It's a different framing but this frame hides a lot of crucial information like the fact this venture used venture capital (and probably VC connections too) and hired many employees. You can't really compare this to the solo-garage-weekend-project.
Wow, reading both, this one comes across really deceptive. It absolutely gives the impression that he built this all by himself, nothing about the millions in VC funds that fueled a team of 20 or so employees working for years to flesh out features and grow the platform.
As other people have already commented, Gumroad raised venture capital (https://medium.com/s/story/reflecting-on-my-failure-to-build...) before. Sahil had to revert Gumroad to a solo lifestyle business after it didn't grow fast enough to raise another round.
My question is, without having been venture funded for a period of time, would Gumroad still be able to $350k/mo now?
During the time Gumroad had a team of engineers, designers, etc., they shipped a lot of features, made improvements and presumably had a decent advertising / marketing budget. Gumroad likely wouldn't have reached the point where it is today product and awareness wise if it had just been one 'indie hacker' grinding away.
Their "gross revenue" is $5m a month. Their part of that is 350 000$ a month (which is still their gross revenue, but I feel like that's what you meant).
> So I built Gumroad. Fast-forward over seven years and we're doing about $350,000 in revenue monthly, helping creators earn over $5,000,000 a month.
The $5m they process is not gross revenue to Gum Road since they're not the beneficial or legal owners of the $5m in payments received. Their X% share of that $5m is their gross revenue.
So now "took money from VCs, tried to do the fast growth and over hiring but learned the hard way, and now still on it work with a small team" counts as indie hacking... Who knew? Taking money from VCs is not bad if that is the path you are choosing, I'm just pointing out it is disingenuous to get featured on a site which is all about an alternative slow growth but higher ownership path.
I think OP meant that while it may not be ideal for the CEO to have used VCs, it most certainly helped the product itself in terms of resources allocated to build and perfect it.
I understand that more cash isn't always the best way to build software, but if the CEO is good (and in this instance, he is) then more cash mostly helped building the current product.
'I started Microsoft as a weekend project and now it's making 1B/mo'
'I started Apple as a weekend project and now it's making 1B/mo'
'I started Google as a weekend project and now it's making 1B/mo'
How the company was started is completely irrelevant to the outcome and it's clearly an 'entreporn' clickbait title.
Gumroad raised millions to get started and it took 7 years to get to the point where they are now. And 350k/mo in revenue doesn't even mean that they are profitable.
If you are an (aspiring) entrepreneur, don't compare yourself to the typical story posted on IH.
Agreed. I stopped visiting IH some time ago after finding that about 95% of the community seems to be obsessed with get-rich-quick ideas and making as much cash as possible to retire by 30 or something. This headline exemplifies that.
None of them will actually retire in any meaningful sense. You have to change so much of yourself to become that type of person that even after you reach that early, luxurious retirement number, you won't take it because there won't be anything left that you enjoy outside of work.
Perfect plan is minimizing work while maximizing income over a long career. Those that figure out how to do that will never share their secrets.
I think (or maybe just hope) that I can avoid that trap by reframing how I think about retirement. Instead of thinking of retirement as not working on anything, I'll be thinking of it as working on the things I want to work on. Instead of seeing progress on the company I'm building every day, I'll be looking for progress in my mountain biking, or guitar playing, or whatever hobby I'm interested in at the moment. I'll still be working, I'll still be building things, they'll just be my things and not done for money.
Plus, one looses so much(health and relations) in the process of making lots of money quickly that their option of coming back is no longer available.
Lots of money also heightens one's expectations and comfort requirements so much that they hardly save much and, even if they do, its not enough for them to maintain lifestyle for long without new income.
Indeed. It seems the real secret to their success is ploughing a lot of venture capital into the ground for eight years. Considering that a “base hit” of capital efficiency is to reach the point where invested capital equals your annual revenue, these guys only got half way there.
Yeah, the last time I saw this on HN it was a long story about a failed startup (bought out an investor for $1) that had managed to survive the failure and remain a small company. It is by no means a weekend project that evolved slowly to what it is now.
Can't believe the founder just built v1.0 over a weekend.
