How Gumroad rebounded after burning $350K a month (Mixergy’s first in-person interview)

Today I’m bringing you for the first time EVER a LIVE Mixergy interview.

Sahil Lavingia, who I’ve interviewed in the past, posted on Twitter recently about his revenue for Gumroad. I thought his business was dead!

Turned out it wasn’t dead. Gumroad is doing well but I want to understand what happened when he had to lay off his entire team and turn things around.

Sahil is the Founder of Gumroad which is a simple ecommerce and audience-building software.

Sahil Lavingia

Sahil Lavingia


Sahil Lavingia is the Founder of Gumroad which is a simple ecommerce and audience-building software.


Full Interview Transcript

Andrew: Hey there, freedom fighters. My name is Andrew Warner. I’m the founder of Mixergy where I interview entrepreneurs about how they built their businesses. This is the first time I’ve ever done a live in-person interview.

Sahil: That’s crazy.

Andrew: Yeah, isn’t it?

Sahil: That’s weird.

Andrew: Sahil Lavingia, last time I interviewed him, he didn’t have office space. He came all the way here. We rented space for him at Regus, like, on the same floor. We shook hands, “Good to see you. Nice flip-flops. I like your toes.” He goes into his own room. He’s like, “Andrew, what am I here for?”

Sahil: Yeah, that was pretty funny. I remember that.

Andrew: With, like, a camera staring him in the face. And the reason we did that is because, over the years, what I wanted to do was be in entrepreneurs’ faces, in their offices, in their homes, and I felt like that would give me a good sense of who they were. And when you came, I just wasn’t equipped for it because I’m meant to do interviews like that. So you happened to come in here, I said, “Let’s do it the way we’re used to doing it.” The reason I’ve got these cameras, Dave from UseProof was asking me about this is my plan is I’m going to travel the world, run marathons on all seven continents. And when I say marathons, I’m not doing, like, this 4-miler and calling it a marathon, 26.2 on each continent, and as I travel the world . . .

Sahil: Is that what I signed up for?

Andrew: No. [inaudible 00:01:16]

Sahil: At least I have a good [more flip-flops 00:01:19].

Andrew: Devin Meadows says, “Capture the moment while you’re doing it. You’re traveling the world. Take photos, get to know people, record it.” And this freaking guy is a professional videographer. You guys should see the equipment that he’s got set up around here. And I wanted to interview entrepreneurs as I went because I feel like I’m not capturing enough of the entrepreneurial experience. I’m getting only America, largely Silicon Valley, even when people aren’t in Silicon Valley, like Dave is from Austin. It’s basically Silicon Valley, just a little bit further south, right? Same mindset, [easy 00:01:51].

Sahil: Basically [inaudible 00:01:52].

Andrew: Right? And so I wanted to get a sense of it. So I’m traveling the world, and then Sahil does this post where he says, “Hey,” on Twitter, “Remember me? Here’s my revenue.” And I thought your business was dead. I thought you went and did something else. It wasn’t dead, his business is doing well, not well enough to get funded but well. Maybe well enough to get funded. We’ll find out. And what I was trying to figure out is what happened? What happened that made him lay off his team? What happened that got him to turn things around and got him to be so comfortable with how things are doing that he’s now sitting here and doing this interview?

All right, so Sahil Lavingia is here. He is the founder of Gumroad. If you want to sell anything digitally online, like, I bought e-books, I generally go to Gumroad. If you want to buy icons and things like that, the digital products without having to set up the website, the credit card processing, right?

Sahil: Yeah, totally.

Andrew: You guys are the ones to go with.

Sahil: Yeah. I mean, the simple ideas like, you know, people have Twitter accounts of and [each of 00:02:52] accounts of, you know, Instagram and Facebook. A lot of people have huge audiences and don’t have anything else, you know? So why build a storefront? At least get started selling stuff directly and . . . yeah.

Andrew: And that’s what you did.

Sahil: That’s what we did.

Andrew: You did great, you got incredible funding. We’ll talk about how you did it thanks to two phenomenal companies. The first . . . You guys haven’t used Toptal yet, have you?

Dave: We have.

Andrew: You have?

Dave: That’s how we launched Proof.

Andrew: Oh. Is there a way to get him on camera later to talk about that in the ad?

Sahil: Yeah, of course.

Dave: We’ll talk about it.

Andrew: All right, Dave from Proof.

Dave: That was our first in the year that we hired to help us launch Proof.

Andrew: I need to do that. All right, I need to bring you on. All right, and the second sponsor is a company that will host your website right. It is called HostGator. I’ll talk about both of those. Sahil.

Sahil: Yes?

Andrew: John, venture capitalist from Greylock, sits you down. When was this, 2014?

Sahil: Yeah, winter of 2014.

Andrew: And you guys have a meal where?

Sahil: I think we met at Coupa Cafe in Palo Alto. We had [inaudible 00:03:51] never been there yet.

Andrew: And are you going into this meeting? This is, like, the first indication that something big is happening in your life, not what you expected. Did you go into the meeting thinking, “I’m going to impress him and raise the next round from him?”

Sahil: I came to the meeting thinking that I would have a really good idea. My goal was to go back to the team. You know, we had 20-ish people at the time. I told them that we were going to have an easy time raising a series B. And this was, like, the first signal I needed, you know, to sort of be able to make that claim.

Andrew: You had a deck.

Sahil: I had a deck that I was . . .

Andrew: Like, on an iPad?

Sahil: Yeah, I think so.

Andrew: And you’re, like, sliding through going, “This is our revenue. This is our growth. We’re doing well,” right?

Sahil: Yeah.

Andrew: “We know we’re going,” and he says what?

Sahil: “You’re going to have a hard time raising a series B.” And we had already raised, you know, 7 and a bit . . . or $8 million. Great investors, right, like, we’re growing, like, but not amazingly. But, you know, the market was, like, really frothy, you know, and, what, playing cash everywhere. I thought it was not going to be that difficult, and, you know, he says, like, “You might have a hard time.” VCs don’t, like, saying, like, “It’s not going to work,” right?

Andrew: So, then did you go home feeling . . . a hard time. “I’ve had hard times before in my life. I could do it.” You do?

Sahil: Yeah. Oh, 100%.

Andrew: So there’s, like, the entrepreneurial delusion gets fed by that and you’re, like, “All right, he didn’t say no. I think we can do this.”

Sahil: Yeah. I think we were such product idealists. We’d really just spent tons of time building this phenomenal product, and we could easily just grow the company if we needed to, right? It was just like a shift in focus that would get us to those numbers.

Andrew: Right, and that’s what you were thinking?

Sahil: Yeah. That’s what I was thinking. That’s what I told the team. I mean, that’s what I believe . . .

Andrew: And a handful of other investors gave you the same response that John did?

Sahil: Yeah, totally. Danny from Index, Mike from Kleiner Perkins.

Andrew: Are you saying this kind of like, “Hey, guys. I’m still standing.” Is that why you’re mentioning their name?

Sahil: No, no. Honestly, VCs like . . . they’re pretty unemotional, I think, like, you know, they’re going to invest in the company if they think it’s a good deal most of the time, and they’re not if they don’t. Like, they’re not . . .

Andrew: So you didn’t feel anything negative towards them, you just felt like, “What’s wrong with me?”

Sahil: Yeah, basically. I don’t have any ill will towards any of these . . . Yeah. And most of them, you know, are friends of the company. I talked to them because I really . . . they would tell me what they thought, right?

Andrew: All right. So what was your revenue and profit at that point, do you remember?

Sahil: At that point, I mean, I don’t know exactly, but I remember we were burning, you know, probably $350,000 a month. Right, we had a big team, office in San Francisco, things like that. Yeah, we were making profits, but it was never, like, enough. You know, we’re processing around two, two-and-a-half, maybe less than that. I would say around $2 million a month, and, you know, retaining 6%, 7% of that, so not enough to offset, really, any people cost at that point.

Andrew: I’ve known you since you were in high school, college, right?

Sahil: Yeah, early. I mean, yeah, probably college, USC 2010. I was probably 17 or 18 at the time. Yeah, I think I was 18.

Andrew: And the thing that stood out for me about Sahil was he was constantly making stuff, right?

Sahil: Yeah.

Andrew: Tons of software.

Sahil: Every weekend, basically. Yeah, apps, websites . . .

Andrew: Because what? You wanted to do what with your life?

Sahil: I honestly . . . I mean, I think looking back, sort of I just thought I was going to be like the next, you know, Steve Jobs, Mark Zuckerberg. Like, you know, I had the privilege, I had the wealth, but, you know, the ability to code, I was young. I was going to be a college dropout soon. It felt like things were . . . you know, had that trajectory back then, right? I got a “Mixergy” interview, like, you know . . .

Andrew: You were a kid. I could’ve sworn I saw braces on your face. I went back and I enlarged it. There were no braces at the time, but you were a kid.

Sahil: Yeah, totally.

Andrew: And so why? Why didn’t Gumroad work out? Well, would you say it didn’t work out?

Sahil: I would say it did not work out in the way that I thought, for sure. You know, I thought Gumroad was going to be a billion-dollar company. I tweeted it out. I went back and found this tweet from 2011, you know, that was like, “I’m going to build a billion-dollar company tomorrow,” or, “I’m going to start building a billion-dollar company.”

Andrew: So you sent me . . . I thought it was a book. I sit down here . . . I swear he was watching me. I sit down over here, I think, “I could read a book in 30 minutes. I know I can.” And, like, five seconds later, it’s a blog post. It’s just done. The interesting thing about that blog post was you basically said, “I thought this was where I was going to go with my life. I actually grew. Look at this chart. It’s impressive. It’s not that I didn’t grow, it’s just not VC growth.” So let’s talk about why it didn’t go to VC growth. It did really well. What do you think was missing to make it go to that hockey stick all the way up to the moon?

Sahil: I mean, honestly, a lot of this is going to sound like excuses because they’re all just going to be me saying, “It’s not my fault,” right? Like, really, when you want to build a VC business, the market matters, right? Like, the growth rate matters. Like, the product quality doesn’t matter. These things are sort of secondary in importance, and, really, the only thing that matters is just revenue, right? It’s like how . . . what you’re doing and how fast you’re growing it, and at the end of the day, they’re nothing else. And we just never achieved . . . either the market was too small, which I think is the primary reason. You know, the business wasn’t sort of in a place to earn a lot of money and capture a lot of that value that we were generating.

