[dropcap size=small]I[/dropcap]t started with a project, successfully completed.

But it was over breakfast at Angie’s Kitchen – where, no doubt, countless Waterloo tech alliances have been forged over the years – that the bond between Loren Padelford and Jim Murphy was set.

Padelford, General Manager of Shopify’s fast-growing Shopify Plus division, had been impressed enough with the work of Murphy’s team at Boltmade, the highly regarded and also-growing product design consultancy Shopify Plus had hired to build a dashboard for clients of its enterprise e-commerce platform.

But in the end, it was the undeniable feeling of cultural and innovative similarity between their teams that led to this week’s news that Shopify had acquired Boltmade, and would move all 21 members of its team into its Waterloo operation.

That move happened on Tuesday morning, when Murphy – a serial entrepreneur with international experience – and his people convened at Boltmade’s second-floor office in the Bauer Buildings at Caroline and Allen streets, to make the short walk to Shopify Plus headquarters in the former Seagram Museum, at Caroline and Erb.

Later that day, I met with Padelford and Murphy over a beer in the Shopify Plus bar, to talk about how the acquisition came to be and why they’re both so enthused about it.

Q – Why are you so excited about this acquisition?

LP – I’m excited about Plus, and this is a big moment for us. I moved my whole family here; I’m long on this community, so to me, this is another example of how strong this community is.

At Shopify, we have the resources and global reach now to look around the world for talent, and go and acquire whoever we want from wherever we want. So, it’s amazing to me, and special, that so much good talent is not only in Canada, but also just in Kitchener-Waterloo.

You go around the world and you find the best people in your backyard.

I just think it’s a great example of where Canadian technology is right now and the potential it has. I’d love to see more of it; more Canadian tech companies buying Canadian tech companies and working together.

To me, there’s just this great community here. That’s why we chose K-W – for talent – and look, it’s panning out. Boltmade and Jim are amazing examples of that.

Q – How did Shopify Plus and Boltmade become acquainted?

LP – It was a project. We wanted to do this dashboard project that showed an overlay of the world – a world map – of orders for our merchants.

We had heard a lot of really good things about the work Boltmade was doing, so we said, ‘Oh, why don’t we work with them on this and see what it looks like?’

We brought Jim and [Boltmade co-founder] Ben [Morris] in to talk to us about what that would look like, and right from there, it was kind of obvious how strong that group was. The way they approached the discussion, the way they approached the requirements-gathering, and understanding what we were, and the time frames – it was always just clear and concise and collaborative, and it felt a lot like working with a Shopify team.

That was the first ‘aha’ moment.

And then the work was great. Our teams worked well together, the end product was good and everyone loved it and thought it was great.

That became the second ‘aha’ moment, where we were like, ‘Oh, OK, they can actually do this stuff.’

Then you have the Shopify Plus story. At the same time as all of this, the Shopify Plus rocketship is just going full-tilt, and we’re hiring like crazy, and we’re moving into this space, and there’s so much opportunity in the market for us. And Shopify is growing like crazy, and talent and people are a constant discussion – where do you get the best engineers, and how are you going to build these products, and how will you grow and excel.

The two [Boltmade and us] kind of just collided. They’re a bunch of really amazing engineers and designers; we need a bunch of really amazing engineers and designers. It was, ‘Ha, I wonder if there’s something actually there.’

So I reached out and said, ‘We should meet and have breakfast and talk,’ and we started talking about technology and commerce and Shopify and Boltmade and history and community.

I went away, and I remember saying to my wife that night that [talking to Murphy] was really like talking to someone who I didn’t need to explain a lot to. Where I was thinking on community and technology and commerce, Jim was right there.

That was the third ‘aha’ moment. Now you’ve got a lot of nice cultural overlaps, capability overlaps, vision and thought-process overlaps.

That’s where it became more tangibly a thing that might be interesting to do.

JM – To follow on from that, I went on a trip up to Ottawa to meet other members of the [Shopify] team, to understand this compatibility a bit more explicitly.

