10 ms·

Reflecting on my failure to build a billion-dollar company (2019)

78 points by Palmik 3y ago

DonHopkins 3y ago
I'm working on my second $billion. ...I gave up on my first.
mufti_menk 3y ago
It's tough to try so hard and still fail. Gotta pick yourself up and try again. If you are worthy, you will be wealthy.
- bruce343434 3y ago
  *If you are lucky
  - mufti_menk 3y ago
    [flagged]
    - bruce343434 3y ago
      I think that might be a slightly different definition of "worthy" than most "normal" people accept. Of course, your luck surface area is largely in your own hands if you live in a western civilization. But the fact remains that life is stochastic. Let me know when you make your first billion, btw.
    - Nevermark 3y ago
      That is virtually of a tautology. It doesn't really tell people what to do. Because working really hard by itself, is often not worth much. But knowing what the right thing is involves the luck of having the right mind, experience, resources, life arrangement, physical health, mental health, etc., to both see and be the right person to execute on something not apparent to others. I am not saying people don't need to overcome whatever is holding them back, but people with a lot of enabling context are simply going to do much better statistically than people with much less ideal starting points. And very few people can create a billion dollar company in any situation.
      - mufti_menk 3y ago
        If you don't have enough experience in an area to see the opportunities in an area, get the expertise. Otherwise find them in your area. If they don't exist go elsewhere. You are ALWAYS the problem.
        mandmandam 3y ago
        > You are ALWAYS the problem. Would you say the same to children born during a (human-caused) famine, or born with defects cause by politically useful wars fifty years ago? Would you say the same to children raised in traumatic households, with chronic self-regulation disorders as a result? Your take isn't just narrow, and wrong, but also incredibly callous. We live in a world where some people have megayachts while 785 million people lack access to basic drinking water services. In the US, the wealthy have world-class healthcare but 530,000 families file for bankruptcy due to medical issues each year (pre-pandemic!). The amount of luck involved in becoming wealthy is immense, and ignoring this most basic fact is both dim and cruel. Perhaps this is a lot of effort to respond to a fourteen-day old account... Still, this demented view on self-determination is bizarrely common even among the "temporarily embarrassed millionaire" set, and has been for hundreds or even thousands of years. I don't know if that's because it's so convenient for the already wealthy, or it's some kind of innate fairness bias, but it's embarrassing (and harmful) for the species that people actually fall for it.
        eigenket 3y ago
        This is so obviously incorrect that I don't understand how someone can write it. Why did Bill Gates found Microsoft and not someone of the same age from somewhere in the Democratic Republic of the Congo? Obviously the kid from the Congo was the problem, and not that the environment that Gates found himself in was dramatically more condusive to success than growing up in a village in Africa. Perhaps if the guy from the Congo had pulled himself up by his bootstraps harder he would be the billionaire by now?
        mufti_menk 3y ago
        Doesn't need to be a billionaire in USD, if he grinded he could have a penthouse in the Congo. Wealth is relative to your surroundings.
    - EliRivers 3y ago
      Like those people who pick the wrong lottery numbers; all they had to do was pick the right ones, it's really not a lot of effort to move the pen and select the winning numbers.
      - mufti_menk 3y ago
        If the lotto was comparable at all there would be VC funds investing in tickets instead of companies
        hluska 3y ago
        You don’t understand the point.
        EliRivers 3y ago
        Relying on VC funds to identify good ideas? That's weak; the problem is your mindset.
- PostOnce 3y ago
  Plenty of worthy men died broke, and plenty of villains were fabulously wealthy. Smart, hardworking, honest, kind men. There's a degree of luck and circumstance, there's the absence of capital, the time and place in which you live, the legal/social/regulatory environment, etc. Then there are villains who work against your ability to compete. They lobby so you can't open a competing barber shop without onerous licensing. Nevermind ten billion dollar patent portfolios and old boys networks. Fight the good fight, but nothing's guaranteed anywhere.
  - bruce343434 3y ago
