Episode with Sahil Lavingia (Founder & CEO of Gumroad)

Hello everybody, I'm KP and welcome to yet another episode of the Building Public podcast. Today I'm incredibly thrilled to welcome one of my favorite building public entrepreneurs, you know, ever since I got started in this space and became active on Twitter. So it's a real thrill to just to be in this room and kind of ask all the dirty questions that I would've wanted to ask over the years right in this podcast episode. So welcome to, welcome to the show, Rahsaan Sahil.

Thanks for having me. Excited to be here.

Awesome. So today, the theme of our conversations is going to be centered around his latest book. Pretty excited to get my hands around it. It's called The Minimalist Entrepreneur. Highly recommend if anybody is interested about Sahil's work and what he's done over the last 10 years, if you will. We're going to dive into some topics from the book, but also want to cover a few building public topics because, you know, that's the audience and we have founders here. So first of all, congrats on the book, Sahil. I know a book is a monster project. I cannot underscore that because I've written a smaller, very micro version of a book and I broke my back. So like, this has been what, 2019 since?

Yeah, 2 and a half years, I think, of work.

So tell us about the process. Like, what was it like for you to go from being a founder, being entrepreneur to like being an author?

Yeah, I mean, honestly, like when I, you know, so the journey was I published Reflecting on My Failure to Build a Billion Dollar Company, which a lot of people are probably familiar with listening

to the viral Medium article.

Yeah, viral Medium article in February of 2019. And Mary Sun, an editor at Penguin, specifically Portfolio, which is kind of their business imprint, reached out and said, hey, you seem to have a really great story. Your voice is pretty interesting. It's different than most business book authors. And most importantly, your audience, or not even your audience, but just like, it seems like the kind of broader community is resonating with a lot of what you've said here. And it kind of went viral and You even mentioned that you were writing science fiction and fantasy as a way of kind of getting out of the headspace of startups in the down period. Have you thought about writing a business book? Would you ever consider that? And so initially I was like, no way, because there's so many business books and they're full of fluff often. And I'm like, I don't know if I have anything that interesting to say that isn't in the essay already. But I had a call with her and then I basically spent like 6 months thinking about it. And the obvious thing would've been just take the essay and kind of write a longer memoir-style thing. But I was like, that's not what I want to write. I want to write something valuable, something that people can actually use and improve their lives with, not just a cool, interesting story that they can read. Because I did that with the essay. That was kind of half— I already checked that box in my view. And then I was talking to David Moldawer. He wrote the— or helped write the outline for Atomic Habits. And so I got an intro from a friend and said, hey, if you're— he was like, hey, if you're thinking about writing a book, you should talk to this guy because he really helps you figure out how to take your your gestalt, right? Like the things that people know you for and kind of helps you think through what would a book, you know, that you would write look like even, right? Because a book is not like just a collection of like 10 essays or 10 blog posts, right? Like it's a little bit more than that or different. And so I had a call with him and he actually really helped me come up with this new idea, which was not just like what not to do, which was kind of what Reflecting on My Failure to Build a Billion Dollar Company was about, but what to do. Like how do you actually build a business the right kind of business the right kind of way. And initially it was called Stop Chasing Unicorns, which we changed the title. But—

I also heard that it was called Leaving Startup Land at some point.

Yeah, well, I wanted it— so initially my first proposal, my first kind of pitch to Penguin was like Leaving Startup Land, which is more of that kind of memoir-y thing. And it just wasn't working. It was like set into 2 parts. The first part was like, you know, a billion dollars isn't cool, which is like kind of the Facebook movie, you know, kind of joke, you know what's cool, you know, kind of thing or whatever that, you know, like, I guess you know, a million's not cool, you know, whatever.

Yeah, right.

My joke on that was like, a billion's not cool, you know what's cool? And then it's kind of like, so this half the book was like, you know, about VC and this and that, more of kind of like the history of venture capital and these sorts of things that I'm interested in. But I kind of just, now it's a paragraph in the whole book. And then the big reason was like, yeah, it's just like, you can go Google that stuff. Like they're great books, they do well, but like I'd rather write a playbook, like a sort of step-by-step, how do you build a business? Because that's what I really wanted. And so he helped me really think through that and that's when we nailed the of most of the kind of what the chapter, at least chapter by chapter outline was, which was like step 1, start, step 2, build, step 3, sell, step 4, market, step 5, grow, step 6, hire, et cetera. So like that came kind of from David helping me think through how to make it very actionable.

This was 6 months from Feb 2019.

Yeah. So around, yeah, like sort of fall, winter of kind of 2019, and then gave that to Penguin. We did a bunch of cycles kind of on it. Like one of One of the big changes was in the final book, there's one chapter called The Minimalist Entrepreneur and then Start with Community is chapter 2. I think in that proposal, I think it was chapter 1 was what, like, kind of like stop chasing unicorns. Chapter 2 was Minimalist Entrepreneur and chapter 3 was Start with Community. And so, we just decided, actually, my agent Lisa Damona was like, you know, people are already convinced in that. You don't need to sell them on. Hmm. People picking up this book are not needing to be sold on like, This way you kind of can get to that as part of chapter 1. And so we kind of got rid of that chapter, folded it into chapter 1, and signed the book deal with Penguin once they kind of liked it overall. I think it was still actually at that point called Stop Chasing Unicorns though. And that was December of 2019.

And it came out officially in October 2021.

Yeah, exactly. So 2020, I mean, that was a crazy year for everybody. It's kind of funny because now people ask me like, how the hell did you write a book, run a company, that grew almost 100% year over year and launched a venture fund at the same time. And the truth is, like, I had to because when I signed the book deal in 2019—

Yeah, you committed.

Yeah. COVID wasn't a thing. Gumroad was kind of this gradual growth company, the same company that I wrote about and that everyone kind of knew it as. And then I had no plans on being a VC. And then COVID happened, rolling funds with AngelList happened, crowdfunding happened. Like, all of these things kind of happened in the kind of last 18 months. And I write a book. And so 2020, I, it took a year to write the first draft. So I basically started writing in January 2020, and I think I gave the first draft to Penguin in December of 2020. So it took me a year to kind of, and really the first draft was more, it was really like a 3rd or 4th draft. Like I had done a lot of work on it and did a bunch of feedback and sent it to a bunch of people. And then January 2021 to March 2021 was kind of like getting to like basically the final, final, which I rewrote the last chapter completely. So there's still quite a few changes that we had to make and then copy edited it in like the summer. And then I think it was finalized around June or July, which is like pretty close to the release date actually, which was kind of surprising to me. Finalize it because then it's sent to the printers, they print the books, they bind the books, and that's, you know, it's like, at that point you can't—

Yeah, it's all sealed. So how much of this process to you reminded you about building a product? What are some parallels you drew and what are some differences that are very unique?

