of a sudden, there's a lot of meaning and urgency to what you're doing. 10%. I mean, I wouldn't say it's like-- I mean, it clarified the mission for everyone. And the mission-- I know sometimes sounds-- everyone talks about the mission, and it's almost like one of those things you go, like,

well, what's your mission statement and whatnot. But it matters. It's like it's a reason. I mean, some companies might have mission statements that are kind of dissonant with what they actually want, and that's unfortunate. But I think that's rare in founder-led companies. They tend to be coming from a particular observation or a particular reason why they needed to exist. And in some cases,

that is a limited goal at some point you might accomplish this goal and then you're looking for something else I imagine in our case I don't think we're threatened by this this is sort of a forever mission an infinite game if you want and so it's really clarifying for us now it was very difficult times like I mean like man so many people were holed up in tiny little apartments and didn't step outside for

a year or more. There's a lot of mental health issues, you know, like it's... Everyone wanted to... They had so much energy to want to do something. People were like upset with what they were seeing in so many different ways, not just COVID, but also like, you know, other conversations. Like there's a lot of racial unrest for very good reasons. And I think...

there was a lot of energy that couldn't be converted into productive means during this time, which made things challenging as well. And it was a fascinating time. It was a challenging time. I think it was a clarifying time. I think a lot of companies reconnected really with what they are there for and how they think about their own principles, how they think about organizing, how they think about talking, how they think about contributing, not just

as a company, but also as a community. And we had to go through this all in a hurry and all at the same time, and leadership for this was tricky, yes. Are there different roles that you see for founders and CEOs? I don't have a good word for non-founder-led companies. I sort of used to refer to them as, like, fashionally managed companies, but the implication there is, like, that founder-led companies are amateurishly managed, which is actually not true.

So I'm sort of lacking a great moniker for non-founder-led companies. But if you've looked for both these types, they are very different internally. Let's keep going with the term. Professionally managed companies are often like the mental picture that comes to my mind is like a river stone, right? Something that's like really smooth around all the edges. It's like

It's a very similar skill level on everything. They usually, if they have significant competencies, they're often about just operational excellence and very, very quantifiable things. Everything that can be measured, they tend to be very good at. The core competency of the CEO or leadership team is stakeholder management, which is very

I say it with great respect because it's a very, very hard thing to do. It's extraordinarily hard to align the interests of very, very different groups and bring them all to the same side of the table. You have shared a community, sometimes society, sometimes definitely your local economies, your employees, your customers, of course.

board of directors and taking everyone for a journey is a tricky thing to do. The way you do this in a professionally run company is by planning, right? Like you, because like bad companies, companies that people tend to not like to work for or companies that sort of were like a shadow of their former self. How does this happen? The key, what happens is a

revision to the meal, right? Like it's the tragedy of the comments is the active ingredient, entropy you can call it. Like all these things describe the same thing. They all affect companies. Where a department or the entire company reverts to the sort of middle of the bell curve ambient industry competency for everything it does.

that's like really bad because ambient industry, like orthodox quality is just quite low. It just is. And so what you're trying to do is like literally everything a company does is try to beat the vision, reverse to the mean. And your options there are like, usually like you have a strategy. That's the plan. The plan by the people

have a stakeholder management who bring all the stakeholders on site imbue the plan with a ton of legitimacy.

And then the legitimacy that the plan has ends up being the thing that beats revision to review because you can now go around saying, "Hey, you team, you have an engineering team, you're implementing the things on the plan. You UX, you're going to build the user interfaces for this. Sales learns what's going to happen when and when we have which competency and how to explain the product."

This is a mechanism. Now, all this to say, a founder of a company doesn't need this, right? Because there's another thing of legitimacy, which is the founder. And I'm not saying this is a person. It's actually the fact that the founder is in the company is a thing.

I think legitimacy is one of the most underappreciated resources that exist. I think the only really good piece of writing I've found, and you probably might now tell others, is Vitalik's. Vitalik wrote an essay on the topic of legitimacy, more like in the blockchain world, but I think it rings true across.

So where does this come from? In every company, there's a sort of founding story. Everyone sort of gets this clear sense that, hey, the reason why we have this job, the reason why we're on this mission, the reason why we're doing this thing is because at some point someone took the first step, right? Like they wrote the first line of code. That story is imbued in the companies, in onboarding. It's like, even if no one would actively talk about it, it's something people eventually like encounter.

What happens when a story is told is that there is some sense, like a little bit of legitimacy almost deposited into a bank account. That's like, you can almost think about it as social credit of some kind. This happens in all companies, but if the founders are still there, they can still draw on this account of legitimacy.

And so my role I see very often is that I have the pretty humbling ability to use the resources deposited into this bank account of legitimacy in the company to make changes. And because I can speak for the entire story of the place. Now, if I were to leave Shopify, this

Banker corn would only increase but no one could draw on it and therefore it can't be an active ingredient in a company. Okay, what does all this mean? The best thing founders can do is subtraction. This is surprising but like it's the reason, like it's much, much, much easier to add things than it is to remove things.

Adding things is a lot more expensive than removing things, actually. However, it requires some measure of bravery and risk-taking anyway.

saying yes to a thing is actually like if you say no to a thing you say no to one thing you say yes to a thing you actually say no to every other thing you could have done in this period of time and so as people are adding things um the the set of things that can be done becomes smaller and smaller and smaller and instead of things that has to be maintained gets larger and larger and larger and um you end up with more and more people actually working on just maintaining of the the

status quo or maintaining code bases and so on. So where does subtraction come in? Very often some things build like every individual addition was a very good idea but where it builds to is actually like sediment layers of

something that actually doesn't make sense in the end and that you have to walk away from. Like, sometimes you're building for really, really good reasons a product that actually will not make a difference for the company. Or when reality changes, you actually have, like I just said earlier, I had to subtract 60% of everything like the entire R&D team was working on. Which, the reason why I could do this is because I could draw on the legitimacy of like, hey, I have seen every single version of this company. I've, I've,

seen recessions. I have seen downturns. I've seen chaotic times and I've seen calm times. I know what to do. And so while this might affect you negatively because like something, your day-to-day job is changing, the thing you want to be working on, you want to be prouder because it's going to help with the

but the corporate's mission in a better way. And that is a form of subtraction. And then there's many, many others that we could go into. So I've actually very rarely-- like the very, very, very best non-founder CEOs can subtract. It does happen. Nadella has done it at Microsoft in a phenomenal way, like potentially better than many founder CEOs can.

but it's probably 10 times harder to do or 100 times harder. So that's almost a service rendered for the business. So in a way where you have Riverstone on one side, you really have sort of

volcanic ash kind of spiky object thing of a rock on the other side. Like, they, like, some have very, very strong aptitudes, spiky objects, sometimes surprising weaknesses. It's not a well-rounded thing in the end, but it's usually perfectly appropriate in terms of, well, in an ideal case, it's appropriate in its aptitudes for the

a particular set of problems that the company-- a company solves. And I think this is why they end up feeling so different internally. You mentioned risk-taking. I'm wondering how you think about risk-taking in sort of a professionally managed, just to use those terms, versus like a founder-led company.

Yeah, I mean, there's exactly one thing that doesn't take risk, which is do the same thing everyone else does. The number one thing that is very, very hard to teach, actually, or very hard to convince people of, but I'm pretty sure is true, is that I just don't see value in doing the same thing as everyone else does. I just, I don't know who grows up to say, I'm going to join in this, like, I'm going to go into finance, and then

I saw the best example. I'm going to go into, let's select UX. Let's go to design UX. And then I'm going to do work that corresponds to sort of what generally everyone else launches around me. I see why you might want to because it gives you more common ground with your peers in other places. It gives you, it's easier to appreciate sort of

making a slightly different version of something else that someone does because then if you encounter those people who are behind that, you can now have conversation about the sort of slight changes you made. But I think that's just

But if everyone does this, that makes this planet simply spin too slowly. I think sometimes there's significant wisdom encoded in what everyone's doing. In most cases, go all in on it. But in many cases, just use, like, put everything you've ever learned together to make something that just works.

as good as possible, right? Like, because otherwise I think you're holding yourself back and I think the company needs to de-risk this for people. Now, it's not no one's intuition. Every single time you do anything that is different from best practices, like there's so many euphemisms for just basically doing undifferentiated work. It's a strong statement I'm making here, but best practices actually just simply means don't take risks and do with what everyone else is saying you should be doing.

best practices are not that good. They should be best practices.

no their average risk adjustment yeah exactly it's just average and um i don't think i have no time for average i i i don't think our shit is that good uh around planet earth i think we can do much better on everything there's no chance that in 100 years people are looking back and saying wow back then we just nailed everything like it's just it's not gonna like we barely nailed anything like i mean you look go back three years and be like wow we just kind of

had no idea how to do all these things right like it's so um you know like all video conflicts the software was terrible and like it's this uh no one had a home home setup home desk and uh you know so on and so on um so everything depends on innovation the innovation depends on a very basic thing which is like to be innovative you have to do things that are different

If you do something different, you can either overperform or underperform status call and RBS. Now, sometimes you get one, sometimes you get the other.

But, like, again, if you can subtract, you can remove afterwards the things that underperformed and give another go at it. And if you do that effectively over and over, then you are outcompeting what other people are doing. So is that the role of the company, then, to provide safety for that failure internally? I think so. And I think it's...

I don't think anyone's cracked a code on how to do this. I think we're in for, like, I mean, school conspires to tell people, here's how to solve problems. Ideally, don't deviate, and you probably don't have to learn anything new after this. It's just like a joke, right? Like, I mean, I don't know how you steal man-boss arguments, but this is definitely what schools say. And, um...

then you are, like, you will have, through your beginning of your career, you sort of put the lie to be statements and you look around you and some people will have

vastly different career outcomes because they are just like walking away from it. They're using orthodoxy as a major input. They learn everything they can out of it. They use it as a starting point, but they're not hamstrung by it. They will do things that could be described as risky. But like I have to say, this is very, very hard to, again,

get people to believe, but it's actually risky to not take, try higher. A lot more people have... It's not risky in the moment though, right? To follow best practices. It's only risky as you fast forward time. Yeah. And I mean, we should acknowledge why. If you do what everyone else does, you are like

say, well, that's what industry does. If you make it added to it, you will have a responsibility, good or bad, for that change. At least that's... If you risk avoidant, this is something you don't want. Now, of course, if it works, it's great. At Shopify, it's very clear, it's very important that we explain to people, like,

Like it's not failure. It's the successful discovery of something that did not work if you underperform. It's we know actually more data and we'll try again. People actually are performance-meshed out, euphemism, to...

if they don't take risks. So it's actually for your career, a job fair is actually more risky to not aim high. And I think that environment and the psychological safety to take this risk is very hard to produce. And I imagine there's going to be like 20 years from now, there's going to be fantastic books on how to create these environments. I think that there might be a few, but it's a very, very hard thing to maintain in my experience.

