Gumroad’s Sahil Lavingia on Taking on Apple and Clones

By David Knight |

It’s one of the more shamefaced clones to have emerged in Germany in recent years – Rocket Internet’s Pinspire bore, shall we say, more than a passing resemblance to Silicon Valley startup Pinterest. One of the (very) young designers who worked on Pinterest, Sahil Lavingia, is now building his own company, Gumroad, with the lofty aim of bypassing marketplaces for content such as iTunes.

The super-confident 20-year-old flew into the dragon’s lair recently to speak about his project at IdeaLab!, a conference organised by the students at top German business school WHU which names Rocket amongst its sponsors. Silicon Allee caught up with him and asked him about taking on Apple, why his tender age is a plus and what he really thinks about Pinspire.

He almost seems out of place in a particularly German startup atmosphere; a young guy with a broad American accent who talks at a rapid pace. Almost, but not quite – you get the sense that Sahil wouldn’t be out of place anywhere. That’s an idea backed up by his idea of nationality. Having spent his formative years in New York, Hong Kong, Singapore, London and Los Angeles, he asserts that he is “a citizen of the world more than anything else.”

So when the students at the WHU asked him to hop on a plane from San Francisco and come to Vallendar, near Koblenz, for the annual IdeaLab! conference he had no hesitation in saying yes. Sahil certainly has the cocksure attitude of youth – as he should at the age of 20, with so much already under his belt.

‘Selling Stuff Should Be as Easy as Sharing Stuff’

Having started designing at the age of 13 and coding at 14, he had a brief stint at university before working at two successful startups – Pinterest and turntable – and then taking the leap and founding Gumroad, which has already attracted $8 million in funding.

Needless to say, confidence is not in short supply.

Gumroad is a marketplace to allow people to offer content directly. “We believe that selling stuff should be as easy as sharing stuff,” Sahil says. “And you’ve seen sharing stuff get really, really simple, fast, easy, personable, over the past five or ten years with things like Twittter, Facebook, Pinterest, Tumblr, YouTube, SoundCloud etc.”

Anyone who has interesting things to say can now quickly build a following and an audience. This has changed from a few years ago, when the record label or publishing house owned an artist’s relationship with the user base. “Lady Gaga talks directly to her 30 million followers. Justin Bieber does as well, And we think if that is the case, why don’t they just sell directly; why don’t they own that relationship with their fans 100 percent?”

Sahil on stage at IdeaLab!

Despite this much-improved interaction with their consumers, artists are still giving away sizable percentages of the proceeds to platforms like iTunes and Amazon. That’s something Sahil plans to change. “If Lady Gaga talks to her fans in this specific way through this specific medium,” he adds, “that’s how she should sell stuff instead of going through this annoying flow.”

Gumroad intends to provide just such a platform – and Sahil is far from worried about how the content giants will react to such a challenge. “I hope that they freak out a little bit, because then we would have done our job.”

The idea for Gumroad had come when he was unable to find a decent way to sell an icon he had designed, in the time he was working at Pinterest. The mention of Pinterest brings us to an obvious topic – Pinspire, Rocket Internet’s clone of the social photo sharing platform. The similarities didn’t go unnoticed – especially when it was discovered that some of the Pinspire code appeared to have been directly copied from Pinterest.

So what did Sahil make of the clone? “Very likely they used some of my code. What happens in the US is that IP laws are so much stricter, and you can’t really do that [making a clone] without getting sued to hell… When I first saw copies of Pinterest when I was still working there, it was flattering; I didn’t feel bad at all.”

Solving a Different Problem

His view has changed since then, however, for two reasons: The people building the clone could be out building something else, solving a different problem, and in addition, a platform like Pinterest works because of its network effect. The more people who use it, the better it is. And if there are clones out there, Sahil argues, then that network effect gets diluted.

So what if someone like Rocket cloned Gumroad? “We have definitely seen clones; not specifically from Rocket, but we have a clone in China, we have a clone in Japan. I would be annoyed for sure, because I do think we can build a better experience. They’re cloning us, they are copying what we have already done. We don’t think about that; we’re working on the next sh*t. They are never going to be better than us because they are always just going to be a step behind…. in the long term, I don’t think it matters. There might be Google competitors, but I think that Google is still the winner.”

So what helps make him successful? His youth, he believes, can actually be an advantage – he has less assumptions and is more likely to take risks and do creative things. “I don’t have ties,” he says. “None of my family lives in the US. I don’t have a significant other, I don’t have a kid, I don’t even have a car or a house. My cost of living is almost zero. An Internet connection, a laptop and a roof over my head. I can do whatever I want to do for, like, ever. When I raised our seed round, a million bucks, someone asked, so what’s your runway gonna be with this, and I was like, really? 300 years! I’m not gonna run out of money.”

Many will feel his words are naive, but he has the eagerness of youth in spades. And his backup plan, what he told himself when he jacked in college to go work for startups, is just as revealing: “[I said to myself that] if everything fails, if the economy crashes or whatever, I go back. I’m out like a year. It’s not a big deal at all. And I’ve learnt way more than a degree would ever teach me.”