Yeah, I mean, it was kind of fun because I was able to kind of use the framework as a way of almost testing the framework with this new product in a way, right? Where start with communities, chapter 1, which is basically what I did. I created a course called The Minimalist Entrepreneur and I said, hey, I have a book that I'm writing. Don't tell anyone. But I just sent it to my email list. I didn't tweet about it or anything. And I said, hey, I'm writing a book. I don't know if it's good, but I would love to kind of try it with folks. And so I'm going to teach a course called The Minimalist Entrepreneur and we're going to go through the whole book. Everyone We'll read it as part of the course and everyone will give me a ton of feedback hopefully on it. And so we'd split the book into basically a Google Doc per chapter.

Wow.

And then every class basically people would read the Google Doc, comment on the Google Doc, like 150 people per Google Doc basically. And then we'd kind of, obviously there was like a slide deck and there was more kind of traditional course element to it. But then I would basically go in and address all the comments and basically by the end of the course I had 150 people give me Hundreds, if not probably closer to thousands of comments on it and really helped strengthen the book, like some confusing parts or some boring parts or things like that. Cut some parts that weren't interesting to people, added some things that I didn't answer before, but really made the book a lot stronger. So that was like start with community and then build as little as possible. Kind of similar, right? It was kind of like, how do I test the ideas? I mean, one is I wrote a blog post, right? Even without the book existing in the first place.

The MVP was a blog post. Yeah,

exactly. The MVP without me even knowing it was the blog post. And that really was like really important to kind of test the waters and see there's a demand kind of, you know, for this sort of thing. And then sell to 100 customers, right? That's like basically the point there is that a lot of people skip, they go from building to marketing. Hmm. They don't go through the really important part of like selling to people, the feedback loop of getting better and better, getting feedback, improving, getting feedback, improving. And so when you start marketing to like people kind of broader sort of concentric circles from your community, you know, you have less opportunity for that feedback, right? It's not like some stranger's going to use your product and be like, oh, there's all these things wrong with it. Right. No, they're just going to close the tab and move on with their life, right? Like Product Hunt, you should not Product Hunt your MVP, right? You should probably do some level of feedback first, right? And so I did that, like, but the course was an example of that. But then also, like, I would, I tweeted, like, when I first, when I did announce the book, I said, DM me for chapter, for the intro in chapter 1. And like, that was kind of, some people were like, you're insane. Like, You have a lot of followers on Twitter.

Yeah, you have like 150 or so. I don't know how many you have, but like 100K more, right? Definitely. So

yeah, yeah, I have, yeah, a lot of followers. And I don't even— if 1%, you know, DM me, that's like thousands of DMs. And, you know, that's like 2,500 DMs.

What I love about you at that scale too, Sahil, is something that you continue to do, and I've seen you do it even at 25K, 30K scale, is that you routinely experiment. Same thing with Ryan Hoover, right? You routinely experiment hoping that even 1% convert is some kind of signal. And I think a lot of people, once they hit like $200K, $300K, $400K, they're just like so afraid to test the waters because they're like, oh, I need at least 50% response rate. But we all know that that's not real. That's not possible.

No. Yeah, totally. And I have to remind myself, to be honest, you know, it's like, because it would be easy. And there's kind of this fear once you're kind of quote unquote successful that you don't want to fail again.

Yes, in public.

Exactly. In public, right? Like once you're, you know, like a lot of people who've built billion-dollar companies will never start another company again, because you don't want to You don't want your last company that you started to fail, right? It takes a lot of confidence. For example, Justin Kan, right? Like, very successful, started Atrium, failed. And it took him a long time, I think, to digest that kind of failure and do it, address it publicly. And I think he's a lot stronger of a human for that. But I think it's very difficult. Very, very, very few people are willing to do that. Like, is Zuckerberg going to start a new company ever? Probably not. You know, it's very difficult to do that.

Also, I think a lot of them have just attachment towards that one hit, you know, and in a weird way, they just don't let themselves reincarnate, you know, their own persona, right? And so they're still playing the greatest hits from the '90s. Like, it's like, come on. It's like the kids who went to Stanford 10 years ago. I'm like, if you're still bragging in 2021 that you went to Stanford 10 years ago, you're a loser. I'm sorry, right? Like, you have to have something else apart from it, you know, in the last 6 months. But so—

Yeah, like even writing for me, right? Like, I wrote Reflecting on My Failure to Build a Billion Dollar Company, and I wrote a book. Like, I think a lot of people would have been like, you did the thing, like, you nailed it. You kind of entered the zeitgeist. Everyone kind of knows you, at least for this specific thing. Like, why even do this? People have told me that, you know.

Actually, that's my question. Why? Why do it when you've kind of, you know, to be honest, from like outside in, like to speak to zeitgeist and sort of get a pulse check with that Medium essay did the damage. I mean, it did the— it caused the tremors, right? And you know, both good and bad, right? It did the damage. You've entered the conversation. Then why double-click into it? Why this particular book? Why come out big?

Yeah, totally. I mean, one, I wanted to see if I could do it, you I knew that a book was going to be incredibly hard, very difficult. And I knew that the only way I would commit to it is if I— and people ask me, why not self-publish and do Gumroad and this and that? Which, yeah, definitely if I wanted to optimize for making money and things, I would. But in terms of creating the best possible product and doing the audiobook with a director and a producer, all of the work that it takes to write a traditionally published book, I wanted to see if I could do it. And I knew I could do it. But I didn't know I couldn't do it at the time that I signed the book deal. I had faith that I could learn how to do it over time. Right. And I would need help, but I could get that help. Right. This is, you know, often, you know, you ask kind of about parallels, right, with building a business. A lot of people think they need to know everything to start a business. The truth is, if you start a business and you make some progress, plenty of people will help you. You know, most people are not interested in starting their own business, actually. Right. They're interested in helping other people start their businesses. Like the vast majority. Right. Like 1% of people are entrepreneurs. Right. 99% of people are helping those entrepreneurs. They work for those businesses. Generally, right? Nothing wrong with that. That's just what it is. You actually need that right now unless you have robots everywhere or whatever, right? And so, yeah, I was like, I have confidence that if I can write a decent first draft and people will help me get draft 2, draft 3, draft 4, the audio, but all this stuff people have seemed to do, right? There are books on my bookshelf. Many of these people, they weren't born being able to do this. They learned how to do it over time. There's an industry that helps people figure this stuff out, et cetera, et cetera. And I have friends who've done it before. Like, I'm sure I could get the help that I need as long as I can show people I've done some of the work myself, right? An idea is not enough, I think, to get help generally.

