Road maintenance projects in Toronto could use a few product managers!
My chat with Brandon Chu, VP of Product Acceleration at Shopify
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I first discovered him through his writing back in 2016.
A veteran of over 7 years at Shopify, he has been a product leader for 5 years and the head of M&A (they don’t call it that internally) for the past two years.
In this wide-ranging chat, we talked about writing, what founders shouldn’t learn from Shopify, what his team does, applying product management principles to the physical world, how to grow the size of the Canadian startup ecosystem, the big ongoing changes in the world, and what the startup blogosphere needs more of.
The case against writing online from a prolific writer
Like Brandon, Im a fan of writing. It has paid off in unexpected ways, both professionally and socially.
So naturally, the first question was about the downsides of writing publicly and often.
Dilution of ideas: “The fact that the writing will be published will impact the purity and directness of the ideas, especially for controversial things subject to cancel culture,” he told me. “An example is that homogeneous teams (as opposed to diverse teams) are better when a company is starting/small, which is intuitive but needlessly made to be controversial.”
He believes this causes subconscious knee-capping of our instincts as we consider the repercussions of every phrase and the bold idea associated with us.
Public perception: “If your writing sucks, it will create the foundation of your public perception, making it harder to benefit from writing in the future,” Brandon said. “You have something to lose by shipping bad writing.”
Product management principles in the physical world
I asked him to pick a topic where applying product management instincts would cause a meaningful step change in making progress faster.
He believes the government does not efficiently apply tax dollars or has a clear idea of its mission, how to prioritize potential projects against it, or how to measure if those projects succeed.
Road maintenance: “In Toronto, road maintenance projects take months for a single block. Commuters and pedestrians suffer en-masse, increasing commute times and lowering productivity. The government is narrowly focused on a locally maximising goal of “fixing the road safely” instead of a globally maximising goal of “making society more productive, healthier, happier,’ he said.
If they considered the societal cost of 3 months of road work and focused on minimizing the time of the project, Brandon said, “Road work would happen on a 24/7 schedule until completed. To compensate labour for working bad hours, pay an overnight premium, and let the market figure out who wants to do that.”
He adds, “Contracts should reward companies for finishing ahead of schedule and penalize them for going slower. It must be within quality standards, of course. This would shorter project times and potentially result in cheaper projects because of the competitive dynamics and skin in the game on execution.“
Growing the Canadian startup ecosystem
I asked him what his strategic doc would look like if he were tasked with 5xing the size and influence of the Canadian ecosystem over the next decade.
He told me the biggest blockers to are quality founders who want to start companies + risk capital to fund new ideas + employee density (especially leadership) + the ability to scale globally.
He explained the root causes :
Population: “Being a small country of 37 million, there’s a natural limit to talent density, and we suffer from 4 decades of our best and brightest moving to the US.”
Venture capital: “It is risk-averse, asking for 5-year financial forecasts for pre-seed companies and being covenant-heavy in term sheets. Because we have had very few large exits, we don’t have many operators with enough capital to seed the market. The vacuum left is filled by traditional PE and VC funds.
Culture: “There is a mindset that you can’t build big in Canada and that, at best, you are 1/10th the size of a comparative US company,” he told me. “Because so few companies have expanded beyond our borders meaningfully, there is a lack of experience on how to do that well (legal, tax, hiring, etc.) and when it’s the right time to do so. Many companies that break out of the Canadian market redomicile in the US and have to learn how that’s done from scratch.”
His strategy to unblock those areas would be :
To be extraordinarily welcoming to non-Canadian founders and talent wanting to start or work in a business here in terms of visas.
Hard pivot on public education towards maximizing the number of STEM-focused students
Make Canadian companies globally competitive through trade/tax deals with the biggest markets to make it much faster to start selling and hiring abroad.
He said most root causes have straightforward answers. He had some ideas for creating more risk capital :
A tax scheme that would encourage more pre-seed capital.
Easing accredited investor rules for individuals for companies to crowdfund.
“Operators from exited companies need to pay it forward, and the community/culture has to encourage that activity. The Shopify Angels group I’m part of has had this as a key focus since its inception,” he said.
“Successful exits create rich alumni → who fund the next wave of startups→ more successful exits. We’ll need a few more Shopify’s in Canada to hit escape velocity”, Brandon concluded.
What startups should not learn from Shopify
He told me his experience at Shopify through its hyper-scale period does not apply to startups at all. He said that the product management frameworks, the people management systems, and the organizational structures they developed are pretty much a distraction for a real startup.
“Do nothing else but build and sell, and do it as fast as you can” continue to be the most salient advice for most founders,” he said.
Avoid playing a big company: “Avoid planning offsites, annual roadmaps, and strategy cycles. Recognize your knowledge of the customer and market are so early that whatever you figure out likely won’t be valid for long and not be worth a large effort to formalize at any moment,” he told me.