Two rabbit holes here. One being, typically what seems to happen in this case is risk can be taken outside of companies, not inside. So you leave your job, you have an idea, you can't do it internally or you fear doing it internally, or you don't perceive enough upside to doing it internally and only downside. You go start a company that is the risk in that profile, company succeeds, gets acquired,

How do you think about innovating internally at Shopify versus acquiring to bring that in? Yeah. I mean, sort of an ergonomic for a lot of companies in the end state is to become companies that maintain what they've got and then acquire all the innovation. I think that's a... I mean, I would not be proud of

overseeing a company like this. If Shopify would turn under my watch into that, I think someone else could do my job better. I think companies ought... Innovation is a lifeline. I think you want to innovate everywhere, and I think every group in a company should be able to go to a conference and talk about how we are doing... How our group is better than...

sort of a general implementation of this discipline or idea and by us doing things differently and how we are thinking about this first principle thinking applies to any area can yield huge upside. And I mean ideally I think the best like the way I would like to see this is actually that

For our own purposes, just to build the best company that supports being extremely innovative for entrepreneurs in the retail space. We are innovating across all the disciplines, across like we've recently done a new company, a new comp system in HR, which is not usually an area that

sees total innovation, but it's been very, very successful internally and generating a lot of interest externally as well. And this is just Shopify applied technology.

to a place that usually just simply doesn't see a lot of innovation and therefore it's notable. But we want to have the same thing everywhere. The best then entrepreneurship is like actually get this, be innovative inside of Shopify, which has the balance sheet to support this kind of thing. You know, failure is just not that fatal. Upside is massive because anything can be brought like to market very quickly. And then, you know, if there is

Like if Shopify, with its focus on entrepreneurs says, well, this idea, there's more value in this if it's brought to another segment, or maybe like this comp system might be prioritizable.

Well, but that's not our main thing. Like, we are perfectly happy to yield this to others and maybe people go and prioritize it and then make this a sellable product for other companies which would like to take part in some of these innovations. I think that's actually, I think that's probably a better way for entrepreneurship in the phase we're going in. I think it's important, like, the stories around entrepreneurship very much come from the same period of time where there was, like, a unique, um,

situation of like incumbent incompetent incompetence. Although it's too strong, but I think it's incumbent. It's just, you know what? It's a fairly new idea that you have to innovate at the pace I'm talking about, right? Like it's actually, it fits into the times because we are in times where everything changes so quickly all the time and therefore so much more complicated. Every time new infrastructure comes online, every time

I don't know, like transformer models. Just like we figured out how to get an unreasonable value out of machine learning now. Like it's the perfect midpoint between the academic ideas and the vocational, like just to sort of get it done now. That's a huge, huge space for innovation. And now it's time for,

for companies to apply this to their own problems and potentially for new companies to be formed around this. It's amazing that it exists. It's a great example which I'm giving. These examples are not coming along at the pace anymore as the early 2000s, right? Like, you know, a lot of multi-billion dollar companies in technologies come from a sort of three, four, five year period of startup creation, right? Which was this

extreme Goldilocks zone of everything was changing. Mobile, SaaS, Internet, broadband, remember broadband? All these things happened at the same time and it was just like easier, let's put it like this. So I think it's, so you see, you could take, like I did, massive risk, career risk, to just go all in on an idea because

the batting average of just having a good idea given all the technological changes if you just pick up natively um like building an internet native in my case software as a service e-commerce system rather than software that could sort of supply online stores um then that was just like so categorically different from what everyone else was going for that there was just a clear obvious business opportunity in there that wasn't like it's not a

craziest idea, right? Like, but it was enough. I think that it's more difficult and subtle now. So if you can basically what I'm saying is, I think a great entrepreneurship is actually about extracting amazing innovative ideas out of now much, much, much more innovative, larger companies than existed previously and bringing them to other fields. And I think that's a good form factor for entrepreneurship.

Coming back to the revision to the mean, one of the other ways, so best practices is a way to sort of start the path towards revision to the mean. Another way would be bureaucracy. How do you fight against that? You're 8,000 employees now. How do you fight against... Let's go to more, actually. It's, well, I mean, yeah, like, I mean, subtraction helps a lot. You know, sometimes, again, bureaucracy happens because...

people put sediment layers of bureaucracies on top of each other. I have found people don't actually describe things that work really well as bureaucracy. I think bureaucracy and process are almost terms that are exclusive to the things that did not work. So if people talk about some area having a lot of bureaucracy, it's actually usually an area that if you apply some first principle thinking, you might actually find a way of...

just streamlining this enormously, right? It's not all bad. You know, like, this is... It is fundamentally extremely hard to build things in groups of people, right? Like, there's very few very, very important things that can be done by individuals anymore online. Just, we've almost mined the...

the entire value space. Basically all the minerals that are on the surface have been mined out. So, like minerals of value. The other...

valuable minerals are now fairly deep underground. For that, you need to organize groups of people to build the infrastructure, the support and air tissue, the safety. You have to, like the automation, you have to build high-tech mining operations now.

so to speak. And that requires coordination, that requires incentive systems, that requires vision, that requires culture, that requires like every trick in a book to say, hey, we are going to do things that can only be done in teams. Very often there is conflict between

different, like, dissonant infinite games, right? Like, it's like the infinite game of Shopify is causing this, like, sort of, like, getting towards the horizon behind which there's a lot of value for entrepreneurs. That's what Journey Shopify is for.

What you need to do is get as many groups and as many things like parts of the company to all be in alignment with this overall overarching goal. It's very easy for a group to end up with their like a dissonant and own goal. And I think what you sometimes encounter is lack of larger, like

I don't know if it's a good example. I remember when I started to look into how to do charity well. That's something I want to do. I'm very interested in comprehensive, how can I affect, for every means of energy I have, time, money, other resources, how can I be as beneficial to all the communities around me as I can? And so I'm like,

the first thing you realize when you talk to people is you have to make a choice between individual level and society level impact. Individual level is like you can do something for a person and that's deeply gratifying because it's very immediate and frankly it's deeply popular with people. It's very easy to point at almost all those are hero stories around a charity of individual level.

But like the data, if anything, it actually causes problems because you usually then create dependence on charity, the things which is actually the opposite of, I think, the goals you are having. So you end up having to look a lot at society level things, like what's the upstream problems for the thing that you're trying to solve.

Companies are just the same. You have the society level and the individual level experience. And company design only allows you to really try to

you know, gets to the large outcomes of a company, get to the alignment, and try to avoid bad individual level experiences to the degree, to the best degree possible, ideally to the, like, just like uptime on servers. You want to get to a 99.99% SLA on people having good one-on-ones with their manager. That would be great. But of course, there's going to be bad ones. Like, people will have, you know, maybe the same person that usually has

good one at once at some point has just a disastrous one. And one of the problems is like in terms of criticism, you know, like a lot of people then describe all of a company through the lens of their one individually bad experience, which actually was an exceptional case and so on. And so, you know, you end up like with a story becoming and description of an exception, which was actually rather expected, although unfortunate. Anyway, with all that being said,

bureaucracy is very, very real and absolutely soul-crushing, horrible and mind-numbing if it happens. I do not want to build a company that causes people to have to go through Kafkaesque experience. However, there are instances where what people describe as bureaucracy is actually good checks and balances, which are like

a way you are trying to solve a problem, you see a hole in the wall and what you would try to do is paper over it, which might make perfect sense in the sort of local context that you have. But actually, if you, the next person with a larger perspective says, actually, we use drywall patches because that doesn't cause problems with rodents and

the person, like if they talk to the next person, they say, you know what, that wall, that is homeless, it's actually a bad wall. It shouldn't be there. Let's actually get rid of entire wall. And, but, you know, so even more perspective might say, you know, we are actually going to remodel this entire floor in this hypothetical office that I'm just sort of spinning up for the purposes of this conversation. The entire floor is being redesigned. So that wall doesn't matter. It's like that hole is going to be

no one has to fix this right now and this is unnecessary work and the next person might actually say hey we're going digital by design and we don't even have offices anymore and um so so what the culture you need is that ideas and action and proposals come from absolutely everywhere ideas must be omnipresent but um decisions on the your strategy should be like

coming from the place of right perspective, which sometimes is for people who are close to frontline and sometimes actually the other people will have a really intuitive understanding of the long-term goals of a business. And so that's, you know, when things get mucked up there and not explained right,

I have found that people reach for the word bureaucracy in these cases, but I don't think that is bureaucracy. I don't know if this is a useful conversation, but maybe. I'm not a bureaucracy apologist. If you ask anyone at Shopify, they will be able to cite many, many instances of me using my legitimacy to subtract bureaucracy in every instance I can. However, it's not

all of that, I guess. I like the visual of sort of sediment layers and how it builds up over time, and you end up with this outcome that nobody intended, but you fast-forward time, and nobody would have chosen this, but it happens, and it happens so incrementally that nobody notices. That's it. I think that's the road to all evil in businesses. Like, very, very, very smart people in groups sometimes do extremely...

entertainingly dumb things. Like, it's like every individual killed it along the way. However, the result is something that absolutely no one can steal, man. A border pilot should be done this way. And if you don't have some kind of

system of removing those things. And like, I mean, Jumor is by the way, very good. This is why one of the books I give to my executives is like, is Parkinson's law, which is a wonderful 80 page read on like how silly companies end up being, you know, like in very often. So being able to make fun of these kinds of things and then just like, hey, let's replace it with something better is a good way of doing it.

How has your thinking on compensation changed? A lot. I think compensation is... I mean, I'm very much in this because I've worked on this quite a lot in the last little while. And I actually don't know if it's a super interesting topic. It's just sort of like a problem we had.

I mean, actually, not one. This is like the other thing. A lot of solutions are multivariant. They solve like five things. I mean, I'm usually a believer that if there's smoke somewhere, there's probably a fire. But it's often like one of those smoldering fires that's been going on for like 2,000 years in the root system. It's like these things exist, right? Like they're...

in real life as well, therefore, they're existing companies. I think the way technology industry ended up doing compensation is one of those many, many, many sediment layers of, I think, individually good decisions which amount to a place that's just strange. For something as important as compensation, I think we should not

press into service reflexively such highly financialized, derivative, instruments of enormous complexity and huge variance of outcome without there being an agreement between both sides of that that's something that they want. Now, a lot of stock options and RSUs, these things exist because it's a tax optimization system. Very often it's not actually

true anymore in many places. Like in Canada has a different tax system, Europe never had really stock options in most places. Actually, there's some instances now coming, which is sort of interesting. I think Germany is creating some tax favorability for stock options. And so like the world is very different. I think these things should be available, but not prescribed. And so, I mean, we switched to a

very simple system where everyone gets a number. This is what you make every year. And so everyone agrees what like the ground truth is of compensation. And then you can say, we want this in cash. Do you want this in stock options? And there's going to be other things like, we will hopefully get to a place where you can use, like we have currently, I think two or three sliders that you can choose how you want your compensation. And then you

Like, there hopefully will be 10 or so to give as we build more capacity for different options. Like, a charity bucket would be great. Maybe even a charity bucket for individual level action, society level action would be like, maybe make that decision at this level.

would be wonderful. And so we now have a system that we control that they can say like, hey, we're making our compensation system and implementation of our belief in what's actually the fairest, best and most flexible and treat people like adults so they can make choices. And then if you want stock, you just simply get those. And if a stock market value of Shopify is very low at this point, you get more shares and it's

very high, you get fewer shares, but presumably once you got previously have appreciated value, they have left there for you kind of ahead in both ways. And the moment of joy, like, I mean, this is sort of gets into the weeds of previous compensation models. Like the thing that really, I think is, it's a weirdest thing about the previous systems is you make these like big grants for three years. At some point there's a grant date, all these grants are created.

every single time before this grant moment, like you actually have to look at the stock. And because I'm like, man, like the individual outcomes of the people for getting this next set of grants is so different based on what's happening that week. Because again, it's like, this has nothing to do with company, right? Like Shopify's real market value is going up, I think, fairly rapidly by all the amazing things we are building. That's what I'm working on.

