Shopify CEO Warns Against 'Founder Day Care' in Hiring

Shopify CEO Tobi Lütke has identified a common corporate misstep that undermines innovation and leadership. In a recent podcast appearance, he explained why companies often fail to capitalize on the unique talents of founders they acquire, instead placing them in what he terms "founder day care."

This practice, Lütke argues, represents a significant loss for organizations that could benefit from founders' distinctive problem-solving approaches and resilience. His insights reveal a deeper issue in how corporate structures handle entrepreneurial talent, particularly during times of crisis.

On an episode of the "Founder's Podcast" released Sunday, Tobi Lütke described how companies frequently fail to recognize the potential of employees with entrepreneurship experience. The Shopify co-founder, who established the Canadian e-commerce firm in 2006, explained that organizations often make the error of placing founders on the "outskirts" of operations.

These employees are typically assigned to what Lütke calls the "skunk work team"—a term for experimental or peripheral projects. He characterized this approach as a form of containment rather than utilization.

"It's day care for people who tell you that your shit doesn't smell right. And your shit does smell," Lütke said. "I'm like, 'No, you don't get to put them in like founder day care.'"

Lütke emphasized that founders possess a unique perspective that companies often reject. Rather than integrating this distinctive approach into core operations, organizations tend to "cocoon" these individuals, effectively neutralizing their potential impact.

During the pandemic, Tobi Lütke noticed this pattern occurring within Shopify itself. Rather than allowing founders of acquired companies to fade into peripheral roles, he implemented a different strategy that elevated their visibility and influence.

Lütke made these founders more prominent within the organization, even positioning them above other managers in certain instances. This deliberate elevation ensured their expertise remained central to Shopify's operations rather than being marginalized.

Shopify has acquired several companies in recent years, including:

• Logistics firm Deliverr in 2022
• Influencer marketing startup Dovetale in 2022
• Workplace messaging platform Threads in 2024

The founders of Dovetale and Threads currently remain in product roles at Shopify, maintaining their leadership positions within the company. The CEO of Deliverr, however, moved on to start another logistics startup after approximately one year at Shopify.

Beyond elevating acquired founders, Tobi Lütke actively seeks their input through a dedicated Slack channel. This direct line of communication allows him to solicit their help and insights, ensuring their experience continues to benefit Shopify's operations.

Lütke's approach reflects a broader recognition of what he calls the "special thing" that founders bring to organizations. Their unique combination of resilience, adaptability, and problem-solving capabilities represents a valuable asset that companies frequently overlook.

This perspective informs his hiring strategy as well. When evaluating potential employees, Lütke specifically asks whether they have started a company before. He believes this experience provides individuals with the ability to adapt quickly and perform effectively during crisis situations.

The CEO's methodology suggests that entrepreneurial experience creates professionals who are uniquely equipped to handle uncertainty and pressure—qualities that prove invaluable in today's rapidly changing business environment.

Shopify's approach under Tobi Lütke offers a blueprint for how organizations can better integrate entrepreneurial talent. Rather than compartmentalizing founders, companies should consider how their distinctive perspectives can enhance core operations.

The practice of placing founders in peripheral roles represents more than just a missed opportunity—it actively diminishes the value of acquisitions and new hires. Organizations that recognize and elevate this talent gain a competitive advantage through enhanced innovation and crisis management capabilities.

As businesses navigate an increasingly complex landscape, the ability to identify and leverage entrepreneurial experience becomes increasingly critical. Lütke's insights suggest that the most successful companies will be those that reject traditional "founder day care" approaches in favor of more integrated, respectful strategies.