From that breakfast meeting, everything seemed so obvious. It was, ‘Your piece is shaped like this, and our piece is shaped like that,’ and everybody could see how it would come together.

It was not quite a foregone conclusion, but . . .

LP – It was really obvious. Sometimes you do these things and they’re not obvious, but with this one, there was a lot of really great cultural overlap.

When you’re looking at talent and people, the cultural fit is probably the biggest component. And really, the Boltmade team is like Shopify. Their people like Shopify; they joke around; they’re social. We knew we were not going to have to force something.

JM – The alignment was easy, the consistency of culture and all those things.

The thing that was really the gap was, we were over here with this company, which is successful and operating well and that we certainly didn’t need to sell for any reason – but there’s this enormous opportunity, and this rocketship kind of smoking on the launchpad, ready to go.

Once I really understood where Shopify was and where Plus was in relation to that, there was no doubt about it. It was like once-in-a-career timing and alignment of the constellations, that I couldn’t imagine not getting on the rocketship, and it was like, ‘Obviously, we’re going to do this. It’s just a matter of how, and getting it done.’

Q – As a consultancy with seasoned talent, Boltmade doesn’t seem like a typical acquisition target. You didn’t build the company with an eye to getting acquired, presumably. So what went into the decision to go ahead with this?

JM – We were in a pretty fertile frame of mind this year. This would be our fourth year of existence, and we had built the practice that I’d imagined we wanted to build at the beginning. So, we were kind of at the first plateau of Boltmade’s evolution.

This was the year when I was exploring models of geographic growth, or more monolithic growth in Waterloo, and trying to build models and plans relative to different places to go. So I was fairly open-minded with respect to what the next steps were.

And also, [I was focused on] not growing just for the sake of growth, but to ask ‘why would we do that,’ and to get some intentionality around the next phase of growth.

So, right as we’re figuring all that stuff out, another alternative presents itself, and [the feeling was] we should probably look at this, and take a real, good, sober look at how to measure the greater good of the team personally – there are huge personal and professional growth opportunities here for me, and as you run down the roster of the team, that just keeps compounding.

We could go to Plan A and keep ‘Boltmading’ our way into the next level, but if we compare that trajectory to this trajectory [at Shopify Plus], it got pretty obvious that, for everybody, this would just be a net-aggregate better path.

Q – How did the Boltmade team respond to that?

JM – People were pretty happy at Boltmade; we’re a pretty happy place to work and the team was pretty tight and loyal.

From the get-go, it was pretty transparent in terms of the fact that we were going to take this on, and obviously there’s due diligence and interviewing and interactions that happen with [acquiring] companies. So, everybody in the company knew relatively early. We had to go through that and have a dialogue and make sure everybody was bought-in as we moved through.

There was obviously some change associated with that, but I think during the conversations that were had in our group and between individuals, we worked through those things and got people to understand the opportunities well, and imagine themselves here.

It’s not a huge leap. It kind of speaks for itself.

Q – Will the Boltmade team work as a unit within Shopify Plus, or be deployed to wherever they’re needed?

JM – We’re feathering right into the organization.

LP – Plus is growing so quickly and we’re expanding so fast that there’s so much work to do to build the product we want to build for our customer base, that we want to integrate Boltmade right into the mix, into core teams with us that are building the product of the future.

There’s obviously work that they have to finish with their existing customer base, but we’re going to move them right into core teams, so they’ll become part of Plus and integrate that way.

Q – One reaction I’ve heard is that Boltmade’s absorption into Shopify creates a big opportunity locally for other product design consultancies to compete for its old business. What do you think an event like this does for the ecosystem that might not immediately occur to people?

JM – That was a pretty big factor when we were thinking through this thing, because the motivation for building Boltmade was not to make a build-to-flip company at all. It wasn’t structured that way.