    The best example I think is Nikola Tesla.
  - thrown1212 3y ago
    Women too.
    - PostOnce 3y ago
      There's really no need to do this, or to point out that some of the men (or women, or persons) were black or asian, non-heterosexual, had a physical or intellectual handicaps or any other particular attribute that I didn't specifically enumerate. It sort of implies malice or misogyny on my part, of which there is of course none. I could have said "people", but it's malicious to assume that by not having chosen that word that I somehow myself am a chauvinist. Policing speech in this way is, in my opinion, detrimental to us all and to our ability to communicate our thoughts and have them interpreted charitably, where instead we might have to consider every possible negative interpretation, carefully tiptoe around those, and just perhaps not say anything at all. Imperfect communication is better than none, and malicious interpretation stifles that.
      - alex_lav 3y ago
        This seems like a pretty wild overreaction to pointing out the implicit bias of referring to all people as "men". > Imperfect communication is better than none Staying imperfect forever is laziness.
- hef19898 3y ago
  Equating worth with wealth seems to be a deeply flawed concept.
- shapefrog 3y ago
  Weak grindset.
mamonster 3y ago
>"It doesn’t matter how amazing your product is, or how fast you ship features. The market you’re in will determine most of your growth. For better or worse, Gumroad grew at roughly the same rate almost every month because that’s how quickly the market determined we would grow". This speaks to me a lot, saw the same thing in asset management over the last decade: Most of the smart, alpha focused strategies that demanded a lot of effort and mastery of the markets ended up losing out to simply getting a lot of beta in the portfolio and not touching it too much.
- withinboredom 3y ago
  The problem with always trying to be first? If you trip and fall, you're screwed. While staying behind, you can just wait and not make the same mistakes as the people in front of you. Eventually, you'll be able to sprint ahead, but when you do, make it count.
  - neom 3y ago
    Second market mover advantage, something Apple happens to be very very good at.
    - Nevermark 3y ago
      They have an interesting second-to-first mover pattern. Technically they are often a late mover, but with so much better market fit that they essentially create a new market definition in which they are clearly first. When they get it right. They have their out of the gate failures too.
      - ljf 3y ago
        Brilliant summary here of how Apple often focus on 'Why' you need something - rather than pushing the 'What' it is. They smashed this for the ipod, the iphone and the ipad - and more recently with headphones. Will be interesting to see if they can manage this for VR. 'Start with Why': https://www.youtube.com/watch?v=u4ZoJKF_VuA&vl=en https://www.youtube.com/watch?v=u4ZoJKF_VuA&vl=en
ThePhysicist 3y ago
I mean he got pretty lucky I think, if I remember correctly he was able to get back the company "for free" from the VCs after they had written off their investment. He was then able to "bootstrap" it into profitability, based on the assets created through the VC money. Quite a good position to be in.
- ZephyrBlu 3y ago
  Yeah, his journey is incredibly, incredibly lucky. One of the first employees at Pinterest, then raised money for Gumroad when he was still a teenager, then when Gumroad didn't grow fast enough (Not even failed!) he was basically gifted it by his investors. A reality 99.9% of us can only dream of, and I've always found his writing/tweeting a bit distasteful because of it. Lottery winner telling you how to pick a ticket kind of vibe.
  - benjaminwootton 3y ago
    If the VCs are willing to write off their shares then it’s surprising or unfortunate that it doesn’t happen more often. Maybe more companies could scale down and salvage something from the ruins with the right incentive.
    - ZephyrBlu 3y ago
      It kind of screws over everyone except yourself though. VCs gave you money for a VC business, you get to turn it into a "lifestyle business" with no or little obligation to them anymore. Your employees joined what they thought was a growing startup, then you lay them off after they built the product because there's no need for them anymore since you're not trying for hypergrowth. Kinda shitty all round except for you.
      - twelve40 3y ago
        What's worse, it might provide other incentives. If you know that you can always negotiate a soft landing, you're not as maniacally driven towards that unicorn status, which is required to make VC economics work.
