Opinion

Letter from the editor: One entrepreneur’s magic trick

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I hope you’re having a great weekend.

I’m writing this on a flight back from a brief trip to Boston, where the celebrations for the Super Bowl Champion New England Patriots haven’t been dampened by the rainy weather. I was particularly amused by a statue near Cambridge Common of George Washington sporting a Gronk jersey.

Sixth time’s a charm and it never gets old.

On the flight over, I listened to a revealing interview with Shopify CEO Tobi Lütke on the Tim Ferriss podcast. In a two-hour-plus (!) conversation with Ferriss, Lütke spoke about the challenges of growing Shopify from a snowboard store offshoot to one of the world’s biggest e-commerce platforms.

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Highlights included Lütke recalling how he rented a bike to get to his meetings with high-profile venture capitalists on Sand Hill Road, introspection over his blunt leadership style and some of the benefits of scaling a company in Ottawa—including a longer employee tenure that leads to investing in people differently than how it’s done in more competitive markets for talent.

While I wish Lütke had sat down with The Logic for 120 minutes instead of Ferriss, I couldn’t help but relate to the tenacity and determination of someone who is clearly ambitious and courageous.

It’s an odd thing being a journalism entrepreneur covering entrepreneurs.

On the one hand, I’m in my natural habitat as an editor covering people doing some incredible—and sometimes not so incredible—things.

On the other hand, like many of the people we cover, I am also a part of the founder’s fraternity—a group of people who share the experience of building a company from an idea into paying customers.

Balancing my editorial and entrepreneurial mindsets is an intellectual magic trick.

Can I both admire and learn from another founder while still covering their company? Does my admiration for Lütke’s journey mean that we won’t cover his company with an analytical and sometimes critical rigour? Of course not.

Just this week, Murad Hemmadi looked at the long-term risks of having Shopify Payments, the company’s fastest growing revenue line, process all its payments through San Francisco-based Stripe.

But at the end of the day, it’s important to be reminded that we’re all trying to figure this out in real time—or as the cliché goes, flying the airplane while we’re still building it.

If anything, I hope that my experience as a founder trying to ramp up my own business makes our questions more thoughtful, relevant and nuanced than if I had never signed our own incorporation documents.

Speaking of founders, the story of Quadriga captured the world’s attention this week. The cryptocurrency exchange filed for creditor protection last month after its CEO Gerald Cotten died suddenly, owing $250 million to account holders.

Reporter Catherine McIntyre has been looking into some of the big questions around the crypto-caper and filed this dispatch:

I spoke with Taylor Monahan, founder and CEO of MyCrypto, who analyzed hundreds of transactions made on Quadriga. Much of those funds were thought to be locked up in cold storage, a typical safeguard against hackers. But Monahan’s search turned up “funky” activity on Quadriga’s exchange, reasons for which she cannot imagine are legitimate, she told me. The biggest red flag: there was no indication that currencies had gone into cold storage. If she’s right, even if creditors could find the key, the cold storage may be empty. The findings only heightened Monahan’s skepticism surrounding the case and the claim that Cotten—who finalized his will two week before he died—didn’t leave anyone a way to access the funds.

“This industry is obviously a bit immature,” said Monahan. “We don’t have a lot of regulatory oversight; hacks and scams and greedy people taking advantage of the masses is not unheard of. That said, when you’ve been in this space for as long as [Cotten] has, there are a couple core rules that you live by.” One of them, she said, is using “cold, cold storage” for big funds; the other is having multiple backups, in case the keyholder loses their hard drive or their basement floods or the die.

Perhaps the biggest problem with all of this, said Monahan, is that no one, by the looks of it, had analyzed Quadriga’s exchange until now—many suspicious transactions Monahan found happened two years ago. The saga is a cry for regulation in the space, including regular audits of exchanges. “It’s a public good to look into the exchanges,” Monahan said, “to hold exchanges accountable, to ask exchanges to provide their addresses, to force exchanges to prove that they have on hand the money that they say they do, et cetera.” Whether it’s a government agency or a members of the crypto community themselves, she said “someone has to hold people accountable and ask the questions before these things happen.”

Sources tell us that the winner of the long-awaited $360-million Future Skills Centre will finally be announced this week. Catherine broke the story in November 2018 that Ryerson University was the winning bidder.  As the Oshawa General Motors plant closure, high-unemployment in the oil sector, and the rise of the gig economy workforce have demonstrated, skills retraining is an increasingly important file. Thursday’s announcement will take place at Ryerson with Patty Hajdu, the minister of employment, workforce development and labour, in attendance.

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In what could prove a precursor for Canada’s federal election, a study from six U.K. researchers released this week found that in the run up to the Brexit referendum, just two misleading claims by domestic politicians spread 10 times wider than 3,200 tweets by Russian trolls.  

As Rasmus Kleis Nielsen, director of the Reuters Institute at the University of Oxford summarized, “Domestic politicians who make and repeat misleading statements are a more pervasive part of wider disinformation problems than foreign state-backed media and bot/troll operations. (troubling as these are).”

This is something I’ve alluded to in previous columns and that wasn’t addressed in last week’s news—first broken by our reporter Murad Hemmadi—that the federal government had allocated $7 million in grants to combat the spread of fake news online and increase digital literacy in the lead-up to the federal election this fall. As the campaign rhetoric heats up, keep an eye on how the politicians—and campaigns themselves—behave.