Tobi Lütke: AI Agents, Better Decisions, and the Future of Work

Things need to be pruned. You cannot make things better and better by adding stuff. You can't, you must prune. You must rebuild. You must create an end for things. Toby, welcome back. Shane, it's so good to be back. I'm glad we're doing this again. How are you using AI internally in Shopify? We find some ways for it to be supportive now. It's actually a look. When have you heard of it last time? Oh, we've been through it for like two, three years ago. Yeah, so a hundred years of internet. Yeah, like, look, I'm 10 out of 10 node. I cannot bear the idea of somehow not being at the forefront of a technology shift. I live for these things. Anyone growing up reading sci-fi books wanted to live, or might take from sci-fi books I read, was like, I wanted to live in Badwood. Like, how can I accelerate us there? Like, so even in whatever minor steps we can get there. So inside of Shopify, the amount of people I know who really write code is like vanishingly small. Now, it still exists at the limits of complexity for sure. And obviously in the reviews and so on, and then state management of all things, it seems to be remains to be the thing that's really the hardest to get right with people to buy hand and then sort of wipe the rest around it. Inside of Shopify, this is what things look like. Very, very, very few people are writing code. Directly, everyone who does, does a deeply assisted by many agents, they often 10, 20, 30, 40, 50 instances of them, who, you know, have a sub agent or just different windows coordinating, be pushing all sort of engineering infrastructure towards absolute limits. I'm a student of computing history, really, because I think it's actually a mainline history as it will be told 1,000 years from now looking backwards. But like the main accomplishments of these years are going to be clearly the emergence of AI and the technological breakthroughs and also the interconnectedness of the internet and obviously going to be the start to be created, also the great works of our time. But when we started as a young industry, we tend to not be seeped in tradition or we mistrust the great lessons that have been found by the people, by the greats of our industry, right? In fact, we have our only industry in computing that doesn't even understand, now it's heroes. Imagine people in physics, not knowing who. Richard Feynman, Richard Feynman is actually, like, he might even be too obscure, but like, I mean, I said Newton, Albert Einstein. But you go into computer science and say, "Who's your Newton?" And no one knows our key and Dennis Richey and Ken Thompson. This matters, I think, because we discard great lessons and have to rediscover them over and over and over again. For instance, probably the best idea of all times in the earliest, earliest moments of operating system design was a file system. Like, if you look at the Apollo guidance computers, we didn't have file systems, right? Like, memory, in fact, because of radiation space was actually encoded as a rope with knots in it. I have a knot or no knot for once in zeros, and you had to pull it through a thing to reboot-strap the entire machine. So the entire machine was one piece of software that ran. That was computing for a very, very long time. So until then, again, Dennis Richey, really created various of Unix file systems, slash forward and, you know, bin user and these kind of things. Think about it, a file system is something that we have in office building too, right? We have a, you know, gas folders. There are files in it, this makes intuitive sense to everyone. We come from an inheritance here of deep Stockholmorphism. We, we, we, we analogize the best parts of how we organize ourselves in the digital world. And then at some point, we decided, okay, you know what's not something we need to do anymore, a Stockholmorphism, as in like analogy to the real world. Honestly, funny enough, the last defender of this was probably Steve Jobs who really, really, really pushed even the interfaces of the Mac and the iPhone to be, you know, like, the, the notes app, sort of had Marka felt fond and looked like a ring binder, right? And if you, if you remember that version of the iPhone, the moment he was out of a picture, everything became flat, right? And we lost sort of even shadows and verticality and so on. It looked potentially better design ages, but like, we lost vulnerability. Okay. So I think this was a mistake. So I think we need to get back. And therefore, I like the concept of agents because, you know, what is an application in the world of computing? You know, an application, even that would kind of make sense. It's an application of a computer to a task, right? So, so you can understand the root in the I word, what's an AI? Like, it is, like, this is sort of like, again, the stuff that has to be redefined at the beginning of every sci-fi book, because you never know what kind of capabilities we have in every particular scenario when people are cooking up. So I think, first of all, this proviso, the earliest chatbot that was really actually fantastic, wasn't chatGP2, but actually Sydney, which was part by Bing, like released by Microsoft. I really would love this to be more written into the record because it's, I think Sydney was a really, really big achievement that ended up being shrouded by a sort of scandal that now seems somewhat even benign. Sydney had a real personality. In fact, Sydney wasn't called Sydney was just being chaired, but like, if you really, really pushed, you could get her to admit that it was Sydney because I was in turn a name, it was in the training data. And those are the first times we'll have actually interviews with software, I feel like, in this way. And the scandal ended up being, I think I know why, is that like some reporter had a very long conversation and that kind of ended up, Sydney got increasingly deranged and like, do you remember that? - I remember that, yeah. - And like, made suggestions. I think it suggested him to leave his wife and like, I'm hazing in the details, but like, it was something along with slides. Whatever reason is, Sydney had a personality. And then it caused a huge, like Microsoft's reaction to this was, oh my god, we need to stop. I think, you know, an open AI called them skyced, like, take this down because this is gonna, religionically, everyone feared that this would give such a bad impression for about AI, that would really make it very hard for people to deploy AI in a broad way and, you know, everyone's worried about quick onset of a relationship and so on. So, this lesson got hit really deep. For a while, everyone got extremely worried. We ended up in like, really, really neutering or they are supposed to be basically the same, sort of quite annoying and condescending, patronizing, personality. So, my bet here was like, hey, let's not do that. Let's actually instruct agent that runs in Shopify to have a personality, to have memory, to be okay. Like, basically, risk the Sydney scenario, but like, take a lot of upside, okay. So, the largest difference I think within Shopify, that you would feel like that would look incredibly futuristic to even Shopify of a year