Andrew: Hey, they’re freedom fighters. My name is Andrew Warner. I’m the founder of Mixergy where I interview entrepreneurs often, uh, over the course of what, 15 years or so that I’ve done this often I get to interview the same entrepreneurs repeatedly. Um, joining me is someone who’s been on several times.
Uh, Sahil, Lavinia. He is the founder of Gumroad a company that was incredibly promising on the verge of being a unicorn. Then it wasn’t. And then he got depressed. I don’t know that I want it. Are you depressed?
Sahil: Um, people would call me depressed. I don’t know if I would use it. Yeah, it’s a heavy word.
Andrew: Yeah, let’s just say he has suffered a setback. There wasn’t everything that you were expecting it to be. And so when the company wasn’t a unicorn, uh, you took some time away from, uh, the tech space. You started going to church, you started going to a small CSS meetups and things like that. And meanwhile, Gumroad this site that you created to make it easy for anybody to sell digital products quickly, um, was growing and growing and growing.
And when you came back into the tech scene, the thing was. I thought an incredible success, even if it wasn’t going to be the next unicorn, we’ve talked in a previous interview about how you ended up getting big pieces of the business back from investors who didn’t think that the business was worth even holding on to, and as you talked about this transition from wanting to be unicorn to accepting, not being a unicorn, you develop this following online of people who just gravitated to your worldview and wanted to hear more.
And I think that’s where this book came from. The book that we’re going to talk about now is called the minimalist entrepreneur. You just released it. It’s how great founders do more with less. And the reason sidehill that I wanted to have you back on here is I kind of want to understand where you are today and how this fits in.
I’m seeing you become a big investor by creating this community. People follow you. They’ve invested money in you. You’re investing money in entrepreneurs. I want to know. Do you really like, would you invest in a, in what you call in this book, a minimalist entrepreneur wouldn’t you want something bigger?
And uh, if you would then, then how does somebody become a minimalist entrepreneur? In fact, even if you wouldn’t, let’s talk about the ideas in the book and we can do it. Thanks to two phenomenal sponsors. The first, if you need a website hosted, they’ll do it. Inexpensively. Talk about really doing more with less little money.
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Sahil: Thanks for having me again.
Andrew: What what’s the revenue at Gumroad right now.
Sahil: I think it’s around 11 or 12 million annualized revenue. This next couple of months will be, it will be strong.
Andrew: because.
Sahil: Just generally November, December is when we see sort of the majority of the growth every year come, you know, a lot of e-commerce businesses, uh, Q4 is pretty strong. So I think we’ll end up probably 13 or 14 million
Andrew: Got it. And then what about prophet?
Sahil: profit is a good question. Um, I honestly don’t track it super aggressively. Um, I know we are profitable, so I think we’ll probably do something like maybe a million bucks or so in profit for the year. Um, which mostly means that I just wasn’t able to hire fast enough.
Andrew: So I heard you on clubhouse basically riff on where you thought your investment career could go in the near term. And it was something that. You said I could basically just by talking now, raise money and then also raise the profile of a company I invest in. And as a result, both get an upside in the company, but help deliver a bigger upside than I would otherwise.
And truthfully, you could do that. Let’s talk about what your investment strategy is. What is it right?
Sahil: Yeah, I think I’m in this sort of pithy one-liner is I want to earn interest on my interests. Uh, you know, I want to invest in the things that I use, that I want to use, the things that Gumroad might pay for, um, and just build sort of a portfolio of assets effectively. Um, one, you know, to sort of become more financially independent.
Um, and generally the more money I make, the more money I plan to invest anyway, um, the more impact I can have. And, um, and then also just to learn, I think, I think investing in startups is, is like a, sort of a hack to just meet really, really smart people. People who’ve sort of spend years and years developing some sort of thesis that they may have, and then they kind of, you know, explain it to you and, you know, 30 minutes or so.
And so I think in terms of just like, you know, I, I, when I, when I was, uh, when Gumroad was kind of down in the dumps for a little while I was, I was trying to figure out what career I could have, that one I could do for basically ever until I died. And then two would basically allow me to read a lot, uh, cause that’s something I really enjoy doing.
And I sort of, at that point, decided on science fiction and fantasy writing, which I still do today. And hopefully now that this book is out, I can kind of refocus on that. But I think investing is another one. I think, as an investor, you’re kind of paid to basically be up to date on interesting things.
And I think you do that. Yeah. But you know, you get paid to learn, which is an amazing. An amazing thing that you get to do podcasting, I think is similar in that way. Um, you get to meet amazing people. They get to kind of explain all the things that they’ve learned over the last several years. Uh, and then, you know, in, in the case of investing it, you get to invest, um, and kind of participate in the upside as well.
Andrew: I like the idea of interest on your interests. So you’re saying if a company could help Gumroad and you believe enough in it, then why should you just be a user? Why not also be an investor? And obviously if you’re thinking about them for Gumroad your business, then you’ve done the research. You’re deep in the space and you know, what’s right for your business.
And what has good upside. Give me an example of a company that’s interest on your interest.
Sahil: Yeah. So for example, one of the big problems that we had with Gumroad the last couple of years, and you know, one thing I do is I look at the P and L and look at our costs and see, where are we spending money? What services are just not that high quality. Uh, and one of the, one of the places we were spending a lot of money, it was QA, right?
A lot of, sort of, and this is something that like no startup really enjoys doing. Um, a lot of the QA folks are kind of treated as second class citizens in the engineering org, et cetera. And so I invested in a company called QA Wolf. I think I saw a tweet about it. Um, basically their, their thing was they wanted to automate, uh, QA testing.
Um, And, and, and the creation of these tests make that super, super quick and visual, and they had this great get up repository that I thought was interesting. So I just dammed them on Twitter and said, Hey, would you ever consider raising money for this thing? Like, I think there’s sort of a path to, if you want, you know, if you want to kind of double down on this, if you want a team, uh, you may not want that.
Um, but if you do, like, I’d love to kind of talk. And so I invested in this company called QA wolf.com, um, which has been doing super, super well recently. And it, you know, Gumroad was kind of a customer, um, you know, as soon as we were able to, and I often look for that, that sort of thing where I can, it also just makes my life super easy.
One as an, as an investor, I don’t actually have to do anything right. Because besides wire the money, because I was already taking a meeting, I was like 80,
90% of the
investment.
Andrew: You already considering them for your business already trying to figure out would this make sense? Are they committed? Okay.
Sahil: exactly, exactly. And really the only
Andrew: I also find you get better, better service. Sorry. There’s a bit of a lag here today. I also find that you get better service if you’re an investor instead of just another, um, another
Sahil: Yeah, I think it cuts both ways, right? Like I think there’s an expectation as well on my end that I am one of their better customers in the sense that I’m not just going to cancel. Right. I’m going to say, Hey, I’m canceling. These are the reasons I’m canceling or, Hey, this is getting really expensive. You might want to consider this, um, or there’s this bug or, or, or there’s this feature that we would really, really love.
So I kind of act as like, I guess they’re called design partners, um, where Gumroad is a sort of a trial customer, a beta customer. And then I just give them as much feedback as I possibly can to make their product better, which I would do anyways, as, you know, as a, as Gumroad CEO. But then as an investor, it kind of gives me an, an extra incentive to, to kind of do.
Andrew: Okay. And so if QA Wolf becomes a minimalist business, does it really pay off? I mean, I I’ll tell you that I haven’t done a lot of investments, maybe about a dozen or so. Whenever there’s someone who’s just doing okay, they don’t need you anymore. They’re almost hiding from you the way somebody who owes you money hides from you because they know you’re not going to see a big upside and they shouldn’t really do much to get you a big upside, like sell the business.
They’re happy they’re doing their job. It’s going to be maybe 30, 40 years. And maybe in frankly, their kids later on are going to take over. If it’s a minimalist entrepreneur, is it even worth it?
Sahil: Um, honestly, no. Yeah. Most of the time I would say that if you’re running a minimalist business, like I think you’ve done. Something incredible, which is you built a business without raising capital from other people. And that’s amazing. I think, you know, the sort of what I tell entrepreneurs and founders that I meet meet with, uh, is one, you know, if you’re considering raising venture capital, you should be really certain that that’s something you want to do because it’s sort of a one-way door.
Right. And I know this running Gumroad, it’s very hard to kind of go backwards in that way. Uh, so make sure that you want to do it. And then yeah, most businesses should not, frankly, right? Like I think 99.9, nine, 9% of businesses should not raise venture capital. They may reach some amount of capital like their friends and family, or, uh, they might, you know, self-fund fund the business for a while or they might have a consulting business and use that.
Um, or, uh, they might raise money from their community. Now, when you have regulation, crowdfunding, and some of these other options that are making it a little bit easier to do that sort of thing. Uh, but yeah, I think most businesses should not be raising venture. If you do believe your business is a really good fit for venture, then I would love to talk to you.
