Pandemic-borne supply chain issues persist. Consumers tighten their belts, bracing for a recession. And high costs plague bottom lines. There’s no getting around it: unforeseen challenges are hitting entrepreneurs at every turn. But where some see uncertainty, Shopify president Harley Finkelstein sees opportunity.
“The numbers support that there are more people starting businesses on a monthly basis now than ever before,” says Harley, who has been an entrepreneur himself since the age of 13. What began as a surge of new businesses at the outset of the pandemic has remained at historically high levels, even into 2023.
History also shows us that some of the most successful companies in the world launched during low economic periods. “If you look back at 2008 or 2001—times where you have the threat of recession or an actual recession—you do see more entrepreneurial activity,” Harley says.
In 2023, you can spend an hour or two and build a business, hit Launch, and immediately start selling to a global audience.
And today, technology is better equipped to handle the needs of the changing world, making it possible for a new breed of entrepreneurs to get started. “In 2023, you can spend an hour or two and build a business, hit Launch, and immediately start selling to a global audience,” Harley says. He points to the growing number of channels and options now available to budding business owners. “You can use YouTube live selling, get listed in Google search, or grab a point of sale device and do a pop-up.”
Ahead, find out Harley’s essential tips for how founders can win hesitant customers, flex their resilience muscle, and future-proof their businesses in 2023—which he’s dubbing “the year of the entrepreneur.” (You heard it here first.)
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Build with intention
“There was a period of time where you could make a bunch of mistakes—it just didn’t matter that much. You try something, throw it at the wall, see what sticks. If it sticks, you scale. If it doesn’t, it’s no big deal,” Harley says. “I think now, you have to be a little bit more precise. You have to be a little bit more thoughtful.”
While it’s tempting to get excited about trying new things, Harley urges entrepreneurs to be intentional about their “main quest.” Each idea should be tested through a framework that determines if a new idea drives toward a main quest or a side quest. And if it’s the latter, it’s not a place to invest energy.
“There aren’t an unlimited amount of resources right now,” he says. “These are tough times. Interest rates are up, funding is more difficult right now, the economy is in an uncertain place. Return on ad spend has gone down.” As a result, successful companies will be those that use resources wisely to push forward a brand’s central mission, while avoiding distractions.
Think small for big impact
“There’s no doubt about it that the cost of customer acquisition has gone up,” Harley says. “It is more challenging today than it was a year ago, two years ago.” He points to the “1,000 true fans” theory, which states that you can make a living with only 1,000 diehard fans who will buy anything you produce. Harley took this same approach when building Firebelly Tea, a brand he co-founded with partner David Segal, cultivating loyal fans of the brand who propelled Firebelly’s story by word of mouth.
The brands that are going to be most successful in the future will fundamentally understand exactly how their customer wants to purchase.
With more people starting businesses, that means more competition. “If you’re a coffee brand, Maxwell House has more money than you, Starbucks has more money than you. They’re going to outspend you when it comes to an ad platform,” Harley says. “The one thing that they don’t have is they don’t have you, the entrepreneur.” He advises entrepreneurs to lean into authenticity and uniqueness to build meaningful relationships and drive loyalty with customers.
Meet your customer where they are
“The brands that are going to be most successful in the future will fundamentally understand exactly how their customer wants to purchase,” Harley says. Do your customers want to buy from you in person? Do they prefer shopping on YouTube or TikTok? Sell in those places, says Harley: “If you’re overly caught up in one particular channel and that channel disintegrates or goes out of fashion, you’re going to scramble.”
For his own brand, Harley enjoys the flexibility of using Shopify to experiment with selling across a variety of channels, including through several retail partners. “When one heats up, we double down. When one gets cold, we pull back on that,” he says.
Embrace uncertainty, grow resilient
“Most people believe resiliency is this thing you either have or you don’t have,” Harley says. “And actually, it’s not the case. Resiliency is learned.” In these times of economic uncertainty, now is the time for entrepreneurs to build resiliency.
The pandemic divided entrepreneurs into two groups, he says. “Some people ran for the sand and grabbed their towels and others ran for their surfboard and surfed,” says Harley. “And the ones who surfed? They’re resilient as fuck.”
Harley challenges founders to embrace uncertainty and build resiliency by pushing through the tough moments of entrepreneurship. “There is no doubt in my mind this is not going to be the last time shit’s going to get hard,” he says. “Every time it gets hard, you build new resilience and you are going to win, ultimately.”
. . .
As 2023 unfolds with all its uncertainty and baggage, Harley is adamant: it’s never been a better time to be an entrepreneur. “Entrepreneurship, as a tool to survival, happens to be incredibly effective,” he says. “It’s not easy, but it’s effective.” For those who choose the rocky path, there is reward: “We are going to look back on this period of time as a time when some of the great companies, great businesses, great entrepreneurs were developed, created, and scaled.”