I'm Arlen Hamilton, and this is your 1st 1,000,000 I'm a venture capitalist. I started my friend backstage, Capital from the ground up while I was on food stamps. I have now invested in more than 100 companies with by women, people of color and LGBT founders. After having raised more than $10 million people often ask me how I did it. I created this podcast so I could tell you my story so that together we could go on a journey and speak with some of the most successful people in the world from all backgrounds and walks of life to learn how they got there. 1st 1,000,000 And who knows? Maybe I'll reach my 1st 1,000,000 in personal capital while I'm recording this series. There's only one way to find out. Let's go. Hey, welcome back to your 1st 1,000,000 It's Arlen. Wow. Okay, so we're right back in it.

I am delighted to introduce you to Sawhill from Gum Road. He founded Gum Road. As you'll hear in the interview, he found that it a cz a weekend kind of hackathon personal hackathon. Basically a few years ago. It now doles out millions and millions of dollars to creators. And I love this episode. I think over the past couple of weeks I've read more than once from you all from the from the audience here that you're digging your 1st 1,000,000 I mean, the love is, as always, is wonderful. There's a little bit of feedback, though, on Hey, okay, and each episode we hear a lot of the details of how people felt.

We hear that store, that personal story, which is really awesome and a lot of cases. We we do hear the how. But can we dive even deeper into that? And so I heard you, and so he'll was the perfect person to start really diving in more. He's very open. He's like an open source, you know, you think about open source technology and information. He himself is open source because he gives a lot of free game at online. He gives it on Twitter on medium on block posts and just by virtue of his company. He does that in this interview, really showcases that. So this is for anyone who wants to know the ends and outs of how he how a person could go from being in high school one moment and the next moment having a tech company that earns millions of dollars per year.

And as you'll see in the in the interview, it's not really like that, not overnight, but it definitely is impressive and exciting. And it wasn't all rosy. It was a lot of heartache in between. If this is a very first episode you're ever listening to because maybe your friend of so hills or you just stumbled across it or you're finally giving it a chance because you've seen it so much on your Twitter and your instagram feed, I thank you first of all and welcome. And second of all, I encourage you to go back and listen to a couple more episodes in the past because I think you're gonna like them. They're all very fresh air, all very new from June of 2019 and onward as I sit here in October 2019. They're very fresh, and I think you can get a lot out of them so you don't have to wait for the next new episode to get your fill. You can do it now if you are a long time listener. Thank you.

Hey, if you live, listen to every episode every episode, including the bonus episodes I want you to write to me at Arlen A r l a N Hamilton a J a M I l t o in at Gmail, Arlen Hamilton at Gmail. And I want you to write the subject all 1st 1,000,000 Okay, I'm just making that up right now. All a l l 1st 1,000,000 And just tell me that you've listened to all episodes. And if you have and be honest, this is the honor system if you have and you have not yet to receive a T shirt because you left a comments which you can hear more about later in this episode. And you want a free shirt or maybe some other sort of surprise gift they send out, send your T shirt size, your full name, your mailing address, and let me know that you've listened to all episodes up until this one, and it's just a little fun we're having.

You still have time to become that to become that podcast v i p. As the T shirt says, And listen to a cz much if you can't spread it to, like, let your friends know we have. Like, soon as we put an episode up, we have just incredible amount of support that happens, which has been like crazy to watch her. And we put the we put the episodes up within 24 hours. It's just boom immediate feedback and immediately has been listened to a ton of times. And so I want to now spend the time we've spent so much time developing the quality of what we do here at the podcast. I want to now think about how to be spread that some more people, how come more people hear it? More and more people here it perhaps get something from it. And I need your help to do that. So just let people know to take a listen. Keep listening yourself and keep sending that feedback because I hear you all right. You know you're in for a treat for us. You know the scythe.

My name is Sato living in. I'm the founder and CEO of Gummer.

How do you describe gum

Road of People? I tell people that Gummer it helps creator cell content on the internet so that they could do more of what they love. So we help musician, designers, writers, filmmakers, stand comedians, photographers. Anyone that makes stuff on the computer would make it really easy for them to take that stuff uploaded on the Internet, sell directly to their audiences. Take the vast majority

of the revenue, just says, Ah, disclosure. You have invested in backstage the fund that I manage in the past, one of the earlier investors kind of midway through investors. You know, one of the things that recent feedback I've gotten about the podcast because we get really cool feedback and one of the things that people said, It's like, Can we go even deeper on the house? Because this is called your 1st 1,000,000 So people want to know more more about how exactly you made the 1st 1,000,000 And of course, when it comes from, what I love about your story is that we're talking a revenue and we're talking income. And in some cases, yes, we're talking about raising capital. What you have all three stories to talk about. Let's start from the top just to kind of give people level. Set is gum. Road is still up and running but still doing its thing.

