Canada's newest technology darling, Shopify Inc., is making a big push into one of the country's hottest tech hubs, announcing plans to add hundreds of people to its office in Waterloo.
Shopify is taking over a 40,000-square-foot building that was once occupied by the Centre for International Governance Innovation, the brainchild of former BlackBerry Ltd. co-chief executive officer Jim Balsillie. There are about 30 Shopify workers in Waterloo now, but the space could host up to 300 more. Shopify's head office is in Ottawa, but it also has large satellite offices in Toronto and Montreal.
The company's e-commerce software lets merchants of any size set up an online store, but it also provides back-end services for "large-volume" retailers called Shopify Plus. The Waterloo office is intended to be staffed with a mix of engineers, sales and account-managing workers to expand the Plus business, which already has such clients as RedBull, Tesla, the Los Angeles Lakers and United Parcel Service.
Waterloo began as a 10-person experiment to give Shopify Plus its own chance to flourish.
Chief executive officer Tobias Lütke exudes optimism in his team's ability to execute, in his company's plans for growth (it isn't profitable yet despite rapidly growing revenue) and his dream to reignite what he calls the promise of the 90s Internet.
"I remember Internet arriving in my town, so to speak. In my eyes it was this promise of, as more people participated it keeps getting better," he said Thursday. "That led to a lot of dot-com situations, people with fairly sound ideas and bad business models. It all crashed, a lot of people lost a lot of money, and a lot of optimism got replaced with cynicism. But I don't think we were wrong in the 90s that the Internet was going to be about individuals creating things." He added that the Internet of "five years ago" was a really cynical version of that dream, filled with monolithic entities, comparing some-time rival (and new partner) Amazon as the Web equivalent of the big-box stores on the edges of town. Ultimately, he sees Shopify as a tool to help his clients return to the home-brew Internet of the 1990s.
The 90s were a good decade for Waterloo, too. Shopify is not alone in setting up a satellite office in the city. Google and Electronic Arts are among those that have also set up sizable teams in the area. But the company's arrival could signal the trend is about to accelerate.
"I would say I am fielding calls – anywhere from two to five a month – with tech companies saying, 'We'd like to talk to you about setting up something in town.' The driver is talent," says Iain Klugman, CEO of Communitech, a local organization that boosts tech culture, and which also used to work out of Shopify's new building.
Mr. Lütke admitted that he wasn't quite used to the attention he commands as the CEO of one of Canada's hottest technology companies. Last week he caused a stir when he objected to elements of the NDP plan to raise taxes on stock options. The next day NDP Leader Tom Mulcair sent Mr. Lütke and Hootsuite CEO Ryan Holmes a letter clarifying his plans, saying that it "excludes options granted by early stage companies." Mr. Lütke admitted he didn't expect to be listened to so quickly or so completely.
"I really don't want to get involved in politics," he said, adding that it just so happened that he knows a lot about the value of options when trying to attract talent to a risky concept, such as his own company that took almost 10 years to take public. "The message got overblown, I don't think it will kill startups. The very fact that politicians are talking about startups … it just shows we really are in the age of the entrepreneur."