20VC: Shopify's Tobi Lütke on How AI is a Scapegoat for Mass Layoffs & What Will Labour Markets Be in the Future | Why We Need More Scrutiny on Charitable Giving, Governments are Bad at What They Do and Trump Derangement Syndrome in Canada

26:15Tobi Lütke:Like, he's so singular. Like, I did not touch the steering wheel of my car this morning. It just, like, drove me. It also didn't, like, put, uses any gasoline. I don't care particularly about this, but that's just, like, fucking hell. That's cool to have that option. And it's also an amazing car. So, like, I have a Model Y. I love it. And by the way, that Model Y that I love is like a car that is incredibly affordable compared to the norms of cars, right? Like it's better than any of the whatever fucking like Koenigseggs I could potentially buy. I have no interest in those because they're not as good as a car.

26:46Tobi Lütke:Then I'm going on a longer trip with that car. I also put a Starlink unit into the back and then just like if someone else drives, I can work from there. That's also Elon. And so like and then usually I open my phone and talk to the planet Earth. Increasingly, I don't know if you're an X. what you will see in this like you're gonna you're getting a lot of replies from people in japan turns out like uh like just you know like hitchhiker's guide like uh you know the bubble fish you know like that you know how much how central that is to the story it's like just like cool you know what the biggest chair your thoughts could a bad system on planet earth is x right now and um the biggest um one to n and at least um biggest follower accounts and so you know there's no barriers anymore you just talk some someone someone says something really really smart in in French or Arabic or any other language.

27:31Tobi Lütke:And I see it in my feed. And like, we can have a conversation in English back and they see it and so on and so on and so on. I will spend the rest of his podcast talking about the incredible gifts that he's made. He's captured some very small amount, like percentage point of all the hypothetical value that exists all around us. He actualized like a tremendous amount and captured some of this for himself, which he then reuses to do more of it. And like, he's like the one man engine. I'm just like, I'm marveling at this in a way that like, holy shit, how cool is it that we live in a planet where when you go through the list of the richest people on planet Earth, all of them have built something.

28:09Tobi Lütke:And that's like incredible. So what I really mean is not about Elon. What I really mean is the misattribution of who we should be angry at. It's okay to have a lot of questions of rich people who like inherited their wealth and then use it poorly or come to it by divorce, for instance. or like if you have not created the wealth, you very much are custodian of the wealth and you need to use it gainfully for society. I think what really sucks in the world is that we are prioritizing things that sound good over things that work. Like, I mean, real people don't. Everyone knows exactly what's good when you talk to them.

28:42Tobi Lütke:It's just that media, like especially state-run media and sort of distorting media, like the stuff that's been around for a while, is on a beat that just like very intentionally trying to obscure what to be upset with. Well, so if we just combine those two together, media is kind of distorting what to be angry about. I remember when Jeff Bezos's wife gave some extremely large amount of money. I can't remember what it is. And they kind of then chastised her for giving it away inefficiently or to the wrong organizations or to the wrong people. And I was like, my God. But that's the good part. So this is what I want more of.

29:17Tobi Lütke:So maybe we are on different sides on this. But like, again, giving something money, ideally through a transaction. So someone starts a Shopify store, sells a new thing, ethically sourced leather jackets, whatever. When you purchase this, presumably it's going to be slightly more expensive than leather. But what you do is you make a vote for it. You make a vote that you think this is a product that should exist and you vote for free money. And what will happen afterwards? That creates resources for a company. And that means it's a viable product. They can employ people. It's a vote for everything that made this.

29:48Tobi Lütke:It's also a vote for the supply chain that was created. Like the ethically sourced leather now has a customer that's viable, an additional one. Therefore, the numbers go up. Therefore, the production can ramp. And eventually, like it's going to come down in price. And therefore, it might even be, in fact, with synthetic leather, the potential is to make it cheaper than the alternative that some people have, you know, just like a lot of issues with. The point is every dollar everyone spends is a vote. Real democracy actually happens by capital allocation that's distributed. This is also why we need markets and why capitalism works, because capitalism causes markets.

30:22Tobi Lütke:Capitalism doesn't work intrinsically. It's like it just happens to be the thing that causes the most intelligence to be imbued into the markets because it's the least distorted. And so when money is used, you should figure out what the second and third order effects are of this. And like I think, look, if you obey Internet, this is sort of like hot of the presses, but it's just like pissing me off to such an unbelievable degree that I just can't stop thinking about it. And maybe a really disarming example of this is I went to a conference once, like I stayed to, like went to a Ruby conference, like 2004, like five, maybe first Ruby conference.

