Sahil Lavingia is the Founder and CEO of Gumroad and author of The Minimalist Entrepreneur.
Link from Episode:
“I think it's actually incredibly important to get to a point where you're bored of what you're doing. Because then you'll force yourself to have more and more interesting, weird ideas. That's how you break out of your patterns.”
Sahil Lavingia is the Founder and CEO of Gumroad and author of The Minimalist Entrepreneur.
Link from Episode:
Intro: (00:00:00) Hey guys, welcome to Asian Hustle Network Podcast, my name is Bryan and my name is Maggie. We interview Asian entrepreneurs around the world to amplify their voices and empower Asians to pursue their dreams and goals. We believe that each person has a message and a unique story from their entrepreneurial journey that they can share with all of us.
Maggie: (00:00:23) Welcome to the Asian Hustle Network podcast. Today, we have a very special guest with us, his name is Sahil Lavingia. Sahil is the founder and CEO of Gumroad and the author of the Minimalist Entrepreneur. Sahil welcome to the show!
Sahil: (00:00:43) Thanks for having me.
Bryan: (00:00:44) I like the intro, it appeals to your new book! For you guys are just listening to the podcast and can’t see the sign behind it, it says the Minimalist Entrepreneur. Please tell us about your upbringing, your childhood, and how that shaped you to become the person that you are today.
Sahil: (00:01:04) I was born in New York, to parents who immigrated from India and pursued the American dream as one does. But I mostly grew up in Singapore. Our family left the United States and moved to Singapore and that’s kind of where I started getting into the kind of like technology at a pretty early age.
I learned about Photoshop and that was kinda my first kind of like the gateway drug into sort online content creation, where I was pretty blown away that this piece of software could like basically creates images that didn’t exist in reality.
It was crazy to me and so I started getting into all these like online tutorials and just like started making stuff for myself and pretty quickly, I don’t know, word gets around people would need websites and you it’s like, hey, Sahil knows how to design websites and Photoshop you should talk to him.
I started doing freelance making just enough money to buy Xbox games. That was kind of like the currency of my childhood and very quickly like ran out of Xbox games to buy. It turns out there are not that many games that I wanted to play but I kept doing that. I often see that once you start doing freelance, you start having your ideas like it’s kind of almost inevitable that you build stuff for other people, you design stuff for other people and you can’t help. But think like once you do that for enough different people you kind of triangulate on your ideas. You’re like, oh, I could build this or design this and so that’s kind of what I started doing.
The timing was perfect because as I started getting into that, the iPhone came out and so that created a very clear to me, sort of new area of opportunity, kind of like almost like a sort of technological gold rush in a sense where there was this new piece of land that no one had built upon.
And so I started making iPhone apps, just again, kind of saw my problems. I built a taxi cab calling app before Uber and Singapore and built a bunch of other things. That was kind of my foray into startups. Once you start getting into that and you start reading Tech Crunch and Mashable and all of those kinds of blogs at the time I started using Twitter back in 2008, I knew that I needed to eventually move out of Singapore.
I would wake up while people in Silicon Valley were asleep. I’d kind of catch up on what everyone was up to, such as the apple keynote or whatever had happened, but I felt very disconnected to kind of like my people in a sense like there were very few people around me that knew what Y Combinator, what hacker news, Tech Crunch, venture capital was.
I knew I had to be in California and so I moved to the states to go to college at USC for a semester, ended up also realizing there that there were not enough people around me that knew what startups and venture capital and all of these things were so I had to move to the Bay Area and my ticket to moving into the Bay Area was getting my first job at Pinterest.
The CEO of the company had seen my work online and a bunch of these apps that I had made. I assume you’ve probably checked out my Twitter account and saw that I was not stupid at least.
I worked at this company called Pinterest, they were looking for the sort of, we have this app, this web app, we needed a mobile app and need/ed an iPhone app. Can you help us? And I was like, yeah, happy to help and so I sort of built a prototype, and that kind of led to the job and I sort of dropped out of USC in the fall of 2010.
I was at Pinterest full-time and then I was there until I started Gumroad so that was my upbringing in a nutshell.
Bryan: (00:05:00) There is so much that happened. We have to take it back a step like wow your sense of motivation as a young person is tremendous. When we talk a little more about that, how did your parents have installed a sense of discipline inside you?
Sahil: (00:05:39) My parents were a little bit more encouraging than you’d expect. Even before entrepreneurship when I went to USC, my plan was too much to graduate, get a job at Google and make my way down to smaller and smaller companies until eventually 10, or 15 years from then I would have my own company. that’s how I saw my career kind of developing over time beause that was kind of the path that other people had generally taken.
It started with software engineering. I think software engineering is kind of a great gateway drug into entrepreneurship because to me like a very kind of independent sort of free anyone can create a Stripe account now and/or an iTunes account and start selling products directly to an audience without a degree, without a certification like you can’t start practicing law or become a doctor.
As a 16-year-old kid, like not super cool but you can totally start becoming a software engineer and so that’s initially what attracted me to that. It’s just the lack of gatekeepers. I’ve always had a problem with people who say I can or cannot do something. Software engineering was the only path that I saw to be able to like make stuff without gatekeepers that I could or could not make stuff. But I didn’t, at that time, consider it a real job. I was like, oh, I can make like a couple of thousand bucks a month, like on the side and it’ll be cool.