atoav 3y ago
When I read that headline my immediate thought was: Reflecting on My Failure to Win in the Powerball Jackbot (2019) There are many, many situations in life where you can do everything right and still not win. Unless you are sure your own underperformance was the deciding cause or you can draw lessons from your failure that would help you next time, there is not a lot of value in ruminating in the past. In Austrian German there is a word for people that do this all the time: "Hätti-Wari" which translates to being a "would-have-could-have". That being said I am a big fan of learning from failures. And sometimes it will take you years to be ready to understand the lessons a failure should have thought you — however learning those lessons won't happen by ruminating in regret, but by moving on and looking at the own past from a safe distance without too much emotion.
- zpeti 3y ago
  > There are many, many situations in life where you can do everything right and still not win Yet the only way to give yourself a chance to win is to take part. If you sit at home and feel resentful, you definitely won’t build a billion dollar company, or win the lottery for that matter. The other issue is, the people who actually DO succeed work extremely hard to do so. They are lucky, yes, because it worked, and there are 10 others who didn’t succeed, but that doesn’t mean they didn’t work hard to get there. Just like there are 100 losers in an Olympic sport for every gold medal winner, the other 99 worked incredibly hard too. A point many on HN seem to miss, and attribute all business success to “luck”
  - atoav 3y ago
    > Yet the only way to give yourself a chance to win is to take part. If you sit at home and feel resentful, you definitely won’t build a billion dollar company, or win the lottery for that matter. I didn't say this as an excuse to not try, quite the opposite. If you are aware of the fact that not every failure is your fault, you can try (and fail) with less pressure. > The other issue is, the people who actually DO succeed work extremely hard to do so. Some of them, yes, others no. You can work hard your whole life and still never have success by your own metrics. I think one has to be careful to not drink the workaholic kool-aid a tad bit too much. A lot of the good stuff can come from low pressure activities like toying around, trying things out etc. If people are to work focused they will never horse around and never harvest the creative fruit of doing so. I would be careful to compare success (which for most seems to equate economic success) with sports. Although sports are not as simple as one might think, they are nowhere near the complexity of a market based economy within a modern information based society. Again, these are not excuses. It just seems sad to me, that many people (especially in the US) have the whole "just work hard enough and it will pay off" mentality engrained so hard in their mind, they will inevitably hit a burn out. And even if they manage to "win" and get the economic success they longed for so much, they will not become happy all of the sudden when it is there. Don't get me wrong, economic stability is certainly necessary to lead a happy life, but there are many other factors that have nothing to do with the money and all to do with how you want to spend your time.
level87 3y ago
> "I built Gumroad the weekend I thought up the idea, and launched it early Monday morning on Hacker News." Being able to build something like this over a weekend is amazing to me.
- happytiger 3y ago
  It was unbelievably basic when it launched, to be fair.
nextaccountic 3y ago
> Soon, we’re also planning to open-source the whole product, WordPress-style. Anyone will be able to deploy their own version of Gumroad, make the changes they want, and sell the content they want, without us being the middleman. Did he eventually opened up Gumroad? I'm seeing https://github.com/gumroad https://github.com/gumroad but I'm not sure if it contains the code required to run a clone of Gumroad, or some ancillary projects that can't replace the product on their own
fartcanister 3y ago
The author worked very hard, but no word on what exactly went wrong at the tipping point. There seems to be a lot of missing context here.
ChrisArchitect 3y ago
(2019) Bunch of discussion from back then: https://news.ycombinator.com/item?id=19105733 https://news.ycombinator.com/item?id=19105733
dot5xdev 3y ago
What's the yearly income for a lifestyle business look like for a founder? $100k/year or $1M/year?
- toyg 3y ago
  Surely it depends on margins...? $1M/y income vs $900k expenses -> lifestyle. 1M vs 50k -> potential for pivoting to growth.