30:55Tobi Lütke:I think first programming conference I ever went to. I stayed for a weekend because at the same hotel, there was another tech conference, which was a conference called, well, it doesn't really matter, but it was an object-oriented programming conference. And basically the first talk was, well, guys, I think we won. not quite sure what we're supposed to talk about because everyone's uh writing code object oriented right now and so um it was hilarious i love the honesty is this is a kind of honesty you can only find amongst nerds i think they actually i don't know if ipsula ended up being held again but like i i think everyone was just sort of like doing a victory lap over their cause and so in real world we don't do that when when we run out of a cause because we cause that cause to continue and so So I think there should be a lot of scrutiny for how money is allocated.

31:40You know what I mean by placing such scrutiny on giving, you just prevent people from doing it in the first place.

31:46Tobi Lütke:Like giving money is not virtuous unless it causes the right things, even if it sounds good. We need to get away from making good sounding things being like beyond scrutiny. It's like you need to figure out, you need to look at the data. You really need to figure out what effects you're causing in the world, right? But what I worry about is people like respectfully you, and I didn't mean to make this personal, but you, you don't have time to do the DD on the organizations that you're giving money to. You're building an incredible business, changing your generation. So then you just don't bother.

32:16But if I said to you, here's an amazing organization, just trust me on it. Well, the scrutiny would say, don't fricking do it. You like Harry, but you don't know. So it stops all giving. And then good organizations that would have got money. Don't get it.

32:28Tobi Lütke:Whatever good organizations. This is totally like you show as good organizations, they are getting a lot of money. Trust me, money is being captured by really bad actors in these systems. You will very likely tell me about Carnegie's libraries very soon, because that is the go-to example. That is a hundred something years ago. That's the thing that really worked. Rockefeller built hospitals. That wasn't enough. Carnegie built libraries, complete banger. When I thought good, I just thought of Jensen and Bloom Energy, how we're going to fund compute exactly those are commercial things this is the thing like it's like we have too much charity dollars the problem with charity dollars is they can't be given to anything that has a self-healing fitness function like which is very fancy way of saying the words for profit markets are voting of if a thing should exist and not for profit like the whole term everyone should be deeply suspicious about because you basically said oh the best fitness function mechanism that planet earth has ever invented the thing that's only thing that's ever raised anyone out of poverty really at scale is the thing you're not participating in so so you're documenting that you're opting out of markets but you will not tell us what your actual uh like fitness function is and fitness function is just like how do you know if the game you're on is worth playing and continuing therefore the fitness function is going to be just determined by anyone.

33:54Tobi Lütke:It replaces merit of organization with pull of individuals. Who is attracted to these places? The people who want to do something for which you have to use, you know, pull. You know, the smoothest talkers, it's not the builders who are doing it. They go and like then, you know, run these institutions. And by the way, this is not a bad faith take. This is the system that's set up. It's fine. Like, and you know, sometimes it works. And like, yeah, great charities. Do you believe in government intervention? I'm in Europe where we have a lot of government intervention? No, not really. I mean, okay, so let me rephrase this.

34:25Tobi Lütke:Yes, I am a fan of Friedrich List, who is a Prussian. Long before James Hunt and Niki Lauda's rivalry, there was Adam Smith, Lasse Faire, and Friedrich List and the Prussian school of economics. And so what the Prussian school says differently to Lasse Faire is that the role of government is very simple. It's to define games that have as externalities societal thriving and then completely get out of the game to then let the players in this game cause through means of competition extremely positive externalities to accrue to society which you know again happens automatically in profit-seeking markets because again what a company does is it takes the potential value that exists which is infinite, absolutely infinite, and coalesces into products that other people then vote for.

35:19Tobi Lütke:And again, the voting mechanism causes then a larger supply chain and more of a supply of these products coming into society. And then that creates a wealth and then the wealth is part of a society. And any dollar that's created in a place that brings new dollars into the system cycles seven times for society in a local way. So dollar flowing into like a community. So this is why it's important to have local businesses. then cycles seven times through the payroll of people in there, like again into the company, then through payroll out, and then to the barista's salary at the local Starbucks and so on and so on.

35:55Tobi Lütke:So money itself is amplifying. This is through mechanisms of trade and also through debt creation by banks. So am I for government interventions? Governments are extremely bad at what they do. Everyone needs to know that the moment a government takes over anything, it will cost 10 times as much which is really really really bad because it's just like the second someone says let's run grocery stores as a government there's going to just be like a couple hundred people like me have to go and build companies to make up the wealth that just simply evaporates in this moment right like so but one of the most inspiring things that humanity's ever done is outsource violence to governments because that is causing you know just like that creates the environment in which personal property can exist.

36:40Tobi Lütke:And personal property is the boundary condition and foundation of everything else I'm talking about. We mentioned kind of fears or concerns or what our society is worrying. One thing that worries me is bluntly Europe falling into this kind of chasm of irrelevance. It's why I started Project Europe, which kindly supported. You've got US and Canada and you also have Asia. What would your advice be? Or if I placed you in charge of Europe for the future, what would you do to encourage growth and innovation in a relatively stagnating economy? I have lots of thoughts on this, of course. Canada has all the resources that planet Earth needs for literally everything that we are going to do for the next 20 years.

