Reflecting on My Failure to Build a Billion-Dollar Company

Jesus this part sucks:

"In those nine months, when the whole team knew that we were fighting for our company’s life, not a single person left Gumroad. From “this is gonna be hard,” to “yep, turns out it was,” every single person worked harder than ever."

Did everyone one of these people have significant equity in the company?

I'd expect people who love their jobs and who work on something crucial, such as researching new medicines or making more efficient batteries to want and be able to do this. No offense, but if this ultimatum was handed out and I wasn't vested like the top guys I'd bail.

The author mentions hiring a lot of good friends, so I assume they did it because they believed in him and the mission.

If gumroad became a billion dollar company you'd be retiring on that 9 months of work with even a tiny bit of equity. I bet there are plenty of people that bailed out of google, facebook or other similarly positioned startups at that stage and regret it.

This is the type of reasoning that startups use to justify making employees work 60+ hour weeks for a tiny amount of equity and below-market pay. Most startups will not become billion dollar companies.

This is exactly why I won't hire good friends. The personal relations would skew business sense then, on both sides in order to stay loyal to your friends. This skew can be dangerous for business, and thus for the well-being of those who are involved and bet on its success.

I bet there are far more people who didn't leave similarly-positioned-but-unsuccessful startups and regret it... maybe spurred on by the survivorship bias (or non-survivorship bias, in this case) of those who left a successful startup.

Exactly what I was thinking when I read that part. I hope those people are still his best friends. Working long hours for 9 months and getting laid off at the end doesn't only affect you financially. It will will have a significant effect on your personal life and the people around you who may depend on you.

You are both right.