Photo: Shl via Twitter
Sahil Lavingia is 19 years old. By age 15 he was financially independent — he created 20 apps and made more than $100,000.
During his first semester at USC, Lavingia was contacted by Pinterest’s founders. He dropped out of school to become a founding member of the site.
At the peak of the Pinterest craze last August, Lavingia walked away to start his own company. Now the teen has founded Gumroad, a site that lets users sell anything directly to their social media followers with a short url link.
Lavingia raised $1.1 million in four days and investors have offered him millions more since Gumroad’s mid-February launch.
We caught up with Lavingia, who is easily the most interesting teen in Silicon Valley right now.
Business Insider: What’s your story? Why aren’t you in school right now?
Sahil Lavingia: I started as a designer when my middle school gave all of the students a Photoshop licence for free. I started messing around with it because I realised I had access to thousands of dollars of software and I might as well give it a shot.
I googled Photoshop tutorials and made really weird things for fun and kind of got hooked. I started designing websites because that’s where the money was.
When I was 14 and I was like, “I’m tired of this, I want to build my own products.”
I had all these random ideas for little things I wanted to build so I would design them every weekend. I would get home from school on Friday, pick one of my gazillion ideas to design and contract out all of the back-end work. I’d launch the app by emailing every tech blog I knew. Inevitably one of the five would write about it and then I would sell it on some marketplace.
What ideas did you create and sell?
I built a to-do list app. I built this thing that let you create Facebook walls but for Twitter before Twitter had any kind of conversation aspect. I built this tool that let users send automatic, customised direct messages on Twitter.
How many apps did you build and sell?
I built about 20. I think I sold all of them.
Whom did you sell them to and for how much?
There was this marketplace — it’s called Flippa now. I couldn’t sell them for much — maybe $1,000+.
How much did you pay to contract them out? Because you were just the idea guy, you didn’t code them yourself.
Yah that was frustrating because I do not like paying people money. You know, maybe that’s why my investors like me. But I probably payed $50 per app.
People would make an app for $50? Where did you find them?
Yeah, I mean for two hours of work for a guy who is also in high school but lives somewhere else in the world. I found them by Googling developer forums. I never went to an e-Lance or anything like that. I just went to forums and tried to get someone reputable to them. I built relationships and would go to the same people every time.
I was also frustrated that I was paying people to build what I couldn’t. So I started learning HTML, CSS, PHP, then the iPhone came out and I learned iOS development. One of the iPhone apps I made was on the home page of Apple.
It’s not easy to learn to code. How did you teach yourself?
PHP was a failure. It took me two months of trying to build my own little app and I just hated it. I gave up and figured back-end development was not for me.
But then the iPhone came out and I learned that stuff really fast. I learned iPhone development in 2 weeks. I downloaded Stanford videos and those became my whole life. So I learned iOS development when I was 16.
I was financially independent when I was 15. I never really tell anyone that because it doesn’t feel relevant, but looking back I think, Oh, starting a company might have actually made sense. I have been doing OK for a while. My bank account when I was 15 or 16 was over $100,000.
Boonsri Dickinson, Business Insider
Are your parents entrepreneurs?My dad is in finance but he’s not really entrepreneurial. They were definitely a little antsy when I left USC.
They knew I was doing what I thought was right and were being open minded but they had never started a company. They are both from India.
My mum actually grew up pretty poor and my dad did OK and then they moved to the U.S. I was actually born in New York. My mum says the best birthday present she has ever given me is my U.S. citizenship.
When I was four I moved to Hong Kong. One year later I moved to Singapore. A few years later I moved to London. After two years I moved back to Singapore and then when I was 17 I moved back to the U.S.
I moved to L.A. to go to school at USC and I was there for four months for the first semester before Pinterest grabbed me and then I moved up to Palo Alto last year.
How did Pinterest find you?