37:18Tobi Lütke:It's purely a choice. Canada ought to be the richest country on planet Earth. It can become that every moment at once. It's actually quite easy. It just has to be willing to build some minds, right? So, which somehow is controversial. Are you proud of Carney's pushback on Trump? I've had him on the show multiple times. I'd like to say he's a friend. I love the interview. It was a very good interview. I think I watched the second one with Connie. Are you proud of him as a Canadian for like bluntly standing up in an independent way? I can't say I'm proud of him for that. It's one of the greatest speeches I've ever heard.

37:50I don't think it's a full credible witness to the reality on the ground.

37:54Tobi Lütke:I also love a speech that is an ambition for a country. I personally disagree with the stance to the United States. I think Canadians are massively overfit to niceness. Like it's kind of the best thing and the worst thing in a country is like to prioritize niceness. Because, I mean, it's certainly pleasant. But the problem is it leads to unkind lies, right? Like it's like it means like you're lying by omission. You're lying by saying things are fine when they aren't, right? Like it's like this is a, you know, can you speak the truth is a much more important test. So unfortunately, the way that intermeshes with the Trump administration is really brutal because it creates this sort of positive feedback loop inside of Canada.

38:36Tobi Lütke:Because he is so unbelievably not nice. In any which way you look at, there's a Trump derangement syndrome in Canada that is just stunning. 60 % of people, more than 60, I think the numbers have gone up since. People think that the United States is the largest risk to Canada, like much larger than like Russia or China would be. And you think that's wrong? Of course it's wrong. is because Canada is a small economy attached to a hegemon. There's been one winning strategy in Canada's history, which is win by helping America win. And that's like Kanye's saying that it's over. Like everything he's doing, I'm agreeing with.

39:11Tobi Lütke:Like it's like, hey, let's diversify the economy. Bang idea. Let's get closer to Europe. Perfect. Let's go. Asia, let's go. Like I'm pro all the things. I just really don't think we need to choose. Like it's like the obvious way for prosperity here is to build the shit out of pipelines, and split the shit of our industry, like get resources that everyone needs, fucking starting to actually refine the stuff ourselves because like we have the most educated workforce on planet Earth here and we can literally do everything. It's just the problem is, you think, are you still in London? Like Canada started for trapping beaver pelts, sending to London, getting them turned into hats and then buying them back, right?

39:47Tobi Lütke:Like it's just like, this is the Canadian self story is we get the resources, other people make the money. And so we've never changed from that. So we don't make the end products usually. And so therefore, it's very, very rare that Canada does anything. It's like Canada Goose, Lululemon, Shopify, maybe Miller Lite. What other products exist from Canada? You mentioned that we over-exaggerate the concern around the US or the threat that they pose. The thing that I think we were all not talking about is how every great American company is using frontier American models and then going, well, that's too expensive.

40:20So let's use open source Chinese models to get as close as we can to the benchmark set by US frontier models. and it's like these CCP funded models are basically powering a lot of the US startup ecosystem in many ways. Do you think the Chinese threat is underestimated?

40:34Tobi Lütke:I mean, I think it's both underestimated and overestimated, but like, you know, I think the much more bigger threat is that in a lot of countries, I think this happened in Spain already and I think even in the United States, social media aside, like the moment the government has the ability to decide at which age children can use technologies, it goes like taxes, right? Like it's just like AI has so many naysayers, like we are going to tell kids they can't use AI. kids will not stop using AI. What they will do is they will download Chinese models and you will never, ever, ever get another high school essay about Tiananmen Square as a consequence of that.

41:06Tobi Lütke:So is that truly the word we want to create here where children are incentivized to get a monoculture of... Because models are trained and are LHF'd into a perspective. Chinese models are, I mean, especially if you switch them to Chinese and then ask something else to translate, it's a very collectivist worldview, which makes sense because of a collectivist country. I mean, this is the predominant fight. Like all politics is just collectivism versus individualism, right? Like it's everything else is smoke screening, this stuff. Do you let your kids have social media? I was going to ask this of one of the biggest technology leaders I can tell you after the show.

41:38And his team was like, that's the one question we won't let you ask.

41:42Tobi Lütke:This is going to be super, super unsatisfying to people because I feel people hope that I would have a very strong opinion of this that's actionable and I don't because for the craziest coincidence, my kids are totally uninterested in social media they completely don't give a shit they follow links to uh social media sometimes but they have no interest in being having accounts and they don't have phones they've never asked for them it's like it's bizarre i saw them when they were very small so they have pcs right like because we make we do video games as a family and um i once i've probably just ran my mouth i i when when phones came up it's like i think tristan and my wife said that um like a bunch of kids in his class are starting to get phones they're just super distracted um and it's cutting into their book reading time which i mean tells you a lot about tristan and then i said yeah like i mean at some point you will ask me for a phone and i'm gonna you will have to cash in your pc because you can only have one of those two things and some of that became the meme in the house and they're just like so into their pcs that like it just never comes up so honestly i i can't add much to this uh uh conversation i also have three boys which i think is a very important uh sort of data point there because i think the situation with social media for what it is, it's like very different there with agendas.

