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Gumroad

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Gumroad, Inc.
IndustryDigital distribution, self-publishing, e-commerce, music, film
Founded2011; 13 years ago (2011)
FounderSahil Lavingia
HeadquartersSan Francisco, California, U.S.
Area served
Worldwide
Websitegumroad.com

Gumroad is an online platform that facilitates the sale of products by creators directly to consumers. Sahil Lavingia founded the company in 2011 with the intention of making selling as easy as social sharing.[1] Although Lavingia claimed "I don’t think five years ago this could have existed”,[2] there have been companies with a similar purpose since 2004, such as PayLoadz[3], E-junkie,[4] and TradeBit[citation needed]. The company received more than $8 million in funding.[5] Within three years Gumroad had to lay-off most of its staff to stay afloat.[6]

Founder Sahil Lavingia in 2010

Creators such as authors, comedians, designers, filmmakers, musicians, and software developers use Gumroad to sell products directly to consumers; mostly digital content like albums, comics, ebooks, films, games, music, or tutorials. Gumroad is built as a plug-and-play product that offers payment processing, file hosting and delivery, marketing and communications tools, and consumption experiences for a diverse array of verticals[clarification needed]. Lavingia has stated that his product philosophy is to ask what creators spend their time on making things, and then build features for Gumroad that do those above-mentioned logistics functions for them.[citation needed]

Gumroad’s marketplace is decentralized. It was also originally notable for having a lower fee than other commerce platforms (5% + 25¢).[7] The service later changed its fee structure, requiring a monthly hosting fee (USD$10) plus an additional per-transaction charge (3.5% + 30¢).[8]

History

Sahil Lavingia built the first iteration of Gumroad in a single weekend, in 2011. Lavingia, previously the first designer hired at Pinterest and the designer of the Turntable.fm app, was 19 years old at the time.[9][10][11]

The idea came to Lavingia when he wanted to sell a photorealistic icon he had created and realized that the amount of effort it took to sell an item directly to consumers was considerable. He decided to build a service that would make the process as easy as sharing web content.[12]

In February 2012, while still the sole member of the company, Lavingia announced a $1.1 million seed round from a notable group of investors including Accel Partners, Chris Sacca, Max Levchin, SV Angel, Josh Kopelman, Seth Goldstein, Naval Ravikant, Collaborative Fund, and Danny Rimer.[13]

Three months later in May 2012, it was announced that Kleiner Perkins Caufield & Byers had led a $7 million Series A round for Gumroad. The investment was the first made by former Twitter engineering head Michael Abbott as a KPCB partner.[14]

On September 8, 2014, Twitter announced its first commerce product, the Buy Now button, in partnership with Gumroad.[15]

On September 30, 2014, Gumroad released its first mobile product, a utility iPhone app that acts as a mobile library for digital content purchased via Gumroad.[16][17]

Notable projects and creators

Many major and independent musicians and cosplay models have sold products via Gumroad, including Eminem,[18] Bon Jovi,[19] Garth Brooks,[20] Girl Talk, Wiz Khalifa, David Banner,[21] Ryan Leslie,[22] Sara Bareilles[23][failed verification], and Sam Hyde.

Magnolia Pictures distributes a curated selection of films via Gumroad.[24] Landmark Theatres also curates a selection of films distributed via Gumroad, including Jiro Dreams of Sushi, Man on Wire, Gonzo, Page One: Inside the New York Times, and Jesus Camp.[25]

Publishing is one of the company’s largest verticals,[clarification needed] with best-selling authors like Tim Ferriss,[26] Chris Guillebeau,[27] and John Green[28] counted as fans or sellers. Gumroad has been adopted by many comic book authors as a preferred platform for direct distribution.[29]

In 2014, Wired featured a profile on illustrator Kyle Webster who made more than $100,000 selling custom Photoshop brushes via Gumroad.[30]

