The Exchanges

Q Where did the idea from Gumroad come from and how did you get started?

A Yeah, so Gumroad, I wanted to sell this pencil icon that I designed for a Mac app, and I had a Twitter account, I had a Dribbble account, I had a few thousand followers. This is 20 11. And I just wanted to sell them this thing. I kind of called it like a lemonade stand. I just, I don't need a whole storefront. Like I need to need all of this infrastructure. I just needed like a little table and, you know, I wanted to sell this icon for a dollar and, and, and, you know, these people who are already following me, you know, I can just share it with them and they can choose to buy it or not. And, you know, they, they enter in their credit card information, they get an email receipt with the download or they get the download maybe in line even, uh, and just made it super easy. And so I thought that would exist and it just didn't exist. It, It felt like a very large disconnect where I was like, oh, I'm going to go sell this icon to this audience. And then it wasn't possible. So, you know, that was Friday night. And then I ended up building Gumra that weekend and then launched it, launched it Monday morning on Hacker News. And it did well, I think. Uh, and then, you know, a few months later I ended up starting, starting to work on it full time, raise, raise some money from folks like Naval, et cetera. That's what I've been doing since.

AI assessment note: “I wanted to sell this pencil icon that I designed for a Mac app”

Q Did you feel any sort of disappointment or did they make you feel disappointed in terms of not accomplishing that as quickly as maybe it was anticipated? I mean,

A Yeah. I mean, there, there definitely was some disappointment. Uh, I mean, I had, I had so many wins so early I had dropped out of school and then I was the second employee at Pinterest at 18. And then I started a company at 19 and raised a bunch of money from really great investors and, and, you know, raised like ten million bucks by the time I was 21 or something like that. So I just felt like if this was going to work, These are sort of the things that you need to see, right? But, but that's kind of a delusion. It's like when your team gets to the semifinals, like it doesn't, you still have to, you're still less than halfway there, right? Like you, there's still work to do, uh, but, but you have so much evidence that you're like, oh, this might, you kind of start believing something that might not be true, but it was, it was mostly internal disappointment. The nice thing about the portfolio theory that VCs have is they don't care that much about you if it doesn't work either, right? So they're all, they're sort of focused on, on other things. They're kind of content to let you Figure it out. At least the good ones are, they kind of understand that. I think, um, but it was certainly, I mean, it was certainly disappointing. I think to admit when we did the layoffs, that was like the big moment that, you know, there's really no going back from that, right? Like you're sort of s…

AI assessment note: “there definitely was some disappointment... it was mostly internal disappointment.”

Q What was the process of raising money like?

A I mean, this is a, this is like, I don't know, a really good example. I think of like figuring out how you get to spend, you know, time with certain folks, like the way that I structured light my life before, before I even, I wanted to fundraise or thought about it as an idea. I felt like I wanted to be a founder. And so I spent a lot of time hanging out with founders, hanging out with early employees, working at an early stage startup. I think that's sort of the best thing that you could do. You know, I left USC to go do that. And so I had a network just from building stuff, meeting with people, people wanting to recruit me for their companies. I'd started to build a relatively strong network of people like Naval and Seth Goldstein from Turntable and, and Samil Shah from Haystack VC now. And when I sort of had the opportunity to raise money, when one, one investor suggested like, Hey, this thing looks really cool. Have you thought about Doing this full time. I know you're at Pinterest, but you know, this is certainly something you think, you know, you'd probably be able to raise money for. And I was like, I really, really had no idea that I could do that. It was not in my mind at all that I could be a founder that early, that quickly. Uh, and so I said, yes. And then I just told all of these people that I had met out of the context of raising money. I was like, Hey, we met abo…

AI assessment note: “it was honestly a relatively smooth transition because I'd built”

Q What do you wish you knew about raising money that you know now?

