Shopify president Harley Finkelstein had no easy childhood, but today’s success is bittersweet. In a personal and upfront interview with Alex Hormozi, an entrepreneur and investor, he shares how he met his business partner Tobi Lütke and how they built their success together.
Finkelstein surrounds himself with two types of people: mentors and a community of peers. It’s, in fact, at a coffee shop where a small group of local engineers gathered on Fridays, where Finkelstein met Lütke.
Three things stood out from this podcast, all based on myths that entrepreneurs believe, but Finkelstein believes it’s only holding you back from achieving that six-dollar figure.
1. Sharing your business ideas with others.
2. If your idea fails, it’s a substantial financial loss.
3. Don’t let someone else cash in on your money.
Sharing business ideas with others
When starting a business, you first have to ask yourself: what will I sell or what service will I provide? Hormozi calls it “scratch your own itch,” which means solving a problem or selling a product you would have wanted.
Finkelstein says it’s actually straightforward. “Tell a bunch of people you are thinking of starting a business and just leave it out in the ether.” Many would laugh off this advice, as feeding your potential enemies all your ideas sounds strange.
The Shopify president’s first profitable company as a student was selling printed t-shirts. He says while he was telling people about his product, those who heard about it became his “think tank.” “The more people I spoke to about that, the more people were telling me, ‘Hey, what about this? What about that?’ Most of the things were not great ideas.
“However, one person made a valuable input one day, reminding him that universities spend thousands of dollars on printed t-shirts for students.” This idea sparked something in Finkelstein, and the spin-off from this short interaction became a huge stepping stone in his journey to becoming a multi-billionaire.
He says these people started becoming his ‘idea generation machine.’ Finkelstein believes the opposite of what new entrepreneurs think is true. “It’s super important to share your business ideas, even at the early stages of starting these things.”
Economical risk of starting own company
In the day, tremendous risks were involved when someone wanted to start a business. Finkelstein’s grandfather had to take a loan out on his house to afford the costs of renting a stall to sell eggs in his local community many years ago. “If this didn’t work, there would be no food on the table, no roof over their head.”
“Back in the day, people with more capital were able to take more risks; they could mitigate the cost of failure,” says Finkelstein. But this has all changed dramatically today. “Right now, the cost of failure of starting a business today is by far the lowest it’s ever been.” To start a Shopify business costs less than $40.
“The upside of starting a business today is effectively infinite growth if you do it well, you are smart and adding great value. The downside is a couple of less coffee for that week. That is remarkable,” says Finkelstein.
Hormozi finds it an interesting way to look at it and adds that it’s more accessible to run your business nowadays. “You just keep taking lottery tickets, and if you lose, you just buy another scratch-off. And you try it again.”
Nearly a quarter of US consumers (23%) are seriously thinking about starting their own business this year, according to the Entrepreneurship in 2024 Report. “That’s the highest I believe it’s ever been.”
He says the reason for this is more than just that technology is improving. “It’s because people realize that entrepreneurship may be the vehicle for them to find their life’s work, make their lives better, create independence, and do the thing that they love most. This is pretty exciting for entrepreneurship, and I think the cost of failure is a big part.”
Make your partner rich
“My Sunday project is called ‘Big Shot,’ an archive of the greatest stories of the most outstanding Jewish entrepreneurs of the half-century,” says Finkelstein. He meets these people, most of whom are in their 80s or 90s, sits down with them, and posts it on YouTube.
Almost all of them say the one thing they wish they had known when they were younger was to “make your partners really rich.”
Interestingly, the people he interviews have nothing to prove at their age. “It’s something that I think is legitimate. In entrepreneurship, there is no such thing as “one loser.” Everyone can win.
For Finkelstein it’s not about the end dream, how you’ll scale the product and your business; it’s about where you start and stay positive. “Partner with someone you would not have been friends with.” He believes these unique business partnerships are usually the most successful ones.
About the author
Mia is a multi-award-winning journalist. She has more than 14 years of experience in mainstream media. She's covered many historic moments that happened in Africa and internationally. She has a strong focus on human interest stories, to bring her readers and viewers closer to the topics at hand.
