The real question is, why did they have 22 employees? I think this would have been an incredibly profitable one-man business (think TinyURL) but it tried to be something that was very hard for it to be.
Layoffs Hit Gumroad as the E-Commerce Startup Restructures
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Re: Layoffs Hit Gumroad as the E-Commerce Startup Restructures
#42The company had 22 employees as of earlier this year, and it has been in the process of laying off all but what is expected to be around 3 of its staff. Normally, when I hear the words "layoff" and "restructure", I think 15% of the company, not 'basically everyone.' That's a bummer, and I expect this won't be the last time we hear this story this year. I hope the frontend engineers making $75,000-$125,000[1] for a sh…
This never made sense to me. A startup should pay you more because if you are capable, you are giving up a lot. If you want to be part of something revolutionary as an early employee, I suggest a better plan. Go talk to your employer about starting something small inside the already big and solid company. Negotiate the equity and terms before getting started. If your company is too big and complex to get this going,…
>This never made sense to me
There's a lot of naive people that will allow their trust to be exploited if there's a carrot dangled in their face. Now it makes sense.
Most investors will flat refuse to invest in a startup that pays anything more than low-mid-range salaries. Contrary to your theory that the greater risk should be rewarded with a greater tangible wage, I've personally seen investors pass on companies because the founder(s) wanted a 100k salary, even though it represented a 40% haircut in wage for the founder(s).
While the investors don't want you to think it, and do a lot to try to stop it from being thunk, Silicon Valley and tech culture make a lot more sense when you just realize that wealthy, seasoned investors are exploiting naive, just-out-of-college young adults as practically free labor, primarily compensating them in idealism and empty promises instead of dollars.
Re: Layoffs Hit Gumroad as the E-Commerce Startup Restructures
#43Earlier quoted context omitted.
I've been thinking about this lately. Why doesn't Google or Facebook just pack up one day and go to... say, Detroit? Buy a shitload of property there, and tell all their workers that in the course of the next 5 years they want to have presence in two places: this new place in Detroit, and the old place in the Valley. Whoever wants to stay in the valley can stay... and whoever wants to move to Detroit can come move to…
Because money alone isn't enough; you need good schools, roads, and other public services.
Which follow when you send in the money. Not because throwing more cash at something is a magic fix, but because people that are capable of earning more money won't accept less.
Re: Layoffs Hit Gumroad as the E-Commerce Startup Restructures
#44Earlier quoted context omitted.
It was April 4th 2011. There's an entertaining sub-thread about Bitcoin in that discussion https://news.ycombinator.com/item?id=2407053 At the current ~$0.70 / bitcoin... I can't imagine bitcoins in their current implementation gaining traction as a form of payment with 'regular folks'...
And four years later at $400/bitcoin, that's still true.
Yep. One of the main allures of credit card processing is that it's instantaneous. Bitcoin's confirmation system is a non-starter as a competitor against credit cards unless you have special circumstances that make it the only practical option (can't trust customers to refrain from filing chargebacks and/or conventional financial institutions won't have anything to do with your business). Ultimately, while Bitcoin may maintain some value, it's not very convenient as an everyday payment instrument (just like gold, actually).
Re: Layoffs Hit Gumroad as the E-Commerce Startup Restructures
#45That's pretty surprising... You would think with 15K creators and their traffic they would be able to monetize better... having to cut down to only three employees suggests they aren't making much revenue at all...
That's the unicorn way. Tech companies are encouraged, practically forced, to overspend in an attempt to show "hockey stick growth". This strategy has two positive properties for the investor: it ensures that the entrepreneur will be back before the VC to grovel for more cash in the next 24-36 months, and it gives the VC a way to kill investments he doesn't believe in anymore, despite what is a conventionally respectable and sustainable growth rate, by refusing to provide that infusion. Since most founders are naive 20-somethings, this trick works.
Re: Layoffs Hit Gumroad as the E-Commerce Startup Restructures
#46Interesting. I've been a customer of theirs for ~2 years. It's been really great until a couple months ago. Then something seemed to change. Rather than just being a great payment provider, they seemed to change direction in order to become a "platform". In emailing with Sahil about my concerns about Gumroad's new direction, he said "We want Gumroad to be the core channel for everything. We started with sales, and ar…
Oof. I sell through Gumroad as well, and now I'm a lot more worried :-/
I had been using hand-rolled Stripe integration. They're not bad, but I really like the invoicing in Gumroad, and that they accept PayPal.