Shopify's stock price is like this crazy function over time based on again sentiment market value so tying everyone's lifetime earnings really but like to this other thing which is like wildly swinging compared to the thing that we are all working on feels like just such a

patent violation. I think it's just like a steel man why this steel steel man me the argument that it should affect what you like a Shopify employee makes as lifetime earnings whether or not Russia invaded the Ukraine the week before the grant or not. Right? Like it's like that seems like if someone wants to steel man this like that's

do it over beers in a bar and I'm like all ears because that would be fascinating conversation. But I don't think it's a silly thing to have to even discuss. I feel like the answer should be no. And therefore you should design systems where that is not that big of a factor. What do you think businesses can learn from programming?

I think all of business has to be really derived from programming principles. I had this intuition. I think we even had this situation on previous episodes, like we talked about this. Wherever I tried it, it worked better than all other approaches. And I think people need to understand it. Why is this? Like, because it sounds random. I mean, I know, like especially in the technology industry, we are sort of used to putting technology on

treating it with deference. Like if you go into like oil and gas or like into finance, where engineering and technology is almost like a cost center, it would be about as random to them to say, hey, we have to derive all of business from engineering principles as it would be to come to a technology industry and saying, hey, you have to derive all your

HR system from server culture, right? It's like it's a total random idea. Here's my theory and we can talk about examples. I think we ended up in a quite path dependent but very unideal treatment of what technology is and how people think of technology.

And actually, I think it's causal from the way campuses of universities are organized in the '50s. And like, big statement. Turing came up with the Turing machine and, you know, reading executions from tape and writing back to it. And von Neumann formalized the architecture that we all are using. This sort of created this sort of conceptual Cambrian explosion around this time. It took, like,

to the 60s for having reasonable implementations of these things. Of course, there were some examples before. But where did everyone put that? If you actually... I'm well through the books that chronicle the history, even though those are obscure books that are... Like, more people have to read. It's always a basement of some building.

Or a rental off campus across the street from MIT or Harvard or something like this where they put people because it didn't fit into anything. It's like, what is this thing? It has a lot to do with language, really. Because what's great about language? Language is a concept of

taking very complex concepts, abstracting them behind new words. You know, like it's the concept of abstraction, which is like, or is it mathematics? Well, mathematics is like, its goal is probability. It's like its goal is sort of, it's theoretical cohesion, the equivalency sign is like those two sides are exactly the same thing, not just coincidences.

reasonably similar. It acts on a very limited syntax, like a very few, like it's sort of a language, but it's actually, it doesn't have a concept of abstraction. It's like everything is just these formulas which are, and so you end up with this new world of a Turing machine, which is actually the midpoint between human language and mathematics.

It has none of the theoretical parts of mathematics. It's all only the practical things. There is no such thing as a pi that is an infinite number that you can't calculate to the end of the universe. There is a very practical, like you can make a function called pi, and this function

you have to make the decision for how much compute you need to invest into it. At some point you should stop because otherwise you end up with an endless loop. So therefore, like what computation actually is, is the practical parts of mathematics and the much more definable parts of linguistics. Basically what Wittgenstein was trying to do in Vitrocartus exactly 100 years ago

I think Wittgenstein was actually probably the first hacker. And so you have this completely new field. What do we do? We put it like we called it what? Computer science engineering. We're still not sure what to put up there. But it's much larger. It's actually...

I think we've taken a significant chunk out of all the fields and figured, hey, there's actually a unification of it. And all the practical people for the next 50 years gravitated towards whatever the part was called, computer science, if you will, because that's where

And leaving behind all the theoreticists, this is why we end up like the philosophy group was only doing real physics and physics basically only does like string theory. The topics that are a lot going on in academia are basically the discipline versions of a nerd snipe, where they have the things which are like, yes, let's discuss them, but like it's not clear that it will have to be of practical value. I'm being somewhat critical of these groups here because frankly,

I am. I think we are just not thinking about all this stuff, right? Okay. With all this being said, where does this leave us? I think what this field is probably is some kind of applied computational philosophy is the correct way of thinking about it. It's like a little bit like game theory and economics ended up being like sort of an extraction from people playing poker. You're like...

you found a practice where Game Theory was applied and then a lot of ideas from Game Theory were sort of informed to this. Computer science is a bad term because it's actually all applied. And therefore, it's the most applied field of systems design. It's the most applied field of architecture. It's the most applied field of

control theory, or it's the most applied field of almost all these things. And it's sort of a practical, almost vocational side of academia, like extracting all the good bits. And so, but we left it, like we were proud of, left it to the nerds and said, hey, for most industries, you're a cost center. You just sort of enable the things that others do.

And the revenge of the nerds is actually that we now build all these companies which have been outperforming everyone else. And frankly, everyone has to kind of understand that that isn't because we have technical skills, but actually because we, and I'm including myself here in sort of this engineering discipline by being very loose with it because I clearly don't have an engineering degree. We spend our formative years designing systems that are

have to be resilient to like weird non deterministic, like the kinds of things that you can't even really put into a mathematical formula, right? Like packet loss. And like, you know, our world actually is one of chaos in which we are trying to pretend that it isn't. And then we have to put abstract systems almost in the heritage of linguistics. This is an e-commerce system. Like that word has

Right now at Shopify alone, like three and a half thousand, four thousand people in R&D working on like every single day. It has had so, it was slightly fewer for years and years and years, 18 years of my life invested into it. And so there's a lot behind this. Okay, all this, why is this applies to business? Business is unbelievably complicated. Business is a...

your departments are trying to use sort of the old way of, the old imports to try to make the most of it in most places. Like the old imports are processes, bureaucracy, and story. Like the V7 means by which, like, and all of those leading to a culture. You know, like that's your culture.

compensation team, for instance, had those mechanisms by which they went through a process to look up, okay, there's a new job, new sub-discipline, what's the cost center, what's the comparables, what does the Redford or Compensia data say is a comparable, what's the upper centile, here's the salary, let's use this as an input. Well,

all this is data processing, right? And we should, you know, engineering discipline has a lot to say about how to build very resilient systems that can roam across a lot more than just a few inputs like this and actually implement like a function that spits out the right results based on

way more important than this. And the function is auditable and can run every moment. And if you are thinking about making a change to your business, like what would it look like when a certain discipline or job moves into a different department of a company? Well, now I make all of this executable. I now go and just edit one file and then it rebuilds the model of a business. I think, and then if you like it,

in an engineering-led, sort of engineering thinking company that becomes the new desired model. And the goal of the HR discipline is actually not to make all these arbitrary decisions, but actually to look at what is the model of a company? What is the actual state of a company? What are the moves that get the actual state as close to the model as possible? Where are the biggest discrepancies?

A company like that retains its ability to evolve with a changing landscape because it's extremely hard to change bureaucracy, extremely hard to change the stories in the business.

It's extremely hard to figure out all these little arbitrary exceptions that have been created and can still move fast, but also just leads to much more fair and observable outcomes. You can use all the systems-building advantages of unit tests, of linters, of where are things weird? Data processing, observability, dashboarding.

And so these are the ambitions, I think, amongst the sort of most technically run engineering companies. And it allows you to think about what we have done, but it gives you a new tool because at the end of the day, I think what Ture invented is not as separate as people make it out to be. If you look at the cells that make all life,

This is kind of what DNA is like. It's a read hat and a write hat, and it creates more DNA, it creates more cells. It can, it's like, the comparison is not equal in science in terms of mathematics, but like, by analogy, yeah, like I think it's a lot more fundamental than we give it credit for. I think in 100, 200 years from now, when we talk about human history,

These books felt like hackers by Stephen Levy and the dream machine and code by Petzold. These books are actually going to be referenced works that show

the actual mainline history of our species, right? And currently, it's sort of like relegated. The newspapers talk about current affairs, which we should, like they are also important.

but it feels like we are living on this in this weird world that actually has not integrated its own mainline history track into the public consciousness and i think this is why the world is so weird to so many people why is like why are things the way they are well because we have a model in our minds that propagate a model through uh i know school media books um

that's deeply rooted in the physical, which is easier for us to reason about, to be fair. But it's not... It's an extraordinarily lossy model if you actually hold it up to what is happening in the world. Anyway, this is a topic I could talk about for hours. I deeply... I never know if it's an interesting topic because I have no answers. I just...

I'm trying to like, I think it's worth, like I think what's, I mean, what's the TLDR? The TLDR here is just like poker taught economics a lot because it was applied game theory and people play many, many, many hands in the evening and therefore develop a more intuitive understanding of the part that's important to economics and the best parts of mathematics.

I think engineering involves applied systems design. It has a discipline of systems design that is just vastly, like we're not talking about slightly ahead. We're talking about 100 years ahead.

into everything else. It is not a contest when you hold it up to sort of industry orthodox thinking on these things. If that orthodox thinking is purely informed by sort of a pre, like if a book is basically from the 80s

it will have interesting things to say because how to implement things with humans is going to be more better developed and potentially how to craft a story and process. But it was a fairly minor support role now to a larger system. I think what makes it interesting is the fact that there's no answer, right? If there was an answer or a definitive answer, it would be a little bit less interesting. Yeah, I wouldn't do this.

I'm only interested in you. I mean, I'm only interested in you. No, I'm interested in the ideal. And I'm actually uninterested in fields where the ideal is figured out. Because there's, like, I have nothing to contribute there. Like, I sort of, I love and understand technology. I love and understand design and UX. Why? Because I really, really care about people. Like, I know it's a weird thing to say, but, like, I am, I have sort of,

built my life around giving people superpowers due to technology. This is what I love delivering. So these are the three pieces. Technology is for enablement. People are the point of the world. And people are awesome and people are creative and people need to be augmented with technology. And I think that's the obligation of us technology, the technology industry to cause this to happen instead of replacing people.

And what we should replace is toil and drudgery. Yes. And bullshit, right? Like this is like, those are the things we replace. Sometimes there's jobs because we are mean or because we didn't know better or we couldn't do better. Better only toil, drudgery, bullshit. Let's replace all these jobs. Everyone locked into these jobs is a creative person and contributes significantly more if enabled with proper tools.