Cleary they didn't know that they should have learned serverless, functional programming, and then iterated through 4 different front end frameworks before they actually built the app.
I recently realized again that information is not a pure benefit. It’s a lesson I’ve learned several times in my life, and this article echoes it again.
Still not regular profit / earnings / bottom line, which is what people tend to mean by 'made'. To get that from gross profit you have to deduct overhead which is probably quite a lot here.
I have to say a lot of the story writing around GumRoad itself seems to be an attempt to attract new customers as they have told multiple narratives that are all click-baity (from trying to be a billion dollar startup to a weekend project making big bucks).
Almost all projects start small. I am a solo founder and my "venture" also started as a Python script I wrote over the weekend to help with my own investing. But it's taken a lot more work since then to actually make it accessible and useful for people who are not me.
The real question is did he finish and make significant revenue from that weekend version? It looks like a heavily VC funded startup that did not produce the growth at par with the funding. For a solo company, this would be terrific. For a VC one, probably mediocre. Not too bad, but it can be deceptive to other entrepreneurs reading this as "inspiration".
I know a lot of people selling gfx stuff (mostly 3d stuff like shaders and models) through it but no one selling musical assets, and I'd like to know if it is a good platform for this kind of content.
Or if you know somewhere else that might be a better fit for this kind of content, please share.
(Just for the sake of it: I make techno/house/psytrance with lots of inspiration from chiptunes/vgm music)
Caveat: It worked 8 years ago when they were starting out.
People might have been jaded by spam already at that point, but they are probably way more jaded now. Spam filters have also gotten alot more aggressive. Just because that worked in the past does not mean it will again.
Likewise, SMB SaaS competition is alot more intense these days. Even if you get somebody's attention, they will likely have alot of options to compare you to.
I wish this interview would have delved a bit deeper into the journey of going from "weekend project" to VC-funded to life-style business. Right now, it kind of lacks any real substance and comes off as a typical entreporn story of how a Python script exploded into a multi-million dollar company. It skips over a lot of what could have been valuable info for other founders. Not to be too harsh, but the interview just seems overly romanticized.
Here [1] is Sahil's original post, 8 years ago. Note that this startup hasn't been all fun and roses: they had layoffs and restructuring over the years [2].
I do think the narrative is propagating a false sense of easy to achieve story, considering the founder wrote a lengthy note of self-reflection. Very sad to see this narrative this removes the faith in the founder's earlier reflection. Creating a successful business is never easy, you could get lucky, but you rarely get that lucky. This kind of article makes it seems all rosy.
I love this story. In life it is so important that you actually get out and do something. It doesn't have to be big, or elaborate. But it should be important to you. A single python main.py file and Google App Engine! LOL
Yes, this is the same Gumroad and same founder of "Reflections on my failure to build a billion-dollar company" (https://medium.com/s/story/reflecting-on-my-failure-to-build...). Interesting how the different framing changes the narrative quite a bit.
It's a different framing but this frame hides a lot of crucial information like the fact this venture used venture capital (and probably VC connections too) and hired many employees. You can't really compare this to the solo-garage-weekend-project.
>A few months later, I left Pinterest to work full-time on Gumroad and raised $8MM from KPCB, Max Levchin, and other investors.
Yet he jettisoned all that and is back to running it as an indie hacker, so it counts ;)
Wow, reading both, this one comes across really deceptive. It absolutely gives the impression that he built this all by himself, nothing about the millions in VC funds that fueled a team of 20 or so employees working for years to flesh out features and grow the platform.
convo on that post https://news.ycombinator.com/item?id=19105733
Yeah the see saw that is the other story is a lot more interesting too, also seems more accurate / context seems more apt.
As other people have already commented, Gumroad raised venture capital (https://medium.com/s/story/reflecting-on-my-failure-to-build...) before. Sahil had to revert Gumroad to a solo lifestyle business after it didn't grow fast enough to raise another round.
My question is, without having been venture funded for a period of time, would Gumroad still be able to $350k/mo now?
