At 19, Sahil Lavingia has already designed scores of apps and worked at one of the hottest startups in the world--but he's only getting started.
At 18, Sahil Lavingia helped design the massively successful Pinterest, currently the third most popular social network, behind Twitter and Facebook. The Wall Street Journal has a Pinterest board. Barack Obama has one.
Then, a year in, Lavingia left. Now he's starting Gumroad, a new service which he says will revolutionize social shopping and e-commerce--and maybe even alter the way people create. Here’s how it works: Say you’ve made something--a song, a blog post, an app, etc.--and you want to make a little money from it. Just upload it, price it, then Gumroad, whose slogan is, “Sell anything you can share,” provides you with a custom product URL that is easily shareable across your existing social networks. Gumroad makes money by taking a 5% cut out of each purchase.
“I was at home on a Friday night in Palo Alto and I really wanted to learn realistic icon design. So I sat down at my computer and worked on this photorealistic pencil I’d designed in Photoshop. It took me around four hours and I thought, 'Wait a sec--if I follow a bunch of designers on Twitter, a bunch of designers probably follow me, and I should try to sell this. I could just put it up for a buck, and if you buy it, I’m gonna do it again.”
The trouble was, Lavingia couldn’t find an online marketplace that fit his needs. Most services charged a monthly subscription fee, which doesn't make a lot of sense to pay if you’re only selling something for a dollar. So by the following Monday, after a marathon weekend during which Lavingia did little more than code and sleep, Gumroad was born.
Lavingia is the latest poster boy for the new young, Flux-y breed of serial entrepreneurs. He started designing iPhone apps at age 14 and dropped out of his first semester at USC to join Pinterest. He says.
“I only want to work on things that solve my own problems.”
The lessons he learned at Pinterest loom large over his work at Gumroad. Mostly important, he says, he's learned not to settle into too specific of a niche. Instead, he's casting a wide net.
Lavingia says the same principle holds true for Gumroad.
“At Pinterest, even though we approached the design and functionality of it from a shopping perspective, it could be used for all sorts of stuff. And there’s no messaging in it that says, ‘You should use this for social shopping.’ I would never say ‘Gumroad is for musicians’ or ‘Gumroad is for authors.’ I think the best products totally surprise you because users are doing things that you have no idea about.”
One of Lavingia’s favorite examples comes from a user who printed Gumroad URLs on sack lunches. Hungry customers could visit the URL, pay $5, then grab a sandwich.
It may seem counterintuitive in 2012 to launch a website with the primary purpose of making people pay for art. Many consumers today expect their music and movies to be free, either through illicit means like online piracy, or legitimate sources like Spotify or Pandora. But Lavingia says this assumption is shortsighted.
“People need a way to pay rent. It’s not, ‘Aw, I had to pay 10 bucks for this album when I could’ve gotten it for free.’ It’s, ‘I get to give this artist that I really like 10 dollars. And if enough people do it, this person might just create way more stuff for people.’ It should be win-win for everybody.”
In fact, his biggest worry isn’t that people won’t be willing to buy creative material, Lavingia says.
“I think one of the biggest challenges is that a lot of people don’t like selling stuff. They’re afraid of putting a price on the stuff they create.”
While Gumroad focuses on amateurs, Lavingia says he would love to court bigger artists in the future. In fact, it wouldn't be altogether surprising if Gumroad became the go-to platform for comedians like Louis C.K. and Aziz Ansari, who are already experimenting with alternative distribution and pricing models. But Lavingia also stresses the importance of making Gumroad's experience just as enjoyable whether you’re a platinum-selling musician or kid designing clip art in his bedroom.
“Twitter is the best example (of that). Twitter is the same product if you have one follower or 15 million followers. Lady Gaga’s font size isn’t bigger because she’s a cooler person than I am. And I really want to transfer that over to Gumroad. And I spend every day thinking about how to do that better and better and better.”