A I mean, I, I would say I, I think every founder thinks that raising money is going to change their life. Like you're going to get all of these phenomenal people on your cap table and you're going to hang out with them all the time and they're going to help you, you know, recruit and build product and figure out, go to market strategy. And the truth is like all of these folks are very busy. Some of them are running their own companies. Uh, many of them are in many, many, many companies of which you are, at least not in the beginning, one of their sort of top few. And the way venture returns work is it's sort of a power loss. So if you're not there, Uber, you know, it's a different, the way they think about you might be a little bit different. So I, I wish I just knew that. I wish I knew earlier that like my company was still my responsibility. No one was going to fix my problems. They were investing because they believed in me and they believed in my potential. But it was up to me to, to, to still sort of take that potential energy and turn it into kinetic energy. It wasn't a handout. It wasn't like, you know, you're going to get these people to come in to your office and help you solve problems day in, day out. And this is an experience I've talked to so many founder friends where they feel like, because the sales process is so good. That's what they do, right? They're selling …

AI assessment note: “I wish I knew earlier that like my company was still my responsibility.”

Q position or some sort of authority or knowledge that we have, then we become wrapped up in that. We, we have to see ourselves as that, and that can be a very, very bad thing over the long term. I'm curious as to, um, what your worst mistake was, like what led to it? Uh, how did you recover from it and how did you learn from it? What happened?

A Yeah. I mean, I think, I mean, to your point, just quickly, like, you know, it kind of goes back to what we were talking about Singapore and like the average of your five friends and stuff, right? It's sort of the same thing. The questions that everyone in your group is asking of themselves ends up being the question that you're going to start asking yourself too. In terms of the worst mistake, definitely like one, one that is very raw because it has like a very specific number tied to it is we, um, We started raising the Series B. We started talking to investors about it. And so for context, like we raised a seed round of a million bucks. We raised a Series A of seven in 2012 from Kleiner Perkins. And then in 2014, 2015, we're growing 60% a year. We thought we had, it wasn't going to be easy, but we thought we had a shot. And we started talking to investors around the Series B. We wanted to raise maybe 15, 20 or some million dollars to keep going. And very quickly realized, like, this was going to be a pretty hard, a hard path if, if we were to succeed at all. And concurrently, our office lease was expiring. And so we had this 33,000 square foot office we were spending 10 grand a month for. And we had the, you know, we, and we were growing, you know, startups, like you have to signal that you're growing. You can't say, Hey guys, we're going to take a break, figure this thing o…

AI assessment note: “In terms of the worst mistake, definitely like one, one that is very raw”

Q Do you wish you would have done that sooner?

A Yeah, that is, that is a decision that I think, yeah, uh, I, I, and this is, as I sort of do more investing, it's something I communicate to, to founders a lot too, is like, look, this is what you need to stay on this path. This is the venture back path. It's actually relatively objective. You need to be growing in the article, I say, 20% month over a month, but it can be 10%. It just needs to be sort of exponential or, or so. Or polynomial or whatever the correct math term is. And if you're doing that, you can stay on this path. If you're not doing that, it's going to be tough. It really, you know, maybe it's pre-seed, seed A, a little bit different, but if, you know, at sort of at some point around series A, series B, that becomes sort of like the end all be all. It becomes the most important thing in which all of the other things can't outweigh that. And I, I knew that, I, I, I saw that in the numbers, like that was evident to me, but I didn't make the connection with how important it was, how fundamental it was for this path. And I wish, you know, a year before I did or so, you know, we said, Hey, look, we're not growing as fast as we need to be growing. Like, let's pause. We don't have to do anything drastic because it's still early, but let's pause. Let's recalibrate. And, you know, and let's, let's figure this out. And certainly, yeah, I certainly wish I would have done …

AI assessment note: “And certainly, yeah, I certainly wish I would have done that.”

Q It's interesting how those expectations shape outcomes too, right? It's like you're expected to go to college there, you're expected to perform academically, I believe.