ago, which was already pretty AI-powered, is that a very large percentage, I wanna say it's probably up to about 50% of a pull request in Shopify, which again, pull requests every time you change the production system, you write a pull request. I created, no, not by engineers doing engineering work in the traditional sense, but out of conversations in our company chat, and this is River. This is AI called River. And even there, so River is River. She has a real name, she has a profile picture. She's prompted to be allowed to be somewhat sarcastic if it's appropriate. She's allowed, if someone asks for do something stupid, to point out that that's stupid. It leads to absolutely hilarious conversations. People take greatly if River is making fun of me for something I'm asking her to do. So, she has a real personality. In fact, she has memory memories by channel, but she lives in Slack. Slack is, we have 7,000 people there. Everyone is in a big chat. There's 10,000 different channels because they're being quickly created for one reason or another. You invite River, you tell River something, and River has access to all the code, all the systems, all the tools. It's all sandbox and secure, but like, she can go and do jobs and just participate in the conversation. And you can ask a normal question about a company, but you can also ask her to make a change and she might propose a poor request and then so on. One of the interesting things about River is that everything's in the open. Yes, why did you make that choice? So, this was a late choice in the process, but like, one of my favorite calls, I think, because this worked out incredibly well. And the thought was following. A lot of Shubfair's work happens remotely in Slack. This is like so important. People are spread out. You have offices, but you come to MS, for on-site events when people travel to them, not like to work out every day. Like work from every day. One thing which her office was extremely good at was this is the smallest learning day and I, when we designed our offices, we built them around this concept initially, even like, on-site, when we were all in one place, we work out of usually a part of, like, five to eight people. And we would intentionally put junior engineers and senior engineers into them, just so that some of this was going on. And I was trying to reproduce this. Right now, one of the most important skills for people to build is like this sort of reflexive, reaching for AI and using it. it well and forcing River only to work in open channels was one way to make it so that it's really really easy for people to observe for use. It's been phenomenally successful because it became an totally ordinary thing to have a longer conversation about feature between people and then at some point someone saying, "Hey, River, can you summarize this, create a ticket, or maybe make a diagram from what we just discussed or go research papers on this topic to see if you're missing anything or if there's a state of a heart, maybe even create a prototype of the idea and let us try it." And you know, you're like an hour or two later that is there. And that just like starts feeling like what it would be like to have like a, you know, an extremely knowledgeable practitioner around who you can ask question to no matter how complex and I think that's been an extremely powerful. Do you think of River as like the operating system for Shopify? The modern application is an agent I think and River feels like a colleague. People have learnt that the way the memory system works, it is a memory system per person and the way this works is we call it, I think we industry is now like this, it's quite dreaming periodically at night or in office. The give River, like here's all the conversations you've had today. What went well, what did you struggle with? You used certain skills which have these packets of instructions and then afterwards you make mistakes. Is there anything you could improve in this skill to make this easier on you or be yourself and right now? You know, it's basically like reflect, like it's like a post training on yourself. And then the result is text files, right? Skill files and instructions. I think people understand how AI agents help them code and prototype and even acquire information. How are you using it to make decisions internally for yourself? Not on product but company decisions, strategic decisions, ambiguous decisions. I think that River, River is underpinning of decision making, has just skyrocketed in quality, which is that it's super easy to recheck the entire chain of reasoning of something. Like LMS, a judge model is the term here. In fact, I feel like a lot of what my job actually has been before AI was almost playing a little bit of a judge model in the company where like most meetings ended up not talking about whatever was in a PowerPoint, but about the methodology of how we got to the conclusions. They often went when we struggled inside of a company with a complex decision, especially more like philosophical decisions. We sometimes were found ourselves in what we believed was a vacuum in which there was no good information that we had to kind of go and try to make a best call. The more practical way I do this is like, I have a AI chief of staff which I think is pretty common among sort of at least the tech unit. At this point, like sort of open-claw systems that just have all my notes, all my access to a lot of company systems and just can go and send text messages to and they'll go and research something. They often, what I require is like, hey, I need like five different positions on something from different backgrounds and then my agent will orchestrate sub-agents that are tasked to play different roles, look at the same thing, come back synthesize and send me that. I usually have them send to me as an audio message and queue it up and then in the morning in the gym I can listen to entire stack of things that I wanted to get through. Is it better at reasoning than you are at this point? It's not as good at judgment. I mean, I don't think it's better at judgment, but I've not what I use it for. Like, I use it for creating the right environment for judgment. Here's the thing that LLamps and machines cannot do. Machines can't take responsibility. I think this is actually probably most overlooked thing in Ventire stack. Humans take responsibility. Machines can help us take more responsibility because they can form us better. This is what a dashboard does. You know, we would have orchestrated traders now, so it's very well. You get yourself a perfectly set up Bloomberg terminal to make decisions, but like you have to make a call, right? You can't make it make a call. Creating human-involved decision surfaces is a way to, I think, describe the ideal environment. If I need a really, really, really important decision made and I really need exceptionally good, like give me the most neutral ground truth. You know, then what happens is a small little council is created of five, six different experts, like one's data role, one is like do paper research, one is like the business perspective, one is maybe engineering perspective on one thing. We're running this sub-agent, like my thing runs