Sahil Lavingia:
I believe that most people know a lot of the content in the book, but they have some block and they have some excuse, frankly. And so I wanted to just really show that to people like, look, you can do it too. And if you choose not to, that's a choice that you're making.

James:
Hello and welcome back to Indie Bites. The podcast where I bring you stories of fellow indie hackers in 15 minutes or less. Today I'm joined by Sahil Lavingia, who is the founder of Gumroad, the platform that allows creators to sell products online. You'll likely have heard Sahil's story about his failure to build a billion dollar company with an article that went viral. But let me summarize it for those that haven't, Sahil founded Gumroad in 2011, aiming to build the next unicorn. Leaving Pinterest, where he was employee number two, he raised over a million dollars from angels, then seven million more in 2012. Things started growing and then they didn't. Sahil laid off 75% of the company to keep the product alive, moved to Utah, to figure out where to take Gumroad from that point. Almost a decade later Gumroad is growing quicker than ever making millions in revenue and helping creators make a living online.

James:
Sahil has just launched his book, The Minimalist Entrepreneur, where he shares a decade of learnings on how to build a profitable, sustainable business and how entrepreneurs can do more with less and make more impact on the world. Stick around to the end of the episode to find out how you can get a copy of Sahil's book for free, as I'm given away five of them. Now Sahil has 280K followers on Twitter and he sure knows what tweets will engage his audience the most.

James:
If you too want a deeper understanding of what engages your followers on Twitter, you should check out iLO Analytics made by my podcast co-host Dan Rowden, who is kindly sponsoring this episode. iLO helps you see which kind of tweets gets more impressions, likes profile clicks and more so you can grow your Twitter audience. iLO has beautiful graphs for the most important metrics for both tweets and threads and we'll be sure to help you grow your following. Head to iLO.so or hit the link in the show notes and use the code, Indie Bites, to get 25% off your iLO subscription for life. Let's get into this episode. Sahil, welcome to the pod. How are you?

Sahil Lavingia:
I'm doing well. Thanks for having me.

James:
Good to have you. Loved the book, fully enjoyed reading it. What really interested me was how you took the framework that you laid out in the book and you went ahead and created an example over a weekend, much like Gumroad was a weekend project, tweet about it on the Friday, had it launched by the Monday. You did this exact same thing, but following the framework you laid out in the book. Can you tell me what that framework is and how you then applied it to your weekend project verification letters?

Sahil Lavingia:
Totally. Yeah. So I got this feedback. I've gotten this feedback about Gumroad's origin story and certainly when I was writing the book and putting it together, that there's some level of skepticism that you can't follow the framework in the book, because it's just too unrealistic or it's too fast, is another one. Like some people are like, there's no way you can get from zero to $1 in a weekend like you suggest in the book. But basically it's one, start with community, which is start with a group of people already in mind, ideally, a group of people you already know and who know you. Then two, find a problem that they have, that they would pay to have solved. Three, is build it, generally in a weekend. I love weekend projects.

Sahil Lavingia:
I think that pairs down the scope of what you're trying to build to something reasonable, so you don't get stuck just like ideating about it or never actually shipping the thing, and then selling it to a hundred customers and then finally marketing it to a broader group of people and then growing, hiring, et, et cetera. So I sort of got that feedback that was like, this is great if you're a Sahil or if you're whatever, or even some people would not believe that Gumroad was really a weekend project initially. And so I thought a great idea would be basically what I did in 2011 with Gumroad, would be to do it again, except livestream the whole thing, so that literally you could like... It would take you a while, it's 15 hours of video on YouTube, but you could literally go and copy exactly what I did and have the exact same thing at the end because it's 100% out there.

Sahil Lavingia:
There's like nothing that I didn't cover as part of that weekend. And I launched Monday morning and I made a few hundred bucks and now my mom runs the business. I believe that most people know a lot of the content in the book, but they have some block and they have some excuse, frankly, whether it's imposter syndrome or being a perfectionist or having no time or not having the right connections. And I think they're all excuses, frankly. Like the internet has made these excuses because it's now possible. And so I wanted to just really show that to people like, look, you can do it too and if you choose not to, that's a choice that you're making.

James:
Without a doubt. And one of the themes throughout the book, you mentioned this a lot on the livestream, is the emphasis on starting. And a lot of people might want to learn something before they start. I want to read this book on content marketing before I start content marketing. I want to learn how to code before I start building my business. And you say, you start, then you learn. Why is it so important for people to just start? And why do you think people keep putting up these excuses and barriers for themselves?