I didn’t realize, wow, you can make a career out of this and it’s called software entrepreneurship or startups or, or whatever. But the reason I got into it was partly that I saw my parents immigrate from the U S to go to Singapore to kind of try to grow their careers and find more success.
There was kind of a lot of my peer group or similar kind of parents and I had never met a parent who loved everyone. When you’re an immigrant and you’re leaving India, like very different kind of set of motivations but there was like a singular focus on basically we need to get rich, we need to make money so that our kids can go to college or whatever, the kind of motivations maybe they never wanted that to be kind of a bottleneck to me or my brother. But everyone I talked to like whose parents were in finance or whatever else like no one was excited about what they did every day.
I still can’t tell you what my parents like. My dad did like his job, like moving numbers around or whatever but it just felt soulless to me. I knew you that while everyone else I knew was going to get into some sort of corporate track either in finance or banking. I was the only one who pursued software engineering, entrepreneurship, startups, and all these sorts of things which honestly blew my mind, given how obvious it felt the iPhone to me. Even today, I still feel like there’s a lack of people getting into it, to be honest.
That was a huge motivational thing for me, where I was like, wow, everyone I talk to hates what they do. So there’s no way I can ever get into the finance industry it just seems brutal. No one likes what they do. You don’t get to make anything. I was like, what can I do so that I don’t have to do that. What is an alternative, and what is an exit strategy? And that was kind of software and startups and when I realized like, wow, I can put an app in the app store charge 1.99, 2.99 for it and like a few hundred people will pay me money for that.
That was kind of the gateway drug for me. It was like, wow, it’s kind of Pandora’s box, right? Like once you realize that it’s possible, then the world kind of opens up quite a bit. I think so. That’s kind of, I think why I got into it initially.
Bryan: (00:09:54) I wanted to frame things for our listeners and their perspective, 2010 was a pretty turbulent time because 2008 housing crash.
Maggie: (00:10:35) I wanted to add to that too. I also know a lot of people like finance and accounting. You’re not creating anything and you’re just going into work and like doing the same thing over and over again. Bryan and I talk about this all the time in terms of like schools teaching software engineering and computer science and like the San Francisco school district. I grew up in San Francisco and I went to school in San Francisco and they taught like rarely taught any tech-related classes.
That’s so ironic, we’re in Silicon Valley, we’re in San Francisco and you would think that they would teach more classes about that. We did have one, but it was taught by a student on HTML and it was just like very, very basic stuff. It was like, not anything like remotely close to what you would need to know if you wanted to get into like software engineering positions when you grow up. So it was just very ironic.
It’s a huge problem. I think one issue is that if you know those skills, you’re not teaching in a school, right? You are making $250,000 a year working on Facebook or something like that. I think trying to get those kinds of people into these universities just doesn’t happen even in 2020, like in really pretty good schools. Like you have to kind of go to there’s very few schools, maybe Stanford or Berkeley or something that like you can learn iOS develop. Like, it’s just super hard to learn and I can’t imagine now with what’s happening in crypto, there’s probably no school on planet earth where you can learn about crypto or web3 from a university teacher.
You kinda just have to figure it out yourself, like Googling, you know, 24/7 sort of thing. So it’s still very early days like that. That’s what it gets. It makes me think. It’s like, wow, if this is still not easy to get into, like, we’re still must be so early into kind of software engineering as a discipline, you know?
Bryan: (00:13:14) What was building out that framework, like scaling up the team, and after we hear those stories how did you transition that experience over to Gumroad. We want to hear like that link between your experience as the second employee to starting your own thing eventually?
Sahil: (00:13:59) I think working on Pinterest was an interesting experience. I think it was probably more unique than that at the time because that was my first foray into like working at a company at all. I was like, okay, this is what all companies must be like and at the time Pinterest was an apartment in Palo Alto and there were four of us total, two founders, one number employee, number one, Josh, and me, and, and then Marty joined. So I guess five, and then students six with Enid. So maybe six or so, uh, in a room with like Ikea desks and like Mac books or whatever. Like that’s it and it showed me like, wow, this is what it takes to build a company.
Like almost nothing in today’s world, like a laptop and internet connection. I’m sure everyone has an iPhone. Some desks and just a couple of chairs. That’s like an amazing thing and that’s how Pinterest, which is, I don’t know what it’s worth today publicly, but probably like $40 billion or something like that.
That’s when it just like took six people in a room with the mop tops and then the day-to-day was incredibly similar to everybody else I’ve talked to, which is you showed up to work, you shipped some code, you fixed some bugs, you designed some stuff, you have a meeting or two, you talked to some customers and then you go home.
I think one thing that I think people may expect working at like a startup, like Stripe or Pinterest or something like that is that there’s like some magic like there’s some secret sauce. There’s no secret sauce is a lot of duct tape. Like every startup is on fire. It’s just crazy.
I remember reading about Facebook scalability problems, and I was like, wow, I don’t even comprehend how you scale, like a billion-user website. Where do you even sort the data? How do you make it fast? How do you use to search? As a kid, I was like, I don’t know how this would, even how you’d build something like this.
