Hacker News Board Hacker News, browsed like a classic message board
Live data from Hacker News

Reflecting on My Failure to Build a Billion-Dollar Company

medium.com

Post reply on HN
Print view View original

161–170 of 380 posts

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

#161

Post by nine_k »

eshyong wrote: post #92
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…

The author mentions hiring a lot of good friends, so I assume they did it because they believed in him and the mission.

This is exactly why I won't hire good friends. The personal relations would skew business sense then, on both sides in order to stay loyal to your friends. This skew can be dangerous for business, and thus for the well-being of those who are involved and bet on its success.

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

#162

Post by sahillavingia »

rsp1984 wrote: post #149
sahillavingia wrote: post #101

Earlier quoted context omitted.

$1.1M @ 1X $7M @ 1X $2.25M (the bridge I mention) @ 4X

I don't see the bridge mentioned. But thanks a lot for clearing that up. There's so little data out there on companies' term sheets so it's always good to get a dose of real world.

Oops, I think I nixed that to use in a future article purely on raising money. My bad!

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

#163

Post by theptip »

randall wrote: post #111
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.

Is your claim "for most companies the quality is already sufficient, and so it's not the limiting factor (even though it would be if the quality was insufficient)"? Or literally "the TAM matters, your app's quality doesn't"?

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

#164

Post by zild3d »

mindcrime wrote: post #87
ChuckMcM wrote: post #57

Earlier quoted context omitted.

I love your story Sahil, it is so true that people equate 'wealth' with 'success' but that is short sighted. If you step back and look at the big picture, you're on this planet for anywhere from 70 to 100 years, and at the end of that time there are two metrics, the number of people you helped and the amount of wealth you amassed and held on to, which number is a better representative of 'success'? Working on things…

at the end of that time there are two metrics, the number of people you helped and the amount of wealth you amassed and held on to I don't disagree with your overall point, but I do wonder why those should be the only two metrics to consider. IMO, the range of metrics is nearly infinite and highly subjective.

Agreed, these two metrics are just as arbitrary as any other life-defining metric, "the number of healthy grand children you had", "the number of phish concerts you went to", "the number of Free AOL hours CDs you collected"

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

#165

Post by jondubois »

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…

It's interesting how Lambda School was able to capitalize on investors pumping cash into and hyping up Gumroad.

It's a smart move to capture some of that VC money without having to pitch anything to them.

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

#166

Post by frtcike89 »

austenallred wrote: post #132
eanzenberg wrote: post #86

Earlier quoted context omitted.

How is that even remotely possible, unless he got no equity in pinterest? They are ~10b IPO'ing this year. Even 1 basis point of pinterest is worth more than what Gumroad brought in.

He owns the majority of Gumroad. Let’s say he had 100 basis points of Pinterest, call it 50% dilution, he’d walk away with $50m. That’s probably very generous, probably actually closer to $20m. Gumroad will be worth that in a few years at this rate, and he could cash million dollar paychecks along the way if he wanted.

So he'll be worth $50M in a few years with Gumroad. Meanwhile his original investors lost all the millions they invested. His employees lost all the time and vesting. Ouch.

That's why it's way to dangerous to just follow any guy and do a startup and waste a few years of your life.

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

#167

Post by mindcrime »

zild3d wrote: post #164
mindcrime wrote: post #87

Earlier quoted context omitted.

at the end of that time there are two metrics, the number of people you helped and the amount of wealth you amassed and held on to I don't disagree with your overall point, but I do wonder why those should be the only two metrics to consider. IMO, the range of metrics is nearly infinite and highly subjective.

Agreed, these two metrics are just as arbitrary as any other life-defining metric, "the number of healthy grand children you had", "the number of phish concerts you went to", "the number of Free AOL hours CDs you collected"

"the number of phish concerts you went to"

Yep. For me it's "number of Mötley Crüe concerts attended" and "number of Trans-Siberian Orchestra concerts attended".

(currently "4" and "4 or 5" respectively)

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

#168

Post by themagician »

chkuendig wrote: post #160
themagician wrote: post #77

Earlier quoted context omitted.

You could say the same thing about Uber, Lyft, Airbnb, Etsy, TaskRabbit, etc.. When you sit down and think about it you start to realize just how “temporary” all these so-called unicorns are, as they are just middleware services with no real differentiating benefits other than size and brand recognition and maybe some vague “guarantee” to the customer. You’ve got to get big fast, because what you actually do is easil…

> no real differentiating benefits other than size and brand recognition and maybe some vague “guarantee” to the customer. - scale - brand - customer loyalty that's a lot of differentiation. more then 99% of the businesses in the world and more than even many public companies. (especially once you add the power gained from aggregating demand and supply which most of these companies have)

Most of the businesses in the world make a widget and sell that widget.

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

#169

Post by rement »

phkahler wrote: post #155

I struggle to see how this story is one of failure. A kid launched a business that is still going 8 years later. He learned that VC funding is a double edged sword and was able to shed some of that burden - buying them out for $1. In the beginning he speaks of building this thing and having it be his lifes work - which it may well be if he keeps going. And yet there was all this talk of being a billion dollar company…

He "failed" to build a billion dollar company.

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

#170

Post by mactrey »

ChuckMcM wrote: post #57
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!

I love your story Sahil, it is so true that people equate 'wealth' with 'success' but that is short sighted. If you step back and look at the big picture, you're on this planet for anywhere from 70 to 100 years, and at the end of that time there are two metrics, the number of people you helped and the amount of wealth you amassed and held on to, which number is a better representative of 'success'? Working on things…

>at the end of that time there are two metrics, the number of people you helped and the amount of wealth you amassed and held on to, which number is a better representative of 'success'?

But of course those are highly correlated - it's easier to help a lot of people if you have plenty of surplus wealth and time to share out. I'd imagine that Warren Buffet will end up helping more people that almost anyone else in the past 100 years despite never really having a goal other than "make lots of money."

Post reply on HN