Andrew: We talked about this before. You’re saying the market too small meaning how many people have an e-book that they want to sell and they don’t have a website to sell it and don’t want to sell it on Amazon? How many people have icons to sell? And there’s not really a home for icons, and they do have enough of a customer basis for it. That’s the thing. You’re saying, “Maybe we just hit our limit in the number of people who could do this.”

Sahil: I think we had a ceiling, for sure, and that ceiling group, you know, is growing every single day, right, like the universe is expanding. But at the end of the day, I think we sort of saturated for, lack of a better word, the market. And I think people . . . I meet people all the time that are like, “Man, Gumroad could be so big if blank,” right? And they’re always like, [inaudible 00:10:06]. And I’ve spent a long time . . . I laid off the majority of my company. Believe me, I was looking for every reason to believe that, right? And, often, those calls end with, “Oh, you’re right.” And I think that’s the reason. I always say the independent creator movement, it’s just not that big, right? It’s just not. One Marvel movie, sort of, per year is bigger than, sort of, the independent creator.

Andrew: What about, like, the t-shirt guys, Teespring? What about the guys who are . . . ? No, I saw you . . .

Sahil: I mean, I think if you compared Teespring to the Warriors as a t-shirt company, you know, you’re taking independence, people that sort of by definition are not that big. And it’s power law, right? So the Warriors are, like, over there, and then, you know, it’s like this. So you’re taking the long tail, but even if you sum all that stuff up, right, it’s just not that big.

Andrew: But isn’t that who Shopify is going after? Isn’t that who . . . ?

Sahil: No.

Andrew: They’re not?

Sahil: No.

Andrew: That’s not their bread and butter.

Sahil: They might be going after them, but, like, in term . . . Really if you look at Square, right, like, when they signed Starbucks up, like, that’s 30% of their GMV, right?

Andrew: And what about if, like, a shopping site, I won’t pick on Shopify, if what they do this, “I’ll charge a monthly fee so that even if you sell nothing, you still pay monthly,” and you don’t have a monthly hosting fee, right?

Sahil: We added that, actually. We did add that.

Andrew: And did that help?

Sahil: So that helped, and it definitely sort of leveled our growth off a little bit, but, really, what you’re doing is you’re signaling. That’s when we realized we can build that business, right?

Andrew: Then you might as well capitalize on the customers that you have. It’s not going to . . .

Sahil: It’s a transition.

Andrew: You’re not going to end up with a world of people who are creatives who just don’t have the hustle to sell but they’re willing to pay monthly to keep their dream alive.

Sahil: When you’re taking a transaction fee, like a 5%, you know, we’re like Stripe, we’re like Square. Like, you got to be processing billions of dollars a year, right?

Andrew: Were you in relationship at the time?

Sahil: No.

Andrew: Okay. You’re saying when you’re in those places you got to be charging billions of dollars a year and you can’t get to billions of dollars selling that. So one of the things we talked about before we started is maybe you could’ve changed to a different product, like, I’m thinking Teachable.

Sahil: Teachable, right.

Andrew: Could you have gone to there and made it or is Teachable in the same boat? Because they have to get creators to create courses, and then they made money only when creators create courses.

Sahil: I think Teachable has picked a bigger market, for sure. You know, I know a couple of people that work there.

Andrew: Why is the market for courses bigger than the market for digital . . . ? I don’t know how to . . .

Sahil: Digital content sales.

Andrew: Digital content sales, yeah.

Sahil: Downloadables, I guess, right? I mean, partly, you know, it’s like education, right? It’s like when you go broadly in terms of that pattern, like, and you remove the downloadable, you’re going to Lynda, you’re going to Skillshare, you’re going to Udemy. What you’re selling is knowledge, and it doesn’t actually even exist in terms of, like, a digital asset, right? So I think that market is far . . . I mean, Lynda is way bigger than Teachable is, right?

Andrew: Because?

Sahil: Like, [Master 00:13:10] is probably bigger than Teachable.

Andrew: Because?

Sahil: I think a lot of people are willing to . . . I mean, what is Netflix? I think Netflix, it’s education, right? People watch documentaries, people . . . Like, I think Netflix gives people that sense of productivity but with that feeling of entertainment, right?

Andrew: All these companies you just brought up, they charge a monthly fee except for Teachable. Would that have been the thing to, like, combine . . . ?

Sahil: I mean, maybe. I think maybe if we went back in time and we’re like, “We’re going to build this as a SaaS company,” from the get-go, but I think we’ve thought about it, like, we’re going to build this massive distributive marketplace.

Andrew: Selling one-off things.

Sahil: Selling one-off things. That’s the other thing, right? One-off things, it’s hard. Like, everyone is starting from scratch every single month.

Andrew: You know, what I wish we had was even more Lavaliers, fucking guys know more . . . We should bleep out the curses. No we shouldn’t . . . They more about this than anyone else. If we could mic them, but I don’t think it’s going to sound as good.

Man: Just let me grab the camera, man. Man, we got a mic right on camera. As long as I use this guy, we’re fine.

Andrew: Okay.

Sahil: But, yeah, you know, and Teachable is going after, like, the Tony Robbins, right, like . . .

Andrew: To sell to their big course makers and make . . . Got it.

Sahil: Yeah. I mean, they’re going after the people that are making, you know, $10 million a year per creator. I wouldn’t even call Tony Robbins a creator. He’s a brand, right? And I think a lot of that growth is coming from people that are really selling something deeper than just with the content. And I think Gumroad was just never . . .

Andrew: Is it helpful for us to go through this? I find that it’s helpful for me.

Sahil: Yeah, no, I’m down. I’m down to go through this much . . .

Andrew: Because I know, ultimately, things work out, and we’ll talk about to what degree they work out so I feel okay doing this, but . . .

Sahil: Brutalize me. That sounds . . .

Andrew: I’m just fascinated by . . . I did ask if you were dating someone at the time. Let me ask you this on a personal level. Can you, when you’re going through this, date anyone?

Sahil: I didn’t.

Andrew: I feel like when things don’t work out well for me, I don’t have enough . . . a sense of self-worth to . . . It’s not that exactly, but I have to get to where my worth is before I could date. Did you feel that? Like, it’s not that I feel insecure or have low self-esteem or low self-worth, it’s more like I can’t go out and date someone or be with someone until I achieved who I think I am, and so I cut off everyone. Did you do that?

Sahil: I think I did but I did not do it intentionally.

Andrew: Well, it’s just you recognized now, but what did you feel at the time?

Sahil: Yeah, totally. I felt like, you know, I was busy. It’s like it was really not super sort of deep, it was just like, “I need to make this thing work,” and, like, any time I spent not making this thing work is, like, lost time. I can always do that other stuff. I remember, like, I went back for winter I saw my parents, and, you know, I was talking to my mom about this, like, journey and stuff. And she was like, you know, “You never told me about the lay-offs ever,” like . . .

Andrew: Did she read about it?

Sahil: She read about it on TechCrunch.

Andrew: And did she talk to you about it afterwards or she just felt like, “He doesn’t want to talk about it”?

Sahil: Yeah.

Andrew: And you didn’t tell your mom because?

Sahil: I don’t think we ever talked about it until, really, like, you know, however I met you, three plus years later. Yeah, it’s pretty gnarly. I never thought about it. You know, I didn’t know that until she told me, but, like . . .

Andrew: But that’s a sense of insecurity that comes from that or a sense of . . .

Sahil: Oh, 100%.

Andrew: It is.

Sahil: Totally.

Andrew: Like, your mom saw you at a certain value and you didn’t hit that, and you didn’t want to [inaudible 00:16:24].

Sahil: Oh, 100%, which is not how parents think, but that’s how I . . . I’m sure that’s how I felt.

Andrew: Oh, I used to also think that. My parents look at me and they think, “He’s moving for something.” Yeah.

Sahil: Bigger than what you did or what you’re doing?

Andrew: Maybe bigger than this, maybe. I don’t know. But I do know that when I used to send my dad pictures of checks from my previous company, and he was like, “Of course. Now, more,” right?

Sahil: They want their affiliate fee or something?

Andrew: I don’t think that they wanted that. It was more like, “This is what I always said. Now, if we could find a way to rub it in some friends’ faces,” and now we could. This guy was a real asshole like me. I was a real asshole growing up. I was like, “I told you guys.”

Sahil: I told you, yeah. You’re like a trophy for your parents’ friends, you know?

Andrew: Yeah.

Sahil: Your parents to brag about.

Andrew: No.

Sahil: Well, that’s what, at least . . .

Andrew: I think there was a bit of that, for sure.

Sahil: I mean, I remember my mom was . . . I don’t think she was more concerned about what other people thought, right, but like the way . . . I’m sure she was, like, you know, “This happens,” or whatever, like, it’s fine. She was concerned about me, but what sucks is that everyone else, right? And the thing that I think was really difficult about that time was that every single person had a different view of me, and I didn’t because I never talked about it publicly. I wasn’t able to kind of like level sense, so every time I met up with someone, I had no idea if they thought Gumroad was 20 people, if they thought Gumroad was 5 people. You know, it was depends on all of these . . .

Andrew: You mean after the lay-offs.

Sahil: Yeah, totally. Yeah, and, you know, the last big article which was probably less than a year ago, it’s like, you know, in some Fast Company spread, right? And it can happen. And so I’m like, “Let’s just pretend that everyone thinks I’m still there.” And then enough time goes by and it’s like, “Fuck, I wonder what people think.” It turns out people thought I went bankrupt.

Andrew: They did, yeah.

Sahil: So, yeah, maybe I should’ve talked about it a little bit more, but yeah.

Andrew: And you didn’t because you were heads down or because you were just too embarrassed?

Sahil: I think it started out because I was heads down, but then, at some point, you know, it’s like too late. It’s like I should’ve talked about it six months ago. There’s no point in talking about this now.

Andrew: Could we get a camera on Dave for the ad?

Man: Sure.

Andrew: How great is this?

Dave: This is good.

Andrew I would like to just talk . . .

Sahil: Every time I talk into these things I’m just like . . .

