Developing Methods to Address the Platform Economy: The Politics of Shopify and Ecommerce
This is a shortened version of the SSHRC postdoc application I completed and submitted last week. Big shout out to David Neiborg who helped me with this. Even if I don’t receive the award, this broadly outlines the direction of my research. I’m going to keep publishing and working in and around game studies, but I also want to pivot a bit and dip into new topics related to Canada’s burgeoning tech economy.
Background and context
This proposed post-doctoral research examines a series of case studies on Shopify, an Ottawa-based e-commerce company whose spectacular growth over the past decade has continuously impressed the Canadian business community (Silcoff, 2017). Shopify provides the online platform which small to medium sized merchants (both brick and mortar as well as online) use to process sales and payments. In 2013, Shopify was the first Canadian “startup” to reach a one billion-dollar valuation (Silcoff, 2013). A year later, The Globe and Mail named Shopify’s CEO, Tobias Lütke, “Our Canadian CEO of the year you’ve probably never heard of” (Cole, 2014). By 2017, this valuation had jumped to 10-billion (Silcoff, 2017). This study will document Shopify’s spectacular growth in terms of revenue, customers, and what can be perceived as its growing dominance (with 500,000 businesses reportedly using the service) in digital commerce (Shopify, 2017). In other words, why has Shopify grown so much, so fast, and received the support of both private and public groups? How does Shopify work as a platform, and how it is changing how Canadians labour and produce value? Finally, I ask what Shopify signals more broadly for the future of communication on and around the internet.
In addition to producing original research on Shopify as a distinct platform, while highlighting its relevance to communication, media, and cultural studies, I will develop and refine new quantitative and qualitative methodological approaches that address the specific particularities of platforms and “software as service”. I will build on the work of methodologies explored by Langlois & Elmer (2013), José Van Dijck & Nieborg, (2009), and Fenwick McKelvey (2011). My own contributions to this area include my doctoral dissertation on the political economy of Steam (a digital distribution platform for video games), a comprehensive analysis of the internet as a spatial fix for the circulation of capital (Greene & Joseph, 2015), and an analysis of how online communities were dispossessed of their hobbies by platforms, and how they resist that dispossession (Joseph, forthcoming). My research expands on established empirical methods like discourse analysis (Jørgensen & Phillips, 2002), document analysis (Bowen, 2009), and thick description (Ponterotto, 2006). Importantly, Shopify has not yet been the subject of critical scholarly inquiry in media and communication studies. This project and its series of case studies intend to address this gap and provide perspective on a rapidly growing business and its place in the Canadian economy.
As one of Canada’s most successful “startups”, Shopify began in 2004 by selling snowboards online, while simultaneously developing the tools (interface and point-of-sale software) that would become the mainstay of its business. Shopify rhetorically positions itself as “making commerce better for everyone” by both providing what they argue are accessible tools, and by increasing the speed at which commerce can take place (Newton, 2016; Shopify, 2015). In other words, Shopify wants to build the technology that will have a hand in the process of “spatialization”, the abolishing of time and space as limits to the circulation of capital (Mosco, 2009). While much of Canada’s digital economy is dependent on monopolies headquartered in the United States, Shopify seems to be Canada’s success story, and its own monopoly-in-waiting. As such, analyzing Shopify’s ascendance is relevant for policy makers and businesses, and serves as a case study of what the future of the Canadian economy might look like.
Shopify’s business model also has serious implications for democracy and politics at a worldwide scale. In October 2016, Breitbart News Network, a far-right political website with close ties to the white supremacist “alt right” movement as well as the Trump presidential campaign, opened an online store to sell branded merchandise. This store was made possible with tools provided to them by Shopify. On February 2, 2017 it came to light that behind the scenes at Shopify, numerous employees were “quietly urging” management to end their business relationship with Breitbart (Daro, 2017). Six days later, Shopify’s CEO, Tobias Lütke, published a defense of Shopify’s official stance to continue supplying ecommerce tools for Breitbart. Lütke stated that: “products are speech and we are pro free speech. This means protecting the right of organizations to use our platform even if they are unpopular or if we disagree with their premise,” (Lütke, 2017). Shopify found itself in conflict: employees and critics pointed out that by providing tools for Breitbart, they were “endorsing hate”. Yet according to Lütke’s professed fidelity to classical liberalism, a private company had no right to restrict speech — in this case, the buying and selling of products — of others. This public relations crisis surrounding Spotify and Breitbart is just one example of the increasing conflicts that are made apparent by the growth and increasing monopolistic status of digital platforms in the world of ecommerce (Srnicek, 2017).
