Shopify could be the next BlackBerry or Nortel.
It could become a world-class e-commerce company, sparking a Canadian tech renaissance.
And 34-year-old founder Tobias Luetke may one day be this country's answer to Mark Zuckerberg or Jeff Bezos.
Given the incredible hype surrounding the Ottawa-based software maker's Canadian and U.S. stock market debut, you might think Shopify was already all these things, and more.
It isn't – at least, not yet.
For now, Shopify is just another fast-growing, money-losing tech company with a promising business model and a familiar-sounding name.
And since last week's initial public offering, it has an extra $131-million (U.S.) in the bank to do something really special.
Average investors may not fully understand what Shopify does unless they are in the retail business. The company's cloud-based software enables small and mid-sized retailers to conveniently manage a range of store functions, from sales and inventory to accounting.
In 2014, Shopify generated $105-million in revenue, and lost $21.6-million. It's on pace to lose money for a fourth consecutive year in 2015. And losses have been growing faster than revenues, the bulk of which come from subscription sales to merchants.
Living up to the accolades of analysts, pundits, investors and the media won't be easy.
All the buzz and heavy demand for its shares has popped the company's stock market value to an impressive $2-billion.
One media report about the IPO said the company "produced" $8-billion in total sales, without specifying that the figure represents the combined sales of its roughly 160,000 retail customers, not Shopify.
An executive of OMERS Ventures Management Inc., which owns a 6-per-cent stake in the company, called Shopify the "next generation of world-leading technology companies." Another analyst characterized Shopify as "the" world leader in e-commerce and "a new flagship tech company in the country."
Really?
Of course, sell-side analysts and shareholders want Shopify to be all those things. They have a vested interest.
Many Canadians also crave another national tech champion.
Telecom giant Nortel is long gone. Shrinking smartphone maker BlackBerry is struggling to reinvent itself as a software provider. The pipeline of new tech startups capable of growing into large flagships has run distressingly dry.
The country needs more Shopifys to drive innovation, growth and employment in the tech sector. Canada continues to be a poor performer compared with other developed countries when it comes to research and development spending by businesses.
We all get that.
But the hype surrounding the company seems more like wishful thinking than reality. The promise is being sold as the present.
At their peak, Nortel and BlackBerry were spending billions of dollars each year on research and development. They employed thousands of engineers and generated a treasure trove of valuable intellectual property.
Shopify spent $26-million on R&D last year. It would have to spend more than 100 times that sum just to get to where Nortel and BlackBerry were a decade ago.
Unless you're a retailer, it's pretty hard to grasp how unique or transformative Shopify's software may be.
It is worth noting that the No. 2 risk listed in its IPO prospectus is the possibility that "competing platforms, discount pricing and other strategies … may be implemented by our competitors."
Just look at BlackBerry for evidence of what happens when a rival comes up with something better, such as the iPhone. It triggers a dramatic loss of market share, lower prices, and often both.
It is the disruptive nature of new technology. The next best thing leaves existing players scrambling to play catch-up. And it happens continuously.
And because Shopify makes a product for businesses, not consumers, sustaining investor interest over the long haul will depend heavily on delivering results and eventually profits.
Like all technology companies, Shopify faces an incredibly uncertain future.
If it's good, the company will thrive and grow. Perhaps one day it will look like BlackBerry.
Investors are free to buy into the exuberance now, with all the risks and rewards that come with a high-flying IPO stock.
The rest of us would be wise to stay off the bandwagon.