Then you talk to someone who’s done it and they break it down and they’re like, oh, you just have like a bunch of databases and then you showed them, and then you started them in this way, and then if people whose names were going to go with, hey, you send them to this database.
This whole time, computers are getting faster and cheaper, so it’s getting easier and easier. A single person could build a billion-dollar user instance of some product today. Right? Like it’s possible now with the Amazon web services and Google cloud and all these sorts of. Which is just mind-boggling. It was honestly like a very boring sort of startup in that way where like, it was just like you coming to work with a bunch of smart people. I probably didn’t appreciate at the time, how awesome everybody I’ve talked to was
I think the biggest thing that taught me was like, there are no secrets, there’s no magic. There’s just a bunch of people working hard on a problem who are honest about it. I think that the thing that a lot of people get stuck on is what pivoted Pinterest, three or four times as a company and even as a product.
I think that takes a level of discipline in the sense that like, you have to confront the fact that you built something that no one wants and that’s hard. I think very few people could do it and even before Pinterest, I think Bennett had like one or two different companies had gone through YC two or three times.
I think at that point most founders would’ve stopped. They would’ve gotten a job at Google like you had before, or stopped being an entrepreneur in some capacity. But like, he was like still going and now he’s a billionaire.
I remember talking to him one time and I was like what’s the difference between people who succeed and people who fail. He was like basically, there’s only one consistent thing, which is the people who fail and stopped. Everything else is debatable. But like definitely the only thing that people who failed, like why they failed is because they stopped.
Like otherwise you’re not yet failing. You’re still going and that was like pretty profound to me. I think probably informed the way that I thought about Gumroad when it wasn’t doing so well in sort of the middle of the journey. The people who succeed are just the ones who don’t stop.
So I should keep going and I believe that like pretty deeply, like, obviously it’s not always true. Certain people should stop, should give up, like, it is healthy to revisit your prior assumptions. But I think if you have conviction and you believe in a certain life path for yourself. I don’t think you should settle on that.
Like, I think it’s worth figuring it out, even though it might take five years or 10 years to get to that point.
Bryan: (00:19:08) I agree with that statement too. You have to keep pushing forward. If you are a true believer in something you’re going to find something that breaks through.
I liked the fact that you brought up that every startup has always on fire. I don’t think that when we look from the outside we’re like, oh wow these companies are so well run. I want to work there and it seems like Disney Theme Park inside. But in reality, it’s, it’s a bunch of people that believe in the vision and them make things happen on a daily.
Maggie: (00:21:49) I think it’s also like a lot of people can’t comprehend how people are like running businesses of that magnitude. So they don’t think it’s possible but if you’re talking to people every day on like a daily basis and like hearing them hearing what they’re saying even if it’s complex, it’s simple.
Like, all you need is A, B, and C and you can do it. All you need is hard work and consistency and just don’t stop. I think if you have the opportunity to like talk to them every day and just like hearing them out, seeing what they’re doing on a day-to-day basis. You can have that experience.
I think like being so young, too, being at Pinterest at such a young age, you were able to have the opportunity to kind of have like an open window to see what.
Sahil: (00:22:49) They were very transparent and one of the reasons I joined is because they were very open to me, like sitting in on pitch meetings with benchmark and a lot of people just don’t get to do. After all, they just don’t ask. I was very upfront and was like this is what I care about.
It turns out everyone is cool. If you’re showing drive and hustle like people are pretty willing to like, it’s like, wait, you’re going to do work for me for free. You’re offering to do more and of course, I’m going to say yes to that. But I think a lot of people fear that I would say the other thing, there’s this rule in system design called Gall’s law.
Is like every system, every complex system starts. It’s a simple system and then it gets more complex over time and no complex system was originated as a complex system. You can’t make up a complicated system without basically starting from some small thing and then adding layers and layers and layers onto it. The reason Ben can run Pinterest, which is like, I think has 3,000 or 4,000 employees now I was talking to him the other day. I was like, how do you do this? And he’s like, it’s the same on basically. Right? It’s like what I was doing before. It’s just more people that I don’t see or interact with, but like, I’m doing the same.
He didn’t go from zero to 3000 people. He went from zero to one to two, to three, to four, to five, to six, but every single number down the line and so it’s possible. How can Jack Dorsey run Square and Twitter at the same? How is that physically possible?
Well, the truth is he could run five more companies at the same time because his time is not the bottleneck. Right? And this stuff gets scaled out. People do the jobs that you used to be doing and you get to kind of operate a higher, higher level of abstraction or Elon with Tesla and Space X and all the other things he’s tweeted.
There’s enough time in the day and the human brain is like insane. I mean, it’s a crazy invention or discovery or whatever. I think people like just under, but the way you get there is you have to start small and then like, Iterate and improve and add complexity over time.
Just like Gumroad or Pinterest or Facebook. Like all of these things started small, like tiny MVPs, and then over time you add employees and people and users and how you scale Facebook to a billion users, no one knew how to do that. When Facebook started nobody had ever done that in the history of humanity, no one had ever scaled a single service to a billion people.
Then now there’s like three or four or five or 10 different services that have done that, you know? So you have to have confidence that you’ll be able to figure it out as you go and that’s the only way you scale Facebook to a billion users.