Andrew: I’d love to talk to you about what you’re going through but you’re not . . .

Dave: I used your link, too.

Andrew: You did?

Dave: Oh, yeah.

Andrew: Oh, that’s great.

Dave: I heard it on a Mixergy interview.

Andrew: All right. Is this that cam? That mic can pick it up?

Man: Yeah.

Andrew: All right. I don’t want to, like, talk over myself. Why don’t we do this. The first sponsor is a company called Toptal. It’s a place where you can hire developers. Dave runs a site, a company called Proof, but I like I to call it UseProof. Is that the URL?

Dave: Against my will, you call it UseProof, but that is the URL.

Andrew: Because do you know how much of a pain in the neck it is for me . . . ? At least with freaking Gumroad, I can go and look up Gumroad, right?


Andrew: It’s super easy to find, and if I forget it’s, I type in gumroad something, it comes up on Google.

Sahil: Yeah. Just find, like, a random word.

Dave: I’m in trouble.


Andrew: You are.

Dave: But Proof is a cool name.

Andrew: It’s a great name, and you’re lucky that everyone who uses . . .

Dave: It’s an expensive domain.

Andrew: So for people who don’t know, what Proof does is when somebody buys something on your site, Proof will come up to the next person who was on your site and say, “Hey, look, someone from San Francisco just bought.” “Hey, someone from Chicago just bought,” right? So it does really well, and so that’s getting a lot of links back when people click the . . .

Dave: Yeah, I appreciate that.

Andrew: . . . link back to, right? And so, you heard me talk about Toptal.

Dave: So we’re launching Proof, or wanted to launch Proof. We had one developer that . . . or my co-founder could develop. He was a programmer and we needed some more capacity, and I heard you talking about Toptal, and it was like go online and just buy a developer online. It was like, you know, Amazon for developers or something. You know, like, we were like . . . And you had some discount, it was like your first, you know . . .

Andrew: Eighty hours.

Dave: Yeah, first 80 hours free.

Andrew: After you pay for 80 hours, your next 80 hours is free.

Dave: Yeah, and we were like, “That’s an amazing deal.” So we just went on there, got set up, and a couple days later, I had this amazing senior engineer that helped us lay a strong foundation for Proof to go launch on, so it was huge for us.

Andrew: And they helped build Proof?

Dave: Yeah, they’ve helped build, like, the very first lines of code to, like, say we don’t know what we don’t know, and you’ve been around the block a few times. We want someone, like, pretty senior to come by and help us set it up.

Andrew: Two more questions and then we get back to the interview. Number one is why didn’t you use one of the cheapo freelance sites where you could’ve hired a freelancer? And, number two, why didn’t you put help wanted ads?

Dave: I think we had used help wanted ads because we didn’t know how to hire. I didn’t know what to look for. I see someone that’s like vetted, it’s, like, ready to start tomorrow.

Andrew: And then Toptal also does something else for you. They talk to you and help you refine who you want to hire.

Dave: Yes, totally.

Andrew: Okay, why not the freelance sites that are super inexpensive?

Dave: Five years ago, I hired a guy on Upwork. I don’t know if I can say competitor’s name here, but it’s kind of the same thing. I don’t know what I’m looking for, these guys aren’t vetted. It was like I just . . . I’ve got the idea, I need to start. I’m going to go somewhere where I can get somebody really vetted, so that’s why . . . And I trusted you. I hadn’t met you yet, but I was like, “Andrew wouldn’t let me down here.”

Andrew: I really wouldn’t. And if anyone out there with any of my sponsors has any issue, you can contact me and let me know. It’s I really do talk to sponsors about this and make sure that I’m not promoting anything that my audience isn’t happy with. All right, and can you say what your revenues are? You told me over dinner, but I’m not going to reveal it because it was private.

Dave: Yeah. I mean, last numbers I think we’re sharing, it’s like $230,000 MRR.

Andrew: Two-hundred and thirty thousand monthly recurring revenue. Okay, that was a while back, right?

Dave: Yeah. It was not too long ago.

Andrew: And so much that I want to ask you, but you’re not ready to talk about it yet because I know you’re still going through stuff, right?

Dave: We’ve got something new we’re working on, and I want to talk to you about it once it’s launched. I’m super excited.

Andrew: His name is AZ?

Dave: AZ.

Andrew: Yeah, your finance guy. AZ’s looking at you like, “Don’t get sucked in with the whiskey.”

Dave: Don’t talk about the numbers.

Andrew: I swear, I was looking at your face.

AZ: Just wanted to see what he would reveal.

Dave: We talked about this. Yeah, yeah.

Andrew: We talked about . . . yeah. Well, thank you. For anyone who’s listening, all you have to do to get the same exact offer that Dave at Proof got is just go to It’s top as in top of your head, tal as in talent, There’s a whole lot more that comes with that, but when you go to that URL, you’ll see it. All right, and if you guys want to, like, jump in here with anything or analysis, I’m going to call and ask you for analysis. But if you want to interrupt, let me know. Just, like, signal to me somehow.

Dave: Cool.

Andrew: All right, let’s go into the turnaround. Why don’t we start with the day you laid people off? We’ll go one last, like, tough day, and then what do you do the day after that helps things turn around? So the day you tell people it’s time, it wasn’t a huge shock for them because . . . ?

Sahil: Well, you know, and after I met with John and some of these other folks, you know, we knew it was going to be difficult. And I’ve always been super open. I was open with the other investors, you know, that were already on board, and we had a great list of them, right? And so I knew I could raise money. So I really felt like if we got the numbers where they needed to be, like, we could do this, and that’s what I told the team in January, like, our all-hands meeting for the year. I told everyone like, “This is going to be brutally difficult, but if we get these numbers, it will be pretty . . . ”

Andrew: You know what, and that’s something we should talk about. You didn’t get the next round. You got a bridge.

Sahil: Yes. And it’s sort of concurrently. You know, we could’ve done the lay-offs sooner, but the minute you do that, I mean, you’re like bleeding, right? Like, VCs are not excited about stuff like that. And so I talked to Mike from Kleiner and he said, you know, we’ll put together a bridge that client would lead for 2 million bucks and that would give us time to keep the team. And it was like . . . you know, it was kind of like a go big or go home.

Andrew: What’s the difference between a bridge and another round of financing?

Sahil: It’s just semantics. Bridge is, like, the pessimistic word that you would use. It’s like signaling that we need more money. We’re saying, “Look, just getting us . . . ”

Andrew: This is not what you need. It’s not what you asked for. It’s just going to get you to a place where you can prove that you deserve the rest. Okay, and so they gave you how much?

Sahil: Totally. Two million bucks.

Andrew: Two million dollars?

Sahil: Yeah.

Andrew: That’s enough for how long roughly?

Sahil: An extra nine months-ish.

Andrew: Okay. And you told the team?

Sahil: Yeah. I told the team. You know, Kleiner gave us money. We got some extra money from our Mark Cuban, and yeah, we’re just going to work really hard. We’re going to do the things that we say we’re going to do around growth and really focus on the numbers, nothing else matters. And if it works out, you know, October-ish, like, we’re going to raise 50 million bucks or more, and if we don’t hit the numbers, like, I’m going to try and probably fail.

Andrew: I feel like that would be a really good motivator for the first few months, and then it wouldn’t be.

Sahil: Yeah. I mean, it was a great motivator the whole time.

Andrew: It was?

Sahil: Yeah.

Andrew: People don’t feel even close to the end, “We didn’t do it,” because . . .

Sahil: I don’t think so. I mean, I think it’s like you signed up to fight a battle, and, like, the harder the battle gets, almost, like, the more people dig in. Like, we worked so much, and . . . I don’t know. People joined Gumroad because they wanted to turn something that wasn’t huge into something huge, right? And so given the opportunity to be part of that story, I think people were totally . . . I mean, everyone was still getting paid, right? I’m not asking anyone to sort of sacrifice on a financial level to do this. So I think . . .

Andrew: Yeah, if not looking . . . Okay, so you guys started to pump out stuff?

Sahil: Yeah. We were shipping so fast . . .

Andrew: I have a list but, you know.

Sahil: Oh, man, I mean, we shipped tons of payouts. So we launched payouts to, like, the UK, and Australia, and to Canada, and we launched payouts . . .

Andrew: And the benefit of that is, look, now, you can start enabling people in the UK, in Australia, and other countries to sell. So launching payouts doesn’t mean you can pay these people, it means you can enable that to sell on your platform. It’s really expanding your market. You would’ve thought that alone would help. UK, Australia, Canada, very similar to the U.S. It didn’t do it.

Sahil: It didn’t do it. I mean, it helped a little bit, but, honestly, like, I think . . . You know, I won’t go back to the market thing. Like, we picked a market, it was a certain size. People found ways to sell even though they weren’t in the countries we were paying out to. It’s sort of a . . . you know, and we launched product recommendations, we updated a lot of our email features, nothing.

Andrew: Email features being what?

Sahil: You know, like workflows. Allowing people to email a subset of their customer base, if they bought above a certain price. Like, really trying to figure out, like, how we expand our marketing to people that are, you know, selling a lot more stuff.

Andrew: Okay. Just it didn’t do it.

Sahil: It didn’t do it.

Andrew: What about . . . there was one thing that I saw on the blog post you sent me which was enabling people to create landing pages faster?

Sahil: Yeah. That was, like, our last Hail Mary. We called it Audience, and it was sort of like trying to really, like, grow our market, right? You know, we had talked about this before. There just weren’t enough people selling content, creators selling ready-to-sell digital e-books, things like that, right? So we thought, “Wait, what if we started earlier in the funnel and we actually started helping people build their audience so that they’d be ready to do that?” So we launched a thing called Audience.
I don’t regret doing any of this, but, you know, at the end of the day, we were . . . You know, we were building these sort of like supplementary things to Gumroad. We weren’t really redoing the core of the product, and I think if anything would’ve worked, it would’ve had to have been a fundamental reshift of what Gumroad made. It probably would’ve had to do with, like, pissing off a lot of our existing user base and just being like, “Those guys don’t make enough money. Let’s go over there,” you know?

Andrew: And what do you think that would’ve been?

