Shopify "Stole" My App Idea
...but did they, really?
On That Note is where I put together long-form strings of words that cover my take on engineering, commerce and the Shopify ecosystem.
Before we hop on and talk about Shopify ruining their partner ecosystem let’s zoom out to get a better picture.
Platforms.
I’ve heard every single start-up founder use the term platform wrong. A platform business and linear businesses are two very different things and the constant mistake of calling linear businesses a platform just shows how well you understand basic business principles and common sense.
A linear business model is where value flows from one direction to the other. Take the clothes you’re wearing right now. The seeds of the cotton plant were sown and harvested by a farmer, sold to an agent, resold to a manufacturing unit, processed by people to create fabric, designed by a designer, sent over to the tailor to sew, packaged and shipped to a wholesaler, resold to the retailer and finally sold to you. The exchange of value flows in one direction and the counter flow of money to acquire said value took the opposite direction. You as an end buyer have no value to add to the farmer who grew the cotton plant.
In the context of tech, every SaaS business is a linear business model. Engineers create a product, marketers generate leads, sales make the sales, customer support gets on a feedback loop to help end users use the product and report back with requested features and bugs, and the end user pays a subscription fee. Your SaaS business is not a platform because value flows uni-directionally and so does the money.
A platform business works very differently. It has two clear parts, the product and the connection. It acts as a mediator between two (or more) categories of users present in its platform for the exchange of value and money and is compensated for facilitating this exchange. The denser the connection between categories of users the more valuable the platform gets, also known as Networking Effects.
Take YouTube for example - the networking effect is determined by how well YouTube can use its product (software) to make video recommendations to users who’ll consume more, in turn having content creators create more, in turn, viewers consuming more. The value exchange here isn’t between YouTube and the content creator or YouTube and viewer, it’s circular between the content creator and the viewer, while YouTube sits in the middle facilitating the exchange and/or creating tools to promote the exchange.
Risky Business.
Now that you know the difference between a linear business and a platform’s circular business, let’s talk about the risk of running a business on the platform. A clear rule to remember is this is not your platform. If the Lord giveth, the Lord taketh.
Let's use YouTube as an example again. Content creators realized YouTube promoted videos which had the viewers clicked, irrespective of viewer watching all of the content, giving birth to Clickbait. Creating click-worthy thumbnails was the only way to rise to the top since YouTube decided in their network they value clicks more than anything else and would base their entire recommendation system around this click.
When viewers finally started complaining about the quality of videos YouTube had to switch up how it values content. They had to make a decision on where the platform is headed and the best case scenario for YouTube is to acquire a viewer and maximize time because if they’re on YouTube they’re consuming more content, generating demand for more videos bringing in more content creators and turning to make more revenue from adverts. This meant for YouTube to keep the scales in balance, it’d have to change how it values content and that meant moving away from clicks to watch time.
This forced content creators to completely switch up their strategy from opening an extra few buttons on their shirts to creating engaging content that would keep the viewer glued to their videos and the bet paid off. Most videos on YouTube are now ~10 minutes long to be monetized, multiple jump cuts to avoid the user losing interest and run a play on dopamine levels to keep the energy level high and have them hooked on the platform.
If you were a clickbait YouTuber with no talent you now lost all of your views, recommendations and income because a change in how the algorithm works and your inability to keep up with it made you go from a monopoly to a washed-up YouTuber.
Shopify - Product and Platform
Shopify is a SaaS company making it a straightforward linear business. They make software to enable commerce and merchants use it to sell everywhere. Two shop owners do not generate circular value, are not part of a network and use the product built by Shopify to run their business.
What makes Shopify a platform business is its ability to bring in developers with Theme Store and App Store, content creators with Shopify Collabs, agencies and freelancers with Shopify Partner Program and control (to some extent) a secondary market with Shopify Experts and third party players. Every acquisition they’ve made in the past few years is either developer tooling (Remix) or solving merchant pain points (Delivrr / shipping)(Dovetale / influencer management) to facilitate more transactions in their network 💡
The more developers, influencers and merchants are in the Shopify network and the denser the network connection gets, Shopify becomes more valuable as a platform. Shopify doesn’t just stand as a SaaS company allowing merchants to host their website to sell their products on the internet and beyond - they’ve created a network of support systems around sales on and off the internet to engineer and market solutions specific to a merchant to facilitate their most valuable transaction in the network, the Cha-Ching!
This is what the team at Shopify understands their value isn’t tied to their stock price, their value is tied to how dense their network gets (not financial advice).
Now when we look at the Shopify App Store their recent changes in making apps embedded, how search works, generic naming of apps, waiving off revenue share on the first $1M every year and more make sense because everything leads to ensuring the merchants are satisfied with the linear side of the business and the network gets dense because Shopify solved the chicken and the egg problem of developers/influencers won't join the platform if there are no merchants and merchants won't join the platform if there are no developers/influencers, and having hit a sustaining critical mass Shopify now enjoys networking effects of Merchants, Developers and Influencers playing along well to deliver more sales.