During the time Gumroad had a team of engineers, designers, etc., they shipped a lot of features, made improvements and presumably had a decent advertising / marketing budget. Gumroad likely wouldn't have reached the point where it is today product and awareness wise if it had just been one 'indie hacker' grinding away.
Sure, but if you are an 'indie hacker', you don't need to make anywhere near $350k/mo to have a very comfortable life.
That's gross revenue. Their business model probably ends up giving them 5-7% of that in average net.
Their "gross revenue" is $5m a month. Their part of that is 350 000$ a month (which is still their gross revenue, but I feel like that's what you meant).
> So I built Gumroad. Fast-forward over seven years and we're doing about $350,000 in revenue monthly, helping creators earn over $5,000,000 a month.
Their "gross revenue" is $5m a month.
The $5m they process is not gross revenue to Gum Road since they're not the beneficial or legal owners of the $5m in payments received. Their X% share of that $5m is their gross revenue.
So now "took money from VCs, tried to do the fast growth and over hiring but learned the hard way, and now still on it work with a small team" counts as indie hacking... Who knew? Taking money from VCs is not bad if that is the path you are choosing, I'm just pointing out it is disingenuous to get featured on a site which is all about an alternative slow growth but higher ownership path.
if it shows people that VC is not the optimal path, then it has value for IH too
I think OP meant that while it may not be ideal for the CEO to have used VCs, it most certainly helped the product itself in terms of resources allocated to build and perfect it.
I understand that more cash isn't always the best way to build software, but if the CEO is good (and in this instance, he is) then more cash mostly helped building the current product.
'I started Microsoft as a weekend project and now it's making 1B/mo'
'I started Apple as a weekend project and now it's making 1B/mo'
'I started Google as a weekend project and now it's making 1B/mo'
How the company was started is completely irrelevant to the outcome and it's clearly an 'entreporn' clickbait title. Gumroad raised millions to get started and it took 7 years to get to the point where they are now. And 350k/mo in revenue doesn't even mean that they are profitable.
If you are an (aspiring) entrepreneur, don't compare yourself to the typical story posted on IH.
Agreed. I stopped visiting IH some time ago after finding that about 95% of the community seems to be obsessed with get-rich-quick ideas and making as much cash as possible to retire by 30 or something. This headline exemplifies that.
None of them will actually retire in any meaningful sense. You have to change so much of yourself to become that type of person that even after you reach that early, luxurious retirement number, you won't take it because there won't be anything left that you enjoy outside of work.
Perfect plan is minimizing work while maximizing income over a long career. Those that figure out how to do that will never share their secrets.
I think (or maybe just hope) that I can avoid that trap by reframing how I think about retirement. Instead of thinking of retirement as not working on anything, I'll be thinking of it as working on the things I want to work on. Instead of seeing progress on the company I'm building every day, I'll be looking for progress in my mountain biking, or guitar playing, or whatever hobby I'm interested in at the moment. I'll still be working, I'll still be building things, they'll just be my things and not done for money.
Plus, one looses so much(health and relations) in the process of making lots of money quickly that their option of coming back is no longer available. Lots of money also heightens one's expectations and comfort requirements so much that they hardly save much and, even if they do, its not enough for them to maintain lifestyle for long without new income.
Indeed. It seems the real secret to their success is ploughing a lot of venture capital into the ground for eight years. Considering that a “base hit” of capital efficiency is to reach the point where invested capital equals your annual revenue, these guys only got half way there.
TBH this is not a typical story that is posted in IH. Most of the stories there are from bootstrappers.
Yeah, the last time I saw this on HN it was a long story about a failed startup (bought out an investor for $1) that had managed to survive the failure and remain a small company. It is by no means a weekend project that evolved slowly to what it is now.
Can't believe the founder just built v1.0 over a weekend.
Cleary they didn't know that they should have learned serverless, functional programming, and then iterated through 4 different front end frameworks before they actually built the app.
Low expectations for this one.
His prototype might have taken a weekend, but a team of 20 VC-funded employees built out the platform's features and infrastructure.
I recently realized again that information is not a pure benefit. It’s a lesson I’ve learned several times in my life, and this article echoes it again.