Like literally the technology to do that didn’t exist, it’s almost like a level of faith that like, if you believe you can go to Mars, you’ll you also have to believe that the technology you need and the costs lowering and the economies of scale and the people will show up as you make progress towards that goal, it’s like the bridge will get constructed.
I think is scary to a lot of people and I think many want all the answers before they get started. They’re like, I need to know how this, I have a friend actually, who was like really early at Square. He’s made enough money and doesn’t have to work a day in his life.
He’s wanting to start companies and every single time he like pitches me an idea. I’m like, this is great. Start working on it and he’s like, well, this problem, there’s this problem here. There’s this and that. He’s like I haven’t figured out how we get to this point.
To be honest, like if you’re waiting for all the answers like it’s like the minimal entrepreneur. For the book that I wrote, I didn’t have the title until I finished writing the whole book, and then I had to come up with a title that represented what was in the book.
But if I sat around and like waited for the title before I wrote the first chapter before I wrote the second chapter, etc I would never have gotten to this point where I have a book, I had no idea how to write a book. I just had faith that I would figure it out along the way and people would help me. As long as you start in. That’s the hardest thing to do. Other people are happy to support you because they don’t want to start. They don’t want to start from scratch. They want to join and help just like I did at Pinterest.
As long as you start, there’s going to be way more people going to be willing to help you get to the next step and the next step and the next step.
Bryan: (00:27:39) I agree with that statement, taking action leads to great results as long as you keep on moving your feet and doing more every day, you’re going to continue.
You’re gonna build the momentum that you’ll want to be a part of. But it’s hard to like push the momentum forward and take action every day. Like Maggie said earlier it’s about consistency, about taking action by believing yourself about a lot of things but most importantly, just moving forward.
Sahil: (00:28:06) I have one story real quick that I think is a really good one from my Pinterest days. The way that Pinterest P was designed was that we hired a designer and that person, I believe was involved, but basically would draw I don’t know what the number was, but I heard hundreds of pieces, and every single P was the only rule is that each P had to be different than the last P.
So you had to come up with like a different design for the peat and that is an amazing thing that everyone I know. To make something really good. You kind of just have to do a lot of that and it does, but it just doesn’t get talked about. I think people think that to come up with a Pinterest P you like to sit down and you draw a P and you’re like, cool, that’s edited a little bit here and there.
Or no, you just start from scratch and do it over and over and over again, you force yourself to keep moving, as you mentioned, and eventually, you’ll get something compelling, but that might be, you’re like the 300th P where you would have given up at 299 but it’s like, no, you have to keep going and going and going and go until you’re bored.
I think it’s incredibly important to get to a point where you are bored of what you’re doing because then you’ll force yourself to have like more and more interesting, weird ideas. You’re like, this is a stupid P, but I’ve drawn all the easy ones. I’m going to do one that looks like that and then that’s how you break out of your patterns.
Maggie: (00:29:38) That’s awesome and that applies to everything. That’s like a really good analogy.
Bryan: (00:29:44) Remember guys, go out there and draw your P’s and get it right.
Sahil: (00:29:48) Draw your P’s works like, if you draw, if you do something 300 times, You will do something good, right? What are the statistical odds? Even if you have a 1% chance, it becomes a 99.9% chance. If you do something 300 times, right? Like if you, if you do 300 golf strokes, like one of those things will be good. Then your mental model, your brain will be able to do it again because now it kinda knows what it needed to do.
That’s how muscle memory gets built. That’s literally what muscle memory is is you, you cannot read a book on muscle memory, right? No, you have to like practice the stroke or the swing or the whatever movement and then eventually like, you know how to ride a bike and you have no idea how you cannot tell me how you ride a bike.
You can’t teach anyone else. All you can do is encourage them. So they don’t give up and I think that many things in business and entrepreneurship and software. It’s like riding a bike or you just have to do it and you’ll figure it out over time. It’ll click, like things will start to click for you and you don’t have to think about them so much.
Just like speaking a language. You don’t have to think about speaking the language all the time. Over time you get better and better. I don’t know how the English language works like it’s fricking weird, but I just speak it and people would speak it back to me.
But like sometimes someone will sit down and have you thought about the fact that this weird rule exists in English? That’s weird. I don’t know how foreign speakers have to figure that out. That’s like insane, but I’ve never like, for example, you can’t say like the red, big truck, right? You have to say the big red truck.
You just have to do it enough and then eventually you just stop thinking about it, your brain, just your brain just works. I never have to think about, oh, what border are the adjuncts
Maggie: (00:32:04) I like that English reference though. I think about that all the time. I’m like if anyone was a foreigner who was like trying to learn the English language, if that was me, I would get so frustrated. Like, like words, like a yacht. Why did he spell it like that? It’s just like simple things like that.
Maggie: (00:33:10) So Sahil, we’d love to talk about Gumroad. You being at the age of 19, a solo founder and founded Gumroad in 2011. We know that it grew at such a substantial rate and almost immediately you raised about $10 million.
Is that correct? Yeah. So talk about just the aspiration of founding Gumroad and what was that growth like?
Sahil: (00:33:45) I started Gumroad as a weekend project. Initially, I wanted to sell this pencil icon that I designed and Photoshop to my audience on Twitter, and I just assumed it was gonna be.
