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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

#111

Post by randall »

theptip wrote: post #100

> 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. For better or worse, Gumroad grew at roughly the same rate almost every month because that’s how quickly the market determined we would grow. This seems like a simplification, and perhaps overly fatalistic. A company's growth rate is a function with many parameters, and at most poin…

Market determines your growth almost always. I have enough data points now to basically say this with enough certainty. Friendster is the countercase where the technology couldn't scale, and their execution was poor, and they focused on revenue at the expense of growth, but generally like... now-a-days with modern web stack market is basically all that matters.

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

#112

Post by TeMPOraL »

PhasmaFelis wrote: post #95
holman wrote: post #11

Really love this post. My favorite line is: > Every month of less than 20% growth should have been a red flag. I think that's pretty insightful. 20% growth is great for a normal business, of course; for a VC-backed startup it can show some warning signs about future hard decisions you might have to face. I think there's certainly lots of discussion that has been had — and should be had — about "should I or shouldn't…

It is still baffling to me that the tech world has glommed onto a business model where steady growth and a solid core of loyal, happy customers is considered a failure.

It's called being "living dead" or "zombie", and it's considered worse than failure. smh

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

#113

Post by [deleted] »

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…

[deleted]

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

#114

Post by randall »

austenallred wrote: post #72

I’m incredibly grateful for Gumroad - Lambda School (YC S17) wouldn’t exist without it. We threw up a my book on Gumroad because why not/it was easy, and now I believe we’re sitting north of $100k in sales. I don’t think we would have put it anywhere else - wasn’t worth the effort. I often think about how important it is to remove even the slightest amount of friction as a result. I also find the move from KPCB admir…

Indie.vc is built to make this not admirable, but the norm. I think KPCB is amazing and should be totally shouted out for this, but indie.vc is building an entire model so that founders don't have to choose.

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

#115

Post by wtmt »

> On top of that, our product ideas, like our credit card form and inline-checkout experience, have proliferated the web, ...

I've used Gumroad several years ago (as a customer), and the simplicity of the transaction and this interface was something refreshing.

You also say that you'd make Gumroad open source soon. May we know what the tech stack behind it is?

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

#116

Post by jim-greer »

My experience with Kongregate was different, but I did feel some of the same things. We became a vehicle for many indie game creators to make a living, which I'm very proud of. In our case we also had a sale that was very profitable for the founders and early employees, and also profitable for our investors.

But the weird thing is that if our VC investors had known at the outset that they would have a 3x return on their money in three years, they probably wouldn't have made the investment. A 50% annual rate of return is not worth their time. That's not what their LPs are looking for.

The angels made more like 6.5x and put in less time - most of them would take that deal all day long. I'm an angel now, and I definitely would. So perhaps startups that need capital but aren't looking to be billion dollar companies should consider just raising a seed round from angels... The difficulty there is that angels do want an exit, not dividends from a profitable company that stays private forever.

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

#117

Post by crispyporkbites »

eanzenberg wrote: post #82

Jesus this part sucks: "In those nine months, when the whole team knew that we were fighting for our company’s life, not a single person left Gumroad. From “this is gonna be hard,” to “yep, turns out it was,” every single person worked harder than ever." Did everyone one of these people have significant equity in the company? I'd expect people who love their jobs and who work on something crucial, such as researching…

If gumroad became a billion dollar company you'd be retiring on that 9 months of work with even a tiny bit of equity. I bet there are plenty of people that bailed out of google, facebook or other similarly positioned startups at that stage and regret it.

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

#120

Post by weehobbes »

I'm really surprised that Gumroad has such low gross margins. For April 2018 $65k gp on $273k revenue is 24% gm. It looks better in December $135k gp on $341k revenue is 40%, but still lower that what I would have thought. Is it credit card processing fees? Server costs? What am I missing?
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