Sahil: I think we could’ve gone deep into membership stuff. You know, I think we could’ve maybe focused on educational content, influencers, right? Like, people that make $10 million selling these, like, $2,000 packages. You know, we had tons of success helping people like Eminem and [Juancho 00:27:40] . . . we sell these, like, crazy physical merchandise packages, we could’ve totally, I’m sure, and built a great business doing that.

Andrew: So going after these bigger guys?

Sahil: But I remember, like, that’s not why we built Gumroad, you know? That’s not why I raised money for the people we raised money from, that’s not why people signed up to join Gumroad.

Andrew: But, honestly, isn’t the reason you created Gumroad was to be a billionaire?

Sahil: I thought so. Definitely, that’s what I thought for a long period of time. I thought I was on that trajectory.

Andrew: But you thought when the rubber meets the road, you’re not going to shift from enabling people to create and sell content to enabling Eminem to sell more tchotchkes to his people?

Sahil: [inaudible 00:28:14].

Andrew: That was it.

Sahil: I don’t know. I mean, maybe it sounds like sort of pretentious or something, but, like, I felt like we committed publicly to building a specific product, right? And I’d almost rather just . . . you know, I shut down the thing and do that again, right? Like, I don’t know. It’s not that revolutionary. And, you know, it was important for me to build something worth a lot because I felt like that was a way to indicate that we built something super valuable. But at the end of the day, like, you know, we wanted to build a very specific thing for a specific group of people. We told them we were going to build something like that.

And, you know, we were processing $2.5 million dollars around the time of the lay-offs, and just saying, “Sorry, we’re going to turn that faucet off,” I don’t know. I don’t think I could’ve done that. And, frankly, I think the team would’ve been pissed because we worked really hard for that demographic and to just go say, “Sorry.” I want to actually still be a billionaire and this is not going to do it, so, like . . . I don’t know. Maybe that would’ve worked and, you know, but . . .

Andrew: We should say we’re drinking Talisker that was given to me by a scotch night guest, Trent, who said, “My way of saying thanks for all the great years of content.” I’m trying to keep . . . when people give me a gift of whiskey, first of all, I don’t open it as much because I feel like it’s from them. I want to save it. For some reason, it has sentimental value in a sense. You could see there’s dust on it. And, second, I’m trying to keep the note so that I remember. We’re going to do this one after this. But let’s do one more pour of this, and then we’re going to go for the Australian, okay?

Sahil: Sounds good.

Andrew: We’re drinking whiskey. I’m surprised everyone is into whiskey. You didn’t drink coffee so I thought maybe you wouldn’t drink . . .

AZ: We do actually have a whiskey hour at Proof.

Andrew: You do?

AZ: Yeah.

Andrew: A whiskey hour at Proof.

Dave: I think I got it from being inspired by you.

Man: 80 proof?

Andrew: Whiskey.

Sahil: And you just stick to the depressants.

Dave: Yeah, at the end of the day.

Andrew: In that case, here, let me let you pour this, and we’re going to go . . .

Dave: I’m curious, was part of the value proposition, did you drive traffic to buyers as well or did they have to do their own traffic?

Sahil: They had to do their own traffic. Yeah, so we were just like an e-commerce tool, you know? Like, yeah, we were just a tool. Laid them off, yeah.

Andrew: It’s time to turn things around. This was now four years ago, almost.

Sahil: Yeah, October 2015 was the lay-offs.

Andrew: Okay.

Sahil: [End of that point 00:30:32].

Andrew: It’s a little over three years.

Sahil: Yeah.

Andrew: What’s the first thing that you did?

Sahil: After?

Andrew: That worked. Yeah.

Sahil: I mean, the thing we focused on, you know, I mean, we went from, like, you know, $300,000 a month in, like, operational expenses with the team to, like, $40,000, right? Mostly just, like, the office space. And it was immediately, like, doable, right, to get to profitability. It wasn’t like some crazy moon shot or anything like that. We just focused on . . . We focused on a premium offering. So we said, you know, we’ve never done SaaS. We’ve always taken this, like, percentage thing which meant we basically needed people to sell stuff. And we couldn’t force people to do that, but at least we can get people to pay us 10 bucks a month, and then at least every month, we have a base on it, right?

And so we’ve definitely focused on . . . we said, “How fast will we ship, like, a premium offering of Gumroad?” What are all the things we would’ve never built but we need to now? And so that’s what we did. We launched customization. We launched more filtering for the email stuff. We bifurcated our pricing. So instead of saying it’s 5%, we’re saying, “If you paid us 10 bucks a month, it’s 3.5% like Stripe or something. And then if you’re not paying us, you can still do that, it’s just 8.5%.”

Andrew: So it’s what can we do to get monthly fees? Because if we’re not going to have any funding, we need to make sure that we could at least pay the bills every month. And the bills were, what, you and four other people?

Sahil: Yeah, four other people. Me and four other people, the office space. [inaudible 00:31:55].

Andrew: And then it’s email. Email targeting meaning people are already collecting email addresses and buyer information.

Sahil: We have all that information so it’s like upsells, how can you get people just, you know, to buy more, right? You can filter, like, people that bought this product in this time frame that paid over this amount.

Andrew: Got it. So one of the things that I bought was a book on how to use Basecamp because we use it for project management at my company. Jason Fried, the founder, did a tweet saying, “There’s this new thing available. It’s a book to show you how to use it.” I clicked the link, it was on Gumroad, I bought it. Now, this guy knows that I have Basecamp, right? That’s the ideal. That’s what you’re looking for. This guy does not want to create a website. He just wants to teach what’s he’s been blogging about.

Now he has not just my contact information but the fact that I bought Basecamp, and if he has an Asana version of the book, you want to know who the Asana people are, and you can come back and say, “If you like Basecamp, we have this other thing for you.” And you enable them to do that, and people are actually using that in that product?

Sahil: Oh, yeah, for sure.

Andrew: Okay. And also an email front. If they’re just collecting email addresses, you know what they collected it for?

Sahil: Yeah. And it’s great. You can do stuff like, you know, if you want to . . . you know, you want to do a free thing and collect emails and you can target all those people that bought that thing and upsell them on this thing. Then you can launch, like, some premium offering.

Andrew: Six bucks a month is pretty low for that.

Sahil: Yeah. I mean, you know, we wanted it to be conservative and make sure that people signed up for it because we needed them to. Yeah, we needed them to.

Andrew: All right. So then that started to work for you. At that point, did you turn a profit?

Sahil: It took us three or four months after we shift. So it took us maybe three months to build all of that stuff. I think we launched that in December. So, from, like, yeah, I mean, pretty . . . I mean, we had worked really hard, but pretty fast.

Andrew: Just, like, a couple months?

Sahil: Yeah. I mean, we had a good team. We had a really good product team. And by June of 2016, we . . . yeah, we turned a profit. We made 10 grand that month in profit.

Andrew: Oh, how did that feel?

Sahil: It was good.

Andrew: Was it?

Sahil: Yeah. It felt great. I mean, that was the first time, you know, in, I don’t know, five plus years that I, like, didn’t need like . . . It was like freedom, you know, like I didn’t have to . . . The urgency, right? Like, the sort of impending doom, right? If I have tons of money in the bank and stuff, there’s always this, like, clock that you’re very aware of as a founder, and, you know, the minute that Excel thing turns from 99 months or, you know, like that burn to infinity or an [A 00:34:27] or whatever . . .

Andrew: Did you literally have a spreadsheet with that?

Sahil: I was trying that so hard, yeah. I mean, because the thing is, like, we did this lay-offs, and then TechCrunch wrote about it. So, I remember how a lot of people were familiar a lot more than I . . . I thought not that many people. It turns out people just didn’t want to tell me that they knew. A lot of our customers knew that. Word gets around.

Andrew: You know what? I saw it at the time. I didn’t reach out to you. The same thing HelloSign guys. I remember I used their software for the first time. They said, “Oh, crap. Andrew’s using it. We’re fans.” They sent me a note. And I feel like when they sold their company, when you went through this, it’s milestones where everyone’s reaching out to you, too busy. I don’t want to be the billionth guy to say congratulations. I don’t want to be the billionth guy to come in and say, “Sorry to hear it.” I don’t know, what could I have said? Could I have said something in those situations?

Sahil: I don’t know. Maybe, I don’t know. I think everyone is thinking that, right? Like, HelloSign, I was actually an early investor in HelloSign.

Andrew: I saw that.

Sahil: Yeah. That was a good weekend. I built Gumroad and invested in HelloSign. One has made me money, I’m just saying.

Andrew: What do you get out of that investment? How much . . . ?

Sahil: I’ve made 16.5X on my investment.

Andrew: It was $25,000 or $10,000?

Sahil: I was $10,000. Yeah, so I made, like, 165k. Yeah, hopefully, they’re okay with me saying that. But, I mean, you know, I bought an iPad, so okay. I haven’t gotten my money in the bank yet, but, you know, might as well start celebrating.

Andrew: Yeah. You want to jump in here?

Prasanna: Yeah.

Andrew: Okay. Well, let’s get the camera on you. We’re still trying to figure out how this camera thing is going to work for us. This is Prasanna. Prasanna runs an accelerator. You’re from India, but the people you accelerate are all over the world. And David Hauser, a guy who I’ve known forever, is an investor in your accelerator. He’s the founder of Grasshopper, and you just happened to be in the Bay Area. Popped in.

Prasanna: I’ve been watching and hearing, more likely usually I like to read, so I read your transcripts. I don’t listen to them.

Andrew: Thanks.

Prasanna: I’ve been listening for, like, roughly . . . for a very long time now. So I noticed your body language kind of changed and you kind of let out, you know, a breath when you asked him what did it feel like when you hit the 10 grand in profit.

Andrew: Oh, yeah.

Sahil: You noticed that?

Prasanna: Yeah. You look like you felt . . .

Dave: I let out a sigh.

Prasanna: Yeah. Thank you.

Dave: Money.

Prasanna: You know, and you should go into that feeling a bit more that you did because a lot of people who went through that transition or just before that transition don’t really realize how good that feels.

Andrew: You’re saying that people who go through that experience of having a low are so busy focused on the low that they don’t realize that once you even get to a $10,000 profit, that’s such a release that things are going to be good.

Prasanna: Right. But if I’m just comparing the numbers, he raised, like, $8 million, and we’re talking about $10,000 . . .