This is a lesson learned for me is like, anytime I think something’s going to be easy and that it isn’t for whatever reason, the great business opportunity there in the book, I call them post-ups where you’re like, I should be able to do it and then you can’t and then most people.
Most of the time say, oh no, too bad, or like, there’s a reason that this thing is hard or broken or annoying or expensive or whatever, right? Like there’s a reason that there’s no Starbucks, like six miles away from me or whatever. But often there isn’t like just no one has done that yet or solved the problem yet.
I wanted to sell this pencil icon thought I could realize I couldn’t like was like, there was, I needed to build a website and embed a PayPal button onto it. I would have to like email everyone who buys the thing and send them the PDF or in this case, the icon file.
It just was like really strange to me and my epiphany sort of the reason I thought it kind of had the potential to be kind of a high-growth startup was this realization that wow like there must be so many people, right? Musicians, designers, writers, filmmakers, standup comedians, and photographers, like all sorts of different kinds of creative people who are building audiences online.
That’s getting easier and easier with Twitter and Facebook and Pinterest and Reddit and YouTube and Instagram, et cetera. There are all of these people, but none of them have websites like they just have these audiences, they need to sell stuff directly to them. That was kind of the idea behind Gumroad.
I started it out as basically a credit card form, like a very, very simple MVP where you would say, hey, I want to send people to this file. I want to charge a dollar or $5 or whatever. We would just facilitate the transaction and then every month I would manually pay everybody out to make sure that there was no real marketplace.
I was just like handling this transaction to them, paying everybody else out. Once a month and it would take me like half a day on a Saturday or something like that to do using PayPal. I had the idea for it and it was it honestly, I think I didn’t realize this at the time, but one of the reasons it excited me so much was the app store was what unlocked this whole career path for me.
When did the app store do, it allowed me to focus on making an app instead of payments and legal stuff and operations and finance and all of, all of the non. The new app, right. I could outsource to apple and it costs a lot of money to do that, but Apple would handle it and it was worth it for me.
And Gumroad felt similar in that way, where it was a platform, it would help people sell content, and then they could just focus on making the content and Gumroad would kind of help with the sales operations, finance, legal, etc. You just get like a paycheck and at the time in your PayPal account once a month.
I shipped it that sort of weekend project on Monday morning and got a bunch of eyeballs. Like there was a lot of interest in this kind of idea and part of that interest was a bunch of investors in Silicon Valley. Part of working at Pinterest at the time and being in the bay area was like, I’d started networking with investors and founders and engineers and designers and all the sorts of people who kind of are in the startup industry.
And so there’s the minute did launch or maybe the hour at launch or something. There are just tons of interests. Like tons of people being like, wait, what? Like you built this whole product and is this a company, like, are you raising money? Like that? Those are just the kind of questions that people ask in Silicon Valley.
It was kind of like almost similar to Pinterest where it was like, hey, did you know, you can work at a startup. I was like, wait, what? I can do that now. I thought I had to get a degree and so the same thing happened with Gumroad where there was enough demand from people who were like let me know when you start this as a company or start another company, I’d love to invest.
I got maybe even just one or two or three of those people and I was like, wait, like, wait a second. When I went to school, my goal was to graduate in four years get a degree, then work at Google for like a bunch of years, then work at mid-size companies, we’re going to start up, and then finally start a company when I was like 35 or whatever.
And then all of a sudden, like I went from like being in high school in Singapore. Investors offering me money to start a company and like a year and a half, like, it was just mind-boggling to me. I was like, well, wait for a second, I can skip, you know, my whole life and get to the end of my career today.
I can skip to at least the dream job that I wanted, which was I can raise money to start a company, kind of do whatever I want, obviously like a high failure, risk, etc but I can try. The way that I positioned that you kind of asked before, my parents had encouragement, like how they handled, like one me going to the states for college and then dropping out to join Pinterest and then dropping even like that was risky.
And then left Pinterest to start my own company. It was also kind of another level of risk, even though the first risk actually would have worked out quite. I always message it to them and myself as like, look like I’m trying something new and if this doesn’t work can go back to what I was doing before.
I can go pick up the stack like I can join Pinterest. And if Pinterest fails, then I just go back to getting my degree. USC is happily gonna welcome me back. They want my money like they’re not going to say no to that. If Gumroad didn’t work out, I could go back to work at another startup or even Pinterest or go back to USC, there are all of these options that I felt were kind of safety nets in a way.
I wouldn’t totally like just crash land. I would be able to kind of buffer my fall a little bit with these different opportunities and the actual. Having these opportunities makes you vastly more employable. Right? So like my expected value expected, expected comp, even if Gumroad had failed, it would be like two to three X higher because companies like Pinterest and Twitter and all of these companies today are trying to hire people.
Who’ve founded things because that’s what they need is they need people who build stuff from zero, because they’re trying to build stuff from zero within the organizations themselves. They don’t have enough people who’ve done that before. There are just not enough people. Who’s done that before on an absolute number?