COMMENTARY: What I like about Gumroad is the overall simplicity and seamless buying experience. Gumroad handles all the hosting, delivery, and payments, so users can focus on continuously creating cool stuff to sell. Gumroad allows users talk directly with their customers and to dynamically price their creations. They also allow "pay-what-you-want pricing", so users can let their customers decide what something is worth. Once a payment has gone through, Gumroad instantly emails customers with a fast, secure download link. Gumroad's FAQ's describe its services
- What can I sell? Most people use Gumroad to sell things that they've made. These include songs, albums, videos, photos, and other things. Even T-shirts! You can sell anything that you can upload or link to.
- What can I price a link? You can price a link for as little as $1, and as much as $1000. We also support pricing links in £, €, and ¥.
- How can people pay? We support all major credit cards. That includes Visa, MasterCard, American Express, Discover, JCB, and Diners Club cards.
- I'm not in the US. Can I use Gumroad? Yes. We support deposits to accounts in over 190 countries.
- What is Gumroad's cut? Simple. We take 5% + 25¢ of each transaction. For example: If you sell a digital video for $10, we get $0.75 and $9.25 is deposited into your account.
- What does Gumroad charge its users? There are no setup fees, monthly fees, bandwidth fees, or withdrawal fees.
- How do I get paid? A deposit to your linked account at the end of every month.
- Why is this FAQ so short? We believe that with simple products come short FAQs. Please send us an email if you have a question that isn't answered here.
Sahil represents part of a growing trend of college dropouts becoming entrepreneurs at at very early age. While little data on the phenomenon exists, venture-capitalists say they are funding more chief executives under age 21 than ever before.
Marc Andreessen, co-founder of venture capital firm Andreessen Horowitz says.
“At a certain point, they can’t get much younger or we’re going to be invested in preschool.”
Andreessen and other venture-capitalists say the entrepreneurs they fund at 18 or 19 typically have been prepping for years — learning computer code, taking on ambitious freelance projects and educating themselves on the Internet. Sahil definitely fits that mold.
Some are self-consciously molding themselves in the image of Facebook founder Mark Zuckerberg, 27, who created computer games as a child and was taking a graduate-level computer course by his early teens.
Sahil Lavingia recalls a day during the summer of 2011 when he had several meetings scheduled on Sand Hill Road — home to many of the nation’s leading venture-capital firms — and no car to get there. The journey of just a few miles took hours by the time Lavingia rode a local train a couple of stops, caught a bus to Stanford University and then hopped a shuttle bus to the Stanford Linear Accelerator Center, which is on Sand Hill Road.
Another time, dreading the combination of a hot day and a sweaty walk around Palo Alto, he pulled on a pair of shorts, even though he was heading to a meeting with blue-chip VC Accel Partners. The outfit — casual even by laid-back Silicon Valley standards — didn’t stop Accel from investing. Lavingia, an alumnus of hot online bulletin-board company Pinterest, raised $1.1 million for his payments startup, Gumroad. Not bad.
In March 2012, TechCrunch's Alexia Tsotsis interviewed Sahil Lavingia.
TechCrunch's Alexia Tsotsis interviews 19-year old Sahil Lavingia, founder of Gumroad, who talks about Pinterest and Gumroad, the social media marketplace.
After listening to Sahil Lavingia, you can tell that he is not only intelligent, but a sharp, albeit young entrepreneur who just beams with confidence. He believes that Gumroad can scale into something big. The next Facebook, perhaps?
I see Gumroad as the prototype of the first social ecommerce site. If you have a large number of followers or fans within your social network, whether on Facebook, Twitter or Google+, they are more likely to trust you because you share something in common with them. Therefore, if you have something valuable to sell them, something they might value because you created it, why not sell it directly to them. If Facebook were smart, they should adopt Gumroad's business model and allow their users to sell things in the same way. Better yet, why not acquire Gumroad. That's my two bits and prediction. We will just have to wait and see if Facebook takes me up on it.
Courtesy of an article dated April 25, 2012 appearing in Fast Company