But I think there’s sort of the Derek Sivers called the two paths where they’re sort of the gate kept path, right. Which is maybe in publishing, like getting traditionally published or something like that, which has like an external party that has to kind of anoint you almost. Right. And then there’s like the other path, which is like the go viral on Tik TOK, write an amazing blog post, like sort of build an audience and then self publish.
And I think both of those paths are, are feasible. Uh, and you should actually, you know, I think frankly kind of be exploring both, right? I think exploring the, the, the sort of bootstrap path is always going to make, if you do decide to raise venture, it’s going to make you, you know, a much more powerful negotiator, right?
You’re going to have a lot more leverage walking into that conversation, which is kind of a core thesis of the book is it’s not necessarily that you want to stay small, but that your operation, like you should always have high. Right. Like you should always be doing more with less. That’s the power of software of the internet of building an audience.
Um, I can tweet and raise $5 million for Gumroad. I think being able to do sort of these sorts of things, I hope still apply to venture backed businesses, but certainly not as much. Right. I think sometimes when you raise $200 million, you don’t, you don’t care as much about freedom. You care about growing as fast as possible, and you actually, you’re not even optimized for scale.
Sometimes you’re you’re optimized for like the absolute growth of the.
Andrew: here’s what I think happened. I think that you were approached to write this book and you talk about in the acknowledgements by Mary son, who, by the way, is the only reason I was able to write my book, stop asking questions, because I would get on a call with her every week and go over my work. And she kept me, uh, she kept me going, I didn’t realize this, but she read your blog posts where you real, where you said, look, my hopes of being a unicorn are dashed and here’s the.
future.
She said, you should write a book about this. My sense is that at that point, you were ready to write about your new path, which is more minimalist. And you also had clients at Gumroad who were also on a path of being minimalist entrepreneurs, and you were trying to give them a path and also encourage more people to be on Gumroad being these minimalist entrepreneur.
And this book is written for that path. The other side of you is the investor path where you’re not looking for minimalists entrepreneurs. You’re looking for people who are going to be unicorns. Am I right? That there’s like a two parts of Sahil and this is the
minimalist part.
Sahil: Yeah. I would say there’s three, honestly, like there’s three, there’s three paths, I think, or three parts to me. One is the sort of startup venture capitalist part, uh, which I still care about. And even when I publish that, that sort of reflecting on my failure to build a billion dollar company essay at the last line or two is, you know, like part of me still wishes I was on that path.
So I, again, some sort of still play in that world. Um, but then, yeah, there’s definitely kind of like the minimalist entrepreneur creator. Like how do I empower more and more people to run small businesses, uh, who may not live in the U S they may not have access to venture capital may not have a degree from the university.
Like how can they use the tools. Uh, cause I kind of believe everyone deserves to run a business if they, if they want to. Um, and then the third one is just like the not business part of me at all, which is like, I spend several hours a week figure drawing, you know, drawing, going to a drawing studio, using pen and paper or pens, actually, most of the time, charcoal and newsprint, uh, recycled newspaper and drawing, you know, a live model in front of me, you know?
Uh, and I, so I think that’s also really key, right? Like ultimately even, even the most minimalist of businesses is not going to solve all of your problems. Right? Like I think ultimately you’re going to need friends. You’re going to need family. You’re going to need relationships. You’re going to need to live in a beautiful place.
Like I think all of these things are important. You need to be healthy sleep well. And I think that’s part of like the thesis of the minimalist entrepreneur and you’re totally right. Like it’s sort of multifaceted. I’m not saying everyone should adopt this completely, but I do think part of the thesis is that this won’t solve all your problems.
Right. And this is one reason you might want to consider minimalizing your businesses. If you expect it to solve all your problems, you’re going to make it dominate everything. And then when it doesn’t go the way you want, you’re going to get sad. But if you say, Hey, the business is like, I consider my life.
It’s sort of a three legged stool. If one of those legs, you know, I can, I can still kind of operate. Right. And so it gives me almost like a diversified portfolio of happiness in a way, um, which I think is important in this market.
Andrew: So how much money do you think you need before you feel financially free? You personally say.
Sahil: I mean, I’ve been financially free since I published that blog post in February of 2019 when I was making, I think I was paying myself at that point $120,000 a year. Um, and that’s really all I need. I don’t want, you know, until I have kids, which is still probably a few years out, um, that will probably change my calculus quite a bit.
Um, but until then, yeah, like 10, $10,000 a month is plenty. Uh, for me,
Andrew: Are you still Mormon?
Sahil: I’m not actually.
Andrew: Okay.
Sahil: Yeah. Yeah.
My, my wife also left, left the church.
Andrew: Oh,
she did. I’ll say this though. So hell I love what you wrote in your book about Mormonism, that you said that you were sitting in church and you saw this community, the, the, the Mormons have incredible community coming back to your book. You say that it should start with community.
Give me an example of someone who started with community started a business that way.
Sahil: yeah. I mean, I can give you examples sort of like the, the archetypal examples in the book, for example, like Brian, Mark Taylor is an oil painter that I met in Utah and he sells, uh, an easel, uh, a sort of physical product called a Strada easel, um, which I own, um, bought one. Um, and you’d take it plein air painting.
So you go on a hike and it’s kind of the apple of, of, of easels because he was going on a plane air trip and his easel broke, which basically means you can’t paint. And which kind of sucks if you hike three or four hours to get to some locations. Well, I’m paying now. And so he built a product, you know, he builds it in wood and then productized, it, turned it into an actual product manufactured in China, I believe.
And it’s doing great. And it allows him to paint sort of as much as he wants because he no longer has to make a living from painting, which allows you to kind of paint the subject matter. You might want to paint versus the subject matter that people buy paintings, you know of. Right. And so I think that’s, that’s one example, but on the other
end, I would argue that
even,
Andrew: did he have.
Sahil: yeah, he, he had an Instagram community.
He had like, I think at the time, like maybe 20 or 30,000 followers. So basically, and he would go to these planar competitions and conventions and meetups. And so he had probably a few thousand people just within his kind of one degree away audience, um, that were all kind of became customers of his or prospective customers of his.
Andrew: Okay. And you were saying on the
other hand, what
Sahil: Yeah. And then on the other hand, I mean, I, and, and this is where, why I think some of the lessons and hopefully the middle of the entrepreneur also applied to like people who are choosing to chase unicorns. Um, do I do think it should be a choice, not something that you’re kind of forced to do, or you feel like it’s the only path, um, is like Stripe Stripe basically started by selling their product.
I was one of the first users of Stripe pre-launch, but they started selling their products to Y Combinator companies, right. In that batch of like maybe 20 or 30 companies. And so that’s like an incredibly tiny community. Everyone knows each other, you know, you can say something, you can say, Hey, I have a product.
Does anyone want to use this? Um, and so I think there are ways to kind of apply some of these lessons. I think the core thing about starting with community is you need people who like you and trust you and you have a relationship with, I think that there’s so many founders that I talk to that are like, Hey, I’m building a product for this group of people.
Uh, and I’m like, ha. What are you getting? Like, how are you going to talk to them? And they’re like, oh, I’m just going to cold email them. I’m like, well, that’s great. Like that’s better than trying to go tweet and go viral or something like that. But they don’t know you who you are. You’re kind of a used car salesman, right?
Like you’re just getting a cold email from someone who is selling some product. Um, and I think that’s just, it’s brutally difficult. Uh, but if you can pick a community that you’re already a part of, you already have built relationships with, and then you’re going to have a much easier time selling your product, uh, getting them to use it, getting them, getting honest, actual feedback from them.
So you can actually make your product better. And then once you have that, you can of course go beyond that. Um, but I think starting is so hard for people. I think that’s kind of like the, the word that I kept going back to in the book was start like, how do I get people to start? Um, and I find that a lot of people don’t consider themselves entrepreneurs.
They don’t consider themselves, but potential business owners. They may not even think of be anyone around them as customers. And so I wanted to find another word that kind of represents. Which I felt community addressed really well. Everyone should find that they’re in some communities, ideally several, um, you know, either offline or online.
Um, and there’s probably a business somewhere there. Right? You have to figure out who you want to serve. That’s kind of the first question you need to ask when you start a business, like who do you actually want to help? Uh, and once you figure that out, then you can figure out, okay, well, what’s the, what’s the problem that they have.
And then from the problem, you can build a product. And then from the product, finally, you can assemble the business right around the product. Um, but I think a lot of people, when they say, I want to start a business, like they’re thinking about step four, which is very, you know, they, and they don’t know how to get there.
Cause it’s like, you know, step four is pretty high up there, you know, for, for many people, they, a business, what is a business? What does that mean?
Andrew: How do you find it once you have a community, how do you find people?
