Sahil Lavingia, founder of Gumroad, writes about running a company with no full-time staff, creator economics, and his failed billion-dollar goal.
HN links it for Gumroad's move away from VC funding and its part-time, contractor-based way of working, which one commenter calls a great company model.
I think it is the opposite - it is a consequence of which system has better long term surviveability.
Companies survive because they don't die. That seems trite, I know. The consequences of it are important, as the equation is one where no matter how well you do, avoiding death is what matters.
SHL at Gumroad is a great example. SHL was encouraged to quit by the VCs when Gumroad was not a clear unicorn[1]. SHL chose not to let Gumroad die, and Gumroad lives.
The problem with all the ideas like the one Yanis Varoufakis proposes, is that they will almost certainly do well in good times, but companies survive because they don't die, and any system like the one you mention will lead to more dead companies.
That's a big claim I know, but imagine a situation where a company has 20 people - 4 sales and 8 support (secretaries, returns, admin) in the office and 8 people who work in fulfillment - a warehouse and lets say deliveries. Times get tough, and they are forced to have a vote on who needs to be sacked - how do they vote? 12 of the 20 work together, do you really think they will vote to have their friends in the office sacked?
And would they even get to that point? Why would anyone ever vote to lose their job? And what about pay rises? How do you negotiate pay rises when everyone votes? In a multi-division company, lets say 3 divisions, would everyone vote to take a lower pay than people in a more productive division? Would hiring be run along profitability lines, with one…
> It wasn’t always this way; from 2015-2019, everyone at Gumroad was paid cash, no equity. No one wanted any.
Gumroad started in 2011 and raised $8 million. The reason "no one wanted" any equity in 2015 was because they laid most employees off, replaced them with contractors, and the investors wrote their equity down to $1 as a gift to the founder. The founder got to keep the IP, ditch the founding employees, and continue running the company.
The founder wrote a couple articles about the experience:
https://www.businessinsider.com/startup-failure-gumroad-why-startup-failed-2019-2
https://sahillavingia.com/reflecting
What's not pictured in these articles is the employee perspective. The founder got to keep his company, got the company's IP handed to him, and I don't know what became of the employees' equity. Probably nothing, given that the company had to be written down to nearly $0 for this transfer.
I remember reading a very angry Twitter rant from an ex employee who was burned. I wish I could find it now, but that was nearly a decade ago. It was one of my cautionary tales about taking equity in startups at the time. It hadn't ever crossed my mind that someone could take VC money, pay employees (partially with equity) to build a company, then everyone gets laid off, equity declared worthless, but the founder gets to continue operating the company at a profit.
It's also interesting to note that the Tweets embedded in both of those articles above come from Austen…
I appreciate the kind words!
The second part of your post is something I've thought about a lot. There are a lot of incentives driving business operators to try to get the most out of the fewest number of employees possible:
- Less communication overhead due to fewer people
- Constant availability (less need to pre-plan meetings, etc to match everyone's hours)
- Less complexity WRT HR, payroll, taxes
- Employees still have to pay for full healthcare, so the employer either provides this or pays a 1099 salary premium (the US's terrible approach of tying health insurance coverage to your employer rears its ugly head yet again)
- Fewer SaaS seats to pay for
Some of these are more solvable than others, and allowing more people to work part-time in tech is definitely swimming upstream, but I do wish more businesses would try.
Sahil Lavingia (Gumroad) is one person leaning into this approach with great success: https://sahillavingia.com/work
Disclosure - I don't know Sahil and have never had any interaction with him or Gumroad except as an ocassional Gumroad customer.
I find this take to be disingenuous at best and outright misinformed at worst. Sahil has been very public with what happened [1]. Gumroad turned out to be a lifestyle business and not a VC funded boom or bust rocket.
He could have easily shut down Gumroad and gone on to bigger and better things. He persevered and today Gumroad has risen from the ashes and creators are better off for it. Kudos to him and his motley crew. He has extensively blogged about it and been public about Gumroad's finances. Maybe one day Gumroad will be worth $1B but it is a long road ahead and I wish the new investors the best.
Back to Sahil's actions, unless you have actual instances of wrongdoing by him, I feel you are just flinging innuendo.
[1] https://sahillavingia.com/reflecting
sahil also said:
> "The public was seeing news reports of mass firings that seemed cruel and heartless, many assuming DOGE was directly responsible," he continued. "In reality, DOGE had no direct authority. The real decisions came from the agency heads appointed by President Trump, who were wise to let DOGE act as the 'fall guy' for unpopular decisions."
He also only very briefly worked with a single agency (VA), and his positives comments were about how the VA already had some open source Github repos and had a previous project to 'reduce claim times from "133 days to under a week"'. He was also critical of how they don't fire people with seniority, regardless of performance (which is enshrined in a reduction-in-force law from 1944) which is why new and probationary employees were the ones let go. https://sahillavingia.com/doge
After reading the article on Gumroad's way of working, I was really impressed that this kind of model functions so well at this scale. [1]
The first question I had was are there more companies that work in this way? After searching, I discovered that I'm not the only one. [2]
That's why I've just launched Creator Jobs which has a goal to collect different companies that support Gumroad's model. [3]
If anyone knows other companies that work in a similar way, please feel free to comment or reach me at contact@creatorjobs.co.
[1] https://sahillavingia.com/work
[2] https://news.ycombinator.com/item?id=25686678
[3] https://creatorjobs.co/