The Shopify Effect: How Entrepreneurs Are Changing the World

When COVID-19 hit, Janna Bishop and Shira McDermott had no idea their business would be so resilient during the pandemic because of what they were selling: flour.

Not just any flour: hand-milled flour from farmers they personally chose, sold out of their bakery in Vancouver, Canada. Artisanal grains, but still…flour.

You may recall the Great Flour Shortage of 2020 that coincided with lockdowns, when people at home with restless hands turned to baking.

Flourist, Janna and Shira’s business, pivoted from selling flour in their bakery to selling only online when they were forced to close their doors. At the pandemic’s peak, they would sell nearly one month’s worth of product in an hour every time they restocked, their most popular variety gone within minutes.

Those were wild days, but Flourist grew by 25% in 2020 and was able to make progress on their mission: to teach people that flour should remain free from the preservatives that allow it to sit on grocery shelves. That people should know where their food comes from, and who it comes from. Flourist buys from farmers across the Canadian prairies, sustaining a local supply chain, and telling those farmers’ stories on their website to connect consumers with the ones who grow their grains.

Flourist wasn’t the only company to experience rapid growth last year, despite the chaos and unpredictability brought on by the pandemic. Businesses pivoted. Many online retailers thrived. And the proof is in the numbers.

This statistic, and the others we’ll share here, are part of Shopify’s annual report we commission from third-party auditor Deloitte. You may know it as Shopify’s Economic Impact Report, but that title was never quite right. These numbers aren’t only about economics; they’re about people. They’re about entrepreneurs.

To properly tell this tale, we’ll introduce you to entrepreneurs of all kinds—from two bankers-turned-farmers who have changed the lives of 9,000 other farmers in India, to a fish-collecting kid who grew up and built an apparel business to remove millions of pounds of trash from the oceans, to a woman keeping the art of calligraphy alive in her Maryland town while creating jobs back in her home country of Nepal.

We’ve been conducting an experiment since Shopify was born to test a few hypotheses: that commerce can be a force for good. That entrepreneurs drive communities forward. That small businesses are the backbones of economies. Over the years, we’ve found all of these things to be true.

When an entrepreneur starts a business, they may have no idea how far their ripple effect will spread. They might have no clue the impact they will have on their family, employees, communities, suppliers, customers, and the world. But we see it, and we’re measuring it.

We call this the Shopify Effect.

Flourist

Flourist has come a long way since receiving their first grain deliveries by Greyhound bus—small batches shipped from Janna’s stepdad, Bob. Now, they sell far more flour than would fit beneath a bus. Flourist has grown to a team of 30 and has kept that staff employed through the COVID pandemic. Former dishwashers from Shira and Janna’s bakery became order packers in their warehouses; baristas became delivery drivers. And not only does Flourist provide their employees with livelihoods, they also provide stability and revenue for the farmers they support.

Like Will Robbins, a young farmer—and you don’t see many of those these days—who moved from the city back to his small hometown to try his hand at agriculture. After travelling and working a variety of jobs, he decided it was time to return to the farm.

Flourist is now one of Will’s top customers, buying all of his organic wheat and French lentils. Janna, Shira, and Will are changing the world, in their own way, from their own small corner of the globe.

Two Brothers Organic Farms

Two entrepreneurs in India are also making a meaningful difference by turning to agriculture.

Brothers Satyajit and Ajinkya Hange quit their jobs as bankers in 2014 to return to the farmland of their childhood and learn organic farming—much to the dismay of all those who believed they should be looking to get out of their small town instead of coming back to it. Because opportunities exist in big cities, not on small farms, or so their critics believed.

The brothers didn’t know the first thing about farming, organic or otherwise. But they did their research, worked on the health of their soil, and planted their crops beginning with pomegranates. One day, Satyajit went to check on his fruit and saw something no farmer ever wants to see: bacterial blight. A crop ruiner. Each and every piece was inedible and unsellable.

And yet, although the blight should have ruined their soil for years, their organic farming efforts had improved the soil quality enough to banish the blight. Their next crop was perfect, or rather, just the right kind of ugly—the imperfection that is loved by organic farmers.

Since those early days, Two Brothers Organic Farms has grown to a team of more than 100. Each employee who stays with the company for three years, from the sales team to the cow herders, receives a stake in the business valued at one million rupees, a life-changing sum.