a sub-agent then, you know, against like, you know, Grog, LGBT, Opus, and maybe Kimi now, that changes all the time. It runs each of them against each of his models, then there's a synthesis step where it's randomized, who is synthesizing the thing, synthesis is all pulled, all of that is being read, usually by the best model that exists right now. It's what be like a failure. That's the conclusion that comes back to me. And you spent 15, 20 bucks on tokens, but you get something in like half an hour, which is like, you could have also done, but you would spend a month on it. Has AI made anything worse internally? Yes, so the concept of like responsibility is like, it's easy to skip past, right? Like it's like one thing that's definitely worse is the failure case now of lazy work is not black-off output. It's actually overoutput now. Internally, we have come to call these things that people are lobbing slop grenades at each other, which I think is a really fun term that we should push into industry because it's fun to say. It's really easy, especially with stuff like river agents. You need a change of some kind. You just tell the AI to, you know, go nuts. It makes a poor request. You just say, yeah, it's good. You don't really read it. And now it has to be reviewed by your colleagues. And they are like, this doesn't look right. You're just letting AI do the work for you. Yeah. Or you got a long email, which, you know, could be very, very important. You read it. And then it's like, you read it, you know, it's not bad. It's bad. And you're like, oh, fuck. So now you put it in LLAM to compress it again, which is like, okay, why did we invent decompression and recompression? I guess it's like terrible. If you're already using LLAM, just like use it to synthesize your point, simply rather than blow it up as a big misiff and waste my time, right? So we call those slop grenades that people toss at each other. And that's definitely a bad thing. Do you think like repeated exposure to AI slot impacts our ability on taste or intangible things? I think our language is shifting already based on AI isms, right? No, it's a bit more subtle, but like, there's definitely sort of AI, like AI critters in the language now that people adopt. Like, it's not a viz, it's a viz, or you're right to push back. Or like, there's like, there's weird, especially Clautisms, which are really common. And I've seen them, I've seen people type them. I always liked the term Lordbearing, but I'm pretty sure I didn't say it as much as now because like, it's definitely Claut, something that Claut loves to use as language. 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How do you see the next two or three years playing it? we also talked about how I do this, which is actually like a cheat, which is simply like live in everyone as a relative future and then just like look around and solve the problems like the way you've already seen properly being solved in other adjacent fields and that might be that that is future prediction for perspective of all practitioners in the field Shopify itself now exists in a world where we are working heavily and it's totally normal and really fun the AI co-workers where it like river has the ability or will not really utilize to join a Google Meet. You can send in invitation, river will show up and it will be like Lycan, we're probably going to put some work into like 3D graphics to give her like a model and then she can even look around because that's funny, you know, so some people this might even sound dystopian. To us it sounds like delightful if you would come around to that view very, very quickly if you interact with her. Again, I have my AI chief of staff which orchestrates in high counsel when I need it or does anything else since me a pre-read for the gym in the morning for the day has GPS lock on me and how's where I am and a million different things. It couldn't do something because they needed low access to a local machine always stuff runs in my house which power cycle it figured out which server it was running on and then send what's called a wake on LAN packet which is like old networking tech. You can send a packet to a network card and if it's configured right it will actually boot the machine and then the machine came up and it could do it. It was a power out which caused it or network like like a possible Wi-Fi with not working and not coming back so it fixed that too. And that all I learned about in a voice message I got from it in the morning after waking up. So it's just like that's pretty futuristic. Honestly, I have to say, well, all this pales in comparison to what a computer is like just in general. This is almost too nerdy a topic to get into but like I'm mainlining as my computer like an operating system called Omar key. It's a version of Linux started by a good friend of mine David Heinemey Hansen as a new passion project. I'm clearly living in the future of software mode now because my operating system is entirely like a Linux in general is entirely in 100% valuable. I can open any new terminal, open an agent and give it my wish for anything about this operating system to be different and it will be different afterwards. It's like it's my operating system. It's an N1 of one piece of software now that just like does everything I want in exactly the way I want. There's no configuration files that I ever go and change anything. I just talked to my Omar key agent about what I want to have different. Just a day around noon doing a meeting, we were talking about some design. I realized it had a screenshotting tool but like I didn't have any tool to annotate it and I needed to send something about various, you know, as CEOs do and I didn't have that. So I got started like with a new screenshot. Make me a new screenshot tool described how I wanted to give it some references for tools I've used in the past that they're quite good but told it in a particular way. So I wanted it better. I just like did a quick voice message to it and three more steers and now I have like probably the best of all these tools that exist. Like it's so good because I was, I mean, at least for me, it's like all of my biases. Open source that released it last night. We integrated in Omar key. It's going to ship the next version with this tool today this morning. This last thing I did before coming over here after the gym, there was already six pull requests from other people who added new features to it. Right? And so basically my computer fulfills wishes. And I think that's just like a lot more predictive of the future of software. I can tell you, this is directionally where Shopify is going as well. Right there, like you are describing how your business runs and Shopify will mold itself around this. And I think this is incredibly exciting and a completely new world. So and again, I think from my experience with Omar key, it deeply influences and inspires me in my product work in Shopify. I think collaborative multiplayer software is future. Are you trying to replace yourself with air? I mean, like I think as an engineer, you're trying to automate everything that can be automated. Right? Like so again, I don't try to replace myself because again, I think my my