Right.

But I wanted to write the book to kind of answer your question of like, why write the book at all? Is just to— I wanted to give— I wanted something that I could give people and say, hey, look, this is how I would approach building a business. And it honestly doesn't matter if it sells a million copies like Psychology of Money or 5 million copies like Atomic Habits or 5 copies. Like, the goal is I wanted something where if someone asks like, hey, Hey, Sahil, like how would you do this? I want to be able to give them something that's like I spent 400, 500, something like that hours on this book, and that's you know probably half of what you know other people also spent time, right? So probably a thousand hours went into this book or so is kind of my approximate guess. So it's very refined, it's very edited, and you can read it in two and a half hours. So you're getting an insane value in terms of like the ROI almost, right? Like the amount of time to do all the research yourself to get all this knowledge would take hundreds of hours. You can read it. It's a very short book, really. You know, it's maybe three hours. Like the audio. Your book's 4 hours and 38 minutes. You can do it on a plane ride. But I wanted something that I could just give to people. People DM me on Twitter every day saying, hey, how do you do this? How do you think about this? And I just want to be able to say, look, go read this thing. I can help you, or you could read this thing and you're going to get 100x the amount of help. And I'll still help you, just read the book first. And then your questions are going to be so much better because you're not going to ask me the same questions everybody asks me all the time. Like, oh, how did you acquire the first users of Gumroad?

Right.

How do you think about raising money today with crowdfunding, et cetera? Now possible, right? How do you market? How do you use Twitter? How do you think about that? Like, these are all, you know, I basically wrote the book to answer every question that people have asked me since February 2019 when I published that article up till, you know, kind of when I finished. Like, I got thousands and thousands of questions and I wanted to be able to answer them all in a single thing, single thing that people, I could give someone and say, here's everything that I really know about, you know, building a business. I would say the only thing I don't know and that's not in the book is exiting. There's nothing about exiting because I haven't done that yet. That's like the one thing I have yet to do. Maybe there'll be a revision or something.

There'll be a sequel, hopefully. Right.

Yeah. Like, you know,

but— Reentering startup land.

But it's really just like, yeah, trying to answer all the questions and just honestly not too different from why I published Reflecting on My Failure to Build a Billion Dollar Company was, you know, I would have conversations with people and people would be like, what happened? Like, you know, my mom, friends, coworkers, like, what's going on? You know, it's been a couple of years. It seems like it's still around. Some people thought it died. Some people thought I sold the business. Like everyone had a different story, kind of telephone kind of game. And then I was like, wow, like no one knows. It turns out because I never wrote about it. Right. And so I really kind of wrote that essay to kind of answer all these questions, like all these conversations I was having over and over again and in a single thing that I could just point everybody to. And it did quite well. And so the book was kind of similar in that way, at least, right? Where it was like, okay, all these people clearly want something from me. They want answers to these questions. Why don't I just kind of do the effort instead of, you know, 500 hours spent one at a time, you know, a minute at a time, like consolidate all the effort and then just have a single asset that hopefully is better, you know, because of all of that, you know, you know, like, yeah, you know, like if someone says, hey, how do you, you know, how did you acquire the first government creators on Twitter? My answer to them is like, I emailed a bunch of people, right? Right. Like, but if I have a book, then I can spend more time. I could give an example. Like I can make the answer like 10x or 100x better because I know thousands of people, tens of thousands, maybe more, will read that chapter. And so I can put in a lot more time and effort. And same thing reflecting on my favorite billionaire company. I put 40 hours into that article, which most people would be like 40 hours into a single blog post. In hindsight, it made sense. Everyone would say it was worth it because a million people ended up reading it. Definitely. Right. But most blog posts, 40 hours is a long time.

Right. The other thing that I love about this book, and I got Some glimpses into this particular topic where I think Naval was the one who said this, where he said something like, live the book and then write the book, right? And there's so many parts about this book where you kind of are drawing from your own personal experience as opposed to a general accepted advice, like do things that don't scale. It's just everybody knows that, right? You're like, specifically, I saw one of the cold DMs you sent in the chapter where it was talking about how it was to some guy who had a PDF. on a website was selling something and you were like, hi, I'm Sahil. Like, here's— and I was like, wow, this is a real example, a specific real cold DM that you sent out. And so it's like you lived it and hence, you know, it's much more relatable to the reader in my view, you know, to the founders. So yeah, what, what, what? Yeah, sorry.

Yeah, I think was like, basically, if you want to write the book, just be the book. Yeah, right. And then writing the book is easy, right? And, and vice versa, right? Like, if you aren't that person, it's very, very difficult to write It's almost impossible, I think, to kind of—

Intellectually, it's going to be very dishonest, and people can call that out. I mean, maybe not everybody, but like the greats, you know, the greats can see through, right? The other part that keeps coming up in some of my conversations about the book and your tweets is how difficult is it really to write a book when you've already tweeted out most of its content? I disagree. I think it's insanely fucking hard because you're condensing all of these thought tweets and building a narrative and fitting that into the chapter/page. How was For you? Like, because one could say outside in looking in, like, you've already tweeted a lot of these tweets. A lot of these ideas were already like placed in the ether on Twitter over the years.

Yeah.

Was it hard to pick from them? Was it easy? Was it harder than you imagined? What was it like?