Business is thriving: Two Brothers will sell nearly $2 million USD worth of products this year. More than that, Satyajit and Ajinkya have taught 9,000 other farmers in India how to go organic, helping them earn 30%–50% more money for their crops, enrich their soil, and supply better food to their communities. There’s a multiplier effect at play here. The impact of Two Brothers expands far beyond what you would imagine one small business could achieve.

Their farming village of Bhodani has become a “center of gravity” for their community, as Satyajit says. And you always know which farmers Two Brothers have worked with: when the rain and heavy floods come, they’re the ones whose fields aren’t washed out from poor soil quality—they’re the ones whose fields are left pristine.

Suta

Nearby in Mumbai, Sujata and Taniya Biswas are two entrepreneurs building their own center of gravity. Sisters Su and Ta have been steadily growing Suta, a company selling sarees—dresses made from yards of material draped around the body.

Since March 2020, they’ve quadrupled their team from 25 to more than 100 and grown their network of artisan weavers to 14,000. That’s 14,000 people being compensated for their work because of Su and Ta’s vision. Sixty per cent of their employees are women, and Suta requires each of them to open a bank account to ensure their money goes directly to them.

The name Suta comes from the first syllables of the two sisters’ names, and it’s a word that means “thread” in many Indian languages. They ship their sarees to the farthest corners of the globe, from the UK to the Fiji Islands, and their business has seen incredible growth. In 2016, their first year, they made 44 lakhs—just over $58,000 USD. This year, they’re set to reach 33 crore: nearly $4.4 million.

But they don’t only think about the health of their business, employees, and weavers. They also think about the health of the planet. They teach local schoolchildren and their social media following about the power of composting. They place their orders in bulk once a month to cut down on their shipping emissions, and they wash their cotton and linen sarees with natural ingredients.

Our thoughts are with our merchants in India who are battling the worst of this global pandemic right now.

United By Blue

More and more companies are viewing the environment as an essential stakeholder. Perhaps none more so than apparel company United By Blue in Philadelphia. Founder Brian Linton was “all about the fish,” as he puts it, growing up with tanks full of them. One thing he learned quickly was how important water quality was to their health. So when he grew up, he decided to build a business to help clean the world’s water.

For every product purchased, United By Blue removes one pound of trash from oceans and waterways. Employees and volunteers pick up the garbage by hand, organizing local cleanups around their Philadelphia rivers and in all 50 states. In 2020, they expanded to international cleanups, beginning in the Philippines.

They’ve now removed more than 3.5 million pounds of trash.

United By Blue was one of the world’s first Certified B Corporations—a title that legally requires them to consider the impact of their decisions on their workers, customers, suppliers, communities, and the environment. One way this manifests is in their decision to work only with factories that hold the highest standards for facilities and employment. For full transparency, they list their suppliers on their website, and each one is a conscious choice they’ve made to stand behind.

More and more companies are viewing the environment as an essential stakeholder.

From the very beginning, they’ve woven sustainability into the fabric of their company. It’s not a box they check. It’s part of their ethos. They believe, like we do, that business can and should be a force for good.

Turns out, being good to the environment can be good for business, too. United By Blue doubled their ecommerce business in 2020. Their two retail locations in Philadelphia have created hundreds of local jobs as they scale up and down throughout seasons. Those stores have cafés in them, selling coffee sourced a mile up the road. ReAnimator Coffee Roasters, another Shopify merchant, now calls United By Blue one of their largest customers, with purchases totalling 12,000 pounds of beans per year.

And not only are they propping up their local economy, United By Blue is also creating entirely new industries. Brian and Mike learned about an underused natural resource that was going to waste: bison fiber. Essentially, it’s a layer of the bison’s shaggy coat that is shaved off as part of regular maintenance and normally thrown away. A bison haircut, if you will. United By Blue decided to use this material in their clothing as insulation. Because of this decision, a fully sustainable, regenerative fiber that previously had no use is now a multi-million dollar industry that reduces waste and provides income to ranchers.

United By Blue’s ripple effect doesn’t end there. People all over the world enjoy the company’s products and contribute to their ocean-cleaning efforts. Brian will never forget the time they had just landed in an airport in Germany and saw someone carrying a United By Blue bag.