42:54Going back to our question, I'm making you the new president of Europe, which is a brilliantly American title, which doesn't exist, obviously, as I'm aware for anyone who's about to chastise me in the comments. What would you do to ensure Europe remains on a global stage?

43:07Tobi Lütke:Well, you have to get rid of the climate cult, first of all, because it's just like, I mean, it's one of the most evil things that's been wrought on population. So when you say climate cult, you mean? random green parties having as part of a founding myth that somehow nuclear power plants are bad and shit like this but like it's everywhere right like we can't build incredibly important infrastructure factories because some fucking frog breeds once in some fucking creek on the perimeter and to the shit right like like what the fuck is you know if if we would be in a saner world and uh someone would go and like write a sort of sci-fi book about the future and describe the shit that you actually have to do to do something on this plant, the book would go nowhere because everyone's like, this is just completely made up.

43:50Tobi Lütke:But actually, we all live in a world where just like people do not understand that there's very few people who have a capability to truly build things. And they need to be enabled by the village to build those things. And then they also have to be held accountable by the village. Again, I think Europe, especially now that the UK has left the European Union, needs to double down on Prussian economic theory of Friedrich Lister and his co-conspirators and just define excellent games that create internal markets. You know, a country is defined by its like sort of internal, again, government services of, you know, like security, safety, property rights, body of law, policing, and these kind of things.

44:29Tobi Lütke:Governments have no money. They can't make money. They can only take money by compulsion, right? Like from people who create things or work, which is fine. because that is a funny mechanism by which then they are doing these services that we deem valuable and build infrastructure and so on. And I mean, the infrastructure is a really interesting case because infrastructure, it's probably the most profitable thing that exists and ever has been existed. Like just building highways changes everything and building an airport. Everyone's about how much an airport costs. Every airport ever built that's actually connected into the sort of hub and spoke system on planet Earth is probably like, I mean, especially the older ones are probably running trillions of dollars of profits in societal true value creation.

45:10Tobi Lütke:Infrastructure is like one of those things that businesses are really bad at making. And it sucks that we're committing businesses to have to build infrastructure of this thing because it just doesn't actually fit into the timescales. Like even the long-term focused businesses can't really build infrastructure very well. You have the odds basics that can start a new city in a swamp, but that's going to be just like, It's not the way to do it. So infrastructure building is very good. And in the end, you define games. You are therefore getting an economy that's growing. And by the way, there's no speed limit for that.

45:41Tobi Lütke:Then afterwards, you can have a discussion about how do you take the riches from this economy, like the additional profits, and then sculpt the economy that you want. And this has been, ever since the Enlightenment, this has been a path by which all progress happened. What were you wrong on that cost you the most? Very often, most of the things you're wrong about are like the paths not traveled, where you many years later understand that the counterfactual would be like a better position. There's, I mean, lots and lots of deals. I think my most public mistake was going into full-on logistics and physical warehouse building just before AI got really good.

46:18Tobi Lütke:And we didn't have the ability to, you know, do both of those things at the same time. So we actually had to like abandon this thing. I still think the initial decision was right, which is actually how I evaluate my performance. But actually, I think this is actually starting to be harder to make that case because I now know about information I could have had and would have been available to me back then that would have discredited this path. So I probably just actually got it wrong and maybe just admit this. That one sucked because it just affected people's lives with employment and so on. But I'm wrong all the time.

46:50Tobi Lütke:I've been wrong more times than most people will ever be wrong because I do a lot of raps on it. I make falsifiable statements because I want people to falsify them. I'm unafraid of a conversation. I'm unafraid of, I also just, I don't care that much about what people think about me, honestly. Do you not worry that with the weight of your decisions and the weight of your voice, when you speak 7 ,000 people follow you, the frequency of your wrongness, that could be very costly. I think you've said before your job as a CEO is to inject chaos into an organization. I prefer to call it temperature these days, just because chaos probably is too negatively connotated.