Yeah, I mean, I think it made it easier in some ways because I could use— I could sort of test ideas. And like, even in the last 2 years, like, I would write and then I would say, I would take a tweet, like I would take a sentence from the book that I thought was really interesting and then tweet it. Like, so actually some people think, oh, like he put some tweets into the book, but actually like I

put the book into the tweets. Yeah,

exactly. Exactly. It just, you know, it took 2 years to write, so people just don't know that. Right. And if you think about it, like most people followed me after February 2019. And so actually like I wrote the book, like, and then the tweets came out of the book. So it's kind of a funny, a funny thing. But What came first, chicken or the egg sort of thing. But it made it easier in a way that I knew there was demand in a sense, right? I kind of knew that, okay, people wanted these ideas. And by the way, sometimes I would do something and it wouldn't work and I'm like, okay, maybe this is not the right approach, not the right framing of this message or idea. So in that way it made it easier, but still writing the book is like a very different beast, right? Ultimately, Twitter is like firing an arrow, I think Naval says, right? You kind of want to get it as far as possible and that means simplifying the message, Trying to make it super pithy, trying to say as much with as few words as possible.

Almost intentionally removing the nuance.

Yeah, totally removing the nuance, implying the nuance, assuming that smart people will figure out the nuance, right? Versus putting all the asterisks in the tweet itself. But a book is very different. A book is not going to go viral. This book was not written to go viral. For example, Psychology of Money is a great book. It doesn't go viral. I mean, how often do you see a tweet or a message from that book on Twitter? Almost never, in my opinion. Versus something like Atomic Habits where you often see some of those methods. Certain books are written more for that and work more for that based on the subject matter. But it was a book that was kind of antiviral in a way where it's like, look, I want people to read this book. You're going to spend 4 or 5 hours in my head on these certain topics, maybe an hour per topic, and you'll hopefully internalize the way that I think about something, which I think Twitter is just very hard to do that. It's hard to— you can kind of You know, there's like the Gray and Novol tweetstorm, which I think is phenomenal, right? But like, so sometimes you can kind of get some of that, but ultimately it's not super applicable in the sense that you can't take it and apply it directly to your own life. I mean, you can, but it requires like real work. And sometimes I think people want, like, they want examples. Like, that was a hard thing about the book was like, I can't—

Yeah, the specific examples.

You know, I can't just rant about sales or marketing. Like, I need examples, I need data. Because truthfully, when people read books, it's also a different audience, right? Like the kinds of people who read a lot of Twitter, like you and me and other folks, like often like the people who read books, very different group of people, right? It's like MBAs, it's like students, you know, it's like airport, you know, you see all those airport books, like it's a very different group of people. And I wanted to write a book like, look, if you already follow me on Twitter, and this is kind of one of the hard things actually about writing and publishing a book is like, it's not even for my audience, to be honest, right? Like the goal of this book is somehow, I don't know how—

To expand the audience a bit. Exactly. To

like grow the Like people will say, hey, why isn't this on Gumroad? I'm like, one, it was on Gumroad for my audience, but two, it's not like the people who already know Gumroad is like already know all these ideas. Like they don't need this. You know, this needs to go beyond that. It needs to go to the people who don't know who Naval is, right? Most people, like 1% of the world, maybe less.

Which is a shame, by the way. I think we should know. The other day I was having an argument with my wife saying like, I can't believe like Naval has like what, a million followers? I'm like, there should be more people. And she's like, you're just a nerd. I'm like, no, this— I, I feel like Twitter has what, 360 million monthly active users or something?

Hundreds of millions.

And if you think about it, it's so weird how, how like an average person out there who's on Twitter is so different, the persona, as opposed to the people who we associate mostly within our tech Twitter. Yeah. So different. So it makes a lot of sense for your book, for you to like invest in reaching to the broader segment, the folks who are at the airports picking out the books next to Michelle Obama's Right? So they're like a very different mindset.

Exactly. Yeah. I mean, these people generally don't know what Notion is, don't know what Figma is, even know what like an MVP stands for. I mean, this is like a, you know, they don't know what a— I mean, even like when I published Reflecting on My Failure to Build a Billion Dollar Company, like I got so many people because it did kind of go beyond my own audience at the time that were like, oh wow, I had no idea that this is how Silicon Valley works. You know? And it's like kind of crazy because it's like, well, can't you just Google? Like, I don't know, some of that, like, you know, it's like not that hard to know. Like, but the truth is like people are busy, they're doing their own life. Like, everyone needs that kind of gateway drug into, you know, startup investing, for example, right? Like, most people have never invested in a startup before, right? Yes. Like, very, very few people. I think 250,000 people a year in the US do it, right? So, like, whatever, you have 300 million people, so like 0.1%, right? Like, very, very small. 1 in every 1,000 people per year invest in a startup. That's obviously changing, you know, but my goal is hopefully 1%, you know, and then 10%. And, you know, but like, very, very few people have ever, you know, equity. How many people Work at a company in which they have equity in the business. 1%.

Yeah,

very, very, very few.

See, the other thing too, Sahil, is that a lot of people— and this is something I had to wrap my head around after moving to the US. I told you before that I grew up in India, and my whole perception, like, you know, like my own mental framework was all about salary, middle class, because I grew up in, you know, as, you know, middle class salary stability, right? Oh my God, like the fact that the path to wealth is through equity, through ownership, is something that I just— nobody just called me and told me, man. I wish somebody like you You should have just called me like 20 years ago. I'm serious. So I think I'm thinking of all my cousins out there. I'm like, oh my God, you guys, what are you doing? Why are you trying to live from paycheck to paycheck?

That's the best tweet in that Naval tweetstorm, right?

This whole equity. Yeah, you can get rich by renting out your time, I think, or something like that, right?

Yeah. I mean, basically, if you remove all those other tweets and you just said the only way to get— or like, yeah, you don't get rich by renting out your time, you get rich by owning equity in a business. And there's really only a couple of ways to own equity in business. only 3, right? You either start the business, you either work on the business, equity in the business, or you invest in the business. And this is like, again, in theory should be obvious because you can go to any list of rich people and be like, okay, how did these people get rich? And they all basically got rich in the same way. The problem is if you read the news and the media, they say, oh, it's like your parents are rich,

right?

And yes, that's also true in some sense, but how did they get rich? Like, at some point someone started a business, right? Someone invested in a business, someone worked early on in a business. And yes, there are issues. There's historical, there's slavery, there's all sorts of crap in the past. But certainly today, starting today, if I had a recommendation for you on how to get rich, there's really only one way, right? Which is you own equity in a compounding asset.

Right.

And what is the majority compounding asset? It's businesses, right? There are others, like you could say fine art. Like there's some of these, right? There's land, et cetera. But in terms of going from zero to You know, you really, it's just starting a business. Like it really kind of comes down to something as simple as that. And it's funny because even I know people who like love the ball, love all his tweets, blah, blah, blah. And they still don't get this.