Sahil: Ten million with a bridge, yeah.

Prasanna: Ten million. We’re talking about a $10,000 profit in a month. Those two numbers are, like . . .

Sahil: It’s ridiculous. But, yeah, I know, it’s true. I mean, the thing is, you know, people always use the terms like underwater, you know, to describe raising money that we’re underwater, right? Wow. And that’s kind of what it feels like. It feels like you’re drowning. It feels like you’re treading water. You can do that for a long time, right? Years, potentially, but it’s draining, and all it takes is one . . . you know, when you step on land or whatever, to extend the metaphor way too far, you feel like, “I’m not dead, and I will not die today.” You know, like, that sort of feeling. It’s pretty crazy.

You’re right. I mean, raising, you know, over 10 million bucks and making $10,000, you know, that’s not even one engineer’s salary. Frankly, in San Francisco, I wish it was, but it’s not. Yeah, the thing is it wasn’t about, like, $10,000 in a month. It was like we could keep paying . . . You know, like, Gumroad exists sort of in this, like, weird . . . Like, there’s the company Gumroad, there’s the investment Gumroad, and then there’s, like, the product Gumroad, right? And so, like, Gumroad has always just been like this. It’s this sort of steady-state.

Andrew: For the people who are listening. It’s just slightly growing. It’s not jumping but it’s consistent ongoing growth.

Sahil: When we did the lay-offs, $2.5 million. When we first talked to John [inaudible 00:38:53], it was probably closer to $2 million at one point of the year or something. Now, we’re at $5 million. You know, probably in a year, we’ll be at $7 million or . . . you know, like, maybe more, who knows? But it’s always been this steady thing, right? But, internally, it’s been like this, right? And so, like, when we made the $10,000 in profit, it, like, aligned me with that external Gumroad because it meant we could keep doing what we were doing. You know, because what could’ve happened is it was $2.5 million, $2.6 million, $2.8 million, 0, you know? And the minute I was like, “That’s what it was about,” I think, and it was like, “This thing is not going away for better or worse,” I think that’s what changed.

Andrew: You know, the thing that I’m wondering is when I’m at my worst, I don’t think I have the wherewithal to figure out what the solution is that’s going to get it back to profitability. The thing that I wonder is how do you get yourself to that when you’re feeling really bad about yourself?

Sahil: I mean, I don’t know. I mean, we just . . . I think you’re right, right? Like, when you’re drowning, you’re busy drowning.

Andrew: At one point . . .

Sahil: You’re not doing math in your head or something, right?

Andrew: But you sent me a draft of a blog post that you were writing about this, and you said, “I was smoking weed, having trouble even not . . . ” Oh, here we go. “Most days, I smoked a lot of weed. It was the easiest way to shut off my spiraling thoughts,” right? Where you just go into negativity and then you feel bad for having . . .

Sahil: Totally. Yeah, I mean, part of it was that we had a team, right? And, frankly, when you’re a founder, sometimes, your team is better than you are, right? And we had a team of people that were just like . . . I mean, their egos were not on the line as much as mine was, right? I mean, most of the time, I was working pretty hard, working 16-hour days especially up to that time. But when the lay-offs happened with that TechCrunch article, that’s really when those two worlds meet and it’s really difficult. And there were times I had left the office at 1 p.m. and the team wasn’t there until 7. Like, it was pretty crazy.

Andrew: I do find that having other people with the fact that they’re just going means you have to keep going. The fact they could see things rationally . . .

Sahil: Most of the time, you would pull them up, right, as a founder, but, sometimes, they pull you up or they don’t let you leave the office and they just keep going, like . . .

Andrew: I had a situation like that. Richard [Herbert 00:41:04], our finance guy at Mailbits, we went from, like, $2 million to $3 million a year to, suddenly, $0.5 million a year. Oh, excuse me, $2 million to $3 million a month to $0.5 million a month, which I thought meant I was a big failure. And he said, “Do you see where we are right now? Do you see we could cut costs at this level? Andrew, go out there and run,” and I said, “But I can’t. Everyone else is working.” “No, you should go out there and run.” And then he found ways to cut costs that I wouldn’t have put up with, and the fact that I was a little bit, “Ah,” meant he could push me out the door and lead better. And that helps a lot. And the fact that they’re all in there working means I can’t give up and just sleep and watch TV, right?

Sahil: Totally.

Andrew: And that’s what you feel honestly?

Sahil: Yeah. But, you know, they’re being paid. I mean, the thing is, to them, it’s a job, right? To me, it’s like a vocation to take this thing. It’s like my magnus opus that is no longer . . . like, that looks like it might die, right? And so I think that does change things.

Andrew: All right. Let me do my second sponsor, and I’m going to talk about what kept happening and the weird thing that happened with Kleiner Perkins. I can’t believe they did this to you.

Sahil: I know. No one . . .

Andrew: Like, what a gift.

Sahil: I never talked about that publicly, so . . .

Andrew: All right. The second sponsor, a company called HostGator. You guys know I’m going to be running around the world, every continent. I have this goal, Dave, I’m telling you, 10 years ago, my buddy, Jon Bischke, forced me to sit down and write what my 10-year goals were and I said, “Fucking Jon Bischke with his get help, like, self-improvement stuff. I don’t want to do it.” But it’s awkward not to, so I sat down, I wrote my goals for 10 years, and one of them was to run a marathon in every continent. That was going to be my easy one because that didn’t depend on the economy, it didn’t depend on anyone. I could just go and run.

So I found it accidentally when I went through Evernote, and I said, “What’s wrong with me? I didn’t do this,” and I decided 2019, I’m going to start. I’m going to do it, and I’m running a marathon all over. The thing that I did was, and I’ll be honest, partially because HostGator’s a sponsor. I created a website for it, right? You get that plan with HostGator, you get unlimited domain hosting because what do they care, right? It’s anything beyond the $2 a month or whatever. Guys, don’t quote me. I don’t have the info in front of me, but it’s a few bucks a month. Anything beyond that tiny . . . you go a little bit more, you get unlimited domains.

So I created a website for it, and now, suddenly, there’s a thing. If I talk to my team, you see that they treat it differently than a personal hobby because there’s a website around it. I had a foot injury. Devin and I went with our cameras, with this camera, in to shoot video at the doctor’s office. The fact that there’s a website means it’s a real thing. It’s happening. The doctor’s on board. “Forget that you don’t have an appointment. Let’s get you in here and do it.” Did I give them a business card with the website? No. People Google you, they see it, right?

So the reason I’m bringing this up in a HostGator ad is if you have an idea, a thing, a project, give it its own website. Notice how people treat it differently. Notice how people, including you, start to take it seriously. And if you have HostGator, it’s unlimited domains hosted as part of your package, and it’s super easy to hit one-click install to have WordPress up. Your site is custom build. Everything you do is custom.

Sahil: I was on the similar stuff, BlueHost, which is HostGator.

Andrew: Owned by the same . . . I love when people email me and go, “No, I don’t use them. I use this other company.” All right, congratulations to you. And then I’d go just to sanity check, I, “They’re owned by the same company. It’s called Endurance. They own HostGator. They own everyone else that you guys use.” Yes, so you were around them, and what did you do?

Sahil: I also have unlimited domains. I asked a girl to prom . . .

Andrew: Using a website?

Sahil: Using a website with its own custom domain.

Andrew: Yeah. How great is that?

Sahil: Yeah, it didn’t work, but . . .

Andrew: She said no?

Sahil: But everyone in school knew it.

Andrew: Oh, is that worse?

Sahil: Yeah, it was.

Andrew: Do you feel better or worse for doing that?

Sahil: I feel great, honestly. We’re friends, so it’s fine.

Andrew: I should say, HostGator . . .

Sahil: She’s one of those people, you know, that’s sort of like moralistically opposed to prom or something.

Andrew: Oh, it wasn’t you?

Sahil: No. That’s what she . . .

Andrew: Let me say this,, unbeatably low price, all the stuff that I’m talking about, and you get tagged as a Mixergy person. You know, I tried to get to be class president at Brooklyn Tech. I went all out. I campaigned with my friends. I put posters up. I failed miserably. I came in fourth out of six people.

Sahil: Was it you?

Andrew: I’m sure . . . you know what? Actually, I never thought of that. Here’s what I did think . . .

Sahil: Don’t keep thinking that.

Andrew: Here’s what I thought. I never regret it because I went all-out, because I didn’t wuss out, and I did put posters up because I didn’t wuss out and I did tell my friends to go vote, and I did say it, you know? And when I realized this is a big moment for me, when you go all-out and there’s nothing you can in the back of your head go, “I wish I had done this. I wish I had done that,” you feel proud even failing. Because I’d rather stand up fighting than fall down out of, like, not having the guts to do it. So do you feel that way about asking her to prom, like, at least you asked out?

I regret the women I didn’t ask or the girls I didn’t ask [inaudible 00:45:31] the ones that turned me down.

Sahil: Oh, yeah, 100%. I mean, those are part of my identity, you know? Like, I’m known to fail, and then . . .

Andrew: You are?

Sahil: Yeah.

Andrew: And you’re okay with . . . ?

Sahil: I make so much crap that, like, some things work, and it turns out, like, people remember the stuff that worked. People don’t really pay much . . .

Andrew: That’s true.

Sahil: People are too busy with their own lives.

Andrew: Kleiner, they come back. Kleiner Perkins, one of the best firms. You had incredible people and firms behind you, right?

Sahil: Yeah, totally.

Andrew: I mentioned Chris Sacca, you mentioned Mark Cuban.

Sahil: Yeah, Naval Ravikant, First Round Capital, Kleiner Perkins, [inaudible 00:46:02].

Andrew: Max Levchin, Ron Conway, all of these people. Anyway, so Mike from Kleiner Perkins comes over to you and he says what?