47:28Tobi Lütke:I mean, what is heat? Heat is atoms that jiggle. And with enough heat, these atoms usually come in the form of molecules. And with enough heat, molecules refuse into something maybe worth having more. That's what all of chemistry does. It's very hard to forge anything new at room temperature. So I think great leaders must be exothermic and must be a heat source for the company um it's very different opinion than the custodial uh idea of leadership which is also a valid position to take i do not need to inject heat into any area that has heat that's not needed like there's some areas that are so red hot because everyone's just like so into just chasing innovation or like just incredible vision or whatever that like just like my services are not needed here i get to get to play a completely different role in these areas um but those are usually not the ones i spend my time on because i spend my time on everything that's wrong again why people should not overestimate how good these jobs are because you literally i have a folder so one of my concessions to potentially maybe call it vanity i don't know if it's quite vanity but like maybe call it uh motivational plumbing is uh like just like i have a part of my obsidian folders that are just like people that i respect who said things about things i built that are meaningful to me little jolts of uh positivity and mini accomplishments because every once in a while like just like especially you can i can handle a couple days of this but like once it gets weeks i only heard things that are going extraordinarily poorly or people making life decisions which like have incredible like i mean just like retire maybe or like do mojitos on beach because you know just like and there's like deep consequences like months of work to figure out how to you know create continuity of an area that otherwise was going great or whatever or much worse any of these kind of things um you get a lot of people's health issues like you know just like it's all affects companies right so so sometimes you just get into these like really really dark places and then it's just like a nice pick me up so like i'm not completely detached emotionally from this in fact i'm actually enormously emotionally attached to shopify i think that's actually a common thing with founders too which is why i'm surprised when you said earlier you don't look at the ticker every public company ceo i meet is like it's not the ticker has nothing to do with the company i'm building the ticker is a is guessing at the fair market value of a company.

49:42Tobi Lütke:I work on a fair market value of a company. Like the ticker is just other people's game to make trades based on their assumptions of a future compounding fair market value. When has the ticker been most wrong? At the beginning of COVID. I think the ticker went up, I don't even know, like a lot. 100 % something more. We did not get 100 % smarter in that moment. This is as a founder, especially again, as someone who has lived with a ticker for 10, 11 years this is really not surprising or confusing i have not looked at the ticker in april i know this for a fact it's probably much longer than that but i definitely know i haven't looked in the last uh 23 days when we record this which by the way makes you a complete anomaly i pretty much only interview public company ceos now and i've never met one like you again it depends on where you are depends on kind of company you're on in some companies it also has more relevancy right like i mean if you run a gold mine you have no differentiation in the You might have differentiation in the amount of mining rights.

50:39Tobi Lütke:I talked with a goldmine guy. This is why this is my example here. I just thought it was funny. For them, technology is actually investor relations. If you are the CEO, your job is to be everywhere and play golf with everyone. Be extremely charismatic because if you can somehow finagle your multiple to be slightly higher than the other goldmines, you just buy the other goldmines. This goes very quick. So you consolidate. It's actually your product is not the gold. Your product is actually your IR. So investor relations. Yeah, I mean, that sounds like not an environment in which I would thrive, sure.

51:11Now I know why you're not a venture capitalist, Toby.

51:15Tobi Lütke:I think it would be very bad, a venture capitalist. I imagine. I don't know. I tend to think I can onboard to anything. It wouldn't come natural to me. Therefore, it would probably not what I would do. I'm just too interested in making things. I will work every day of my life. Toby, I'm going to do a quick fire round with you. So I say a short statement. You give me your immediate thoughts. What have you changed your mind on most in the last 12 months? One thing I'm wrestling with is I had to change my mind. I thought straight out of school, engineers would have a really big advantage with no priors and like immediately sort of being AI native.

51:49Tobi Lütke:And many of them are exceptional and are speed running their careers in ways. And there's even younger people at universities. Like we had an intern with 13 from Waterloo, which is like still blows my mind. And he was not even in his first semester. his mom has to accompany him for classes which is like it's like i love this and and by the way he's very good like it's just unbelievable so you know we're seeing like incredible uh like sort of career trajectory increases that i think are coming here but i had to change my mind here because initially i thought just having no price would be better because we had to reinvent everything turns out the way uh i think authentic programming actually works you give an initial problem you give a task it might come for a ticket afterwards an engineer like constantly talks with the AI to like steer it in the right direction.

52:34Tobi Lütke:All engineers are massively underestimating how important the steering is. It's incredibly important. It's actually, it's just the same as programming. It's just very high level. And it turns out that just having done a lot of reps and having seen a lot of those just means senior engineers just steer these things in such a way that like they can accomplish incredible feats in their little time. So I don't know what that means exactly, but it's something I had to change my mind on. What role does not exist today that will be incredibly common in five years time? There's something about this context engineering, which I had a hand in popularizing term of.

53:06Tobi Lütke:I think that will become more recognizably like a role in companies that will potentially subsume a bunch of other more specialized roles right now. Honestly, it turns out, I think people who've done like engineering management and management general are actually excellent AI programmers because they actually have been prompting intelligent agents for much longer than cloud code existed. And they are just good at communicating. So that's now, I think, increasingly the best work is to prompt other people and AIs directly as sort of part of the same team. So I think there's going to be something that like maybe some ascension path job that you can get into from product, from design or from engineering.