Yeah.

Like they still say, oh, well, like, I, you know, it's like not for me. I don't want to learn to code. I don't want to build. I like, I don't want to sell, like, but I like his tweets. And I'm like, well, that's the

point. Yeah.

Yeah.

Like, you know, someone's handing—

You can, you know, you can go out to a steakhouse and order mashed potatoes. But, you know, maybe, you know, it's a little weird.

So that's a great segue to my next part, which is around investing, around crowdfunding, and this new persona you've embraced, right? Sahil the investor, which really happened, I think, in 2020. I know you've done a few handpicked angel investments. I think one was HelloSign and a few others you mentioned. But what really happened? Like, what was that pivotal moment in 2020? Like, you were like, All right, fuck this shit. I'm just going to stand up and raise my hand, become an investor. That caused a lot of tremors again, right? As we all know, like, it caused— he shook up the bench a little bit. But what happened?

Yeah, totally. I mean, this is why, frankly, I had to change the name of the book from Stop Chasing Unicorns because— Okay.

Yeah, it would've been a little—

How do I—

yeah.

And there is nuance in the book. Like, my goal is not to say, oh, is amazing or evil. Look, you should figure out what tools make sense for you. Most people cannot raise VC, and so that's the book is for them. But if you want to raise VC and you think, then maybe I'm the right fit for you or what have you. But the story goes that I tweeted in— this is right after the George Floyd stuff.

Black Lives Matter.

All that stuff happened and kind of continues to happen. And I tweeted like, I want to invest in more Black founders. I've angel invested in some companies like HelloSign and Lambda School, And Arlan Hamilton's Backstage Capital, and I want to invest in more Black founders. My next check, and this is something I think I do, this is very actionable, right? It's a real example. And I put this in the book. I think it's like the last chapter of the book. But I said like the next, there are all these tweets like, oh, we should invest in more Black founders. Like, we invest in Black founders. And I always try to find like, what's the risky tweet? Like, what's edgy? Not just edgy to be edgy, but like what's actually skin in the game?

Right. And

so my tweet was, and a lot of people miss this because they think I'm just, my tweet looks like all the others, but they don't, they miss like the actual, like why these things resonate so much with people. Even other VCs are like, I don't get why people like you as a VC. They hated us as a VC, but then you said you're a VC and everyone loves you for it. Like, I don't get it, you know? And I'm like, well, it's because I'm authentic and honest. And like, anyway, my tweet was, my next investment will be in a Black founder.

Straight up.

My next investment will be in a Black founder. Actually, my next 3 investments ended up being in Black founders, but my next And I gave my email. I said, you know, if you're a Black founder, here's my email. I got 200 emails, you know, power of Twitter from Black founders. And I invested in 3 of them, I think 4 actually, but only 3 were looking to raise more money. And obviously more, you know, more since then, because, you know, there's like kind of ripple effects of getting into these communities and networks. Like it's not easy, you know, which some people kind of may think it should be, but it's just not right now. And so I invested in 4 companies, 3 were looking for raising more money. And so I wrote like kind of like an email and I said, you know, basically because I know a lot of investors, Right? I could only write like $10K checks at the time. Like, I could— I honestly like ran out of money pretty quickly. Like, it's not like I'm—

It's kind of my problem this year too. But yeah, yeah, other people's money. The other thing nobody told me is OPM, other people's money. Oh my God, every young person in tech when they're 22, 23 should get like a TL;DR of here's how you can make— create impact. Because again, like, I'm sure that you could have done what you did 2020 4 years ago, don't you think?

Yeah, totally.

How many new companies would have existed because of that act? And also your process, your due diligence, all of that's so fucking fast if I'm wrong for my friends. I know. Yeah. Because you're just— it's so simple. You don't like friction. You're not sitting there like wasting their time. Most importantly, your time.

Yeah.

You just— you're either in or not. And I feel like there are so many people like that, you know, including me, who, when you're aligned with the belief of like, here's what I want to see in the world, here's, you know, building public, for example, boom, not a no-brainer, just go for it. Exactly. Traditional VC is upset with this because they love the dance of 17 meetings and, you know, the financial models and all that So anyway, so tell us to the— I know that. So this happened and I'm sure you got a lot of backlash.

Yeah, I mean, I think I just kind of, you know, well, the thing is like, you know, to a lot of people, like there were VCs who'd never written a check into a Black founder and then I tweeted and did 3. And so I think a lot of people were like, like you're showing that it is, it's like, it's not easy, but it's possible in a way that maybe showed some, you know, kind of maybe the industry has a little bit more work to do, which, you know, we all do. And anyway, so I wrote an email. I said, you know, these 3 companies are looking for more capital and I sent sent to basically all the Gumroad investors. I said, hey, you know, I invest in these companies, like, let me know if you want intros. And Naval, you know, sent me replies and says, hey, you know, if you're doing all this work, like, I'd rather give you money and then you can just invest in whatever you want. If you do, you know, you're already doing— you're basically running a fund without running a fund. Like, you're doing all the work a VC does. And so I was like, I didn't know I could do that. Like, you know, so we had a call and he's like, yeah, we, you know, AngelList, we have this new product called Rolling Funds. You can basically spin up this vehicle really quick. You don't have to say, oh, it's— I'm raising a $5 million fund. You can just start from zero and, you know, People can commit. You can—I'll be—you can use my name, ping your friends, and you'll see how much money people want to give you. And then you can just start deploying it. And instead of writing ten K checks, you can you know write a hundred K checks. And and the economics aren't that much better for me, to be honest, because like a ten K check as an angel is like equivalent to maybe you know a hundred K. It's like twenty K, right? Because you get twenty percent carry. Right. But it's a lot more money, right? It's a lot more money for founders, right? Because a hundred K for two founders much more than ten K. Right. And if I write

two It's a net win for even your LPs because they're now getting to be part of this new kind of entrepreneurs that they probably would never get, you know, face time with.

Yeah. And the thing I learned, and this was kind of surprising to me, it's just there's a lot of money out there that wants to be deployed in this way if they can find the right avenues.

Vehicle.