I built Boltmade initially with the idea that it would be a utility; that I would create a succession plan to hand it off to people, and it would be a utility to take the raw materials of tech and design talent that we do have in the industry, and expose them to a wide variety of projects, from Fortune 500 to startups to different tech stacks all over the place. We call it the Boltmade Gym, in a euphemistic term.

We have teams that have worked on a dozen projects with each other over a period of a couple of years, and you get different data points; they’re exposed really directly and independently to the vagaries of the project, so they understand the accountability; they understand the technical nature; they understand all these things. They kind of own their whole experience there, and that crucible is a really effective tool to take in raw materials and really make teams out of people. And the ability to let a project go down the river and then start again, and say, ‘OK, clean sheet of paper’ – it’s a pretty healthy learning environment.

Independent of having a consulting group in Waterloo, that machine is almost like a co-op for adults, and I think there still remains a huge potential to do that in Waterloo. And if anyone wants to start that, I’ll have any conversation they want to help them do that.

In Waterloo, we have a fantastic technology brand, but when people come here, it’s hard to get their hands on it to get it to work for them. As ever, in this community, there’s still so much potential.

There are other companies around that I hope can evolve and grow and take that stuff on. That would be great. But make no small plans, either. We were ready to grow to 50, to 100, and really go that way, and there was no real limit to our growth; the model was pretty scalable. So, I still think it’s a phenomenal opportunity.

Services get a bad rap in a lot of ways, but if you like doing the work intrinsically, and that fuels you, there’s kind of a purity to it.

Q – Loren, a lot of the talk since Shopify came to Waterloo has been about developing sales talent and a sales-minded culture in this region’s tech community. Does this acquisition mean you’re now adding design to that mission?

LP – When we first came, Shopify Plus was very, very new, so there was a lot of experimentation going on. And the first thing we started to experiment with was sales, so we started up that sales lab, and the first hires in Waterloo were sales.

Two years is a long time, and a lot has changed. The opportunity in our market is so huge that we’ve expanded what Shopify Plus is, to be more of a startup within Shopify.

So now, if you look around in this building, you’ve got engineers and UX and project management and sales and account managers and HR and recruiting and operations. I mean, we’re operating as a fully functional business inside the Shopify empire.

[The Boltmade acquisition] just adds to that capability, and ultimately, this acquisition was to help us rapidly advance our roadmap for Shopify Plus, and the engineering and design talent was what we really needed to focus on.

We’ve done a great job with sales and have done some amazing things, and now we need to add the same layer of amazing product to the market that our customers have been asking us for.

Q – Jim, your team moved in today. How has that gone?

JM – It’s been an action-packed day, I would say. We met at the Boltmade offices this morning and walked over, and had kind of a parade.

We were greeted very graciously by the whole team here; it was a warm welcome, and much appreciated.

We got a nice tour of the office for everybody, to see where everything was at and get sorted out. We had a nice lunch and we were back to work.

We have some time to wrap up our current client engagements, so people were doing that. We have a nice little intervening time here when we can make that transition.

We wanted to get here right away, as fast as we could, and start socially mixing and blending the teams, and getting to know people just even casually, and then it won’t be too many weeks before we’re [up to full speed].

Q – Anything else you’d like to add?

LP – As I said before, the Canadian tech scene is so strong, and Kitchener-Waterloo is so strong and full of talent. The talent is in different little pockets here and there, doing different things, and we came to Kitchener-Waterloo – and I set us up here – because of that.

This is the perfect example of what Canadian tech companies should be doing – building communities, building on that talent, and taking what Canada’s good at and building world-changing technology, which is what we’re going to do.

It’s exciting; we’re excited to have Jim and the team here, and we’re going to do some wild things here.

Anthony Reinhart is Communitech’s Director of Editorial Strategy and senior staff writer. View from the ‘Loo looks at the issues, people and events that shape Waterloo Region’s technology sector.

Photo: Former Boltmade CEO Jim Murphy (left) and Shopify Plus General Manager Loren Padelford at the Shopify Plus office in Waterloo