A I think expectations cannot be underrated, and I think In your peer group also can't be underrated. Like, I, I think there's so much emphasis on, on sort of the system that you're a part of, uh, your sort of your set of teachers, et cetera. But honestly, I think the biggest thing is just like, you're kind of the average of your five friends, you know, and if you hang out with certain people, you're going to end up in a very, very, very different place based on, based on that kind of like that osmosis that you'll go through and the sort of like this, this sort of socialization You know, that, that you'll have as, as a kid. And I think that happens super early. And certainly, yeah, Singapore, it just, you know, it's, it's a pretty ruthless, it's a pretty ruthless place. Like the idea that there's no fat people, for example, in Singapore, it just like, doesn't really exist as a concept. And I don't mean that in any sort of derogatory way, but there's just people in general that aren't overweight. Uh, and part of that is in, in the local school system, if you are overweight, you go through a program. Like yes, part of you skip lunch and you go through a program that you basically run around a track instead of eat lunch. I mean, it's like a sort of a regulatory, a regulatory system. And, you know, there's also a national service. Everyone who's Singaporean, if you stay in Singapore,…

AI assessment note: “I think expectations cannot be underrated, and I think In your peer group also can't”

Q Where are you in the hierarchy? How useful are you going to be to me?

A Yeah, something, you know, this is, I assume it happens in any boomtown, right? Like people are there for a specific reason, typically sort of accelerating their career. It definitely, when you hear that question a lot and you're kind of responding to it a lot, you, you kind of end up Sort of conflating that with your whole identity. And it took me leaving San Francisco and moving to Provo, Utah. And, and, and there the questions were very different. You know, it was like, Hey, are you married? Where are you from? Do you go to church? Just different, different kinds of questions. It's maybe a similar things happening. They're also trying to figure out where you stand on the, on, in their own journey. Where do you fit in their journey? Right. And they're, they're also trying to form a connection around the common topics that you both are probably interested in. But after a while of that, you, you, I kind of forget, oh, I'm, I am a CEO of a company. Like that all kind of like I almost forgot about. And really that I think distance was what got me to write that article in the first place, because I think if I hadn't, I wouldn't, I would not have been able to write that article, like sitting at a coffee shop in San Francisco, right? Like just the, the ego, the, the self consciousness of it. I think I needed that distance to be in the middle of people who didn't really like to, to b…

AI assessment note: “when you hear that question a lot and you're kind of responding to it a lot”

Q What are some of the books that have had the biggest influence on you in terms of your thinking around entrepreneurship or investing?

A How to win friends is my, my sort of top recommended book. It's almost, you know, kind of a cliche. I feel like at this point to recommend that book, but it is like the canonical example for me of this saving other people time. Like that whole book is about like, how do I operate in a way that makes everyone's else's life just really clean, really stress-free, really easy. And so then everyone's going to want to work with you and, and be your friend. And, and so I think that is a really great book. Thinking fast and slow is a, is a really great one. Um, all of the Matt Ridley books I think are really, really, really good. I think understanding, uh, your mental prison almost like understanding the constraints of your brain physically and your body, like just where you came from, like what led to this moment, I think is just so helpful. Um, in terms of like feeling like, oh, these are the things you have control over. These are the things you don't have control over. Um, David, uh, George's books. I just read the beginning of infinity and the fabric of reality. Those books, it's actually currently the thing that I'm thinking the most about is, is the fabric of reality. Um, it's, it's like, I, you know, I, I don't know, you learn about, you know, parallel universes and sort of quantum mechanics and things in high school, you take, you know, an elective or, or what have you. And yo…

AI assessment note: “How to win friends is my, my sort of top recommended book.”

Q What do you think is the hardest skill to transfer to other people that's necessary for success in business?

A Yeah, the, the skill that's been really top of mind for me right now is, um, The ability to save other people time. Basically what I mean is there's certain people that go about their lives. I try to be like this, but they just operate in a way that requires less of everybody else for them, for the equivalent amount of success in that relationship. Right? So for example, someone who sends calendar invites, someone who's very diligent about taking notes and following up and, you know, people like you, you put like the link to, to have this conversation right into The, the Google Calendar invites a lot of people, like, they'll just put in the email, go find the email. Like, there's just a level of care. It feels like you're, you're almost like, it's like a concierge service for, like, getting to spend time with this person. And then there are, there are other folks that, you know, they're just being responsive. Like, there's just things that, like, lead to a less, less level of stress in everybody else around their lives. And it's so rare. It's so rare, I found that, And I think it's because everyone else is also trying, you know, is very time sensitive to about their own time. And so they end up sort of operating in a way that's saving them time by sort of maybe pushing that burden onto other folks, right? You're sort of like playing hot potato with the task that no one really w…

AI assessment note: “The ability to save other people time.”

