Reflecting on my failure to build a billion-dollar company (2019)
sahillavingia.com
sahillavingia.com
A reality 99.9% of us can only dream of, and I've always found his writing/tweeting a bit distasteful because of it. Lottery winner telling you how to pick a ticket kind of vibe.
VCs gave you money for a VC business, you get to turn it into a "lifestyle business" with no or little obligation to them anymore.
Your employees joined what they thought was a growing startup, then you lay them off after they built the product because there's no need for them anymore since you're not trying for hypergrowth.
Kinda shitty all round except for you.
Because that's what happens for most startups.
VCs aren't screwed because they already accounted for the risk of failure. That's kind of their job.
Target smashes damaged goods instead of selling them at a discount so employees or customers don't purposefully cosmetically damage things they want to buy.
If the failure state of a business is "the founder can buy it for pennies and try to make something of it", then why wouldn't all lifestyle businesses pitch themselves as VC-backed growth businesses and then use up all that money and settle as a lifestyle business?
Then he ground away at something that involved laying off a lot of people and watching his team dwindle to 1.
He does now have a lifestyle business, but from the number, it seems pretty modest.
Maybe it’s like a scratch off winner telling you how to pick tickets. But like one of those $20 tickets.
"Gumroad in February 2023:
- GMV: $14.5M
- Revenue: $1.81M
- Gross margin: 69.21%
- Net income: $834K
- Monthly churn (creators who made a sale in Jan that did not in Feb, in terms of GMV): 2.46%"
https://www.youtube.com/watch?v=st8ns96z7d4
$10M/yr profit, very modest business. No luckier than a $20 lottery winner.
There are many, many situations in life where you can do everything right and still not win. Unless you are sure your own underperformance was the deciding cause or you can draw lessons from your failure that would help you next time, there is not a lot of value in ruminating in the past. In Austrian German there is a word for people that do this all the time: "Hätti-Wari" which translates to being a "would-have-could-have".
That being said I am a big fan of learning from failures. And sometimes it will take you years to be ready to understand the lessons a failure should have thought you — however learning those lessons won't happen by ruminating in regret, but by moving on and looking at the own past from a safe distance without too much emotion.
Yet the only way to give yourself a chance to win is to take part. If you sit at home and feel resentful, you definitely won’t build a billion dollar company, or win the lottery for that matter.
The other issue is, the people who actually DO succeed work extremely hard to do so. They are lucky, yes, because it worked, and there are 10 others who didn’t succeed, but that doesn’t mean they didn’t work hard to get there.
Just like there are 100 losers in an Olympic sport for every gold medal winner, the other 99 worked incredibly hard too.
A point many on HN seem to miss, and attribute all business success to “luck”
I didn't say this as an excuse to not try, quite the opposite. If you are aware of the fact that not every failure is your fault, you can try (and fail) with less pressure.
> The other issue is, the people who actually DO succeed work extremely hard to do so.
Some of them, yes, others no. You can work hard your whole life and still never have success by your own metrics. I think one has to be careful to not drink the workaholic kool-aid a tad bit too much. A lot of the good stuff can come from low pressure activities like toying around, trying things out etc. If people are to work focused they will never horse around and never harvest the creative fruit of doing so.
I would be careful to compare success (which for most seems to equate economic success) with sports. Although sports are not as simple as one might think, they are nowhere near the complexity of a market based economy within a modern information based society.
Again, these are not excuses. It just seems sad to me, that many people (especially in the US) have the whole "just work hard enough and it will pay off" mentality engrained so hard in their mind, they will inevitably hit a burn out. And even if they manage to "win" and get the economic success they longed for so much, they will not become happy all of the sudden when it is there.
Don't get me wrong, economic stability is certainly necessary to lead a happy life, but there are many other factors that have nothing to do with the money and all to do with how you want to spend your time.
This speaks to me a lot, saw the same thing in asset management over the last decade: Most of the smart, alpha focused strategies that demanded a lot of effort and mastery of the markets ended up losing out to simply getting a lot of beta in the portfolio and not touching it too much.
Technically they are often a late mover, but with so much better market fit that they essentially create a new market definition in which they are clearly first.
When they get it right. They have their out of the gate failures too.
