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Gumroad

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Gumroad, Inc.
IndustryDigital distribution, self-publishing, e-commerce, music, film
Founded2011
FounderSahil Lavingia
HeadquartersSan Francisco, California, U.S.
Area served
Worldwide
Websitegumroad.com

Gumroad is an online platform that enables creators to sell products 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],[5] and TradeBit. The company received more than $8 million in funding.[6] Within 3 years Gumroad had to lay-off most of its staff to stay afloat[7].

Creators of all types, 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.[8] 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.[9]

Gumroad’s model is notable for the decentralized nature of its marketplace, placing the product emphasis on the relationship between the creator and consumer, instead of discovery. It was also originally notable for having a substantially lower fee than other commerce platforms (5% + 25¢).[10] The service later changed its fee structure, requiring a monthly hosting fee ($10) plus an additional per-transaction charge (3.5% + 30¢).

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.[11][12][13]

The idea came to Lavingia when he wanted to sell a photorealistic icon he'd created and realized that the amount of effort - even for an engineer and designer with a deep technical skill set - it took to sell an item directly to consumers was considerable. He decided to build a product that would make selling digital content as easy as sharing it.[14]

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.[15]

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.[16]

On September 8, 2014, Twitter announced its first commerce product, the Buy Now button, in partnership with Gumroad.[17]

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.[18][19]

Notable projects and creators

Many major and independent musicians and cosplay models have sold products via Gumroad, including Eminem,[20] Yuna Ero, [21] Bon Jovi,[22] Garth Brooks,[23] Girl Talk, Wiz Khalifa, David Banner,[24] Ryan Leslie,[25] and Sara Bareilles.[26]

Magnolia Pictures distributes a curated selection of films via Gumroad.[27] 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.[28]

Publishing is one of the company’s largest verticals, with best-selling authors like Tim Ferriss,[29] Chris Guillebeau,[30] and John Green[31] counted as fans or sellers. Gumroad has been adopted by many comic book authors as a preferred platform for direct distribution.[32]

In 2014, Wired featured a profile on illustrator Kyle Webster who made more than $100k selling custom Photoshop brushes via Gumroad. Also in 2014, Kiwi Juice was founded by a community of artists to curate the professional art tutorials sold via Gumroad in one place.[33]

Funding

Since its inception, Gumroad has raised more than $8.1 million in two separate rounds.[34] In February 2012, there was a seed round of $1.1 million from investors Accel Partners, Chris Sacca, Max Levchin, SV Angel, Josh Kopelman, Seth Goldstein, Naval Ravikant, Collaborative Fund, and Danny Rimer. In May 2012, a $7 million Series A round was led by Kleiner Perkins Caufield & Byers.[35]

References

  1. ^ Shontell, Alyson. "The Most Interesting Teenager in Silicon Valley", Business Insider, 2 April 2012.
  2. ^ https://techcrunch.com/2012/02/08/gumroad-gets-1-1-million-from-chris-sacca-max-levchin-and-others-to-turn-any-link-into-a-payment-system/
  3. ^ https://kk.org/cooltools/payloadz-1/
  4. ^ https://www.techytricks.com/
  5. ^ https://money.cnn.com/galleries/2008/fsb/0802/gallery.paypal_alternatives.fsb/5.html
  6. ^ "Gumroad’s Crunchbase", Crunchbase
  7. ^ https://techcrunch.com/2015/11/05/layoffs-hit-gumroad-as-the-payments-startup-restructures/
  8. ^ "Gumroad.com", Gumroad.com
  9. ^ "Gumroad Library for iPhone", Gumroad Blog
  10. ^ Flaherty, Joseph. "Sell to Your Friends: New Startup Gumroad Makes It Easy", Wired, 7 June 2012.
  11. ^ Holmes, David. "Who’s Next: Pinterest Designer Sahil Lavingia and His New E-Commerce Site Gumroad", Fast Company, 25 April 2012.
  12. ^ 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.
  13. ^ Shontell, Alyson. "The Most Interesting Teenager in Silicon Valley", Business Insider, 2 April 2012.
  14. ^ Holmes, David. "Who’s Next: Pinterest Designer Sahil Lavingia and His New E-Commerce Site Gumroad", Fast Company, 25 April 2012.
  15. ^ 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.
  16. ^ Gannes, Liz. "Kleiner Perkins Leads $7M Funding for Payments Upstart Gumroad", All Things Digital, 7 May 2012.
  17. ^ Brustein, Joshua. "Explaining Twitter’s New ‘Buy’ Button", Bloomberg Businessweek, 8 September 2014.
  18. ^ Ifeanyi, KC. "Online Marketplace Gumroad Launched An iPhone App", Fast Company, 30 September 2014.
  19. ^ DBW. "New Gumroad iPhone App Helps Authors Sell EBooks Direct", Digital Book World, 30 September 2014.
  20. ^ "Eminem’s Gumroad Page" Gumroad
  21. ^ "Yuna Ero Gumroad Page" Gumroad
  22. ^ "Bon Jovi’s Gumroad Page", Gumroad
  23. ^ "Garth Brooks’ Gumroad Page", Gumroad
  24. ^ Popper, Ben. "Girl Talk goes Gumroad: a web payment startup woos pop stars", The Verge, 17 August 2012.
  25. ^ "Ryan Leslie’s Gumroad Page", Gumroad
  26. ^ "Sara Bareilles’ Twitter", Twitter
  27. ^ "Magnolia Pictures", Magnolia Pictures
  28. ^ "Landmark Theatres", Landmark Theatres
  29. ^ "Tim Ferriss’ Gumroad Page", Gumroad
  30. ^ "Chris Guillebeau on His New NYT Best Seller, Writing, and the Road", Gumroad Blog
  31. ^ "Things I Can Do" Archived 2014-12-14 at the Wayback Machine, John Green’s Blog
  32. ^ Joe, Ryan. "Digital Comics, Digital Payments", Publisher’s Weekly, 26 Sept 2014.
  33. ^ "Kiwi Juice", Kiwi Juice
  34. ^ "Gumroad’s Crunchbase", Crunchbase
  35. ^ Marks, Gene "Drilling Down: A Teenager Raises $7 million", The New York Times, 14 May 2012.

Competitors

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