Ryan Delk
Growth at Gumroad
Around the 5th or 6th grade, I was at the grocery store with my mom and saw a 12 pack of Coke for $2. All my friends would spend 50 cents at the soda machines, so I did some quick math in my head. I knew I could sell them for a cheaper price, guarantee they’d be cold, and have a bigger selection. I think my mom agreed to buy the initial inventory and I promised to pay her back with my first earnings. I would bring a cooler to school and at breaks, I would sell soda to my friends for 40 cents or something. I probably made like 40 bucks over the course of a year. But it was the first time I realized that I could create value for people and make money in a sustainable way. They were happy with the transaction — I was happy with the transaction. I realized there was probably a lot of ways to do this and that I’m probably going to do this in a lot of ways in the future.
I think I studied business by default in college. The University of Florida had a really cool entrepreneurship program and I always had an interest in economics/commodity trading. In retrospect I might have done CS, but I have no regrets. After freshman year, all my friends wanted to be investment bankers, so I figured I might as well do an internship in Finance. The first half of the summer I loved it. The second half I realized that I wouldn’t enjoy spending a ton of years in finance, and it probably wasn’t a good fit for me. At the end of that summer, I knew I had to do something different.
I read a NYT article about a TED fellow who started a tech incubator in Nairobi. I was fascinated by it. I just wanted to do the craziest, most out of the box thing that next summer so I shot him an email and since we had some mutual friends, he agreed to met up for coffee. He decided I could help with the business side of things. Essentially it was a co-working/incubator space with 2500 developers in the middle of Nairobi. We ended up getting a lot traction- we launched a Tech Crunch Disrupt-style conference for Africa and raised a several million dollar seed fund for East African tech startups with people like Eric Schmidt and Dave McClure. I got to connect with a ton of people who I likely never would have been able to meet if I had done a normal internship at a startup in San Francisco. It was almost like I got into the startup world via Nairobi.
I came to SF my junior year and reached out to a bunch of companies. I had seen Sahil in a Hacker News thread when he announced he was working on a side project called Gumroad. I was fascinated by the idea of wrapping any piece of content into the paywall. If you could simplify the infrastructure on the seller’s site and simplify the buyer’s experience, that’s a very powerful tool. We ended up having coffee on the day he announced the seed round. I remember the conversation going really well and when I went home, I sent him some stuff. One of our investors, Chris Sacca, always says, “Add value before your ask for value.” That was my mantra for this whole process and continues to be one of my favorite ways to think about relationships and business. Whenever I interviewed with a company, I’d always try to provide something valuable to them. For Sahil, I think I sent him a few PDF’s of potential corporate partners and potential aggregation points for Gumroad users. If you’re not willing to put in 2 hours of work, you probably don’t want to work there. Or you’re just lazy and shouldn’t be working at a startup. Sahil ended up asking me to join the Gumroad team full-time. I remembering thinking — people go to school for these types of opportunities. So I took it and left school early.
The real premise behind Gumroad is that the commerce experience and payment model for content is pretty much the same as it was 15 years ago when iTunes launched. If you’re a creator, the cut was still 70/30 or 65/35. At the same time, communication has been totally democratized. In the past, there was a massive gap between the creator and their fans. That gap no longer exists. If you look at the way commerce has evolved over the past 50 years, we’ve piggybacked off the ways we communicate. Phones disrupted the way we communicate, now a huge percentage of commerce happens over the phones. Today, creators own their audiences on Twitter and Facebook and blogs and email lists. I think the next step is selling directly to these fans. It’s sort of the way history has worked- figure out a way to communicate with your audience, then figure out a way to transact with them.
I’m most excited about what the world will look like if Gumroad is successful. You would live in a world where people can make what they love, sell directly to their audience and make a really good living. We have independent success stories of people making a lot of money, but we’re focused on helping as many people as possible make 60, 70, 80k a year selling their content. We want anyone that’s passionate about something to spend as much time as they want doing what they love. Most people spend 5 hours a week doing what they love and spend 50 hours working on derivative of what they love that’s more commoditized. When people can make a living from their passions, more content will be created, higher quality content will be created, people will invest in learning these art forms, and new economies will evolve around bettering the tools for artists. That’s a pretty cool world.
In regards to advice, adding value before you ask for value is number one by far. That will get you far in life beyond just landing a job. I’d also say to play the long game. I feel this pressure, especially in SF, to be doing more things and bigger things. But you have to realize that people you really respect are often 35 or 45. You have to realize you’re young and you have a lot of time. The people that end up being successful think about the long game.
As told to NICK BASTONE
