Great read on the Failure to Build a Billion-Dollar Company
In 2011 I left my job as the second employee at Pinterest–before I vested any of my stock–to work on what I thought would be my life’s work.
Gumroad would become a billion-dollar company, with hundreds of employees. It would IPO, and I would work on it until I died. Something like that.
That didn’t happen.
Now, it may look like I am in an enviable position, running a profitable, growing, and low-maintenance software business with customers who adore us. But for years, I considered myself a failure. At my lowest point, I had to lay off 75% of my company, including many of my best friends. I had failed.
I no longer feel shame in the path I took to get to where I am today. It took me years to realize that I was misguided from the outset. This is that journey, from the beginning.
A weekend project turned VC-backed startup
The idea behind Gumroad was simple: Creators and others should be able to sell their products directly to their audiences with quick, simple links. No need for a storefront.
I built Gumroad that weekend, and launched it early Monday morning on Hacker News. The reaction exceeded my grandest aspirations. Over 52,000 people checked it out on the first day.
Later that year, I left my job as the second employee at Pinterest–before I vested any of my stock–to turn it into what I thought would become my life’s work.
Almost immediately, I raised $1.1M from an all-star cast of angel investors and venture capital firms, including Max Levchin, Chris Sacca, Ron Conway, Naval Ravikant, Collaborative Fund, Accel Partners, and First Round Capital. A few months later, in May 2012, we raised $7M more. Mike Abbott from Kleiner Perkins Caufield & Byers (KPCB), a top-tier VC firm, led the round.
I was on top of the world. I was just 19, a solo founder, with over $8M in the bank and three employees. And the world was starting to take note.
We grew the team. We stayed focused on our product. The monthly numbers started to climb. And then, at some point, they didn’t.
To keep the product alive, I laid off 75% of my company–including many of my best friends. It really sucked. But I told myself things would be fine: The product would continue to grow and no one far from the company would ever find out.