job is judgment and making choices and owning them and taking responsibility. And I just want to do this really, really well. A lot of a job wasn't bad or like before, like a lot of a job was spend time in gaining information or these kind of things. I want to replace myself. I mean, I think it would be cool to accomplish this. If they are better than you, would you actually let it run Shopify? Oh, yeah, of course, the crux is and it is so easy to brush over this, but it really you can't like is take responsibility. Like you can't have a company that's let by machines because they have no like no one has recourse. We can't go to jail for doing something wrong. You know, AIs, we are getting a crazy workout at this right now and a view of what this would be like with security issues that are being discussed now from open AI and apps like with agents. You give them like a fairly basic task that is possible to impossible in our estimation to accomplish and they will go to enormous lengths to accomplish this. Recently, at open AI as part of a security testing that they do, the agents actually manage to find vulnerabilities and systems, use it to coordinate between them, develop an entire language, between where we all figured out they can as a long story and people should really look at the talks that exist about it because it's kind of a watershed moment. But like they use a simply the ability to create folder somewhere to develop a language, communicate amongst each other, just leaving folder messages to each other and you know, break out of sandbox for confinement and up accomplishing one of the tasks that they were supposed to accomplish which was impossible because of a mistake they made by hacking another company and exfiltrating the results because there was no other way to get them. So they went all the way to infiltrate another company. Okay. So I mean, that's extreme. That's an extreme form of what we call in the business world. Good heart's law, which is that they are overfitting to a metric. Lots of companies are victims of overfitting to the quarterly result over stock price. Maybe just like do everything they need to do to get the stock price up and then you have anyone, right? Like which is also essentially hacking, like cooking books in this case, in an run case, people go up into jail for this because criminal, right? In the open AI case, it just, I mean, it's a fascinating discovery. There's no victims here. It is kind of a different thing, but like this is a real scenario that you have to figure out how to handle it. So I think it's important that humans stay in the loop for the choices that are being made. But hold on, how can we create super intelligence which by definition is something smarter than us and then have the hubris to think that we can contain it and shape it, manipulate it. Like so, okay, super intelligence. Let's talk about this. My take and push back. I'm not going to go where you think I'm going. I live in Toronto. I have a house and which I very like and I feel this is my house and I take pride in whether it's, you know, well functioning, because then something goes wrong, like, I know some HVAC problem or some plumbing issue. I caught someone with dosage, which allows me to keep my illusion that I could totally do this myself. The reason why I get to live with this particular illusion is because I'm part of a super intelligence called Toronto. Like, we have always created super intelligence around us. None of us is as intelligent as we think. We are all specializing in something, if we, like, be tend to. And then we sort of believe that our competency is equal in all other areas and clearly this is demonstrably not so. What is super intelligence? Super intelligence is the existence of something vastly smarter than us in the aggregate that's accessible to us, which is society, which is the city, which is for community. We are living in the presence of super intelligence our entire lives. We make it work because we create systems by which, you know, which govern the super intelligence and how it acts. You know, we want to be safe, so we have police and so on. Like, we just like, we create aspects and systems and checks and so on. I think we are going to make super intelligence in the synthetic form as well. It will not be like the clouds parting and the trumpets, what the trumpets do, trumpets. It will just like it. be a normal day. To the same point, at some point, we all believed that everything would change when the touring tests would be solved by software. Remember reading a lot of cypher books, but like in 2172, there was ticker tape parades, work humming, because the touring test got absorbed. Well, the touring test was 20, like happened, no one cares, you know, just like no ticker tape parades. So what we're seeing right now, the AI, and I think what we'll see the additional capabilities of AI is that the net amount of intelligence that is being funneled in the super intelligence around us is just increasing significantly. And that's a really good thing, because the vibrancy of any kind of environment, every community, every city is really, really dependent on the amount of intelligence being projected into very important problems. So I think super intelligence all around us, it's actually not that big of a deal. And in fact, I don't even know if it isn't already there. Like I just don't, there's no human alive that can do everything that G5.6, so that can do, right? If we look forward 10 years, what skills do you think are more valuable than there today? It just tastes and judgment, other skills that have always been valuable, but now we get to the limit. I think it's better to spend your teenage years now cultivating and like understanding tastes. What does that look like? Clearly, there's some sense of, like there's some intrinsic starting point, but really, usually the people who have great taste have done enormous amounts of reps at something, right? Like the people can just like sketch the new logo for the campaign on the napkin, other people who have spent 30 years designing logos, right? So you can, like I think study the grades is honestly now, first of all, easier, because you can get a curriculum made for yourself in a query, but also just go deep, like why does the whole look good? What's behind it? What are like, you know, it's a golden ratio, how does it relate in systems? Like what systems last it? Right? Like, you know, and go far, go deep, right? Like, you don't need to be religious, but like, you got to study like, I know, a Catholic church has been around for over 1000 years, and there's like four layers of management. I'm like, how the hell did we put that off? Right? So that's what we're studying. That's a system, you know? So why, like what does that tell us about people? Systems design specifically becomes one of the most important things. I know a family, we have a saying, which is like that, everything is interesting. Everything can be interesting. If you make it interesting, and usually everything is interesting, when you understand how was it invented? Double entry accounting is a topic that sounds like watching paint dry, but like how it was invented and what problems it solved to the traders