# Reflecting on My Failure to Make Gumroad a Billion Dollar Company – Sahil Lavingia

Channel: Rob Walling
Video: https://www.youtube.com/watch?v=zE4MO4wozVk
Duration: 46 min
Language: English
Words: 9111
Transcript page: https://viewrankai.com/tools/youtube-transcript/zE4MO4wozVk

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[0:00] [Music] [Music] anyway so this is how I got started I got started designing stuff as I was thinking about you know I've known about my microcon for a long time Ryan one of our early employees spoke here in like 2013 I think but I never felt like I should go I wasn't like a micro confer I was trying to build a huge company I was working crazy hours I didn't care about what was what was it Robb relationships freedom and purpose I cared about a billion dollars but I realized as I was working on this talk that I actually have like a pretty similar journey to a

[0:49] lot of a lot of y'all I started out as a designer this is what the Photoshop icon used to look like which was really funny I totally forgot that it wasn't just PS I started I was a designer doing freelance work that I found on forums I would design forum software I would go on site point which is now basically 99designs kind of the same things and flip bought they kind of separated into these like two different startups and do these logo design competitions where basically people would you know say hey I need a logo for my local bar I'll pay 500 bucks everyone competes and then you

[1:26] know someone gets first place someone gets third place second place someone gets third place I never won I did this for a year I was the worst logo design I was 14 years old but I did I didn't have some success building you eyes and I think typically this is what happens to a lot of people in the crowd like you do you do consulting work for a while and you sort of inevitably have ideas for it like your own stuff right you get tired of building things for other people and you're like hey what if I built this I have this idea for a forum or an app or

[1:54] web app or or whatever and so I started building my own applications I built this thing called tweeter I think that was the first thing I had ever built I didn't build it I designed it and I paid someone a PHP developer like 100 bucks to script it but it was basically like a wall to wall sort of like how Facebook used to have a wall to wall feature for Twitter before they had any any functionality really around that and the thing that really got me into startups into this track of like of like building these big things and trying to have a huge amount of impact was when the iPhone came out

[2:27] and that as a designer I saw a lot of appeal to building stuff for this this new platform that was sort of like very design focused and really when you build iPhone apps like you don't really need to know how to code it's like super well you're basically building like a front end right this is an app that I built in 2009 or 10 called taxi law which is how you call a cab in Singapore which is where I grew up could have been uber let's go to maneuver but you know just let you call a cab is just a simple thing and I started building these apps I learned

[3:00] how to code free Gumroad pre you know buying a book on Gumroad you can I watched these videos on on iTunes University from Stanford that are free called cs193p over a few weeks and learn how to make make iphone apps I went to school at SC my parents paid the school 500 thousand dollars so that I could get in se is never in the news for good reasons ever no I don't think that happened I had the lowest GPA of anyone in my high school to get in those so maybe Benny was I went to SC though I moved from Singapore to LA I did the

[3:43] same thing I was doing before which is starting you know doing consulting work building my own apps and one of the companies that reached out was Pinterest so Ben from Pinterest sent me an email saying hey you know we have this like startup we're trying to help people collect organize and share the things that they love we don't have an iPhone app we need one could you build it for us they found me through I think I posted one of the apps I made this app called data that allowed people to track these sort of like arbitrary numerical data points in their life da yta by day and

[4:15] it was you know pretty and and I could code InDesign and turns out like that's a pretty like in-demand skill so I started doing a consulting work for Pinterest and a few other sort of YC startups and things I built Pinterest built and design Pinterest for iPhone I made it read that was one of my contributions and while I was there I still was building stuff I couldn't sort of like really like stop doing that and one of the things I built I was pretty excited about I think I think I probably had a similar attitude to Chris when he took those photos luckily I didn't take photos but I would you know

[4:55] I wanted something that I knew this thing was was was gonna be huge and I wanted something I wanted to sort of like put a stake in the sand so that in five years in ten years this could be the cover of Time magazine I just had an idea for my first billion dollar company I said first to like they were gonna be multiple tomorrow I start building it and I'm I'm glad that I had that ego because it it is a good sort of framing device for for me and I can sort of like look back and sort of try to put myself in the head of that person he was

