Member-only story
Reflecting on My Failure to Build a Billion-Dollar Company, Part 2
Sahil Lavingia, Gumroad’s founder, shares what he’s learned along the way about strategy, product, and growth
Sahil Lavingia is enjoying his second act. (Mostly.)
Back in 2011, when he was employee number two at Pinterest, he had an idea for “a sort of link shortener with a payment system built-in.” So he hacked it together over the weekend and launched it on Hacker News that Monday. He called it “Gumroad.”
A few months later, Lavingia left his job — leaving all his Pinterest stock on the table — and raised $1 million from top Silicon Valley investors. Then he raised $7 million more. He hired a team of 20 people, leased a fancy $25,000 per month office in SoMa, and poured everything he had into making Gumroad his life’s work.
They hustled to attract a wide variety of creators to sell digital goods through their platform: musicians, movie studios, designers, writers, programmers. They hit a peak of nearly $2 million in gross volume in 2014.
“I was basically alone.”
Then, in 2015, the growth stalled. The company started running out of cash, and it became clear that VCs weren’t coming to the rescue. In fact, they wanted Lavingia to shut down the company and try something new — they even offered him money to do it. But he couldn’t, as he explained:
“We helped thousands of creators get paid every month. About $2,500,000 was going straight into the pockets of creators — for rent checks and mortgages, for student loans and kids’ college funds. And it was only growing! Could I really just turn that faucet off?”
He couldn’t. So he laid off all but five employees. They stumbled along for a bit, but as time went on, the remaining five all eventually left for more exciting opportunities.
“I was basically alone,” he says.
With Gumroad scaled back to the bare minimum, Lavingia moved to Utah and learned to paint. He worked on sci-fi novels. And in his spare time, he answered support emails and fixed bugs to keep Gumroad afloat.