Sahil: Um, I think I, I mean, I think a great first step is to ask, um, you know, just, but honestly I think the best way is to observe, just pay attention, just get really good at paying attention to the problems that people have, um, that I call them toe stubs in the book, but basically things where you feel like it’s going to be easy.
You’re like, oh, of course, I’m going to be able to do that. And then you try and you fail. And you’re like, this is weird. And I think a lot of people, their tendency is to kind of explain it away, right? It’s to say, Hey, the reason this is hard is because, or this is painful or slow or, you know, or what have you, high friction is because of this reason or that reason, or, you know, supply chain issues or whatever.
And I think it takes sort of like an entrepreneurial mindset to say, maybe it shouldn’t be anymore. Like maybe there’s new technology today that we could use apply to this problem. Um, you know, maybe I have the skills to solve this problem instead of saying, oh, someone else will solve it later. Um, but that takes like a certain level of competence that takes a certain level.
Awareness, um, you know, to, to kind of say, okay, no, I’m going to be the one to solve this problem, uh, for my community.
Andrew: Yeah. You know what to explain it away is such a good understanding of what’s going on. I even remember before you started, Gumroad when I tried to use PayPal to sell digital products. PayPal had buttons. They had ways to do it whenever it wasn’t working. I thought I must not be going to the right section on PayPal.
I’m too. I’m too embarrassed to admit to everyone that I don’t know where this is and that I’m having a hard time creating this link and that it’s not exactly working for me. And I think my, my customers were doing the same thing saying it’s not working for me, but I must have hit the wrong thing, or I must have a unique situation here.
Um, but by the way, speaking of, uh, audience, one of the things that really stuck with me in your book was, uh, Nathan Barry talking about how he was looking at someone else. Another designer named Chris, I’d say almost with envy watching how they were doing the same thing, but Chris was taking off. And then do you know what I’m
talking about?
Sahil: Yeah. Yup. Totally.
Andrew: You want to tell that story? Cause I was about to launch into it but
I’d love to hear it from you.
Sahil: I’ll tell the story. Sure. Yeah. Yeah. So Nathan Barry was kind of at that point now he’s CEO of convert kit 20 million ARR. But before, you know, he was like kind of a freelance web designer and there was another guy Chris Coyier who ran a blog called CSS tricks. And he did this Kickstarter campaign.
And at the time, you know, Nathan and Chris were kind of both kind of like at the same level in the community. And um, and then Chris did this Kickstarter campaign and raised a bunch of money, uh, way more than expected, like tens of thousands of dollars. And, and, and Nathan was kind of pondering, like why?
Like, I feel like we’re just as good. We kind of do the same. We have the same sort of audience, you know, uh, community, uh, like what what’s what’s he doing that I’m not like there must be some reason for it. And he, you know, he, he basically realized like, basically, and then this is kind of a key lesson, is that.
Nathan would, would do the client work or do the project and then he would move on. Right. And Chris had a very different process, which is you would do the work, but then he would document as he was doing the work, you would document all the stuff that he was learning, uh, all the things, all the hacks that he had to figure out, like basically he would write a tutorial every single time he did a project.
Uh, and so he basically got two outputs out of it. Everything that he did, right. One are really three. He had the product that he was already doing, that Nathan was doing. But then two, he had actually like the, what Jack, uh, butcher calls, the sawdust, right? Like the, all the extra stuff that you create as part of that, you can kind of package that up and, and use that to build your audience.
And so he would actually put this out there and which would build a ton of trust with his audience. And I think that’s like the third asset is he was, he was really building the most important thing he was building was actual trust. He was creating value. He was helping people over and over and over again, he was teaching as he learned and.
When he had a Kickstarter project, uh, that he wanted help with, you know, that that audience would probably spend at that point years and years getting value and value from Chris, but not necessarily Nathan. Um, he was, he was able to do that incredibly financially successful. And I kind of think about, I mean, even with the book, I think of a lot of purchases as like, thank yous almost versus like, oh, I need this book because it’s going to solve a problem for me because frankly, a lot of you just don’t know, like you don’t, you might not know what’s in the book, especially if it’s a pre-order for a book.
Right. But I find that a lot of the people who support you are the, and this kind of goes back to the, starting with community. I think that’s why it’s so key, uh, is because these people are not buying it because they think you’re necessarily solving a problem for them. They’re buying it almost as a, as a token of gratitude.
Like you’ve already provided, let’s say the book cost 20 bucks. You already provided $20 a value to me in the last like year or two years, 10 years. So, you know, I’m going to do this to support you, right? Gary Vaynerchuk calls this kind of give, give, give, give, ask.
Andrew: I always have a problem with that, but it’s true that it happens. It feels like it just doesn’t seem to be a capitalistic, rational decision for people to make, to buy a strangers book as a way of saying thank you. But, um, but I acknowledge that I do that and I know other people do that. Um, all right.
Let me take a moment. Talk about my first sponsor. It’s HostGator for hosting websites. I’ll let me ask.
you this, your creator. You’re talking to your book about all the things that you’ve created over the years, and I think you have a phrase like creation, begets creations, which I’ve definitely seen with you.
If, uh, if, if you were starting your career and Andrew Warner comes to you and says, I’m going to give you a HostGator account, it doesn’t cost much. Anyway, I’m just going to hand it to you. What would you create on a website today to get yourself started? Let’s use that as the ad for home.
Sahil: Yeah, no, that’s great. I would, I would, I would create a personal website. Right. Um, I would start it with my name at the top and then I would have a blog and I would have a portfolio. I think those are kind of like the two essential things that every, and maybe an about page or something like that. But frankly, I think the most important thing, like, I think better than an about page is just like a series of thoughts that you’ve had.
And so right. To start writing a blog, uh, use WordPress or, or what have you. Uh, and that, which is basically what I did, you know, 10, 15 years ago. Um, and, and then started building a portfolio, a portfolio of real work of real things that you’ve shipped. Uh, and it doesn’t have to be things that you’ve designed or built, but like some combination, you know, maybe it’s some no-code app or something like that.
But I think it’s important to start thinking about it. Like you, you, you, you want a paper trail, right? Like
whenever you meet someone new, you, you want to give them something where they’re like, oh, this is interesting. So I’ll have like a funny. Right. That should not be the end of the relationship with me.
They should say, oh, that’s interesting. Click on my avatar, go to my website, go to my blog, read, reflecting on my failure to build a billion dollar company and get to the bottom, subscribe to my email list, get an email three months later about my book. Like I think that’s the sort of customer journey if you, if you want to call it that, but it all starts with sort of creating a trail of breadcrumbs effectively, right.
Um, to allow people to kind of like learn more about you without you having to do anything. And you’re going to suck in the beginning, you know, like your first few blog posts are probably not going to be that interesting. You’re you’re going to kind of say the same thing. That’s been said a bunch of times.
Um, but you know, the only way out is through, right? Like you kind of have to get those things out of your system before you can kind of move on to the more interesting topics.
Andrew: You know what? There’s an artist who took Hebrew letters and Arabic letters, and it turns out you can really decipher Hebrew letter from the bottom of the letter. You don’t need the top and you could decipher an Arabic letter. If you just see the top, not the bottom, she goes, the letters are kind of similar sounds.
I’m going to combine them. And I’m going to make this one font that basically has both together that both could read, even if they can’t read each other, I’m seeing your eyes light up from that. Right. Um, so. You would not think that this would work, but it works. It’s amazing. And because she had this, it was just a project, but because she had this website up where she just published all the different things that she’s been thinking about or creating over the years now, when the independent in the UK and other places, uh, publish articles about her, they link to that and you get to see, she’s got this body of creative work that she must have just put on there.
And I imagine she thought, no, one’s going to pay attention to it. Why am I even publishing it? But you know, she wasn’t doing a lot of writing, but she was saying, here’s my latest project. Here’s another project I’ve created. Um, her name is . Uh, and I think her last name is Turk Kennick, but anyway, Laura lobby is up online right now and you can see all the different things that she’s done over the years and, uh, and see that her site’s getting a ton of hits.
Now. Anyway, the reason I’m bringing this up is I like what your idea is. I hell I always think, uh, what’s the best business you could create on a HostGator account. But I think just having a portfolio where people can see what you’ve done over the years, even if they’re not following along throughout the time that you’re publishing, they have something to come back.
Like you said, breadcrumbs. And I highly recommend that people do that on HostGator because HostGator’s inexpensive. They host well, and they just fricking work. If you go to hostgator.com/mixergy, you’ll get the lowest possible price. hostgator.com/. All right. So you talk about community. The second thing you talk about is they don’t even minimalist entrepreneurs don’t even build and do their time cycle, where I would look at some of the people who sold on Gumroad and think what the hell, dude, you’re not really creating anything.
All you’re doing is taking an air table and you’re filling it in with some data. And then you’re selling that. It almost feels like it doesn’t seem worthy of selling. I’ll give you a examples. You know, what’s one is contact information for bloggers contact information for podcasters. It’s just, they put it in their table and they let anyone else add to it.