[5:31] a totally different person than I am I am today that billion dollar idea was Gumroad I wanted to help people sell stuff on the internet I felt like it was so easy if you wanted to give someone something for free you could just send them a Dropbox link or email them or what have you and if I wanted to sell that thing if I wanted to charge even a dollar for it it became very very very difficult to do that and that just didn't make sense to me right people are building these huge audiences on Instagram on YouTube on Facebook on Twitter they don't even have websites

[6:06] sometimes like where do you put like the PayPal button there's no place to put it on Twitter on YouTube or anything like that and so that's that's sort of where the idea for gummer came from I left Pinterest before my cliff for those I was the second employee at Pinterest I had 0.75% the company you can do the math on that because I will not just kidding I have I won't tell you though and raise a bunch of money I raised a $1,000,000 seed round from a bunch of Silicon Valley angels and VC firms like navall Bravo conked and Max Levchin from PayPal and accel partners and lowercase

[6:46] Capital Chris Sacca sp Ron Conway Danny Rimer from Index Ventures collaborative on some other some other people it's a pretty good list I think I like a pretty pretty phenomenal list and then there was just me at the time sort of solar founder I hadn't done anything besides that weekend project of building Gumroad I bill Gummer it into a weekend project I said I should say that launch you know had that idea on Friday night I wanted to sell this icon and then Monday Monday morning I launched it to some fanfare on Hacker News and then basically used that to raise 1.1 million dollars at a 5.1

[7:25] million dollar valuation price round and then a few months later I raised a seven million dollar series a just me at the time still crazy what you can do in the valley it's only crazier I think from kleiner perkins Mike Abbott it was VP of engineering Twitter led that let that round this is also crazy I talked to two venture firms had to partner meetings got to term sheets this was seven on 28 million post 25 percent of the company died Ellucian and then the other term sheet I had was from index that was four million on twenty two million so less money but less tie

[8:05] Lucien and that my goal here is not to make a case for like why VC is amazing or terrible I'm just gonna state the case and you can sort of decide for yourself like what you want to go go out and do but raising money was that was the easiest thing I've ever done like to date it was so easy to raise that money and I don't mean that in like sort of some confident way some coffee way or anything like that but just to say that like when you're when you have these things like when you're you know in the early employ at this company you can

[8:35] design in code like raising money is not that hard if you want to go do it and you fit a pattern right that's the important part you fit a pattern it's it's like closing the loop on something that you know that you that you started a long time ago and if you can't raise money it's not because you suck at raising money I didn't have a deck when I raised that $1,000,000 like it I've tried to find my deck for this and it was so terrible I think our gmv for that month like total process volume on Gummer it was like forty thousand dollars which is like

[9:04] less than what Adam makes in a day I think on Gumroad now but our Series B DAC was amazing I spent so much time on that it was so beautiful all these custom illustrations like totally failed to raise money so it's not really a raising money skill it's like did you build something interesting are the numbers interesting one of my investors Josh Kopelman awesome awesome guy he has this great line there's nothing like numbers to up a good story and fundraising is about telling a really really compelling story and the later you get the more important numbers are and if you have numbers that's the that's the best way

[9:40] to make it really hard for you to raise money if you don't have numbers you can just make them up it's awesome this was our growth up until the layoffs not terrible right like I think as a sort of like naive first-time founder especially up until that first little spike things were looking pretty pretty good turns out this is kind of like how growth happens with an e-commerce business especially with seasonality right like November's typically like the best month of the year every year so if you're raising money for an e-commerce startup do it like you know in January or something like that can't do it in

[10:15] November December could species take the month off but yeah it looks not terrible I think if you're building a SAS business what was it called the slow death ramp or something this low ramp of death not terrible but you know but like if you're raising a bunch of money like this is not good enough you know like the the the number that I use the the line that sort of went viral I think was every month of less than 20% month 20 percent month-over-month growth is not a not good enough and you can replace this number with 15% the 20% leads to around 10x every year which I would argue is

[10:49] closer to actually the VC and what they want not tripling you need to 10x the first the first little bit and you know you can replace with 15 which i think is a 5x or 5 percent which is 2x I think it doesn't really matter I think what's important is that you're basically exponential right when you're when you're a venture investor when you're when you're gonna be rewarded based on a liquidity event you need a hundred X a thousand acts like you need these really big multiples and the only way you can get that is by basically some sort of some form of compounding and I

