Waterloo talent a magnet for Shopify founder, Tobias Lutke

Tobias Lutke admits he didn’t know much about Waterloo until he went to Silicon Valley a few years ago. The founder and chief executive officer of Shopify, one of the hottest software companies on the Canadian tech scene, had gone to California seeking venture capital funding to expand his company.

When he told investors where he was from he was shocked at their response. “It must be so great to be in Canada because you’re next to Waterloo,” they told him. “I didn’t know what Waterloo was. I had to look it up.”

Lutke started what would eventually become Shopify in Ottawa in 2004 as a way to sell snowboard equipment online. When he realized the software available was expensive, complex and mostly geared to big business, he built his own. The rest as they say is history. Shopify has exploded into a company with 175,000 customers in 150 countries.

It has 780 employees, annual revenues of $180 million, and last year opened a small office at the Tannery in Kitchener. On October 1, Lutke was in the Waterloo region as the company announced a major expansion in Waterloo with plans to hire close to 300 people in leased space at the former Seagram Museum.

Great companies are built by innovative people in geographic areas with a deep and enthusiastic talent pool and Waterloo is that kind of place, Lutke said as he met with an audience of about 50 students at Engineering 5 at the University of Waterloo. He was interviewed by Michael Litt, co-founder and chief executive officer of Vidyard, a successful video analytics company based in Kitchener.

Wearing his trademark driving cap, Lutke said companies can get a fresh shot of energy by opening in new locations such as Waterloo. The Waterloo office will launch Shopify Plus, which is geared toward large retailers.

Lutke, 35, was born and grew up in Germany. He came to Canada in his early 20s after meeting his girlfriend, now his wife, on a ski trip to B.C. “Growing up, I wanted to move to North America,” he said. After spending time in Canada, he realized Canada was “the U.S. for Europeans.”

He began tinkering with computers as a kid by reading computer magazines, then trying their exercises on his home computer. He later learned this was called programming. He never could have launched Shopify without these programming skills because the software was so terrible at the time, he told Litt. Then he realized he was sitting on an “insane” opportunity to provide decent e-commerce for other companies.

An early key was using an obscure software platform called Ruby on Rails, he said. He tried building his online store with Yahoo software, but wasn’t happy with it. Ruby was “so difficult but so much more correct” and gave Shopify the “flywheel push” to outperform the competition, he noted. Shopify still uses this philosophy. “We’re always looking for new technology to leverage. We’re very, very current,” Lutke said.