PepTalkHer Founder & CEO Meggie Palmer spoke with Gumroad CEO, Sahil Lavingia on how to make a living as a creator. He shared his top tips on how to make money online. Sahil’s advice? Keep creating valuable and interesting content, build trust and an audience, ask your audience what they'd pay you for, and break it into manageable chunks and build as you go.
What is your Gumroad story and why you founded the business in the first place?
Sahil: I started Gumroad in 2011, nine years ago. It was a weekend project. I wanted to sell this pencil icon that I designed in Photoshop to my audience on Twitter and Dribble. And there just was no real easy way for me to do that. And so I built Gumroad just over the course of a weekend. It’s a really simple prototype where you could create an account, specify a product, specify a price, then you got a little short link that you tweet out or whatever so people could see it, buy it, get a little, receive an email with a download. And it was really just for myself to sell that thing.
Then, over the course of the last nine years, we've gone through a bunch of ups and downs. We were in San Francisco, raised a bunch of VCs, and did that whole thing for a while, got to process. So it's not really a startup, it's kind of a business, a software business that works. It’s profitable forever. Yeah, that's kind of the gist. And before that, I was an early employee at Pinterest.
Meggie: For people who are thinking about financial security, maybe looking to have different revenue streams. How hard or how easy is it for someone who doesn't know how to code, who’s never built their own website before?
How easy is it to start making money online as a creator?
Sahil: It's never been easier. I don't know if it's easy. I think it's simple. Like there is sort of a few things you have to do. You have to build an audience. You have to build relationships with people, you have to tweet or share content, you have to be interesting. You have to have some skills that people respect you for what have you. These are all sort of simple but it can take years. It can take years to get to that level.
But, if you have those things, if you have a skill set that you want to teach people, let's say you're an amazing baker, for example. You can totally go from just making stuff to making a living, baking basically, within a year, two years, really like you can build an audience. You can sell products, sell cookbooks, recipes, and do all sorts of stuff. And we've seen that over and over again, where people will go from basically having nothing to making a full time living selling digital products online, especially courses, ebooks, and videos.
Nowadays, with quarantine, we're not seeing as much of the in-person stuff but you know, before it was like a lot of events and workshops and stuff as well.
Meggie: Interesting. We've had a question come through from a woman called Mama's bear on Instagram, and she's saying that she wants to start to develop that income online as motivational speaking and blog. What are the steps that people should take? Where do you start if you want to be here now during COVID-19 quarantine, and in 12 months’ time you want to have some income coming in?
What are the steps to take if you were starting that journey from scratch?
Putting out content
Sahil: Again, putting out a lot of content, that's super, super, super important, right? So and it also just makes you better. Just producing a lot of content makes you more interesting. It will teach you what you don't know when you have to learn in order to teach people. So start sharing a lot of content and then put it everywhere, put it wherever you can.
Even when I write a post still, I mean, I have a pretty large audience, mostly on Twitter. But you know, I'll spend half a day every time I write a blog post. Post about it on Hacker News, on Reddit, tweet about it, share it with a bunch of friends, and like just doing the work.
I think a lot of people think that this happens organically that you just tweet and share and you’ll build an audience and right then you can make like six figures a year. It's a lot more strategic than that. It requires hard work to build an audience, DM people, reply to all your mentions, like it. And hopefully, you want to do it right like these are things that hopefully people are excited about. Engaging with my audience and teaching people but once you do that, you know you spent a year to build that audience, you'll end up with thousands of people that love your work, respect you, basically want to give you money if you had a way to do that.
Building an audience
And so the actual selling stuff, I think a lot of people do that too soon. It's really about building an audience, building a community, being an interesting person that people respect a lot. And then you can literally just say, “Hey, I would like to make money on this so I can spend more time doing this. There's something wrong with that. What would you pay for? Do you want me to do coaching you want me to do workshops? You want me to do a video course you want me to do an E-book?
I had a friend who had no social audience a year ago. Now, he has like 26,000 Twitter followers, and he's just started using Gmail at Christmas. So literally four months ago, and today he's made $100,000 on Gumroad. In four months, he's made 100K.
And this is not from zero like this isn't from one platform to another. He didn't even have any social media up until one year ago, I think February of last year. So 14 months, he wrote a really great post on leaving Amazon to sort of going full time on his own that went viral on Medium and gained like 10,000 followers. From that he wrote, like a few more posts and then he asked his audience, like, what do you want from me and people said, "You know, AWS is this crazy thing. I'd love to understand it.” So he wrote a book with a friend, spent a day a week over like the course of a month or two, writing this book. And you know, it's like 170 pages or something, sold it for like 30 bucks, 40 bucks, and made you know, 80 grand off of this book. You know, he spent 40-50 hours in it that requires work.
