Reflecting on My Failure to Build a Billion-Dollar Company

I wasn't interested in the emotional story behind this. But I did resonate with 1 line in particular here: "It doesn’t matter how amazing your product is, or how fast you ship features. The market you’re in will determine most of your growth."

This is so true, in my experience. You hit a roadblock in recurring revenue, not because your product doesn't have enough features, or your team sucks, but simply: your market is smaller than you thought.

I always think of the market as ... all those shitty services and websites I absolutely hate / or just don't like ... that i still use because I want the service.

Arguably they failed to execute some of what they did (their actual app or site) very well, but it doesn't matter, they picked the right market because I can't stop using it even in the face of other things.

Give us some examples of what you're trying to do, maybe someone here will help you in the future.

The corollary is that you can shift the market you're in and increase growth.

Clickfunnels addresses a slightly different market and has 9 figures of recurring revenue. Partly because they charge a lot more and have a lot more bells and whistles, partly because they have way more intensive marketing, but partly because they're targeting the demographic that wants those bells and whistles over the simplicity of gumroad.

This is weird because... I've noticed the opposite. Often markets are way bigger than you think; or rather, 1000 users for a product seems small but is actually quite a decent size depending on how much effort has been put in.

What it comes down to is being content that you will not always make a billion dollar product. With that in mind, a big market has many definitions. Maybe you should have paid attention to the emotional aspect.

That's really more for market leaders. If someone stops by your site and starts comparing it to other businesses and their features, you're not likely to shift the market soon. Even if you do shift the market, you might not get the growth as your well-funded competitors copy your features. It'd have to be some ground-breaking technology that essentially propels you to market leader overnight.

Clickfunnels isn't particularly ground-breaking. I identified what I believe got them to their position.

In many cases, they're attracting customers who would never dream of using gumroad.

Scaling to a billion dollar company in that market was certainly attainable. Patreon started two years after Gumroad and now look where they are. Gumroad had a movers first advantage - so I really disagree with the quote. Had they continued to push feature development and tweak PMF they could have been a billion dollar company.

Don't take that as a slight to Gumroad either. Building a profitable business from almost going under and now generating close to $1m in annual profits is an incredible feat. But I do disagree with the point that the market wasn't ready (as clearly demonstrated by the success of others).

I agree. Some of the most successful companies became that way because they told us we "needed" their products, usually by clever marketing.

Patreon and Gumroad were different businesses for most of their histories. Gumroad was always a place to sell stuff and launch subscription services. Patreon is trying to pivot that way now with all their talk of membership businesses, but no one who uses it seems to see it that way.

That's why everyone was up in arms about the fee change in 2017. People tossing $1 here and there to people they liked were the foundation of everything. Membership businesses generally start at $5 a month.

And Patreon isn't going to have much luck with it. There are so many better options if someone just wants to set up a membership business. Memberful, which they bought, wasn't even one of the better options. It doesn't even handle anything other than plans, payments, and integrations with services that do the heavy lifting.

>. Patreon started two years after Gumroad and now look where they are.

Two years away from buying back shares for $1 from their VCs?

There's this whole swath of the internet that can support thousands of small businesses that's being slashed and burned by VCs in search of a unicorn. Gumroad and Patreon are both perfect examples. They are both good ideas that are well executed. They are not, however, companies that can extract tens of millions to hundreds of millions in profit a year. They really should be 20-30 employee type companies making a steady couple of million in profit.

Any examples of other business that do what you mention at the end? Just curious what the "better" options are. I like to keep abreast of the underdogs.

Gumroad is the only one I've used. Others popped up over the years, but I didn't think to keep notes.