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Shopify is Eating their Ecosystem (thread):
Of anyone in commerce,
Shopify is the undeniable behemoth.
They’ve made commerce accessible for independent merchants.
All good, right? Not entirely…
Shopify is the undeniable behemoth.
They’ve made commerce accessible for independent merchants.
All good, right? Not entirely…
~~ Background ~~
As some background, Shopify is an end-to-end commerce platform.
This means that they have to provide a full suite of services out-of-the-box.
With limited resources in the early days, they couldn’t build it all.
As some background, Shopify is an end-to-end commerce platform.
This means that they have to provide a full suite of services out-of-the-box.
With limited resources in the early days, they couldn’t build it all.
Introducing… the Shopify App Store.
Launched in 2009, the App Store allowed others to build new features for Shopify, make them accessible to Shopify merchants, and make money.
Startups and developers went to work.
Launched in 2009, the App Store allowed others to build new features for Shopify, make them accessible to Shopify merchants, and make money.
Startups and developers went to work.
The App Store blossomed 
Developers and startups flocked, many of which built entire businesses on top of it.
It was a thriving community.
Developers and startups flocked, many of which built entire businesses on top of it.
It was a thriving community.
Shopify benefited tremendously from this ecosystem.
Developer partners provided critical functionality since the earliest days.
With them, Shopify would not be what it is today.
For context, Shopify is now worth $80B+.
Developer partners provided critical functionality since the earliest days.
With them, Shopify would not be what it is today.
For context, Shopify is now worth $80B+.
Anyone familiar with the history of Shopify knows this:
It has been built by partners.
It has been built by partners.
But as Shopify grew, they had a decision to make:
Prioritize openness and commit to empowering the community.
-or-
Replicate these apps as their own products, sell them, and drive direct revenue.
Prioritize openness and commit to empowering the community.
-or-
Replicate these apps as their own products, sell them, and drive direct revenue.
What was their decision?
Twofold:
1/ Publicly commit to being open: thus incentivizing more partners to build on them. See their post on “community over competition” https://www.shopify.com/partners/blog/business-competition
Twofold:
1/ Publicly commit to being open: thus incentivizing more partners to build on them. See their post on “community over competition” https://www.shopify.com/partners/blog/business-competition
2/ Clone the most profitable apps: putting those partners either out of business or at a significant disadvantage.
Effectively, Shopify uses app partners as their R&D engine.
Anyone too successful gets cloned.
*The problem: you don’t know until it’s too late.*
Shopify has been telling you they are here to support you the entire time.
Anyone too successful gets cloned.
*The problem: you don’t know until it’s too late.*
Shopify has been telling you they are here to support you the entire time.
~~ Let’s take a look at some prominent examples ~~
In 2013, Shopify launches as Shopify Payments, their own payment processor amidst an ecosystem of 100s of other payment processors.
Fun fact: Stripe powers this; accounting for a large % of Stripe’s total volume.
In 2013, Shopify launches as Shopify Payments, their own payment processor amidst an ecosystem of 100s of other payment processors.
Fun fact: Stripe powers this; accounting for a large % of Stripe’s total volume.
Then comes:
Shopify Shipping (2015)
Shopify Capital (2016)
Shopify Arrive, order tracking (2017)
Shopify Fraud Protect (2018)
Shopify Email Marketing (2019) ...
Shopify Shipping (2015)
Shopify Capital (2016)
Shopify Arrive, order tracking (2017)
Shopify Fraud Protect (2018)
Shopify Email Marketing (2019) ...
Shopify Fulfillment (2020)
Shopify Subscriptions (2020)
Shopify POS (2020)
Shopify Balance, cards & bank accounts (2020)
Shopify Installments (2021)
... and much more.
Shopify Subscriptions (2020)
Shopify POS (2020)
Shopify Balance, cards & bank accounts (2020)
Shopify Installments (2021)
... and much more.
Few are safe from Shopify cloning their products.
Marketing tools would surely be far enough outside their core focus, right?
Not anymore.
Shopify has an entire suite of marketing tools.
Marketing tools would surely be far enough outside their core focus, right?
Not anymore.
Shopify has an entire suite of marketing tools.
Shopify will rarely “kick out” anyone directly due to the PR backlash.
Instead, they put restrictions that drive superiority to their own product.
Mailchimp received so many data limitations that it had to break up with Shopify (April 2019).
Instead, they put restrictions that drive superiority to their own product.
Mailchimp received so many data limitations that it had to break up with Shopify (April 2019).
That said, rebuilding Mailchimp is pretty darn hard.
Shopify learned that lesson.
After realizing this, they “made up” with Mailchimp and lifted the restrictions (Oct 2021).
I can’t imagine how tough this was for Mailchimp and the thousands of Shopify merchants using them.
Shopify learned that lesson.
After realizing this, they “made up” with Mailchimp and lifted the restrictions (Oct 2021).
I can’t imagine how tough this was for Mailchimp and the thousands of Shopify merchants using them.
~~ The Bolt Story ~~
Bolt was founded in 2014 with a vision to build the world’s most delightful checkout.
An early focus (2016) was Shopify, given their growth and traction.