'Start with Why': https://www.youtube.com/watch?v=u4ZoJKF_VuA&vl=en
The itouch came out first, and some people were like "omg, I wish this was my phone!" and some of us said, "I don't want people to interrupt me while listening to my music." Here's the thing though, they cost "around" the same amount (after AT&T subscriber subsidies). So, which one would you get, even if you didn't want people to call you while you are listening to music? If you had AT&T, anyway. If you didn't have AT&T, you couldn't use the phone at all.
The internet was a thing, but not as you know it today, but Facebook was still kinda new (it had just rolled out to everyone IIRC, or was about to, instead of being limited to universities). The "hashtag" was brand new and still kind of 'wtf is this?' and limited to certain circles. Apps were basically toys and games, nothing like what we have today. In fact, when the itouch launched, there were no apps. I got one hot off the shelf and was disappointed with the battery life while listening to music. I think the only "app" it had was a web browser and notes. My peers around me, didn't really think it was interesting.
I didn't get an iPhone until ~2016, when my wife started giving me crap about blue bubbles. Before that, I used Windows Phone simply because it was a phone first, and a computer second. That probably won't make sense to most people, but we're talking about "low power modes" that allowed the phone to last until you got home from the bars at 2am. I was always the one who still had juice to call a cab. Modern phones have all these features, but they really didn't until ~2015ish (android) and 2018ish (apple), while windows phone had it from the very beginning in 2009ish.
Nobody else had anything like the iPhone or iTouch when they came out.
After their first successes, Palm stalled. Microsoft’s phones were interface abominations. I suffered through both.
Adding the App Store completed Apple’s redefinition of what a phone was, what mobile computing was.
Kudo’s to Google for leaping into that new market by redirecting Android. Every manufacturer that tried to keep up by upgrading their previous platforms bit the dust.
(1) Apple was a small company going into a new area with a very unusual design for the time. Apple couldn't make enough of them from day 1.
(2) the phone market required major business changes to adapt to the iPhone. AT&T made all kinds of unusual concessions to Apple to make the logistics, and Apple's business needs.
A complete redesign of how phone software, hardware, interfaces work, along with major changes to cellular partnerships and logistics, is not an "accident".
The polish was excellent too. Every phone I used before the iPhone had limited and flaky interfaces, from basic phones to handheld computer phones.
Bill Gates was floored when he saw the iPhone, by his own report.
Steve Jobs was obsessed with the design of the phone and how he needed to change cellular business models. They designed numerous candidate hardware, and two alternate internally designed operating systems, before settling for the iOS they delivered. Steve didn't always get everything right, but "accident" isn't particularly applicable to anything Steve did.
But when there is that level of preparation, it just strikes me wrong just to summarize is at they just got lucky.
Also, Steve Jobs got "lucky" many times, with similar preparation.
So everything requires some luck, but it seems very dismissive of what they did, that nobody else did as well, several times.
I don’t know or care about Steve Jobs, so I can’t really comment on his luck. But lucky people tend to be lucky.
I’m not dismissing what they did, but by putting them on a pedestal, you are dismissing all the other innovations that have come and failed, for nothing more than not being as lucky. I worked on some game-changing real-estate software in 2007-8. They weren’t so lucky. Had the crash happened a year or two later, the entire way you buy/sold houses would be different.
Did he eventually opened up Gumroad? I'm seeing https://github.com/gumroad but I'm not sure if it contains the code required to run a clone of Gumroad, or some ancillary projects that can't replace the product on their own
...I gave up on my first.
Being able to build something like this over a weekend is amazing to me.
Bunch of discussion from back then: https://news.ycombinator.com/item?id=19105733
Smart, hardworking, honest, kind men. There's a degree of luck and circumstance, there's the absence of capital, the time and place in which you live, the legal/social/regulatory environment, etc.
Then there are villains who work against your ability to compete.
They lobby so you can't open a competing barber shop without onerous licensing.
Nevermind ten billion dollar patent portfolios and old boys networks.
Fight the good fight, but nothing's guaranteed anywhere.
Policing speech in this way is, in my opinion, detrimental to us all and to our ability to communicate our thoughts and have them interpreted charitably, where instead we might have to consider every possible negative interpretation, carefully tiptoe around those, and just perhaps not say anything at all.
Imperfect communication is better than none, and malicious interpretation stifles that.
