Quick Summary
- 1Shopify CEO Tobi Lütke warns companies often undervalue founders' experience and leadership by sidelining them.
- 2Lütke says putting founders on 'skunk work teams' is a mistake that stifles their potential.
- 3During the pandemic, Shopify elevated founders of acquired companies above other managers to harness their expertise.
- 4Lütke identifies former founders as ideal hires for crisis situations, asking potential employees if they've started a company before.
Quick Summary
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.
The 'Founder Day Care' Problem
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.
"It's day care for people who tell you that your shit doesn't smell right. And your shit does smell."— Tobi Lütke, Shopify CEO
Shopify's Alternative Approach
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.
Leveraging Founder Expertise
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.
Key Takeaways for Leaders
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.
"I feel like it's a very special thing. And companies reject it. Companies cocoon them."— Tobi Lütke, Shopify CEO
"I'm like, 'No, you don't get to put them in like founder day care.'"— Tobi Lütke, Shopify CEO
Frequently Asked Questions
Lütke describes 'founder day care' as the practice of companies sidelining founders they acquire by placing them on peripheral 'skunk work teams' rather than integrating their expertise into core operations. This approach effectively neutralizes their unique problem-solving capabilities and leadership experience.
When Lütke noticed founders being marginalized within Shopify, he elevated their visibility and influence, even positioning them above other managers. He also created a dedicated Slack channel to maintain direct communication and solicit their help, ensuring their entrepreneurial experience continued to benefit the company.
Lütke believes founders possess a unique combination of resilience, adaptability, and problem-solving skills that make them particularly effective in crisis situations. He specifically asks potential hires if they have started a company before, viewing this experience as a key indicator of their ability to adapt quickly and perform well under pressure.
Shopify's approach varies by acquisition. The founders of Dovetale and Threads currently remain in product roles at Shopify, maintaining leadership positions. The CEO of Deliverr, however, moved on to start another logistics startup after approximately one year at the company.