References

  1. ^ Shontell, Alyson. "The Most Interesting Teenager in Silicon Valley", Business Insider, 2 April 2012.
  2. ^ Tsotsis, Alexia (February 8, 2012). "Gumroad Gets $1.1 Million From Chris Sacca, Max Levchin And Others To Turn Any Link Into A Payment System". TechCrunch. Retrieved 2020-09-13.{{cite web}}: CS1 maint: url-status (link)
  3. ^ "Payloadz". Cool Tools. 2005-05-04. Retrieved 2020-09-13.
  4. ^ Maltby, Emily (February 11, 2008). "5 PayPal alternatives - E-junkie (5) - FORTUNE Small Business". money.cnn.com. Retrieved 2020-09-13.{{cite web}}: CS1 maint: url-status (link)
  5. ^ Taylor, Colleen (May 7, 2012). "Gumroad Gets $7 Million Series A From Kleiner Perkins For Indie E-Payment Platform". TechCrunch. Retrieved 2020-09-13.{{cite web}}: CS1 maint: url-status (link)
  6. ^ Lynley, Matthew (November 5, 2015). "Layoffs Hit Gumroad As The E-Commerce Startup Restructures". TechCrunch. Retrieved 2020-09-13.{{cite web}}: CS1 maint: url-status (link)
  7. ^ Flaherty, Joe (2012-06-07). "Sell to Your Friends: New Startup Gumroad Makes It Easy". Wired. ISSN 1059-1028. Retrieved 2020-09-13.
  8. ^ "Gumroad Review [2020]: Pricing, Pros, Cons, & the TRUTH". Freedom Bound Business. Retrieved 2020-09-13.
  9. ^ Holmes, David. "Who’s Next: Pinterest Designer Sahil Lavingia and His New E-Commerce Site Gumroad", Fast Company, 25 April 2012.
  10. ^ Tsotsis, Alexia. "Gumroad Gets $1.1 Million From Chris Sacca, Max Levchin and Others to Turn Any Link Into a Payment System", TechCrunch, 8 Feb 2012.
  11. ^ Shontell, Alyson. "The Most Interesting Teenager in Silicon Valley", Business Insider, 2 April 2012.
  12. ^ Holmes, David. "Who’s Next: Pinterest Designer Sahil Lavingia and His New E-Commerce Site Gumroad", Fast Company, 25 April 2012.
  13. ^ Tsotsis, Alexia. "Gumroad Gets $1.1 Million From Chris Sacca, Max Levchin and Others to Turn Any Link Into a Payment System", TechCrunch, 8 Feb 2012.
  14. ^ Gannes, Liz. "Kleiner Perkins Leads $7M Funding for Payments Upstart Gumroad", All Things Digital, 7 May 2012.
  15. ^ Brustein, Joshua. "Explaining Twitter’s New ‘Buy’ Button", Bloomberg Businessweek, 8 September 2014.
  16. ^ Ifeanyi, KC. "Online Marketplace Gumroad Launched An iPhone App", Fast Company, 30 September 2014.
  17. ^ DBW. "New Gumroad iPhone App Helps Authors Sell EBooks Direct", Digital Book World, 30 September 2014.
  18. ^ "Eminem on Gumroad". Gumroad. Archived from the original on 2016-04-07.
  19. ^ "Bon Jovi’s Gumroad Page", Gumroad
  20. ^ "Garth Brooks’ Gumroad Page", Gumroad
  21. ^ Popper, Ben. "Girl Talk goes Gumroad: a web payment startup woos pop stars", The Verge, 17 August 2012.
  22. ^ "Ryan Leslie’s Gumroad Page", Gumroad
  23. ^ "Sara Bareilles’ Twitter", Twitter
  24. ^ "Magnolia Pictures", Magnolia Pictures
  25. ^ "Landmark Theatres", Landmark Theatres
  26. ^ "Tim Ferriss’ Gumroad Page", Gumroad
  27. ^ "Chris Guillebeau on His New NYT Best Seller, Writing, and the Road", Gumroad Blog
  28. ^ "Things I Can Do" Archived 2014-12-14 at the Wayback Machine, John Green’s Blog
  29. ^ Joe, Ryan. "Digital Comics, Digital Payments", Publisher’s Weekly, 26 Sept 2014.
  30. ^ Flaherty, Joseph (2014-08-27). "This Illustrator Makes $100K Selling Virtual Paintbrushes". Wired. ISSN 1059-1028. Retrieved 2020-09-13.
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