Yeah, we're doing where It's $6 million in revenue a year now. 38% gross margins. Were cash flow positive for Ebola? Profitable? It's a great business. Took eight years to get there. We started the company in 2011. Did the whole venture back thing raised a $1.1 million seed round and then $7 million series eight Right after

that. Okay, we'll stop there. Stop there. Let's go back. So it's well, do you know

I'm 27

in 2019 Year 27. Super young. So you started this way. I don't want to do the math. Is math is hard? 19. You started this at 19 years old. You in school were in some sort of school where you dropped out.

What was the deal? So I went to USC for school not too far from here, and lasted four months before I job dot Join Pinterest is employee number two. And so I started gum red as a weekend project while I was working at Pinterest and eventually just

took that full time. What were you doing at Pinterest

so primarily I designed and built interest for iPhone. That was my big

project at this young age is a teenager. How did you learn how to design for iPhone? I mean, you're saying it, like, as casual as can be. That sounds like

I can't talk any other

way. Way. It sounds like a really intense talent to have. It was a just self taught at home. We figured it out like many engineers do. Er I mean, where did the even the interest come in?

Yeah, So I started as a designer. So I started learning Web design and logo design just, you know, messing around with Photoshopped googling around for how to do like, we're text effects. And you know, these sorts of things in photo shop. And I think I wanted to buy some Xbox games or something. So, you know, I try to figure out how I could make money doing it, which is typically a pretty good indication that this thing is gonna be interesting. And so I started doing just freelance web design. I'd find clients in just different forms back and, you know, just probably like 2006 or seven or something like that.

and did that for a long time. And inevitably, you know, you do enough service work for other folks. You have to start having your own ideas. And so I start having my own ideas for why baps that I wanted to build and I basically do the design for them. And then I threw the same forms that find developers to build it out for me. And I think just as a cost saving mechanism, I was just like I could learn a code. I can do this, you know, I'm they They sent me the code that they make. I used it on the website, so I see everything they're doing. So I'm just sort of learning by osmosis. And then the iPhone came out,

and that was a servant, servant, design minded person. I feel like the Web is like 20% front end, 80% back end and making iPhone app says, like 80% front and 20% back. And it's mostly the u I layer right? And so it's a designer is like I can do this. I can totally learn how to

do this. What is you? I mean, for those who don't

know. So you I means user interface. So basically, any anything that you on the glass screen of your of your phone is sort of. You. I, uh You excuse her experience as well, and I started just designed my own APS and I found this course on iTunes University free. Ah, that's that Stanford put up there. They're Iowa's development course called CS 1 93 p Top by Evan Doll. I spent basically one summer in between I think junior and senior Year of High School to 2.5 weeks. Just every single day I'd wake up watch, sort of like the Monday lecture do the assignment. Watched the Thursday Let's Launch, I think, do watch the Thursday lecture do the assignment.

So I was basically doing every day I was trying to do a week. Were at the school because, you know, roughly semester of schools around 12 to 14 weeks of class. So in two weeks that I did the whole the whole Stanford course, which, you know, some students paid thousands and thousands of dollars to d'oh. It's available for free and still available for for free. I think it's been updated since There's a new teacher, right for the for the new stuff, but it's it's amazing what you can learn on the Internet. And so after that, I just started making my own APS. I made it. Twitter client called Twizzlers

Whistle was Twist will do that.

I'm not very good at names. I think

the road is

pretty darn good. Thank you. Yeah, I think it's become good overtime, you know, but ah, it was just It was just a Twitter client. I wanted to make it to our client. Twitter at that point had this phenomenally open a p I. And so I started making APS and and And that got me the attention of Pinterest. And that's how I got the job interest doing consulting for them. I think the first thing app that I first built for them, I charged them, like $8000 for for the first version of pictures for iPhone wasn't enough to actually get everything done. And so I ended up joining full time, took a leave of absence from school and then moved up to the Bay Area.

From where?

From Elliot from,

you assume Ellie? Yeah. So you grew up here.