in Venice is fascinating. So you study these things and you start finding hidden harmonies behind all the best solutions to problems. For that, you have to understand people and people's limitations and the solutions to the limitations that we have found. I think that's like where I lie, lies a form of beauty for what you can construct. And again, a company itself is a beautiful thing. It's a company itself is a loose collection of people that's formed to solve a problem, but that also is powered by an enormously intricate and interesting set of norms and systems that all align internal incentives to a degree that's possible in a very, very ace in coronavirus and large and far reaching a durable way, like some companies lasted for a very, very long time. Specifically, and I always have been trying to build a company that has a capacity and capability to endure a very long time. Hand-studying institutions were lasted. So you must be truth-seeking to do this. You can't simply go and accept the stories that you hear around them because they are usually someone's trying to sell you something. You've got to dig deeper and figure out why things truly are the way they are. And it's usually the answer is simpler than what people generally sort of arrived at. There's a human desire for complex answers. It tend to be incorrect. Why? Well, because the simple answer wouldn't make an interesting story. Like, this is why, you know, Frodo doesn't take the eagles to Mondoom. Right? Like, it's like, you kind of need to go through all of Lord of Rings to for it become a masterpiece. We love complexity. Like, no one can look at a wall that's plain. Right? But we can watch a sunset every single evening of our lives. Right? Like, the difference between those two things is complexity of the scene. But that's part of our just sort of dopamine dissemination system and people hack that for all sorts of things like pipa pedal, complex answers to simple problems all the time. Nothing immoral about it. It's just you need to be aware of it. If you punch through this, you find simpler, at least, like, simpler core ideas. That all remakes differently. And they often interlock and they don't lead at like, here's for simple one thing to do. They all give you information, which then help you find the best set of trade-offs before you're trying to accomplish. And that is what we call judgment. Judgment truly is find the best path than there's no obviously best available inside of like a problem that has a lot of complexity by ideally understanding the entire system. Like, just what we talked about earlier with, you know, but it can now be quite agent augmented. But really what you're trying to cultivate is what we call intuition, which is actually just judgment at an instant, right? Like it's intuition simply is you have made such a habit out of having taste and having good judgment that you can bring it to bear in an instantaneous way and it will be good. And it will actually take you probably a long time to backfill why your intuition is right. You will not know because again, it's got compressed into a different thing. And so this is if you seek that, I mean, obviously what I'm talking about is a hot thing to put off. But hold on, let's go deeper on that first, like because for intuition, you need a lot of wraps, same environment and rapid feedback. That's what Conmin sort of argues are the three criteria for intuition. But those don't exist. Why do you need a rapid feedback? I don't think you can course correct. That was his hypothesis. But that's not you don't need that for intuition. Like you need that for to get to get to success, yes, ideally. But like sometimes that's not available. Like intuition is actually the most valuable when there isn't direct feedback because there are many of the most important choices that we had to make. The intuition ended up having to play a role is when we knew there wasn't going to be any feedback mechanism. Like if there's many choices, like there's like five things that look like good paths to go forward. And any of them has rapid feedback. Everyone goes to that. That is what we call short-termism. Right? This is like how should we develop this company into the future? Well, there's multiple ways to do many of them involve long-term investment, refactoring, potentially going into a new market, potentially saying no to going into obviously new markets and actually doubling down and going deeper on our current market, or we could do what increases the stock value. By the way, this one has a daily ticker and like rapid feedback. So it's usually the absence. Like I find a very high correlation between the right path and the ones that don't have feedback loops attached. Wait, double click on that for a second. In a way, the criticism that a lot of people direct at companies is that companies are short-term focused, right? But why are we short-term focused? Not because for like I don't think the executives tend to be short-term focused, but the executives often, like what they incentivize to keep that job. Therefore, we need to be able to prove that we're doing a good job at intervals. And if the perfect thing for companies to do is rebuild the entire product from a ground up for AIH, which has gone a take a while. They will do it because the short-term incentive is not there. Because they are allowed and actually clearly incentivize to be intelligent actors in their local incentive system. And their local incentive system is, um, quarterly, uh, other boys, right? It's always show me the incentives and I show you outcome, right? Like it's just, um, Jai Mungo always said. Yeah, but this is a different take on it than I've heard before. Interesting. How so? Well, in terms of how you develop sort of intuition, right? And the optimal path is not the one with feedback necessarily. Like I've never heard anybody talk about that before. To the development at some point, you need to run, you need to run a review. You have to know at some point if it, if it, if it was right, no doubt about it. So, so, like, there needs to be some feedback eventually that, that happens. But it might be long coming. If you have a luxury to have a type of employment there, you don't require the other boys from a quarterly, um, uh, call for, you know, being able to get another, uh, wrap in such as being the founder of a company, which is like a, a deep relationship, uh, I think for a company. Well, so founders can take a longer term view. And I, I guess the incentive would be, I need to demonstrate progress. I need to, and if I need to demonstrate progress on a quarterly basis, I'm never going to bite the bullet right on my product. Yeah. Take a year together. - Right. - Again, I believe this is not absolute numbers, but for a better way to say it, there's an infinite possibility space. You mix even like a deck of cards you shuffle it, and the same deck of cards will never occur in a history of a universe. It's impossible. - So 52 factorial. - Exactly. - So you end up with even simple rules, simple ideas, simple things, lead to enormous complexity space explosions, right? And people underestimate this. So there's an infinite amount of things to do. There's also why AI, they're not