OTTAWA — With three new executives named to Shopify’s top table this month, the commerce technology company has swapped out its entire C-suite since the start of the pandemic, save its top two leaders. And as it bets big on real-world warehousing and delivery for its merchants, and tries to sign up new ones around the world, the Canadian tech darling’s leadership is increasingly based outside the country.

Executives with experience running very large tech companies remain relatively rare in Canada, and Shopify has had few peers for growth and scale in recent years. So the firm has increasingly filled its top ranks by poaching from U.S. software and financial services giants. In doing so, it has taken the remote-first working style it adopted during the early days of COVID-19 to a new level, abandoning the clustered, physical C-suite and leaving new leadership recruits where they are. 

Shopify made US$4.6 billion in revenue in 2021, closing out the year with a workforce of more than 10,000 people. Sales skyrocketed during the pandemic, as businesses small and large turned to the firm’s technology to sell online to homebound consumers. Shopify’s stock followed, making it Canada’s most valuable public company in May 2020. But the firm’s share price has since fallen back to earth as growth has slowed, and it’s laid off more than 10 per cent of its staff this year.

The firm’s two early leaders have been constants through all the upheaval. Tobi Lütke, who wrote the original software around which the firm was founded in September 2004, remains CEO and in control; in June, shareholders approved changes that effectively give him 40 per cent of the voting power as long as he remains an executive, board member or consultant. Harley Finkelstein, who joined Shopify in December 2010, was elevated to president in September 2020, and still often serves as the firm’s media face. 

But there have been major changes below them. When new CFO Jeff Hoffmeister starts in October, nine members of Shopify’s 11-person leadership team will have been appointed during the pandemic. Most are new hires who joined the company within the last year, replacing leaders who helped take Shopify public in May 2015, or came on board soon after. There’s been significant change on the rungs below the C-suite as well—more than a dozen vice-presidents and general managers have departed over the last two years, according to LinkedIn data.

Shopify’s management turnover reflects its recent scale and success. Lütke has “retooled how he thinks about where the company’s going in the future,” said Richard Tse, managing director of National Bank Financial Markets and a longtime technology stock analyst. The change in approach necessitates a different skill set than the one that helped early executives grow the firm at the beginning, he said: “They may not be the right people to navigate where they want to go in the future.” 

Last week’s changes included promoting Kaz Nejatian, vice-president of product for merchant services, to COO. (Shopify did not make Nejatian available for an interview.)

But the company’s search for experienced executive talent has also reached beyond its own ranks, and it’s increasingly recruiting in top echelons of the corporate and political worlds. In October 2021, Shopify named White House staff secretary Jessica Hertz as the firm’s new general counsel, and hired Allan Leinwand from Slack as CTO. Tia Silas, the new chief of talent, joined in April from a top HR role at Wells Fargo; she’d previously been chief diversity and inclusion officer at IBM. Hoffmeister, the incoming CFO, spent two decades at U.S. financial services giant Morgan Stanley, where he most recently led the tech investment banking practice in the Americas. He brings “deep insight on third-party tech companies, given his work on many recent tech IPOs,” RBC Capital Markets director Paul Trieber wrote in a note to clients.

Those kinds of hires reflect the firm’s aspirations to sign up larger clients, said Tse. Shopify began by building technology for direct-to-consumer brands and other independent merchants. But in recent years it’s scored a number of big-business customers, including major retailers like Aldo and Lord & Taylor as well as consumer-packaged goods giants Nestlé and Unilever. Shopify Plus, the company’s service for such clients, was bringing in US$33.7 million in monthly recurring revenue as of the end of June, just under a third of the total. “Someone who has that skill set in dealing with SMBs doesn’t sort of have [the] same skill set on the enterprise side,” said Tse.

The company’s stock run also helped make a lot of early executives very wealthy, he noted; some have left Shopify to start new businesses or invest in startups. The departure of others may reflect the more challenging operating environment the firm faces. “When things become tougher, and you don’t have that critical mass or momentum that you had in the early days, some of those weaknesses show through,” Tse said.

As it replaces them, Shopify has increasingly made additions to its leadership team across the border. The U.S. is by far Shopify’s biggest market, accounting for US$2.97 billion in revenue in 2021, or 64.5 per cent of the total. Hoffmeister and Silas are both based in New York, according to LinkedIn. So is Glenn Coates, named vice-president of product for the core platform in October 2020. Hertz and John Asante, hired as chief information security officer in August 2021, remain in Washington, D.C. New chief growth officer Bobby Morrison is based in Dallas, while chief growth officer Luc Levesque is a Canadian in Palo Alto, Calif. New CTO Leinwand is based in San Francisco.

By contrast, every member of the leadership team at Shopify’s IPO seven years ago was based in Ontario, with almost all in Ottawa. New hires into the C-suite in subsequent years typically relocated here, as when outgoing CFO Amy Shapero joined from New York-based Betterment in April 2018.

The geographic shift isn’t limited to the corner offices. Lütke declared Shopify “digital by default” in May 2020. The firm gave up its former Ottawa headquarters building and a Toronto location, although it retains workspace in both cities. As with other Canadian tech firms, the shift to remote-first helped attract executive talent, whom Shopify hasn’t required to move to its home town or country. Cathy Polinsky, former CTO at San Francisco-based Stitch Fix, cited the new policy when she joined Shopify as an engineering vice-president in January 2021; she departed this May, and subsequently took a job at San Francisco startup DataGrail.

Tse said Shopify is “clearly trying to really scour the globe for the best people,” and may make notable hires in Europe over the next quarter or two. But its “mind and management clearly still is in Ottawa,” he added. Lütke and Finkelstein and their respective spouses have acquired significant real estate in and around the Canadian capital, and are philanthropically active in the city. And while Shopify switched the placeline on its press releases to “Internet, Everywhere” early last year, its main corporate entity continues to be registered in Canada.

Since it went public, Canadian policymakers have held up the company as an example of a Canadian business success worth emulating; federal ministers regularly say the goal of scale-up support programs is to create “more Shopifys.” The company itself continues to fly the flag, particularly in its relations with government. As The Logic first reported, it proposed a $20-million federally-funded program in May 2020 to train young workers and help small businesses sell online. Its pitch to federal officials emphasized its Canadianness, and its contributions to the domestic economy.