And so I left Pinterest. Uh, raised a seed round, raised a million dollars initially $1.1 million in the fall of 2012 or 2011 and then in 2012, early 2012 raised a series A from Kleiner Perkins. So they put us, it was a $7 million series a and then ended up raising a little bit money of money since, so kind of ended up being around 10 million or so dollars and that kind of era of the company.
We spend the money on hiring engineers, shipping products, and just, again, going back to what I was saying at Pinterest, right? Just like the loop, right. Of just like showing up to work shipping products, talking to customers, and trying to improve the product, doing that over and over again.
And then luckily the product kind of grew and we hit sort of what people call product-market fit. That’s kind of, yeah, that’s kind of like what, what, what happened until 2015? When we went out, tried to raise the series B and then failed to do that. So things stopped working out for me, but I was on a nice little run for the first few years of my career.
Bryan: (00:41:27) Let’s talk about me if you don’t mind us talking about that a bit more than sales, the fail series B, and we read your blog about it and you’ll receive details, just statistics and charts, and everything. He kind of explained to us, like what was going to resell with your mind from a mental standpoint, from like mentally, what were you thinking about your yourself, your employees or company, and then kind of talk about like, what were some of the reasons why you guys were unable to go for a series.
Sahil: (00:41:56) I mean, it was tough, honestly. I mean, we went out initially we had like maybe a year and a half worth of runway. We would have run out in a sort of like mid-2015 and I started talking to investor friends of mine in sort of fall or winter of 2014 and they came back and said you have a great team, you have a great product, and have product-market fit. It seems because you’re even growing up into the right, like, but you’re not going to be able to raise a series B, or at least you’re going to have a harder time. The reason I kind of have a singular reason in my I’m sure other people have other opinions on it, but my sort of view on it is that the numbers just weren’t strong enough.
Like we were growing up into the right but what I didn’t estimate at the time was how important sort of this compounding month-over-month growth was you can’t just be growing up into the right. You have to be growing at a rate that. Your potential to be a hundred X or a thousand X investment over time, which means you have to be growing 20, 30% a month at that scale that we were at.
Like, you have to be growing very, very fast and we just weren’t. That was rough, honestly, because I publicly put so much into Gumroad as my identity. I was like, as I mentioned, I was like, my bio is like the founder of government. Which is great if it’s working and maybe not so great when it stops working so well.
That was the hardest thing. The hardest thing was realizing, wow. I put all of my eggs into one basket, even though everyone tells you start-ups are high risk. I think if you’re a founder, you kind of believe that you’re going to defy the odds, and then when you realize like, oh, maybe you are a part of that statistics, right?
That’s like pretty duke brutal to your kind of ego and the way that I dealt with it was saying, look, I’m not going to fail. I know we’ve gone will exist because I have positive unit economics. If I need to, I can run the team or run the company very lean.
It wouldn’t be easy. We’d have to do a round of layoffs. We’d have to let a bunch of people go, we’d have to get rid of the San Francisco office. I might have to leave San Francisco. They’re a bunch of things that may need to happen, but Gumroad is not going to die. I think as long, it’s kind of like when it almost gets harder sometimes when you realize that, because it’s kinda like what you can finish the marathon, but you still have 10 miles to go.
You’re like, oh, I know I can finish. It’s up to me and that sucks because I wish I almost got hurt and then I didn’t have to, but if I know I can, then it’s, it’s only me stopping me. That’s kind of what I realized in sort of that 2015 timeframe. I told the whole team, that this is something I’m very glad that I did, but I told the entire team, that we were around 20-23 people at the time.
And I said, look, it was January and it was our all hands. I was like, we in our current state will fail to raise our series B. Like I think it’s incredibly unlikely with the numbers. The good news is the only thing we have to fix is the numbers. If we can fix the numbers, we have the right team, we have everything else.
We just need to fix the numbers and maybe I thought we focus a little bit too much on other things we didn’t. We thought investors would give us a little bit more leeway. It turns out they need the numbers. Let’s just focus on the numbers. Let’s show them that we can move the numbers.
We called it moving the needle but effectively inflect the numbers. Then I’m going to keep talking to investors and I have good relationships with them. So they’ll be honest with me and as soon as we believe we have the numbers, we’ll go raise some money and we’ll get back to it. And then nine months later, we didn’t have the numbers.
It turns out it’s much harder to like fix those kinds of things than we initially thought we did have a great team. We did ship a ton of features, but it just, the macro kind of environment I think was just too strong. I talk about this in the essay where I say the market you’re in is going to determine most of your growth, right?
Like you cannot be in control of how, for example, COVID was amazing for GeMar. We doubled, we went from 5 million to 10 million in revenue, which is just crazy for basically no employee company with no marketing, no sales team, nothing like just pure organic growth. Why? Because COVID like it wasn’t up to us.
Right, so it cuts both ways. It can be great, can be terrible. But I think it’s important to understand that you can’t surf in a, like, you have to go find a notion so I told the team, hey, we didn’t hit the numbers. We’re going to have to do a round of layoffs.
It shouldn’t be surprising anybody because we’ve been talking about this for the last nine months. And it wasn’t, and everyone was very grateful or maybe not grateful is the right word, but like, you know, understanding I guess. Even some employees are like, wow, you have, you must have had such a hard time.