Share stuff constantly and get feedback
The cool thing is he already had an audience. He was constantly writing the book, he was sharing stuff, getting feedback, it was an ongoing thing. And so like, I would treat the blog like that, or the blog is almost like the ongoing research for this thing. And you can even tell people like “By the way, this is all going to be part of this project I'm working on. It comes out in three months.” And guess what, like all the people that followed you through that journey are much more likely to buy your book.
Then he did another video. He did a video course on how to build a Twitter audience. It's like an hour and a half he made $25,000 on a weekend, you know? This is like a forever audience. You could do this residual.
People think of it like “oh, it's a one-off thing”, but it's really not what we see. People on Gumroad every time we gain a new audience, members as you know, people follow them on Twitter all the time. You get 1000 followers yesterday. How many of those are gonna go by one of those two things like a significant amount?
We have a creator who does something similar. He makes $250,000 a month selling the same. He's making $2.5-3 million a year. His recent spike has gone up a lot in January. But since January, he's made around $200,000 a month. And that's just his Gumroad selling e-books and courses and stuff. And he's not the top creator. We have people that make a lot more than he. He's probably the top person who's so open, but we've had some figures and stuff.
We had someone who did a design template. A templating system made $800,000 in one day. You can do well if you have an audience that has disposable income and wants to support you. Again, those are the hard things than sitting down and you know, doing 40-50, 100-200 hours of work putting together a package for folks. That's not super daunting that part becomes relatively easy.
It's the building of an audience that is really good. You know, like him. He worked at Amazon for 10 years. So he has all this knowledge and insight and credibility, he knows that right? Because Amazon all you do is frickin write memos all day long. So like, build up those skill sets. The same thing with me, I wrote a Medium post and it had 700,000 people read it, but it was about eight years of my startup journey, right? No one can write that except for people like me who actually got through it, which is also why it turns out that's what people want.
People want eight years’ worth of experience packaged up into an E-book. That's what people are literally are paying for. So I think people that try to skip that, struggle because they're always looking for like, ‘how do I like to make money tomorrow.’
Giving Free Content
The problem is if you do that 12 months in a row, you never do anything. But if you just spent those 12 months building it on and just giving away content for free. Then when you are ready to do that thing, then it's actually incredibly, shouldn't say easy, but simple.
Like the Gumroad logo, it's G with the two dots that don't kind of go in this thing. And the reason is it's sort of the final step in the process, like making the amazing product. Having the audience connecting the dots. That's something. We can say, you know, I can have a webinar on YouTube or something, and it's like an hour and I go through every single Gumroad feature because it's a simple thing. It doesn't take a ton.
You know, setting up a Shopify store is easy, like Kylie Jenner makes a billion dollars or whatever. Right? But the Shopify store’s the easy part. Building 10s of millions of people that want her products and whatever she puts her name on, and curates and these sorts of things that's what's really, really, really valuable. And there's no real shortcut to that. That's what I love about it. If someone's like, “Hey, can I have your audience?” even if I wanted to, I can’t give it to somebody. It's not a fungible asset, you have to build it yourself from scratch. No one can give you an audience.
Meggie: We've got a question here from Marianne, who said she's loving the examples, but she wants to know the how.
How do you build an audience?
Sahil: What you need to do is create content, you need to build that audience and really the trust, which is what to say. Ask them. Basically, I want to be transparent about it. I think a lot of creators, I talked to creators quite frequently in my job. They don't like talking about making money. It's like it feels wrong or weird, or like capitalistic or whatever. Well, the alternative is you don't make money. And then you have to do ads or sponsorships or like these things. Why don't you sell your own products?
So, you'd rather sell somebody else's products because it's uncomfortable to talk about. Obviously, I'm sort of simplifying it a little bit but your audience would much rather support you if you are just sort of open and frank with them and like you to take them on the journey with you.
I tweet all the Gumroad numbers every month, like, you know, we just crossed 1,000,002 creators in April, which is the first time we've ever done that. And guess what, tweets like that go viral. People want to support that kind of stuff. That tweet probably alone got me 1000 followers.
People like it because they're learning how to build. People who don't follow you on Twitter, basically saw that Gumroad as a company for the first month paid out $10 million to creators in that one month. So obviously, if you annualize that we're talking over 100 million dollars that people on your platform are taking home, which is super exciting.
Meggie: So let's pretend, PepTalkHer. We have an audience across social whatever. We have programming that we run, we've got the trust, people to want to buy from us. What do we do next? Like what is the tangible step?
We have the content, built the audience, and trust, what next to do to start making money?
Sahil: I would say I would pick a product. So for example, a really great one would be like, who is your audience? I think a lot of people, they sort of think, “Okay, I have 100,000 people on Twitter, I'm going to have 100,000 customers.” No, that would be nice. Well, you pick what subset of your audience you want to be your customers. And so for example, for PepTalkher might be there are a group of people that are women that want to run social media powered e-commerce businesses, selling products on Shopify, or Etsy or something like that.
