I mean he got pretty lucky I think, if I remember correctly he was able to get back the company "for free" from the VCs after they had written off their investment. He was then able to "bootstrap" it into profitability, based on the assets created through the VC money. Quite a good position to be in.
Yeah, his journey is incredibly, incredibly lucky. One of the first employees at Pinterest, then raised money for Gumroad when he was still a teenager, then when Gumroad didn't grow fast enough (Not even failed!) he was basically gifted it by his investors.
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.
When you say lifestyle business, what do you mean? Is it a self employed kind of job/business where he will be broke if he doesn’t show up everyday? Or more like he will do very well and have a good lifestyle but not have big fuck you money?
He could be making millions in a respectable way but not with enough out-of-control growth to move the needle for some billionaires, who then look down their nose at him with the attitude that he should get a life and get some style.
The latter. When people say "lifestyle business", they typically mean a business that can comfortably sustain the owners' lifestyle, but is never going to grow significantly.
If the VCs are willing to write off their shares then it’s surprising or unfortunate that it doesn’t happen more often. Maybe more companies could scale down and salvage something from the ruins with the right incentive.
It kind of screws over everyone except yourself though.
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.
What's worse, it might provide other incentives. If you know that you can always negotiate a soft landing, you're not as maniacally driven towards that unicorn status, which is required to make VC economics work.
Failing a VC-funded startup is an expected outcome (statistically). What difference does it make whether the founder ended with nothing (the typical scenario) vs. a lifestyle business? VCs get nothing either way.
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?
but this piece at least didn't really come across to me as preachy or anything. Just sort of describing how it happened. No idea if it's all accurate, but at least sounded reasonably honest and plausible.
When I read that headline my immediate thought was: Reflecting on My Failure to Win in the Powerball Jackbot (2019)
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.
> There are many, many situations in life where you can do everything right and still not win
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”
> 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.
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.
Mere luck is not sufficient, but one could argue that it is necessary. Among those who work hard, those who additionally have luck will be more successful than the others.
I think outliers like Bezos, gates level success has a huge part which is luck but apart from that I think most people can have a successful business which will make them a multimillionaire if they get their tactics right and work diligently.
I'd work my butt off too if I was effectively earning $10k or $100k/hour or whatever. But plenty of the 'owner' class don't, even then, unless working on your golf swing counts as work.
At that point though, the highest impact things you can do are sometimes nothing. Strategy, as in actually choosing what to do, and then holding people accountable, is the hard part.
>"It doesn’t matter how amazing your product is, or how fast you ship features. The market you’re in will determine most of your growth. For better or worse, Gumroad grew at roughly the same rate almost every month because that’s how quickly the market determined we would grow".
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.
The problem with always trying to be first? If you trip and fall, you're screwed. While staying behind, you can just wait and not make the same mistakes as the people in front of you. Eventually, you'll be able to sprint ahead, but when you do, make it count.
They have an interesting second-to-first mover pattern.
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.
Brilliant summary here of how Apple often focus on 'Why' you need something - rather than pushing the 'What' it is. They smashed this for the ipod, the iphone and the ipad - and more recently with headphones. Will be interesting to see if they can manage this for VR.
the iphone, in my opinion, was a bit of an accidental success. I remember having a Nokia at the time...
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.
I never questioned how hard Apple worked, how many iterations, etc. Innovation's success is rarely ruled by those things. They got lucky in the US. They got lucky that AT&T (or anyone) was willing to make those concessions. They got lucky that enough people wanted a phone like that (I didn't). They got lucky that the US turned it into a status symbol. There are probably many other things as well that required luck, that I didn't pay attention to at the time.
Luck is pretty much the defacto model for capitalism. Luck has so much to do with everything and nothing at all. Being prepared? They got lucky in that they were prepared for what actually happened. They had no control over the market, for all they knew the phones would explode after 600 days of use. They weren’t prepared for jail breaking via a TIFF file, they weren’t prepared for that at all.
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.
> Soon, we’re also planning to open-source the whole product, WordPress-style. Anyone will be able to deploy their own version of Gumroad, make the changes they want, and sell the content they want, without us being the middleman.
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
Plenty of worthy men died broke, and plenty of villains were fabulously wealthy.
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.
There's really no need to do this, or to point out that some of the men (or women, or persons) were black or asian, non-heterosexual, had a physical or intellectual handicaps or any other particular attribute that I didn't specifically enumerate. It sort of implies malice or misogyny on my part, of which there is of course none. I could have said "people", but it's malicious to assume that by not having chosen that word that I somehow myself am a chauvinist.