I grew up in primarily a Singapore. Okay? Yeah. Parents from India through New York.

Yeah. So your parents are from India. You were born where

I was born in on Long Island. Yes. And

they love it too. Moved just in a poor

Yeah. My, uh my dad got a job working for Deutsche Bank

and say OK, then came back Thio l a. To start a school there. Yeah, Pinterest came calling after you. Kind of self tight all this time. Did you start college early?

Uh, roughly the same. Same as everybody else. Yeah,

18. And then you're a painter's For how

long? I was only there for nine months, I think

nine months, but even start up world in that time, especially that so that's almost lifetime. That's

a lot. I know. It's it's it felt like a lot of it. It just because Pinterest becomes

so massive. Now what? You're looking for my identity. What? You're what they have been in at that point.

So they have Ah, really interesting story that doesn't get a lot of air time because Ben is such a quiet person. Uh, he's like frustratingly night. Sometimes he's like the kind of guy that, like you, punch him in the face and

he'll apologize. Don't

try that on. Wait, don't don't do that. But so they started the company, I think Cold brew labs in 2008. And then they went through a bunch of different products were at least one that I know of, and I think maybe one or two before that. And then they landed on Pinterest, I believe, in February of 2010 and then I joined full time January 2011.

Could you tell back then that there was a magic happening there? Yes, it looked just like, Well, it's hard.

It's hard to say because I felt like there was magic happening there. But I remember there was this one meeting, and there's like, maybe three or four employees at that point, and I remember being I was like, This thing is gonna be huge, like we just closed a series A. I think that's what we're talking about. And so they just raised 10 10 million from Bessemer and I was like, This is gonna be massive, like this is gonna be a $1,000,000,000 company like I was so certain. And I remember one of the other employees I want much of the same but because I don't know if he wants me to mention this. But he was like, I've done startups. Yeah, it always looks like

it's looks great.

And then it and I was like, No man. And but I you know, I was like an 18 year old kid, Justin, my first go around. I had no idea. But I was so bullish. So I think part of it was the naivety, which I think you need a healthy amount of. If you want to do start ups, because the odds are just statistically not in your favor, which doesn't mean you shouldn't try should just sort of temporary expectations a little bit. And I remember so I grew up in Singapore, so I wasn't super exposed to start a planned. And then when I went to U. S.

C. One of the big reasons I chose USC is because it was in California was close. As close as I could really get to San Francisco, I could get into Berkeley or Stanford, and I was super disappointed with how little of a startup culture there was at USC at the time. I think I met one person that semester Who knew what happened used was, which is, like, sort of the paper of record for for Silicon Valley innocents. And so when I met Ben and Paul Ah, from Pinterest, I was just, like, enraptured because it was like, the first time I really felt like I could just be myself in that way and just talk about product talk about design. We were messing around with Instagram. I think it's a gram. It just sort of was still new. And my first instagram post is actually from that meeting.

Probably still bourbon at that point or whatever

it was those early days, they had probably two or three employees at the time. They would never let you fall 2010 ish. Yeah, a great time.

It's like the heyday of the Hollywood Brat pack or something feels like, Yeah, so you're there for nine months? Is that you said on the on the weekends, You're you're now coming across this idea of gum. What gum road will become? Talk about the impetus of that.

Yeah. So one Friday night, I was designing. I was learning how to design these photo realistic icon designs. You know, like Mac app icons in the dock in photo shop. And I spent three or four hours, I think, designing a pencil, a sort of a three D photo realistic pencil. And at the end of it, I was like, I just wish I had this asset, you know, full of these layers and everything. Four hours ago, it would have taken me 15 minutes to learn how to do this,

and that sparked this thing like, Oh, like, how much is 3.5 hours of my time worth, like at least a dollar? So I'll try selling it for a dollar on the Internet and see what happens. And I couldn't do it if there wasn't really a way for me to sell this thing on the Internet. It's a digital product, right? There's it's a sort of file. If I wanted to share for Free would've been super easy use Bentley or Dropbox or I built this other project in my free time called Crate, and the minute I want to attach a price tag to it became impossible.

