Shopify Shop, Shopify’s Reason to Exist, Google’s Earnings

Many have argued that these announcements are related to each other: Shopify needs to build a customer-facing application in order to take-on Facebook, and the announcement of Facebook Shops is why. My takeaway is the opposite: the inevitability of Facebook Shops — thanks in part to a surprising culprit — is precisely why Shopify should not spend m... See more

Facebook Shops is a perfect example: it is going to succeed because it is good for Shopify’s merchants, but the reason it is good for Shopify’s merchants is because Facebook and Apple effectively teamed up to make it impossible for Shopify to fix the payment problem on their own.

Shopify’s big strategic question is how it can build network effects. It wants to sell higher-margin products to merchants for the money, but it might be more important in the long term that those products build a network, pull more merchants and users into the system, and make the core business more sticky. Shop Pay is one building block, but an a... See more

However, suggesting that Shopify take responsibility for directly acquiring customers (as opposed to building tools to help merchants do so) is not only out of step with Shopify’s position in the value chain, but there is also no particularly good reason to believe that Shopify will be any better at this than their merchants. What Facebook is capab... See more

I think it’s inevitable that Shopify will become a consumer destination, but the way it monetizes demand gen will need to be aligned with its role as a Platform.