53:49Tobi Lütke:That's like something like a product builder role. It just involves like the coordination of intelligent actors to build products. It won't sound or look or be described as what I say, but like that sort of direction out here. I mean, honestly, people with good communicators are usually good thinkers because like good communication usually is like distillation of complex thoughts into unambiguous words. Even when I say this, it just sounds like context engineering, doesn't it? Right. Like I think that is becoming a very, very, very important role. If you're building a large-scale AI system, we have one thing called River, which lives in Slack and does some ludicrous amount of Shopify's engineering now.

54:29Tobi Lütke:People just talk to it over Slack. And it's called River because our Shopify has a very big monorepo. The monorepo is called World and River is shaped with World. So I think that's very poetic. River named herself. We first built her, then asked her what name she wants, and she came up with that. And that's kind of crazy. So River sits on Slack, does a lot of Shopify's engineering with people steering her to public Slack channels, which is awesome because then everyone learns from everyone else. What percent of code today at Shopify is AI generated? It's a fair deal over 50%. It's converting to much higher numbers.

55:04Tobi Lütke:I don't think we've updated public numbers there, but like it's many of our best engineers have not written code this year ever since December. Like December changed everything. Like Opus changed everything. Does that excite you as someone who loves the craft? Oh, I love it. It's so wonderful because I just like, I love the craft and I can, the craft is not lost. Also, I love mechanical watches, which make no sense, but like they're selling more than ever. So people always overestimate. Again, this is what it, this is what growth is. Growth is not subtraction of things or replacement. It is just adding.

55:35Tobi Lütke:There's more in the world, right? Like we now have AI as well on to all the other wonderful products we can consume. So anyway, I can sit down and write code when I want to do this. Sometimes I do want to do this. Often it's part of a steering, right? Like I write the part of a code that concerns itself with the data structures and how the data is persisted on disk, which unfortunately that's sort of a German school of engineering, which is different from the computer science-y world of North America. I think North America is wrong. I think you should think about how data is persisted on disk above everything else in your databases.

56:11Tobi Lütke:And then you can plan the system with this. I still follow this. And so work on this either by describing or by literally just like making the sort of data access layer. Everything else can be Vibe call on top because I know the result will be excellent as long as the data structures are used right. And maybe that changes in the next couple of months. But that's an area where I can definitely steer the AIs to get better results than they can do themselves for a little while longer. And then afterwards, I'll do something else. And maybe I'm going to do it just for kicking it old school. But what my engineering ability allows me to do is reason about these systems in a way that I can be a partner and a co-worker with AI because I can ask it very specific questions to go chase down.

56:54Tobi Lütke:And I have those same questions all my life. in every meeting i'm like really wonder what the data structure is here or like how we're persisting this or what we save or what we discard or what we rederive in uh the data warehouse instead of actually just like writing it down in first place and uh you know i have my laptop open and my river open and then i can ask a question i get a result um because again river can use the entire monoreport and just like goes chase down whatever i'm asking her it's a random one would you encourage your children to go to university so they seem uninterested right now i think my oldest is probably gonna make a play for it i i definitely would not encourage them to go to university for being part of university i would definitely encourage them to go get a degree especially one that's hard to get into because then you're surrounded by people who also got into it figuring out how to get in the room with people who really really want to be in the room with a topic of something you care about is actually the cheat code for any career would joining a stripe of the day not be better so my bias would be that uh if you can be of value to a small company that that's the thing right like you have to have the skills to actually be of value and the company agrees with you and sees that value you should do it but that's like that's actually a wonderful test for both sides like an interview is a test is like both sides interview each other right like um that's what you should try and then i think it's better than uh for alternative because again it's much harder to get in a company both working for than it is to get into university do you believe in nepotism toby like respectfully if one of your kids apply for a startup job the surname is relatively obvious remember my kids have the genes of my wife and me they probably don't like i think nepotism comes in if you if someone needs a little bit of help and i think so but like they're fine i just like we believe in nepotism i think actually nepotism has a bad rap, frankly.

58:42Tobi Lütke:It's annoying, but I'm starting to understand also. I mean, nevotism is probably just actually bad. I'm a very big fan, this is probably, you can discern this from what I'm saying here of Thomas Sowell. And Thomas Sowell, just like, basically everything he's ever said is incredibly smart amongst the many things worth quoting. I think in a book he wrote when he was already in his 80s is that one of his regrets about society is that we have spent the last 50 years replacing things that work with things that sound good. so you know i so so uh ever since reading this i'm like don't have a knee jerk in reaction anymore against basically anything that i'm hearing about that uh that that that sounds terrible because i i just try to get to figuring out what is the redeeming value of nepotism i think the answer is none so merit double blind is the gold standard unfortunately merit double blind is not the standard right like it's like very very rare i think nepotism might be better than some of the crazy shit people have doing to decide who should be uh appointed into especially in academia like in canada we have a big thing with like basically all the job postings for any kind of uh like academic seats are now sort of full-on intersectionality a fever dream right like find exactly a description that fits one person in terms of all the disadvantages they had in life and which i mean always comes from a good place and maybe also ends up uh you know having some Maybe it's an arbitrage sometimes because if, you know, actually there's always like countervailing forces there that prevented them from getting the jobs they're auto.