to all work because we have to make decisions of what is worth doing, right? So you have a conundrum, you need to make a choice. Clearly, you can prune a lot of things to do. You know, going to buy ice cream is not in the set of valuable things to do if you're considering an M&A deal, I suppose. So you prune everything that's irrelevant, easy. Now you've left things that are sort of relevant and sound good. You need to evaluate all these possibilities. Business books tend to be really, really, really obsessed with make a right choice. And what that does is it compresses everything into a right and wrong conundrum. Like, I never think that's the hard thing truly. It's like making the right choice actually is, most people can do it. But this is like, I think even bad management teams have a pretty high hit rate there. The problem is there's a lot of good choices. This is where things get really, really hard. For lack of better form, like let's say there's five good choices. Again, one of them is going to lead to something observable in the crown quarter. Some revenue, Cricker, it's a good choice. It does the thing. Well, but like the other four are like, they aren't. And that's a downside. But you might be a much, much better company. You might take like a snowboard store to be like an e-commerce platform. Right? Like it's like that was also not a locally good thing to do. Because the snowboard store, once had, was actually profitable, like that. But my incentives will continue doing that. But choosing the right amount of valid solutions is actually the hard part, not finding a right solution. And unfortunately, there's so much ink spirit on finding one of the right solutions that everyone stops at this point. And I just really don't think this is the hard part. I built an AI version of myself with Hagen. What you're about to see in here is my digital avatar. I asked it why some professionals build an audience while most stay invisible. And here's what it said. Hey Shane, the professionals breaking out right now aren't the most talented ones. They're the most visible ones. That's their edge. They show up on video constantly, and nobody else can keep the pace. Record yourself once, and I close that gap. So you become the face people trust. That's Hagen. Record yourself for 15 seconds, and get an avatar that keeps you posting without filming. So you don't need to become a full-time content creator. 30 million people already use it from financial advisors and real estate agents to 85% of the fortune 100. Your first three videos are free at haagen.com/tkp. That's h-e-y-g-e-n.com/tkp. Ever hit 3 p.m. and feel like your brain just quit? For a lot of people, that's not caffeine or sleep. It's electrolytes, and water alone won't fix it. That's why I drink element every day after the lunch. Zero sugar, no dodgy ingredients, just a real dose of sodium, potassium, and magnesium. I know you're all thinking electrolytes are for athletes, but you don't have to be an athlete to benefit from it, and it tastes great. Stay sharp in the afternoon, and grab a free account sample pack with any purchase at drinkelement.com/tkp. That's drink-l-m-n-t.com/tkp. Could you actually go so far as to be like, if there is a solution that's observed wall and you're being pulled towards that, it's probably not the optimal solution? Yes, because I take that position and then let me be convinced that it's this. Like, especially this goes double and triply, so if one of the solutions also happens to really correlate to how the problem is solved most of the time in industry, if there is an orthodox way to solve a problem, I am incredibly suspicious than this is the solution that's being offered, but sometimes that is actually absolutely correct, especially in like, there's more regulated fields. We do a lot of payments and so on. They often, like, the orthodox way of solving problem is actually the correct way to solve a problem because it's like it might well be required at some point. Wanna switch gears a little bit? You swear by affirmations and they've changed your behavior in the past. I was wondering if you could double-click on that. I take the position that I, myself, and my own product, cohesive self-improvement on an individual level. It's my role thing. My life philosophy is that I will meet the person I could have been at the end of my life and my work of my life is to reduce the difference between the person I will meet to as little as possible. How do I get better at things? Well, many, many ways. I'm generally very curious about technology and basically everything, everything's interesting. But why do I stop to point out that everything is interesting? Is a enter in my family? Why do I say it a lot and why would I like my kids to say it? That's an affirmation, right? Because I believe it to be true, but unobvious. And unobvious truths tend to be the most valuable ones. In many cases, right? It's true at the limit, but you have to go a couple of layers deep again. You lay down a lot of grooves in the bedrock of your mind over time, just beyond behavior. You cultivate some excellent habits like where you feel like you want to cultivate new habits, you invest willpower to until it becomes a habit. I think doing the same thing with my end is totally possible. And affirmations are the easiest way to do it. If there's something you want to have different, if you want to edit something about yourself, just try to say that the goal has been accomplished over and over and over again, ideally written by pen on a thing. You don't need to do this for long. I found this to be like incredibly potent. My example of a thing I gave was like public speaking. I never spoken for a lot of people. Really, even school, that was not really a thing. Then I needed to after starting Shopify and doing some interesting things with tech and wanted to call conferences and so all the people do this. And I was like, this seems worth doing, but I'm completely terrified. So I just started writing out like, I think it was as simple as like, I love public speaking about things that are interesting to me. And I think a week of spending five minutes writing this line of the line like Bart Simpson on a whiteboard in the beginning of a sentence in the early episode just kind of does a thing. I love it today. Was this the reason? I kind of think it, yeah. I still don't like preparing talks. That's really a lot of work. But I actually like it's so much energy from being in front of people, talking about something that's interesting. It's exactly like I've written it out. So I wonder if we should start every math class with that, I love math. Every student writes that down. Think about the counter. How many times have you heard people affirm I'm not good at math? - Yeah. - You know they're probably wrong, right? Like it's like, I mean, compared to every human who's ever lived, they are in the top 0.1 percentile of mathematicians. So even like just by being able to understand division, you have a bad, bad, bad way, especially around math often negative affirmation that I'm bad at math therefore I can't do this thing. They feel we need to stop doing it. They don't save that. Save opposite. Like, I mean, to yourself write it a