Sahil Lavingia:
I think a lot of it comes down to fear of failure. There's kind of three kinds of fears, I think. One is uncertainty. Another is unworthiness. Another one is abandonment. I think uncertainty is a big one. That's at least the one that kind of, I empathize with the most, which is like, you don't want to waste time. You don't want to spend three hours and then no one reads your blog post, for example, or you spend three hours and it's terrible. Like you realize you're not that good, right? That's kind of fear of worthiness. Or you build an audience and they all leave or something like that. So I think there's just a lot of fear associated with putting stuff out there, trying and failing. And so I think that's generally why people don't do it is that, you don't want to go for a run because you're scared that you won't be able to finish the run.

Sahil Lavingia:
If you knew without a doubt that you would be able to run the half marathon in an hour and a half, I think you'd have a much easier time showing up. And then why I think starting is so important is because honestly there's no answer to that. I think people try to resolve it. They think that they can read another book and it's going to help them learn, okay, this is how I start running. Or this is how I think about building a business. Or this is how I answer this question about leadership, but the truth is you're not going to resolve those fears by reading about them. The way that you resolve the fears is by ignoring them and doing it anyway. And then after a while, your brain is kind of like, oh, it turns out like that. Having those fears, which is probably some sort of like evolutionary instinct based on sort of survival and the wilderness, doesn't apply to this thing, you shouldn't be that scared about running a business. Running a business is very different from going on a hunt.

Sahil Lavingia:
I remember watching a documentary, Free Solo with Alex Honnold, the rock climber, the [inaudible 00:06:30] guy. One scene that really stuck in my head was he's talking to a doctor and they're basically like analyzing his brain and the doctor's like, you don't really have a fear instinct and so, you're just sort of genetically a good fit for free soloing because you just don't have this fear instinct. And I think Alex's comment and his reply to it, I think was underrated. He basically said, how do you know that, maybe I just bludgeoned it with activity? You know, in the beginning your brain might have been like, don't do that, that's scary. But after you do it 50 times, your brain's like, okay, nevermind, he's not listening to me anyway. My guess is that's more of what happened, right?

Sahil Lavingia:
,There's sort of a nature versus nurture, but I'm a big believer in self nurturing almost. Where if you want to do something, you can do it. You just have to do it. If you want to write, you have to sit down in front of a computer and start writing and everyone can write, everyone can put three words together with some spaces in between.

James:
Talking of writing, you consider yourself a writer, both in the business sense. But if we think about so many aspects of our life, writing is such a core part of that. And especially for you, running an async business where a lot of communication is written. Why is writing so important for our everyday day life, for you specifically? And how can we build that muscle to be writing more?

Sahil Lavingia:
I mean, there's only a few ways to communicate, right? Like you can basically talk, which is how I assume humans started communicating. And then you can write, which is now become at scale kind of with the printing press and all that stuff. And I guess you can, in theory, someday in the future, you'll be able to think to each other with something like some brain computer interface like Neuralink. At some point, I believe there will be actually a new form of communication that we don't have yet, which will be 10 times better than writing. But writing is 10 times better than talking. It's faster. You can read far faster. I mean, everyone knows this. You can read a book in two hours. And the audio book is like seven. I believe that it's much easier to edit words than edit audio and certainly edit video.

Sahil Lavingia:
So I believe that when you read, you're just generally getting a higher quality density of information. And then three, like when you write or when you have a writing culture, literally everything is documented for free. With a meeting, you might have someone who like at the end has to compile what happened, but if you think about how the world really truly runs, it's in words, the government is a book. And I find that like, why not make 100% of a company that? Why make 5% or 10% or 50% of it meetings that aren't documented? For example, if you said, Hey, how did the rebrand at Gumroad happen? I literally have 100% documentation. Every single decision, every single conversation is there. I just believe that you get that for free with writing and you just don't get it with speaking. The other thing is that it allows for me to do what I do best, which is I consider myself a writer. I think I'm pretty good at writing. I think I'm persuasive in writing. And so I want to build a culture that rewards me and other people like me.

James:
Let's move on and talk a little bit about Gumroad. Bootstrap for a while and then more recently you've raised another crowdfunding round. How has your perspective changed on funding from initially starting it to bootstrapping to crowdfunding more recently?

Sahil Lavingia:
So quite a lot in the sort of the early days of my career, the only real funding model I was exposed to was venture capital. You would have an idea. You would maybe build out like a prototype and then you'd go to investors in Silicon Valley and otherwise, and raise a million bucks and then use that to build a small team and get an office and start the startup journey. That's great I think, for certain kinds of companies, but many companies don't fit that mold and it gets harder and harder to fit that mold. Even a company that may have fit the mold sort of seed series A level, may not series B onward level. And so, bootstrapping was another model that I like. I think that, I have sort of nuanced there too. Like I think bootstrapping is great.