Avoid hiring a product leader too early: “When early-stage founders want to “scale”, they say they want a “product leader,” but the idea that the founder would give up control over their product is ridiculous. They just need a project manager or a strong eng lead who can run a project,“ Brandon said. “They think they can’t hire good people unless they have the PM title. They hire a PM with the wrong expectations, who later realizes that they don’t have agency on the product direction.“
Platform is not an input: “Shopify’s ecosystem of 3rd party developers only emerged after aggregating tens of thousands of businesses that presented an economic opportunity to those developers. I see many pitch decks with seed founders touting a platform as a strategy, but it’s not feasible until they hit scale on the core product. Platforms are an output of product success that can propel the next stage, not an input.”
What startups could learn from Shopify
He mentions cultural values are one important exception. He has learned that the following Shopify values scaled infinitely :
Product thinking is everyone’s job: “Everyone needs to understand our product and have an opinion about where it should go,” Brandon told me.
Everyone is technical: “The marketers had to deploy blog posts through git for years. No content management platform.”
Get shit done: “Figure it out. Be entrepreneurial.”
Do the thing that creates the most merchants: “A simple optimizing function for everyone to remember so they can make good decisions at any scale.”
Shopify’s Product Acceleration team
He has been running the M&A and investments team for two years.
I was curious why the function is called “Product Acceleration” and not M&A.
Leadership: “It’s led by product people, not folks with VC or corp-dev backgrounds, and the team sits in the product org and rolls up directly to Tobi [Shopify’s founder & CEO],” he said.
Purpose: “It is a reminder to everyone, internal and external, about why we do M&A. We only deploy capital when it accelerates the product today or in the future, never because of a financial return.”
“Sounds cool!” he told me as the third reason.
I mean, yes.
On the learning curve: “I had to learn the nuts and bolts of deal-making: term sheets, deal process, where good deal flow comes from, VC psychology, how founders view corporate venture, and how to best position and develop our team.”
On product background edge: “The ability to nerd out with founders about their products earned us their trust and helped us develop a good reputation quickly. In leading Shopify’s developer platform, I had useful experiences regarding partnership development, integrations, and commercial deals negotiation - all of which enabled us to structure interesting deals.”
What startup blogosphere could use more of
Brandon thinks there isn’t a lot of good writing on how company building, product strategy, and execution tactics change as a company grows from pre-seed to public. He wants to read about how the team was organized, how they made decisions, and the alternative approaches that preceded the final outcome.
He told me, “Usually, only the founders get to see those transitions. Founders only have a sample size of one, so while they can write a great memoir, it’s hard to develop generalized thoughts on it.”
In most successful company histories, he thinks most of the content is just entertaining stories to create a narrative about the company being quirky and full of brilliant characters.
“Don’t tell me about the childhood of the designer who redesigned the box that changed the business forever,” he said.
What are we not paying enough attention to?
“The macro environment is getting rewritten, and I don’t think we’ve grokked the implications,” he told me.
He gave me a list of things happening now simultaneously:
1. Inflation at 8%+ and interest rates moving to 5%+ for a sustained period
2. Late-stage SaaS companies that raised 50x revenue last year are now priced at ~7-10x revenue
3. War in Ukraine and geo-political tension rising everywhere (China/US, Iran/Israel, etc.)
4. The rise of India, its massive English-speaking population, and its influence on the world and the West in particular
5. The rise of Southeast Asia as a manufacturing alternative
6. The next India is Indonesia or Nigeria, or both
6. The rise of populism and focus on shoring up the domestic supply chain, manufacturing, and energy
7. The rise of remote work
8. The rise of crypto
9. Incredible progress in AI (GPT3, Stable Diffusion, etc.) and biology (mRNA, etc.)
10. The imminent recession could be very long
“To build a great company, you must build toward the trend. If it takes 7-10 years to hit scale, what will the world be like in 7-10 years that should inform the type of company you build now and how it should be done?” he said. “I think founders have to reconsider what has been defaults for the last few decades.”
He’s pondering over the following questions :
Should you still domicile in the US and focus on the US consumer?
Should you hire globally not just for cost arbitrage but for cultural know-how?
As the West retreats from globalization, is crypto the only remaining global frontier?
How does consumer internet change, and how are customers acquired when AI can create content infinitely faster than humans?
How do you best capitalize and grow for the long term when investors are prioritizing profitability? Is the hyper-growth-through-VC-funding model dead for the next decade?
If I’m building physical products, do I now need to optimize for supply chain security?
Am I a remote-first company from day 1? Or an in-person-only company?
“At the same time, something should be said about not overthinking these things. Founders can’t control the macro, and it’s too complex to predict how all those factors will play out. So instead, go back to square one and focus on problems, customers, and building,” Brandon said in the end.
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