To simplify it further for us as developers, everything we build directly or indirectly influences merchants ability to put food on the table; Caviar if you’re taking it seriously and Bread if you’re not.
Bread v/s Caviar
Shopify wants all of its user categories to do great - if one fumbles the entire network is going down with them. In our context, as app developers, we should expect Shopify to tighten up things if the most valuable transaction doesn’t seem to be working as well as it should and it's not. This is my reasoning around why Shopify made the changes:
Generic names: Developers were spending more time on SEO as compared to creating a better experience.
Badges on apps: Merchants don’t trust reviews and user generated content as much and would rather have Shopify tell them “Hey this is good because we assure you it’s fast”.
Reviews: Bad actors buy reviews and are not just a Shopify problem. There are rumours of apps not being ranked higher even if they have more / better reviews.
Embedded apps: Shopify wants its merchants to spend more time on Shopify and not on external sites (see: YouTube) where they can't control the merchant experience.
There’s a very clear pattern to all of this - as more developers are attracted to the platform the quality of apps is on the decline, agitating merchants and taking their time away from focusing on sales and onto making the platform work. When a partner developer’s app doesn’t perform well Shopify gets a bad name too because Shopify doesn’t just call us Partners they call us Shopify Partners. By giving us the brand they they expect Caviar level commitment because Shopify is delivering Caviar level results.
Merchants rely more on Shopify to tell them what’s good because user-generated content and reviews can be easily manipulated but recommendations from the platform owner cannot. Sure there are instances where a partner might know someone on the inside and have them rank higher on searches but you can only get so far. A great analogy here would be if you apply for a job and have a reference get you the interview, it’s having an unfair advantage. However, you cannot keep the job for long if you’re not good enough.
Shopify Stole My Idea
Shopify cares about putting Caviar on the table and now that we’ve established, to some extent, that the general quality of apps on the store is on decline, Shopify needs to put its foot down and create entry-level guidelines and experiences that sheds off the Bread partners and gives the potential Caviar partners a reason to upgrade.
To simplify, Shopify needs to create entry-level guidelines and experiences that sheds off incompetent partners.
Shopify Editions came with best practices and a literal guide on how to get your app featured which included what you can and cannot do in terms of experience, how to use Polaris components, the language of text that goes inside and a rebrand of the Shopify App Stores app landing page.
Let’s talk about Shopify translate & adapt app which agitated a lot of developers. I’ve seen an engineer punch a hole in his monitor because “Shopify is now taking away business from its partner developers and is ruining partner relationships”. Anyone who’s affected by the platform owner entering their space would be intimidated, true, but let’s take a step back and see what kind of partner they are.
I installed their app on a test store with 200 products and translations and compared it to Shopify's app. Turns out, they’re a Bread partner. Their other apps are not anywhere close to Caviar level either. Huge load times, average UI, everything takes too long to load, subpar customer service, etc but the result is their work doesn't product a Caviar level experience for the merchants.
Bringing this up agitated them even more but a simple question brought the discussion to an end and I want you to ask yourself this too. What do you think about more - ranking higher on the App Store or engineering a better service?
If Shopify didn’t care about their partner relations we’d all be gone by now. There’s no way to stop Shopify from acquiring the Caviar partners in their own ecosystem. If Shopify launches an app in the App Store, take a look at which other players exist in that space and compare their user experience with Shopify’s offering and if you can build on top of it, you're headed in the right direction.
It eventually comes down to this - Level up or perish. Everything we do as developers directly or indirectly impacts merchants' ability to put food on the table and it has to be done playing by the rules Shopify sets because they own the platform. If you’re a solo developer and are worried about being run over, you either need to wrap up and get a stable job and never take a risk in your entire life or understand that it’s going to be difficult and build anyways knowing it’s not about blindly falling for the propaganda of quitting your 9-5 and hustling, it’s about putting food on the table for your family and if you’re making more on the side that’s a welcome upgrade and doesn’t have to be your new full time “hustle”; Though you might get a few good blog posts after you eventually burn out but it’s going to be the same story as everyone else and becoming a life coach should be a decent paying job.
Every single space you enter as an indie developer, partner, organization or more, there will be winners and losers. You're going to scream inequality at the bottom and brag about your hard work at the top. What Shopify does is bring equality of opportunity in the commerce space with it's app store, not equality of outcome, which creates competition and pushes every single partner in the ecosystem to do better. Once you get over the excuse phase of why it's not - you start to move towards why it is.
At the end of the day, You need to invest heavily in your skills to create experiences that support the base transaction of the platform you're working on, identify the most valuable transaction in the network which in our case is to help the merchant put Caviar on the table because You want to succeed as a partner.
If you take anything away from this it's everything you do as a developer directly or indirectly impacts merchants ability to put food on the table, which affects your ability to put food on the table.