And then they sell it on Gumroad. And you think that this is a good approach because.
Sahil: Yeah. I mean, I think it’s because business is a muscle and muscles require muscle memory and muscle memory requires experience. And there’s no way around that. And I think so many people get stuck. You know, if you do get to a place where you are like starting with community and you are adding value, I think you still have to there’s other business muscles that you have to develop, like pricing, like sales, like marketing.
Um, and yeah, I think the point is just, just try something, right. And it, maybe you don’t even have an air table maybe. 30 minutes and I’ll get on a phone call with you. You know, it’s like 30 bucks, I’ll get on a 30 minute phone call with you and I’ll just talk through your problems. Right. Um, you can start with the most manual process, uh, and then over time you can sort of automate more and more and more of it.
Right. And, and this is like, I think something that a lot of people miss when they look at startups or, or websites or products, um, apps, and, and these, these things, like they, they think that they, they were like this amazing and sexy and automated from the beginning. Right. And, and actually like a lot of these businesses start out very, very manual.
There’s like maybe someone in the back that you don’t even know exists doing a lot of the manual work, you know? Uh, and then over, I mean, Stripe, for example, I bet you that a lot of their underwriting in the early days of their first merchants was manual, you know? Um, and then over time, once you have the data, once you have like the sort of the, the, the inertia, um, then you can start to kind of.
Automate things away. Um, and so I think that’s just like a hurdle that a lot of people never, never crossed because they think they like their first product has to be a product. It has to be, uh, an app that is totally self-serve. You can sign up, you can pay, you can use it, you know, without talking to a human being.
Um, but that’s just not true. I think ridiculous amount of businesses, even the, even like the crazy large ones are still very manual. You’re still a lot of process. Um, you know, and so I think it’s okay to, to kind of embrace that. Um, and I also love the idea that people are starting with something incredibly tiny.
Um, as long as they’re honest about what they’re selling in the beginning and they are, you know, a lot of the, it’s not hard. Like, for example, even with my book, I was going to make a joke tweet. Um, that said, look, if you don’t want to read the book, um, here’s the glossary. Here’s like the index of every single term mentioned in the book and you can literally just Google each word, each person, each phrase.
And compile your own book, right? Um, it’s like 300 or 400 search terms. It’s going to take you days and days and days to do. Um, but you can do it. Um, and I think that’s part of the point here is like, look, if you’re able to save people money and save people time, uh, or make people money, those are kind of like the three things that I like to focus on, then it doesn’t matter the form that takes, right.
It could be a phone call. It could be an air table. It could be an app. Um, it there’s a, it could be a book. It could be a cohort based course. It could be like, there’s so many different ways. And I see this with creators all the time where they’re like is really people would pay for this. Um, and it’s like, well, you would, right.
You compiled all this data for some reason, probably for yourself, right. You probably spend hours and hours doing this. And so like, you would have paid for this if it already existed. And so, yeah, I think the evidence is, is the fact that you even assembled this product in the first place.
Andrew: Uh, you gave an example about John era making the book who, I guess he was what he was. Uh, he worked in the film industry. Oh, he ran a post-production company and he noticed that a lot of people had trouble getting the closing credits into movies, which kind of makes sense. It is a pain to remember all the people who are on it.
And then all the different cities you mentioned and the music and so on. I didn’t realize that they had that much trouble with it. He said he was going to create a company that would solve it. And then he and his co-founder basically did the whole thing in Google spreadsheets and then just kept adding and adding to it.
But they were taking on all the work for their clients, even if they were using spreadsheets, it didn’t matter. And then they built it. How big did that business get?
Sahil: Um, I’m not exactly sure, but I think it’s, they, they did raise a tiny amount of money from, from the comm company fund. Um, so I think they’re, they’re doing quite well. Um, obviously COVID was, was a tough year for a lot of people in the film industry, but I think they’re, they they’ve come out of it pretty, pretty darn strong.
And that’s a great example. Yeah. Like for example, like end credits, like, let’s say you add someone or remove someone like you have to reformat the entire list, you know? Um, and so yeah, they just built this thing and they’re like, oh, just we’ll just add it in Google sheets. And then we’ll write a little Pearl script that basically takes the Google sheet data and then turns it into, you know, you can just hit a button every time you need to generate like the new, the new list of people.
Now, I think it’s a lot more automated than that. Gumroad is another example. Like a lot of people are like, how did you build a Gumroad into a weekend? You build like an entire marketplace of buyers and sellers, but the truth is. Was it a single seller? I was selling on behalf of all the merchants on Gumroad and then every month I would go into PayPal and I would make a list of all the people I owed and then I would pay them all.
And then I would literally go into the database and like change the balance to zero, um, which, you know, worked for months and months and months, maybe even a couple of years. Like, I don’t know. It would, it, it worked for a very long period of time. I think this is the other thing that I learned when I first started working at a startup.
I S you know, I got a job at Pinterest and I had this, uh, I don’t know, like this vision of startups, it’s like this crazy thing, super computers on the wall floor to ceiling, like everyone wired in, or, you know, like whatever hackers, like whatever kind of the movies portrayed, uh, portrayed startups as, um, and, and then I got there and I was like, wow.
There’s like just a bunch of duct tape. Like anyone can do this. And I think that’s really empowering, right? It’s like, oh, wow. Like I have, it’s both empowering. And then also like, oh, oh, I have no excuses anymore because it turns out all I need is a laptop and internet connection and a phone. And I have all those things.
And so, yeah, like what am I waiting for? Right. Um, and I think that’s kind of another important thing here to get is also just like, there’s a lot of duct tape out there. Like you think Stripe is the most perfect company with the most beautiful UI. I guarantee you that there’s a ton of duct tape all over the place within that company, because they have to work with banks.
They have to work with all sorts of, I mean, you know, you don’t want to know like the, about Sabre, you know, every time you book a flight, like the database that, that, that every flight, uh, runs on is like some database in like Texas, you know, uh, you know, written in like the sixties and seventies that still maintain, you know, it’s just like, it’s crazy.
Um, the world works though. Right. And I think that’s kind of the important lesson here is that the user experience is. It’s solving the problem, then it doesn’t necessarily matter. Right. If you’ve produced Shakespeare, it doesn’t matter if it was like a bunch of monkeys on typewriters for billions of years.
Right. You produce Shakespeare. Um, I just think that’s kind of an important thing to get is that look like a lot of people, they just get in their head about it. They’re like, no, this needs to be the perfect thing. You know, it’s like, I remember reading a book as a kid and the first book I read with a typo in it.
And I was like, what? Like, this is allowed. Like, you don’t go to jail. Like, you know, like teachers would tell you, like, you can’t have typos, that’s wrong. And then you read a published book by some author and you’re like, wait, but there’s typos in here. How is that possible? Um, and that was, that was
pretty eyeopening.
It’s kind of the Steve jobs quote, right?
Andrew: what was
The Steve,
jobs quote, and then we’ll go into the next
Sahil: The Steve, yeah. The Steve jobs quote is basically, you know, like basically you realize that the world is, was built by people no smarter than you are. And once you realize that you realize you can reconstruct the world the way that you want. Um, if you have the, you know, the discipline, the time, the energy and.
Andrew: All right. Next point is you say minimals entrepreneurs should sell to their first a hundred clients. and.
here’s the thing that, that blew me away in the book. You said slack, when they IPO code at $16 billion valuation, 575%, 575 of their customers accounted for about 40% of their revenue. So you don’t need as many customers as you think you need.
That’s a really exciting realization,
right?
Sahil: Yeah, this is another thing that kind of blew me away about a lot of these startups is you think that you need, I don’t know, thousands, tens of thousand, hundreds of thousands, millions, maybe of customers. Uh, you know, because I think maybe the startups, you know, it’s like Netflix where their subscriber count or Facebook where their daily active users or Twitter, you just kind of assume that you need like, just an insane amount of people.
And the only way to get those people is by basically, you know, having some crazy, scalable growth marketing channel or engine or SEO or, or, or what have you, or you need some celebrity influencers to kind of sell your product for. Um, would you, would you do if you’re, if you’re like selling deodorant or something like that.
Right. But most of the businesses are not trying to do that though. There is one example of that, but, uh, really the goal is to sell to yeah. To figure out how many do you actually need, if you say, okay, I want to get to, let’s say, you know, use my number $120,000 a year and you kind of work backwards from there and say, okay, the, you know, it’s like, it’s like a hundred bucks a month.
Okay. Well that’s 1200 a year. Well then you only need a hundred people and then you you’re, you’re good. You know, you have an a hundred customers to, in a year there’s 261, I believe business days a year, something like that. So that’s like, that’s like doing a, you know, signing up a new customer, you know, every three days.
