Investment Plans and Quarterly Bets
Set an annual direction, empower quarterly bets, and abandon stale work
- Difficulty
- Advanced
- Time to result
- ~ongoing to results
- Steps
- 5
- Confidence
- 96%
Shopify's investment-plan process separates strategic direction from execution detail. A leader responsible for a large portion of the company proposes an annual vision, directional change, or outcome and aligns it with executives, sometimes the board, and the headcount behind it. The organization does not then pretend to know every project required for the year. Product directors propose how their groups can contribute during the next quarter, build conviction among engineering peers, executives, and teams, and commit to near-term bets. This creates coordinated movement without removing team agency. The final discipline is continuous re-evaluation: software is uncertain and the world changes quickly, so prior effort is never sufficient reason to continue. Teams repeatedly ask whether the work is still the most important thing they can do now.
Origin
Chu explained Shopify's annual process when Lenny asked whether the company used a framework for major decisions. Shopify calls the broad annual commitments investment plans.
Core principles
- 01Broad direction aligns energy without pretending the full year can be planned
- 02Smart teams need agency to discover how they can contribute
- 03Quarterly commitments translate a long-range vision into near-term bets
- 04A bet earns momentum through alignment with peers, leaders, and the wider team
- 05Changed conditions matter more than sunk effort
How to run it
- 1
Set the annual direction
Define what a large part of the organization should accomplish during the year as a vision, directional change, or measurable outcome. Keep it broad enough that teams can still discover the route.
Pro tip Specify the destination and why it matters before discussing a complete project list.
Watch out A direction so vague that teams cannot connect their work to it will not concentrate energy.
- 2
Align leadership and resources
Build agreement with senior leaders and the relevant resource owners. Confirm the people and capacity the direction can reasonably command.
Watch out Direction without corresponding resources creates ceremonial planning rather than a real investment.
- 3
Invite quarterly bets
Ask product leaders to propose how their groups can advance the direction in the next quarter. Let them iterate through ideas rather than prescribing every task from the top.
Pro tip Frame proposals as bets that can be revised, not promises that must survive any change in evidence.
- 4
Build momentum for each bet
Test the proposal with engineering peers, senior leaders, and the broader team. Use those conversations to sharpen the bet and generate the trust required to move.
Watch out A strategically sound bet can still stall if the people who must execute it do not share the conviction.
- 5
Re-evaluate without sunk-cost bias
Repeatedly ask whether the bet remains the most important available work. Stop even a three- or six-month effort when new conditions make it irrelevant.
Pro tip Make the possibility of abrupt change part of the culture before a crisis arrives.
Watch out Protecting a roadmap merely to avoid upsetting people trades strategic relevance for emotional comfort.
In the wild
A company sets an annual outcome of improving merchant resilience rather than prescribing every feature. A product director proposes a specific quarterly bet, tests it with engineering and leadership, commits the team, and stops or redirects the work if merchant conditions change.
→ The organization stays aligned on the destination while retaining the ability to revise the route.
Common mistakes
Planning the whole route upfront
Fast-moving software environments make a detailed year-long execution plan falsely precise and deprive capable teams of agency.
Defending sunk work
Three or six months of effort does not make a project important when the world or the customer need has changed.
Is it for you?
Best for
It is best for large software organizations that need shared direction while preserving local discovery and fast adaptation.
Not ideal for
It is not ideal for small teams whose strategy and execution can be coordinated directly without an annual planning layer.
From the episode
Brandon Chu on building product at Shopify, how writing changed the trajectory of his career, the habits that make you a great PM, pros and cons of being a platform PM, how Shopify got through Covid