78 points by Palmik 3y ago

DonHopkins 3y ago

I'm working on my second $billion. ...I gave up on my first.

mufti_menk 3y ago

It's tough to try so hard and still fail. Gotta pick yourself up and try again. If you are worthy, you will be wealthy.

bruce343434 3y ago
*If you are lucky
- mufti_menk 3y ago
  [flagged]
  - bruce343434 3y ago
    I think that might be a slightly different definition of "worthy" than most "normal" people accept. Of course, your luck surface area is largely in your own hands if you live in a western civilization. But the fact remains that life is stochastic. Let me know when you make your first billion, btw.
  - Nevermark 3y ago
    That is virtually of a tautology. It doesn't really tell people what to do. Because working really hard by itself, is often not worth much. But knowing what the right thing is involves the luck of having the right mind, experience, resources, life arrangement, physical health, mental health, etc., to both see and be the right person to execute on something not apparent to others. I am not saying people don't need to overcome whatever is holding them back, but people with a lot of enabling context are simply going to do much better statistically than people with much less ideal starting points. And very few people can create a billion dollar company in any situation.
    - mufti_menk 3y ago
      If you don't have enough experience in an area to see the opportunities in an area, get the expertise. Otherwise find them in your area. If they don't exist go elsewhere. You are ALWAYS the problem.
      - mandmandam 3y ago
        > You are ALWAYS the problem. Would you say the same to children born during a (human-caused) famine, or born with defects cause by politically useful wars fifty years ago? Would you say the same to children raised in traumatic households, with chronic self-regulation disorders as a result? Your take isn't just narrow, and wrong, but also incredibly callous. We live in a world where some people have megayachts while 785 million people lack access to basic drinking water services. In the US, the wealthy have world-class healthcare but 530,000 families file for bankruptcy due to medical issues each year (pre-pandemic!). The amount of luck involved in becoming wealthy is immense, and ignoring this most basic fact is both dim and cruel. Perhaps this is a lot of effort to respond to a fourteen-day old account... Still, this demented view on self-determination is bizarrely common even among the "temporarily embarrassed millionaire" set, and has been for hundreds or even thousands of years. I don't know if that's because it's so convenient for the already wealthy, or it's some kind of innate fairness bias, but it's embarrassing (and harmful) for the species that people actually fall for it.
      - eigenket 3y ago
        This is so obviously incorrect that I don't understand how someone can write it. Why did Bill Gates found Microsoft and not someone of the same age from somewhere in the Democratic Republic of the Congo? Obviously the kid from the Congo was the problem, and not that the environment that Gates found himself in was dramatically more condusive to success than growing up in a village in Africa. Perhaps if the guy from the Congo had pulled himself up by his bootstraps harder he would be the billionaire by now?
        mufti_menk 3y ago
        Doesn't need to be a billionaire in USD, if he grinded he could have a penthouse in the Congo. Wealth is relative to your surroundings.
  - EliRivers 3y ago
    Like those people who pick the wrong lottery numbers; all they had to do was pick the right ones, it's really not a lot of effort to move the pen and select the winning numbers.
    - mufti_menk 3y ago
      If the lotto was comparable at all there would be VC funds investing in tickets instead of companies
      - hluska 3y ago
        You don’t understand the point.
      - EliRivers 3y ago
        Relying on VC funds to identify good ideas? That's weak; the problem is your mindset.
PostOnce 3y ago
Plenty of worthy men died broke, and plenty of villains were fabulously wealthy. Smart, hardworking, honest, kind men. There's a degree of luck and circumstance, there's the absence of capital, the time and place in which you live, the legal/social/regulatory environment, etc. Then there are villains who work against your ability to compete. They lobby so you can't open a competing barber shop without onerous licensing. Nevermind ten billion dollar patent portfolios and old boys networks. Fight the good fight, but nothing's guaranteed anywhere.
- bruce343434 3y ago
  The best example I think is Nikola Tesla.
- thrown1212 3y ago
  Women too.
  - PostOnce 3y ago
    There's really no need to do this, or to point out that some of the men (or women, or persons) were black or asian, non-heterosexual, had a physical or intellectual handicaps or any other particular attribute that I didn't specifically enumerate. It sort of implies malice or misogyny on my part, of which there is of course none. I could have said "people", but it's malicious to assume that by not having chosen that word that I somehow myself am a chauvinist. Policing speech in this way is, in my opinion, detrimental to us all and to our ability to communicate our thoughts and have them interpreted charitably, where instead we might have to consider every possible negative interpretation, carefully tiptoe around those, and just perhaps not say anything at all. Imperfect communication is better than none, and malicious interpretation stifles that.
    - alex_lav 3y ago
      This seems like a pretty wild overreaction to pointing out the implicit bias of referring to all people as "men". > Imperfect communication is better than none Staying imperfect forever is laziness.
hef19898 3y ago
Equating worth with wealth seems to be a deeply flawed concept.
shapefrog 3y ago
Weak grindset.