How can we teach them how to do that? How can we teach them how to build an audience? How does it get set up on Shopify? Basically, run them through the entire experience and you can do this with just blog posts, and Instagram lives like you don't have to produce all this content, you can be recording all of this. And then once you are at the bottom of every single thing you do to say, “Hey, by the way, we're going to release this as a video course or as a course on Gumroad or another service you know, sign up below and you know, you'll get an email and it'll be 200 bucks. But if you do it in the first week, it'll be 100 bucks or something like that.”
Over time, you'll have thousands, literally thousands of people that literally are getting free content, just tons of free value from you and then when you read and they're constantly being reminded “by the way this thing is happening in three months.” It's sort of marketing on one, right?
Say the same thing a lot
You have to repeat yourself. You have to say the same thing a lot. Saying at one time is not enough. People have lives that are busy. That's just the way it is. And so you do that and then you have you send out the email blasts, it's like, “Hey, you can get a lot of this content, it's already there. You don't have to pay for this if you don't want to. But if you want a really nicely packaged thing, you could run through it. Three, four hours, it comes with XYZ thing, it comes with this exclusive content, we're going to do a webinar where everyone can join.”
Maybe everyone that buys us gets added to this discord or Slack community or what have you. Guaranteed, you'll make 1000 sales plus each sale 100 bucks, that's 100 grand, right? That's how the math works. Like, this is how people go from zero to $200,000 in four months. That's literally the playbook, right?
The cool thing is that I can talk about it because it's not a secret. Like, this is how you do it and it's not bad. I could tell my entire audience, by the way, this is my plan, and they're like, cool, let me know when I can give you $100.
You know, I think sometimes in a retail model, people think it's like the business versus the consumer. And they're kind of like, the more the product, the better for the business in the worst for that. But it's just not really like that and really the value of that course. You could argue with it's zero because you could all get that content for free. Or you could argue it's like tens of thousands of dollars because the content that's the true value of what you're learning, and the sort of the accountability that you get from it and all these sorts of things, right?
The hundred dollars is kind of just like an arbitrary random number that is such a good deal for the people that want it. But then, you're not telling anyone to buy it. Well, I really think that's why we're so open is because just sharing this playbook, building, but really, it just goes back to building that audience, building that trust, finding your community, wherever they are, Reddit, Pinterest, etc. Build up that email list, build up that blog, and then put together all that content and then sell it. A lot of people even do it over time. They release a chapter a week, and they're like, “Hey, by the way, I'm just gonna update the PDF every week, and so you can buy it now.” And by the way, every time I'm incremental, it goes viral.
Meggie: A lot of people, creators, do they just say like it's too much? The 175-page book is too much?
Does the number of pages matter?
Sahil: 175 pages is actually not a lot. You could write that in a month. You could write three or four pages a day, you'll have 175 pages. There are images and blah, blah, blah, right. And so I think a lot of people, they just get overwhelmed. There's just too much and so a lot of it is just breaking it down. And it's always just building an audience.
First, worry about that and then start worrying about this other stuff. And then you know, it can go forever, I had a conversation with someone today who's messing around with Facebook ads for his digital products. So it's basically a 100% gross margin. He's spending over a full time living on the intercom on Facebook and Instagram ads just messing around with because he literally makes all his money back just he's figured it out… Facebook, so good and magical sort of retargeting and everything. And he's like you could just spend getting into that, right? It gets more complex as much as you want it to be.
But even something as simple as building an audience on Twitter, write Medium posts, start a blog, start a newsletter, and then you know, sell an ebook to them, enough to make a living and it just really how deep do you want to go?
We have people that make millions of dollars a year on Gumroad. Several of them now and you know, they've just decided this is a business. Now they have employees, you know, like, you can get just like YouTube productions, right? You can get more intense like there are huge production studios now that like just creating YouTube content. Yeah. So it just depends.
Gumroad is, of course growing all the time and adding features into the stuff you'll be able to do and sell. Gumroad is going to get crazier and cooler and better. Over time as well. So it's early days. That's the other thing is super early, like we're barely starting. The surface of empowering creators to make money. Living it's early days, even though it’s a nine-year-old company.
That's the way it works, right like that incremental growth of the product as well. And so for people who don't know, so on Gumroad, basically, let's say you've got an E-book or a course you can charge for that you can have the facility to have people pay what they think it's worth, you can have recurring payments, there are lots of different options. So it is a really great, easy, no-code way to kind of get those sales coming in.
Meggie: You talked about breaking it down into chunks that you can handle. We talk a lot at PepTalkher about imposter syndrome.
What do you hear from creators that hold them back like it's too overwhelming? Is there something else that holds people back?