Q I want to talk to you. What other skills do you look for when you're hiring?

A Communication is a huge one. It's similar to that, but people who over communicate, people who are always thinking about, you know, the next day, the next week, the next two weeks, the next month, the next year, and telling me what they need from me. How they feel about our relationship. People who are very good at doing that. It's, it's, it's low stress. It lets me solve their problems before they need them solved potentially. It makes me feel confident that they're in a good place and that they have what they need. It's, it's like static electricity where like you, you know, you ever go too long without touching something, you hit something and you're just like, you're like skin fries for a second. It's like, but if you did that all the time, it would never happen. Like That's how I think about communication, especially within, within sort of like a high stress, high functioning organization where that's going to happen very quickly. And you need to constantly be like tapping and like being like, Hey, this is what's happening now. This is what's happening now. This is what's happening now. And so I think people who are really good at sort of ambient signaling saying like, I don't need to ever go to them and say, what's going on? Like, I just know I wake up, I check Slack, I do whatever. I just know what they're doing. To me, that's the dream. That is just like a Phenomenal, p…

AI assessment note: “Communication is a huge one. It's similar to that, but people who over communicate”

Q That's interesting. I want to dive a little bit into that. What's your ideal ratio of sort of exploring broadly to diving deep into a certain subject? Do you think for reading?

A I, I would say I spend almost all of my time exploring broadly. Like I go deep very, very, very rarely. Um, even with authors, like it's pretty rare where I find an author where I am like, this person is so good. I need to read everything that they've written. That's happened a couple of times. Like Matt Ridley recently was one of those people for me. But even like when you read his books, it's like every book is different. One's about genomics. One's about risk. One's about virtue. One's about evolution. One's about innovation now. Um, and there's clearly a thread, right? Like you can kind of see the rational optimism. You can see like what's, what's where he's coming from and certain sort of fingerprint is certainly on those books. But even he is, it seems to me is just exploring these things broadly because I think like It makes those connections when they happen, like, just so much more satisfying. When you find a connection between, I don't know, the way that mole rats, like, resemble, like, the way humans used to be, and, and maybe, like, they're sort of, we figured out that there's this sort of, like, middle ground of social, you know, there's, like, packs, there's pack animals, and then there's, like, you social animals, the collie animals, that are, like, bees, ants, and mole rats for some reason. Mole rats are also part of this group. And then there's humans and there…

AI assessment note: “I would say I spend almost all of my time exploring broadly.”

Q Agree that that's also making it easy for you, right? Through investing and through Gumroad, I mean, you've dealt with probably thousands of entrepreneurs at this point. What are the common patterns of success and failure that you've seen?

A Yeah, I think one big one is, is they build stuff. They actually build stuff. In the early days, it was the, it was the only group of people that I hung out with. Like I wasn't just hanging out with startup people. I was hanging out with the people who went through some stuff to get there. Um, it's like often the people, the best people in the industry are the ones that didn't go to school for that industry because it, it means that they had to cross all of these things to get into it. Um, if that makes sense. So people who, people who build stuff, I think I was surrounded by those people when I get it, started getting into it more and meeting thousands of people, um, Realize a lot of people don't actually build stuff. They don't know how to build stuff. They need help. This kind of goes back to what we're talking about again. Like, you know, there are people who need all of these things from other people. And I don't like those people. I like the people who are like, I want this for my life. I want to build a company. I want to build an app. I want to be a musician. Like it could be, I want to write a book. I need all of these things from other people in order for me to do that. I mean, that is a very, uh, Uncontrollable way to live your life, right? Like to, to say, it would be the equivalent of saying, like, I want to make a movie. I have a great idea. Right? Like, and, and …

AI assessment note: “I think one big one is, is they build stuff. They actually build stuff.”

