Moving Forwards Looking Backwards
By Andrea Bullard
When Tobias Lütke quit his job to start an online snowboarding retailer, he was looking for a reprieve from the rigors of backend programming. The plan was to leverage his technical expertise to build an online store (Snowdevil) as cool as the products it sold, and then focus on his passion for winter sports and niche retail. The plan was to have some fun, but what Lütke encountered when he searched for e-commerce platforms was a slate of deeply un-fun tools that didn’t enable him to create the breezy shopping experience he envisioned. This was in 2004, when the best available programs included clunky options such as Yahoo Stores, Miva, and OsCommerce. “Customer experience” didn’t even factor into the equation.
“Truth be told, all those systems made my skin crawl because of how bad they were,” said Lütke. “The final straw was when I got a custom design made for my snowboard store and I couldn’t get it to work in Yahoo Stores. We had this great CSS-based layout done with all these new-fangled ‘web standards’ and the customizability of Yahoo Stores barely allowed me to change the background color of the top frame.”
Lütke decided to build the store from the ground up. The framework he used—a Japanese program called Rails—inspired the Snowdevil site’s lightweight interface. The retailer’s first year was profitable, but, as it turned out, people in his circle were far more excited about how Lütke built the site than in Snowdevil itself.
As they packaged up goggles, boots, and boards, Lütke and his partner Scott Lake decided they, too, were more enthralled at the prospect of helping other retailers through easy-to-use tools that would empower them to manage and grow their businesses. The pair agreed to funnel the money they made selling snowboard gear into something new. Lütke dubbed it “Shopify.”
The start of every business is a problem its founders experience or observe. As is the case with Shopify, that experience is often embedded in the narrative of the company’s early days: its origin story.
Every organization has an origin story, even if that tale is just a literal recollection of inception and launch. Effective and powerful origin stories, though, are like creation myths: they reveal powerful truths about an organization’s purpose and beliefs. Because companies are often asked to share their origin story repeatedly—in sales conversations, in investor pitches, and during onboarding—designing the origin story to careful mirror the key points in the brand’s overall story transforms it from a tale of days gone by into a powerful catalyst for growth.
Take, for example, how it allows startups to connect with early adopters. The struggles of the founder directly echo those experienced by potential customers, and the journey to develop a solution creates a personal connection to the product’s capacity to alleviate those struggles. The origin story creates an emotional context for understanding a company without much of a track record, casting it as the key to righting a fundamental wrong experienced by customers.
Shopify’s origin story was critical to helping it win early adopters. Tobias Lütke’s dissatisfaction with the poor customer experiences provided by other tools hit home with his pioneering peers in e-commerce. Its first wave of customers included Simple Sugar’s Gina Lazzari, who turned to Shopify after her brand’s mounting popularity exposed flaws in the technology she was using at the time: “We were away on vacation in the mountains of North Carolina with no internet, and we had this first national publicity, and our old website crashed,” said Lazzari. “That’s what originally led us to Shopify.”
It’s hard to find an article about Shopify that doesn’t mention its origin story. The right origin story is particularly effective for brands in competitive spaces, such as SaaS. Potential customers are often bombarded by companies promising technological transformation and touting amazing features and benefits, but a well-told origin drives at the emotional core of the brand in way a product demo never can. It’s proven that shared experiences and values lead to increased economic transactions—it’s no surprise that a brand with an origin story crafted to perfectly communicate its strategic story has total revenue of $2.93 billion from over 500,000 active customers, as Shopify did in 2020.
The origin story provides structure for internal growth as well, as it communicates the values and practices that define a company’s culture and position them as being foundational to success from the earliest days. Lütke, weary of the mundanity of back end programing, took great pains to ensure Shopify was (and is) a fun place to work: “My goal is that every single employee, at the end of their careers, will say that working on Shopify was one of the best times of their lives,” he said.
When looking to fill positions, human resources asks every candidate what do you do for fun? “In short, we look for independent, creative, fun-loving, and resourceful people,” said Lütke, precisely the qualities that defined his role in Shopify’s origin story.
Lütke’s pivot from programmer to retailer to SaaS entrepreneur inspired a culture that pushes employees to resist comfort. Comfort, he believes, is “completely useless.” Shopify employees are continually pushed into unfamiliar situations that accelerate learning and growth. Chief Platform Officer Harley Finkelstein’s job involves sales, business development, and partnerships. But the focus of his efforts changes constantly: “[Lütke] has created for me an insatiable desire to learn and grow every single day,” Finkelstein said.
Origin stories have particular resonance with investors. Investor Josh Ritchie has identified a brand’s origin story as a key factor in his decision of whether to invest in the company: “When it comes to deciding what company to give my money to, whether for a pair of shoes or a new piece of software for my company, I always try to learn as much about the brands I do business with—and the people behind them—before pulling the trigger. Basically, I want to know [the] origin story. That story influences how I evaluate a brand’s product or service and whether I want to join their vision.”
In addition to all the ways it connects with customers and employees, detailing how the brand overcame its early difficulties and sharing the motivation of the founding team gives investors a sense of a company’s humanity—and its ability to realize its potential.
Scott Weiss, a general partner at venture capital firm Andreessen Horowitz, looks specifically for stories that speak to the character of their founders. When asked about the most memorable origin stories he has heard, he often mentions his investment in Quirky.
Quirky, which helps everyday people manufacture and market products, was a natural extension of founder Ben Kaufman’s passion for invention. While still in high school, he devised the Song Sling, an iPod case with headphones that looked like a lanyard, allowing listeners to listen to music incognito. After persuading his parents to refinance their home to fund its mass production, he then flew to China, where he quickly burned through $185,000 and learned just how difficult it was to bring a product to market.
That lesson drove him to found Quirky.
“I can remember it almost word for word,” said Weiss, who went on to tell the brand’s origin story in his own language. “This quintessential story of a kid trying to get his first product to market with his first company. It was called Mophie, named after his dogs, Molly and Sophie. The process of getting them made in China, the shipping problems—it was so hard to do. He figured, ‘There’s got to be a better way.’”
Quirky’s origin story hits many of the same points in Shopify’s: it mirrors the company’s story to customers, conveys its founder’s motivation, and connects with audiences who have felt injustices similar to Kaufman’s. More importantly to the investor, it communicated the company’s zeal for realizing its vision: “When you heard Ben talk about his struggle and insight, you were convinced that he’d walk through walls to follow his vision,” Weiss said. Andreessen Horowitz invested $68 million in Quirky in September 2012.
The right origin story isn’t about factually retelling what occurred in the past: Shopify, Quirky, and countless other companies have benefitted from origin stories that reflect the organization’s purpose. A company must start with defining the strategic narrative it wants to communicate across all its channels, and then bring the origin story into alignment with that. The result may be apocryphal, like Apple founder Steve Jobs’ experience with calligraphy, but the impact of this approach is remarkable.
An origin story immortalizes the brands inspiration, giving it a near-mythic appeal, while at the same time making their feats seem attainable to customers who’ve encountered the same problem. This journey connects with stakeholders emotionally, and makes it incredibly easy for them to apply the company’s product or services to themselves—captivating early employees, customers, and investors drawn to the brand’s purpose.
Andrea is an associate at Woden. Want to stay connected? Read our extensive guide on how to craft your organization’s narrative, or send us an email at connect@wodenworks.com to discuss whatever your storytelling needs may be.