So I picked up that there was no interest. Just there was no mechanisms, No mechanism Do this thing you want to do with you Sell a file basically line to other people quickly and

exactly exactly. And when you have thing you want to sell and when you have the audience waiting for you on the other side of Twitter or dribble or any of these sites that you might have an audience in your blawg your newsletter, it just felt weird that there was no thing connecting those two dots. And so I pained. Ah, friend of mine who had just met John from Stripe and said, Hey, like the end at this point, I think number is probably like user number 50 or something of striped because Ban launched yet there is still a super private beta

and you're really move on your kind of dropping these names as if it sounds It may sound to some people a little from a place of privilege, but to me, Oh, you're more You're a hacker. You are more of in the dirt kind of guy. So you would have just met John Collison of stripe not because you were at the same school or hang out the same kind. You both were probably on some website working on

some stuff. I'll tell again I'm happy to. I will literally every single person, I imagine if you ask me how I met

them, I'm happy to go. This is not necessarily. But I just want to bring that out in people because it can sound a little bit like, Oh, well, that's why their success there. Because you want these guys, you know, you are like you were. You're working because what I'm hearing Maur is that you you're putting in the 10,000

hours I'm putting in the 10,000 hours. I'm I just really love. You know, it's easy to say now, like, you know, learning I Wes in 2009 was probably a good decision, right? But I was just genuinely like how I want to make stuff. What's the easiest way for me to make stuff? Oh, the APP store lets me make stuff and then not have to worry about all the financial stuff Apple will deal with that I could do that. I live in Singapore. I can't participate in so many of these things. that exist here. But at least the APP store was. That was a global things.

Apple at that point was already a global company, and I don't know it's hard. I was meeting someone yesterday. He was talking about how he had a similar mindset about JavaScript. Huge Guillermo from A from sight. And he's just always been obsessed with JavaScript. And it had a very successful career, and it continues Thio. And I think sometimes it just finding out what you really love, what you have a deep passion for. And if you're early and you really put in the work you put in those 10,000 hours, you'll find these relationships because there are other people that want to do that, too. And like Ben sent me an email, John actually reached out to me. I believe on we grab lunch in Paul Otto.

I think the email was something like, Hey, we're both like, 18 years old, living in full auto, working on startups. It was like seven of us,

you know, you think that the same sort of kismet can happen today, Maybe not necessarily in Palo Alto, but maybe I'm gonna answer my own question it sounds like that sort of kismet that has created so many beautiful things. Sense is the same thing that could now happen in other nascent

community. I've I believe that strongly because I remember living in Paul Auto feeling like I missed the boat because I remember. For me there was a different era. Was like Kevin Rose and Dig and destination Jack Dorsey and Twitter and have Williams. And they all knew each other like that. You know, you'd see photos of a wedding post on Twitter, and they're all

there. Yeah, hanging out on top.

Whatever. Yeah, I missed out on the boat, and now it was funny, you know? Now people tell me that, like, feel like that now, like, Oh, you know, all these people I'm like, by the way, like, 10 years from now, there's gonna be another person telling you that if you investing in yourself and your abilities today because the world is growing and it's happening more and more and more and more, and it might not look identical. It might not happen geographically. In the same positions are on the same forums, the same websites. But I'm so bullish on the fact that we're in the early days

of almost everything. And also, if you're not around those hot spots or hot beds, you can create your own infrastructure, your own rat pack situation by connecting with like minded peers. And hopefully some not like mine appears and build that yourself just through conversation and connection. I want to drop you right back into the story you were saying about talking to John once you discovered I want to sell this file to whomever for a dollar.

Yeah, So he gave me an account. I signed up and basically Saturday, Sunday, I just spent, I think, 22 hours or something. Building gum road, designing it and shipping it using. Ah. And at this point, I was not that great of a Web engineer. I was pretty competent in the Iowa side, and because of Pinterest, I had a sort of do a little bit of work on the A P I site to make the app work. I was a little bit familiar with jangle in Python, and so I used app engine Google app engine,

which I think is rebranding now to go cloud. They had these tutorials on how to make a crowd app, so I literally like Gummer is a glorified crap. You create products, you update products, added products, you delete products and you should show products you enter and credit card information. It's a form submit Ajax form submit to stripe. It's a very, very, very simple service, at least on the onset and s. So I was able to build the whole thing in a weekend and then I launched Monday morning, I woke up and the first thing I did was copy Paste. All the sort of the tax died had written for, like the hacking use post on the block post.

