Archie Abrams on Why Shopify Optimizes for Churn, Not Retention

The Churn Paradox: Why Shopify Wants More Merchants to Fail

Most SaaS companies would panic if their Head of Growth said they optimize for churn. Archie Abrams, VP of Product and Head of Growth at Shopify, says it's the entire point.

Shopify powers 10% of U.S. e-commerce and generated $235 billion in GMV in 2023—roughly the size of Finland's economy. The secret? Making it absurdly easy for people to start, knowing most will fail.

We want to lower the barriers to getting started and get as many people in the door trying their hand at entrepreneurship. If we do that, many of those businesses will maybe on their first attempt not be as successful, but we're going to have a set of merchants who go on to become extremely big businesses.

— Archie Abrams

The model works because Shopify doesn't make money from subscriptions alone. They monetize GMV through payments and services. A few massive winners—Allbirds, Figs—subsidize an entire cohort of experiments. It's angel investing, not SaaS retention.

Your Winning Experiments Probably Don't Work

Here's the part that will keep you up at night: Archie estimates that 30-40% of experiments showing positive lift in the short term have zero impact a year later.

Shopify auto-pings teams at 3, 6, 9, and 12 months with updated results from every experiment. They run permanent holdouts and revisit decisions years later. What they've learned is brutal: most "wins" are just pull-forward effects or attract users who were never valuable.

I would encourage everyone, if you can look at some of the experiments that you thought were your biggest winners, look at the downstream metrics for a year, 2 years on that experiment. I'll bet you'd be surprised how many times the metric is different than what you thought it would be.

— Archie Abrams

The most interesting cases? Experiments that unlock pockets of high-value merchants missed by short-term metrics. Reducing monetary friction—trial length, credits, discounts—often shows this pattern. You give bootstrapped entrepreneurs a bit more runway, and some turn into multi-million dollar businesses.

If you can't run year-long holdouts, Archie's advice is simple: ship things that show short-term lift, but don't take too much credit. You're probably not hurting the business, but you're not the hero you think you are.

The Absolute Numbers Doctrine: Why Conversion Rates Are Poison

Shopify bans teams from optimizing conversion rates. Instead, every team focuses on absolute numbers—total people who hit a milestone, not the percentage.

Why? Because the easiest way to improve retention is to make signup harder. Constrict the top of the funnel, and your activation rate soars. Your dashboard looks great. Your business shrinks.

When you have teams naturally break up the world into different funnel stages, it gets very seductive to look at my part of the funnel and what's my conversion rate through that part of the funnel. But in practice, it's actually almost always easier to just make it harder to do the thing right before your step in the funnel to increase your conversion rate.

— Archie Abrams

Teams optimizing for "more activated users" behave differently than teams optimizing for "higher activation rates." The former reduces friction everywhere. The latter games the system.

Archie sees teams panic when retention rates drop after reducing signup friction. But CAC drops even faster. You get more people in the door, more shots on goal, and better unit economics. The conversion rate looks worse. The business gets stronger.

How a 600-Person Growth Org Runs Without KPIs

Shopify's growth org is 600 people across product, design, engineering, data, ops, and marketing. They don't have traditional KPIs. Core product teams operate on taste, intuition, and a 100-year vision from CEO Tobi Lütke.

The company splits into three time horizons: Core Product builds for commerce 100 years out. Merchant Services (payments, shipping) operates on medium-term bets. Growth focuses on the end-to-end journey with the luxury of long-term accountability.

The North Star? Cohort value over time. Take all merchants acquired in Q1 2024. How much GMV do they produce over 3, 4, 5 years? That number, divided by acquisition cost, determines success.

Within Growth R&D, there are three pillars: Growth Product (signup through retention), Enable (internal tooling, experimentation platforms, martech), and Customer Support (yes, support sits in growth because it's part of the merchant journey).

Growth Marketing operates with LTV-to-CAC guardrails across paid, SEO, content, and affiliates. But every channel is measured against long-term cohort value, not monthly conversions.

Archie's advice on onboarding remains timeless: collect more information than you think you need at signup, then use it to personalize guidance. This isn't rocket science, but "the amount of impact by just nailing those flows has never ceased to amaze me." Even at Shopify's scale, fixing signup and onboarding remains a bottomless well of opportunity.