Shopify – A Tale Of Two Cities?

Starting a business is hard.

It’s very hard.
I’m not sure what’s harder: Getting the first sale or getting to your first million in sales.
As an entrepreneur you can do everything “right” and still not find a market fit.
Most businesses fail. Hard.

Success in business is the exception. Not the rule.

I also hate that people like to blame the tools and not the business.
That’s why articles like this frustrate me to no end…

Shopify has a growing problem with customer retention, Globe data study shows (via The Globe & Mail).

The article alleges that:

• The average life of a store on Shopify is 143 days.
• 34% of stores on Shopify survive their first year.
• 42% of stores survive after 254 days.
• 62% of the merchants on Shopify Plus (their enterprise solution) make it beyond their first year.

That’s not a Shopify problem… it’s an entrepreneurship problem.

And, in entrepreneurship, they don’t give out awards for participation.
You sell or you die.
Shopify can’t make your business idea work, it just gives you the tools to put it out there.

The data on business success has remained fairly consistent.

20% of businesses fail in their first year.
Around 60% will go under within their first three years (this will vary from country to country).
So… if there’s a platform like Shopify or Amazon third-party merchants… or even accounting software that makes it easier for a new business to operate, are they the ones to blame for a business model that didn’t find market fit?
It’s like blaming Google Docs for books that don’t make the bestseller’s lists.

Let’s look to see if Shopify mimics the real world of business.

I’m curious about the businesses that made it past their first 3-5 years.
That’s where the real rubber meets the road.
I’d be more interested in knowing how the businesses that have made it past the three year mark are performing on Shopify in comparison to a world before Shopify.

Shopify (and other platforms like it) have made starting a business easier for everyone.

I was around the e-commerce space when it was, practically, inaccessible unless you had significant money up-front to make it happen.
I’m talking thousands upon thousands of dollars to have your own ecommerce store.
Some might argue that having money to start a business is a good barrier of entry to have.
Some might argue that making the hurdle of starting a business so high just continues the cycle of inequity.

I prescribe to the latter.

And, yes, I am friends with many people at Shopify.
And, yes, I am a fan of the platform and an (unpaid) advocate for it.
Want to sell those bracelets that you’ve been crafting on the weekend?
Start a business on Shopify and try it out… the barrier is low.
Your first business idea may not work, but you will learn a lot.
For many entrepreneurs it takes multiple failures before it clicks.

What does this all mean?

The number of businesses that fail on Shopify should be higher, because people who could never take that shot at starting their own business, can and will.
More people are starting a business… this means more businesses will fail.
With that blessing comes many sins… scammers, ne’er-do-wells, people who don’t have the skills or acumen to run a business, and when a company takes venture capital money and then goes public… there’s a lot of greed.
And that’s (probably) the bottom line of this article.
It’s less about the true success of the people who took a shot and started their own business, and much more about Shopify’s stock performance. 
I’m willing to guess that the vast majority of venture capitalists and investors in Shopify haven’t built a business on the platform, but simply hope to make money on the backs of those that are.
Wall Street and Main Street are two different worlds.
Don’t let the media confuse the two.

Starting a business is hard. And, there’s no greater feeling than making it work… regardless of the tools and platforms that you used to build it.

I just launched a new business called, ThinkersOne (and, yes, we built it on Shopify… proudly). It’s a unique way for organizations to buy bite-sized and personalized thought leadership video content (live and pre-recorded) from the best Thinkers in the world. If you’re looking to add insight, excitement, and big smarts to your regularly scheduled meetings, corporate events, company off-sites, “lunch & learns” and beyond, I think you will love this. We have democratized access to the smartest people by providing a platform for these incredible and personalized “moments in time.” Will you check it out?