Wow, I’d like to thank all you people who have turned this thread into a great discussion!
There’s one point I was trying to make though that I don’t think anyone has understood. A number of people have said that Saul has shown that growth is decelerating. But what I really was trying to show was that, contrary to expectations, that rate of deceleration was accelerating.
Here’s a simplistic example.
Small company has its rate of growth drop 50 points yoy from 270% to 220%. No one blinks. It’s what’s expected as the base grows.
Bigger company has its rate of growth drop 50 points yoy from 70% to 20%. Whoa! What happened! When you are coming from a smaller base you expect a smaller number of points of drop. Maybe 10 points yoy from 70% to 60%, but not the same number of points as when it was bigger.
Are you with me so far? What was troubling me is that the number of points that Shopify was dropping each quarter was rising as its growth rate base got smaller. That’s the opposite of what you’d expect! In order the number of points of drop went 7, 13, 14, 17, 18. That’s NOT a healthy progression!
If you think of it in terms of the percent of the starting growth rate that they lost (for example a drop of 7 points from 70% to 63% being a loss of 10% of its growth rate (7 is 10% of 70)), Shopify lost 9% of its growth rate, then 17%, then 19%, then 24%, then 26.5% of its growth rate. That’s just NOT a healthy progression either! In fact it’s worse. Losing 26.5% of your growth rate yoy is a bunch!
It just feels to me that something is wrong. I may be completely off-base. I’ve made plenty of errors before. But it just doesn’t seem right. And then when I saw them trying to sign up people off the street (subway), who had no businesses at all, it really, REALLY, reinforced my concern, and I wanted to warn people. (What makes a company like Shopify desperate enough to literally say “Make your Mom’s apple pie recipe into a business”. I’m not kidding, that was one of the ads, as was “Remember that idea you had last week”). Is that how they are using S&M dollars to reaccelerate growth? But again, I may be wrong, and make your own decisions.