Reflecting on My Failure to Build a Billion-Dollar Company: 15 Ideas That Will Shape Your View Of Building Products

Kazuki

Hatched by Kazuki

Sep 18, 2023

5 min read

0

Reflecting on My Failure to Build a Billion-Dollar Company: 15 Ideas That Will Shape Your View Of Building Products

In the world of business, success is often measured by wealth and the ability to make a significant impact on the well-being of others. However, as someone who has experienced failure in building a billion-dollar company, I have come to realize that wealth is not the only measure of success, nor is it necessarily the best one.

For me, success lies in the ability to improve the lives of those around me. This is exemplified by individuals like Bill Gates, who have invested heavily in philanthropy. Instead of chasing the elusive goal of building a billion-dollar company, I have shifted my focus to making my current venture, Gumroad, better and better for our existing creators. It is these creators who have kept us alive and who deserve our utmost attention and dedication.

Happiness, to me, is about expecting positive change. Every year prior to 2016, I had seen improvements in my expectations - whether it be in the team, the product, or the company as a whole. However, 2016 was the first time when the present year felt worse than the last. This realization made me reevaluate my priorities and the direction in which I wanted to steer Gumroad.

I made it clear to every new hire and investor that our creators were our top priority. I did not want to risk disappointing yet another customer base by becoming a serial entrepreneur. Instead, I saw the potential to grow a small team, slowly buy back our investors, and build Gumroad into a meaningful business centered around our creators. While we may never become a billion-dollar company, I have come to accept that and it no longer bothers me. Our thousands of creators certainly don't mind either.

It is important to understand that, no matter how amazing your product is or how quickly you can ship new features, the market you are in will largely determine your growth. This realization has shifted my focus from solely capturing value to creating value. I still strive to have a significant impact, but I no longer feel the need to directly create or capture it in terms of revenue and valuation.

Now, let's delve into the 15 ideas that will shape your view of building products and how they connect to my own journey:

  • 1. "People don’t buy what you do, they buy why you do it." This idea emphasizes the importance of understanding and conveying the purpose behind your product. It's not just about the features, but the underlying motivation and value it brings to users.
  • 2. Identify the narrow set of features or customers that drive the majority of impact on your business and focus on improving that functionality and delighting those users. This aligns with my focus on our existing creators at Gumroad. By understanding their needs and continuously improving our platform for them, we can have a meaningful impact on their lives and our business.
  • 3. The practice of testing and using your own products allows you to empathize with your customers and identify areas of opportunity. This resonates with my belief in being hands-on and understanding the pain points our creators face. By experiencing our product firsthand, we can better serve our customers and uncover new possibilities.
  • 4. Velocity measures distance displaced. In product development, you want velocity, and the direction you want to be traveling is towards your strategy. This idea emphasizes the importance of aligning your actions with your overall strategy. By prioritizing tasks that contribute to your strategy and saying no to those that don't, you can maintain a high velocity and make meaningful progress.
  • 5. Irreversible decisions should be made carefully and require extensive information gathering before reaching a conclusion. This idea highlights the importance of thorough decision-making, especially when it comes to irreversible choices. By gathering as much information as possible, you can make informed decisions that will positively impact your product and business.
  • 6. People can be overwhelmed by the options presented to them, resulting in indecision and less satisfaction. This idea reminds us that simplicity is key. By reducing complexity and presenting users with clear choices, you can improve their experience and increase their satisfaction.
  • 7. Doing things that don't scale is a reminder that putting in manual work is often the faster path to learning. This resonates with my belief in getting close to the problems and customers we are building for. By being hands-on and willing to put in the manual work, we can gain valuable insights and uncover new opportunities that we may have otherwise missed.
  • 8. The key to product positioning and selling is identifying the real pain point your product solves, who experiences the problem, and the "trigger" that causes the problem. This idea highlights the importance of understanding your target audience and their pain points. By identifying the triggers that lead to their problems, you can position your product effectively and provide a solution that truly meets their needs.
  • 9. Identifying the bottleneck and working to reduce or remove that constraint can improve throughput. This idea emphasizes the importance of identifying and addressing bottlenecks in your product development process. By removing constraints, you can improve efficiency and achieve higher throughput.

By connecting these ideas and reflecting on my own experiences, we can draw actionable advice for building successful products:

  • 1. Focus on creating value rather than solely capturing it. By prioritizing the needs of your customers and striving to improve their lives, you can build a meaningful business that makes a positive impact.
  • 2. Understand the real pain points of your target audience and the triggers that cause those problems. By positioning your product effectively and providing a solution that addresses these pain points, you can attract and retain loyal customers.
  • 3. Continuously learn and adapt. By being hands-on and open to manual work, you can gain valuable insights and uncover new opportunities that will drive your product's growth.

In conclusion, success in business should not be solely measured by wealth or the pursuit of building a billion-dollar company. Instead, it should be about creating value, understanding your customers' pain points, and continuously learning and adapting. By incorporating these ideas and taking actionable steps, you can build products that have a lasting impact and find fulfillment in your journey as an entrepreneur.

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