Sahil: So what happened with Mike is . . . so we had board meetings every three months, right? Well, after the lay-offs happened, he was so gracious. He was like, “I don’t think you need to do more amazing anymore. You got enough stuff going on, there’s no point. Go figure it out and let me know,” right? And so we stopped and we just worked on the product, and, you know, he ended up leaving Kleiner and he’s like, “I’m going to resign from the board,” so I was like, “Yeah, sure. That’s great. I’m not doing anything on that front anyways.” And then, out of the blue, I got an email, you know, from Kleiner Perkins that’s like, you know, “We need a board seat.” And I was like, “Okay, let’s have a call.” I mean, I talked to them about business, and they were like, “Cool. We’ll get back to you on the board seat. It’s going to take some time.” And then I got another email that basically was like, “We’re going to write off the investment,” which, honestly, I mean, by breath of fresh air, that was like almost more than that. Because the thing is when we got to profitable, we weren’t going to die but there was no exit, right? We would have $16.5 million in liquidation preferences which basically means you can’t sell the company. I mean, like, we were fucked.

Andrew: That means what? You can’t sell the company for . . . ?

Sahil: Like, you basically have to sell the company for more than that to make a dollar.

Andrew: More than $16 million? You made . . .

Sahil: Sixteen-and-a-half million dollars.

Andrew: Sixteen-and-a-half, and then you split the upside.

Sahil: And then the rest gets split, so based on that.

Andrew: All right. Now they come back to you and they make you an offer, a price for all the shares which is?

Sahil: One dollar.

Andrew: One dollar?

Sahil: One single U.S. dollar.

Andrew: Because they just want to write it off and be gone?

Sahil: Yeah. I mean, I think it was a combination of things, and I will never know the full story, right? Like, who knows what happened behind the scenes, but I think they . . . like, the operational overhead, the tax write-off benefit, just, like, the good will. I don’t know. Who knows? Honestly, I was like . . . I didn’t want to ask too much or I don’t . . . I want to make them think about this. That’s a guess. Yeah, sounds great.

Andrew: And then you went and you said what to the other investors?

Sahil: I said, “Hey, Kleiner wrote it off. Would anyone else like to?”

Andrew: And?

Sahil: One did. So that was, you know, for 100 bucks, so that was 100 times more expensive.

Andrew: Who was it?

Sahil: Lowercase.

Andrew: Oh, Chris Sacca’s company?

Sahil: Yeah.

Andrew: And partially . . .

Sahil: Oh, they stopped.

Andrew: They stopped? Chris doesn’t want to invest anymore, so he says, “Let’s just move on.”

Sahil: Yeah. They stopped that. Yeah, invested through funds.

Andrew: Okay. And then the others are just sitting there, and so how much . . . ? Like, what’s the liquidation preferences now? What’s the number?

Sahil: Now, I think it’s around $2 million. So it’s like a seed funding company now, roughly.

Andrew: All right. Let’s get to . . .

Sahil: Yeah.

Andrew: What were you going to say?

Sahil: Well, it gave me a path, right? I don’t intend to sell the company for, like, 10 million bucks or anything like that. But just the feeling that I had built something and its worth could’ve been more than the investment price, you know, that gave me a lot of self-confidence, I think. And, like, all of a sudden, I think . . . really, overnight almost, right, I felt like, “Wow, I can work on Gumroad again.” Because the thing is, with Gumroad, every day, every minute I spent working or thinking about it, it’s like, “It’s not going to come back to me,” you know? It was hard to work on it like that.

Andrew: And now you actually own enough of the company for it to matter?

Sahil: Yeah.

Andrew: Okay. Let’s talk about what you did to get it there. So, one thing, monthly membership. What do you do? Create a monthly . . . What do you need to do to create a monthly membership? You put that together, it’s out there. It helps getting things. You get to $10,000 breath of air. What’s the next thing that you did to keep going?

Sahil: The next thing we did is we just . . . honestly, not much. There was probably a year or two years where I almost did not work on the product.

Andrew: And what did you do?

Sahil: I drew, I wrote, I painted.

Andrew: Really?

Sahil: Yeah. I could not . . . I had to disconnect. I moved to Provo like you do.

Andrew: How did you end up in Provo?

Sahil: I wanted to . . . Well, it was a combination of things. One, San Francisco was so expensive. All of my friends were raising gobs of money. Some of them are billionaires now, you know? Like, it’s not a healthy place to be if you’re not doing a lot of that stuff and if you sort of can see yourself, like, an measly failure and just smoke weed all the time. And so that was happening, so I was like, “I don’t want to be here anymore.”

And then Trump won the election, so that made it great. And then, yeah, so I started doing writing. I was painting and all of this sort of other stuff. And, like, I applied to this writing class that one of my favorite authors, Marion Sanders, teaches in BYU, and I got in. And that was like January, I don’t know, 1st or something. He told me, like, “You got to move to Provo. Class starts in, like, two weeks.” So I was like, “Okay.”

Andrew: Is it inappropriate to ask if you’re Mormon?

Sahil: I actually am Mormon now. I’m trying it out.

Andrew: It’s a new thing?

Sahil: Yeah, it’s a new thing.

Andrew: Did you have a religion before?

Sahil: I was brought up Muslim. I didn’t eat pork or anything like that until 16, 17-ish, and I became agnostic or atheist, I don’t know. Whatever the word everybody uses. Yeah, so now I’m trying out Mormonism. Why not?

Andrew: What do you mean by trying it out? Do you believe in it?

Sahil: Belief is a tough word.

Andrew: Really?

Sahil: Yeah. I’m trying to have faith, right? And faith is sort of inherently illogical, I think, right? Faith is like the absence of reason, so I’m trying.

Andrew: But you can’t cut off reason? So what is it about Mormonism that draws you?

Sahil: I mean, honestly, a lot of it is like gonzo journalism in a way. A lot of it, I think, was getting away from the failure that I was and trying to change everything about me, right? And, honestly, I don’t know. People ask me like, “Why?” And Mormons ask me that, “Why would you do that? Why would you become Mormon? It’s weird.” Well, I think a lot of it . . . Yeah, I don’t know. I did it, and, you know, I was like . . .

Andrew: When you say you did it, did you get . . . is it baptized?

Sahil: I got baptized.

Andrew: You did?

Sahil: Yes, I got baptized.

Andrew: So, can you actually try it out when you’re considering you were baptized?

Sahil: I mean, I think everything is in a trial.

Andrew: Is your girlfriend Mormon?

Sahil: She is Mormon.

Andrew: Is that a big thing?

Sahil: Oh, yeah. That definitely spurred it, right, but, like, she says it well, like, “Don’t let me be . . . ” What is it? Like, “I can’t be the reason. I can be the motivation,” something like that. I don’t know, whatever the quote is. But, yeah, I met with my . . . you know, part of being baptized . . . I don’t know how long you want to talk about this. It’s going to be a whole episode. But part of being Mormon is you have to agree to these sort of questions when you get baptized, right? That’s like, “Do you believe this? Do you believe that? Do you know this?” They use the term “know” a lot, that’s why I there’s no way. When I first moved to Provo, I went to church, as you do, and I was like, “These guys are nuts.” They know all of these crazy things. And so when I met with my missionaries, I found it sort of challenged me. It’s like, “I bet you . . . ” Like, you try to be with them and see if you can get to a yes on these questions honestly. Don’t lie. And so I met with them and I was like . . . I didn’t answer yes or no. I was like, “This is how I think about this,” right, and I sort of finagled my way through it.

Andrew: Did your mom feel upset?

Sahil: Not really, no. She always says, “As long as you’re happy, I don’t care.”

Andrew: Okay. So we’re drinking whiskey.

Sahil: Yeah.

Andrew: I thought Mormons don’t drink? They come in here, they drink water.

Sahil: I’m trying.

Andrew: You’re what? Oh, you’re trying.

Sahil: I don’t drink a lot. It’s funny when Mormons talk to me about that stuff, I always say, like, “Well, I used to drink this much. Now I drink this much. You want me to drink this much. Like what’s better? If I didn’t become Mormon, I’d drink this much?” I don’t know. It’s honestly just a really interesting question.

Andrew: Are you okay with finishing that so we can go to this one?

Sahil: Oh, totally, yeah.

Andrew: Can you do it now?

Sahil: This is going to go off the rails really quickly.

Andrew: That’s a lot.

Prasanna: Now you know how he [inaudible 00:53:45] $10 million.

Andrew: Move by when?

Prasanna: He convinced the Mormons that drinking was okay.

Andrew: Oh, if he could do that, he could do anything.

Sahil: I’m a good salesperson, not just [inaudible 00:53:56] sorry.

Andrew: And you don’t have any guilt, like . . . Actually, forget about guilt. Do you feel, like, more empowered because you believe in God?

Sahil: Do I feel more empowered? I feel happier that I have faith, that I’m living sort of a life of faith.

Andrew: You do?

Sahil: Yeah. I think I do, yeah. But a lot of it is like . . . you know, it’s not like a replacement. It’s like I believe this on top of what I . . . It’s kind of a paradox. I don’t know if that makes sense, right? But it’s like I’m open to a whole new set of experiences.

Andrew: Is there a part of you that just says, “These guys are really rich and happy, and they got happy kids.” Forget where it comes, from where it’s going. I want that. I want to be wealthy, happy, and have happy kids. Right?

Sahil: There’s a really great article I read about Mormonism and how insanely the metrics are pretty great, but it makes the point that, “Is this possible if you don’t believe this stuff?” Because that lifestyle . . .

Andrew: It’s possible. My brother, [Randy 00:54:48], his organization in LA, he kept saying the reason people go to religion is because they do things like charity drives and they have the ongoing ceremonies. We’ll do it, too. Do you know how hard it is to, like, recreate that?

Sahil: It’s so difficult. Sometimes, you need to feel, like, the threat of hell to get someone up by 8 in the morning.

Andrew: I want to know, like, deep inside, self-interest is still there, right? There’s still a part of you that thinks, “I’m going to achieve greatness here.” Maybe not now on this lifetime, but I’m here.

These guys, the upside from this is good, right? They’re still there.

Sahil: Yeah.

Andrew: All right, can I tell you where this came from. This is Chris O’Halloran. He’s a guy who’s come here twice, once for the . . . I did this live event around [Truman 00:55:29] because I needed to focus, so I got a bunch of beads, I did an event and I say, “Tim Ferriss, can you come out and do, like, an event with me?” And he goes, “Yeah. I’ll come out. I’ll speak live for you and help you out.” So he comes out, Chris comes here all the way from Australia. I go, “Wow. That’s amazing,” and then he brings me this. This is the second bottle he brought.