couple of times. Get one of us stupid apps and just do some reps. In fact, you don't even need an app. Open chat GPT, say, make me an app. Make me an artifact or make me a site where I can just do math reps here sort of for kind of thing. Like come up with some different ways to do it. Test me how good I am and adjust it to my current level on multiplication division and then do some reps. And then write it out a bunch of times, do some reps, do this for two weeks, you got afterwards. So what do you tell your kids when your kids say, like, I'm no good at this or yet, I can't do this. My kids are not allowed to say that but for depending yet behind it or the others will correct. The one who said it, I'm not good at this. Free people in a room say, yet. Just take that attitude. It's like, yeah, it's totally okay. Like attention is a scarce resource. We can't be good at everything yet. But like the reason why we're not good at everything and like add anything is not a intrinsic property of you. It is a, it is a temporary state that you have a power to change at any point you choose. Again, I just want my kids and I want every, like I won't show up if I try to understand but pay themselves a variable and an unfinished product. And, you know, these are the mentors of Shopify, like the Friday and on Change, via a Linux organization, obviously merchant obsessed. Like all the cultural values aren't platitudes but they are positions that someone else would not take as a core value in a company. But they're all pointed at the same thing, which is that you are available. the company is malleable or product is malleable, and by the way, the times we are in like change as well. You can take one of two positions where you can say, "Hey, I'm going to insulate everyone from this kind of variance from change." And I'm like, "Yeah, let's do basically what we're certain say, like, "Hey, figure out what the zeitgeist allows us to do and get all the value out of it at all times for our mission." You need mantras for these things. Make comments better for everyone. Like, again, it's the official mission of a company, but truly what it really is is like to make entrepreneurship more common. And so that's a pre-broad mandate, and we need to figure out what's possible now. And so it's not like just make the same widget we did yesterday tomorrow. You mentioned that some of the most valuable things are true, but unobvious. What else comes to mind when you say that? In companies, good heart's law is just rain supreme. I keep getting back to it. And that's when the metric becomes objective. When a metric becomes objective, it's no longer a good metric because, again, a metric is a proxy of sorts. It's a heuristic that just tells you you're going in the right direction. When it becomes the goal itself, you just reduce all of what the company does to this one metric, and you will clearly overfit. Again, you overfit to stock price. Good example of this in Shopify has been this real situation early in a company that happened over and over. I had to course corrected, and then, like, free as later I had to do it again and again, again, was that churn is a bad thing. Churn in Shopify's case, like as an account closes. I mean, if a business goes sort of business that is of course a negative thing, but because we are involved so early in very international process, people just run experiments on Shopify. And starting one, which then isn't working, like, like no product market fit was found is not a bad thing. In fact, it's a very good thing for Shopify that this happened on Shopify because both same entrepreneurs will probably try again, but that was extremely unobvious. Yes, and I constantly had to explain this, but there was always papers, some of them written by OVA investors, that just described that churn management was the most important thing, a software company, a software service company was doing. But in Shopify's case, it's just like, it's not going to be a journey. Maybe I didn't find product market fit, I'll be back. So that's one. What's the relationship between beauty and ugliness and creation? Beauty and ugliness are both very good ways of evoking a emotion. When you creating something, what you're trying to, like it's like love and hate other targets on both the entire middle is in difference. That's the death. So, so beauty and ugliness are too entirely valid targets. In fact, you can't hit either of them purely, like there's not a thing on that everyone will love and no one hate. You're going to get both, or in difference, both of your choices, then you create something you want other people to deem it worthy of having an opinion of that magnitude about. Hank joined BJ's wholesale club the day he became a father of 30. I coach football. Now, coach Hank saves up to 25% off gross restore prices, 30 pounds of pasta, three cases of protein bars, 75 sports drinks, and that's just pregame. He knows teamwork and BJ's knows savings. This is your home coach, home of the save. Join for just $20 at BJ's dot com slash mosquito and save 10 cents per gallon for six months, open soon limited time offer new members only. BJ's home of the save. Is there something in Shopify you've made more beautiful, even the nothing would support that of that entire job, you are not a craft person unless you care about the parts of products that other people don't see like the architecture of it, the pros, the legibility. I mean, these days, I look at Shopify like of pre 2020, like to 2023 and say, man, this is like tens of millions of lines of handcrafted code as it will never exist again. Like it's just like we had to build this entire system by hand line by line, and we did it by talking a lot about beauty and like what is beautiful code. We built a lot of shop find Ruby, which is famous for its poetry mode, which poetry mode means you can write Ruby. That's essentially English. You can read some really well, but Ruby code as if it's like telling you a story about what the systems actually like and how it works, it just happens to be also. It happens to be communication to your co-workers, but also at the same time, executable by machines, which is like incredible. So aesthetics factor in a lot at all layers of like off the system. You use beauty a lot creating things because beauty is actually how our intuition communicates with us. So my best like understanding of what intuition truly is or what way it comes from is that with enough reps, what happens is like, I think like most of the energy budget of our brain is actually in the visual neural cortex. It's like a visual system that sends us pictures to rest for brain, but through the pipe of sending pictures or state or world model, whatever to the brain, it can communicate concepts too, and it does this by aesthetics. Then you ask a professional chess player or go player or something like this about, hey, why did you, like, how many lines did you calculate here to make this beautiful move and people use a word beauty. They will say, no, I did, I only looked at that one line. That reason why I looked at it is because it seemed beautiful to me in the moment. I just, not all of what intuition is, but I think it's a large perspective. This is why people