1:00:08Tobi Lütke:And then on day one, the person you do find is a complete banger in the job and hats off to you. You just like play the system perfectly. In any other case, you just made a choice of prioritizing things that are not merit, right? Which again goes against enlightenment values that literally everything that anyone likes about the planet Earth in Western society and the foundation of all the countries that essentially have net immigration, depending on in a lot-bearing way. So I think we should probably keep to some of those. Final one for you. What's the best piece of advice you've ever been given?

1:00:42Mine is, you're never wrong to do the right thing, and the right thing is often the hard thing.

1:00:47Tobi Lütke:I think the best advice I've been given, but I haven't been given it, but it's like sort of a rallying cry i think that is just like i i kind of want to coalesce on that sentence just because it's memorable and i think people can't hear it enough is you can just do things it's just like at any point of time the system is exists to try to get to good outcomes if you know what good outcomes are you can step out of system and give it a go cost is lower than ever and um Action causes information. And again, one of the best things that can possibly happen is you figure out something that there's actually a lot of reason why the system discourages it.

1:01:26Tobi Lütke:There's limits to this, of course. This needs to be a completely victimless endeavor. You can't have someone suffering for you trying a thing. That's very important. People can't have negative consequences of these kind of things because then you're just actually being an asshole because you're dividing people and prioritizing your own gain over other people. And fundamentally, you're engaging in a zero-sum thing. And in zero-sum environments, you should probably not run experiments. But if you are in a zero-sum environment, you should figure out how to get a positive sum. And that's much more often possible than people imagine.

1:01:58Toby, I'm not sure I've ever had quite such a broad-ranging discussion. I'm not sure if most of your interviews quite cover the future of climate, Trump and Canada's relationship, the future of developers in organizations. But I've so enjoyed this so thank you i mean it's like the things i i wrestle with like if you get me on a

1:02:15Tobi Lütke:different time i'll talk about different things i i just like look again what would be awesome if there's like some people were like really disagreed with everything i said but like like are still listening at this point right like because that's it's all i want like it's all anyone wants like we just like let's get back to like having conversations allow people to be wrong like i'm wrong all the time like doesn't matter to you this is fine like we can lower the temperature We can realize there's some priors in society. Some things were lot-bearing. We've placed some things which worked. I've made very, very few comments on what we ought to be doing.

1:02:46Tobi Lütke:I mostly talked about creating the boundary conditions in which people can just do things. That's the genius of the world thing. The genius of the world we inherited, like our ancestors created ever since the Enlightenment for us. It's just that they created like a sandbox in which people can do things. They take responsibility for doing things. They are personally accountable. They take personal accountability for the outcomes of this. They go to jail if they do something bad. But they are allowed to have property if they're right. The people, everyone who builds something is making just like an incredible Faustian bargain with society here in a world that discriminates against builders in a way, just on account of their products having worked.

1:03:33Tobi Lütke:I own 6 % of Shopify. That makes me incredibly wealthy, yes. But it also means 94 % of it are owned by other people. That's all of those people made a lot of money with the company. And that's not even talking about the customers. And all the people employed by the customers of ours. Like there's probably 10 million people working day to day on Shopify. Like their job is to do the thing that Shopify asked them to do. Like send out the products, like deal with customer relations, all these kind of things. Build new websites and so on. like that was always there and Shopify has brought it into existence in actual ways that can be consumed and like we are not the only company many do it and people vote right now and hopefully for a long time every month by paying the subscription that Shopify's instantiation of this idea that needed to be pursued is the one that is valuable to them and you know there is a belief in society that when there's a good thing there must be a counteraction it's some kind of misapplication of the Newtonian laws.

1:04:34Tobi Lütke:And, you know, some things are just good. Like some things are just like super fucking good and the downsides might even be describable, but they just don't pale in the face of all the good that comes. It's like we said earlier though, which is like the demonization of wealth. A lot of people you see in America think that to gain and to have a billionaire, they must have stolen from someone who doesn't have money. Yeah, show me one. Like you can't get to a billion dollars by stealing like money. I mean, maybe you can, maybe there are some instantiations, But then to talk about was specifically the people who get their wealth by building companies have not stolen anything.

1:05:08Tobi Lütke:They have created a product that people voted for. It's actually the most democratic thing that exists. It's vastly more democratic than any of the elections that we actually go doing bullets at. People shape the world around them by the way they allocate their money to products. Every time you buy something from a local shop, you're voting for the welfare and the future and the thriving of local shops in your area. They are not just the product that you purchase. And there's nothing bad about that shopkeeper because they are putting themselves out there. They're working extremely hard. It's an unrational act to start a company.

