Betting on the new Gumroad

How we stopped trying to scale and discovered a new way to succeed
Sahil Lavingia - Founder and CEO of Gumroad.
Sahil Lavingia
Gumroad founder, Irregular painter, VC-hating VC, Aspiring Sci-Fi author

Our small beginnings

One Friday night in 2011, I was home designing a pencil icon for an app that I never ended up releasing. The icon was cool, but it took me four hours to design. I felt like I could have done it in half the time, if only I had a source file to learn from. I then realized that having a source file was worth something. And if it was worth something to me, it would probably be worth something to others. So I decided to try selling my file online, but found out it was impossible. To my surprise, there was no easy way to quickly sell digital products on the internet.

So I built Gumroad that weekend, and launched it on Monday. No complicated setup. No elaborate storefront. Just one link for your customers, and you’re in business.

The original Gumroad logo

Flash forward a decade and there are dozens of easy ways to quickly sell digital products online. The problem Gumroad originally solved for is solved. As we look ahead to the next 10 years, I’ve been asking myself, and many others, which path Gumroad should take next to further support creators. This is where we landed.

The middle path—a new way to start, work, and grow

Gumroad went from a weekend project into a full-fledged startup because I believed that millions of people could earn a living by amassing an audience to sell directly to (without middlemen). For folks looking beyond the traditional 9-to-5, Gumroad offered more than a way to make money—it offered a middle path more suited to our modern world. One where ideas become income and identities are more than roles and resumés; where communities can come together to learn new skills, launch experiments, and level up their lives, together.

Unfortunately, we didn’t originally take that path ourselves. Instead, thinking time was short to corner the market, we raised millions of dollars of venture capital, grew an all-star team, and shipped as fast as we could. Until we exhausted ourselves, and our venture funding.

To survive, we changed virtually everything.

Illustration by BoxBrown

We did what it took to get profitable and started placing small bets towards an alternative way of working and growing. We changed our mindset, to be less about scaling and more about working and growing sustainably.

Here's some of what we did:

  • Instead of going big (or being acquired), we slimmed down → We got rid of our San Francisco office, decentralized our work, and now operate with an entirely part-time staff working at their own discretion. (Just log into Notion and pick a to-do).
  • Instead of exhausting ourselves, we paused to rest → No meetings. No deadlines. No working hours. No cult-like culture. No one’s identity is wrapped up in Gumroad. because we think it’s important to be more than your career.
  • Instead of prioritizing shareholders, we prioritized creators → We redefined success to be based on our creator’s profits, not ours. This led to new funding models, new pricing models, and sharing our financials publicly on places like YouTube.
  • Instead of trying to be successful, we decided we already were → We showed the world you don’t have to be a unicorn or even have full-time employees to be successful. “Enough” is what you decide, not some universal benchmark.

We made these changes to survive, but it made us thrive, too. These shifts are proof that a middle path is not only possible, but more accessible than ever. So we are pointing Gumroad toward this new path, one dedicated to helping as many folks as possible to create a work/life that is right for them—whether that means more balance, flexibility, or just a different gig.

Our new role

The COVID-19 pandemic accelerated everything. Dramatic job losses and massive employee burnout are among the macro shifts that have led many to seek out alternative ways to build their lives. Every day, more businesses get started by creators and digital entrepreneurs who aren’t willing to sacrifice their autonomy and spirit in pursuit of a job.

As we continue to support these people, we see Gumroad taking a new role—as a model of the middle path and a guide to help you take your first step in search of a more sustainable work/life. Because we believe everyone should be free to create the life they want to live, whatever their definition of success.

It seems simple, but it’s not easy. It takes practice, and failure (which we know a thing or two about). And what we’ve learned is that the best way to start that journey is to place a lot of small bets, learn quickly, and see what sticks (get it?). Think less risk / more reward. Less expectation / more experiments. Less stress / more life.

It worked for us, and it can work for you too.

Betting on tomorrow

Now, Gumroad is ten years old, but instead of just celebrating, we’re focusing on the next 10 years with a new series of bets.

  • In March 2021, we allowed anyone to join Gumroad’s mission and participate in a (first-of-its-kind) crowd equity round. In just under 12 hours, over 7,000 investors–including thousands of Gumroad creators—helped us raise $5 million, helping us scale without sacrificing our values.
  • In August 2021, we revisited our pricing to remove all monthly minimums. Now, instead of high fees and monthly subscriptions like our competitors, our creators actually pay us nothing monthly and pay less as they earn more.
  • In October 2021, I published my first book, “The Minimalist Entrepreneur” — a manifesto for founders who would rather build great businesses than big companies.
  • And today, in November 2021, we’re launching a pretty big bet: our new brand. We’ve revisited every decision we’ve ever made about our business strategy to center the things that make us unique. Everything from our logo and colors to website and product platform have evolved to better communicate our new point of view. Some big shifts:

-> We’re not just a tech platform, we’re promoting a lifestyle. Since we’re inviting people to work, learn, and live differently our brand should reflect the possibilities. So you’ll notice more creator stories and fresh comics from BoxBrown that bring the emotional experience of the entrepreneur to the foreground. Litmus test for our logo: could it be on the cover of a magazine?

-> We’re building recognition around “see what sticks.” The new brand integrates visual mnemonics that bridge our name (specifically the Gum) and the idea that starting simply and learning quickly is at our core. You’ll see new design elements meant to amplify this association—like a gummy pink color, a new mascot with a rather gum-like head, and a new name for our podcast, “UnStuck”, among other changes.

You know all those great ideas you have? We want you to try them, lots of them, and see what sticks.

The Gumroad Way
Start Small
Get Better Together
Learn Quickly

We can’t wait to see how this bet plays out. We hope you enjoy our new strategy, brand and way of working. There’s more where that came from in 2022 (just check out our product roadmap). And if you’re looking to earn your first $1 online, we hope you place your first bet with us at Gumroad.

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