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Reflecting on My Failure to Build a Billion-Dollar Company

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Re: Reflecting on My Failure to Build a Billion-Dollar Company

#101

Post by sahillavingia »

rsp1984 wrote: post #91
sahillavingia wrote: post #13

Hey, #1 on Hacker News! I don't think that's happened since...I launched Gumroad back in 2011: https://news.ycombinator.com/item?id=2406614 Thanks HN for being a part of my journey!

Hello Sahil, thanks so much for sharing this. I know it helps a lot of founders out there. One question: You mentioned that you raised ~$8m from investors, but that your liq. preferences used to be $16.5m. Was there a 2x preference in the Series A term sheet?

$1.1M @ 1X

$7M @ 1X

$2.25M (the bridge I mention) @ 4X

Re: Reflecting on My Failure to Build a Billion-Dollar Company

#103

Post by KaoruAoiShiho »

Eric_WVGG wrote: post #62
evanweaver wrote: post #45

Amazing and poignant story; thank you for sharing. I do wonder if there was a path for Gumroad to become a Shopify killer, instead of focusing on sellers too small and unsophisticated for Shopify, which limited the addressable market.

They're not really congruent products… if anything Gumroad is more similar to Stripe. But to take your question seriously, I'd far rather hack together a shopping site and use Gumroad for payments than grapple with Shopify again, they give me a migraine. Gumroad is also going to have some new opportunities if Patreon continues to struggle with their similar deal-with-the-devil. +1 Gumroad, glad to see it's found a wa…

Yes I'm confused why Gumroad didn't become more like stripe or patreon. That would've been a natural development. It must be execution problems.

Re: Reflecting on My Failure to Build a Billion-Dollar Company

#104

Post by Novashi »

ikeboy wrote: post #41
AznHisoka wrote: post #4

I wasn't interested in the emotional story behind this. But I did resonate with 1 line in particular here: "It doesn’t matter how amazing your product is, or how fast you ship features. The market you’re in will determine most of your growth." This is so true, in my experience. You hit a roadblock in recurring revenue, not because your product doesn't have enough features, or your team sucks, but simply: your market…

The corollary is that you can shift the market you're in and increase growth. Clickfunnels addresses a slightly different market and has 9 figures of recurring revenue. Partly because they charge a lot more and have a lot more bells and whistles, partly because they have way more intensive marketing, but partly because they're targeting the demographic that wants those bells and whistles over the simplicity of gumroa…

That's really more for market leaders. If someone stops by your site and starts comparing it to other businesses and their features, you're not likely to shift the market soon. Even if you do shift the market, you might not get the growth as your well-funded competitors copy your features. It'd have to be some ground-breaking technology that essentially propels you to market leader overnight.

Re: Reflecting on My Failure to Build a Billion-Dollar Company

#105

Post by sahillavingia »

davish wrote: post #78
sahillavingia wrote: post #13

Hey, #1 on Hacker News! I don't think that's happened since...I launched Gumroad back in 2011: https://news.ycombinator.com/item?id=2406614 Thanks HN for being a part of my journey!

Thanks for sharing your story, Sahil. Something I was wondering: do you think that Gumroad could have gotten to where it was without raising money to begin with? You mentioned sales not really changing with or whithout a sales team, but do you think you could have developed Gumroad in the beginning with a smaller group of developers, or even just by yourself?

I don't think Gumroad could be the high-quality, full-featured product it is today without raising VC funding. Less, maybe, but bootstrapped, no.

(Though, I was living in SF.)

Re: Reflecting on My Failure to Build a Billion-Dollar Company

#106

Post by rossdavidh »

jiveturkey wrote: post #74

Nice story, but: > It doesn’t matter how amazing your product is, or how fast you ship features. The market you’re in will determine most of your growth. This is just a cop-out. The market will limit , not determine, your growth. It's up to you to hit that maximum, and use marketing/sales to extend that maximum. That is called creating a market. And overall it's called execution. OTOH, Sahil isn't wrong. Some markets…

I think what he meant was, there is no product so amazing that it will give you growth enough to satisfy your VC investors, if the market you're in is not big enough or growing fast enough. Could have been worded more precisely, but in the context of the article it was pretty clear.

Re: Reflecting on My Failure to Build a Billion-Dollar Company

#107

Post by rossdavidh »

Not that you asked, but as a word of advice from a random person on the internet: if you do go the open-source it like Wordpress route, it would be good if you made an easy path back in to your product. Some people who start off self-hosting WP, Prestashop, or whatever, then decide after a few years they would rather have somebody else do it. Oddly, it is often not a marketing focus for the company that makes the software. If I had a self-hosted, open-source Gumroad setup, and a couple years later wanted to pay someone else to host/manage it, I would want a clear and easy article on your website about how I could turn it over to you and pay you to do that.

Re: Reflecting on My Failure to Build a Billion-Dollar Company

#108

Post by bdcravens »

sahillavingia wrote: post #84
bdcravens wrote: post #39

Earlier quoted context omitted.

I've had some interactions with @shl on Twitter where he seemed a bit full of himself (a few years ago - I didn't realize he was so young, so that probably had a lot to do with it). However, he could, and most would, have cut and run and found the next opportunity. Not doing so probably cost him millions of dollars; that's pretty authentic in my book.

I'm sorry you had those interactions with me in the past! I think I've grown since, but it still sucks to hear that about past-me.

No worries at all. Keep building good products and you as a person (too many double down on their character flaws).

Re: Reflecting on My Failure to Build a Billion-Dollar Company

#109

Post by gav »

why_only_15 wrote: post #65
fh973 wrote: post #29

Earlier quoted context omitted.

This would be 9x per year. What are examples of companies with such a growth rate?

Startups. To choose a recent one that turned big, Facebook was approaching such numbers: https://i.guim.co.uk/img/static/sys-images/Guardian/Pix/pict...

Not even close.

If you start at 1 million users, 20% monthly growth for 9 years means you would have 13,375,565,248,934 users, or a little over 13 trillion.

Re: Reflecting on My Failure to Build a Billion-Dollar Company

#110

Post by ikeboy »

Novashi wrote: post #104
ikeboy wrote: post #41

Earlier quoted context omitted.

The corollary is that you can shift the market you're in and increase growth. Clickfunnels addresses a slightly different market and has 9 figures of recurring revenue. Partly because they charge a lot more and have a lot more bells and whistles, partly because they have way more intensive marketing, but partly because they're targeting the demographic that wants those bells and whistles over the simplicity of gumroa…

That's really more for market leaders. If someone stops by your site and starts comparing it to other businesses and their features, you're not likely to shift the market soon. Even if you do shift the market, you might not get the growth as your well-funded competitors copy your features. It'd have to be some ground-breaking technology that essentially propels you to market leader overnight.

Clickfunnels isn't particularly ground-breaking. I identified what I believe got them to their position.

In many cases, they're attracting customers who would never dream of using gumroad.

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