We built our product and signed up droves of merchants who loved it.
Bolt was founded in 2014 with a vision to build the world’s most delightful checkout.
An early focus (2016) was Shopify, given their growth and traction.
We built our product and signed up droves of merchants who loved it.
Like many Shopify app startups, we were helping improve the Shopify ecosystem.
Checkout was a sore spot of theirs for many years.
Checkout was a sore spot of theirs for many years.
Then something interesting happened.
Shopify’s checkout got an uplift.
It was just like Bolt.
Shopify’s checkout got an uplift.
It was just like Bolt.
But that’s not all.
Then Shop Pay launched (2017).
It was Bolt’s seamless one-click authentication flow almost exactly.
Then Shop Pay launched (2017).
It was Bolt’s seamless one-click authentication flow almost exactly.
Shopify was copying Bolt.
Even still, I held onto the hope that we would simply let the best product win.
Their philosophy is “community over competition.”
And any time we spoke with them, they reassured us of this.
Even still, I held onto the hope that we would simply let the best product win.
Their philosophy is “community over competition.”
And any time we spoke with them, they reassured us of this.
We kept building features, making checkout even better.
… And then one day we got an interesting email:
… And then one day we got an interesting email:
Harley - Shopify’s COO - wanted to meet.
We had our call a couple days later, and he told me he had some bad news and some good news.
We had our call a couple days later, and he told me he had some bad news and some good news.
The bad: they were banning all external checkout providers on Shopify.
The good: he believed in Bolt and wanted to make us the only exception to that rule
I felt honored and hopeful.
The good: he believed in Bolt and wanted to make us the only exception to that rule
I felt honored and hopeful.
Harley’s ask: in order to be a good partner we should unwind our Shopify integrations.
i.e. turn off Bolt on all our Shopify merchants.
In turn, they’d work with Bolt on a formal partnership.
We wanted to be a formal Shopify partner badly.
So, we followed instructions.
i.e. turn off Bolt on all our Shopify merchants.
In turn, they’d work with Bolt on a formal partnership.
We wanted to be a formal Shopify partner badly.
So, we followed instructions.
1 by 1, we turned off our customers on Shopify.
I reassured our team, who had poured so much into our customers, that it was for the best.
The COO had said explicitly that they wanted to partner.
Quickly, nearly 100 customers that we had spent 4yrs cultivating were turned off.
I reassured our team, who had poured so much into our customers, that it was for the best.
The COO had said explicitly that they wanted to partner.
Quickly, nearly 100 customers that we had spent 4yrs cultivating were turned off.
What happened next was a rude awakening to the world of business.
We followed the instructions.
And then…
Harley never answered back.
We followed the instructions.
And then…
Harley never answered back.
I sent countless emails with no replies.
Here I send a reply explaining what we'd need to make Bolt's checkout work with Shopify.
*Note: I say it's a subpar merchant experience due to the API restrictions we faced; I'm not saying Bolt is a subpar experience.
Here I send a reply explaining what we'd need to make Bolt's checkout work with Shopify.
*Note: I say it's a subpar merchant experience due to the API restrictions we faced; I'm not saying Bolt is a subpar experience.
And several more, no reply…
We were ghosted time and time again.
For years, I kept up the optimism.
For years, I kept up the optimism.
Recently, there were merchants demanding to use Bolt.
They were important enough customers that Shopify couldn’t ignore us.
We started drafting an agreement to partner.
Then the redline came in: only allowed for a specific shortlist of merchants, restricted functionality.
They were important enough customers that Shopify couldn’t ignore us.
We started drafting an agreement to partner.
Then the redline came in: only allowed for a specific shortlist of merchants, restricted functionality.
Bolt said no.
The restrictions were far too crippling and would result in failure.
We asked if they’d be open to a full partnership.
Shopify said yes.
Then they fell silent and stopped responding.
The restrictions were far too crippling and would result in failure.
We asked if they’d be open to a full partnership.
Shopify said yes.
Then they fell silent and stopped responding.
Ghosted once again, we lost hope for a partnership.
We started discussions with Shopify merchants to use Bolt on other supported carts.
When Shopify realized they might start losing customers, they reached back out…
We started discussions with Shopify merchants to use Bolt on other supported carts.
When Shopify realized they might start losing customers, they reached back out…
An SVP called saying:
They want to partner with us.
But in order to be a good partner we should stop going after their merchants.
[sounds familiar]
They want to partner with us.
But in order to be a good partner we should stop going after their merchants.
[sounds familiar]
This time, I asked them to explicitly propose a partnership.
When pressed, their proposal was to not allow Bolt to run a checkout.
But rather work like a payment option i.e. Google Pay.
This is highly restrictive and not how Bolt works (... they knew).
When pressed, their proposal was to not allow Bolt to run a checkout.
But rather work like a payment option i.e. Google Pay.
This is highly restrictive and not how Bolt works (... they knew).
A few weeks ago, I finally realized:
They steered us in a way that made us feel at every turn there was a major partnership ahead.
But that partnership would never come.
They steered us in a way that made us feel at every turn there was a major partnership ahead.