Sahil: You’ve been drinking too much, dude.

Andrew: Thankfully, I can actually hold my alcohol pretty well now.

Sahil: As a Mormon I’m telling you.

Andrew: Yeah, that’s true if I want. I love Provo.

Sahil: Do you?

Andrew: Yeah, yeah. You can still get alcohol. I would live there. I would almost be Mormon for, like, all the benefits that I just brought up. They’re so nice.

Sahil: Okay, pretty good for me at the end.

Andrew: So he comes over with this. This is the only Tasmanian Whiskey I had ever heard of. People from Australia go, “What the hell, we have a whiskey?” They do, and this is another reason why I want to travel the world. It’s so interesting that there’s a new thing that I never experience and that none of us know. So we’re going to try it. Can you guys down your alcohol or do you need another . . . ?

Dave: In a little bit.

Andrew: In a little bit? Okay. We’re going to try it. This is the only whiskey that . . . I’m going to pour a little bit not because I’m stingy about it, even though I don’t know how I’m going to get another bottle but because this is the most polarizing whiskey you will ever have. I mean, people love it and hate it instantly, and everybody has a different feel for what it is. I’ll read the name of it from the label in a moment. Everybody has a different set of, like, flavor that comes from this whiskey. And if you do whiskey tasting at all, which you should, or tasting as opposed to a thing, don’t have whiskey tasting then people try them, this is the one to bring out because it is so different. Okay, this is Hellyers Road Distillery Tasmanian Single Malt Single Peated, slightly peated. Devin, are you bringing a whiskey bottle over . . . I mean, a glass over?

Devin: Oh, I can. Sure.

Andrew: Do it.

Devin: All right.

Andrew: I wish I could pop this over into everybody’s hands. I highly advocate whiskey night, scotch night, whatever it is. And I think that what you should do is always have a set of different types of whiskeys to give people something to taste. Now, I’ll be honest, I love tasting it. Most people don’t give a rip. Hey, this is Devin. Devin, can you go on camera?

Devin: Yeah. I’m on camera.

Andrew: Okay.

Dave: You know, with Jamie, you know, [inaudible 00:57:47] podcast. That’s you now.

Andrew: That’s right.

Dave: Here’s to Devin.

Andrew: I’m glad that I like hanging out with Devin a little too much. Like, he and I will talk forever because we’re going to be traveling all over the world. Can you imagine if you didn’t have anything to say to him or if it was awkward?

Prasanna: So do we raise a toast?

Andrew: Yeah, let’s do it. Let’s raise a toast. Good call. Cheers, everyone.

Together: Cheers.

Prasanna: To $10,000 in . . .

Andrew: Yeah. The first 10k.

Dave: To hope.

Andrew: What do you think?

Sahil: That’s weird.

Andrew: Right?

Sahil: I’m feeling like I’m chewing on a plant leaf.

Prasanna: Eucalyptus.

Andrew: Eucalyptus? What do you feel from that?

Dave: I like it the first second, I don’t like the second nod.

Andrew: Yeah. What about the third second?

Dave: It’s not just . . . [inaudible 00:58:30] second second I don’t like it, but the first second tastes really nice.

Man: It’s good.

Andrew: Yeah?

Man: I like it.

Sahil: I want that on a bottle. The first second tastes really nice.

Dave: At least till the first second.

Prasanna: I haven’t gotten with the second second yet.

Andrew: I poured it over the weekend. We did like a kid’s thing . . .

Sahil: It’s like sweet now. It’s like caramel now.

Andrew: Yeah. I don’t taste that.

Sahil: Weird.

Andrew: My friend, Johnny Chen, drank it and he said, “Tastes like champagne.”

Dave: Yeah, I could taste that.

Andrew: You could taste that?

Dave: Yeah, yeah. A little sweet. It’s interesting.

Andrew: Right? Like, there’s all this stuff all over the world I never even tasted. Thanks, Chris. So, I was asking you what you did. If I’m taking away stuff from this, number one, I feel like monthly recovering, it’s the only way to survive.

Sahil: I mean, it’s literally the only way to survive. At the end of the day, every business does that, right?

Andrew: Right. Proof does monthly recovering. What’s that company?

Dave: All new startups.

Andrew: All new startups do monthly recovering. If a company comes to your accelerator and they don’t have monthly recovering, do you even work with them?

Prasanna: No.

Andrew: What is your company accelerator called? Upekkha?

Prasanna: Yes.

Andrew: U-P-E-K-K-H-A.

Prasanna: That’s right.

Andrew: And you will only deal with people who are SaaS, monthly recovering . . .

Dave: I don’t know how you would sleep at night without monthly recovering.

Andrew: Right, because you have to keep . . .

Sahil: And that’s why.

Andrew: You still smoke weed?

Sahil: No. I’m Mormon, come on.

Andrew: Strictly whiskey. So monthly recovering, number one. Do you feel, by the way, that you’re not giving your customers monthly recovering, that maybe you need to give them that, too?

Sahil: Yeah. Actually, this year, we’re going to really invest in a subscription business.

Andrew: So that they could also have something that . . . Okay. So monthly recovering was one. Is it weird for me to take away that, like, the faith helped you, too?

Sahil: Faith, I mean, yeah, it did, I mean, even before I was baptized. Like, faith, yeah, it’s super important.

Andrew: Faith.

Sahil: Delusional faith, almost.

Andrew: Delusional?

Sahil: Yeah. I mean, I was down and out and, like . . .

Andrew: So you were delusional before you started. And as, in the beginning, you lost the delusion and now you’re different delusional, and that’s good. I’m with you on this, right?

Sahil: I’m trying to follow that train of thought, but, yeah, I think so.

Andrew: Delusional before, you lost your delusion, and like you said, you utilized your . . . right, you’re faith delusional, and that’s good. Okay. Give me one or two more things that you did to get you up. Cutting expenses, of course. Give me two.

Andrew: What else?

Sahil: Yeah. I mean, that was huge. Honestly, like, you shrink the team, you get rid of the office. The great thing about, you know, I remember people would ask me, “How is Gumroad still alive? What happens when you fire almost everybody?” And the great thing about software is the software keeps softwaring, you know? It keeps going. And that’s great, right? Like, while you sleep, if you’re sleeping, like, it’s still going. And, I mean, honestly, it was almost like simple. You cut costs a lot, you launch a premium service that gets, you know, to $10,000, $15,000, $20,000 a month, you’re profitable.

Andrew: Yeah. Let’s close that out with you. This is Prasanna. Prasanna, Dave, AZ, if you guys want to close it out, just go ahead and . . .

Prasanna: One question I had is, you know, you’ve spent $10 million building this. And then you were the happiest you seem to have been . . . based on your body language, it seemed to have been when you hit the $10,000 in profit. Yeah, I could truly see whenever, you know, Andrew asked you a question about before profitability, your body is, like, tensing up.

Sahil: That’s so weird.

Prasanna: And then after that, it’s like he’s relaxing. Did you see that?

Dave: Mm-hmm.

Prasanna: Okay. And so it is just hard for me to understand because I don’t know your product. Would you have built it with less money knowing what you know now?

Sahil: Yeah.

Prasanna: Would you build a different product?

Dave: And that’s my question, yeah. What would you do just looking back? Hindsight 20/20, what would you do?

Sahil: Yeah. I mean, you know we’re at $100,000 in profit a month now, right? And I’m not saying we built this phenomenal . . .

Andrew: A hundred-thousand dollars in profit a month?

Sahil: Yeah. A month, yeah.

Andrew: $1.2 million a year?

Sahil: Yeah. Yeah, it’s pretty good.

Andrew: That’s really good.

Sahil: And growing.

Dave: That’s good.

Sahil: And the thing is it’s always been growing. Like, all that variable cost stuff, it’s just the internals, the fixed cost, that stuff has shifted, like, and really messing with my head and stuff like that. I mean, honestly, a lot of people ask me, “Do you hate VCs?” People think, you know, they fucked you over. You know, they deluded you. I go like, “Most of that delusion is self-inflicted, honestly.” Like, I really think VCs . . . and I raised from great VCs, you know? Like, they give you money and then they’re gone, like, they’re investing the next thing. Like, they’re busy trying to find the next thing. That’s the game, right?

The game is a VC. It’s basically you make deals and you raise more money from LPs, unless you become an Uber and then they’re all over you and then you don’t need them anymore. You’re Uber, right? So I think I don’t regret raising money, honestly. I think we built a product. Just sort of like I don’t think I could’ve done this intentionally, but I think where we . . . However, if I did, it would’ve been this mastermind, evil sort of villain move, but I think we built this amazing product for creators. And we could not have done that without that much money. I got to work with some amazing people, I got to be famous for a second in the Valley or whatever. None of these things . . . frankly, I think it’s wrong.

I think our culture is obsessed with wealth, right? And it would be cool if you could get on to the front page in New York Times off your MRR, but that’s not going to happen. But it will take . . . you know, if you raise 30 million bucks, it doesn’t matter if you blow it at the next month, you know, you’ll go to “The New York Times,” right? So I don’t necessarily regret it, but I do regret that we placed such an emphasis on wealth, and I did, right? Bill Gates was, like, one of my heroes, right? And I don’t think it’s a coincidence. He was, like, the world’s richest person for a long time while I was growing up and figuring out what I want to do.

But I do think, yeah, I wish I was more cognizant of some of the expectations that come with raising VC. And sort of on a personal level, I felt like a failure for a long period of time, right? And one of the things that really helped me shift my thinking recently is I stopped thinking of Gumroad like an investment of $10 million that I blew into $10,000 a month, which if you do the math, it doesn’t look good. But I started thinking about, like, I took this much money and I turned it into $178 million, which is not for us, just for creators, and ongoing, right? Every month, $5 million more. And so, yeah, it’s a terrible investment. I will never pretend. I failed to build a billion-dollar company 100%. I failed to do that, but I still built something pretty awesome. It’s awesome, people love it, and, like, yeah, the VCs are not going to make 3X or 5X or even 1.01X.

Andrew: Dave, do you regret taking money?

Dave: No.

Andrew: You don’t?

Dave: Mm-mm.

Andrew: That was a very quick no. All right, do you have a question for that?

Dave: I’m just in the seed.

Andrew: You might?