[11:23] think I wish I knew that I wish when I was building this company that I spent more time on those down once right I was always like making excuses like oh it was like you know February there's 10 percent less days in February I know I'm probably some of you familiar with that that is a very topical joke but yeah it's you know you just see the you you have you know like for example there's a few slow months and you have this crazy month and then goes down and so you kind of average it out but really every month needs to be great you look at this and

[11:59] you forget that those terrible months are massively hurting your your your overall growth trajectory and that's what you're competing against by the way right like venture investors it's not like is this a great investment it's like I can be on four board seats or six boards well I can have you know four board seats I can be on six boards or whatever are you one of those right do you have a good chance at being Facebook and if your numbers don't look like almost this insane vertical line when I was at Pinterest we were we were doubling every month for like nine months straight that's what you need to

[12:34] you know Pinterest was the easiest billion-dollar company I've ever seen it was it was so obvious because it was literally doubling every single month while I was there this is something I don't really talk about in the essay what worked what didn't work I'll talk about some of the stuff that we tried right when we when we realized we're gonna have a hard time raising money I sent this deck out sort of like this update DAC met with a bunch of investors and said hey we have 18 months of burn or cash left in the bank what do you think like what are our chances of

[13:03] raising money with the numbers that we have with the with with the company and it wasn't like a sort of a good diagnosis it was like this is gonna be hard your numbers are not that strong like you you guys got to work really really hard to get to a place in which raising money is going to happen for you and that was something I think we did well as a company and we really knew that it was gonna be hard it wasn't a surprise another quote that another investor Mike Abbott told me one of the first things he told me when when he invested was consider every surprise

[13:31] to your employees every surprise is a failure on your part like there should not be surprises in the company that means you fail to communicate to a person if you let someone go and they were surprised by that fact like you up so what worked what didn't work this is what we did we launched an insane amount of features you know we allowed creators to select files that they'd uploaded we launched email analytics we a lot of people to customize their emails we launched this thing called a small product lab that allowed creators to or top creators how to get started and start with this really small product to just you know

[14:06] ten days one do one thing a day and launch a product at the end of it did really well download all functionality so you know if you have a bunch of files you can just download them all and it's a file that's like sort of Auto automatically generated for you we launched physical goods we did an integration with printful to make that easier we launched pay with PayPal which was something I really never wanted to do but when dire straits third party analytics so you can you know embed your Facebook and your Twitter and things like that affiliates also something I didn't really want to want to do but I'm

[14:41] actually really really excited about that feature and how it turned out multi buys so you can buy multiple products Add to Cart basically we launched creator side apps so creators can see their sales and and if they really want to be addicted to something they could download the Apple watch app and get a notification every time they make a sale which I don't recommend consumption analytics so if someone buys a book for example from you you can actually see like where they drop off and how far people get my pretty cool stuff and that's May through July that's three months that's what venture can do right you can

[15:15] build a team and you can build this these insane amount of features and it's hard to look back and sort of really diagnose like what went wrong like why didn't things work and everything did work like everything drove some amount of volume creators were really excited but it just wasn't enough right and when you're when you're like making things better these are also incremental features you're not like really changing the market that you're in like it's very hard to double by launching pay with PayPal right that's that was like a 10% boost or something like that which is I mean that's nice and you know overnight

[15:51] literally a ten percent boost sets can't complain about that but it's not enough right and so nothing worked well enough nothing worked sort of in a way that would mark that we would alter the market that we were in and I think that's sort of the most important lesson that I learned through this entire thing in building in companies it doesn't really matter how awesome your product is how fast you're shipping those features like I could I literally just got bored of going through the blog post I could have done like July through September and it was even more and saying like how much stuff we shipped it

[16:23] doesn't matter because if you're not if your market is a certain size if your market is growing at a certain size that's that's the ceiling that's like sort of as fast as you can grow and I've had fights about about this point and I'm like I would love to actually argue with you if you disagree if you think I'm or it can be this much more much larger company but I always tell people like I want I wanted more than you for gummer to be a billion dollar company believe me on that it was not fun to make the decisions that I had to make but I'm open minded I would love to if