Digital platforms such as Shopify act as intermediaries that offer governance frameworks and facilitate business interactions (Evans & Schmalensee, 2016). However, those who own them discursively frame their operations as neutral, while in practice they have the power to restrict the flow of products and speech (Jørgensen, 2017; Langlois & Elmer, 2013; Napoli & Caplan, 2017; Van Dijck, 2013). In other words, these platforms often have more direct power over speech and commerce than the states whose rules they profess to follow, and exercise this power when it is convenient to them, and within what they consider ideologically consistent with their corporate, or in the case of key executives, their personal values (Dror, 2015; Hoffmann, Proferes, & Zimmer, 2016). Research on the future of platforms like Shopify must take into account that these governance frameworks will frequently be confronted with a broad set of discursive, legal and economic contradictions.
Related Literature
This project builds from my dissertation, “Distributing Productive Play: A Materialist Analysis of Steam” (Joseph, 2017). In it, I foregrounded how platforms are distributed technical systems that have human values built into them, and in the process, produce new (as well as reinforce existing) social hierarchies. This work is in line with existing research in platform studies, software studies, and political economy (Helmond, 2015; Langlois & Elmer, 2013; Montfort & Bogost 2009). This body of work has, in its own way, addressed the ongoing process of monopolization, control, and centralization at the heart of the digital economy. I chose to study Steam because it is the world’s largest distributor of games on the PC, and it hosts a variety of features (marketplaces, forums, content databases) that make it a site to investigate platform power, politics, and tension among consumers, producers, distributors, and workers.
My research is firmly located within the tradition of platform studies research in communication and cultural studies — what Canadian scholars Ganaele Langlois & Greg Elmer (2013) break down into three major approaches. The first comes from critical political economy, which addressed concepts like “immaterial labour” (Hardt & Negri, 2001), “semiotic capitalism” (Berardi, 2009), “digital labour” (Terranova, 2003), and “cognitive capitalism” (Moulier-Boutang, 2012). The second tradition came out of critical empirical engagement with platforms in software studies, and used methods that practitioners considered to be “native” to the technology (Helmond, 2015; Rogers, 2015). Finally, Langlois & Elmer (2013) argue that the last tradition emerged from media activism and software design, which focused on theorizing and finding concrete solutions to the problems that were raised by critical political economy or software studies (Lovink, 2012). Elmer & Langlois (2013) saw that all of these traditions for studying platforms could be productively unified by stressing that each focused on different moments in the production of communication and culture.
The study of platforms involves a host of political and methodological challenges. Platforms are driven by corporate, profit-seeking logics, which set distinct limits on what researchers can hope to understand and know about the platforms they study. Elmer and Langlois (2013) argue that critical social media research must always contextualize the degree to which platforms are enmeshed with these logics. They argue that “Corporate social media platforms obfuscate: their logic goes against critical approaches at many levels… (p. 8)”. The data that these platforms produce is far from objective; instead it merely records “corporate and participatory logic” (p. 10-11). As such, the researcher of a social media platform must move forward asking this: “how can we unpack the different articulations of corporate and participatory logics by examining what is available to the researcher with limited access to corporate social media data and to the social media algorithms that organize life online?” (p. 14) This is the tradition of research in which I position this proposed study.
This research also theoretically addresses some of the most important dynamics at the heart of a critical analysis of capitalism. In the decade since the crash of 2008, and the subsequent Great Recession, many of the core theoretical arguments in Marx’s (1867) Capital vol. 1 have garnered serious attention in both the public and in communication studies (Fuchs, 2012a; 2012b). One of those is the dialectical relationship between concentration/monopoly, and competition. I want to continue to test and theoretically challenge the core principles of critical political economy by making an empirical contribution via my investigation of Shopify, and how it conforms to and deviates from these dynamics. Shopify has done an excellent job of creating a monopoly in the midst of a very competitive marketplace; how well will it fair, when profits could easily be squeezed or decline? Will there be a repeat of the dot-com crash of the late 1990s? Is the enthusiasm around Shopify’s business model simply a repetition of the rhetoric of the “digital sublime”? (Mosco, 2005) This is important for the future of the Canadian economy, especially if it wants to base its future on tech companies like Shopify, which have yet to post a profit.
