This week, Entrepreneur+ members were invited to a subscribers-only call featuring Shopify President Harley Finkelstein. Subscriber-only calls are just one of the many benefits members of Entrepreneur+ enjoy. Sign up to experience the next call live and learn more about the exclusive content and resources available to members by visiting Entrepreneur+.
There is an entrepreneurial renaissance going on right now. Powerful technology has made starting and running a business easier and less risky than ever before, propelling millions of people to pursue their dreams.
This week, Entrepreneur magazine’s Editor in Chief Jason Feifer and Shopify’s President Harley Finkelstein sat down for an in-depth conversation about the incredible growth of opportunities in e-commerce. Over the course of the call, Finkelstein shared best practices and strategies for growing an online brand and dropped some amazing data points that highlight just how massive the ecommerce revolution is. “If you look at the U.S. alone, applications for new businesses have been approximately five million per year for 2021 and 2022,” says Finkelstein. “That is one million more — or about 20% more — than the previous five years.”
More and more people are attempting to change their careers — and their lives — through entrepreneurship, and in this conversation, Finkelstein outlined the little things that small companies can do to give big brands a run for their money.
“The ingredients for businesses today are just different. Historically, the most important ingredient for starting a business was capital — you needed money,” Finkelstein explained. “And now, it’s more about creativity than it is about capital. It’s more about being resourceful than having resources.”
Watch the entire conversation in the video above and read selected takeaways from Finkelstein’s commentary, which has been edited for length and clarity, below. And be sure to subscribe to Entrepreneur+ for an exclusive invite to the next member call.
1. The growth of ecommerce
(1:50) “Applications for new businesses are up 20%, and Google search terms for 2022 included a rise in terms like ‘How can I find my passion?’ and ‘How can I change careers?’ You’re seeing this shift from how to get a job to how to create my own job. During the pandemic, you saw a lot of people begin to look at their hobbies through a different lens. Instead of looking at their hobby as the thing that they play with and tinker with on nights and weekends, people began to think, ‘Hey, can I actually turn my hobby into a monetizable business?'”
2. There’s never been a better time to try something
(5:00) “There’s this great Kevin Kelly blog post called 1000 True Fans, which has been sort of my bible. It talks about how when you’re starting a business, you don’t actually need a million or 2 million or 10 million subscribers or fans. What you actually need is a really stable, small base of people who believe in you, who want to support you, and who really, really want your products. And I think that new entrepreneurs need to consider that when you compare starting a business today to starting a business 5 or 10 years ago, the cost of failure of starting a business in 2023 is as low as it’s ever been. This isn’t a promotion for Shopify, but there are tools out there that make it very easy to get started at your mom’s kitchen table. Now, that business may grow into the next Allbirds or the next big thing, but if it doesn’t, it’s okay. You’re not taking food off your table or losing the roof over your head because you’re starting a new business.”
3. Iterate, pivot — no idea is forever
(6:20) “With the cost of failure being lower than it’s ever been, I think we need to change our perception of what we view failure as. One thing I’ve noticed about multi-billion dollar companies — the FIGS or the Bombas of the world — is that when they started out, that wasn’t their original idea. They sort of iterated on an idea or they thought about something in the shower one morning that ended up turning that small company into a big company. So don’t get married to your first idea. And appreciate that you may need to try a couple of different things to see what works best. If it works, scale it. If it doesn’t, move on to something else.”
4. Be a part of the community you are serving
(11:10) “Authenticity is a timeless characteristic of successful brands. There’s a company called FIGS that makes incredible medical scrubs. When the founders Heather and Trina were first getting started, one of the things I think they did really well was each time they had a new prototype, they would go and give it to doctors, nurses, and frontline workers and say, ‘What do you think? How’s the elastic band? How’s the length? How’s the material?’ And so they were almost running an iterative production manufacturing process where they were getting instant feedback. They showed up to where their product was being used, and every time they showed up, the product got a little bit better. That’s impossible to do in a traditional business. An advantage that small businesses have over large companies is they can be a lot more agile, more reactive and they can be more authentically connected to their customers. Here’s a small business that I love: Bleusalt. They make my favorite hoodie that I wear almost every day. It’s run by a great entrepreneur named Lindy. Whenever Lindy sees me wear it while I’m doing interviews, she’ll send me a note: ‘Hey, that Bleusalt hoodie looks a little bit worn down, so here’s a coupon code.’ Or ‘I’m just sending you another one.’ She pays attention to her small community of very loyal fans, which is something the biggest companies on the planet don’t do because they have this massive infrastructure. When you’re small, you absolutely can do those things.”
5. Ask your competitors for help — it’s not a zero-sum game
(19:50) “If you go back to the history of business, there was sort of this competitiveness. If I had a business on Main Street and you had a business as well, the idea that I would ever share my secrets or best practices with you was kind of unheard of. But the internet is not like that. We have completely shifted from the zero-sum entrepreneurial model to a positive-sum model. If you go to any social media platform right now and post, ‘I’m starting a business right now. Here are my products. Any advice for me to get my first 10 sales?’ Even if you have just 10 followers, people are going to respond and give you their tips, because the total adjustable market for online retail is effectively the same as oxygen, right? The entire world with internet connectivity may be a consumer. And when you look at Shopify’s merchant base — we’re about 10% of all ecommerce in the U.S. — you see this incredible community of merchants and entrepreneurs sharing what worked for them, what keywords they’re using, what new ad platforms you’re using, how much they’re spending, what their CPM is, and the like. I mean, it is quite incredible.”
6. Build on customer relationships
(21:00) “With existing customers, you want to increase your engagement with them. You want to increase your relationship and get to know them better. You want them to become frequent buyers of your products as opposed to one-time buyers. When you go to your Shopify dashboard to see orders coming in, you see a lot of signals. So, for example, if someone bought a package of Fire Belly tea from me on Monday from me, and then on Wednesday and then on Friday…Okay, something is up here. Either they love this so much or they’re buying it for gifts. I usually just email that person directly from my email address and I say, ‘Just want to say thank you so much for buying my tea. Is there any feedback, positive or negative, that you have for me?’ And often they’ll just write back and say, ‘No, I’m good.’ But sometimes they’ll give a great gem of insight that will help me create a better product or better buying experience. The checkout is too slow or they’d like to see more bundling options, for example. But besides the feedback, they’ve established a relationship with me — a person, not my tea company. It’s authentic and it’s real. And they now may actually buy all their tea from me.”
7. Think small and targeted with your outreach
(22:30) “The most important idea or concept around content creation and influencer marketing in any community is that there are usually one or two people who are incredibly relevant in that community. Someone who is a role model or sort of a centerpiece of that community. That person doesn’t have to have a lot of followers, but if you can develop a relationship with that person — send them some free products to try — they can help introduce you to a brand-new demographic. Likewise, with podcasts and YouTube shows, you don’t only have to go on the biggest shows in a community. There are micro-communities that no one else cares about. Get in touch with them and give them something to try. If they like it, this host, who is a center point of a community, will start talking about you and sharing more about your business and your products.”