[16:58] you have ideas definitely open to hear them and there's sort of three options that happen when we you know we talked to these investors and the way investing typically goes raising money right you talked to like the best investors and then they say no and then you talk to like the not as good but still pretty good investors and they say no and it just gets worse because you basically talk to people you don't even respect and then they say like we don't want to invest in your business and you're like I wouldn't have taken your money anyway it's like there's not not a not a not a

[17:27] great time so there's basically three options right like you can shut down the business you can just start again or go home or whatever return like the $300,000 we had left in our bank account or something like that you can aim for sustainability you can get to a place where you can decide what you want to do you know this would be painful right we had 20 people we were burning at our peak a lot of money more than Chris so I beat him on that more than $300,000 a month or you can visit Union you can sell the company right you can if you're burning money but you really think this

[18:04] thing is really important and and and it just needs to live within a bigger thing a entity that can afford that like right venmo has Braintree Braintree now has PayPal there are ways to do stuff right cash cash out probably burns money but square owns it right so there is that option and I think it's it's it's a fine one but the problem that I had was that I was forced to make a decision right I had a certain amount of time to like I wasn't I didn't feel like I could decide the right thing to do I was in this like super super reactive mode and that's the

[18:36] problem that I had with it and I to me that that meant that picking that middle option saying the first I might shut down the business I might just grow this into this nice sustainable thing I might sell the company but I want the time the bandwidth to really think about what's the right thing to do and to in store prioritize and and to me that meant that there was really only one option which was the middle one so you don't have to read this slide the you can find them online or I'll post them on on somewhere so don't spend your time reading the text but basically like this is the

[19:10] slide to just put you in the room this is a slide that I use to like basically tell the company like we're gonna lay off 75% we went from 20 people to 5 I made it normally the slides are more colorful but that felt like wrong at the time so I sort of made it look like a funeral or something I realize now that it looks like an uber deck even with the gum red black that's basically like how they do it but and then also you know when you get profitable you call it you know you're in the black so I thought those can't resist upon even in dire

[19:40] times and and there are two things about this that really sucked it was probably one of the one of the hardest times of my life and I was genuinely excited about this path right and the week leading up to this this is like we called this wine time it's a pun on like whining like it's a time for people to whine about stuff and you know everyone every startup has like beers and happy hour so we thought we'd be a little classier than call it wine time and the week leading up to this I would talk to like our best designer our best growth person our best engineer we're

[20:12] like we're gonna you know it's gonna suck it's gonna be hard we're gonna have to part ways with a lot of our friends but we're gonna like build this back up it's gonna be this amazing sort of like new founding team everyone was gonna get a bunch more equity or whatever and then and everyone was on board it was awesome and I was genuinely excited about this new path that we were going on and then that week Monday through Thursday maybe just before Friday the the meeting on Friday - I don't remember every single person all four of them were like sorry I like I'm not interested in that and

[20:39] that was like devastating because it was like great I'm basically have to go fighting these new people I'm not even that excited about working with I mean they're so great and I'm so grateful for what they did they turn out to be amazing but I had this like whole you know happiness is so much about these like future expectations that you have for yourself and I sold you know I'd worked you know for nine months straight like 16 hours a day a friend of mine did the slack so used our slack data to figure that out it was not just me saying I was working a lot but you know

[21:08] the way that you get yourself to do that is to like prompt you know you have like a carrot on a stick right and that was that was that was it for me and it was gone I just like basically ran a marathon I was signing up to run another one and all the friends that I had that said they were gonna run the marathon with me are not gonna do that anymore so that was that was that was pretty brutal but fine you know found a few other folks like we're gonna go do this thing no one's gonna ever know it's gonna be great like we're just gonna do this

[21:33] inside we're still gonna ship stuff no one's gonna freak out all right and then I was in TechCrunch again for this is I think this is the only time that we've got PR that we didn't want or didn't like seek right like you it's it's it's funny you basically either make the news or the news makes you and the news never wants to make good news layoffs at Gumroad yeah this was this was painful and and you know we were already in this point of like sort of like real you know like saving a bunch of money you're like cutting a bunch of costs and really like

[22:08] trying to figure this out and then all of a sudden like the world knows that we're in in these straits all these creators that sort of a lot of them make their livings using using Gumroad like might know about this but they might not they also might not know about this so like I'm in this like really weird position where like I can't really talk about this publicly but so like butBut people might read it anyway I'd say so I would meet up with someone and like I didn't know like what they knew I didn't know if they thought Gummer it was 20 people on this like billion

