TIVP21: SHOPIFY (SHOP): THE BATTLE FOR THE FUTURE OF E-COMMERCE

W/ SHAWN O’MALLEY & DANIEL MAHNCKE

25 May 2025

Shawn O’Malley and Daniel Mahncke break down Shopify (ticker: SHOP), a leading e-commerce platform company enabling e-commerce merchants across the world to seamlessly manage nearly every part of their business in one place. Shopify has been locked in a power struggle with Amazon, as the two present distinct visions for the future of e-commerce: Amazon tries to pull merchants to its marketplace and to conform with its standardized shopping experience, while Shopify empowers merchants to manage their own websites that go direct-to-consumer.

In this episode, you’ll learn how Shopify started humbly as a snowboard website, what makes Shopify such a killer app, how Shopify and Amazon compete but also have found ways to strategically co-exist, why Shopify may have multiple moats working to its advantage, and whether Shopify is attractively valued given its compelling growth prospects, plus so much more!

Prefer to watch? Click ⁠⁠⁠⁠⁠here⁠⁠⁠⁠⁠ to watch this episode on YouTube.

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IN THIS EPISODE, YOU’LL LEARN:

  • Shopify’s origin story as a simple snowboard website in Canada.
  • Why the enterprise software market was ripe for disruption.
  • How Shopify’s value proposition differs from Amazon.
  • Why Shopify abandoned its logistics business just one year after making a major acquisition.
  • How Shopify has responded to Amazon encroaching on its turf.
  • What to make of Shopify’s share split and ownership structure.
  • Why Shopify’s growth story may only be just beginning.
  • Whether Shawn & Daniel add SHOP to The Intrinsic Value Portfolio.
  • And much, much more!

TRANSCRIPT

Disclaimer: The transcript that follows has been generated using artificial intelligence. We strive to be as accurate as possible, but minor errors and slightly off timestamps may be present due to platform differences.

[00:00:00] Shawn O’Malley: Payments is a thorny issue for many small businesses, or at least it used to be. And Shopify has made the process so much easier for them. And just to hit on it again, because whenever we talk about software companies, especially something as boring as enterprise software, it can all feel a bit abstract if you’ve never used the services yourself, which I haven’t.

[00:00:22] Shawn O’Malley: But in short, Shopify is a platform designed for anyone to sell anything anywhere, giving entrepreneurs the resources that for many years were only really preserved for larger corporations. And since IPOing in 2015, Shopify has shown just how powerful its platform is by growing gross merchandise volume revenue by over 50 x.

[00:00:53] Daniel Mahncke: To start today’s episode, let’s put on our Star Wars fan caps for a moment. If Amazon is the evil galactic empire, then Shopify is the rebels fighting back and the war for e-commerce. Amazon is this massive third party marketplace for just about everything you could ever need to purchase. With unrivaled convenience and deals, netted forces merchants to sacrifice a lot of their brand autonomy to conform to Amazon’s standardized checkout process, and also to accept Amazon’s higher fees for using its ecosystem, which are even higher.

[00:01:27] Daniel Mahncke: When you consider the merchants typically have to pay to advertise on Amazon if they want to get any kind of meaningful visibility. Amazon helps brands with order fulfillment and gives them reach they may otherwise never have dreamed of. But in return, Amazon tries to turn them into commodities for the sake of making prices as low as possible.

[00:01:49] Daniel Mahncke: Given that something like two fifth of all e-commerce in the US touches Amazon, you can see why some refer to them as being this empire that dominates the universe. Yet Shopify enables any small business anywhere in the world to its own, all in one platform for managing operations and professionally overseeing e-commerce sales.

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