Yeah, exactly. And there are a lot of regulations. Like, it's not easy. It's not like you can just spin this stuff up immediately, but there is that capital out there. And if you can kind of— that wants to be in startups, and if you can kind of connect the dots, like, there is a lot of opportunity there. And

so that So that became Sahil's Rolling Fund, right? That one tweet to email to Naval's suggestion to the final, the actual fund. Now, how many— what's been the journey like and how many— if you have any stats you want to share?

Yeah, totally. I mean, so yeah, so basically after that, I DM'd like a couple hundred people in my network on Twitter and said, hey, I'm starting a fund. And I tweeted about it and launched the fund in August. And so I think that tweet, I guess George Floyd and stuff was probably like May or something like that of 2020. And then I launched the fund in August, $5 million a year fund. And then now it's like $12 million a year fund, right? So like within a little over a year, like grew quite a lot. I mean, to basically not considering myself a VC at all to having a $12 million a year fund, which is like really the equivalent of like a $40, $50, $60 million fund depending, you know, because you're doing part-time.

Yeah,

yeah. Depending on sort of deployment cycles and follow-on, et cetera. Like most funds don't, you know, follow-ons are 50%. So I'm doubling because all of my money is in first checks. So it's a lot. It's like $100— it's actually closer to $100 million a year fund in terms of first checks into startups. It's like a huge fund, which a lot of people really don't realize outside of the industry. But a lot of people in the industry are like, how the hell are you like this? And which is why there's some backlash there. Like, it shouldn't be this, you know, you're kind of breaking the model a little bit too much. Right. But yeah, it's been great. I write $100K to $250K checks. I've written over 100 investments, I think. Wow.

Over 100. Wow.

Yeah. So I try to, I try to write a lot of checks. I try to have, you know, thousands of startups, you know, that I talk to so I can make sure that my bar is still very, very, very high. But it's going great. I mean, you know, like, it's, I mean, it's a crazy market, so I don't think it's hard to have great numbers, but like the first quarter of the fund is up 100%. It's like 2.5 TVPI. And so the metrics look good. I think it'll take probably a year or 2 years from now to be like, okay, which startups are really breaking out and which are your Stripes and Coinbases? Right. I think it's very unpredictable to know those specific ones for the first couple of years. It's not that obvious. Stripe, like 5 years into their business, was a great company, but I think it took COVID and stuff to really go from like $3 billion to $100 billion. Coinbase was a similar thing. Yeah, same thing. It takes time to get to those, or Robinhood, right? Like, it takes time to realize which ones those are. But I mean, the cool thing is I get to like invest in a lot of cool stuff, and as long as I feel like I'm not missing a ton of great things. And the cool thing is it's not that hard because if I do miss something, I can just DM the founder on Twitter and say, hey, I saw you raise money, can you let me know about the next round? And normally there's space in the next round because they're raising a lot more money. And I try to write the same check every time. A lot of, I mentioned the institutional LPs, like they want specific kinds of ownership and things like that that I don't care about. Like, I want $100K. I'm cash on cash, right? I'm just like in $100K, $250K, whatever the stage, because that's how I think is like, what's the return multiple on this cash? Not like I need 1% of the business. And so therefore it's like a $10 million check. That's not how I work just because I model my investing like an individual models they're investing, which is like I have a certain amount of money, I want to increase that versus like I'm a portfolio manager and I have all these bets and I need to make sure I own 1% of 100 companies and this and that. Right. Just a different model.

I'll have to say very honestly, that Hawaii Watching a lot of this fall on Twitter, bits and pieces, of course, has inspired so many people. I think you don't even know that, you know, including me. I mean it. And, and it kind of created this new stage between being a founder and being a seasoned, like, almost like suit-wearing, buttoned-up investor, because that's what I had in my mind. And you broke the mold.

Me too, to be honest.

And

credits to Naval, right? Because,

I mean, I think let's, let's just call it out there, put it out there, like rolling funds was the best thing that happened to AngelList after AngelList, right? It's just, I mean, best thing that happened to probably investing in general, like the level of innovation they're doing at AngelList these days. Oh my God. For the last, they're on fire the 18 months.

It's amazing. Yeah. And I would like to think that I participated in that kind of rise and at least, you know, popularizing it at least. Right. Because again, like going back to, you know, you mentioned the book is full of specific examples. The reason that rolling funds, I would like to think, took off. You know, they launched in February of 2020. The reason it took off is because I gave everyone a very clear example of how to do this and why it's interesting. And I was loud about it in a way that, you know, Naval's a little bit quieter about the VC stuff, right? Generally. So I was able to kind of go out there and say, like, I'm doing this. This is my fund memo.

You took one for the team.

Yeah, I took one for the team and it paid off, right, for me and everybody else. But I think that— I think what it did, if I had to guess, like, it made AngelList realize what their true value is, which is not just a marketplace, which was initially their pitch, right? AngelList was like a list of startups and angels, right? It was SaaS. It's actually building products and software services.

The back office.

The back office. And now you have roll-up vehicles. You had like— I think that really crystallized for them. And I'm sure they've been working on a lot of this stuff. I think Rolling Funds probably just accelerated that transition. I also think COVID probably helped as Well, in this way, because now you can fundraise on Zoom. Yeah. So now you need software because before it was like pen and paper, like literally, I mean, very old school, right? Like HelloSign document and this and that, like, and now you're so fast.

Do you remember your— when you raised your $8 million? I know you mentioned a bunch of investors, you mentioned Accel and a few, I think even Naval was one of the first investors, right, in Gumroad. Yeah. Do you remember meeting them in person? Was it all in person a deal?

In person, not as— I mean, Zoom didn't even exist back then, right? I mean—

See, you can't say that with a straight face. My kid's like 6 months old, and when he's going to be 20 years old, I can't even look at him and say like, yeah, we used to travel, fly 8 hours or 4 hours to have a 1-hour meeting on a thing that we could have signed online.

