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Gumroad’s CEO on the company’s first 10 years, competitors like Patreon and Substack, the rise of the creator economy, and how app store “taxes” stifle growth

“Gumroad allows you to escape your desk job at 9 to 5. Get rid of your tie and suit. Stop your commute. Earn money for your art.”

In the present, this promise may not be so extraordinary. Numerous companies, such as Patreon, Substack, Ko-Fi, Teachable, Cameo, and others, have all created their own spaces in the ever-growing creator economy and promised their users similar services. Gumroad’s story and the principles that underpin its business model differ from the established norm.

Sahil Lavingia launched Gumroad in 2011, following the departure of his position at Pinterest, renouncing his one-year cliff, and deciding to go full-time into what he perceived as a growing market for individuals to market their work. The following 10 years weren’t an easy path. Despite the growing presence of the creator economy in the present, Lavingia wrote a blog that was titled “Reflecting on my failure to build a billion-dollar company,” which detailed Gumroad’s difficult past of layoffs, rapid growth, and the pressure to close, and how those experiences have shaped how he runs the business currently. This is why Gumroad is a business that doesn’t adhere to the traditional business metrics based on venture capital and instead operates on a loose schedule with flexible working hours. The message Gumroad offers its creators is that they can leave their job and be free to work as they please and be paid for their work. So why is it that Gumroad be held to the same standards?

The philosophies that have been formulated by Gumroad haven’t led to Gumroad becoming the most well-known company in the industry. Patreon, Substack, and others are all growing quickly, even though they were founded years later. However, Lavingia believes that the constantly growing creative economy and Gumroad’s philosophy strategy will pay off in the end.

Business of Business spoke to Lavingia about his take on the current situation of the creator economy, how Gumroad stands out against other players, and what it will take to help the market expand even more than it has already.
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