Q you were talking, I was saying, I was thinking that maybe you can just appreciate the beauty of the world in a different level, uh, with, with that sort of understanding. And I think that that's really important to be able to do in terms of quality of life. Maybe I want to come to happiness later, but Switching gears a little bit here, what are you most insecure about?

A I, I am definitely insecure about, like, wanting stuff. I mean, I, I still think I am driven by a level of, of ambition and want for something. Even though I have read all of these books, and I feel, like, relatively good about what I understand about the world and how little it really matters, like, it, there is something satisfying about it, and, and so I'm definitely kind of, like, insecure about the fact that I, I Have those wants and desires. Like, I think, I don't know if they will go away, but I, you know, I always try to try to figure that out and unearth, like why similar, why, like, why am I like this? I don't have to solve the problem, but just understanding where this comes from, it just gives me a level of sort of like closure almost like, okay, that's just the way I am. That's because of this thing. I can't change it. I can't get taller. I can't do that. Right? Like there's just certain things that that's, that's, that's fine. So that's, that's, that's, that's probably a big one. And then just like figuring out, I'm, I'm sort of insecure with how much I work, like how I work a lot. Um, I enjoy it a lot. I am insecure about the fact that I enjoy it so much. And even, you know, like I go on Twitter and I talk about maybe not working so much, but I just genuinely really enjoy, enjoy it. And so, yeah, there's a, there's a lot of things like wanting a nice house or wha…

AI assessment note: “I am definitely insecure about, like, wanting stuff.”

Q I want to explore something you said there about sort of the, you are a product of the five closest people you hang around. How do you use that information to consciously choose, uh, the people that you're hanging around?

A I'm really mindful of, of that, you know, like in terms of the books that I read, uh, the people that I listen to, uh, the tweets that I follow, I think it's, it's super important to To really, you know, it's sort of like you are what you eat, right? The, the companies that you work for, I think, like, I've never read a book and, and, and come out of it being less convinced of the argument, even though I was not on the side of the argument. Like, when you spend that much time sort of looking at a subject from a specific perspective, you just end up becoming more empathetic to that point of view, and it's like doing that On mass, right? When you go on the, on your phone, you're kind of seeing the way that a certain group of people see certain things. And I think this has actually sort of been accelerated with COVID because you don't have maybe some of the back and forth. You're just, you can't, you know, it's sort of this very asynchronous medium. And so you end up just like absorbing all of this content and your perception is your reality. So I think you just inevitably, inevitably kind of Become closer to those sorts of people, which I think can be a great thing. If you want to be a great business person, for example, you can read books by great business people. And of course they're selling things like you kind of have to be mindful of maybe what their incentive structure mig…

AI assessment note: “If you want to be a great business person, for example, you can read books”

Q What about the people you physically hang around with? Like, do you call sort of friendships when you're like, this isn't serving me? Or how do you think about that?

A Yeah, this is something I struggle with a lot. I think there is a large expectation around friends and like what friends mean. And, you know, Silicon Valley is kind of funny because there's this concept of we're friends. And I like to joke that we're startup friends because it's such an overused word. And what it means is like we met once in person for coffee. And if they, you know, I need something from them, I'll send them an email and they'll reply to my email. It's not like we hang out At the bar, you know, like, you know, like all these sorts of things, unless it's sort of some situational thing that arises typically from some sort of business reason. And that might just be a differentiator between friends in school and friends, you know, in adult life. I'm not really sure because that's the only sort of career path that I've, I've sort of taken. But yeah, it's, it's, I always struggle with, with that idea that we need to be friends with everybody. Uh, there are people that I talk to all of the time. But I wouldn't consider them even friends of mine. We just happen to be valuable for each other. Very symbiotic relationship. And then there's other people that I'm friends with that I would consider close, close, close friends with that I haven't talked to in, in months. Uh, and so I, I really, I think those can be separated, but yeah, I spent a lot of my time thinking about …

AI assessment note: “I always struggle with, with that idea that we need to be friends with everybody.”