Author: Maddie Hill

In last week’s post, I outlined the early beginnings of Gumroad. Every journey has its rough patches, and Gumroad is no exception. From near shutdowns to hard pivots, the road hasn’t always been smooth.

By 2015, it became clear that Gumroad wasn’t growing at the pace required to secure its next round of funding. Despite a loyal base of creators and steady revenue, the company wasn’t hitting the numbers needed to justify another major investment.

Without that funding, keeping the team intact became impossible. In what was one of the most difficult moments in the company’s history, Gumroad laid off 75% of its employees.

The news became public, and the future of the platform was suddenly in question. Customers wondered if they should look for alternatives. Some of the platform’s most successful creators left, unsure if Gumroad would survive.

At that moment, there were three options:

Shut down and return the remaining funds to investors.
Sell the company and move on.
Operate as a smaller, self-sustaining business.

The easy option would have been to walk away. Investors encouraged shutting it down, suggesting that time and energy would be better spent starting something new. But thousands of creators relied on Gumroad to power their businesses. Millions of dollars in sales were processed every month, paying for rent, student loans, and everyday expenses.

Sahil chose to keep going, even if it meant running Gumroad as a lean, scrappy business instead of a venture-backed rocket ship.

So, what went wrong?

The numbers told a clear story. While we had a loyal base of users, we hadn’t reached the scale necessary to justify another major round of funding. The creator economy was growing, but not fast enough. We had built a great product, but we didn’t have enough customers to sustain a venture-backed business.

The good news: These challenges forced us to confront hard truths about sustainability versus growth at all costs. While each setback tested our resilience, they also clarified our mission—helping creators above all else. We learned that building for creators meant prioritizing stability and reliability over rapid expansion—even when that meant making unpopular decisions or growing slower than investors might have preferred. Worst of all, shrinking the team.

Looking back, these difficult moments shaped Gumroad's identity as much as our successes did–ultimately leading to helping creators earn more than $1,000,000,000 (that’s a billion) over the coming years.

In next week's post, we'll shift focus to how Gumroad transformed these challenges into opportunities, ultimately building something more sustainable and creator-focused than the venture-backed path could have allowed.

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