Right. Um, and, and, and obviously it’s going to take longer than that. You’re going to have churn. Like it’s not going to be a smooth or simple, but I think it makes it much more reasonable. You know, I can tell my mom, like, yeah, if you spend eight hours a day today, do you think you could acquire one customer for your product?
Um, the answer is probably yes. You know, Yeah. Or if you fail, you’ll have data to make your product better. Right? I think every, every sales conversation either is useful, right? You either acquire a customer or you acquire a reason that that customer was not acquired and new chain can kind of either say, okay, that’s not the right customer for me.
And you can kind of recalibrate on, on your kind of ideal sort of customer profile. Or you can say, I want that customer, they need this thing. I’m going to go build it, or I’m going to go solve that problem, or I’m going to, they need this level of trust. So I’m going to have to.
Andrew: You wrote in the book about how, um, actually, you, you basically gave the email that you sent out to people when you were trying to get them to use Gumroad. It was something like, I see you’re selling a PDF using PayPal. Do you know the Gumroad could make it easier, et cetera. What did you learn by talking to customers one at a time like that?
What helped you shape? What helped shape, how Gumroad
became.
Sahil: Yeah. Yeah. I mean, I think the, the most important thing is you figure out the, as Clayton Christianson calls it, the job to be done. Right. I think everyone, when they have a business, they believe that they know the problem that they’re solving for their customer. Uh, for example, for Gumroad, it was like, oh, I need to help all of these people in the beginning.
I want to help all of these people like become, you know, sell directly selling these atomic things, get rid of their storefront, sell all these products directly on social media. Like, I really felt like that was kind of the future of commerce, um, which frankly did not play out the way that I thought it was gonna play out over the last 10 years.
Um, And then I realized talking to customers, I think they didn’t care about any of that stuff. They just wanted, they were spending, you know, let’s say 10 minutes a day, like copy pasting a link from Dropbox into the email because they wanted to email everybody who’d bought their thing. Or they were dealing with a bunch of customer support because they took too long to do it.
Or, um, or they would send a file and, and, you know, it was like a zip file and they were on their phone and they couldn’t read it. And like, literally customer support was like one of the major problems here. Um, and if you told me when I built Gumroad that like the problem I was really solving for people was called customer support issue.
I would have said what, like Gumroad is not, it doesn’t do any customer support. It’s like, uh, it makes it saves you time. It like automates things. Um, and so I think that’s the big thing. The big lesson for me, it was like, what problem are you actually solving? And, and, and, uh, I use the example of like milkshakes, uh, you know, and, and, and this, the problem that milkshakes for, for McDonald’s solves for McDonald’s customer selves is that people want.
Want a companion wants something to do on like the 30 minute drive to work in the morning they sell most of their milkshakes or 40% of their milkshakes, like free 8:00 AM, which I was like an insane, like, imagine realizing that like we have milkshakes, we have like eight and eight in the morning. Like what, like clearly there’s a, miscalibration of like why we built this, why we produce this product and why people actually want it.
Um, but I think an important lesson in the book, uh, and it was really internalized for me even was like, look, the reason you built this business is to serve customers. It’s not to kind of live up to maybe the vision that you have, right. Ultimately it’s about finding that community, serving them. And if they want you to do something else, you might want to consider doing that, right.
If you’re, if you really want to truly help them, um, you will change, you know, you will pivot, you will kind of change the way that you think about it because ultimately the kind of highest order goal here is to, is to help this group.
Andrew: All right. So we said, start with community, build as little as possible, sell to your first hundred customers and then market by being you is the next point. You know what, let me take a moment. Talk about my second sponsor. And then we’ll come back into that. My second sponsor is send in blue cycle. I bet you never heard of them.
I
right.
Sahil: You’re correct?
Andrew: So you
look and you’re deep in the space. Here’s the thing that send in blue. Does they say, look, we are going to do email marketing with all the marketing automation tools that you need. So for example, style, if somebody buys from Gumroad, you could just tag them as having bought and not send them more messages to try to sell them.
Right. This is the type of thing that a lot of email software doesn’t offer, because it seems too complicated to tag where they do and they make it too complicated. Use, send blue has it and more, and they make it super easy. So why would you send in blue when you hadn’t heard about them? First of all, they’re a huge company. I interviewed the founder. Actually. I interviewed a company that sold to the, to them. Um, But so they’re a big company. They, they’re also a company that understands the way that other email marketing companies work, which is they get you in cheap or free. Once your email list grows and it’s hard to move the tagging and it’s hard to move the email addresses away and it’s hard to move the permission they locked you in.
And then they ratchet up the price until it’s unbearably expensive. And Senator Lou says, you know what, for most people they’re going to be okay with it because they don’t even think that far ahead. But there’s some businesses, there’s some people who think that far ahead because they have clients that they’re servicing.
And so they see clients build up to this big level or because they built businesses before and they see that, yeah, you’d spend a long time on the free plan then boom, suddenly you get hit and it becomes. And so they said we’re going to just service those customers. Give them all the marketing automation tools they need at a price that’s reasonable at first and incredibly reasonable and fair later on, especially compared to competition.
If anyone wants to try them out for free right now, if you want to just play around with them, you can go to send in blue.com/mixergy. They’ll let you use it for free. They’ll give you a discount on the price, and frankly, you don’t even need discount because the price is already low. So you’re not.
doing it for the discount.
You’re doing it to say, thank you, Andrew, for introducing me to send in blue, I’m gonna use your URL. So they give you credit for signing me up. Here’s a URL it’s send in blue.com/mixergy. Go, go check them out. I think you’ll be happy with them. Alright, so market, by being, you talk a little bit about how you’ve done it.
Sahil: Yeah, totally. I mean, ultimately you want to find a business. You don’t have to sort of spend a ton of your time marketing. I think marketing is just one of those things that like, maybe it’s just me, but I just don’t really enjoy doing it. And then it’s kind of ironic because some people would say like, that’s the one thing that you do best out of everything else.
And so I was trying to figure out, like, why is that? Like, what, what, what, what am I missing here? And I realized that like, I’ve found a business and this is not just Gumroad, but now it’s like my venture stuff. It’s the book stuff as well. Um, but I find, I try to find things where I can inherently just talk about them.
Right. I can go on clubhouse and that someone can ask me a question and I can just ran for a few minutes and I can basically talk about the three things that I’m, I’m I’m building without having to explicitly think about, oh, I have to talk about Gumroad or I have to talk about my venture stuff. Oh, I have to talk about angel investing or I have to talk about my book.
Oh, I have to talk about this, that whatever. Um, because yeah, I want to be doing it all the time and I don’t want to be spending any extra energy doing it. Right. And so I think it’s really. To figure out like, what’s your angle, like how, how, what you care about that you’re already interested in, you might already be sharing it to some group of people.
And how do you apply that to your business? Right. A real example that I use in the book is, is, is, uh, like fitness and weight loss, which is a big category on Gumroad. And it’s, it’s, it’s, uh, a lot, you know, examined.com kind of started this way as well. Um, but if you’re, if you’re on a weight loss journey, if you’re trying to build muscle, if you’re trying to do all the things that you may want to be doing, it turns out a lot of other people are trying to do those same things.
Right? And so if you can talk about those sorts of things, not just, Hey, I built a product, I sold it. I have this product you can purchase, or I have this business that you can buy a product from. Um, but actually the journey of getting there, the actual day-to-day learning, um, that you’re, that you’re experiencing and the, and the, and the tough stuff, right?
Like this, the failures and struggles, like the, the best marketing I ever did for Gumroad was basically telling the world that it. Which, you know, I did not expect to be the best marketing ever for the company. Um, but it turned out to be. Um, and so I really have tried to internalize that, what, what can I share authentically about myself that I already do?
Um, and how can I apply that to, to sort of growing and growing the business. Um, and sometimes people might get to that step and say, Hmm, I’m not, I’m not doing it the right way, but I found so many businesses that kind of post product market fit have customers are scaling. And this is maybe the chapter that I think applies most to, to venture sort of unicorn chasing startups, because I think marketing is a broad principle.
Um, and I’ve found a lot of, a lot of really positive feedback from people who were like bought the book skipped to skip to the marketing chapter. Cause they’re like, um, this is where I’m at. I already have a hundred customers. Like I already have a business already profitable. Um, but they find a lot of value in that because they’re like, oh wow, this is how I talk about my business in a way that is appealing to people.
I entertain people. I make jokes. Um, I educate people on what
I’ve learned.
Andrew: be yourself. Be yourself, talk a lot. It’s I get it. I wonder though, if it becomes, if it becomes painful for you saw how I looked at you when I asked you if you’re still Mormon and was like, God damn Andrew. It’s like, I’m exhausted already from talking about this book. And they got a pry into my religious life and my, you know, my family’s religious life look, he just looked over to the side.
Like, this is an awkward question to ask. Does anybody come exhausting to have everyone be so deep in your life?