And so, of course, UX is in the very middle. It's like UX makes all the world of technology and everything we have accomplished there available and approachable by everyone. It's a fundamental equalizer. And so, I think I... And I have a very concrete set of problems that I need to solve around organizing tens of thousands of people to do...

build a highly innovative company with tens of thousands of people. I think this might be surprising to people. I don't think that has been attempted many times before. I don't think people, like, you know, there are companies you can describe as being highly innovative that are hundreds of thousands of people because I think you're going to always get sort of a residue of innovation out of it. And if you have a lot of people, that ends up being

you know, still significant in terms of innovation. Of course, there are phenomenal companies that have succeeded this, but I'm

I think it's not unique, but it's probably single, maybe low double digits of companies have ever attempted it. Most companies are just trying to be like build, like find their market fit, their core competency, and then play a defensive game around this, which is a very, very different thing to do. Everyone pays lip service to innovation, but innovation costs you a lot. Innovation is a, if you want this,

every single-- like, solving any single problem in a company is 10x as hard as it is if you don't. And so I don't think many people have signed up for this kind of headache, but I think it's intoxicating. One of the things that you sort of said was unleashing people with technology, which is-- it's fascinating to me because small differences in skill

technology can amplify or leverage that ability to massively different results. You and I have the same iPhone, we have the same technologies available to us, but you can do a lot more with that than I can. Well, I'm not sure about that, but like, I, yeah, like, I mean, again, the tools we use is a multiplier, not an added, not something that adds. Like,

I think until the computer around, the most powerful tool in the world, but at a probably a slight goal. It's actually an interesting conversation about what might have been the most, the highest sort of multiplier tool that existed before. Probably sitting on top of bureaucracy, frankly. There's probably a times 10. Like, I mean, I'm sort of making this up right now, but like,

I indicated, let's say you would go back to pre-desk calculator times. The way they had to do the Manhattan Project was rooms and rooms and rooms of people. A lot of what they did at Los Alamos was actually calculating calculus, doing the trajectories for artilleries.

And it robs and robs and robs of people doing this manually, right? And so...

all these people were better at mathematics than I will ever be and most of us will ever be. And what belonged behind writing tables for every particular artillery, every one of them was different, so you had to re-derive all the calculus, like lookup tables, basically, for different differences. And that sucks. So now you're living in a world where one of them could probably go on YouTube and learn enough programming in...

maybe a week from scratch because again people must be always to make how complicated is to learn programming it's like you fire up Khan Academy you sit down

clear your calendar and by the next weekend you're programming some useful stuff like this example. And you will write a function that you input some calibration numbers from the artillery that you're okay about and the distance and maybe an elevation difference and it will spit out very quickly to, you know, exactly where to point it. Or you do it with a desk calculator. So after that person, after you do this, this function, this thing is going to

always be like correct maybe you need to add someone adds wind at some point because you forgot about it but like that's just one optional parameter um you add to the function that function will solve the work yet yeah that gets it done um forever um the amount of productivity added to the world is not the utility value of a function it is freeing

all the best people at Calculus I'm glad of to do productive work and actually write these functions. It's flabbergasting in terms of work.

planetary productivity number. By the way, we are terrible at calculating productivity. Also, this is because none of what I just said would actually be in productivity numbers that economists use to figure out if productivity is going up. So are we more productive now? Because based on that, we should be massively, but it doesn't seem that way. Because... I'm curious why it doesn't seem that way. I think it does overall...

if you put a movie on from like there's a funny list I've seen recently about like all the movies you love that could not exist in a world that has cell phones it was just like die hard and obviously it's just like all the movies you've watched in those days so like

It's like, that Earth has changed a lot. It's just we're all-- we're all the frogs sitting in this slowly boiling water. We're the sentiment. Yeah. But the sentiment is, like, I mean, one of the most important things that I think everyone's overseeing is the, um,

I'm great, but everything else is fucked effect. So this is actually like a metric you can look at per country. Basically, people have to answer question, how are you doing? And how do you think everyone else is doing around you? Right? And what do you get back? Everywhere in the world. It's like, I'm doing great. Everyone's anxiety is based on their understanding of everyone else, which everyone else literally disagrees with.

So we all think everyone else is doing bad and everything else is getting worse, but it isn't. The numbers don't bear it out. There's countries, I think South Korea was like 90-10. 90% of people are doing fine, and they only think, like 10% think anyone else is okay. So our sentiment, it's an important thing. The sentiment tracks...

the actual experience of planet Earth in the same way a stock tracks the fair market value of a company. It's maybe eventually convergent, but sometimes vastly swinging up and down based on... And driven a lot by media, right? And what you're exposed to and the messages you're getting. Yeah, because, I mean, why? Because media has a grudge against technology for frankly understandable reasons.

Everyone in media works for an institution that probably was negatively affected by tech. No, I think media itself, like if you zoom out, is actually doing great. Like podcasts are doing great. Like a builder-operated, founder-operated media is killing it. You're a founder-operated media, right? It's like, it's the golden age of media along those lines. I could never find, like there's no chance I would, like I am a, like a,

delighted customer for the product of the knowledge project, but I don't think I would have been serviced in any other period of time, right? So founder, builder,

operated media is doing amazing. Institution, legacy institution operated media, some of them actually doing great. I mean, titles at higher influence rate than they ever have been. But like there is a prestige change to these jobs. And so I understand that people are fundamentally in this space are colored and pessimistic about the changes that technology wields.

But what is technology? Technology is progress. So if you have the people who own the airwaves, every person on the planet ends up becoming, well, everyone becomes sort of the average of the five people they spend the most time with, right? Like that's just sort of a really well-documented or it's fundamentally true, but it's super useful as a mental model.

And I think that one of those people is the media for most people. And so you're adopting a set of beliefs which are, I think, extremely colored. And in this particular case, I think somewhat unfortunate because you just recast the applied field of human progress as something that is causing detrimental outcomes. Which, again, in the individual case,

can happen, but clearly on society level isn't. And so we lost our ability to be optimistic and love the future and love progress. And I think that's, I mean, I think that's extraordinarily unfortunate. And this is like somewhere in the top five things that we really ought to edit

And because people actually think they are doing okay. No one's so perfect. Everyone has problems. It would be great to get rid of all of those too, but overall things are going in a really, really neat direction. And books like Enlightenment Now and so on, everyone chronicles, hey, what was the past like?

will overwhelm you with evidence for how good we are at it. Well, if you can go back in time, you'd definitely choose today. Like, I have incredible, I don't know, both the year and be with my kids. Like, it's just like, I, you know, I was born in 1980. Probably one of the best sort of

Like, it's one of the better times to be born. Like, we saw, like, perfectly, sort of, dating to physical-- like, the handover and digital nativeness and all these kind of things. But, man, like, wow, is that going to be diminished compared to what our children will see? You hit on something interesting there, which is the search for accuracy over utility. So a lot of people dismiss ideas because they're not 100% accurate, even though they're useful.

How do you think about that? Oh man, like I mean this is like the reoccurring topic that you, I think, teach extremely well. Like what concept of like all models I use are wrong but some are useful. Like yeah, I just like it's a right way to think. Like I think this is another one of those things that you learn in engineering adjacency like electrical engineering has this really well down.

The sciences don't, sadly. But computer engineering is like, you're carving a system that works out of what you got. Now, that's good engineering, but actually, if you expose yourself to this, this is actually good thinking. You have to think in bets. You have to make choices earlier. You have to make a choice when you have

You can't wait for having 100% of the inputs because you will never have it. Sometimes after the fact, you get to go back and give yourself a scorecard for how good of a job did you make when you had to make an important choice? How good of a job did you find all the relevant inputs to connect to make a choice with? That's something you can really review after the fact. Like, "Hey, I made this choice this way. It was wrong choice.

Was it a wrong choice for chance, in which case you made no mistake? Was it a choice for a certain chance that could have been known and wasn't considered? That is something you had something. Was it invalidated because you didn't see the bigger picture? That's like totally your fault, right? Like I'm making a choice. As long as the bigger picture would have been available easily. Like my test is always like,

Were there any 20 minutes I could have spent to pull this piece of information that I didn't consider right into the set of things I used as inputs to make the decision? If so, I wasn't equal to the task of making the choice at the time, and I need to understand this better in the future and improve from. So accuracy is like ethic. Accuracy very often is...

picking the right result, but that's actually independent of making good decisions. Like that's just, I think resulting is what poker players call this and I think it's not really the right thing to do.

Let's talk about decision-making a little. I mean, we sort of highlighted the last two and a half years and all the ups and downs in that. How do you keep your cool when everybody around you is sort of losing theirs? A lot of people end up getting really invested in their sort of job title as an identity. And they think they are valuable because the job is valuable. Unfortunately, so much of the world is kind of

is a second order effect of self-confidence issues. People seem to have a fairly low opinion of themselves fundamentally, which I think is just so sad because I think we should have a vastly higher opinion of people's capabilities in general. I have a very, very high opinion. Sadly, actually, that makes me somewhat disappointed in people.

In a funny way, I had this funny exchange with Toby Shannon, who I worked with for 12 years, recently retired, joined the board. He told me, like, "Hey, Toby, one of the biggest differences between you and me is, like, you have an extremely high opinion on people's ability, and therefore you're constantly disappointed in people, and I have a very low opinion of people, therefore I'm just utterly delighted when they do anything useful." And it's like, he was offering this as advice for me to change my mind. I think,

I think I'm less confused about people's potential than I think they sometimes are themselves. In many cases, I see it as one of my major contributions from my career to help people actually reach their potential and have a more clear idea about their capacity ahead of time. One of the ways how this low opinion reflects itself is that people think they are valuable due to more legitimate sources of information

like external accredited internalization. I've butchered this word. I mean, having-- External validation. External validation, like having a degree is-- I'm valued because I have this degree. I'm valuable because I am a front-end developer. And most things are fundamentally incorrect. I mean, maybe in some of these sort of meandering, middling companies, that might be true.

You are valuable because of the brain you've got. You're valuable because you make choices. You're valuable because as a front-end designer, not just that you are actually engineering, that you can program, but also that you have an aptitude to work on, build systems that are great and easy to use for people that are resilient to random, people do very random stuff with user interfaces and you build something that will pay now.

It's your experience, it's your skill, it's your actual, it's your life story rolled up is your intuition, is your ability to make great decisions quickly. And so often this anxiety that we're talking about popping up the stack to your actual question is that people confuse

their own self-worth and their role in the world and their ability to feed their family, frankly, with the continuation of jobs and the continuation of a role that they have. But the question you should have is like, how can it be valuable? That's Shopify hired you as a person. The only reason why we create roles and racks is because they are like lures to great people.

The interview process is not a process of figuring, can you do this role? Can we slot you into this role? It is, will job fair be better for you being here? And so people shouldn't have those anxieties.

uh people should figure out how to be valuable and and and and show great flexibility in this ideally develop range or like you you should make a fundamental choice of of of of of are you are you going all in on specialization i'm for range most people should opt for range um um specialists uh will like everyone who knows

that they should be a specialist knows they should. It's like everyone should be a specialist knows they should be. This is a very particular set of character traits. It wants to dedicate itself to a very narrow kind of thing and go unbelievably deep, like to a degree that's absolutely impossible to appreciate for the non-specialists. The depth, the true depth of true specialists is incredible. What specialists don't understand is like how

how incredibly good journalists can be at 50 things, right? Like, they think like a... Many people think a journalist is sort of like a jack-of-all-trades, master of none. Like, this is one of the dumbest sentences I've ever heard. That's like not... Like, that's just usually someone who hasn't made a choice and is not good at developing any kind of skill set. Like, they're fairly rare people. You're like Pareto principle. No one tells you, but first 80% of every field can be done 20% of the time. So, like,

You can develop easily five fields to a degree of eight out of ten.

while the specialist is just looking at primary topic, right? So, and frankly, this is even incorrect because learning the next thing is significantly faster than learning previous thing because the skill set of learning is itself a skill set. And it's actually your skill set of how quickly you are learning which determines how long it takes you to pick up any kind of new field to a set in the head of 10 out of 10. Okay.