mamonster 3y ago

>"It doesn’t matter how amazing your product is, or how fast you ship features. The market you’re in will determine most of your growth. For better or worse, Gumroad grew at roughly the same rate almost every month because that’s how quickly the market determined we would grow". This speaks to me a lot, saw the same thing in asset management over the last decade: Most of the smart, alpha focused strategies that demanded a lot of effort and mastery of the markets ended up losing out to simply getting a lot of beta in the portfolio and not touching it too much.

withinboredom 3y ago
The problem with always trying to be first? If you trip and fall, you're screwed. While staying behind, you can just wait and not make the same mistakes as the people in front of you. Eventually, you'll be able to sprint ahead, but when you do, make it count.
- neom 3y ago
  Second market mover advantage, something Apple happens to be very very good at.
  - Nevermark 3y ago
    They have an interesting second-to-first mover pattern. Technically they are often a late mover, but with so much better market fit that they essentially create a new market definition in which they are clearly first. When they get it right. They have their out of the gate failures too.
    - ljf 3y ago
      Brilliant summary here of how Apple often focus on 'Why' you need something - rather than pushing the 'What' it is. They smashed this for the ipod, the iphone and the ipad - and more recently with headphones. Will be interesting to see if they can manage this for VR. 'Start with Why': https://www.youtube.com/watch?v=u4ZoJKF_VuA&vl=en https://www.youtube.com/watch?v=u4ZoJKF_VuA&vl=en

ThePhysicist 3y ago

I mean he got pretty lucky I think, if I remember correctly he was able to get back the company "for free" from the VCs after they had written off their investment. He was then able to "bootstrap" it into profitability, based on the assets created through the VC money. Quite a good position to be in.

ZephyrBlu 3y ago
Yeah, his journey is incredibly, incredibly lucky. One of the first employees at Pinterest, then raised money for Gumroad when he was still a teenager, then when Gumroad didn't grow fast enough (Not even failed!) he was basically gifted it by his investors. A reality 99.9% of us can only dream of, and I've always found his writing/tweeting a bit distasteful because of it. Lottery winner telling you how to pick a ticket kind of vibe.
- benjaminwootton 3y ago
  If the VCs are willing to write off their shares then it’s surprising or unfortunate that it doesn’t happen more often. Maybe more companies could scale down and salvage something from the ruins with the right incentive.
  - ZephyrBlu 3y ago
    It kind of screws over everyone except yourself though. VCs gave you money for a VC business, you get to turn it into a "lifestyle business" with no or little obligation to them anymore. Your employees joined what they thought was a growing startup, then you lay them off after they built the product because there's no need for them anymore since you're not trying for hypergrowth. Kinda shitty all round except for you.
    - twelve40 3y ago
      What's worse, it might provide other incentives. If you know that you can always negotiate a soft landing, you're not as maniacally driven towards that unicorn status, which is required to make VC economics work.

