Shopify

Uber

Shopify

Shopify charges merchants a monthly subscription fee — $39/month for Basic, $105/month for Shopify, and $399/month for Advanced. Enterprise clients pay more through Shopify Plus.

On top of the subscription, Shopify takes a cut of every transaction processed through Shopify Payments (2.9% + $0.30, similar to Stripe). If merchants use a third-party payment provider, Shopify charges an additional 0.5-2% fee.

The genius of the model is stacking revenue. Subscription fees are the base layer.

Payment processing is the second layer. Then there's Shopify Capital (lending money to merchants), Shopify Shipping (discounted shipping labels), Shopify Email, the app store (Shopify takes 0% on the first $1M in app revenue, then 15%), and Shopify Balance (banking for merchants).

Every new service extracts more value from each merchant.

Uber

Uber is a marketplace that connects riders with drivers. You request a ride through the app, the nearest driver accepts, picks you up, drops you off, and Uber takes a cut — typically 25-30% of the fare.

The driver keeps the rest. Uber doesn't own any cars.

They don't employ any drivers. They built a $150 billion company by being the middleman with a really good app.

The model expanded into Uber Eats (food delivery, same concept — restaurants cook, drivers deliver, Uber takes a cut), Uber Freight (connecting truckers with shippers), and advertising. The advertising business is quietly enormous — Uber has data on where millions of people go every day, and brands will pay handsomely for that.

Shopify

Tobias Lütke was a programmer from Koblenz, Germany who moved to Ottawa, Canada in 2002 because he fell in love with a Canadian woman. He wanted to sell snowboards online through a store called Snowdevil.

The problem was that every e-commerce platform in 2004 was absolute garbage. They were expensive, ugly, and painful to use.

Most required a computer science degree just to set up.

Lütke was a Ruby on Rails developer — one of the early ones, when Rails was still a brand-new framework. Instead of suffering through the existing tools, he just built his own e-commerce platform from scratch.

Snowdevil launched on the custom-built platform, and it worked beautifully. Other small business owners saw it and started asking if they could use the same software.

Lütke teamed up with Daniel Weinand and Scott Lake. In 2006, they launched Shopify as a product — a hosted e-commerce platform that let anyone set up an online store without knowing how to code.

The first year was slow. They had about 100 merchants.

But the product was so much better than everything else that word spread. By 2009, they had launched an API that let developers build apps and themes for Shopify stores, creating an ecosystem that would become one of their biggest advantages.

Uber

The idea started in Paris in December 2008. Travis Kalanick and Garrett Camp were at the LeWeb tech conference and couldn't find a cab.

Camp had been obsessing over the idea of summoning a car with your phone. He bought the domain UberCab.com, built a prototype, and recruited Kalanick to help run it.

The first version launched in San Francisco in 2010 as a black car service — not the cheap rideshare everyone knows today. You'd tap a button, a Lincoln Town Car would show up, and it cost about 1.5x a regular taxi.

Ryan Graves answered a tweet from Kalanick looking for an "entrepreneurial product manager" and became employee number one. He ran operations while Kalanick was still finishing up another startup.

Graves would later become CEO briefly before handing the reins to Kalanick. The app launched with just a handful of cars in San Francisco.

It worked so well that riders couldn't shut up about it.

The real inflection point came in 2012 when they launched UberX — regular people driving their own cars at prices cheaper than taxis. That one decision turned Uber from a luxury black car service into a verb.

Within two years, UberX was available in hundreds of cities and the word "Uber" had entered the dictionary.

Shopify

Shopify grew by being the anti-Amazon. Their pitch was simple: Amazon is a marketplace where you're one of millions of sellers with no brand identity.

Shopify lets you build your own brand, own your customer relationships, and control your destiny. "Arm the rebels" became their unofficial motto.

The app ecosystem was a multiplier. By letting third-party developers build apps, themes, and integrations, Shopify created a marketplace of 8,000+ apps that extended the platform's functionality infinitely.

Need email marketing? There's an app.

Need inventory management? There's an app.

This meant Shopify could stay focused on the core platform while the community built everything else.

The Shopify Partners program turned freelance developers and agencies into a sales force. Partners who built stores for clients earned recurring revenue from referrals.

Over 10,000 agencies worldwide now specialize in Shopify development. It's basically a franchise model for tech.

COVID was rocket fuel. When physical retail shut down in March 2020, every small business in the world suddenly needed an online store immediately.

Shopify's new store creation surged 71% in Q2 2020. The stock went from $400 to $1,700 in less than a year.

