Product Hunt Radio
Jun 18, 2019

Sahil Lavingia on failing to build a billion-dollar company


Back in February, Sahil Lavingaia, founder and CEO at Gumroad, wrote a post on Medium that detailed his “failure” to build a billion dollar business. The post went viral (you can check it out here).

In this interview on Product Hunt Radio, Sahil gets deeper into the rollercoaster ride of trying to build a unicorn, the good and the bad of living in a tech hub like Silicon Valley and the personal impact of scaling a business.

3 lessons…

  • Be aware of what it means to get investment. Too many startups still don’t understand the pressure to perform once investors are on board.
  • Relationships in places like Silicon Valley tend to be transactional – everyone is focused 24/7 on building their thing. It’s hard to create meaningful connections.
  • You have a lot less control over your journey than you think. You have to be ok with that and focus on what you can control.

Abadesi talks to Sahil Lavingia, founder and CEO of Gumroad, an online platform that enables creators to sell directly to their customers. Sahil is a very authentic founder who is not afraid to speak uncomfortable truths, as you’ll see in the interview.

They talk about...

His journey starting Gumroad and what happened when they realized the company wasn’t going to be as successful as they had hoped

Sahil was very young when he started Gumroad (he’s only 26 now!) and had worked a couple big tech companies where he saw that “there’s a lot more duct tape in the industry than people realize.” He recounts the ups and downs of the company and what precipitated the events described in his now-famous article.

“We raised over ten million dollars from a great list of investors and realized when we were trying to raise a series B that that was unlikely to happen and went from 20 to 5 employees to get to profitability. Then we went from 5 to 1 when I could run the company by myself but luckily we’ve been able to grow the team again. Even though we’ve processed over $200 million for creators, eight years later it still feels like we’re in the first inning, as people say.”

He says that a lot of people think they can be the exception to the rule that most companies don’t succeed as much or as fast as they hope they will, and that you should remember that “you’re probably closer to the mean than you think.”

Why relationships in Silicon Valley are so transactional

Sahil talks about the difficulty of building deep relationships on a personal level in the Valley and how that changed when he moved to Provo, Utah, where he was able to find a support network. He says that people were eager to meet with him when he was perceived as successful but not so much when the company wasn’t doing well.

“There’s this transitive property of trust, where if someone that someone trusts gives you an intro to them you’re sort of guaranteed to meet them. I think network-building is better in Silicon Valley than anywhere else but it’s difficult to meet with someone multiple times and build a deep relationship without a clear agenda that’s going to help [one or the other].”

Dealing with the psychological ups-and-downs of having your identity as a founder so wrapped up in the fate of your company

“On a personal level, you do suffer, because you realize how much you’ve invested in your company and how little in yourself.”

He talks about the difficulty of admitting that your company isn’t doing as well as people think and how to find help as a founder:

“The only way you can get support is to be open about the thing that you need help with, and when your identity is so wrapped up in something that isn’t working, it’s difficult to be open about that.”

He comments on the trend of watching successful founders try to find themselves in public and in real-time on Twitter after their exits:

“They have all this time and all this money and they feel anxious and don’t know how to spend their time and don’t know what’s next for them. You realize, that’s my future if I don’t figure this stuff out.”

His philosophy of technology, both personally and at Gumroad

“Pick a couple things that you really believe in strongly and do the boring, standard things for everything else. The things that you do differently, you really want to invest in doing them differently in the right way. It’s easy to fall into the trap of doing things differently the wrong way.”

Why he believes so strongly in in-person connection

Even with the advent of technologies and tools that make it possible to connect over long distances, he points out that the physical world is much higher fidelity than the digital one:

“Technology is great and getting better but nothing replaces being in the same place as another person and breathing the same air.”

“Gumroad is great, but if it’s not making people’s lives physically better, it’s not worth it.”

We’ll be back next week so be sure to subscribe on Apple Podcasts, Google Podcasts, Spotify, Breaker, Overcast, or wherever you listen to your favorite podcasts. Big thanks to Embroker and Vettery for their support. 😸

Companies and Products Mentioned In This Episode

GitHub — The world’s leading software development platform.

Notion — Increase your team intelligence.

Slack — Be less busy. Real-time messaging, archiving and search.

Wikipedia — The free encyclopedia.

YouTube — The video-sharing site.

Zoom — Cloud videoconferencing and simple online meetings.