Russ Jones, the former CFO at Shopify, spoke with us at a fireside chat about his evolving role within the company, leading them through multiple funding rounds all the way to a successful IPO. Russ explains what’s he’s learned about dealing with Canadian investors and the importance of telling your story as a company.
Russ begins by explaining the meteoric rise of Shopify. He credits their success to the ease-of-use of the platform with tools like a Business Name Generator and their popular Build-a-Business competition.
“The market is anyone who wants to make more money than the cost of the software. Starting a business on Shopify should be as much fun as watching Netflix.”
Clearly, this strategy is working for them. Shopify now hosts over 600,000 online stores and have processed over $4 billion in payments. He explains that a ‘fail-fast’ mentality drives the company, with their software team often running hundreds of mini-experiments at a time to measure the effectiveness of their ideas.
“Sometimes people get paralyzed by decisions, but can you undo the decision? If you can easily undo the decision, make the decision. Our approach is fire bullets and then fire the cannons. So try lots of stuff, and when you find something that works put more effort behind it.”
From 2010 to 2015 Shopify, went from Series A fundraising all the way to a successful IPO.
Russ acknowledges that the path wasn’t always easy. In hindsight, he wishes they had spent more time clarifying Shopify’s story and internally discussing the best way to position the company in the marketplace. Since their total addressable market ranged from individuals looking to sell small items from home all the way to some of the world’s largest companies, they had to create a fine balance in their messaging.
His advice on taking a company public? Don’t be afraid to put up your hand and ask for help. At the end of the day, it’s just another financial transaction. He advises to actually think about the day after you’re public:
“What are the metrics, what is the story? The investors will want you to say what they think appeals to their clients. But after that day, you own that story and need to keep telling it and show your progress. So make sure that you own the story and you’re comfortable with the metrics. You can’t easily change them after the fact.”
His final advice to a startup looking to raise money in Canada? First, make sure you’re working with the right investors. Not necessarily those with the highest terms sheets, but those who understand your company’s values and have the industry expertise to drive the company forward. Second, since Canadian VC frequently don’t provide enough funding and can leave you in a sub-optimal position compared to American VCs:
“Figure out what you need — then double it and add 50%, so that you have enough to get you to the next stage.”
Want to hear more about the factors that drove Shopify’s remarkable success? Listen to the full conversation with Russ on LumiQ. It’s time to start enjoying CPD!