> Imperfect communication is better than none
Staying imperfect forever is laziness.
One of the many dangers is that instead of debating the merit of the core argument (that worthy people become wealthy), we sit here splitting hairs and nitpicking at the choices of individual words that are extremely tangential to the original argument.
Therefore, as I said, imperfect communication is better than none -- otherwise we'd never get to debate anything at all, and therefore can't learn and grow.
It's not impossible to improve though!
> but I also disagree that saying "men" is necessarily wrong or "imperfect"
I'm sure that you do.
> (that worthy people become wealthy),
Note that you used "people" and not "men". Almost like this is a more accurate depiction of the argument you believe you're making. So why say men in the first place? Maybe...a deeply ingrained bias?
> otherwise we'd never get to debate anything at all, and therefore can't learn and grow.
But...if you're committing to not learning and growing either way, by suggesting that opportunities for growth are "nitpicks" and "splitting hairs", you also can't learn and grow...
That means I might spend 15% of my time thinking about how I might possibly be misinterpreted instead of on the actual problem at hand.
It's overhead and expense that doesn't actually help anyone. It's just a veneer of pretending to help. Anyway I think we've covered the whole tangent now.
If you consider this interraction an "attack", I'm unsure how you're able to communicate with other humans at all. I've been very cordial, simply pointing out an alternative way of thinking.
> subject instead of the substance of my argument about wealth and worth.
If you'd like to talk only to yourself, maybe don't post on the internet? I'm sorry, but communicating with other people involves _actually communicating_. As in, they're able to respond to the things you write.
> That means I might spend 15% of my time thinking about how I might possibly be misinterpreted instead of on the actual problem at hand.
If it takes you that long to replace a single (to you) irrelevant word in a sentence, I apologize for having ruined so much of your day. It's really not that complicated.
> It's overhead and expense that doesn't actually help anyone.
Are you sure? It seems equally as likely that you're just demanding to behave however you want, regardless of other people's opinions.
Anyway, enjoy the day.
To be clear I'm not trying to imply your participation is an attack, I just meant that in the general sense in the modern world it's something we have to consider, people overreact to everything.
I mean, you yourself think I am overreacting -- perhaps we all are, but whatever the case, it's definitely on many of our minds in many of our interactions, I think.
After all, when I tried to discuss wealth and human merit, at least 3 people (me and you and the original reply) got into a discussion about something totally unrelated: uninclusive word choices.
Maybe I should learn to say "people" instead of "men", maybe I should say "denylist" instead of "blacklist", maybe I should say "differently abled" instead of "disabled", but the list is very long, changes by the day, and is sometimes an extreme niche of offense that no-one is aware of.
At the end of the day, I can try, but people will still get offended by something, so I think the friendlier, more productive option is to assume that people have good intentions, which is what I think my original comment was:
You can be worthy without being wealthy.
I suppose what I'm trying to impart, is that just because _you mean something_, doesn't mean that's what other people get, and saying "Well what they got isn't important because it's not what I meant" is just kind of...not really how communication with other people work? Previously you said you don't believe that saying things like "what's up guys" is a problem which, _you_ think that, but the people around you might not? And again, you're communicating with them, so demanding they accept your standard of communication is just kind of closed off.
> Maybe I should learn to say "people" instead of "men", maybe I should say "denylist" instead of "blacklist", maybe I should say "differently abled" instead of "disabled", but the list is very long, changes by the day, and is sometimes an extreme niche of offense that no-one is aware of.
Or maybe you can exist mostly-similarly to how you're currently existing, but instead of arguing with them and acting adversarial, simply acknowledging their point? This all happened as a result of a person saying "Women too". Would a "Totally." not have been a validating response? Does that type of behavior compromise your opinions too much?
The common trend seems to be, if a person points out some kind of language issue like we're experiencing now, the person that made the original comment kind of flies off the hyperbole-handle and assumes they must correct every possibly contentious word, when really it seems way less complicated than that?
> At the end of the day, I can try, but people will still get offended by something, so I think the friendlier, more productive option is to assume that people have good intentions, which is what I think my original comment was:
I will turn this comment back on you, and say that the person that said "Women too" may have also been being friendly, and your response opened the less-productive negative-intentioned path.
I appreciate the dialogue regardless.