Sahil: Um, to a degree. Yeah. To be honest, it is, you know, it’s, it’s not easy. I think that’s kind of a, you know, some people think that like, you know, maybe for some people like Kim Kardashian or something, they can wake up and, but I get, I bet you, even for those folks, they get tired, they get exhausted. Um, and so, you know, you have to manage it.
Um, and of course, like you shouldn’t share anything, you feel uncomfortable in sharing. But I do think like there is a degree of uncomfortableness and, and truthfully, like, that’s why people follow you is because they know that you’re doing something difficult. They know you’re doing something uncomfortable.
It’s not hard in the sense that like, oh, like no one can do that thing. Right. In terms of a skill or, or what have you. It’s like, wow, you’re doing that thing, Andrew, willing to talk about it in a way that is risky. You know, you’re talking about your failure. Like that’s, what’s difficult. That’s the hard part.
And everyone knows that everyone knows that being vulnerable, vulnerable is much harder than, than actually doing the skill. Right. Like sharing my figure, drawing on Instagram is a great way for me to be accountable, to getting. But it’s tough. I look back at those old drawings and I was like, wow, that was terrible.
But guess what? Like no one really cares. Like everyone is kind of self obsessed. Everyone’s insecure about something,
Andrew: But I care
like sometimes I’ll have somebody go. Sometimes I’ll have people bring up things that are deep in my life. And I think, oh man, I talked about the fight I had with Olivia because at the time I thought it made sense. But now, now it’s an invitation for everyone to talk about my fight with Olivia from five years ago, that’s just a invasive, I’m listening now to this guy.
I’ve become obsessed with chess. I’m watching this guy, levy Rosen. I think his name is, he goes by Gotham chess on YouTube people for awhile. They were saying you’re not even a grand master. And he’d say, I don’t need to be a Grandmaster. I’m teaching you chess. And I’m going over games. It’s fun. That’s it.
At some point a few weeks ago, he decided he was going to try to be a grand master and he’s losing to 11 year olds do their 11 year old grand masters. You know
that
Sahil: I did
not know
that.
Andrew: That sucks. It’s like you could see did this video yesterday, where he’s, because I have to tell you what’s going on.
And it’s really difficult because now everyone’s watching me as I do this. And at the same time I have to do my regular video uploads or else no, one’s going to follow and I have to create the stupid thumbnail. You don’t come stupid. The thumbnails That look at. And, uh, and meanwhile, it’s the videos that are getting the most views.
So I guess what you’re saying is look, suck it up, buttercup. That’s what it’s about right now. If you want people to care about you, you’ve got to give them something to care about, and they’re not going to care about your PR version of yourself. They’re going to care about the vulnerable, the part where you admitted that you didn’t do what you wanted to do is what drew everyone to
you exile.
Sahil: totally, totally. I mean, if you think about even the, you know, the crazy success stories, right? Like what do you really gravitate towards like obviously Steve jobs, like, you know, he got kicked out of apple. I mean, that’s insane. Right? Elon Musk. I mean, he has so many stories of. Um, really every, almost every, every, every person that you, that you respect and hold up, the reason you respect them and hold them up is not because they had an easy life and they were incredibly successful from day one.
Like you actually don’t respect those people. Right. Um, generally the people that I think you admire are the ones who face adversity, overcame it, uh, and are still, you know, still, still going. And I think, at least for me, that’s, that’s like, you know, it’s even Kim Kardashian, which I think a lot of people will make fun of her because he’s not really creating any value.
I kind of disagree with that. I think she’s a phenomenal entrepreneur, but she had like a sex tape leaked in front. I mean, like, that’s insane. Right? If you think about like, like, I don’t know what I would do if that happened to me. Right. Um, and so, and by the way, people would probably, you know, it’s not even a thing anymore who cares.
Right. Like, and so I think that’s the other important thing is like, once you’ve experienced that you think of the world, like, I remember when tech crunch wrote about the Gumroad layoffs and I was like, I’m done. Like I can’t recover from like, uh, you know, the paper of record in the industry calling me, you know, sort of showing the world that I was a failure and that was brutal.
I was very, very, very difficult. Um, and I didn’t tell anyone, like, I kind of hope that no one had read it. Obviously everyone had read it. Um, and, and, and so it was just kind of this awkward thing where no one wanted to bring it up. It’s kind of like, you know, like, you know, a family member passes away or something like that.
You’re like, do I say anything? I don’t know. Um, uh, but yeah, three months later I’m like, well, I’m still alive. It turns out no one really, you know, everyone’s focused on their thing, whatever that thing may be. And then once you get through that, it’s, it’s so freeing. It’s so freeing, like even today, if Gumroad somehow imploded and died, I would be 100% content with that.
I would be 100% fine. I don’t think it’ll happen, but I think it’s certainly a possibility and that would be fun with it because when I, you know, when I went through the ups and downs and when Gumroad kind of made it to the other side, I felt like. I’m just playing with house money at this point. Like I wrote it off.
I have no, you know, I like, I, I wrote it. I was a zero to me. And so now that it’s doing really well, you know, we raised money recently to a hundred million dollar valuation, like is doing quite well publicly. It doesn’t matter. Right. It doesn’t, it doesn’t matter. Um, and I think that’s a really healthy state of mind because then I can just focus on what I do think really matters, which is, can we build an amazing team?
Can we kind of innovate on the way that we work? Can we build an amazing product? And none of those things by the way, might have any impact on the growth of the company. So I think
that’s
really.
Andrew: you’re talking about, you’re saying at once you’re ready to grow, grow mindfully, grow the business and yourself mindfully. How are you growing? Gumroad mindfully. How are you growing yourself? Mind?
Sahil: Yeah. Yeah. That’s a good question. That honestly was I think the hardest chapter to write. Um, cause I think it’s incredibly important, but it’s also like pretty abstract in terms of like all the other chapters are very, I think, actionable, hopefully. Um, but this one is like, what, what does growth mean? What does sustainably mean?
And I think part of it is you just have to figure out what do you really want? Like, do you want to chase a unicorn? Do you want to raise a bunch of money and go that direction? Um, do you want to raise money from your community? Do you want to bootstrap the whole way? Do you want to have co-founders do you want to do it yourself?
Uh, do you want to hand off the keys to somebody else? Um, and I, there’s sort of two framings that I use in the chapter. Um, but one is basically managing your energy, right? I think being able to be in a place where you can do this. As long as you want. And I think that’s really important for me. I don’t want to run a company where I’m like, okay, I got two more years of this in me, right?
No, I’m 10 years into government, 11 years in the government, something like that. And I want to have 10 more years, 11 more years. And by the time I get close to that, I want to, you know, I want to continue to make it interesting for me. Um, and I think that is really, really, really important. Um, and then the other one is money, right?
Managing your money, making sure you don’t run out of money, just like you don’t want to run out of energy. And that’s pretty simple, which is you want to have like an incredibly lean mean machine. When you do spend money, you want to be spending money on R and D on things that you don’t need to. So if anything kind of goes off, you can kind of revert to the mean and be profitable again, which I was able to do with Gumroad and frankly saved the company in 2015.
Um, And you just want to pay attention to the thing. You know, a lot of people don’t understand like basic sort of what is some fixed cost, what is a variable cost? So what is cogs? What is, you know, uh, where does AWS fit into this sort of picture? Where do employees fit? What is capital expenditure? Like really basic simple stuff.
I remember I took like a business class in high school or something like that. And the first thing they teach you is the most important equation in business, which is profit equals revenue minus costs, right? That is, and as long as profit is greater than zero, you’re gonna live forever. Right? Paul Graham calls this default alive.
You can basically do this thing forever. Otherwise your default dead, which is eventually you’re going to, if nothing changes, you’re going to run out of money. And there was some stat where I think when he wrote the piece, like 42 or something percent of founders, like didn’t even know which one they were, which is kind of crazy.
It’s like you continue driving this car. You’re either going to go off and play, you know, off a cliff, or you’re going to end up in New York city, but you don’t have. And it’s like, well, you should probably figure that out. Um, and so it’s just being mindful, just, just thinking through, what do you want, is this business in this current form going to get you there?
If not, why not? What changes can you make to be more profitable sooner? Um, and, and can you have visibility on that? Right. One lesson that I really loved was like, how, where, where do relationships start to break down? And this was kind of a weird thing to put in a business book. Um, but in sort of therapy, there’s the Gottman’s who are very famous for this, this concept of the four horsemen of the apocalypse, right?
Like basically the four things that, and relationships, which I think is like stonewalling, defensiveness, contempt, uh, and one other thing, but for me, contempt is like the big one that I really pay attention to. Right. Everyone probably has different things, like kind of that they, that they sort of trend high on.
But for me, it’s always like, I want to make sure that I respect everybody I work with. Um, and, and Gumroad got to a place where I was like, I don’t really respect some of these people because we’re looking where our goals are now different. Right. It’s not that they’re better or worse than I am. I might be the worst word, you know,
like I might be the one who like.