[22:38] dollar path or not it's very very very very strange and my public and personal identity is like totally diverged where it was like the first time where like I just didn't know like who was I right like who was I on a public basis like what is my hashtag personal brand was not was was not great but the good thing is we did get to profitability in June 2015 right but before the layoffs we were burning 350,000 dollars a month in June 2016 a net profit of $10,000 not hard to do when you fire 15 people but still awesome like still awesome to know that like we like if Gumroad

[23:24] disappears it's because we wanted it to disappear or we made the choice to make it disappear wasn't forced upon us but life didn't get much better I was still in this like weird spa where I didn't know who I was I didn't know what the world thought I was I was still living in San Francisco spending a lot of money on rent all my friends are like hiring a bunch of people raising a bunch of money and I just like I said why am i paying $2,500 a month to live in a place that I don't need to be here anymore right like I'm not doing that thing that

[23:58] I came here to do and so I left and you know a lot of a lot of people have I'm sure in this room have gone through something like this right and you want to like go to Mexico and like enjoy the weather be on a beach like be sort of a digital nomad and so I did similar things I thought the thought the weather I needed a change so I went to Provo Utah the widest place I've ever lived though this room is not much better yeah I moved to Provo and and and it's complicated it's not like it's sort of like this simple reason like why I did

[24:31] it I didn't really know what Mormonism was or anything like that but I wanted to live and all this stuff was happening and Trump won the election right so all these like personal stuff was happening in my life and then things are not like worse and Sarah Cisco became like a a city is he would say because everyone just like that's what everyone was talking about and it was like I don't want to be here like I didn't personally was a surprise to me and just kind of like what you know what Abbott said about like surprises failure like I was surprised I'm not saying that

[25:02] like like Trump is a great present or anything like that I'm just saying that like it was a surprise to me and I should have known that and the reason I didn't know that's because I was didn't have people that thought that differently for me I was sort of in this bubble and so I moved to Provo Utah to change that up you know Provo is the most conservative city in America over a hundred thousand people it's the most religious city in America even though it's a college town it's very very fast saying it's super white it was awesome it's super cheap to eight hundred bucks

[25:33] for a one-bedroom you know that was like the price of a parking spot in San Francisco and I wrote about this if you want to read read about this you just google from Bubble to bubble which is the the medium article that I wrote about this journey and I elaborate a little bit more on like what I learned and stuff like that and I got into these other hobbies I was Gummer it was still doing its thing it was still growing it's still disliked useful product you know as I talked about the market is what really determines so much of your growth you know I was working 16 hours a

[26:05] day seven days a week for nine months and then I was working for at the 4-hour workweek I did it and so I started doing all these other things these things that I felt like I could control these things that I couldn't I could sort of have this like measurable growth right like a business is doing its own thing it's reacting to a market when you're writing fantasy or painting in oil paints like the the the the you basically do the thing you get a little bit better you do the again you get a little bit better it's a very sort of like nice path and so I did

[26:39] that for a while and and and I think in hindsight like moving to Provo was like one of the best things I've ever done because what it allowed me to do is allowed me to disconnect my my my identity you know I was talking about how I had this public identity and this personal identity and the personal identity is the true one the private and is is the one that I'd sort of didn't want to admit to and when I moved to Provo like no one gave a about the public identity no one knew what Gumroad was you know and it was awesome you know you can sort of tell what a place cares

[27:11] about by the first question that they ask you and in San Francisco it's what do you do who you work for in Provo it's where are you from are you - are you LDS how are your kids etc things like that which war do you go to and people just didn't care people weren't didn't care about money didn't care about billion-dollar companies at all and it really like gave me the freedom to make that own sort of transition on my own you know for myself and while I was painting and writing Gumroad continued to grow right like we went from five to one I was the only

[27:49] person in the company for a while we had a sales team than we did in 16 hours for four hours for 16 hours a day four hours a week I can't tell you I don't know like where where is that right like where like if you tried to add those those pins like it just doesn't matter and it gave me this like freedom to just say like I don't matter that much I should just work on what I think is really important to creators because doesn't say it doesn't seem to matter you know and then I got this email from from kleiner we had talked and you know

