Sahil Lavingia was Pinterest's second employee, according to his own account, working on the Pinterest iPhone app. He wanted to sell an icon he had designed in Photoshop. According to his own account, he built a weekend project to make selling digital content easier. Gumroad was founded in 2011. The supplied Wikipedia entry reports a $1.1 million seed round in February 2012 and a $7 million Series A led by Kleiner Perkins. But, according to Lavingia, Gumroad failed to grow quickly enough to justify another financing round. He says the team fell from 20 employees to five and then to one. Instead of shutting Gumroad down, he says he kept operating it, moved from San Francisco to Provo, Utah, and shifted his focus toward profitability and cash flow. A 2024 episode description reports nearly $20 million in annual revenue, high profitability, and no full-time employees.
The path
- 2010Lavingia attended USC and began working with Pinterest. Quote: "This is 2010."
- 2011Gumroad began as a weekend project and was started in 2011. Quote: "Gumroad is a startup that I started in 2011."
- February 2012Gumroad announced a $1.1 million seed round. Quote: "In February 2012, Gumroad announced a $1.1 million seed round."
- May 2012Kleiner Perkins led a $7 million Series A round. Quote: "Three months later Kleiner Perkins Caufield & Byers (KPCB) led a $7 million Series A round."
- 2015Gumroad did not grow quickly enough to justify another financing round and reduced its team. Quote: "We shrunk the team to five, and then shrunk the team to one, just me"
- 2017Kleiner wrote off its investment, and Lavingia moved away from San Francisco. Quote: "So in 2017 when, you know, in 2015 when we failed to raise the money"
- February 2019Lavingia published an essay reflecting on his failure to build a billion-dollar company. Quote: "I wrote this piece called ‘Reflecting on my failure to build a billion-dollar company.’"
- 2024A supplied episode description reported nearly $20 million in annual revenue, high profitability, and no full-time employees. Quote: "Gumroad does nearly $20m per year, is highly profitable, and has no full-time employees."
The numbers and where they come from
Every figure comes with the source it was taken from.
„allows creators to sell products directly to their audience"
„I wanted to make it really easy to sell content online"
„It started out just as a weekend project"
„around a million dollars seed round"
„In February 2012, Gumroad announced a $1.1 million seed round."
„Kleiner Perkins Caufield & Byers (KPCB) led a $7 million Series A round."
„we just weren’t growing the business fast enough to merit another round of financing"
„We went from basically 20 people to one"
„our liquidation preferences fell from 16,5 million to 2,5"
„Reflecting on My Failure to Build a Billion-Dollar Company"
„probably over maybe 550,000 people have read it"
„Gumroad does nearly $20m per year"
„is highly profitable, and has no full-time employees"
„Now we do about $160 million a year in annualized GMV."
„We take 10%, ends up being our revenue"
„we make about $8 million a year in like net income"
„Key people Ershad Kunnakkadan (CEO)"
„If Gumroad doesn’t grow, I can shut it down. If it does, we’ll figure it out."
„they were like, hey, we'd be interested in selling our stake back to you for a dollar."
„I still own 57 or so percent of the company."
What to take from it
- Start with the specific problem in front of you, not the company you think you should build.
- Scalability does not remove the time it takes people to change habits and make decisions.
- Venture capital can create expectations that do not match the business's actual growth rate.
- A smaller, profitable company can be a better outcome than a larger company built around someone else's target.
- Separating your identity from the company's valuation can make difficult decisions clearer.
Where things stand today
The material reports that Gumroad is an e-commerce platform for creators. One 2024 interview describes nearly $20 million in annual revenue, high profitability, and no full-time employees. Another interview reports approximately $160 million in annualized marketplace volume, a 10 percent take rate, and approximately $8 million in annual net income. The material also reports that Ershad Kunnakkadan is CEO in a Wikipedia entry retrieved from a page dated August 14, 2026, while other supplied interviews identify Sahil Lavingia as founder and CEO.
The full guide as a PDF
Every step, the numbers with their sources, the mistakes and the lessons — as a document to keep.
Guide als PDF ladenSources
All the material this story rests on.
Transparency: every figure in this article was checked against its original source. Anything stated only by the person described is labelled as self-reported. Claims that could not be verified do not appear here at all.