Methodology
In addition to producing original research on Shopify — a Canadian business with impressively rapid growth that has received scant scholarly attention to date — I will develop and refine new quantitative and qualitative methodologies to address the specific particularities of platforms and “software as service”. To do this, I propose to conduct a series of case studies concerning different “moments” that together make up Shopify.
The first case engages with the platform at the discursive level, analyzing popular representations of the company in the press and by employees and executives (Hoffmann et al., 2016; Jørgensen & Phillips, 2002). Here I am interested in answering the question of how Shopify has been discursively framed and written about in the press that is most read, and presumably, most influential, to Canadian investors. At stake here is also the discursive construction of “platform” in the press, which Tarleton Gillespie (2010) has argued is a political exercise that frames the wider public discourse around these technologies. I will begin by conducting a discourse analysis on media representations in Canada’s major business newspapers, The Globe and Mail, The National Post, and the Toronto Star. I will build a database of stories with significant commentary on Shopify, code each using NVIVO, and analyze them until I reach saturation in terms of themes and discourses (Rogers, 2015). Understanding the discursive positioning of Shopify in the popular media adds to a broader understanding of Shopify’s valuation in the stock market, and the conflicts that arise around the company’s public behaviour.
The second case is located at the level of the platform’s user interface, mobilizing Shaw’s (2017) proposed mixture of Stuart Hall’s (1980) encoding/decoding framework in dialogue with James Gibson’s (1986) affordance theory, which “looks at the encoding/decoding of designed affordances to better account for power, resistance, and interactivity in digital media environments” (p. 2). In other words, I will analyze what Shopify does and does not afford both users (those who shop in digital and brick and mortar stores using Shopify’s services) and subscribers (the customers of Shopify, who use it as an ecommerce business solution). The goal is to “not simply point to how power is operating, but work toward subverting existing hierarchies and finding the hidden affordances of hegemonic processes” (p. 9). From a user perspective, this means finding online stores that use Shopify’s tools, and interacting with them. From the customer side, this will involve semi-structured interviews with small business owners who use Shopify’s tools, possible supervised visits to Shopify’s Ottawa and Toronto offices, and structured experiments with using Shopify’s tools to run a personal store for myself. To do this means subjecting Shopify to a variety of conceptual typologies, and utilizing thick description’s ability to contextualize space and technology (Ponterotto, 2006).
Finally, as a scaffold for the above cases, I will use document analysis (Bowen, 2009) to investigate Shopify’s assets, mergers, partnerships, board members, and revenues. In other words, I will conduct a network analysis using principles from political economy (Mosco, 2009). This analysis will contextualize the company’s growth, strategies, and its place within the Canadian economy to answer how Shopify is both unique (historically) and itself a product of a cycle of concentration, competition, and fragmentation. Moreover, these cases can be addressed by the theoretical toolkits provided by critical political economy, which takes a holistic (and often implicit [Meehan, Mosco, & Wasko, 1993]) qualitative approach to technology and the economy (Hardy, 2014; Mosco, 2009). At the same time, within this framework, there is an undogmatic approach to the specifics of each method, working inductively and re-triangulating as new challenges arise and as conditions and historical moments change (Elmer & Langlois, 2013). In light of this, my goal is to develop and refine existing methods of analysis so they become highly effective tools for the study of “software as service” platforms. This will help move the field beyond the study of social media (Elmer & Langlois, 2013) or hardware consoles (Montfort & Bogost, 2009) toward traditionally “hidden” platforms like Shopify. Bibliography Bowen, G. A. (2009). Document Analysis as a Qualitative Research Method. Qualitative Research Journal, 9(2), 27–40. https://doi.org/10.3316/QRJ0902027 Cole, T. (2014, November 24). Our Canadian CEO of the year you’ve probably never heard of. 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