Sahil Lavingia:
I think people may think that it's just an alternative to venture capital, but it's way harder. If you imagine raising a million dollars of seed capital, how long it takes to a million dollars of profit, which is what you need to pay people a million dollars worth of salaries. A million dollars is going to take you three, four years to get to generally, of profit, like real profit, not just revenue. And so I think that is the nuance that I think people miss sometimes about the kind of debate is like, well, one, ultimately it depends on what you want to build, how fast you want to build it? How many people do you need to work with to build this thing? How much personal capital do you have to fund it yourself?

Sahil Lavingia:
And that's why I love crowdfunding, which is kind of like the third funding model that we took. We raised a $5 million crowdfunding round in 2021. I really like that because it's kind of a middle path where you're able to raise external capital, so you're able to get that million bucks or so, and we raised five, but you get to raise it from people within your community.

James:
Yeah. And you've got your fund now. What's your approach to investing?

Sahil Lavingia:
It's kind of funny because originally the book was going to be called, Stop Chasing Unicorns, and now I'm a venture capitalist. So, but you know, it just goes back to that, which is, I think the nuance is, that there are many businesses that I think venture capital is a great fit for. For example, if you're trying to build a nuclear fusion reactor, you can bootstrap that generally. Like you're going to have to raise capital in some form, whether it federal grant or venture capital or contracts paid upfront or whatever that may be. And I think venture is currently accessible to 0.01% of people, very few people even have the option of raising venture capital. That's kind of another thing that I think often gets missed, is people kind of love to say, oh, VC sucks. But the truth is, it's a position of privilege to even say that because most people have never had access to that ecosystem.

Sahil Lavingia:
And so I think that's my goal as a venture capitalist, obviously invest in people that I know and I've known for a long time. So I definitely invest in insiders and stuff like that. But I also am trying to dedicate a good chunk of my portfolio, mostly because I think they'll generate the best returns, in first time founders, people who don't live in the Bay Area, Silicon Valley, New York, et cetera, et cetera. And I that's where the returns will come from is people who are outside of the sort of typical wheelhouse of San Francisco Bay Area startups.

James:
And like Gumroad is run very different to many other companies, async, no meetings, quarter hours. You wrote about this in chapter seven, build a house you want to live in, in the book. Why does this specifically work for Gumroad?

Sahil Lavingia:
When I started the model, it was literally just because it worked really well for me and I was Gumroad at the time. The thing that I learned working on Gumroad was that sticking with it is really important, right? Like I stuck with it for a long time when I think many other people may not have. And that really is what led to Gumroad being successful today, is just the fact that we existed long enough so that when COVID hit and the creator economy started booming and all of these sorts of things, we were really like super well positioned for it. And so I wanted to pick a working style that allowed me to feel good about working at Gumroad for many years and that was one, that was async, that I could do my own thing. I could check in whenever I had free time, work on Gumroad whenever it made sense, whenever I felt like it, everyone else had the similar kind of expectation.

Sahil Lavingia:
And the other thing is, when you have a startup and you give everyone equity, and this kind of goes into that kind of the VC model, everyone wants the same outcome, which is like a billion dollar company or now a 10 billion company or something like that. But the issue is, that really allows for only one kind of personality to work at the company, right? You kind of need everybody to be super bought in, like work six days, 12 hours a day, et cetera, et cetera. So I wanted to build a company that you could totally do that if you wanted to, you could also work 10 hours a week. You could also work 20 hours a week. You could also take a month off for Christmas or whatever. And I felt like the only way to have that kind of working model and have that diversity of work styles was to have this like hourly model where you basically just bill however many hours you work. And then I let people decide how much they want to work. And that has worked, I think quite well, for us.

James:
At the end of every episode, I ask for three recommendations, a book, a podcast, and an indie hacker entrepreneur that's inspired you.

Sahil Lavingia:
Book, I will say, Predictably Irrational, by Dan Ariely, which is about pricing and human psychology. And I think it's very relevant, especially if people are interested in Web3 and NFTs and crypto, et cetera. Like I think learning about how we think about pricing and financial contracts and social contracts, I think is a good one. And Levy is a great entrepreneur that I follow and am inspired by. The All-In podcast is actually the only podcast that I listen to regularly.

James:
Sahil, thank you so much for joining me on this episode of Indie Bites.

Sahil Lavingia:
You're welcome. Thanks so much for having me.

James:
Thank you for listening to this episode of Indie Bites with Sahil Lavingia. If you want a copy of Sahil's new book, I'll be giving away five copies to people who share this episode on Twitter. Want an extra entry, send a link to this episode to a friend and DM me the screenshot of you doing that. All details on how you can enter along with some useful links from the episode will be in the show notes. Thanks again to iLO Analytics for sponsoring the show, see you next week.