Anyway, how do you keep your core? Like no one matters and like humans are awesome and humans are like, every individual human has more compute than all the computers we've ever built in the network together. So therefore there's a lot of roles for us to play. And especially when millions of variables change, software technology pits us. Right now the way engineering works, the way systems work,

as great as they are and as flexible as they are these days, they are still a little bit more, like you pour a little bit of cement into your current approach. Like refactoring and like technology is tricky. So if the world changes, it's time for humans to shine. And so we should actually be very self-confident into our role. And then again, you make decisions. I think decision-making is misstudied. I think decision-making is,

Easiest thing in the world. It is blindingly obvious how to make a decision or any decision. What isn't is finding the inputs. Like what is the context? What are all the things that affect the decision? Developing that is hard, right? So like knowing all things you should look at. Knowing what to ignore such as what everyone else is doing. I mean you might use

when everything else is doing, it's actually a second order import. It's an import, like you should look at it, make a judgment on like how much value there is and use your judgment on that as a hit put into your decision making. So you're twice removed. And then you build up a picture and then honestly, everyone who looks at the imports will kind of come to the same. I've actually never really seen this situation where people are truly making different choices. Like there's always...

If there are like people on different sides, you just have to like, okay, let's take it from the top and like talk, like state all the unstated assumptions that are actually inputs into decision making. And once also flushed out, it becomes pretty obvious, I find. And then,

after you make this decision, you don't just, if it's an important decision, like strategy or something, you don't throw away this entire book. You actually capture it and you revisit it because, again, the world keeps changing. And by the way, your appreciation of the inputs that you considered end up evolving as well. And so you should actually, at any moment, rerun a function over the inputs and be fairly neutral to what that says. Like,

I did that with, I decided we built a lot of offices. We did them extremely well. I think they got very good at building offices. But then a change happened in a world and one of the variables was like, well, are people allowed to go to it? Like the offices. I don't think I had that. There was an unstated input. There wasn't a stated input, but it was one. The moment that flipped,

we decided like, okay, no offices anymore, right? And then another input was like, where is our current staff? Like, are they all close to offices? And then we said, like, another decision was, should we hire now outside of these places? And after we made that decision, the variable on like where people live changed. Not everyone is close to offices. And I think it just said, okay, well,

you're going to go digital by design. And like this, these decisions actually went very quickly because you could see how one leads to the other. And then we just called it early, for instance, is something we did very like 2000, like I think in May or so I did like, okay, we are done with offices. We are going to be probably the biggest role.

And you were the first to come out, basically. And we thought it was valuable to be the first because again, I think removing bad ambiguity is a very important thing. And I think a lot of people want to know, like, some people were like, just waiting to get back to office, which I appreciate. But many people were saying, and people at Shopify who are in this stage should know that that's not something Shopify could provide in the future or would not. And

people in other places which were clear that they would go back to offices and actually liked this thing or liked the ability to, you know, move wherever they want to live, like, engage in more lifestyle design than what you can do when you have a desk job. For them, it was important for me to, like, for them to understand that Shopify would be a fantastic company to join, and I think that was very good for us. So I think it's fair to summarize what you sort of said about decision-making as being easy in the sense that

The source of all errors in decision-making is basically blind spots, or other blind inputs, where you're blind to the effects of your decision. How do you think through the primary, secondary, third order

effects of your decisions and then the broader impacts. Yeah, I mean, I think you would develop a little bit of an intuition for the second and third order effects, but I don't think they are, you can't plan for them. You tend to make decisions on primary effects and you communicate them on primary effects. I think in a smaller team, you might talk about, okay, this by way will actually cause this other thing, the trend will cause this other thing, and it's,

I think that's sort of expert level decision making is being able to have a fairly high batting average idea of how this is going to continue because you're saving future headaches by being aware of them. But I would say this is like, this is where things get really hard. Most people in really only concern themselves with primary effects. Secondary effects are very, very hidden and opaque. Although I think govern the world a lot more than people realize.

Very, very often the secondary effects and tertiary effects are vastly more societal impact than the primary effects. I mean, primary effect was people didn't like their power. It's like a different conversation about how that might have happened. But I mean, if you look at causal requirement, it's probably because

all the green parties in the world, which I actually appreciate for what they do, somehow ended up embedding nuclear power being bad as one of their founding myths and organized around this. And therefore it was like possible to get out of their platforms later on when this became sort of silly. And so there is like an input, like, which I mean, maybe to the best of knowledge when these parties were created in countries like Germany,

Maybe that was thought to be true. Like, I mean, I think sustainability and environmentalism and so on meant something different back then. We didn't really understand fully the role carbon played in the air. It became a huge problem. And so anyway, what VEDA then didn't do is, like, after they got more data, they reran the function of their position on nuclear power, and they just kept with it because that was, like, convenient, I think,

Or you don't rerun it, you just dismiss the change in variable. Well, it becomes just, I think that's actually more accurate, sadly. It's probably just, it's written into the set of, again, it's a founding myth. Founding myths can't be revisited. Like, I mean, this is like, this is why you better end up with a really good set of

you know, initials, like rules, because once the people who write the initial rules are gone, they often, there's going to be a great set of, like, great deference to them, because again, no one will ever reach for legitimacy of the founding, like the founding fathers are like, I mean, there's an entire piece, like, think about how few founding fathers there were and how many constitutional lawyers there are now interpreting, how this, like, crazy discrepancy,

But this is one where it's super important that we find a way to rerun or get rid of or change. How do we do that? Yeah, I mean, we actually-- so talking about secondary effects, sometimes we use-- very often secondary effects are really the opposite of a primary effect. So I like-- a lot of our carbon issue in the world comes from the environmentalists convincing the world that even though we're building a--

economy that required nuclear power, we could somehow do it with coal instead and oil. Now I think we got the scorecard for that. This really worked very poorly. And I don't, I certainly think it's an expense that PADF needed to run, but like we did. And

Until maybe a year ago, it seemed like we actually were really not looking at this. Because, I mean, I should make this explicit. The secondary effect of us not building nuclear power plants is that now we have climate change. So the primary effect is environmental movement. Secondary effect is climate change. Like, chew on this for a bit.

Again, everyone in this movement wanted to do what's best, the best of their information, but like the secondary matter. Now take another one. Russia invites Ukraine, which seems to be a recurring topic here. Everything in primary is bad. Secondary effects, many, many, many, many of them are bad. Like there's a secondary effect of everyone having to look at the energy policies and realizing holy hell.

We probably need these nuclear power plants back. So, you know, we actually, in a really odd way, Europe's dependence on Russia for natural gas pipelines, plus the act of aggression by Russia may actually cause climate change to be solved, which is like an unbelievable story when you're looking at this. And honestly, this is the danger of secondary and tertiary effect thinking is incredible.

It really lends itself to cynicism because sometimes you see these connections which feel extraordinarily inconvenient for the main story we tell ourselves. But I also think facts are friendly. And also, words are not facts. They are effects. They are like compounding systems that feed into each other and loops and cycles. All of this is just like...

Yes, and then a hundred things besides, but it's really good to think about that. So you do the same thing, I hope, in a micro way in the company, right? Like it's, you know, like if you are in a company, everyone is allowed and actually encouraged to be an intelligent actor in their own sort of local incentive system. The system should be designed so that people sort of individualistic

efforts level up to the society level benefits like the roadmap, the mission,

Bureaucracy very often ends up being the grinding between those things, like the local incentive system and the needs of a company or the needs of another group. So designing things in such a way that they're in alignment is really important. And for that, you will have to go analyze these things. So I think that's, to me, those are interesting challenges. And again, it's interesting, again, because there are no right answers. No one has figured this stuff out properly. I think...

Partly because we had to build every company before computation really from very basic building blocks, which is policy, rules, process, and story. And those are like software for humans.

Now with computation and actual computing, I think we can implement more complex systems that are more auditable, that will be able to provide some of the analysis if things are going in the right direction in a macro sense. And will actually make it much easier to implement more complex incentive systems. Or will make it easier for everyone to know if they're...

doing work that's actually helpful to all the company and the mission. I think that's completely underappreciated right now as a source of business thinking value. And I find this very, very interesting. This is really what I mean with applied computational thinking and applied computational philosophy being almost the higher order, like,

academic department that should exist on the campus of Bioware should probably have the nicest building. And then this sort of computer science, hacking, tech, like engineering are like sort

sort of the super applied versions of this, but like I think a lot of other fields should have moved into this particular faculty as well. Now, I'm not engaged in redesigning academia. It's not something I'm interested in in any shape or form. I've never been in a university outside of giving talks there. So I'm doing an, I'm a little bit outside observer there, although I am looking at what's going on with a little bit of exasperation because I think

Academia fundamentally is one of those areas where all the systems are incorrectly designed for society's interests. And I wish

we would have more founder-led academic institutions that could engage in some redesigns and subtractions or figure out some different means by which we could enable some good thinkers with the legitimacy needed to make some changes there because otherwise we are just going to get papers, citing papers in rings. And I think progress from academia has slowed down too much given the amount of

If you sort of look at IQ dedicated to... If you believe in IQ as a heuristic for potential, which is not necessarily a discussion, like I put my signature under, but for simplicity's sake, man, we are diverting a lot of people into...

academia, nerds, and I think I'm thinking about the string theory, and I just like, man, there's a lot of practical things we need to solve here, and I think we should go and, like, solve those. And you did some of that during COVID, right, with the rapid grants? Yeah, I mean, rapid grants was great. I mean, there's an entire sort of emergent field led by a bunch of, like, non-academics or sort of academic adjutants, sometimes founder-builder types called progress studies, which are

says a very basic thing about, hey, we should probably study how progress happens. Because it's probably slowing down a lot right now. And we should kind of have a theoretical framework by which to just like, you know, like meta-academics is probably almost a better term there. Before watchers or watchmen, so to speak. And

I think that's very nascent and probably not like university loved and potentially, I don't know if it can get off the ground, but like we did some experiments with fast brands and some other things where we just said like, hey, with enormous time pressure, give us a proposal and we'll tell you if you might get money for it in like a couple of days because that was really needed at the beginning of COVID because the granting process is too Byzantine and Kafkaesque and bureaucratic. And I don't think, and this was sort of

That is my opinion. Propsies to society's goals, very often. What have you learned so far about how progress does happen? I mean, like, FastGrants was incredibly successful. It's unbelievable. It was like, the amount of times that things that made a real difference ended up being the recipient of-- Like, it was like a clear mark of, like,

the people really want them to be trying to make the system work but like they're stuck behind barriers and um i think that was good i don't know how reproducible it is and um because it was a unique moment um i think um

there was also unexpected springing like these ideas on people is very important sometimes because the problem is in any other case you reward the most prepared and the most prepared are usually filled with most time and feel the most time are not usually people working on important things right like sadly too um so it's very hard to build academic environments or even processes that reward the the

the people who can make the biggest difference. That's a very complex problem in, sort of, system design and, again, systems design, especially once humans are part of it. Sadly, the people who are most capable tend to be the busiest.