Meggie: And yeah, like, what would I know to make money online? Why would people pay me? Is that another barrier?
Sahil: Yeah, totally. A lot of people think that they're not good enough or they're not qualified or they're not experts. I mean, that's enough. The reason I feel like I'm so open with the company is to show people like, “Look, I'm just me, like, I run a $10 million a year revenue business, but I'm just trying to figure things out. I'm just a normal human, that built a thing that grew over nine years. You know, it took a long time.”
I think most people are like this. I had a tweet a few months ago. That was basically, “one of the best things you can do is to meet your heroes, you will be disappointed.” You'll realize that they're just human beings that work really hard and have discipline and hit snooze and get up in the morning. And, you know, they just work.
I don't know, at least I had this idea that people that could code and work at Google were these super genius people and they have a miracle formula for success or something. But like not, I mean, some of them sure, but the vast majority of them are just normal people that have a job and they do it. So, the same thing goes with musicians and actors, filmmakers, and directors, it's just like a lot of work. A lot of iteration, a lot of feedback loops.
I think a lot of people, take their first draft, and they read Harry Potter or something. They're like, this is amazing. I could never write this. And it's like, of course, you can't write this, no one can write this. No one wrote this, like, JK Rowling did not write Harry Potter. She wrote a draft of Harry Potter and then gave it to people. And they gave her feedback. And she made it better. And then she gave it to her agent.
Dozens of people helped make that thing better and better and better. And so when you're especially near the end, maybe the first-second book is a few people, but you know, as the impact and the scale of it increases like, tons of people are looking at that stuff. You can go find early drafts of this stuff, and it's not nearly as good as what comes out. And that's not a dig on her at all. That's just saying like, “Look, we're all human.”
I can watch a great movie and think wow, that's like the best thing I've ever seen. But I could never make anything like Parasite which is amazing, but guess what? That's not the first time they shot that movie right? They've worked on this project for a long time and they've worked up to it too right it takes people often look at the best work and they're like I want to make that but it's like go watch the filmmakers first things right. Go watch his first couple of movies, they're not that good.
There's a lot of birthdays getting broken and potholes, and like every so often you hit something perfectly it's the perfect project, perfect timing for the perfect director. But often it's not and so that just comes through doing. It comes through.
I think a lot of people, they're waiting for the right moment. That's not going to come. The right moment comes by like you doing things and then eventually, you realize like that there are no moments that people working. It's like someone was waiting for lightning to strike. It's a compounding thing.
So it looks like this. This is what governance growth looks like. This is what Coronavirus looks like this. This is what compounding growth looks like. And what it means is when you're up here, when you see people up here, you're like, there's no way I could take a staircase all the way up here. But that's exactly right. That's how it works. It looks like this. And when you zoom in on that, it still looks like this.
You know, that's what exponential growth looks like. And so, just like Gumroad, growth has always kind of looked like this. But now when you look at Gumroad, it's like, wow, you didn't know volume back then. Back then I looked like this, too. It's just the numbers were a lot smaller.
So just like editing, a skill is similar, where you look at this master painting. And you can't imagine that but that person has painted 10,000 different paintings to work up to that, you know, that presented to paint trees and paint faces and paint this and that, and that. There's so much work that goes into this stuff. And so I think sometimes, especially with the internet, people like to think there's this assumption that maybe it's just like someone on their laptop writing a book and it's amazing. And it's like, no, there's a lot more that goes into it. It's not just like a musician in the studio or whatever. Like there's more work that goes into this stuff. So I think anyways, sort of long answer.
But yeah, I think imposter syndrome super real. I think everyone feels that. I think it's good to feel that because if you don't feel that you might be insane. And every creator I've ever talked to, every successful creator is always like, I cannot believe that I was able to do this. Like, no one has been like, “Oh, yeah, I totally knew I was gonna make $300,000 a year selling digital files to people on the internet that I don't know.” No one knows. Like, that wasn't even a thing you could do 10 years ago, or 15 years ago or whatever.
So it is literally unbelievable. And that's so that's why I think everyone kind of feels like they shouldn't be able to do it. But the truth is, so many people feel like they shouldn't, that they don't. And so if you do, there's plenty of space for you. There's no problem with that.
There are so many people just literally waiting to give you money. You just have to find them and then give them something special. They want to give you money. Make it easy for them to give you that money.
Meggie: I couldn't agree more. And it's such an amazing time to be able to make money online. And also, I think there's a lot of people right now who are thinking more strategically about different revenue streams and not wanting to be in a situation where they're beholden to an employer unnecessarily. If that's you and you're watching, we would really encourage you to take the step. Check out Gumroad, its amazing products, it’s easy to use.
Sahil, thank you so much for joining us. I'm really grateful to have you on our daily Power PepTalk, and loving all the transparency of your business on Twitter as well as sharing your figures, your growth rates.
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