Uber

Uber's early growth strategy was beautifully ruthless. They'd roll into a new city, launch without asking permission, and deal with the regulatory fallout later.

They called it "Travis's Law" — it's easier to ask forgiveness than permission.

The playbook was simple: launch in a new city, give massive discounts to riders (sometimes completely free rides), pay drivers signing bonuses and guaranteed hourly rates, and flood the zone until the city was hooked. Then slowly raise prices and cut driver incentives once the market was locked.

They burned billions doing this but it worked — by 2016 Uber was in 500+ cities across 70 countries.

They also weaponized word of mouth with referral codes. Every rider could give free rides to friends.

Every new driver got a bonus for signing up. The viral loop was insane.

At peak growth, Uber was adding a new city every day.

Shopify

The Amazon problem looms over everything. Amazon controls roughly 40% of US e-commerce.

Every Shopify merchant competes against Amazon, and many of them sell on both platforms. Amazon can always undercut on price, offer faster shipping, and has nearly unlimited resources.

Shopify's entire business depends on convincing merchants that owning their brand is worth more than Amazon's convenience.

The post-COVID hangover was brutal. After the pandemic boom, Shopify's stock dropped 80% from its November 2021 peak.

The company had hired aggressively during COVID, expecting the e-commerce shift to be permanent at pandemic levels. It wasn't.

In May 2023, Lütke laid off 20% of the company — about 2,300 people — and wrote a public letter admitting he had bet wrong on how much of the COVID shift would stick.

The fulfillment pivot was expensive. In 2019, Shopify announced the Shopify Fulfillment Network — their plan to build a warehouse and logistics network to rival Amazon.

They poured hundreds of millions into it. By 2023, they realized it was a money pit that distracted from their core business.

They sold the logistics operation to Flexport and wrote off the investment. Lütke called it "taking the medicine."

Uber

Where do you even start? Uber might have faced more simultaneous existential crises than any company in history.

Regulatory wars. Taxi unions, city governments, and entire countries tried to shut Uber down.

London revoked their license. France arrested two executives.

Uber was banned, unbanned, re-banned, and sued in dozens of jurisdictions simultaneously.

The toxic culture. In 2017, former engineer Susan Fowler published a blog post describing rampant sexual harassment, discrimination, and HR cover-ups at Uber.

It went nuclear. Investigation after investigation followed.

Board members resigned. Executives were fired.

Travis Kalanick's ouster. After the culture scandals, a leaked video of him berating an Uber driver, and a federal investigation into stolen trade secrets from Google's self-driving car unit Waymo, the board forced Kalanick to resign as CEO in June 2017.

Dara Khosrowshahi came in from Expedia to clean things up.

The cash burn was legendary. Uber lost $8.5 billion in 2019 alone.

They subsidized rides so heavily that riders were paying less than the actual cost of the trip. The company didn't turn its first operating profit until Q3 2023 — fourteen years after founding.

Shopify

Shopify Online Store is the core — build and run an e-commerce website. Shopify POS (Point of Sale) handles in-person retail with card readers and inventory management.

Shopify Payments is the built-in payment processor powered by Stripe. Shop Pay is the accelerated checkout — it saves customer info so returning buyers can check out in one tap.

Shopify Capital provides cash advances and loans to merchants based on their sales data. Shopify Fulfillment Network was their attempt to compete with Amazon on shipping (they scaled it back in 2023).

Shopify Markets handles cross-border selling — currencies, duties, and translations. Shopify Audiences uses anonymized data to help merchants find new customers on ad platforms.

Uber

Uber Rides is the core product — get from A to B in someone else's car. UberX is the standard option, Uber Black is the premium black car tier, UberXL fits bigger groups, and Uber Reserve lets you schedule rides in advance.

Uber Eats is the food delivery arm and competes directly with DoorDash and Grubhub. Uber Freight is the logistics play — basically Uber for semi-trucks, connecting carriers with shippers.

Uber for Business lets companies manage employee rides and meals. Uber now also offers package delivery, grocery delivery, and even boat rides in some cities.

Shopify

Bessemer Venture Partners, FirstMark Capital, Felicis Ventures, Georgian Partners, OMERS Ventures

Uber

Benchmark Capital, First Round Capital, Menlo Ventures, Jeff Bezos, Goldman Sachs, Google Ventures, Saudi Arabia's Public Investment Fund, SoftBank, Toyota, PayPal co-founder Peter Thiel, Tencent