[28:28] I was like hey were we're working on this or we're you know we're doing this thing we're never going to be this return for you you invested at this like 28 million dollar valuation and and and and gummer it you know I was excited about it but we still had you know 16 and a half million dollars in liquidation preferences which basically means like if you saw this company for seven million dollars 16 and a half of it goes to investors to sort of make them whole and then the other $500,000 will get split among you know sort of on a on a percentage basis right so basically like

[28:58] impossible to make any money on it and then kleiner just sort of out of the blue deus ex machina sent me this email saying hey we want to just basically right off our position in the company like it's not going to be a thing Mike our board remember we stopped doing board meetings so there's no real point to it he left kleiner to start his own company and kleiner I assume what I will never know but what I assume happened is like it was attacked right off or like they don't you know I was knowing like thing on their balance sheet that it thought they had to worry about so they're like

[29:33] yeah well you know we'll sell back our ownership in the company for a dollar and I was like that's awesome sure like I don't know it was the weirdest call - it's like it would you like to do this and I'm like yes I don't know it was very it's one of those things where you just like you're like you know it's fine there's nothing no some no strings attached really and so III had this like new company right I had 16 and a half million dollar million dollars in preferences that dropped basically to two and a half you know they were by far like the largest sort of investor in the

[30:13] company and yeah obviously there's like the financial component of it right like there is now this this path to some some liquidity for me personally but I think it really like allowed me to say hey that what that investor that signed up for this journey this billion dollar thing is no longer part of this journey like they're they're gone right and so I think that really allowed me this flexibility to say hey what so what do I want to build gum right into and as I was sort of thinking about this this experience there's another thing that venture lets you do you get a see Bill

[30:46] Gates in person at a kleiner perkins a CEO summit John Doerr I think asked you know you know Microsoft like you you know you basically invented this like personal computing thing but like Apple is is is destroying it and like or soft you're only worth like on 200 billion dollars and you know like how does that feel like how does it feel to like basically fail to capture like all this immense amount of value you could have been the first trillion dollar company or whatever and build you know basically it was like we're on a first-name basis bill bill was basically like that's but that's what happens like that's what

[31:24] companies do right like you you create some amount of value and you you you your revenue is not going to be a hundred percent of that value or even close sometimes and with Microsoft I mean personal computing is like what it like a hundred trillion dollar who knows like how much value that is right they succeeded in capturing a very a very small percentage of it and that's the transition that I made I started focusing on how can I create value how can I do stuff that helps people that just will never come back to me and at least on a revenue basis I wanted to

[31:58] focus on on on creating creating value and so I started experimenting with that you know as I mentioned before we didn't have board meetings I had no accountability I could have bought a yacht maybe not a yacht like a small boat a dinghy and no one would know and and and I and I felt like sort of isolated disconnected from startups like no one no one really knew what I was doing right and this allowed me to like sort of like do that again to like have a reason to talk to the world again and to restart this conversation and sort of reenter the the that community community

[32:34] but you know but but a community and so I started sharing like the that sort of like top-line like numbers gmv revenue profit etc I actually will share like our full P&L if anyone if you email me and say hey I want to see the P&L I'll just email you the file I don't care yeah I'm just trying to figure out like how can i how can I be helpful how can i how can i create value and another thing I realized is how much value gummer has created I never really fully appreciated I think how much value no I was always looking at like oh we did four million

[33:08] dollars right that's how much value we created but we did way more than that right like Austin he's actually from Utah phone funny enough but he you know he started talking a book on gum road that allowed him to fund his company lambda school which is which is doing pretty well in VC terms who knows just where he's like thirty million bucks like wasn't possible you know without without gum road Nathan Berry is another example right like convertkit was funded from his sales on on Gummer like that's value that week you know I'm not taking credit for it right I'm not gonna say that like well

[33:41] without gum road like like Microsoft Michael cough would be seven people in a room and Boise Idaho or something but we're part of it we're part of this you know this ecosystem and there's just so many one here is right and there's just so much more value that's being created through through through all all of everybody's work and then there's the employees right the employees learn all this stuff they go and do stuff they create companies or they work at companies there's just there's just so so so so much stuff and so many different ways that value is being is being created one of the things that we