You said in the past that, I want to read this so I get it right, people should make decisions based on the decision they assume the company in 10 years from now wishes they would have done. Can you expand on that? I love having these questions as one of the governing, putting it as an input there, or at least as sort of a

linting rule, if you will, on the quality of a decision. It's very easy to do what's popular right now and commit yourself to more pain in the future. This is almost every important decision that doesn't have a mnemonic ends up being a little bit of a, do we do what's right or do we do what's easy? Those are the only real decisions that people get hung up on outside of the

"Hey, we see no path forward. We will have to eat shit." Which is the pile we should start nibbling on. It's like that exists too, I mean, especially in times of crisis or sort of wartime. Both will also end up becoming discussions, but usually it's in the form of are we allowing ourselves to do what's expedient or easy and

I want to have good heuristics for viewing towards best decision overall in the long term. Ideally, again, especially at the strategy level and people systems levels, these things should be along the lines of a long-term benefits and inclusive of some of the secondary and tertiary effects that are predictable. And so this is why I try to ask people, hey,

I found this question to be clarifying for people. Because often, I mean, or, you know, on strategies, like a lot of what people call strategies actually go to market. And a lot of go-to-markets involves...

trying to figure out if you want to pull future profits forward at a discount. And how big that discount is. And sometimes these discounts are enormous. Like absolutely crazy, like 90% discount, but you can finish a quarter. I'm not talking about like,

Here's a Shopify card for 90% off. I'm talking about, we have a product called ShopPay, which I think a lot of people are familiar with because it's the kind of thing that makes checkouts good, so you don't have to type your address with your thumbs. And that thing is like increasing conversion rates to the degree that not having it simply makes it a mistake to

Like, you're basically committing a strategic mistake by not using Shopify if you call this to sell products on the internet because that's how high the number is. I'm super gratified to be able to get to this point. The attachment rate is massive. The value is insanely high of this. There exists a lever inside of the company. Obviously, it does. I don't think I'm really anything with this. Like, basically, when you build products that are extremely valuable, you have

like a dial, which is like your monetization dial. It's like set to zero. That exists in a room full of monetization dials or dials like that exists. But as like your roadmap tries to build more dials for that room,

your long-term strategy ought to be to use as few as possible because I could walk up to the one attached to ShopPay and just say, you know what, like, you should charge for ShopPay. You should just say, hey, you know, like, cost an extra percent. It's, like, utterly worth it. It's, like, again, like, from vision is, like, 20% better. Like, everyone in the world would probably pay this. Yet. I think that would...

Mean that people will like that. They could create all these incentives for disintermediating the product It will create competitive landscape things it would Yeah, you know It's just like I think Shopify all in like over the next 10 years would think we would be a very diminished company For not giving our best feature like to everyone to make it like a fundamental like You know

like flag in the ground about, hey, you come to Shopify because we work on things like this and then we have them, they become available to you. And because again, for the period of time that involves us not, like the web doesn't have identity built in in a good way. You don't have, like there's autocomplete, but that's really hacky solution to the problem. I think even,

pre-internets like uh your btx and and other things had uh your identity as part of what the platform just supported it's like your name had transactions built in and um our aol right like had all this um so so it's kind of surprising that the internet doesn't um but it doesn't and and therefore

a certain period, which is still ongoing, requires us to sometimes enter just with our thumbs. And Shop Pay is the port-a-phone using internet platform feature in a way, right? And so this is valuable for this period of time and it will be something else valuable if this is solved.

um at some point and um um but we want to play the role of like democratizing the best features to as many like minutes minutes or small businesses because we are pro this we want the small business to compete on uh equal grounds of the biggest companies and so um the mission like all this to say um this style is not just a dial of like monetization this style is a dial of um uh

how much the observable difference to the mission, you know, how much we invested into this. And I think it's more valuable for us to build our reputation of doing this way than it would be for us to, you know, absolutely kill it for a bunch of quarters. So that's an example of that. I want to talk with you about two ideas that have left an impression on you. The first one is Paul Graham's essay on conformism

Can you talk to me about what insights you drew from that? Okay, so let me see if I can reproduce this. I mean, I have to say, like, Paul's essays are, they're kind of this wonderful, like, I find they're always insightful. They're always gems. And I find even sometimes the same essay actually is valuable, reading it at multiple stages. Like, I think...

So his writing is brilliant. Very often he does this thing where, again, he does the thing that language is best at for putting a couple of labels to things that are being observed in general, but afterwards they make them easier to reason about. And he always builds up these

pretty arguments around them which can serve as almost onboarding to my idea. I guess it's like, I mean, mental bottle faking, that's what I'm saying. I find, so in this he draws, if I remember this right, like one of those four panel grads where one axes how independence

minded you are and or how conformist you are on the other side and then sort of a passive-aggressive standard separation. And, you know, I think it's valuable because I think you can sort of put a relation density crowd like over this and you would sort of, I think he makes the argument that most people are probably passive to begin with and which I think makes

I mean, I think society would kind of like fall apart if that's potentially not true. And then there's more people are, significantly more people would be on the conformist side, which, I mean, one thing to acknowledge, conformist is a really, like, I mean, maybe it's only to me, but it seems like a very negative connotation in there. Like, this just means like,

people were willing to like work on great ideas really like it's like had like especially passive conformist it's like It's something that you know some of the greatest people are probably can be described this way people who are like I was of a specialist I think people who are making a choice on like I'm going to really go super deep into this one topic and I'm going to go like I I will I'm okay like

working based on what I know on like a company goal, right? Like this is like very sort of this on the aggressive side, the picture kind of changes, right? And because both are people who are trying to like, I guess, get everyone else to go to their sides. And I think there's a, you know, like the aggressive independents are clearly entrepreneurs. I think there's like,

They also look a little bit different. And the aggressive conformists, and I think that is what the essay gives at. I think it's important that we sort of talk about them with a little bit of like, hey, there's probably a lot good in there, but we should also really understand the downside effects on here. Because aggressive conformism is a thing that is going to

make it very, very, very hard to innovate. It's going to be a thing that certainly makes a lot of people's, notable people's life living hell on places like Twitter. And, you know, there are a good deal of industries that are deeply invested in this sort of as an archetype. Again, I would say, like, generally, bureaucracy is

Like, especially sort of the sort of bad part of bureaucracy, the Kafkaesque part of bureaucracy usually involves aggressive conformists. They're often the comic book villains, but like they blend in really well. So like, it's just like, I don't know. I don't know if one person is like one of those things always or in different contexts. But what I like is like, hey, this is useful. Like this feels like,

What's going on? Why are people like having so different opinion on looking at the same thing like here's something that changes things and and some people automatically say well, it was quote quotient people say that's clearly something I'm going to fight and I think it's important that companies kind of state what kind of groups they like

like a company that makes no choices of what people they want to, so they make, I mean, again, you end up with a full on bell curve and therefore you're going to end up with full on average results because the potential for agreement is extremely tiny if you are fully in implementation of like every set of ideas, right? Because

If you combine everyone's favorite color, you end up with mud brown with no legs. And that's sort of a thing you're going to end up with. So if you are wanting to build an innovation company, you should...

be very deliberate with where you put the conformists or aggressive conformists. They play a very important role in some groups, but you have to be clear about which rule, because the consequences of that kind of thing are like they will cause a thing to happen that you need to want to happen, because they will definitely make it happen. If not the output you want, then you should treat carefully.

The other idea is the Infinite Game, which we've talked about a little bit earlier. That's a big topic. I find James Carr's book, Infinite Games, to be really profound and underestimated. I think Paul Crabb could do us all a service by making a video

single essay, three-page repackaging of the idea because he seems to be able to uniquely be able to simplify complex ideas to this point. For everyone else, you have to read James Picasso's book, which is somewhat dense, but actually I think it's wonderful. It gives you this real sense of like what, like the difference between long-term

Yeah, well, okay. Let me take a stab at it, okay? Is that true? Yeah, go. Yeah, yeah. It is important to delineate finite and infinite games. What's the difference? Finite games are things that have a goal. Anything that has a goal can't be an infinite game anymore.

they have a winning condition, and the winning condition is usually met when basically participants agree that the winning condition is met. This is sort of a convoluted way of saying tennis is a very finite game. Like tennis exists in a world of rules. It's been defined as probably a governing body of aggressive conformists that keep tennis the way tennis is.

And the match goes to a couple of sets and there's a referee who's a participant in the game that people forget about, but it's actually like the game is won because all the players, all the participants agree that the winning condition has been met, which is that someone won three or two sets.

And then it recrows and it's the same game of tennis that's played over and over and over and over again, right? So that's a finite game. An infinite game is something that has no goal. It's actually interesting. Let's try to make this happen with tennis because that's the example I've used. An infinite game is actually, let's say, fitness.

it's like this is not a destination there's no like this is not a there's no winning the foundation it's a journey it's like it's it's a it's a there is no defined thing that happens there like it's actually um um the goal of the game the only goal of the game is keep playing it's the the you are trying to say i'm going to go into some direction the direction of fitness swap you can make the opposite to say the decision you know but you could

make a decision to go towards sloth if you wanted, I guess. But you made that decision and that you have to compromise on this. Every single step along this way is going to be different. What you are allowed to do though along the way is play Final Gates. So, and this is where things get really, really interesting because people, like everyone should think about their infinite games. What is the infinite game they do? And maybe you have multiple ones that happen to be in reasonable alignment.

And you should make your life decisions largely based on your infinite game. Like, again, I talked about my infinite game as I love computing. I have...

computation and technology has huge potential. I really love people. I guess it's like we have huge potential and frankly we are people and therefore we should look out for each other. We should help each other reach our full potential as species and individual level. And you know design and systems and organization and all like

My goal is, through everything I do, is try to get people as much power from technology, like via a little bit on that fridge. And so Shopify is awesome for me because it's that and it costs resources. It's like my infinite game is in 100% alignment with all the finer games I play within the company of doing financial calls.

And, you know, I don't know, like, you know, build a company worth working for. And, you know, all these things are finite and have goals. Filling the role of CFO, you know, like it's a game that recurs every, you know, hopefully not too many years. And so...