It said I had the tweet and then did that you know 67 in the morning or something and then biked liketo work back to Pinterest and blew up. It was number one on Akron use 50,000 people visited that first day because I think they saw that it was It was almost like if it was too complicated, it would have just been like, Oh, it's another startup. It's another business. But the fact that it was like it was just so raw, they could just look It was like almost transparent. Like they could just see the idea, the crux of the idea right there because there was not much to distract them, Not not a ton of pretty pixels or Grady into any of that

stuff. And also, the thing that you were solving for sounded like it was a pain point for a lot of people. I mean, I remember back then during that time I would have been trying to sell things for my my blawg. Yeah, you would embed papal add two carts and this and that, but there was nothing like gum road that

I couldn't remember. It was all it was all pay. And that was The thing is, I remember I remember doing some research trying to sell the pencil icon, and it was just basically different service is that will allow you to all basically, just add a PayPal button. Your website, which mandates a website which turn already at that point, was starting to go away where people had a Twitter account and that was it that was like their thing. They're had Iran, these different social websites. They need

website anymore. So when you saw that 50,000 people on hacker news. It was number one, he said. What did you think? I

felt like my expectations were being validated. I really felt like this was I think I tweeted like I just had the idea for my 1st $1,000,000,000 company because I was so confident that there was something super profound in making it possible to sell any file, any piece of content and how much value that would unlock for people. And when I saw the 50,000 I was like Oh, I was correct, Yeah, at least to some level. There's something here. There's something worth exploring here, and I remember I would shit weekend projects all the time. I almost every couple weeks, I think, and that was the first time where I wanted Thio. I looked forward to the to the weekend so I could work on the same project, not a new project. That was the last weekend project I think I worked on because I was just like there's something really compelling you and for a variety of reasons, and I think this will appear later in the conversation as well.

But I think I was just there were all these things I had built and people would use him, and they do. Okay, But this is the 1st 1 that had anything to do with helping people earn a living. And that, I think, was what made me so interested in this problem specifically. And I think that has paid off in dividends

since. And then do you immediately think okay because you thought it says I may have stumbled upon a $1,000,000,000 idea here. Do you immediately go all in on it and make it your number one priority and start thinking about how does this become a company? Or was their time in between?

There was time in between at around six months, and I I think it's because I didn't really know, like, the path to doing that. Like, how do you start a company? How do you raise money? How do you do any of these things? You know, I have seen pictures do some of this stuff, and I was him. Ben was gracious enough to sort of invite me to some of these meetings, so I had some context. But what changed things where people would reach out to me investors would reach out to me and say, Hey, are you going to start a company like this is a company? It,

like just this is like one step away from being being a company. And I had always thought, I guess that the product was like a part of a much larger sort of thing called a company. But all these people were telling me like That's the easy like that. If you have a product like you can, you can figure

this stuff out of interest is the hard part. The product market fit is the hard part, but the putting together we can find someone to help you put the company together.

Yeah, we've done. They do this

all day, every day over. Some of the things people were selling early on was really resonating with people.

Well, the funny thing is, I don't even know if it really resonated with anybody because I look back at the early numbers and I mean people were were messing around selling things, but like a lot of icons and PSD files and source code and stuff. But I think it it took a one person musicals while music was probably the first industry that I think latched onto it. I think music is always a little bit on edge with their like They're always looking for ways t to do better on. And so they were super willing to try stuff out. Sell MP three's, I think Imagine Dragons was was one of the first musicians to use Gum Road to distribute some content. Rihanna maybe as well, um, did blows was early and, um and that it was It was like I was I I almost like, didn't even care about the usage. I was just like, there's something profound here. I'm just I just need to keep working on this thing.

And that's when I decided to start a company was when I was like, I just want to work on this problem for five years, Yeah, with no distractions. So we're want to think about anything

else we're in 2010

at this point 2011.

2011. Now you have some inbound interests, which is what I think most people should do is work on the thing, get people to love the thing and then and make it more valuable so that they're not immediately going out looking for funding for it, if at all. So let's skip ahead to where maybe you started to bring on employees. Or maybe you start to have these investor conversations. Where does it start becoming the kind of start up that we all Yeah, I have come to know.

