This is a quote attributed to Harley Finkelstein, the CEO of Shopify, in a recent interview:
“It’s less expensive and more affordable to build an online store than to set up a physical store where you need rent, you need leasehold improvements, you need inventory, you need payroll to pay staff. It’s easier to get up and running, and it’s more affordable in a pure online context. When you add technology […] and you add companies like Shopify […], the cost of failure gets really, really low, which means that you can try something and, if it works, you scale it. If it doesn’t, you can try something else.”
To put this quote into context, here’s the deal: when the Covid pandemic started back in 2020 (remember, 2 weeks to slow the spread, right? now it’s three shots if you want to keep your job), government imposed restrictions created a bleak economic landscape, but Shopify managed to flip the script, i.e. the Canadian based e-commerce platform reported huge revenues, $2,9 billion respectively in 2020, compared to $1.5 billion the year before, which makes for a huge 86 percent increase.
As Shopify’s profits skyrocketed, as well as other major big tech giants like Amazon, Facebook, Google etc., while millions of small businesses went under, many have been justifiably critiqued for exploiting the year’s turbulence for maximum profit.
However, that’s how the current economic system works, and Shopify managed to achieve a symbiotic relationship with its small-business clients in a volatile economic environment.
Basically, Shopify saw impressive growth, yet, in the same time, it assisted small businesses in adapting their commerce strategies for an increasingly online world.
This is a “let’s coexist” business model, as Shopify accelerated its growth alongside small businesses, unlike other big tech giants/global retailers.