And I’m like, what? I’m like one who’s letting you go. I think that’s been a theme that I try to honor all the time, which is like, that I try to be super transparent with everybody. I find that that is a great way to build trust with people and when things work or even when they don’t work that’s how you retain that trust and integrity you never surprise anybody. I’ve found that that works pretty well, but yeah, that’s kinda what happened. And then basically government shrunk it ended up being like a small team of like five people and then eventually it was just me at the time.
I just ran the shift base basically by myself for like a couple of years and then Gumroad has sort of been on the uptake recently. So we’ve, we’ve kind of grown and now. We’re doing great, but it was definitely like a rough period and the way that I justified it to myself was a lot of it is a matter of perspective, right?
Like the easy kind of Silicon Valley framing of it, which was the framing that I was coming from was I tried and failed very publicly to build a billion-dollar company. I don’t have a team and the governor is probably not going to be a unicorn and no one cares about me and so that kind of sucks.
I have to like do support and like keep the lights on but I don’t have any energy to do anything else or whatever. That’s one framing. The other framing or another framing is I can travel the world. I can work on this thing a few hours a week, do support, keep the lights on and then I can write or paint or draw or do nothing.
I have almost unlimited time and I just slowly try to adopt the second way of thinking. I think that is really what gave me the energy to be like, to be grateful for my sort of situation instead of bitter about it, you know? Once I was grateful for it, then I was like, wow, this is amazing.
I can do whatever I want over time which allowed me to build up my energy kind of reserves and then hire people. Then now I still run GeMar today where like 12 million ARR and growing pretty nicely and we have all this amazing stuff that we get to do, but only because I was not going to fail.
Like it was just not an option for me and maybe that’s survivorship bias because maybe It could have still failed. Who knows? There are certainly those moments, but all I can say is that it works for me eventually, but like COVID is a great example. Like I could not have predicted COVID.
Nobody could have predicted COVID really, but it was a like, but the only way Gumroad, would’ve taken, been able to take advantage of COVID was if we just stuck with it for literally nine years and then we had an amazing year and many people I think would have given up a year seven or year eight or 8.9.
How crappy would that have been? How crappy would that have been? If I stopped working on Gumroad either I sold the business or shut it down or whatever I ended up doing with it, and then COVID happened and be like, dang, if I only waited another six months or a year or whatever but ultimately I stuck with it and I was eventually kind of reward for that.
So that’s the only kind of advice that I can give is like, it worked for me. Don’t give up, if you do have a conviction on your idea like I did, I felt like the greater economy was eventually going to happen. That’s how you ended up getting rewarded for it.
Bryan: (00:50:13) Thank you so much for taking the time to share with us a story. It’s wow, it was a lot to take in for us, even as podcast holes and just understanding because for us, it’s like, we kind of feel like the up and downs, but the sense of like the struggle of the loneliness, which is looking at you from a different lens, it’s remarkable because you’re so resilient ingredient never gave up.
Sahil: (00:51:04) I feel like I had a career within my journey which is what entrepreneurship kind of is, to be honest, it’s like, it’s like a career squeezed into a few year periods. But you’re, it was kind of like if you look at the photos of like Obama, like before I saw that, I’m sure being present as much harder, but like, wow there are certain experiences where you just, you experience a lot that’s the other thing that I love about being an entrepreneur is you can’t say no sometimes, and that is sometimes like, what you need, it’s like a coach that says, sorry, you’re staying in the game. Even though you want to throw up afterward you’re like grateful for the coach.
And the moment you’re like this sucks. I think entrepreneurship and starting a business are kind of like that because look if I stop. Gumroad just stops, so that is part of the pros and cons of entrepreneurship is it’s all your fault in a way, but sometimes it’s the best learning you’ll ever have when you’re the only one who can have to figure it out.
Bryan: (00:52:31) We’ve got a glimpse of like your book and minimalistic entrepreneur, and now I can kind of see how everything links together, but dive deep into that a little bit more about your travels.
Sahil: (00:52:49) You mentioned the oxymoronic nature of the title, right. It’s minimalist, which is about a kind of lack of ownership, maybe lack of time, spend doing things you don’t want to do, and then entrepreneurship, which is often linked to owning things first and foremost, owning a business.
Having everybody kind of come to you and like not being very free kind of being on call all the time, working 60 hours a week or, or whatever it may be. I had a joke the other day, it said that entrepreneurship is working 60 hours a week to avoid working 40 hours a week.
It’s like, it’s more work a better kind of work, hopefully, I think the kind of book just explores this idea of how can you own a business without the business owning you, right? How can you start a business scale? The business, grow the team, build a product to solve customers’ problems and needs, but in a way that lets you travel draw, right?
Paint, do all of the things that you may want to do, and ideally, the vision I have for the world is if we have a bunch of minimalist entrepreneurs, we have a bunch of people who are building wealth, but also not being a slave to their job. Not being corporatized in the process.
I think it’s important. Like I just think it’s really important that we make entrepreneurship more accessible to more people. Because I think the vast majority of people when they think about entrepreneurs, don’t identify with it. I didn’t consider myself an entrepreneur in high school or college, even, even though I ended up becoming one and I wanted to like, like go right into an entrepreneur as a title, because I wanted to see if we can redefine the word a little bit in people’s heads because I think it’s important.