But that partnership would never come.
~~ On the flip side ~~
We began focusing on other platforms, luckily.
BigCommerce, Adobe, Salesforce, SAP, PrestaShop, and more.
I’m grateful that we did.
We began focusing on other platforms, luckily.
BigCommerce, Adobe, Salesforce, SAP, PrestaShop, and more.
I’m grateful that we did.
There are so many incredible commerce platforms out there!
200+ globally.
So many of them have powerful tech and are ecosystem-first.
*And many of them deserve more attention.*
200+ globally.
So many of them have powerful tech and are ecosystem-first.
*And many of them deserve more attention.*
Many other startups and developers don’t have the resources to work with other platforms like we did.
Each new platform supported requires immense lift.
They start with Shopify and spend their resources there.
As Shopify eats their ecosystem, some never make it out.
Each new platform supported requires immense lift.
They start with Shopify and spend their resources there.
As Shopify eats their ecosystem, some never make it out.
~~ What Shopify might say ~~
1/ They offered Bolt the ability to partner with them.
Yes, technically.
But with punitive limitations (work with X merchants in a highly restrictive way).
Yes, technically.
But with punitive limitations (work with X merchants in a highly restrictive way).
2/ They cannot allow a third-party checkout.
They’ll reference obscure technical reasons (ie rate limiting inventory).
But, this isn’t true.
Nearly every other shopping cart has done it.
From BigCommerce to Magento to Salesforce Commerce. All Bolt partners.
They’ll reference obscure technical reasons (ie rate limiting inventory).
But, this isn’t true.
Nearly every other shopping cart has done it.
From BigCommerce to Magento to Salesforce Commerce. All Bolt partners.
3/ They are committed to the best product for merchants winning in the end
The reality: they oftentimes dramatically limit the functionality of these third party products.
Or they’ll reposition their product in a way that’s 10X advantaged.
The reality: they oftentimes dramatically limit the functionality of these third party products.
Or they’ll reposition their product in a way that’s 10X advantaged.
4/ Shopify is committed to community over competition, and while they compete the community still comes first
True… until you’re successful.
They want more developers coming onto the platform so they can watch who wins.
There is a “success ceiling”.
True… until you’re successful.
They want more developers coming onto the platform so they can watch who wins.
There is a “success ceiling”.
~~ More on Shopify and Bolt ~~
To read more on Shopify’s strategy:
Stratechery does a particularly good job and has a recent post on this very topic: https://stratechery.com/2022/shopifys-evolution/
To read more on Shopify’s strategy:
Stratechery does a particularly good job and has a recent post on this very topic: https://stratechery.com/2022/shopifys-evolution/
What does Bolt have to do with this? We see a 3rd evolution of commerce coming.
1.0: Amazon, commerce scale centralized
2.0: Shopify, commerce scale in an enclosed platform
3.0: Bolt and the Headless Commerce community, commerce scale decentralized
1.0: Amazon, commerce scale centralized
2.0: Shopify, commerce scale in an enclosed platform
3.0: Bolt and the Headless Commerce community, commerce scale decentralized
We’ve designed Bolt CheckoutOS to be 100% headless - which means it is an open platform with shared technology and synergies.
This gives merchants complete technological freedom.
Shopify: locked into one fully enclosed platform.
Bolt: pick and choose the tools you like best.
This gives merchants complete technological freedom.
Shopify: locked into one fully enclosed platform.
Bolt: pick and choose the tools you like best.
~~ In Closing ~~
Some companies generate profit doing good business.
Others leverage good people to make them richer.
Developers on Shopify can have short-term success.
But anyone too successful without a doubt gets replaced long-term.
Some companies generate profit doing good business.
Others leverage good people to make them richer.
Developers on Shopify can have short-term success.
But anyone too successful without a doubt gets replaced long-term.
If you decide to develop on Shopify, at least now you know.
Go into it eyes wide open.
And strongly consider prioritizing the other platforms who are truly committed to the community.
Go into it eyes wide open.
And strongly consider prioritizing the other platforms who are truly committed to the community.
BigCommerce, Magento, Salesforce, SAP, WooCommerce, Prestashop, and more.
These platforms are ecosystem-first and love seeing partners thrive.
There’s no success ceiling.
These platforms are ecosystem-first and love seeing partners thrive.
There’s no success ceiling.
I would still love to see Shopify change.
Cloning successful apps is unnecessary.
If revenue is the priority, they can simply charge higher revenue share fees.
Cloning successful apps is unnecessary.
If revenue is the priority, they can simply charge higher revenue share fees.
Shopify used their ecosystem to build a big business.
Now they’re eating the ecosystem that made them.
This might help revenue short-term,
But it’s indicative of a fixed pie mentality.
Now they’re eating the ecosystem that made them.
This might help revenue short-term,
But it’s indicative of a fixed pie mentality.
The global commerce opportunity isn’t a fixed pie to be eaten.
Openness will be king.
Bolt is going to always be community-first.
That’s because the opportunity in commerce is boundless.
Openness will be king.
Bolt is going to always be community-first.
That’s because the opportunity in commerce is boundless.