[34:17] started doing now that we're profitable is and I can't really spend the money fast enough at this point it's not it's not that much money it we launched this thing called the Gummer it's creative critters fund which is basically a $50,000 like ten percent of our of our profits that we just give to creators that want it we're actually sponsoring a bunch of microcon uh like for Micra ten DS which is really cool but stuff like that right like one of the ways that like you capitalism and like the free market and like building products and SAS and stuff like can solve a problem but there are problems that just can't

[34:51] be solved there you can ask people that sort of like bootstrap or whatever and they're in the traditional sense pull yourself up by the bootstraps right but like self fund right like you some people cannot do that they can't raise money they they it's difficult right and and so this was one one way that I felt like we could give back in that way and so people can basically apply and say hey I want to do this thing like for example the the fire the fire lit magazine wanted to do this presence of blackness project but basically they measure like how many black voices are in speculative fiction and fantasy which

[35:28] is a thing that I personally care about and we just gave them a bunch of money to figure that out and they have this cool project that I'm sure it's gonna do some awesome awesome stuff and it's cheap by the way it's like tech things are expensive engineers are expensive building products is expensive you go to paint painting or writing or some of these other communities and like it's insane how far eight hundred dollars will go so I highly recommend it this is a video from a recipient that I I love the big I love the back a little early in the morning I like I have no makeup

[36:02] on I don't have a hair down I don't even have my contacts and yet but I just got this email and I wanted to say I I'm so excited I'm just I'm so excited like I can't say thank you enough we're we're gonna do some really fun things with this I can't wait to go find a couple of people to take with me to this conference pumped thank you thank you so much this is gonna be awesome peace peace I love that video it's just so it's so like honest and real and and it feels awesome and it was not a lot of money and it's and definitely not

[36:38] compared to some of the you know the top line and some of the other stuff that we've done in terms of creating value but for this person it's so huge it's like to a point like there's a ceiling of like of like of like rational realization that she hasn't you just can't even like emote anymore it's it's it's so cool and it feels better that feels better watching that feels way better than watching someone make a million dollars on gum roads this sort of the I think the big epiphany that I had this whole time right is this idea that like binary outcomes like having a binary goal is stupid because

[37:16] life is not binary right like building a billion-dollar company is like this really arbitrary goal and success is not that just like success is not bootstrapping a company or self funding a company or self booting or whatever whatever term is invented to describe whatever that is I like boot fund self boot I don't know whatever it's all anytime you label something the label is it's it's your your it's reductive right and and it's important to understand that what matters is moments like that video building cool stuff being happy purpose freedom relationships being like doing things that you care about your company that you're building now is

[38:02] probably not going to be around in 300 years no one's gonna remember you in that period of time anyways another tweet a better tweet I had a lot of personal growth I guess through 2010 we're never and we're whenever I tweeted 2011 and 2013 and I don't really know really what I meant by this by success in this context I was you know I was still doing this thing I was still on this path but it doesn't matter right it doesn't really matter this is kind of a joke right how all these people like talk about failure when they're when they found success but I'm successful I

[38:40] can sort of like say that and feel good about that and feel proud of what I built I don't have to feel shitty for years because I didn't accomplish this insane goal that basically nobody does anyways and one thing I've realized that migrant Conniff actually in the last couple days if you if you're jealous about someone's path or their story or I like how easy it was for them or how well they're doing talk to them because you won't be jealous for much longer it's pretty it's pretty amazing and I think that's why that that article resounded I think that's why I was asked to speak Rob said something something

[39:17] along those lines you know Cinderella stories don't exist you just don't you just have the surface right and the minute you get deeper into it you realize it wasn't as simple as it looks I think of it like like when you're on when you're taking off and you look down at the cars right and the cars look weird right because they're just like perfectly moving along because all of those bumps and stuff are like you don't see them from that height so that's kind of how I think about this and I just have one more thing to say we one of the other things that we did to

[39:46] create value was we hosted this dinner for Utah creators just like the top 25 they've made like nine million bucks on Gumroad so it's like cool well just you know what the dinner and invite all these creators that can hang out and eat subpar food because it's Utah and learned some stuff it really just like taught kind of like this right and one of the one of the creators Allison Faulkner she's awesome she gave it she gave me talking it was it was interesting because we'd met up in 2017 and this is sort of before I wrote that article or and stuff right and so and and and she was talking after