I think business ownership. Being a creator, building an audience, creating a product, selling that product. Those are amazing things that we need more of in the world. If we want all these problems that we have to get solved, like the way climate change gets solved, it’s not a bunch of people tweeting or writing.
It’s a bunch of people building businesses and not one business that solves it all. But many, many, many thousands of businesses that all do a little bit. That’s at least my belief
Sahil: (00:55:09) You can do both, but tweeting is good. It has some benefits, but ultimately, you need the entrepreneurship component as well. It’s not a replacement for it and I think the way you make it accessible to everybody. Find an approachable, very kind well-meaning simple message that helps people think through what building a business means? Like if people do have an image of Facebook and supercomputers and charting and all these crazy terms that scare people away, how do we make it as approachable, as accessible, as minimal as possible, which is, you know, as I mentioned, kind of like a bunch of Ikea desks and laptops and, you know, an internet connection, that’s what you need.
Everything else is optional and so I think it’s just, that’s a lot of, kind of why I titled the book the way that I did. Part of the message I hope kind of comes across over time is that entrepreneurship doesn’t have to be a scary, big thing. Running a business is not some weird, daunting corporate task in which you need a suit and a briefcase and whatever else you think of when you think of an entrepreneur, it’s just a person who solves a problem for a group of people, charges money for it.
It pays the bills. They pay payroll, and other people’s bills too. That’s a business and then beyond that, you can kind of do more and more with it, but at least you have the building blocks to kind of get financial freedom and financial independence, and then you can kind of start solving other problems that you may want to with your time and money.
Energy effort, attention, etc.
Maggie: (00:56:44) Absolutely. I love that you kind of break it down for us because I think a lot of people oftentimes say entrepreneurship is very daunting and it’s hard, which it can get very complex, but you mentioned time and time again, that it can also be very simple, you know?
There’s a problem and you’re trying to solve that problem and you know, you get paid for it and that’s, it’s just that simple.
Sahil: (00:57:07) Things get complicated over time, but they start saying always right, and over time, as things do get more complicated, it turns out there are professionals, there are experts and they don’t want to start companies.
And so if you can say, hey, I built this thing, it has a product-market fit. I need help. I guarantee you will be a line of people who are like, awesome. Do you need a CFO? Do you need support? You need a designer like that tons and tons of that. So we have this like a pretty big supply-demand issue where there’s like a lot of people who want to work in companies, not that many people who want to start them.
That I think the solution is to get more and more people excited about starting as many businesses, as possible and as many per person too. Right? It’s not, I think that one idea that I try to hit on in the book is that success is about you as a person, not about your business, ultimately like your business, many businesses, you start will not work out, but that’s fine because the goal is not to have a successful business.
The goal is to be a successful entrepreneur and that might mean, yes, at some point you need a successful business, but often the path to a successful business is actually through three failed businesses, right? Just like Pinterest, I think is a great example of this, right.
Like it wasn’t as the first thing, you know, it takes time to get to the bigger and bigger ideas and you build confidence in yourself and your ability to do that and that’s the only, the only way, but at the beginning, like start the lemonade stand. Don’t start them at three Michelin-starred restaurants.
Start the lemonade stand, then do the pop-up dinner. Then do like the pop-up dinner instead of at your house. Maybe at like some restaurant down the street and like do that and build up to it. Eventually, you’ll have a restaurant you will, or maybe there’s a food truck in the middle.
But you will have a restaurant like that is what it takes and that’s what you want it to take because that’s how you’ll learn the skills you need to learn. And then when you’re ready to own a restaurant you’ll be an amazing chef or whatever it may be. You don’t want to make those mistakes.
When you have a restaurant, you want to make them when you’re doing pop-up dinners for your friends, you know, uh, the same thing goes with tech, like start with side projects, start with a blog. So are we tweeting start with being a creator? And then over time, you can say, okay, I want to build like a moonshot pie in the sky and a big business idea.
Um, so yeah, that’s at least that’s how I kind of think about it and how I wish more people thought about it. But many people just, they don’t see that as an option. They just see Facebook and Microsoft. It’s like, for example, I had this idea, this is a few years ago. I was like, what if I wanted to start a bank?
Well, that seems impossible to me because there’s like Wells Fargo, which is like a 150-year-old company. Like all these, you know, JP Morgan is like a hundred-year-old company. Like I, all I could see are skyscrapers right. In my head. It’s like, how would I start a bank? Like how, how does that even? And it turns out you can, you can start small and scale up just like they did.
Bryan: (01:01:00) Everything starts with baby steps. And as you break down a problem, enough steps. Now you have one step, right?
Exactly. You have to think about that point of view that is over time, just scales up compounds is, and it just goes astronomically high higher than you ever imagined. But since we’re short, a little bit short on time, I want to give our listeners a chance to find out where they can buy the book or reach out to you or learn more about your, read more about your blog because everything you put out there is great content, you know, as our listeners check out, check out its contents.
Maggie: (01:02:23 Awesome. Thank you so much for being on our podcast, Sahil. I feel like this conversation was so insightful and I feel like our listeners can learn a lot just from this conversation. So thank you so much for being on.
Sahil: (01:02:35) Thank you. That was fun. Thank you so much again!