Dave: There’s, like, no strings attached. You know, a seed round is kind of just, like, “Here’s a check. Email us if you want.”

Andrew: Do you feel bad about the people who copied you?

Dave: Well, that’s not really mine to regret. I prefer that they [inaudible 01:05:47].

Andrew: You’re smiling. I don’t know why, I literally get angry at them. I don’t know why that happens for me . . .

Dave: I appreciate that. You’re our biggest public defender.

Sahil: We have a friend who’s like Gumroad. We have so many clones, and I just want to tell them . . . you know, we started . . .

Andrew: But it takes effort to clone you. Some of these guys are just copying exactly.

Sahil: That’s true. Yeah, that’s true. We start publishing our numbers, and I think one of the things it is, people stop plugging us as much.

Andrew: Really?

Sahil: I think people are like, “Oh, shit. That’s not that big of a business.”

Andrew: Really? Wait, so I’m surprised. So . . .

Sahil: Seriously, like, I want to email people that clone Gumroad and I’m like, “Don’t do it.”

Dave: Please, don’t. It’s a waste of expenses. It’s not worth it.

Sahil: Take it from me.

Andrew: What about the guy . . . ? There’s always a guy who’s going to come out with a WordPress plugin that does the same thing.

Sahil: Yeah, free or cheap.

Andrew: Yeah. But there’s not that much margin in each sale.

Sahil: Yeah. Like, there’s a difference between, like, creating value and capturing value. And capturing value in this business, when you’re, like, working with independent creators, like, it’s hard. It’s a brutal . . . I mean, Patreon is killing it but they’re also . . . You know, they’re fine, but they’re not Square, or Stripe, or anything. You know, you’re picking a market that is, sort of by definition, very hard to monetize.

Andrew: Do you have a question to the close out with?

Prasanna: Yeah. I just wanted to kind of come back to one of the things that you said earlier. You said you were too busy heads down to tell your mom that you laid people off, but then you said you were busy smoking weed so that you’d forget that.

Sahil: I think busy was an excuse, obviously. It would’ve taken 10 seconds to tell her, right? But I was like . . . When people say they’re busy, what it means is like, “You’re not important.” You know, like, in my list of priorities, like, you’re down here, right?

Andrew: We could call your mom right now on speaker. Yeah, we could do it, too?

Sahil: Yeah. I can do that.

Andrew: Can you capture that?

Sahil: Sure. Let’s do it.

Andrew: You wanted to dial it here and we’ll do some . . .

Sahil: My mom is awesome, so let’s try it. She’s in Singapore [inaudible 01:07:41]. Oh, we’ll do it. We’ll do it. It’s 11 a.m.

Andrew: What time is it in Singapore?

Sahil: It’s 11 a.m.

Prasanna: [inaudible 01:07:46].

Andrew: Oh, wow. Look at you.

Sahil: I will call her. She’s active now on Facebook.

AZ: While he’s doing this . . .

Andrew: She is?

AZ: I have a funny thing on the clones. We got a clone that on their Twitter feed had our business address.

Sahil: That’s hilarious.

Andrew: Why do you think that was?

Dave: They were literally just going to become . . .

AZ: Just copy-paste everything.

Andrew: You’re saying that for Proof, there was someone who just . . . probably they went out to some developer site and said, “Please copy them,” and the developer site said, “All right. Copy, huh? Right, I’m going to copy, yeah.”

AZ: Oh, everything.

Andrew: Do you regret . . . ? Like, don’t you think that the more popular you are, the more people copy you?

Dave: Yeah. We see them more frequently. But it always disappears.

Sahil: They do disappear. We have that, too. People would be . . . I think what happens, right, is like they see Gumroad, they’re like, “This is an amazing product, but they’re not a good business. So we’re going to do that and be a great business somehow.” Yeah, so they try that.

Dave: And they don’t have to brand . . .

Sahil: I’ll try again one more time. Let me text her and tell her, “I’m doing an interview.” You know, they see that and they’re like, “This is a great product, and they didn’t do it because they’re dumb,” or I don’t know. That’s probably what they were thinking, right? And so they do it and they’re smarter, and then they realize, like, two years later, like, “Oh, that’s why,” except they didn’t raise money, so they died.

Andrew: I’ve seen that happen where I interviewed someone, and because of the interview, they end up with a competitor who just . . .

Dave: Oops.

Andrew: Right. They go up to Upwork and they ask for a copy.

Dave: You just can’t win being 10th. There’s just no money left for 10th. There’s no money left for third.

Sahil: Frankly, there wasn’t money left for first.

[crosstalk 01:09:24]

Andrew: No, you’re right.

Sahil: But it’s a power law, right? So you could get number one, which . . . Let’s say Gumroad is number 1, right, 1.2, like, what is number 2? I’ve actually caught one of the . . .

Prasanna: I disagree. So if you take CRM today, if you take Salesforce, they’re making $12 billion. The second CRM is okay.

Dave: Yeah, I think that’s fair.

Andrew: I think their second is fair.

Prasanna: The third [inaudible 01:09:49] is okay, too. The hundredth is okay, too, except . . .

Sahil: Well, number one is a billion, right?

Prasanna: Number one is $10 billion.

Sahil: Yeah, right? If number one is $1 million, like, sure, like, 100k, right?

Andrew: Sahil, that’s one thing, but I do think it depends on the market. When you build a consumer product, which Gumroad is this weird thing where it’s like B2B but it’s also B2C because, you know, creators are closely just individuals, which basically then the worst . . . You have this scale of B2B of, like, a thousand . . .

Prasanna: And the marketing cost of . . .

Andrew: That’s wonderful.

Prasanna: Yes.

Sahil: Yeah, I’m not saying, “Don’t do it,” and if you cloned Gumroad and you built a better product, like, you deserve it. I’m not saying . . . Everyone has a right to do that. But, to me, like, I would prefer . . . if I were them, like, go pick a new thing. There’s so much opportunity in the world. Like, there’s so many problem spaces. Things are just getting started, you know?

Prasanna: Fail at something new, right?

Sahil: Yeah. Fail at something new or succeed at something.

Andrew: I like this. The top Gumroad creator made $890,429 in December. That’s a monthly?

Sahil: Yeah, in just December.

Andrew: In just December.

Sahil: Eight-hundred-ninety-thousand dollars.

Prasanna: So do you know what Bill Gates said [inaudible 01:10:55]?

Andrew: What did Bill Gates say?

Prasanna: Because he wanted to be Bill Gates. Bill Gates believes that he became a billionaire because he made 1,000 people millionaires.

Andrew: Bill Gates says that he became a billionaire because he made 1,000 people millionaires? I get that.

Prasanna: He’s on that road.

Sahil: She hasn’t responded.

Andrew: What do you call your mom, mommy? No, you have a different name.

Sahil: Mom.

Andrew: Just mom?

Sahil: Yeah, mom.

Andrew: Are you from Singapore?

Sahil: I grew up in Singapore primarily.

Andrew: Wow. [inaudible 01:11:22] hard time leaving Singapore. It feels like it’s so clean.

Sahil: Yeah.

Andrew: And you have no issues with the world.

Sahil: No one has [inaudible 01:11:30], right?

Andrew: All right. I guess we’ll end it over here. For anyone who wants to go check out your website, it’s Gumroad. Is there, like, a product that you’re selling on Gumroad right now? I was really hoping you were going to sell from . . .

Sahil: Do I have products on Gumroad? I honestly want to, but the thing that I struggle with is, like, I don’t want to compete with my own user base. Because I could, you know, “And, by the way, the number one product on Gumroad is mine.”

Andrew: I think you should do a book on, like, the top five things to do or things to do to sell digital products, how to make and sell a digital product, and then highlight your key people. That would be interesting. You don’t think so?

Sahil: Maybe. No, I do sell stuff on it. I sold some of my physical paintings on Gumroad. My icon, I had launched Gumroad by selling something on Gumroad, which is still available.

Andrew: So I will see you on Gumroad?

Sahil:, S-A-H-I-L.

Andrew: S-H-A-I-L?

Sahil: S-A-H-I-L.

Andrew: S-A-H-I-L, right. All right, I want to thank Sahil for doing this interview. I want to thank my two sponsors who made this interview happen. The first will host your website right, it’s called HostGator. Check them out at And the second is the company that will help you hire phenomenal developers. I wonder what would happen if you went to them and you said, “Copy Proof.” You bill them for that. No, they’re not in that space. But if you need to hire a really phenomenal developer that Proof used to get themselves going, go check out

And I will be running around the world, one marathon on every continent this year doing interviews as I go. It’s much, much harder to get people outside the U.S. to sit down and have this kind of conversation, really. I am trying to get people in Mexico. That’s my first country to go and do a marathon. And they’re not big on talking about it. I told Dave before we started, when I was in Argentina, I asked this guy, “Can I do an interview with you?” He said, “No.” Maybe I got on him, he said, “Yes,” but he said, “Please don’t tell people I’m in Argentina.”

Sahil: They need that American . . .

Andrew: [inaudible 01:13:17]. Everyone knows how much money you make. You don’t feel, like, a sense of, “They know how big I am?”

Sahil: I do feel that, honestly, and it feels so good.

Andrew: Like, from confidence? Like, you know they see you did it.

Sahil: I mean, I remember Silicon Valley . . . I don’t know, we ended this interview, like, 30 minutes ago. But Silicon Valley or whatever, you kind of puff up your chest, right? You always want to, like, pretend that you’re bigger than you are if you raise money, if you’re hiring people. And so, like, it’s frankly so awesome to just be like, “This is how big we are.: It’s probably not as big as you thought, maybe it’s bigger, but, I mean, that’s it, you know? Everyone I meet is like, “You make $120,000 a year.” That’s public information, right? It feels good.

Andrew: All right. Come see me wherever I run, and give me feedback on these interviews. See my runs,, powered by HostGator, thank you. And give me feedback on how Devin and I are doing with this recording, with this type of interview style. We’re going to be flying all over the world interviewing people, and I love when people give me feedback, give my whole team feedback. Well, thanks. Bye, everyone. Look, I’m going to close this. That means it’s officially closed. The iPad is shut.

Sahil: Awesome.

Andrew: All right. Let’s keep drinking. Cool, Devin Meadows, thank you.

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