Glen Coates on Product Decisions, Shopify and the Art of Storytelling

Glen Coates began as a video game developer before moving from Australia to run a U.S. warehouse for an eco-friendly shopping bag business. At trade shows, he saw wholesale orders being written by hand and kept expecting someone to build an iPhone app to replace the order books.

When no one did, he learned Objective-C and built a prototype that became Handshake. He briefly attended business school, then left to build the company; his friend Mike joined as co-founder to lead sales and marketing.

Asked why gaming might produce strong founders, Coates suggests that games reward analytical thinking, competitiveness and the willingness to keep trying through frustration. Building a company can feel similar: repeated setbacks interrupted by small signs of progress.

After roughly nine years building Handshake, Coates and his team joined Shopify through an acquisition. He initially worked on wholesale, then in 2020 took on an urgent checkout project that Shopify called a code red.

The checkout work exposed an organizational problem. Shopify then had roughly a dozen product divisions with separate teams, but checkout crossed many of their boundaries; problems that required coordination across divisions could linger unresolved.

Coates resists reducing product management to a rigid framework. At its core, he says, the job is making good decisions about what to build and when, while reducing wasted work and disagreement discovered too late.

For a new project, he asks teams to sketch three things: outcomes, assumptions and principles. These surface the places where people may think they agree but are actually heading toward different destinations.

An outcome answers how the team will know the investment was worthwhile. Sometimes it can be a conversion or performance metric; sometimes the outcome is aesthetic and requires judgment. The key is agreeing in advance what success will look like.

Principles govern difficult trade-offs where reasonable people could disagree. For example, a team might agree that when merchant and developer interests conflict, it will favor merchants; a stated rule prevents different parts of the team from pulling in opposite directions.

Such conflicts occur often at Shopify's scale, Coates says, including between small and large merchants. He sees assumptions as another source of disagreement: two people can argue about a product while holding different beliefs about the future of mobile and desktop use.

Outcomes can be especially hard to define for foundational platform work, whose effects pass through many dependencies before reaching revenue. Stebbings and Coates also discuss how targets can be gamed: a meeting count can be met with poor prospects, and acquisition goals can ignore subsequent churn.

Coates argues that the lower a team works in the platform stack, the more it must think about the future. Startup founders often plan around their next one or two years of cash, while infrastructure and APIs can shape users' choices much further ahead.

Serving a very small merchant and a large enterprise with the same product is difficult. Coates identifies two tools for preserving simplicity: progressively reveal functionality as it becomes useful, and let an app ecosystem add capabilities to the core.

Permissions management illustrates progressive disclosure: a single-user business has no need for it, so exposing that feature too early can add complexity without value. The feature should appear when the need arises.

An app platform can extend the product without burdening every user. Coates argues that third-party developers need tools capable of producing apps as good as first-party features; otherwise an ecosystem cannot provide the quality needed by larger customers.

Coates describes Shopify Functions, released the previous year, as a difficult technical step for extensibility. Traditionally third-party logic ran on developers' servers because running arbitrary code on Shopify's servers created security concerns, but the network calls could slow the experience.

He says Functions uses WebAssembly to run compiled third-party logic in secure environments on Shopify's servers, bringing extensibility closer to the performance of hosted code. His claim that Shopify was the first at scale to do this is presented as his understanding, not an independently verified finding.

The reorganization merged seven or eight earlier divisions into Shopify Core, but Coates then divided Core into smaller teams again. He says an organization of about 2,500 people still needs manageable groups; the change was where decisions and escalations could be resolved.

Previously, the first common manager above the divisions was CEO Tobi Lütke. Coates says Core's leadership team now sits above its smaller teams, handles escalations and makes trade-offs, reducing the time teams spend in unresolved conflict.

Shopify describes work as aiming, assembling and achieving: setting direction, organizing people and resources, and doing the work. Coates and other senior leaders, he says, are willing to set a clear product direction rather than leaving every decision to the edges.

His argument for leadership direction is coherence across a suite. If every component is decided independently, he believes it is harder for products to work together and feel like a unified experience, as he says Apple's devices do.

Coates supports disagreeing and committing, while acknowledging that a team may move more slowly when people disagree. A failure to commit can reflect an individual's unwillingness to follow the direction, but it can also reflect leaders failing to explain why the direction makes sense.

Coates learned the value of storytelling while raising money for Handshake. At a CEO peer group, a venture investor repeatedly asked him to tell a story people could feel instead of listing processes, customers and product features.

Coates eventually described a shopper looking for a white T-shirt in the right size and finding an empty shelf. Handshake, he explained, helped the businesses supplying goods get them to the right stores at the right time. The investor could finally understand the problem in human terms.

His lesson is to find a story in which the audience can see itself. Numbers and analysis have a place, but he believes a relatable experience creates emotional understanding that a process description alone often cannot.

Asked how to speak to different customer groups, Coates says the best stories can work across audiences, though teams may use different messages. He does not claim a formula for making people feel a story; he emphasizes authenticity and the speaker's own conviction.

Repetition matters because people forget quickly, he says, so leaders need concise, memorable language they can return to. He also finds it hard to deliver a script he does not believe, because an audience can sense the difference.

Stebbings challenges Shopify's website copy as bland and improvises a message about helping business owners fund the lives they want. Coates agrees the site could improve, while noting the difficulty of creating one message for many countries, industries and sizes of business.

As Shopify's customer base grows beyond its earlier concentration of smaller North American fashion businesses, a message must speak to founders without alienating more cautious established retailers. Coates calls finding an authentic message that does not lose too much of the audience the art of product marketing.

On managing up, Coates says Lütke is effectively Shopify's head of product as its founder and CEO. Coates leads the core platform portion; in his view, expanding his own remit further could dilute his focus on that work.

He distinguishes Shopify's platform from aggregation businesses such as Shop and Shopify Logistics. In 2023, he argues that combining a merchant platform with a growing buyer base could be more valuable than either alone, and predicts Shopify could compete with Amazon in scale within five years. That is his forward-looking view as a Shopify executive, not an established outcome.

Coates identifies a strategic mistake at Handshake: its architecture assumed users would often be offline. That was valuable in 2010, when trade-show connectivity was poor and pre-synced data helped sales representatives keep working.

As connectivity improved, the offline capability became less differentiating while its technical debt remained. Coates says he should have considered how quickly the environment might change and built with that future in mind; the accumulated complexity slowed innovation.

In quick-fire answers, he praises the feel of a Roland electronic drum kit and compares a CEO and product leader to a lead singer and drummer working together. He believes a product-focused founder cannot simply hand off being the ultimate product leader without creating confusion or abandoning an important part of the role.

Coates describes Shopify's 2023 strength as its speed of shipping at large scale, along with the combination of merchant tools, developer platform and buyer aggregation. These are his assessments as a company executive, not independently established comparisons with competitors.

He identifies a strategic weakness as well: Shopify does not control the top of the shopping funnel, which often begins on social media, news sites or search ads. That leaves merchants and the company dependent on platforms upstream, despite efforts to help merchants reach buyers.

Coates would like product managers to focus less on the craft's processes and more on sound decisions, collaboration and delivering what they promise. In his view, the best product managers maintain momentum while building things that make customers happy.

Asked about an impressive recent strategy, Coates praises Microsoft's partnership with OpenAI and its then-new AI search push. His 2023 view is that Microsoft could take a risk in search because its other businesses supported it, while a successful change could challenge Google's core business; he explicitly says the approach might not work.

Stebbings thanks Coates for joining him, and Coates closes the conversation.