It looks like Shopify has broken the Canadian technology curse. 

When Tobi Lütke’s e-commerce outfit leapfrogged RBC in 2020 to become Canada’s most valuable publicly traded company, those afflicted by tall poppy syndrome were quick to their pruning shears. Doubters noted that displacing Canada’s biggest bank atop the mountain was a kiss of death. Nortel Networks, Valeant Pharmaceuticals and Blackberry-maker Research In Motion had all captured the flag before suffering miserable fates.  

It takes a certain mindset to wrap a negative narrative around a positive news story. You could dismiss it as Bay Street wags being Bay Street wags, except the Icarus allusions returned in a number of “told ya” commentaries when Shopify stumbled coming out of the COVID-19 pandemic. Lütke hadn’t simply misjudged the trajectory of demand for online shopping; he had flown too close to the sun. 

The price of Shopify’s shares on the S&P/TSX has risen some 320 per cent since bottoming out at around $36 in the autumn of 2022. That’s not enough to reclaim the throne at the Toronto Stock Exchange (TSX), but that hardly matters. If Canada’s most recent Nobel laureate Peter Howitt is correct, and sustainable economic growth is the result of innovation through creative destruction, then Shopify might be Canada’s most important company. 

Shopify is the only big Canadian firm that exhibits an observable commitment to steady disruption. The other companies on the list of S&P/TSX’s Top 10 constituents are the members of the banking oligopoly, a pipeline company, a gold miner, a bitumen miner and a massive investment firm. They are rent seekers and risk managers, not innovators and risk takers. That’s good for shareholders, but not so great for the economy. One reason Canadian productivity is stagnant is that the economy’s biggest companies have matured and no longer have an incentive to strive for anything more than incremental growth. 

Shift Canada, a charity that wants to foster “entrepreneurial courage,” earlier this year put three founders on stage at Toronto Metropolitan University’s startup incubator DMZ to discuss how to stir a notoriously risk-averse society to make bigger bets. Candice Faktor, who is co-founder and co-CEO of learning platform Disco, said that she thought part of the problem was that risk-averse business leaders beget risk-averse business leaders. “You can’t become what you can’t see,” said Faktor. 

You don’t see a lot of boldness on the leaderboard at the TSX. The exchange’s biggest constituents suggest that you get ahead in Canada by existing long enough to become a rent seeker; any company that succeeds by any other means is either an outlier or a flash in the pan. The incentives that drive those companies restrict the imagination of what’s possible. If an economy’s biggest corporations are all on cruise control—focused on returning money to shareholders rather than gaining market share or creating the next big thing—they become an anchor on ambition. 

Lütke recommends that founders read 14 books. One of them is Mindset: The New Psychology of Success by Carol Dweck, the Stanford University psychologist who popularized the concept of fixed mindsets and growth mindsets. Those of us with a fixed mindset believe intelligence is static. Because humans are wired to care about status, we are sensitive about having our intelligence questioned. We protect ourselves from these feelings by avoiding challenges, giving up easily, telling ourselves that effort is pointless and ignoring feedback. Rather than applauding the success of others, we feel threatened by it. 

It’s probably folly to apply a concept designed for individuals to large populations. But Dweck’s theory fits the Canadian business establishment rather nicely. It fits when Thomas d’Aquino, the godfather of Canadian business lobbyists, offers the idea of an economic and defence treaty with the U.S. as a “holy grail.” It fits when the oilsands miners describe carbon capture as a cost instead of an opportunity. It fits when the banks double down on harvesting wealth-management fees instead of making riskier bets on ambitious entrepreneurs. It fits when Canadian executives tell the Bank of Canada that they are putting all investment on hold because the future is too uncertain. 

Having a fixed mindset doesn’t make you a bad person, or even an unsuccessful one. But a fixed mindset means you’ll never know if you could have done more. If you avoid failure, you are missing out on chances to learn. If you give up on a project because it’s hard, you are condemning yourself to the status quo and leaving yourself at the mercy of your environment. 

It’s become commonplace for Canadian policymakers and think tanks to aspire to create more Shopifys, as if the perfect combination of subsidies, tax rates and intellectual property rights could replicate what Lütke and his fellow travellers built. There’s a blind spot in those beliefs. They assume Canada is suffering from a bad policy when the root cause might be a fixed mindset.

In 2024, business writer Larry MacDonald pieced together the Shopify story by combing the public record. There’s never one thing that explains success or failure. Luck is the one constant variable, and Lütke has said on many occasions over the years that fortune is the best explanation for Shopify’s success. 

But luck only works for you if you are willing to take chances. Lütke once described comfort as a “useless” feeling, because it’s during the “intense learning” that comes with discomfort where “growth happens.” Failure wasn’t a “bad word,” it was a “successful discovery of something that didn’t work.” Shopify’s “core competency” was being able to “thrive in chaos.” Those are hallmarks of a growth mindset, and explain why Shopify broke the curse.  

Kevin Carmichael is The Logic’s economics columnist and editor-at-large. He has spent more than two decades covering economics, business and finance for outlets including Bloomberg News, The Globe and Mail and the Financial Post, where he also served as editor-in-chief.