When I moved to the U.S. I wanted to build a brand for myself, so I started blogging, tweeting, and using Hacker News. That got me attention from startups in the Valley, including Pinterest. Pinterest sent me an email in August 2010. At the time it was very small. I think it had less than 5,000 users.
I met up with the two founders to chat for a couple hours about what they were doing, what they wanted to accomplish and to hear their story. I left thinking, “Holy shit, I definitely want to get up here.”
My goal was to get a four year degree and then join an early phase startup and maybe found one of my own. That was a 7 year plan. Then I thought, “Wait a minute, I have the ability to skip three years of this process; I might as well do it.”
I wasn’t that dead-set on Pinterest and I had a few other offers. There were some Y Combinator companies I was considering and Flipboard. I picked Pinterest because it was the earliest company. My goal was to figure out if I could found a startup or not and I felt joining the earliest company was the best way to learn.
I stayed at Pinterest for one year and left in August, 2011.
You were there when Pinterest’s traffic was exploding. What was that like?
It was amazing. I joined Pinterest when we only had 5,000 users but we were growing something like 80 per cent month-over-month (don’t quote me on that, I’m not sure the exact metric). We had engaged users, and which would you rather have, 10,000 users who really love your site or 10 million users who never use it?
Before we raised $10 million from investors we were doing very significant amounts of traffic. If you looked at the numbers, it was clear if we just kept doing what we were doing we were going to be successful. The numbers got bigger and bigger. Going from 1 to 2 users doesn’t sound as cool as going from 1 million to 2 million.
What was your role at Pinterest?
I was the first designer and second engineer. I designed the iPhone app and did all the front-end stuff. The two founders Paul and Ben are both non-technical. Josh, the first engineer, did all of the coding so when I joined I did all of the front-end stuff. I worked on the API, all of the social sharing buttons on the site, the about pages, and all of the mobile stuff. As a typical early employee, I had to do everything.
What is your new company, Gumroad? Your tagline is “share and sell anything to your followers.” It turns anything you upload and want to sell into a short url that can be shared to personal networks, right?
Over the past 10 years sharing has become easier. Before, in order to share your thoughts, you needed to write a book and contribute to a newspaper or magazine. Then you had to contribute to a blog or start one. Now all you need is a Twitter account, a Tumblr or a Pinterest page.
Sharing information has gotten easier, but the way people sell hasn’t changed much. iTunes still takes the same fee it took 10 years ago even though the world is completely different.
I thought, if Twitter, Facebook, Pinterest and Tumblr have [given people their own followers], why hasn’t there been a restructuring in the way people sell?
Kanye West, for example, used to have a blog and now he has just three buttons on his entire site — a Twitter button, a Facebook button and an iTunes button.
The way Kanye West markets is very different than the way he did 10 years ago. People have chosen to be his fans and followers; if he wants to talk to them he tweets. But if that’s the case why does he still give 30 per cent to iTunes? Why doesn’t he or his label have the ability to sell directly to his followers?
I don’t think that applies just to music and Kanye West. It applies to any person who creates content, because Twitter has given them the ability to own their following and given them a distribution channel. Gumroad gives them the opportunity to sell directly.
I don’t think it was possible to build something like Gumroad 5-10 years ago because you needed Facebook and Twitter to build personal networks before the commerce piece could exist.
So you’re saying people needed big distribution networks like Walmart, iTunes or Amazon to reach an audience before, but now they have their own online audiences they can sell to instead?Yes. When iTunes first came out that was the only way you could sell music online so they deserved to take 30 per cent. Not so anymore.
You’re hoping that, along with having a Twitter feed and a Facebook profile, people will have Gumroad links to sell directly to those networks?
[See demo of how Gumroad turns an item for sale into a short url that receives payments on the left]
Can you only sell one thing at a time with Gumroad? If I am Kanye West, can I only sell my one current hit with a Gumroad link or can there be multiple Gumroad links for multiple products?
You can create as many links as you want and we will have profile pages to aggregate all of the things you are selling via Gumroad.