Andrew: what are your goals?
Sahil: Yeah, but they’re, their goals might be like,
oh yeah, for sure. Like, for example, like, let’s say you own a 1% of the company as an employee of the company you want, you need GeMar to be a multi-billion dollar company. And I don’t, and that is like a very hard conversation to have with someone like, Hey, because by the way, I sold them on that multi-billion dollar pitch.
Right. I was the one who convinced them that, that this was a possibility and I believed it at the time. Uh, and, and I have to say, look, you know, like Gumroad is not a headed in this direction. It’s maybe it’s, I’m not saying it’s never going to happen, but it’s unlikely. I don’t know what could change.
Obviously you can’t predict COVID you can’t predict a lot of these events that have happened. Uh, and so look, if you care about owning a bunch of equity in a fast-growing startup, you care about a ton of career growth really quick. Um, you want to see a company grow around you really fast. Um, then, you know, frankly Gumroad is probably not the place for you.
And I think that’s, that was a, that
was a
hard conversation. I had to have a
lot.
Andrew: one of our mutual friends basically got upset with you because they felt that you did that to someone who worked for you as a way of clawing back equity, so that you could then own that, that piece of the business.
Sahil: Um, yeah, I can give you, I can give you some context on that. Uh, and so, yeah, so basically, um, Nathan Berry, uh, had this public tweet thread the day of the public fundraising saying, Hey, just so you know, before you invest in Gumroad, which I think is totally fair to do. Um, you know, here’s some, some, some thing you may not know, which is, you know, effectively, I think he had some other points that I do disagree with more, but I like, I want to talk about the stuff that I agree with, because I think it’s important, which is basically, he said, you know, the people who built Gumroad have no equity in.
Right. And so like, you should be mindful when you invest in this company that like, I don’t know if he was saying maybe the same thing would happen to you or just to, just to know that this is like what Sahil has done. Um, and th the truth is like, it sucks. Like, yeah, totally sucks. Like, I, I wrote about this in publicly myself, um, in, in that essay, reflecting on my failure to build a billion dollar company where we, we wrote up the investment.
And what happens in startups is you have 90 days to exercise your stock options, because there are stock options. There’s not stock. Um, and if you don’t do that, um, and, and you won’t, if you really believe the Gumroad is a zero, um, though some people did exercise. So it’s not exactly true. There were some people who did have equity in the company.
Um, but, but most people did not. Right. Because Gumroad had been a zero, it was, it was basically totally written off. Um, and that basically meant that, yeah, everyone, you know, it was kind of like a sinking ship. Everyone kind of wrote it off, found new jobs, did whatever. Um, and then. Three or four years had passed a Gumroad, you know, which by the way, was like longer than most of those people had ever worked at the company.
Um, and then Gumroad started to do much better because mostly because of COVID, which you know, was really pretty, pretty unpredictable. Um, and it’s, it’s kind of funny because I actually did try and I still am trying, by the way, to, to give equity to these people, I will end up actually gifting my own shares because that seems to be like the best way to do it.
Um, but I can’t do it from the company. Like my law, my legal firm is not happy with that. Um, but basically you cannot just give equity to people who don’t work at the company. So I literally can’t go back. I can gift it to them for my own personal stake, which, which is what I plan to do now. Um, but I tried doing this a couple of times and, and Cooley was like, you can’t do this.
You can’t just give equity to people who no longer work at the company. You basically have to reemploy them. And I’m like, well, that’s not going to happen. They’re all on jobs and stuff like that.
Um, but after that,
after.
Um, it’s just, it’s just legally not allowed. Like you can’t give equity to people. Um, sock options to people who are either, they either have to be at work, working for the company, uh, advisors to the company, um, or vendors to the company.
But basically they have to be doing some work to get those shares. You can’t just, the company can not just give chairs, which I assume is fraud or, or, or embezzled linter or something like that. Um, but I have these conversations even, you know, years before that, before that whole drama kind of happened.
Um, and I literally told Cooley, like, I’m doing this, so like, I’m going to do this. Cause I think it’s important. It’s not going to be life-changing money for anybody, but I think it’s a good token of thanks. And I, you know, I’m, I’m sort of grateful, even though I may disagree with the way he did it to bring it, bring it up because I think it is important.
Um, uh, I will say, you know, like he offered to buy the company for $300,000 in 2016 and he would have. A hundred percent of the company with his buddies. So I don’t think there was any discussion of giving equity to
any of the employees. So I think it was a little weird. Uh, but
anyway, um,
he’s
Andrew: you sell it?
Sahil: why didn’t I sell it?
Um, honestly, I
was
just,
Andrew: of.
Sahil: yeah, I mean, I think I w I w I was a better shepherd of the business. Um, like I, I felt like, I dunno, I didn’t trust them, or I didn’t feel like they, they, they were aligned with, with what I worked with, what I felt the business should do. Um, and so, yeah, I just felt like I’m going to keep running this thing.
Um, and we’ll see, we’ll see what happens. Um, and, and it, it turned out, I mean, literally that was 2016 and then COVID was 20, 20, so four years, it took to really kind of,
Andrew: Didn’t it do.
Sahil: to change. And
frankly
Andrew: COVID
I interviewed you before, long before COVID back in 2020, the company was on a good path. I don’t know that it was a hundred million dollar business at the time, but it.
was clearly
on the path to being
that.
Sahil: Yeah, it was probably 20, 30 million maybe business. Um, but, but part of that I think, and this is, this is something that I, it’s hard to address this, uh, in, in a sense of like how much of an impact did this have. But I think a big part of that success was writing about the failure, which is kind of ironic, but I wrote it,
I wrote this
piece and then a million people ended up reading that piece and Gumroad all of a sudden was like a, sort of a household name within the tech industry, like almost
overnight. Um, and that was like, you know, and I literally, when I, when I wrote that piece, I remember it was, it was, it was, uh, Gumroad had grown 25%. 18. I wrote that in probably some piece in, in February. And I wrote it because I had written it off. Like I literally wrote it because I was like, yeah, at some point I’ll sell this business for a few million bucks or something like that.
And then I’ll do something else with my life, but I’m in no rush to do that. Um, and creators seem to like it, and I’ve hired people back to run the business and add features and fix bugs and no one was really complaining. Um, and then that essay did so well. And then, you know, we went from 25% year over year growth to 40% year over year growth.
And I think that also helped because when COVID happened, Gumroad was now a household name. And so we saw a lot more kind of acceleration of the accelerate. So that started to compound in it in a very significant way. And we grew 87% last year. Um, you know, so we went from 15 to 25% to 40% to 87% growth and which is just crazy.
Andrew: let me
let me ask one last question about that before moving on to, the next part of the book, which is, what year was it? What year was it that Nathan made that offer for $300 million for
the business?
Sahil: It was $300,000 to be
Andrew: Oh, two and a thousand. Oh, no wonder you didn’t sell.
Oh, nevermind. Okay. I misheard
that.
Okay.
Sahil: Um, I think it was 2016. I think it was 20. I would have to go look. I found the deck cause I was like, wait didn’t he offer to buy the company?
Andrew: Okay.
Sahil: But I think it was, it
was, uh, it was, a 2016 or something, something, something like that. Um, so yeah, and all those people will have equity in the business.
And even though, you know, the vast majority of people who are like, wait he’s, he’s basically asking you to give equity to people who no longer work at the company. And, and I was like, yeah, but you know, he has a friend who feels betrayed. Um, you know, it was a hard time. I, I will be real about that. I mean, it was hard like laying off 75% of the company, you know, we had put a lot of time and energy and, you know, blood, sweat, and tears into this thing.
And it was not working in the way that we thought and it kind of sucked, you know?
Um, and I
can totally see
that now it’s doing well people,
Andrew: I think I know the friend that he has, and I’m glad that you’re not bringing up the person’s name. I would love to get that friend to do an interview with me here and to talk about one of his bad past challenges, not in an aggressive way, but he had this one thing that was the didn’t go right.
That I wish that he would get open about what happened there, because I do think he’s incredibly analytical. He’s incredibly smart and well-respected, and I think he’s doing himself a disservice by not talking about what didn’t go right there. And then also I think a lot of us are looking on the outside, going what happened there, where it’s like, we’ve got this hole in our understanding of you.
I won’t say any more than that because. I, I promised him that I’d be private and I promised you I wasn’t going to bring up, uh, that it was Nathan Barry here, but I, I texted you right away. You were open with me right away. And I think you were because you knew that I would keep things private. And so I’m going to keep that going.
All right, let’s close it out with two things here. Um, you say, build a house you want to live in, which is something you’ve talked about before. You said, make something people want also goes to the business that you build, make something people want to work in. And one of the things you’ve done in the past to make your company into something you love is go remote and you are ahead of the curve on that can be another like socialism realism of what is it that you make Gumroad feel like that is a uniquely Sahil thing that other people would find wacky
wacky.