1:05:39Tobi Lütke:You're working extremely hard for yourself instead of working less hard for someone else. But you're actually creating another thing and other people get to have employment there and have the jobs that work according to their lifestyle. And so it's so weird that we are like putting this in contempt. And again, I'm very, very pro-constructive criticism. but like constructive criticism is itself something that someone builds right like there are people who can who create excellent constructive criticism and i learn a lot from them i'm fortunate in that i get a lot of constructive criticism as even just as a public company ceo like you have some people write incredible memos uh externally that are really really worth reading because they give you a perspective you didn't have and that's them building up a picture in the public mind about some how to think about something but there's also lazy and bad faith criticism or just like hot takes and this kind of stuff that is actually incredibly corrosive and should be had an incredible contempt by people and we don't but it's like how many times those um do people who are saying something incredibly wrong like look through the entire all the things people have published during the covet times or even just like climate uh panic uh pieces how many times have you actually posted revisions to to this it's very rare and so you you realize it wasn't about truth right otherwise they would do it because that's the correct thing to do if you were wrong.

1:06:56Tobi Lütke:The ice caps did not melt, in fact, at the time frame. We are in the years that they told us that the ice caps would be gone. And so just like, that doesn't mean there is no climate change. Climate change is all the time. It's not that, it's inducing panic. Like, you're not allowed, I'm a very pro-free speech. Free speech is a mechanism of self-healing for everything else related to property and to classical liberalism. This is why it's worth protecting. But there is no absolute free speech. You can't scream fire in a cinema in almost any place like that. You're going to the precinct afterwards.

1:07:29Tobi Lütke:But somehow you can do it in media. Somehow you can do it in all sorts of, like if the time frame is long, then it's fine. Do you worry about that moving forward when the most common response on Twitter is, at Grok, is this true? No, I think this is why I'm so bullish about the future. There was an effort mismatch in terms of bad faith acting. It's really easy to do. It's like one assertion, right? Like there's famously, it's like a Stalinist kind of thing. It's like for every man, there's a combination of words that will undo him. And so it doesn't need to be true, but it just exists. There's some accusation that's just plausible enough that the person disappears afterwards.

1:08:06Tobi Lütke:Especially, I mean, I think this was specifically a case in the Soviet Union. It's always true when there's a lot of collectivism around, which is really just centralization of power with the state. Now, the fact-checking is very, very hard. It's an asynchronous warfare. It's sort of information terrorism to take a very absurdist position on it. Proving that it's not true is a lot more work than saying the thing like this. And so you can, like, there's not that many bad faith actors. It's actually a small number, but they can be incredibly prolific and, you know, seed all the kind of important things.

1:08:41Tobi Lütke:So, you know, like, I think AI is just going to, AI is moving the power back to good guys, I believe. Or not even, like, that's actually wrong framing. It's not, there's no, no one, like there's no good and bad. It's like everyone's like good in their own local system. And some people have a wrong system. And this is why we need conversations to arc them to the valuable ones in society. I mean, this is the nicest way to be. You can't actually believe that. Like there are malicious bad actors who will use AI to exploit systems. I didn't say this. I'm sorry, but they had a lot of interest in, no, no, you're completely right.

1:09:13Tobi Lütke:There's also, especially, so there's always a societal level and an individual level. On an individual level, which is the one we document, right? it's like on a midget level, there's going to be so much shit happening, like voice cloning, like just like the hacking stuff, all software turns out to probably not be good enough in terms of security. That's going to be like a whole lot of bullshit we will have to deal with. Absolutely. However, the same models can also write fixes for these kind of things. In fact, like being able to apply as much intelligence in a form of artificial intelligence to the side of preventing fraud, I think that shift, like the balance will shift here.

1:09:46Tobi Lütke:I think we're actually going to get in a much, much better way. Even like claim testing, like is a statement true? It's a thing that can be done by a council of models, especially like Chinese trained model, Germany's trained, France trained model. Like let's get everyone's opinion on something and just give a different perspective and synthesis. Look, building the thing I just said, I can do by just going to one of those ghosty terminals, taking the transcript of just the words, two, three more steers, and I can put this on the internet and it will work. I would have to pay for it because the token's so expensive right now.

1:10:16Tobi Lütke:But suddenly we have a new institution, which is like, well, see what everyone would think. What's the council saying about this claim and do some research. So we're going in a world where less of the airwaves will be dominated by the bored people who act in bad faith, because I think the other side has the ability to push back. The Ed Claude, the Grok thing, is sort of the primordial version of this, is what I'm saying. But before we leave you today, did you know the industry average for booking a business trip is 45 minutes? That's a massive waste of your team's time. Well, with Navan, your employees can book a trip in just seven on average.

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