They've been great while I've used them, though.
Re: Layoffs Hit Gumroad as the E-Commerce Startup Restructures
#47I've wondered why a company like this needs to be present in the bay area paying bay area salaries and bay area office space prices.
For anybody doing the VC thing, they need to be able to plausibly promise their VCs to grow really, really fast.
That means hiring a lot of engineers, designers, etc., really fast.
That's much harder outside the Bay Area, and especially outside really expensive areas generally -- Seattle isn't that much cheaper than the Bay Area, for instance.
Re: Layoffs Hit Gumroad as the E-Commerce Startup Restructures
#48Interesting. I've been a customer of theirs for ~2 years. It's been really great until a couple months ago. Then something seemed to change. Rather than just being a great payment provider, they seemed to change direction in order to become a "platform". In emailing with Sahil about my concerns about Gumroad's new direction, he said "We want Gumroad to be the core channel for everything. We started with sales, and ar…
I was part of GumRoad's recent 10-day challenge called Small Product Lab. I had this feeling that they were getting very good at their business. I'm about to finish up work on my ebook. I was to go with GumRoad. As per my research, they were THE best in terms of design, seller pricing and payment experience for end-users.
The next best would be PulleyApp.com by BigCartel. Costs $6/month. Nowhere near Gumroad's percent-per-sale pricing. But BigCartel.com has been around for a long time (I remember they focussed on helping people sell tshirts online). PulleyApp is just their digital variant.
The main downside of most GumRoad-alternatives is that if the product's sales go down or just die out. Unless seller has made huge amounts of profits (say $10k), then paying $6/month to keep it alive for previous customers might slowly leak out profits previously made.
If anyone is to buy Gumroad, it should be Twitter (or Facebook?). They have the buy button and GumRoad would be a nice fit for small sellers.
Re: Layoffs Hit Gumroad as the E-Commerce Startup Restructures
#49The real question is, why did they have 22 employees? I think this would have been an incredibly profitable one-man business (think TinyURL) but it tried to be something that was very hard for it to be.
This is what VC investment does to a company. The investors make you go for hockey stick growth, which means instead of just having a good service for selling content (that makes the owner a very handsome income), you need to take on the likes of Facebook and Pinterest. DHH's article from yesterday is right on:
> Part of the problem seems to be that nobody these days is content to merely put their dent in the universe. No, they have to fucking own the universe. It’s not enough to be in the market, they have to dominate it.
Re: Layoffs Hit Gumroad as the E-Commerce Startup Restructures
#50I run a company called SendOwl, which is probably the biggest competitor to Gumroad, and I must admit I'm sad to see this. We've been watching them over the years and have been impressed with some of the work they've delivered. I've also met a few of their employees and have liked their thinking around selling digital goods and where it's going. You could see they wanted to make a success of the company.
Their problems, in my opinion, have come from being VC backed. VCs ultimately want thier money back and with this comes massive, often unrealistic growth expectations. I've had a lot of offers of VC money for SendOwl over the years but I've never once considered taking it. I've bootstrapped SendOwl because I wanted complete control of the company, to direct where I thought it should go, to create the company where I wanted to work at (we work a sensible 9-5, I spend lunchtimes hitting the gym...), but most importantly to serve our customers and build something for the long term. This last part is something I've always seen as uncompatabile with the VC model.
The VC model is alluring though - VC money makes growing quickly easier, it makes getting PR easier and it makes bringing in lots of staff early on an easy decision. I'm not saying it's right or wrong per say, it's just not the path I wanted to go down. Bootstrapping isn't as sexy as VC money, but as long as we're growing, getting great customer feedback, and innovating with new features I know we're on the right path. Focus on those three things with Boostrapping and it's hard to go far wrong to be honest.
Interestingly we're getting more and more people asking about us as a company and whether we'll be around long term, so maybe the tide is starting to turn. Anyway I wish everyone leaving Gumroad all the best for the future. And any sellers out there who are interested in alternatives please check us out at: https://www.sendowl.com Happy to also answers questions in the thread below!