So that's, I think, important. I think the world, they often confuse this because, for instance, school is such a great example. I'm really down on academic and school here. This conversation is funny. We all have, I think, an infinite goal for being educated, right? Like, we want to be educated. We want to acquire knowledge so that we can turn it into wisdom, right? Like, that's sort of like a...

pursuit, I think, everyone's on. I hope. But then we explain this to kids. The way we tell them to do this is like, you play the game of grade one. And there's a test in the end, and you are passing or not passing in the end. At least in the German system, you repeat the entire class. And then the first prize is you play a grade again, and this time it's called two. And then you do this again, and you do two. And underneath there, each subject is like

Math is like we start on page one and we do a page of a book and we solve the current topic and then there's a test and you solve the test. It's like it's a fractal of finite games. And everyone's forgetting about education because if you remember the education being the infinite game, I think there's a whole lot of finite games you're playing even in schools that are not leveling up to the infinite game. We end up obsessed with

testing, over-testing, rote memorization, random things that are just like kind of so beside the point. And I think very often my criticism of school and my observation, my biases before having kids and my observation with having kids is that

Some of it is really, really good and some of it is totally random and just is something we're doing because we're doing it and we are falling out of alignment. Okay, so what does all this mean? If a rubber hits the road, with finite and infinite games, there is the following. And actually we talked about this and this is actually potentially sort of a theoretical sort of framework and knowledge tree to hang these sort of leaflets of interesting ideas from earlier on. The biggest difference is the attitude to change.

between those two games. If you pull a lever somewhere and you change gravity down to 0.7g on planet Earth, if that would be a thing, the finite games of tennis cannot recoil. Tennis depends on gravity being 1g. No, it's not something that is going to be edited, hopefully. But it is not possible to have a game of tennis ever again if planet Earth just doesn't have 1g of gravity.

you can potentially invent a new game, but then maybe even one which is more fun and tennis, frankly. But you have to end forever this game and you have to invent a new game. It seems to me that the only people who seem to have ability to reinvent a game based on changed information are the people who are actually the Infinite players along some other journey. Maybe the Infinite Millicent's like,

like just again fitness or self-mastery or something or you know just actually sort of a need for physical entertainment it's like like whenever it is um but if you are on an infinite journey change is actually welcome change is clarifying change is a new bit of information because you actually have no opinion to like you you want to try to get a horizon but like

you're not because this is a goal, like there is no goal in an infinite game. The only reason why you want, like you have this vision of wanting to get towards your horizon is to gain more vision from horizon for something else. And I think that's poetic, that's beautiful. And I think it's described, like I feel this,

I read this book twice now, once when it sort of roughly came out and once like 20 years later almost. And I realized maybe the first helped me in this way myself, but I feel I just always had more to do with the infinite games. And I've learned to translate

the tasks that need to be done along an infinite game into finite, winnable, quantifiable, sort of higher, more fast-paced games, because a lot of people asked me to. Right? It's like, most people are just not okay on the full, like, sort of raw, like, you never know how you're doing. You sort of, like, even progress is not... It's a lot of ambiguity. It's not satisfying because, like, it's like...

there is nothing you're working towards. It's just trying to, it's its own, like it's progress for its own sake. It's not even progress for like an outcome that you're hoping for. It's almost a little bit spiritual, the pursuit of this. It's like you're doing this for your own purposes and nothing in society

tells people that this is anything worth doing. Or even that anyone else, like you can't have a career unless you climb some kind of ladder, which is finite. And then one run and one job up and one title change and like,

therefore people's identity gets tied into the finite like I'm currently crushing the finite game of being a senior UX developer or something like this and you think that's your self-worth and you're like and if someone comes to you and saying hey we don't do UX developer because we just moved to UX developer like that's actually an engineering job because it's part of engineering discipline we move them over there that's like crushing to some people and

delightful to others. And I was always wondering, trying to figure out how to separate people. And I do find you can sort of spot it in the language that people use talking about their own career. Shopify hires through, we talk about just your life story a lot. And I feel like you can find a lot of predictive artifacts in the life story about which kind of type of pursuit you're on.

But I think the key is just invite people. I actually think this is one of those, like, a lot more people would say, "Holy hell, that sounds like a lot more reasonable as a way I'm going to structure my career and my life than this sort of mill to do the same thing over and over and just trying to, like,

I don't know, hit the quarter close slightly better with a slightly higher number. You do that if you actually want to become one of the most persuasive people out there. If that's a thing you want to build. Or if this is your craft.

through which you make commerce better for everyone and make entrepreneurship more available through our products. If you can find the alignment between the infinite goals of a company and your infinite goals of the things that you really want to acquire for yourselves, and then you pick your finite games as things that have a second-order effect to help you along your actual journey,

there's a harmony that's unbeatable. And I think when you study really, really successful people, you invariably find people who are on some kind of intrinsic, sometimes unacknowledged to the outside world, journey of their own. And they structured their time

management in such a way that they spend most of their time doing things that are either valued by society, potentially for the purpose of a job, but actually spend, play dual duty towards their own goals.

We'll switch gears, talk about a couple of personal questions. One of which is, you recently tweeted that you had fixed your sleep. I'm curious, what did you do to fix your sleep? I have to admit, one thing, one compromise I made when COVID started is I had a prescription for sleeping pills, which I had just for sort of international travel. Like, so I could, I just added up like,

I was really worried about it initially because it's like, sleeping with a pretty slippery slope. It's easy to create a dependence on. But like, the other side was, if I can't do red ice, then I can just lose one day with my family on each side of international travel. And I just like, that felt like an easy decision to make. So I had this. When COVID started, I mean,

as you can maybe spot if like spools up chronologically here at the top i the things i shared about um you know going for all roadmap and looking at and canceling a lot of things and doing a million other things besides covet um for me meant

14, 16 hour days every day, like seven days a week for probably a year and a half, actually two years probably almost. I think I started taking weekends after about a year and a half again. Or at least one day. It was just like lots of my executives turned over who ended up just like

It wasn't for them to go into those times. So, for obvious reasons, anyway, this is sort of not making excuses. It's just I'm like, I can work two free jobs with my time management skills and background if I'm reliably sleeping six and a half hours a day, precisely. By the way, I thought I needed much more.

So, um, then--so I took sleeping pills. All it was to say I took sleeping pills. And I was like, "Okay, I gotta get off this, because I'm not gonna stay dependent on sleeping pills." And so I imagined this is gonna take me a very long time, but I'm saying, like, one of my first questions I ask is, like, "Who in the world is good at this, and what can I learn from them?" I'm like, "Clearly, a lot of people are good at sleeping." Like, this is some--this feels like a core skill for a lot of people. And, um,

You know what, because when you go into sleep hacking and you're like, okay, melatonin plus redshift on your screens and routine and all is the same and temperature. You know when you talk to people who are good at sleeping, they don't know of any of these things, they just sleep. It's actually almost annoying to the simplicity there. Okay, that was a backdrop. I'm like, okay, what's the theory here?

I eventually found that there's like, I mean, CBT is like a modern package. I mean, it's, if I might be clear here, it's like a modern packaged stoicism, right? Like, you know, cognitive behavior and therapy, that is. It's like sort of take stoicism plus, I think, a little bit of Alfred Adler and...

a little bit of young and then package it in a modern system that you can study and then it's like brilliant. It's exactly what we need. So good stuff. Unreasonably effective as a form of therapy. Has a lot of sub-theories. One of them is CBDI. CBDI is the sub-part of that called insomnia. It's actually awkwardly named, but actually it's correct. I think the taxonomy is correct.

So finding out whether this exists. I tried finding a doctor for it. I couldn't because there's only like, I think all of the United States has a hundred certified people that have been doing it since the 90s. Effectiveness rate is 90% as better as sleeping pills. They reliably fix everyone's insomnia in a bunch of sessions. And kind of somehow we don't talk about it.

I'm like, okay, how do you... I found a book to read. I think I read two books on it. They were pretty pop-sci-fi. I think you can pick any book because it's actually pretty basic. I actually found some apps that help, which I think is actually really great. Sort of entry point for...

app-based healthcare because I think what the practitioners do is very similar. They just put you on a program. They hold you rigorously to it. But these apps actually do a very good job on this. Actually, I have more data because

I have wearing an Aura Ring, which was very useful to have data before I even started with this already. I highly recommend Aura Rings or Apple Watches or these trackers, because having some data about your sleep is important. And then the apps can just help you interpret this. Okay, what have I learned? I'm not gonna go through the entire program because you just have to do it, but I thought this is gonna take me a month of a grind. I actually sort of pre-registered for Shopify, may have to take like full time off to do this.

by day three i slept for a night i have been sleeping perfectly ever since i mean once a month i maybe like wait what walk me through this this is like what what are the steps to to do that what app do you use honestly it just it's it's like it's mental unfortunately or annoyingly it's like it's i've thought poorly about sleep i've had i have had bad stories that i told myself like such as

If I wake up in the morning and I feel drowsy, I had a bad night's sleep. That's incorrect. It's like that just means you woke up in a different part of the sleep cycle. You cannot judge your sleep.

It's also, I add stories like I need eight hours of sleep. I don't. I, in fact, you can think if you've spent enough times forgetting to church your apple wash, you probably have enough data to figure this out. You go into the sleep app, you look at all of history, you get us to pull the average of your sleep

Like sleep is like hunger. Like there is no need to train for it. Like sleep will come, your body takes it. Like you probably like will tell you when you're hungry. And there's no, your body will tell you when you're sleepy. If you're not sleepy, that means just exactly one thing, you're not sleepy. There's a difference between sleepiness and fatigueness. Fatigueness is like you are running on too low sleep.

Fatigue can lead to sleepiness. They are often correlated. They are different things. You cannot sleep when you're just fatigued and not sleepy, but you can always sleep when you're sleepy. So what you do, on an effective basis, is you do create this routine. A lot of these tools are useful. But, and this is the hardest part, you do not do, basically,

that's some minor allowances. Anything in your bed that isn't sleeping. It's your bed for sleeping. You have a chair close by. You take your book there. You read there.

you do not bring your phone to bed ever, even in the afternoon if it's convenient and you're just hiding from kids or whatever. And it needs to be a little bit more Parthenobian to sleep, to allow yourself to go

sleep like into a bed if you're sleepy, you don't go there until you're sleepy. You learn how to figure out if you're sleepy, you will always get sleep at the same time of the day. And if you don't sleep, you don't need to sleep. You just... I'm going to sleep at like... I'm going reading at 10:00 every evening, basically. That's sort of like maybe sometimes a little bit earlier depending on how good my book is.

And then I go to my bed and I'm sleepy and I sleep immediately. I fall asleep. The sleep effectiveness rating on my sleep trackers is basically 95% now. That means on average it's like five minutes in bed that I'm not sleeping. And then some nights there's more, some nights it's fewer.

after like over a course of week it averages to exactly six and a half hours which is exactly what my what told me the average amount of sleep that my body takes um is now yeah you can be less lucky like you can be more unlucky here and you might actually need it um at which point that's your number um but this is uh yeah apparently there are people who need who actually legitimately needs up to 12 hours of sleep i i that sounds like

That's crazy. Incompatible with modern society, I really feel for those people. That should be treated as like, man, what a rough cut that would be to be dealt with. But there's lots of people who are fine with less. There's a book which initially I thought was good called Why We Sleep, which is actually very bad from everything I know now. I mean, it's not that the book is incorrect in the macro sense.