"now it's making $350k/mo"=="we're doing about $350,000 in revenue monthly"
Gross profit: https://twitter.com/shl/status/1083805607201669120
Yeah that has for Dec
Revenue: $341K
Gross profit: $135K
Still not regular profit / earnings / bottom line, which is what people tend to mean by 'made'. To get that from gross profit you have to deduct overhead which is probably quite a lot here.
That is a terrible gross margin for SaaS.
I have to say a lot of the story writing around GumRoad itself seems to be an attempt to attract new customers as they have told multiple narratives that are all click-baity (from trying to be a billion dollar startup to a weekend project making big bucks).
Almost all projects start small. I am a solo founder and my "venture" also started as a Python script I wrote over the weekend to help with my own investing. But it's taken a lot more work since then to actually make it accessible and useful for people who are not me.
The real question is did he finish and make significant revenue from that weekend version? It looks like a heavily VC funded startup that did not produce the growth at par with the funding. For a solo company, this would be terrific. For a VC one, probably mediocre. Not too bad, but it can be deceptive to other entrepreneurs reading this as "inspiration".
Is someone here selling music/tracks on Gumroad?
I know a lot of people selling gfx stuff (mostly 3d stuff like shaders and models) through it but no one selling musical assets, and I'd like to know if it is a good platform for this kind of content.
Or if you know somewhere else that might be a better fit for this kind of content, please share.
(Just for the sake of it: I make techno/house/psytrance with lots of inspiration from chiptunes/vgm music)
Anyone here can share an experience?
As a listener / purchaser, I'm a fan of Bandcamp.
I want to sell music as an asset. Like, background tracks for videos or game music, etc.
just for the sake of curiosity, this is the kind of sound i produce: http://www.soundcloud.com/flipbit03
Ah Boy I hate such unclear wording and simplification.
So he just created that thing with 22h effort and 7 years later it makes 350000$/month?
I'm betting probably not...but it's a "feel good" write up and who can't use a little motivational fantasy once in a while?
Being that clear wouldn't have been as catchy (read: clickbaity)
>How have you attracted users and grown Gumroad? People always ask me this, and the answer is always super boring: we sent a lot of emails.
Thats really grim advice. Spamming people sucks but do it until you gain momentum.
Caveat: It worked 8 years ago when they were starting out.
People might have been jaded by spam already at that point, but they are probably way more jaded now. Spam filters have also gotten alot more aggressive. Just because that worked in the past does not mean it will again.
Likewise, SMB SaaS competition is alot more intense these days. Even if you get somebody's attention, they will likely have alot of options to compare you to.
Distribution is tough.
Everyone wants to know because building a product is comparatively easy. Building a customer base is the hard part.
I wish this interview would have delved a bit deeper into the journey of going from "weekend project" to VC-funded to life-style business. Right now, it kind of lacks any real substance and comes off as a typical entreporn story of how a Python script exploded into a multi-million dollar company. It skips over a lot of what could have been valuable info for other founders. Not to be too harsh, but the interview just seems overly romanticized.
Here [1] is Sahil's original post, 8 years ago. Note that this startup hasn't been all fun and roses: they had layoffs and restructuring over the years [2].
[1]: https://news.ycombinator.com/item?id=2406614
[2]: https://news.ycombinator.com/item?id=10517008
I do think the narrative is propagating a false sense of easy to achieve story, considering the founder wrote a lengthy note of self-reflection. Very sad to see this narrative this removes the faith in the founder's earlier reflection. Creating a successful business is never easy, you could get lucky, but you rarely get that lucky. This kind of article makes it seems all rosy.
I use Gumroad for some stuff and it has been great, easy to use and better than alternatives.
If I did it, then so can you.
That is, unfortunately, the foundation of a lot of discussion/talks in the entrepreneurship industry.
I love this story. In life it is so important that you actually get out and do something. It doesn't have to be big, or elaborate. But it should be important to you. A single python main.py file and Google App Engine! LOL
DISCLAIMER
https://xkcd.com/1827/
> After payments, hosting, and risk—our only three costs of doing business
What is risk in this context and how is it quantified as a dollar amount? Is that an amount allocated for returns/chargebacks/fraud?