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.
It's impossible to become perfect, but I also disagree that saying "men" is necessarily wrong or "imperfect", much like saying "hey guys" to a group of people that includes women, it's just a figure of speech, not a political statement.
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.
> 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's just it though, isn't it? I have to say "people" instead of "men" or I'll be argued with and attacked on a tangential subject instead of the substance of my argument about wealth and worth.
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.
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:
> 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.
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.
That is virtually of a tautology. It doesn't really tell people what to do.
Because working really hard by itself, is often not worth much.
But knowing what the right thing is involves the luck of having the right mind, experience, resources, life arrangement, physical health, mental health, etc., to both see and be the right person to execute on something not apparent to others.
I am not saying people don't need to overcome whatever is holding them back, but people with a lot of enabling context are simply going to do much better statistically than people with much less ideal starting points.
And very few people can create a billion dollar company in any situation.
If you don't have enough experience in an area to see the opportunities in an area, get the expertise. Otherwise find them in your area. If they don't exist go elsewhere. You are ALWAYS the problem.
This is so obviously incorrect that I don't understand how someone can write it. Why did Bill Gates found Microsoft and not someone of the same age from somewhere in the Democratic Republic of the Congo?
Obviously the kid from the Congo was the problem, and not that the environment that Gates found himself in was dramatically more condusive to success than growing up in a village in Africa.
Perhaps if the guy from the Congo had pulled himself up by his bootstraps harder he would be the billionaire by now?
But that doesn’t eliminate great disparities within any context.
One person will be miserably poor, neglected and abused by their parents, face social challenges due to appearance and speech issues, get cancer, then during remission be shot to death by a local criminal.
Another person has a stable childhood in a supportive, healthy and ethical environment. Effortlessly accumulates useful friends and acquaintances in part due to family reputation, height, mesmerizing speech qualities and physical attractiveness. And happens to discover the useful and novel work they love and are meant to do while still in high school.
And everything in between.
Also, we all think differently in ways we can’t undo. I don’t mean facts or beliefs or learned skill. Nature and early childhood experiences, that none of us were in control of, wired each of us very differently. The kinds of things each of us can do well vary greatly in quantity, quality and variety, and in usefulness within our context.
Two randomly selected people in any society are not going to have the same probability of success with the same amount of work. The variance is tremendous.
Turning every problem into another version of “work harder”, “do what it takes, “learn what it takes”, might be a good attitude. It might be helpful. But it won’t eliminate the disparity in results regardless of commitment.
Life is full of unfairness, accident, important epiphanies that come too late, etc. Stoicism and objectivity about that isn’t defeatism.
The ways things happen in the exterior world, and our internal worlds, are inherently chaotic. Small seeming things can lead us to serendipity or ruin in ways we will never be aware of.
We are more likely to create greater fairness and opportunity for ourselves and others by recognizing reality, and responding with a will to improve things despite the uncertain returns.
Ironically, the very point of Y-Combinator is the recognition that context matters. A lot.
Would you say the same to children born during a (human-caused) famine, or born with defects cause by politically useful wars fifty years ago?
Would you say the same to children raised in traumatic households, with chronic self-regulation disorders as a result?
Your take isn't just narrow, and wrong, but also incredibly callous. We live in a world where some people have megayachts while 785 million people lack access to basic drinking water services. In the US, the wealthy have world-class healthcare but 530,000 families file for bankruptcy due to medical issues each year (pre-pandemic!).
The amount of luck involved in becoming wealthy is immense, and ignoring this most basic fact is both dim and cruel.
Perhaps this is a lot of effort to respond to a fourteen-day old account... Still, this demented view on self-determination is bizarrely common even among the "temporarily embarrassed millionaire" set, and has been for hundreds or even thousands of years. I don't know if that's because it's so convenient for the already wealthy, or it's some kind of innate fairness bias, but it's embarrassing (and harmful) for the species that people actually fall for it.
Like those people who pick the wrong lottery numbers; all they had to do was pick the right ones, it's really not a lot of effort to move the pen and select the winning numbers.
I think that might be a slightly different definition of "worthy" than most "normal" people accept. Of course, your luck surface area is largely in your own hands if you live in a western civilization. But the fact remains that life is stochastic. Let me know when you make your first billion, btw.