But it gives you... I think the book itself is anxiety-inducing because it makes claims on, which I don't think prove out on the importance of sleep and how everyone's goal should be to sleep eight hours and there is no variance. This is a...

bizarre claim to make given that they all they're incredibly good trackers now and we have all the data and we just simply know that that's not true um and so i think there's a bit of damage caused by this and i think we need to change the story okay so i don't know if that's like all content that needs to go on a podcast i i actually um i i don't know what to do with this i feel like it's just like

It's silly that we have so many people who can't sleep and it's actually something that seems like maybe this can't help everyone but like it seems to help everyone I'm sending in this direction. Well that's how I wanted to talk to you about it because everybody has problems sleeping and it seems like the most common problem these days is like you go to bed you don't have a problem falling asleep but then you wake up at like 2 or 3 a.m. and you're like wide awake and wired. Yeah exactly it's I mean

what you do is you get up to your chair for 15 minutes you read and your body is sleepy and then you go back and um after a while your body just doesn't do it anymore like it's it's i know it sounds crazy but like

It's like it takes two to tango. You need a brain and body for this. And if one of us is super not in on the job or not aligned with the institution of sleep, then you feel not sleep. I interfere. Yeah. Two final questions. What did you used to spend time on that you now see as a waste of time? A lot of travel. I think it's hugely pro-specialization.

spending time with people and I think travel is a sort of a tax on doing this which is totally like easily worth it but I think there was a lot of travel before that pandemic I think which was almost like I don't know feels like it was almost penance for meetings like it's just like hey there like it's like

your sincerity had to be proven at some kind of altar of sincerity by you sacrificing days of travel and airports and cross-continent travel and compromising your time with your children. It's just like, it sounds insane now, but we did this, all of us. That shouldn't come back. What should come back is like, hey, deliberate time spent with people that are important and then it works, and that's out. I fell a little bit into this

Work through the org chart, treat it as a trust fall, you know, like hire smart people and then get out of their way. I think that's a waste of everyone's time. It's not even good for the... Like, it's a nice story, but it's like dumb. It's like one of those would be nice if that would work, but doesn't. At least not... Maybe again, if you're going for middle of a bell curve outcomes, then I think probably it works, but...

In some industries that's all you need to do, but not in mine. We are trying for class. So I have enormous perspective and ability through, again, found legitimacy to make things happen faster. And it's not that I want to make decisions, I want to be part of important decisions because that helps me for my mental model. And so now I work, again,

on the old idea of a trust battery that we talked about in previous times we talked about about um together um the trust battery builds we work together we work alongside we make key decisions together as a team everyone brings perspective we listen to absolutely everyone but the choice at some point has to be someone's and um um yeah

that it's not a good place for faith. It's like, at the end of the day, if you're trying to make a work as product, it's all the details that matter. And for that, you need to have a team of people who are okay to go into all the details or at least can talk to the trade-offs that are being considered when we talk about the details. And so I think that's...

It's a way how I always worked on all technology. I like understanding many layers below the level I'm working at. Again, I feel very-- I don't know why it took me almost a decade, but it took me almost a decade to allow the way I've been successful in working with technology and software to actually fully come to fruition outside of working on technology.

like you like maybe this is sort of a thing you're spotting in our conversation i'm i'm a lot more at ease with the integration of those two things i think it's not even integration it's actually on collision course and i think maybe it's already happened i don't know man like i'm looking at some everything there's a lot of good content and something like how a business report and sometimes i read these things i'm like

That is some kind of weekend at Bernie's kind of style party you guys are on where you think there's still just... This is like everything that you're talking and taking as like statements and as this is the immutable truth is utterly invalidated by things that we've figured out in engineering system design 10 years ago and just

Because that's the nerds doing this kind of thing. They haven't been pulling out the lessons in the way like Nash pulled out the lessons from his poker evenings to then get a Nobel Prize for.

in Gabe theory, right? Like, it used to be that academia was better at pulling the lessons out of the practitioners, and I don't think that's happening anymore. And with academia not doing it, we should-- at least the business leaders need to do it more. And so, I don't know. I've changed the way I work, mostly around self-confidence and my--

Again, I think your intuition is all of the mental models, all of your experience. The supercomputer in our brain is utterly unsurpassed by all training machines combined coming to work to use everything you've ever seen to make the best decision in the moment and continuing just to build out.

the situations I can fold up models to or can say I've seen this before and you know that's how I become better at my job and

I'm not putting engineering skills on speed dial anymore. They are now the core of how I make decisions. And I, I, I just, that's been just a fascinating, like if I could travel back in time, like, and just give this as a, hey, this is, this will happen. I wouldn't, I would be extraordinarily surprised by this. I really was almost in a like, hey, I've, these skills took me here. They will not take me there. I actually need to

go for a change of identity and just, like, embrace me working for strategy and, like, a bit more of the sort of old school things a bit. I thought this was gonna work. It's blown up in my-- Like, I think it can work in peacetime. Mm-hmm. I think it cannot in-- I don't like wartime. I think crunch time. And, like, where, like, everything matters, where all the slack is gone. You know, like, where they're, like,

where it's much more of a high wire act of like, can you pull this off? Like, it's just, there's not enough slack in the system then. And everything has to be more precise. And the feedback loop is much taller. Like we are in a recession time potentially. It came out of COVID, which was like a different, like it's crisis into crisis in a way.

Although the weirdest crises compared to previous ones, like just bizarre shape to them. And therefore even less predictive than, you can't even really look at previous ones because we just never had an economy that was also good, but inflation, but all this kind of things. So in these times, there's like no margin for error, but like very tight feedback loops. It's actually,

better times for this kind of decision-making and, again, even more valuable. Very valuable and innovative in the new. You seem a lot more comfortable. I hope so. What technology are you most excited about right now? Well, I would say

I mean, look, I'll say Metaverse and Emma's Rolling Eyes. I think the Metaverse is like a Hemingway limitation. It's like nowhere and then suddenly everywhere. And it's like, it's hard to predict where it's going to be. We definitely have platform requirements around glasses, but like the labs are yielding those. We know how to...

I think we know how to make the lasers for the glasses now. Mine is maybe red. And like, this is really where academia shines. And there's a lot of practical industry relevant work happening. So that is going to happen and I'm excited about it. I think that it'll just be clear when it's openly going to that world. It's not as far away as people think.

Right now you got to say like machine learning. So machine learning has been unreasonably effective already. But all the transformer models change everything. Like it's another one of those, the transformer models feel a little bit more vocational than academic. And like they're probably not as good an analogy to the brain as maybe some of the other like approaches, or at least as popular as some of them.

But it's crazy what's happening. It's crazy. And another thing that I love about what's happening in machine learning is it feels like... I mean, DALI deserves, from OpID, deserves all credit here. But really, I have to say, as a sort of lapsed apprentice computer programmer slash hacker, I love that stable diffusion approach.

happened and not even for what it can do although that is stunning like who knew that so much of the human creativity could fit into 4.2 gigabytes of binary floating point numbers. I mean that's another thing to send back in a bottle like for a time machine and really really stun people with a

But we all live in that world where we know that that's true, which is like also something that doesn't feel fully reintegrated with our mainline human history. But what is so profound, I think, in stable diffusion is that it's gotten released as open source and now what's happening with it is just a monster. It's like all acceleration has... This is already probably maybe minus crypto the fastest progressing field in the world. And...

has just found two or three more gears there. Because if you track, like, I mean, we started, like, I think first versions on top of the line graphics cards on your own machine, you can execute this, right? It's open source. You could make an image in 15 seconds. I think we're down to three. And like, with no hardware changes. And just like, wow. Because the tooling behind machine learning was, again, it's a very academic field. It really feels academic. It's

jankiest hack. Not really an outcrop of the soundest engineering that I've ever seen. Although it's unbelievable what they've enabled, but it's coming from, again, mathematical purity rather than developer experience, this kind of stuff. So that's true. But now you have a lot of people who can contribute because we have an open source thing that we can all hack on. So suddenly you have people who are good at developer experience. Suddenly you have

people like John Carmack who are like, "Hey everyone, we can probably do this with less precision and here's like 15 ways no one's ever used a computer." I don't know if he actually is saying this, but like he will say this because he's that kind of person. He's going to tell us how to make computers do this thing significantly easier. And a lot of people who grew up on Carmack's contributions to video games and have been inspired and want to do and bring the same thing to this field. So,

everything changes every time there's a significant breakthrough in terms of speed and computation because it is extraordinary how many things we can do with language, large language models and diffusion models and transformers. And I just wish, in a more inspired world,

Yesterday's breakthroughs in the world of Stable Diffusion would be every single day of the last couple months. Front page news in the newspapers. We are just spending our time thinking about very relevant and very important, but although there's more important things going on in the world that are a lot more crazy, exciting, cyberpunk and optimistic. And I think that's

I think that's incredible. I just can't wait to see what's coming from there. I'm pretty optimistic about coming out of, like, whatever valuable things coming out of the crypto world as well. Now as that went through a cycle, they're just shedding a lot of the froth that was very obvious and easy to criticize for. And so I find that I am extremely excited whenever things progress. I

can watch three, four, five different fields right now, or if I'm progressing at breakneck pace, where, I mean, especially machine learning is the first time I think I found my total capacity, where I actually have to say, this progresses so fast, but I think my model of what's possible is falling behind, even though I'm trying to make that not true. I think sometimes I

just don't notice that something is accelerating and fall behind, but then I can catch up. There, I'm actually having trouble staying on top of it. I mean, maybe that's a statement about me being very busy at work. Maybe it's a statement of me being in my 40s now. But like, I don't know, if it's a test,

The machine learning model build is the first which is clearing it. The technical ram and I think very, very cool just for that because I think we have a lot riding on this. So that's awesome. The best is yet to come. It is. And it's going to be freaking amazing. There is no chance. Like I'll take a long bet for a lot of money on this if anyone wants to take it. It'll have to be a real long bet. But like if I'm right, I'll have to pay out. That

for the rest of human history, the 20 years before this point and the 20 years after are going to be more studied and will be treated as the coming of HMO species. They are going to be treated as the formative years where we went through the questions we had to ask ourselves, where we had to learn how to organize in a way that we save our planet or at least

um take the things that are available to us and and prioritize them based on something that is clear prioritization for the for for the for for the global good like where we actually band together i was had very high hopes this would happen around cobit covet felt the first time um maybe since uh since the plague has as a like

all humans got attacked by something and it might be a binding experience. We all know that didn't work. But I think we learned a lot about how information travels and how, you know, like the upsides and the downsides. We've become so much more mature in understanding what the world is like.

given all these new possibilities we have. And so I think these are all formative years in a lot of ways. They involve the coming of age of, I think, one of the greatest bits of, like, if technology is progress, the Turing machine is the engine of progress. And that almost all, like, net human progress is going to be built on, because everything else is going to round to zero.

and was probably mainly needed for bootstrapping the terrain machine. And they're like the early sort of custodians and explorers of this field. And I just, I have, man, like, there's no chance you would want to live through any different times. Hey, the future is fantastic, and we'll probably become immortal relatively soon and all these kind of things. And maybe not us, but our children definitely will. And so...

a lot of what people will be preoccupied with in the future is clearly what's next and what's possible. And many of the biggest questions will remain to be studied and to guide our curiosity, but like,

it's here where it all was like pop on the table and it was molded for one thing. And it just, it seems so incredibly great to be around, you know, to study this stuff. It's so fantastic to go and actually be a, like play a tiny little role, like make the tiny little dent into it. Like again, the crazy possibility that,

you know, so many of us who made these choices to get into this industry or pick up these disciplines and these skills, which all really, really help making companies, which are the implementations of large-scale coordination, which again, as I said earlier, it's like all the problems that are worth solving now are large-scale coordination challenges.

you know, we get to play our part in it and we get to make a dent into it. And I think that means we get to write into the most lit up parts of a historical record. I think that's just humbling and incredible. And we get to all play a part in it and that's cool. That's a great place to end this. Thank you.

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