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Running a $100m Software Business with only Part-Time Employees | Sahil Lavingia of Gumroad

Part-Time Tech Podcast Episode #003

Today’s podcast guest is Sahil Lavingia, the founder of Gumroad. He’s also the author of The Minimalist Entrepreneur, and a startup investor.

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Sahil wrote two viral blogposts that caught my eye:

These posts openly share his journey in building Gumroad and how they operate. Though they failed to become a unicorn, Gumroad eventually transformed into a profitable $100m business where everyone (Sahil included) is part-time! In this interview, we dive into the story of Gumroad, how part-time works there, how Sahil decided to opt-out of the unicorn chase, and much more.

The interview is split into two parts. Part 2 is here.

Watch on YouTube, listen online, or wherever you get your podcasts.

5 Takeaways and Quotes from Sahil Lavingia

1. 🕥 Everyone is Part-Time (33:28)

Everyone at Gumroad is a contractor who works between 20-35 hours/week for cash + equity. The company is almost completely asynchronous and meetingless.

Most employees are mid-career with good incomes, but they optimize for flexibility over 💰.

Most of the company’s operating practices are published publicly, so anyone applying to work there knows exactly what they’re getting into.

2. 🦄 A new definition of success (11:34)

After failing to become a unicorn, Sahil had to lay off most the company and try to rebuild the company as a profitable one.

No longer beholden to VC, he built the company to optimize for what *he* wanted. Stability and profitability became more important than growth at all costs.

And maybe most of all, Gumroad and work was no longer his identity.

3. 🧳 A company you want to work for (11:34)

“I have a lot of friends frankly who are running businesses that they don’t like working at… They’re killing it, it’s growing… but they made decisions because they were prioritizing the growth of the company rather than building a company that they themselves wanted to work for”.

4. ⚙️ Minimal process enables part-time (37:00)

“What surprises me is how little process you need if you hire well.”

A common objection to part-time work is that there is too much overhead, meetings, and process to make part-time employees worth it. However, this assumes all that process and overhead is actually necessary! Gumroad operates nearly entirely asynchronously and without meetings because they embrace a culture that values writing and tools over face time. New employees at Gumroad can be productive from day 1 because the company is optimizing for it.

While this certainly might not work for every company, Gumroad is able to make this work because Sahil threw away all preconceived notions of how a company is supposed to work and built it the way he wanted.

5. 💪 The Operating System for Flexible Business (Pt 2)

Gumroad has internal software that manages compensation, contracts, equity, and more. Their next endeavor is productizing this software, called Flexile. It’s still being developed, but you can sign up to receive updates on the website.