Reflecting on My Failure to Build a Billion-Dollar Company

Gumroad’s founder on shrinking from twenty employees to five, discovering the market sets the growth rate, and giving up a billion-dollar company as the measure of success.

Kyle’s own filing line, verbatim: “Read [Reflecting on my failure to build a billion dollar company] by Sahil Lavingia at Gumroad”.

Kyle’s highlights

• In those nine months, when the whole team knew we were fighting for our company’s life, not a single person left Gumroad. From “this is gonna be hard,” to “yep, turns out it was,” every single person worked harder than ever.
• We decided to become profitable at any cost. The next year was not fun: I shrunk the company from twenty employees to five. We struggled to find a new tenant for our $25,000/month office. We focused all of our remaining resources on launching a premium service.
• The eight years I worked on Gumroad were full of personal ups and downs. There were months where I worked 16 hours a day, but there were also some months where I worked four hours a week.
• 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.
• At a CEO Summit many years ago, my all-time hero, Bill Gates, took the stage. Someone asked him how he dealt with failing to capture so much value. Microsoft was huge, sure, but tiny compared to the total impact it has had on the world and on humanity.
• Bill’s answer: “Sure, but that’s true with all companies, right? They create some value and succeed in capturing a very small percentage of it.”
• ==I am now more focused on creating value than capturing it.== I still want to have as large an impact as possible, but I don’t need to create it directly or capture it in the form of revenue and valuation.
• For years, my only metric of success was building a billion-dollar company. Now, I realize that was a terrible goal. It’s completely arbitrary and doesn’t accurately reflect impact.
• Where did my singular focus on building a billion-dollar company come from in the first place? I think I inherited it from a society that worships wealth. I don’t think it’s a coincidence that Bill Gates was my all-time hero *and *the world’s richest person. Ever since I can remember, I’ve equated “success” with net worth. If I heard someone say “that person’s really successful,” I didn’t assume they were improving the well-being of those around them, but that they’d found a way to make a ton of cash.

How it connects

• Sahil Lavingia
• Gumroad
• Bootstrapping
• Value Creation