atoav 3y ago

When I read that headline my immediate thought was: Reflecting on My Failure to Win in the Powerball Jackbot (2019) There are many, many situations in life where you can do everything right and still not win. Unless you are sure your own underperformance was the deciding cause or you can draw lessons from your failure that would help you next time, there is not a lot of value in ruminating in the past. In Austrian German there is a word for people that do this all the time: "Hätti-Wari" which translates to being a "would-have-could-have". That being said I am a big fan of learning from failures. And sometimes it will take you years to be ready to understand the lessons a failure should have thought you — however learning those lessons won't happen by ruminating in regret, but by moving on and looking at the own past from a safe distance without too much emotion.

zpeti 3y ago
> There are many, many situations in life where you can do everything right and still not win Yet the only way to give yourself a chance to win is to take part. If you sit at home and feel resentful, you definitely won’t build a billion dollar company, or win the lottery for that matter. The other issue is, the people who actually DO succeed work extremely hard to do so. They are lucky, yes, because it worked, and there are 10 others who didn’t succeed, but that doesn’t mean they didn’t work hard to get there. Just like there are 100 losers in an Olympic sport for every gold medal winner, the other 99 worked incredibly hard too. A point many on HN seem to miss, and attribute all business success to “luck”
- atoav 3y ago
  > Yet the only way to give yourself a chance to win is to take part. If you sit at home and feel resentful, you definitely won’t build a billion dollar company, or win the lottery for that matter. I didn't say this as an excuse to not try, quite the opposite. If you are aware of the fact that not every failure is your fault, you can try (and fail) with less pressure. > The other issue is, the people who actually DO succeed work extremely hard to do so. Some of them, yes, others no. You can work hard your whole life and still never have success by your own metrics. I think one has to be careful to not drink the workaholic kool-aid a tad bit too much. A lot of the good stuff can come from low pressure activities like toying around, trying things out etc. If people are to work focused they will never horse around and never harvest the creative fruit of doing so. I would be careful to compare success (which for most seems to equate economic success) with sports. Although sports are not as simple as one might think, they are nowhere near the complexity of a market based economy within a modern information based society. Again, these are not excuses. It just seems sad to me, that many people (especially in the US) have the whole "just work hard enough and it will pay off" mentality engrained so hard in their mind, they will inevitably hit a burn out. And even if they manage to "win" and get the economic success they longed for so much, they will not become happy all of the sudden when it is there. Don't get me wrong, economic stability is certainly necessary to lead a happy life, but there are many other factors that have nothing to do with the money and all to do with how you want to spend your time.

level87 3y ago

> "I built Gumroad the weekend I thought up the idea, and launched it early Monday morning on Hacker News." Being able to build something like this over a weekend is amazing to me.

happytiger 3y ago
It was unbelievably basic when it launched, to be fair.

nextaccountic 3y ago

> Soon, we’re also planning to open-source the whole product, WordPress-style. Anyone will be able to deploy their own version of Gumroad, make the changes they want, and sell the content they want, without us being the middleman. Did he eventually opened up Gumroad? I'm seeing https://github.com/gumroad https://github.com/gumroad but I'm not sure if it contains the code required to run a clone of Gumroad, or some ancillary projects that can't replace the product on their own

fartcanister 3y ago

The author worked very hard, but no word on what exactly went wrong at the tipping point. There seems to be a lot of missing context here.

ChrisArchitect 3y ago

(2019) Bunch of discussion from back then: https://news.ycombinator.com/item?id=19105733 https://news.ycombinator.com/item?id=19105733

dot5xdev 3y ago

What's the yearly income for a lifestyle business look like for a founder? $100k/year or $1M/year?

toyg 3y ago
Surely it depends on margins...? $1M/y income vs $900k expenses -> lifestyle. 1M vs 50k -> potential for pivoting to growth.