That’s the thing about global commerce. It allows you to have an impact on your own community, and around the world. All at once.

Pen Boutique

In Columbia, Maryland, Leena Shrestha Menon is shipping products globally too. Her company, Pen Boutique, sells fountain pens and specialty stationery. Since immigrating from Nepal in 1993, Leena dreamed of starting a business for herself. In 2004, the same year she gave birth to her daughter, she also brought her business to life. But the latter was harder. She began approaching banks for the loan she needed to start, and was turned down by seven of them.

Thankfully, she went to an eighth. That banker happened to be a pen enthusiast. He gave her the loan. And bought a few pens.

Leena has never forgotten where she comes from. On a visit home to Nepal shortly after starting Pen Boutique, she turned her family’s wedding gift—a small house—into her office and interviewed young locals for data entry jobs. Two of her hires were 18-year-old boys who still work for her today. When times got tough during the pandemic, the office transformed back into a home as Leena allowed those two employees to live there. In total, she employs seven people in Nepal on top of her US staff.

Leena’s employees are her second family. She calls them her world. When she was diagnosed with breast cancer in 2017, her team was the reason the business stayed afloat. Her staff rallied together and kept things running until Leena could return to work.

Now that she’s in remission, Leena teaches calligraphy workshops to local schools to keep a love of penmanship alive. Pen Boutique has grown into a business that supports its local community, the Nepalese economy, and the livelihoods of several other businesses including her pen suppliers and accountants. Leena gives back in other ways, too: she created a pen in partnership with the American Breast Cancer Foundation, and contributes to many other charitable organizations including a school for children with special needs in Nepal.

Madlug

Helping kids is at the heart of another business worth highlighting. UK-based entrepreneur Dave Linton founded Madlug in 2015 with a very specific goal: to provide dignity to children in foster care. As a foster parent, Dave learned that those kids often lug their belongings from place to place…in garbage bags. That didn’t sit right with him. With just £480 to the business’s name, he started Madlug to sell handmade bags. For every bag purchased, he gives one to a child in care.

Each bag has a label that says, “You are incredible”—a reminder to the foster children who receive it and to the people who vote with their dollars by buying one. That £480 has turned into about £480,000 donated into the foster care system, and by mid-2021 will have helped around 43,000 kids.

Shopify Partners

It’s not only merchants like Dave who create impact far beyond their borders. There’s a whole ecosystem orbiting around Shopify businesses: developers building apps that solve problems for merchants; designers creating beautiful stores to help bring brands to life; marketers, photographers, accountants—a whole network of humans around the world who make their living by helping Shopify merchants.

We call them Shopify Partners. One such partner, Gopi Para, dreamt of becoming a developer when he was a young boy in India. Coders were the rock stars of his small town. And so when he started a web development business, he named it Coderapper—his own version of being a rock star, with code snippets as his artistry instead of lyrics.

In recent years, Gopi has grown his business from seven employees to 21, with plans to hire 10 more this year. Through various Shopify contracts, he saw 300% growth in revenue in 2020, and this year he’ll likely grow another 200%.

Opportunities abound in this partner ecosystem. Klaviyo, a Boston-based business with an email marketing app popular in the Shopify App Store, was recently valued at $4 billion and secured a $200 million funding round in late 2020. They’ve built their entire business around democratizing opportunities for small businesses—and, as Shopify has learned, that’s a winning business model.

For those of you who aren’t a merchant or ecosystem partner, you’re part of this beautiful system, too. Incredible things happen when people support independent businesses. You vote with your dollars for the things you want to see more of in the world. You enable organic farming practices, job creation, plastic being removed from the oceans, foster children gaining dignity. You kickstart the flywheel so that more of these things happen. And you help small businesses thrive in a world that needs more entrepreneurs.

For every $1 of revenue Shopify makes, our merchants earn $40.82.

We are committed to creating more value than we capture, because we are focused on something far more meaningful than revenue.

As French brand Comme Avant puts it in their manifesto: building an independent business means operating “an atypical company. A human adventure…terribly imperfect.” But one that contributes, on its own scale, to a ripple impact of good. For our entrepreneurs. Our farmers. Our soil. Our communities. Our oceans. Our neighbors. Our world.

This is the impact of entrepreneurship. This is the power of the few in the hands of the many.

This is the Shopify Effect.