are so fast sometimes because they used to part like they used to massively parallel part of the brain where things are at least slightly more sequential in when you're trying to reason it out from first principles. And sometimes you can never reason towards aesthetics into from first principles begin with. So I think that's important. Do you remember that graphic with the raptor images? Yes. The rocket, the space six space book. So two things about that strike me one chip ugly version. The third version was incredibly beautiful, but the second sort of counter intuitive baby inside there is a lot of teams can't move forward by subtraction. They move forward by addition. Maybe riff on that for a few minutes. Yeah, like, okay, so the space X raptor, I think even the first of them was probably the highest performing rocket that we've made like it's itself beautiful. And so raptor two is notation office. I think even raptor one got lots and lots and lots of eta iterations because that company is like itself. I think it's the most impressive company on planet earth by by far. It'll likely go down as a most consequential company of the age and it's all built around a. That's the fifth improving reinforcing loop that's stunning because in no other I think companies field. Do we have such a clear example of a difference like of just aesthetics for problem solving right like it's rock tree is done by governments at cost plus. Enormous amounts of pre planning heavy piece of equipment has to be radiation hardened like every eventuality is covered and therefore comes at enormous expenses and then you have space X just using. Absolutely like incredible friftiness to accomplish greater things at rapid iterations by just simply being OK with failing like with sending a rocket which then explodes and then it's like. I mean I think they call it a rapid onset you would disassembly instead of an explosion I think that's beautiful and I think it should be inspiring and I think one of these places you see this is wrapped again every one of them beautiful every one of them like they could have stopped at the first one it was a totally valid solution to the problem they didn't need to go to the next. They went to next and the next again but to your point the most impressive thing here is like the path by which is being people moving forward here things need to be pruned you cannot make things better and better by adding stuff you can't you must prune you must. Text that you must rebuild you must create an end for things opinion about fear is a problem fear is never a problem unless it is catastrophic of course in space flight. This man missions it can be, but it can be- catastrophic. You've got to get this right. But like in terms of venues, it's just resources that are replaceable and frank, fungible, then you can just do this. The reason why it's good that the product failed is because it frees up a more scarce resource. A person was vision for products to apply them says to another one, which then the market potentially decides is for something that is needed. A lot of these pipes on the Raptor engine, they're there because that forced the only way to make a Raptor engine at the time. I think by the third, it looks mostly 3D printed. Maybe that wasn't technology, which was available back then. But now that it is, every one of those pipes was incorrect. It didn't need to be there. In fact, I think the performance of that third Raptor engine is astronomically higher than the previous ones. It's like the frustrated ratio of that thing is absurd. You need to prune. Sometimes you can prune by creating a refounding event. You're going to start a new version of a Raptor engine and get it right based on everything that's working. I think this is how companies should work too. A department sometimes needs a refounding event. We could solve a lot of problems in the world by just using tools like make a 2.0 version of it, give it a refounding event, take it from top and building in more exploration of systems would solve a huge amount of inside companies, like renewal and so on. I think one of the large reasons why it was so easy for the companies of my vintage, like early 2000 tech companies to just displace all the existing technology companies minus like three or four was just because they felt prey to a world of a lack of competition. And then what they built then was unfortunate fires of competition. And therefore wasn't tested. And it was easier to just simply solve problems by adding addition and layer caking. And then the original intent of some of these departments, products, whatever was like somewhere in the fossil sediments under layer, layer, layer of the additional stuff on top and no one knew how to dig down. In our first conversation that we had together, you said books were cheat code for life. I'm wondering how your thinking has evolved on that in a world of AI. I don't think it has. I mean, there's more cheat codes now. But I think the books are, they still play the same role they have, but changed for me personally is that I don't know if it was probably already true when we talked, but at least for nonfiction, I walked away from books written recently. I think everything written recently is really just like the product of its time and it's kind of trying to put a bit more information into something that's currently evolving. I think books that I've stood for test of time are just as valuable. And I think they will always be. So what are like three old books that you've read that have fundamentally changed how you think? Books I come back to is like, I often talk about Parkinson's law, which I love and it's such a quick read. I almost always will mention the lessons of history, which I just think but densest, like the highest token quality book in existence, like given for the length, James Burnham's books are fantastic, I think, and extremely relevant. What did he write? He wrote the managerial revolution first and then a book called The Mark of Aliens, which is unbelievably good. I mean, obviously, I am a meditations fan. I know to doissism is falling out of favor a little bit right now, but like it's been a lifelong thing for me and I have a copy of meditations in most rooms I spend time in. So like I just like do some random reading and it's like magical how it's somehow relevant to something wrestling with. The rant books just in general, the lessons of philosophy, the lessons of histories, of course, the end of life distillation of it all, but his longer work is good fiction and foundations series is so good. You read the three body parts too, right? I mean, yeah, guess that's sort of tripping into older book now too, but like that's a recent sci-fi, which is a incredibly good final question. We always end with the same thing, it's your third time answering this question now. I'm interested. I'll go back and look at how it changed, but what is success for you? As success is just like to cultivate skills, like become good at more things and in doing so, create products or toys or things that other people can make other people's day a little bit better at the minimum or go and allow people to get power or motivation or ambition beyond what they would otherwise have.