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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 investm

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.
    - nextaccountic 3y ago
      Do you think that closing the business and distributing exactly $0 in assets is a preferable outcome? Because that's what happens for most startups.
      - ZephyrBlu 3y ago
        I don't understand the point you're trying to make here.
        nextaccountic 3y ago
        Failing a VC-funded startup is an expected outcome (statistically). What difference does it make whether the founder ended with nothing (the typical scenario) vs. a lifestyle business? VCs get nothing either way. VCs aren't screwed because they already accounted for the risk of failure. That's kind of their job.
        HWR_14 3y ago
        Incentive alignment. Target smashes damaged goods instead of selling them at a discount so employees or customers don't purposefully cosmetically damage things they want to buy. If the failure state of a business is "the founder can buy it for pennies and try to make something of it", then why wouldn't all lifestyle businesses pitch themselves as VC-backed growth businesses and then use up all that money and settle as a lifestyle business?
  - jtode 3y ago
    Wait till you hear about Sears!
- twelve40 3y ago
  but this piece at least didn't really come across to me as preachy or anything. Just sort of describing how it happened. No idea if it's all accurate, but at least sounded reasonably honest and plausible.
  - ZephyrBlu 3y ago
    Yeah my comment wasn't about this piece in particular. I've formed that impression from reading his tweets and other pieces of writing.
- Hnrobert42 3y ago
  Not sure how lucky he was though. He didn’t get anything from Pinterest because he quit before beating. (Other than regret, maybe.) Then he ground away at something that involved laying off a lot of people and watching his team dwindle to 1. He does now have a lifestyle business, but from the number, it seems pretty modest. Maybe it’s like a scratch off winner telling you how to pick tickets. But like one of those $20 tickets.
  - pryelluw 3y ago
    When you say lifestyle business, what do you mean? Is it a self employed kind of job/business where he will be broke if he doesn’t show up everyday? Or more like he will do very well and have a good lifestyle but not have big fuck you money?
    - toyg 3y ago
      The latter. When people say "lifestyle business", they typically mean a business that can comfortably sustain the owners' lifestyle, but is never going to grow significantly.
    - fuzzfactor 3y ago
      He could be making millions in a respectable way but not with enough out-of-control growth to move the needle for some billionaires, who then look down their nose at him with the attitude that he should get a life and get some style.
  - ZephyrBlu 3y ago
    From the description of his "Q1 2023 Public Board Meeting" video: "Gumroad in February 2023: - GMV: $14.5M - Revenue: $1.81M - Gross margin: 69.21% - Net income: $834K - Monthly churn (creators who made a sale in Jan that did not in Feb, in terms of GMV): 2.46%" https://www.youtube.com/watch?v=st8ns96z7d4 https://www.youtube.com/watch?v=st8ns96z7d4 $10M/yr profit, very modest business. No luckier than a $20 lottery winner.
nomaD_ 3y ago
True but you have to give him credit for holding the fort for 1-2 years on his own with conviction esp when everyone he knew advised otherwise.

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.
  - nextaccountic 3y ago
    Do you think that closing the business and distributing exactly $0 in assets is a preferable outcome? Because that's what happens for most startups.
    - ZephyrBlu 3y ago
      I don't understand the point you're trying to make here.
      - nextaccountic 3y ago
        Failing a VC-funded startup is an expected outcome (statistically). What difference does it make whether the founder ended with nothing (the typical scenario) vs. a lifestyle business? VCs get nothing either way. VCs aren't screwed because they already accounted for the risk of failure. That's kind of their job.
        HWR_14 3y ago
        Incentive alignment. Target smashes damaged goods instead of selling them at a discount so employees or customers don't purposefully cosmetically damage things they want to buy. If the failure state of a business is "the founder can buy it for pennies and try to make something of it", then why wouldn't all lifestyle businesses pitch themselves as VC-backed growth businesses and then use up all that money and settle as a lifestyle business?
- jtode 3y ago
  Wait till you hear about Sears!
twelve40 3y ago
but this piece at least didn't really come across to me as preachy or anything. Just sort of describing how it happened. No idea if it's all accurate, but at least sounded reasonably honest and plausible.
- ZephyrBlu 3y ago
  Yeah my comment wasn't about this piece in particular. I've formed that impression from reading his tweets and other pieces of writing.
Hnrobert42 3y ago
Not sure how lucky he was though. He didn’t get anything from Pinterest because he quit before beating. (Other than regret, maybe.) Then he ground away at something that involved laying off a lot of people and watching his team dwindle to 1. He does now have a lifestyle business, but from the number, it seems pretty modest. Maybe it’s like a scratch off winner telling you how to pick tickets. But like one of those $20 tickets.
- pryelluw 3y ago
  When you say lifestyle business, what do you mean? Is it a self employed kind of job/business where he will be broke if he doesn’t show up everyday? Or more like he will do very well and have a good lifestyle but not have big fuck you money?
  - toyg 3y ago
    The latter. When people say "lifestyle business", they typically mean a business that can comfortably sustain the owners' lifestyle, but is never going to grow significantly.
  - fuzzfactor 3y ago
    He could be making millions in a respectable way but not with enough out-of-control growth to move the needle for some billionaires, who then look down their nose at him with the attitude that he should get a life and get some style.
- ZephyrBlu 3y ago
  From the description of his "Q1 2023 Public Board Meeting" video: "Gumroad in February 2023: - GMV: $14.5M - Revenue: $1.81M - Gross margin: 69.21% - Net income: $834K - Monthly churn (creators who made a sale in Jan that did not in Feb, in terms of GMV): 2.46%" https://www.youtube.com/watch?v=st8ns96z7d4 https://www.youtube.com/watch?v=st8ns96z7d4 $10M/yr profit, very modest business. No luckier than a $20 lottery winner.

nomaD_ 3y ago

True but you have to give him credit for holding the fort for 1-2 years on his own with conviction esp when everyone he knew advised otherwise.