Yeah, no, totally. I can tell you, I was living in Mountain View at the time and I was very frugal, right? And so, I would get on the free bus, go to Stanford, like the tip of Stanford, and then Stanford had a free shuttle that would take you to Slack, their linear accelerator, which was only for Stanford students. So, I'd get kicked out before I could enter the accelerator. Accelerator, but that was next to Sand Hill Road. And so then I would get kicked out of the bus and then I would walk, you know, and this Sand Hill Road is like this famous road. Yeah. Like Kleiner, Accel, Sequoia, Greylock, Benchmark, et cetera. Like all the funds, right, were based out of there. Still are technically, right? And then I would literally walk like in the blistering heat, like into, you know, for my meetings with like, and yeah, and like, you know, like half the meetings, the VC was like 20 minutes late. Like it was just like, you know, I remember like running because I was late for a meeting. And then like one of the VCs didn't even show up for like, it was like 40 minutes or something like that for like, you know, an hour-long meeting. Just crazy. But this, yeah, like literally like, and that was like, I lived in the area, right? Like imagine if I didn't, like basically— There's no way to— Yeah, you'd have to fly, get an Airbnb or hotel, rent a car, like do all this. And now you can raise $500 million on Zoom.

Yeah, on Zoom. I mean, everybody is giving remote work and this like remote fundraising a lot of shit, but you know, I think it's misplaced. I think, you know, I'm sure, you know, you agree too, is that it kind of, for a lot of founders, and especially VCs, it made it very natural and normal. It destigmatized this lack of in-person meetings, which were bullshit in the first place to me, because I was like, I live in Georgia, man. I'm like, there were so many times where I made my trip to SF and I'm like, it feels so wasted. And you know this inherently, but you don't want to say it out because it's like it's the norm. Yeah. And with COVID I was so glad that finally everybody's ideas were evaluated on the merit of their product, merit of the customers, merit of the community, and not merit of your location and how close you are to certain hub.

So yeah, totally. It's totally true. And like, you know, VCs feel the same pain, so they should appreciate it as well. Because like, you know, if I wanted to raise a venture fund in 2018, I would've had the same, you know, I could've had that call with Naval, rolling funds, blah, blah, blah. But then I would've had, you know, I would've DM'd all those people and like a bunch of them would've been like, let me know when you're in SF, let me know when you're in New York, let me know when you're in here in LA, right? Like it was just the culture of how this stuff happened. And if I said, oh, Like, I'm just— let's just do a phone call, right? Like, people have been like, well, that's weird. Right.

That's shady. Yeah.

Yeah, it's really— and, you know, VCs and LPs are the same. Like, if you want to raise from LPs, like institutional LPs, then you're flying to University of Chicago, you're flying to Harvard. And at least with Sand Hill Road, you could do like all of them in a week, right? With LPs, like, literally, you're like—

They're all over.

University, university endowment, hospital, pension fund. Like, it's just crazy. I mean, this, it takes 18 months to raise a venture fund. I mean, it takes— On average. Yeah. And honestly, like, it's going, it's starting. I've already started to see it start to revert to that with LPs being like, hey, can you let me know when you're in Boston or whatever? And I'm like, uh-oh. Like, one, I don't like that. But two, you're screwed too.

Yeah, you'll, you'll be part of the old guard and nobody wants to do business with you. So let's move to the meat of the questions I had for you around building in public. And I expressed early on in this interview that I've been a big fan of your experiments with building in public. I think Ryan Hoover, you, maybe Peter Levos, and maybe there's another 4 or 5— Amanda, a few— 4 of our examples who are so good at it that whether you know it or not, you're just so inspiring to a lot of us, you know. And I've taken so many notes from how you do certain things. So one, did you intentionally build a lot of these things in public? Because it may have been maybe the first one, like the one where you mentioned— even in the book you mentioned about your weekend project, which is Gumroad. You announced it saying, this weekend I'm going to build something and you followed up and there's a bunch of tweets around it. But over the time, have you been more intentional or has it always been an accidental, like, I'm just going to write about what I'm going to do?

Yeah. I mean, even before Gumroad, I had this project called One Week App where I built an app over a week and tweeted about it and blogged about it. And then that became an app called Data, which I put on Hacker News, and then that got me the job at Pinterest. And so, yeah, I mean, honestly, I would say that it wasn't as strategic. It was like, you know, part of it was like I grew up in Singapore. Singapore, and I didn't have any startup community at all. And so like Twitter and Hacker News were my ways of meeting my people. Yeah. So I had to, I mean, it was the only, maybe if I lived in, I went to Stanford or something like that, then I wouldn't have had to tweet because I just go to the meetup or the happy hour or whatever they would do there. But it was the only way that I had access to this community. But then I also think there was probably part of me that was strategic in the sense that like I knew that once I entered Silicon Valley, I didn't want to start from zero. I wanted to be able to have a track record, a paper trail that people could look at and be like, okay, this person's built a bunch of stuff. This person has had a bunch of thoughts, you know? And that, you know, kind of goes back to, I'm gonna like, you know, like Daniel Casallo, like he got a job at Gumroad. He wrote an email. Yeah. Right? Like he put everything out there. Like I just, you know, I just appreciate people who do that generally. Right. And I think I always try to do that too, where I'm like, look, I don't want to convince you that I'm the right person. I'm not going to sell you on me. I'm going to tell you everything I believe, and if you like it, great. If you don't like it, it's not even worth the sales call. And maybe, you know, if I held my thing, you know, my cards closer to my chest, and then, you know, then I would've been able to convince you or whatever. But I just think it's not really worth it to do that. And so, yeah, I just find that, like, I'm a huge fan of putting myself out there. And I also think it keeps me accountable, right? Like, a lot of this stuff, like, it's not easy to build something in a weekend. Hmm. It's like staring at computer for 15 hours. Like, that's not easy. Most people may not want to do that. I don't want to do it either. It's like sometimes not fun. But if you, you know, if you commit to building in public or Ship 30 for 30 or some of these things, like, you know, you need that, especially in the beginning of your career. I think it's even more important because you don't have that confidence yet. You need that community and accountability and feedback. Over time, maybe you need to do it less and less and less. Like, now I'll build stuff, I might just send it to a few friends. Or like, if I'm writing a new essay, I might just send it to a few people or my Slack community or something, you know, my, you know, Gumroad folks or something like that. But I do think it's still, I still try to do it because I think every time I want to announce something, I always want it to be really good. I do think that bar is going up over time and I can't make things really good just by me being better. The way that I make things really good is I try to make it as good as I can. And then I get 100 people to give me feedback. And that's always great.

The shorter the feedback loop, you know, the more, the shorter the feedback loop, the better you know what they want from you. Essentially, that's what you're trying to solve for, right? What is something that they want from what I want to create?

And people, I think, don't want to do it because like they think their failures will be memorialized for eternity. But like, it's funny because I've shipped so many things even in the last like 3 or 4 years that I bet you most people won't even know.