[40:22] I'd written that are gone she was like I was jealous of you you know I wanted to I wanted what you had I was you know making 150,000 dollars a month on Gumroad but I wanted Gumroad like I wanted to build sass I wanted to scale this thing and and they're probably people in that room that were jealous of her and she said this thing that I think is super pithy but super super true which is enough as a decision not an amount right success is not reaching the goal its redefining success on your own terms you can have enough right now if you want it to it's your choice to have

[40:53] enough enough should not be a billion dollar company it should not be a hundred thousand dollars and M are are enough should be however you wish to define it are you happy can you pay rent whatever whatever that thing is for you figure that out and and get there that's it thank you for a great and honest talk we go back to the VCS for a second sure the you raised a bunch of money right on this rocket trajectory plan or at least what they perceived to be one yeah it wasn't eventually where the business turned out to be which has a great deal more meaning but how much of your

[41:42] success today getting to where you are is attributed to the fact that you were able to get that 7 million dollars for however much has actually cost you to actually keep it in the end especially has a story with the key PCB mm-hmm and how many bootstrapped competitors do you have along the way it kind of got Bigfoot it along the path I guess what I'm trying to do is get a little burst perspective yeah on like what you perception of the market distorting effects yeah of the vast capital as applied in your case yeah yeah no I think it's super valid you know and I I

[42:21] think I'm sure like they're sort of bootstrap competitors of ours that we're jealous of our path right and we're frustrated that we could go do this thing that made it sort of like unfair quote unquote for for them and and is you know this is not different from Amazon doing what they do right or Walmart going into a small town and like you know cutting their prices and you know kicking everybody out of business and then and then sometimes they leave anyways you know and then like sort of the whole world is like worse often than it was before and yeah it's true we could not have built what we built

[42:51] without that seven million dollars in or eight million dollars or ten million dollars in venture you know that we raised right and it is market distorting it is market distorting but the truth is that we live we don't live in a vacuum right like everything is is is combined and and your customers don't care if your bootstrapped are self-funded or boot funded or or a non-profit or you share your numbers or not like most people operate on like a pretty sort of like incentive based like selfish sort of structure as I think most people should probably and just is what it is you know the truth with venture is that

[43:29] it works right like it does work in terms of like returns for inviting me n-- it's it there's this huge sort of lag right in in terms of knowing if it works right so we know that venture worked for all the funds up until it you know until 2000 and whatever ten years ago was seven years ago whatever it is right like so who know maybe you could argue it there will be a collapse right like that's how Ponzi schemes work right they always work everyone does super well except that last circle concentric circle and that's contentious curtilage is worse than all the other ones so it's

[43:59] it's really hard to say but I just think it's important to yeah just be aware of it and I don't know I I don't have an answer it really for you but but yeah we're definitely you know definitely aware of that problem you know but as long as as Facebook you know there's one Facebook every decade like venture will continue all right we have time for one more question so the market isn't big enough for Gumroad to be a billion-dollar company today what do you think you could be that in in 10 years because it seems like that market you know your graph is still going up and to the right I have a

[44:36] post drafted called failing to reflecting on my failure to fail to build a billion-dollar company I don't know maybe I really don't know honestly I was like yeah sure potentially I think I mean the creator market I mean like you know like that slide that Rob had about SAS companies right it's just like 100 in 2000 whatever and then like now 7000 or something like that that will happen right and and and and and sure that could I totally there there could be a large enough market we might get it someone else might get it a thousand companies might get it and split it up like I'm not sure how that looks like

[45:16] yeah there is there and that that's kind of a cool a cool thing right it's not binary right it's not like you either go scale and like build this crazy awesome business and like your life sucks and you work really hard in that everyone does hackathons every weekend or whatever and then you have like SAS or a lot were not satisfied like micro cops sort of like lifestyle businesses 4-hour workweek whatever you build stupid stuff no one cares about it's not binary like that right you can build a massively scalable company you're good to have the best of both worlds it's sort of you can do it on your own terms but you still

[45:44] exist with all these other companies so you have to figure out how that works and and and and and things will move forever right so like not none of this is forever all this stuff is temporary and will change by the way I know that was like the last sort of question I am around up until tomorrow morning so if you have questions like you can ask me in person I'm around I'm pretty friendly yeah thanks so much for listening see you

[46:17] you

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