Users can link to that personal page directly and it is kind of like a personal collection of items for sale. The personal collections can apply to all sorts of content — like books. Why should you have to wait three years to release a book and see how well it does? You should be able to release a chapter and see results faster.
There is also an option where, if you want to sell 10 albums or 10 tracks or 10 photos, you can turn them into one file and sell them as a package. So if you want to sell a ton of stuff at once you can still use Gumroad, you just have to zip them up beforehand.
When did you come up with the idea for Gumroad?
Even when i was at Pinterest I wasn’t 100 per cent sure what I wanted to do. I was pretty sure I wanted to start my own company but I didn’t know exactly what I wanted to work on. I talked to a bunch of people and Gumroad was really the only idea I felt I could work on 10 years from now. It was the only one with an initial problem small enough you could grasp it and build something people would use immediately.
I designed an image that led directly to Gumroad, the pencil icon [see above left icon in the demo], in April or May of 2011 while I was at Pinterest. But it wasn’t like I had been thinking about Gumroad specifically for a long time. If you go back, I guess I had been in some way or another.
I realised I wished it was easier to sell stuff online when I was making iPhone apps.
The thing about charging someone for a product is whenever someone buys it, it’s validation — that person thinks it is valuable. Whereas if one million people download a free app you have no idea if it’s valuable for anyone.
How big (or small) is Gumroad right now?
We’re pretty small. Two weeks ago it was just me working on Gumroad. One of the reasons I wanted to be able to do everything was so I could lower costs and see if I could make the thing work before making anyone commit to an unstable vision or an unstable product.
I launched Gumroad basically by myself in mid-Feb and my goal was traction. If I could get traction then I would hire people. If not, I’d keep working on it to make it better until I got the traction. Luckily I got some traction the first time around. A lot of my investors said I was crazy to try and get traction before hiring anyone, but I don’t really do things very typically anyway.
Right now we have three employees — I just hired 2 back-end engineers, one started this week and one started last week. We are growing pretty aggressively!
As for users, any hour of the day you will see people buying and selling stuff on Gumroad. Traffic is pretty significant. My goal with the launch was to have maybe a few hundred, maybe a few thousand dollars worth of sales, but it’s a lot higher than that. It’s much higher.
How does Gumroad make money?
When our users make money, we make money. We take 5 per cent instead of a monthly subscription fee. A lot of sites take money every month regardless of whether or not their users sell nothing or $1 million dollars worth of stuff.
I think that’s a really weird way to make money. I think the best businesses are tied into the product. So for me it’s like, ok if you make more money, we’ll make more money so the only thing we can really do is to make our product even better. It aligns everyone’s interests.
It’s the same reason we give investors equity. If we do well, they do well.
A lot of businesses aren’t like this. Facebook, for example, isn’t like this. Neither is Pinterest or Twitter. But if I have the ability to build a product and a business that does have this kind of trend, just like Airbnb, we should take advantage of it. Facebook might spend a ton of time building the best product ever for users but when it needs to make money it tacks on advertising and screws over users in a sense to make advertisers happy. That’s not for me.
Who are your investors?
Accel Partners, Max Levchin, Chris Sacca, SV Angel, First Round’s Josh Kopelman, Turntable’s Seth Goldstein, and a few others.
Was it hard to get investors interested?
I raised $1.1 million with basically a weekend’s worth of work. I knew most of the investors previously. It took about four days to raise the round.
It is a very momentum-driven game and I just had a lot of momentum leaving Pinterest.
Is the plan to create an entire marketplace on Gumroad or will it always be focused on personal selling pages?
Our focus is right now to nail the commerce piece. If you have a Twitter account and you have a bunch of followers who want to buy stuff we should be the best tool to use to sell to your following. Once we have nailed that then we will probably start doing other interesting things — but I have no idea to be honest.
I think Twitter and Facebook will get smarter and smarter. Gumroad could just be a standalone tool that fits super well into all of those other platforms.
But yeah, I have no idea.
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