Sahil: Yeah. I mean, one example of that is no meetings, right? When we don’t do any meetings at the company, it’s all kind of asynchronous in that way. Just like basically we do all of our communication over text instead of video or audio. Um, which I think is a really kind of important, uh, way of, you know, that we work and we kind of need to do that, frankly, because we have people in 17 different countries now, like it just wouldn’t be, if I had to pick a time my daily and ate some part of the company, I kind of night like one time.
So, and as like the time
Andrew: Yeah, but how do you do that? don’t you sometimes have an issue that.
you need to hash out with people and just bring them all together. Let’s talk it through or even one-on-one let’s talk this thing through.
Sahil: Honestly, it hasn’t happened. I think that’s partly because we just run this, you know, I think when you’re on that unicorn chasing path and you need to grow super fast, you need these things resolved like now, right? When you have time to figure this stuff out, you can write like a nice email. You can edit it down.
You can really try to figure out what are you trying to say? Um, and then they can do the same thing. And sometimes I find like in terms of the time, it might take longer to resolve, but maybe in terms of the back and forth and the kind of like the emotional stress and the anxiety of these conversations, I find that it’s a lot less because both of you are taking time to process, um, process it in a way that, you know, generally if you’re in, in an office, you’re kind of just going, you know, there’s kind of like a fight, right?
You ever get into a fight with somebody, um, like Olivia five years ago or whatever. Like, I I’ll speak for myself. Like sometimes the best thing and something I learned in therapy is to just say, look, I’m in a flooded emotional state. And, and that’s just a, sort of a physical hardware bottleneck. Like I cannot fix it now.
So like, Go for a walk for 30 minutes and then I will that’s whatever bad Juju energy. I don’t know exactly the physiological stuff that’s happening, but 30 minutes from now, I’m going to come back and we’re going to both be level headed and it’s increased. And by the way, if you use that 30 minutes kicks in when you stop arguing, right?
So it’s not like you argue for 30 minutes and 30 minutes in your argument, all things get better. Right? You kind of have to say, I need to, I need to take a break. Um, and so I find that like applying that lesson to sort of building this business has been like incredibly freeing. I think the other nice thing that writing does is it gives everyone a level playing field, right?
There’s certain people who are super charismatic, they can talk really well. They’re loud, confrontational, they’re a type sort of personalities. And there are other people who are shy. Et cetera. And I think it’s really important to build a culture that allows both of those people to thrive, um, and both of their ideas to thrive versus, oh, it’s the idea from the type a personality that always wins.
Right. Um, and I think writing, at least for me, I feel writing is like, is a much more sort of equal level playing field, especially different cultures, you know, maybe, maybe English, not your first language. I think writing generally can help, help with that as well.
Andrew: All right. Final section of the book is where do we go from here? Where do you go from here? One of the things that you talk about is hiring as a way of doing it. You’ve said you’ve shown how you hired hire on Twitter, which is pretty, uh, impressive. You also say that you look to hire somebody who will take over your work, but do it better than you can.
Tell me more. What else is it that we need to understand about that?
Sahil: Yeah. I mean, I think, I think it’s one thing that business books just don’t get into a lot. Um, and I, I wrote, we wrote that chapter a couple of times because I also was like, what do I want to say at the end? And part of it was like, I don’t know what to, you know, like I don’t have all the answers. Like, I don’t know, you know, every, you know, again, like the business is not going to solve every, but you know, sometimes you read a book and you’re like, there’s like, you know, to a hammer, everything looks like a nail, right?
It’s like, oh, you have to apply this concept to every single thing in your life. And that’s the answer to everything. Um, and I think for me, it’s like, look, your business is not going to solve all the problems. And so you should figure out what problems will be solved by other things. And you need to give yourself time, space, energy to go solve those other problems.
And that means hiring people who can do your job for you. Because ultimately I think the best way to get sort of the fully minimalist approach would be to like, have. Time energy attention spent on this sort of thing, right? Find a new CEO for the company. I have not done that yet. Um, maybe I need to re you know, update it, having to provide version in a couple of years or something like that.
But, you know, eventually you, you want people who can do the job that you were doing better than you can. And because you built the company in this way, you have writing everywhere, you have documentation, you have a paper trail on all the decisions you’ve made and why you’ve made them. And the ones that turned out to be great.
The ones that didn’t turn out to be so good, ideally it means that other people can do the job for you, right? Unless you really believe that out of the 7 billion people on planet earth, you are the best, most qualified person, which I think statistically is just unlikely. You need to be hiring people who can do all of the various jobs and actually have a Google sheet or Google docs that lists all the things that I do manually.
And I’m like trying to whittle away at it, right. Until there’s nothing left until I can say, Hey, maybe this should maybe gum or to just be a Dow, you know, like maybe I just don’t need, maybe we don’t need a company at all.
Right? Like,
Andrew: still on that list.
Sahil: It’s like, it’s like really boring stuff, you know, like stuff like, uh, you know, besides recruiting, which is probably the biggest thing that I do, you know, it’s like moving money from like Stripe to Wells Fargo and from Wells Fargo to PayPal, you know, like, because just cause you can’t automate stuff like that, it’s like, you know, making sure that like, you know, I have a, check-in call every three months with like our lawyer about this thing or equity incentive plans, or like this is really like it’s stuff that I really feel should be automated.
It just, we haven’t gotten to that stage in sort of our society and technology in like maybe regulatorily, um, to get to a place where we can kind of automate all this sort of stuff. Um, and then, yeah, fine. You know, ultimately you don’t have to automate this stuff. You can just find someone who wants to do it right.
Who has maybe more energy and what has a different approach at, at what you’re trying to do. And so my guess is in the next year or two, I’ll probably tweet, I’ll say employ hiring employee, number one, CEO, and doing, doing an open call for a CEO and, and, and for Gumroad and, and seeing what happens, I think would be, uh, would be a fun, a fun.
Andrew: You know, who did that incredibly well is Paul Graham. Y Combinator was so Paul Graham that the early people to go into the program came because of his writing. Then It was because of the small team that they had on board, uh, and including Jessica Livingston, who basically saw the person behind the, the entrepreneur anyway.
And then he, one day just tweeted out. All right. And I’m gone. And here, the people who are taken over it was shockingly good.
Considering how tidy was the business?
All right.
The
Sahil: worked out great for them.
Andrew: it worked out really well for them and it sounds like it worked out well for him. He’s just tweeting about his kids and his ideas and politics and not a single thing about like, what’s wrong with hacker news today.
All right. The book is called the minimalist entrepreneur. It’s full of great stories. What’s one thing that you did to help that worked especially well for selling the
book I’ve been hearing that you’ve been
Sahil: Yeah.
Andrew: it.
Sahil: Thank you. Yeah, it’s been going well. I think one thing I did was I did a course, the cohort, so I did 136. I think it ended up being a people and I gave them all access to the book. Chapter by chapter, got a ton of feedback on the book and a ton of advocates, you know, they helped write the book. I acknowledged them all in.
They’re kind of at the end of the book. Um, but it made the book one made it a lot stronger to gave me a real community of people that I could use, you know, reviews on Amazon. Like these things really add up. Right? And so having even just a hundred people, 150 people, people look at maybe like 250,000 Twitter followers.
And, but like, look, maybe one day I’ll have 250,000 book reviews or breeders or whatever, but like, ultimately right now I’m trying to build really deep relationships, really make sure that this book is useful to these people. And I think the best way to do that is to go right back to the beginning of the book, which is start with community, find your people, add value and build those, build those relationships, plant those seeds.
So I’m really grateful that I did that also gave me the confidence to know that, okay, when this book comes out, October 26th, it’s going to be good because at least a hundred people read it and didn’t think it was terrible.
Andrew: All right. It’s the minimalist entrepreneur. Um, congratulations on The book and graduations on all the investing. I wish that you would’ve let people invest more in Gumroad. I was one of the people who put in only a thousand dollars and I think, all right, this could be a billion dollar business,
just $10,000.
Sahil: The state Chan say to you and what we’re going to hope to make that easier for more people to do soon.
Andrew: Do you mean to invest
more?
Sahil: Yeah. Yeah.
Andrew: Alright. Alright. Cool. Thanks Sahil. Congratulations. And Thank you to my two sponsors made this interview happen the first, if you need email marketing that will grow with your business without growing the expense, uh, go-to send in blue.com/mixergy. Go check them out. If you’ve never seen them before, at least introduce yourself to them, because there’s a reason why they came back.
It’s working for a lot of our customers. They sticking around long-term and so they came back and bought a bunch of more ads from me, send in blue.com/mixergy, and of course, hostgator.com/mixergy style. Thanks.
Sahil: Thank you so much for having me again,
Andrew: Alright, man. Thanks.