Yeah.

Like they know, okay, reflecting on my failure to build a billion-dollar company, maybe no meetings, no deadline, no full-time, no deadlines, no full-time employees. Like maybe the book, maybe the Gumroad crowdfunding round, the rolling fund, whatever. But like, I've had a bunch of different experiments that like didn't work. But the truth is everyone's busy with their own life, right? And they don't remember those things. They might not even remember my successes, frankly, right?

It's actually lucky. You're lucky if people remember your hits, you know, right? People were like, I think it's almost like an ego speaking when I see someone like saying, oh my God, like I'm gonna be judged for this. I'm like, really? You think the whole planet is gonna pause and look at your tiny attempt? And say, oh yeah, like no way. They're

you're last time you did that for somebody else.

Yeah, somebody else. And so I mean my favorite tweet that I tweet about this on the same topic is like David Perrow when he first started his YouTube channel, which is now wild and pop like you know it's kind of like Gary Tan level channel, right? He had he said he did something like ship thirty for thirty for seventy eight days. He went nonstop posted something every day, a thoughtful video essay. He had like thirty five followers subscribers. Nobody gave a shit, right? So it's so funny because now after other hits, now they go back and they're like, oh my god. Let's see, you know, it's so viral, so awesome. But like, nobody's going to remember your failures, especially early days. It's actually luxury if you're early. It's a luxury that people won't remember most of what you do. So do it anyway.

Yeah. I mean, you could look at like, I don't know, the first episode of Joe Rogan on YouTube.

Yeah. Oh my God.

The first 15 minutes are him.

It's my favorite. It's just—

And he kept it up there. He's, you know, it's fine. It doesn't matter.

But it's also the truth, right? I mean, why hide away from it? Yeah, I'm sure you feel the same way. So the other thing is, so the risk—

in a second, by the way.

Okay, let me close on this. We talked about the positives. And so let's talk about the risk. What are some risks associated that, you know, building in public comes with and you should be aware of?

Yeah, I mean, I think the biggest risk is, look, like, ultimately, sometimes you do have to work with the existing system, right? Like, you might have to raise money from venture capitalists, you might have to work work with universities. You might have to, you know, there are a lot of, you know, the mainstream media, like these people do have real power. And, you know, I do think, you know, one thing that maybe some people miss from like maybe me or Naval is like, look, we are also kind of insiders. Like, I think we're not totally outsiders and we do kind of critique the system, but I think we also have like a dialogue with them, right? Like, it's not just like we're just like over here shouting, you know, or even like Donald Trump. Like, it's not like he was an outsider, right? He was an Right. That's why he was interesting. You need both. And so I think ultimately there's nuance here, right? Like some tweets go super viral, but like ultimately, like, you know, if you want to change the system, like, you know, like Balaji talks about entry versus exit, right? Like there's like the total start a new country thing, right? But like the truth is like very few people can do that, right? And so just, you know, maybe you can't start a rolling fund, but you can like angel invest or you can work in a VC. Like there are a lot of different ways to have an And I do think having an audience now and being able to crowdfund, that does allow me more freedom because I know, okay, I don't need VCs anymore, frankly, but most people do. And so I think those are some risks, right? You don't want to piss off all the people that you might need. Ultimately, you need to know what do you want and then how do you get that? And if you want to build a crazy company that has a bunch of impact and you need to work with VCs in order to do that, then you don't have to— I think some people get very like ideological about it. They're like, oh, I will never work with VCs. They're evil. And it's like, well, sometimes like, you know, maybe they, I don't know, like evil is a tough word for me. But, you know, if they're, you know, I don't know if you need them to do what you want, then you need them. I mean, you can work with them and you can acknowledge that you're just, you know, like you can be honest. But I think sometimes people see my tweets and they're like, oh, I need to go completely outside the system. And it's like, well, you know, I raised VC. I lived in SF. Like I'm not totally Like, you know, like, make sure, like you mentioned, right? Like, if you want to write the book, be the book, right? Same thing goes when you read the book. Like, better than reading the book, you know, is watching the person who wrote the book, right? Like, observe the per— like, what did they actually do? Right. And that, that, you know, same thing. Like, Naval's tweets are great, but like, look at what he actually did. Like, look at his life. You'll probably learn more from that, even though it might not be applicable. It's been a long time. You know, things change. There's more technology. Like, but you also think—

Think for yourself, right? Like, what applies to you, your situation, your goals may be very specific. It may not be generalized. So you have to think—

Yeah, like my story was like, I raised a bunch of money, then I failed, then I like, Kleiner bought back the investment. Like, when does that happen? Right? Like there's a lot. And then I wrote an article and then it went viral, like, and then rolling funds. Like there are a bunch of things like Daniel Vassallo has like said, right? Like there's so much luck involved in this stuff.

Randomness.

And randomness. Exactly. There's so much randomness. And if you're only reading the success stories, you kind of might realize, you might start to think, oh, it's not random. These are all— everyone who tried is successful. It's like, no, no, no, you know, you're listening to the successful people, but there's a lot of people who didn't make it. And like, I made it for a variety of reasons that were not necessarily in my control. And I would like to think that they're, you know, it's because I'm awesome and smart and whatever. But, you know, who knows? Like, I, you know, if I— what if I joined a different company instead of Pinterest back in the day?

What if you joined Stripe, right? Could have been a whole different—

Or, yeah, or, or I would, you know, or I could be Elon Musk today. Who knows, right?

Who knows?

Who knows? Like, it's very impossible. It is impossible to realize, or like Elon could be a nobody today. I mean, it's really uncertain. I

think. We all, we are. I mean, I have the more I grow, I mean, the more I age, I feel like the more I really leaning into that we're all in a simulation and the fact that they, especially watching Elon and I'm like, I think we're definitely in a simulation. Like, especially what he's done this weekend. I'm like, what's going on?

It's fun.

It's fun. Anyway, so one last word. Where can people find the book? It's The Minimalist Entrepreneur. Where can people find you online?

Yeah, well, I'm on Twitter @SHL. The book is available in all the usual places, Amazon, IndieBound, et cetera, et cetera. But you know, if you just Google The Minimalist Entrepreneur book, you know, it'll, it'll show up.

Awesome. I'll make sure it's in the show notes too. Thank you so much, Sahil. This was fun. I enjoyed chatting with you and thanks for being here.

You're welcome.