So basically what happened was you know, these investors would reach out and I would say, I have a job. I work at Pinterest and, like Monday through Friday, like, let me let's hang out on a Saturday or Sunday And investors would say Sure, and so I would meet with investors and I'd say, How do I turn this into a company like, What do I need to do to raise money? And you know, there's this. There's this common saying in Silicon Valley, like if you want advice, ask for money. If you want money, ask for advice,

and I think I don't know if I knew it at the time, but I was just asking for advice. I was like, How would I How would I do this? And it turns out, if you're asking for advice on how to raise money from investors, and that's their job. They're gonna They're gonna probably offer themselves up, right? They're gonna be like, Well, if you want to do this like, I'll help you do this. I want it because they want to be the first

money in a lot of it's attractive enough. If it's a trap, I If it's attract experience, a lot less of that, then yeah. Ah, and certainly to

them, it's a privileged conversation is a key part of this, I think because I just, like, look and breathe like a startup founder. You like that? I I pattern match so well that I'm certain a lot of these conversations would have gone differently if I wasn't so specifically Blake. This type of person I am with this accent, um, and and all these different mannerisms that I've sort of, like consciously or subconsciously worked on, you know? And I think even my parents, like I was just telling my mom the other day and she was telling me about You're so English in my third language. Good. Robbie was my first Hindi was my second English is my third, and there was this one school that I went to in New York when I was,

like, three or four years old and they wouldn't let me lay there like this person can't speak English. You can't take your kid to this. Look, this. Yeah. And at that point, my mom was like, no more indie, No more drop. They like you're speaking English for the rest of your life. So I think there's even them that, you know, they'd come to America from India like they were very aware of the presentation layer, I guess, right?

You y you acts of a human like Linda. And so yeah, I think so. So I had these conversations, investors, and Craig Shapiro from Collaborative Fund. Was was the first person to be, like, where do I wire the money? And I was like, I don't have a bag like you just personally. What does that mean? And so he connected me with with a partner from Cooley. Matt Bardos. Cooley elope the law firm, um, and had great. And I highly recommend getting a good lawyer for this because they helped so much more than just legal stuff, I think.

Good one s. That's a key. Some some lawyers air. There to milk the time or to do things that don't necessarily need to be there. But when you find a really good lawyer, someone who will work with you for free is a good indicator someone who like at the beginning, yes. And he'll just give you their time. That's a really great indicator. But if you work with someone, they can They can save you. Who's good? They can save you a lifetime of heartache. And what do you say you ended up taking title?

The seed round was $1.1 million.

And what is that? In $2019 would you say, um, probably

to exit, maybe 2 to 3. Expert? Yeah. Yeah,

it was. It was a substantial amount of capital for a 20 something 20 year old who had done built this on the weekend. But kind of you have the exact plane point of needing to be the customer needed to find this to be on customer, you've seen some traction. You're in the right place at the right time, and you started talking to people early on and getting feedback and yes, and taking that feedback.

And I've always done that like I everything I do like now living in l A trying toe work on this animated series pitch like I just love like I don't mind again Privileged probably plays a component, but I love having these early conversations like even before I'm ready to and always seeking advice And if your authentic about it and you generally want him. It was always about making something people don't want to help people make to get rich, I think. But if you're like, I really want to make

this little build this

I want to build this thing Ah, everyone wants to participate in, like the building of something that might change the direction of the world. And so, yeah, they're super onboard and I don't have a deck. I just had gummer dot com which anyone could visit on. I remember, actually, Max was took forever toe to say yes, you, Max Levchin, cofounder paper. And ah, he's a recently raised 1.1 set of one is because we only had 100 k left and he was like, My minimum investment is $200,000. Yeah,

otherwise it doesn't mean anything for me. And I was like, Wow, you're an individual. You would? Yeah. Ah, And I remember I asked him afterwards. You know, he asked for all these references and everything and ask him, like, why did you ultimately say yes and said No. You spent monster really thinking about this. And you said you told me that, like you could go to Gum Road and you told me the steps to sell a product. And it was just like,

people tell me that all the time. And so I you know, and it's not true. Like they exaggerate. And so I went to govern road. I entered an email in a password I entered. You know, I I created a product which is like a name, a price and a final. You Arlette wasn't even file upload at that point. And it worked like I sent it to somebody. They paid me a dollar, and that was

it. Like he wasn't even mad. You're using stripe do it? No. Yeah. So, President. So the ease of use and the and the actual follow through of what you say I could do.

Yeah. And you know, it's it's it's It's the same today. If someone has a resume versus a product that they've built the product. It just speaks so much because it it it shows a level of experience. You dealt with things

that are impossible

to sum up in in a recipe or a dagger or or a picture or anything like

that. That's important. Try to apply that. If you're listening to write a play, that's anything, even if you're not engineer having something to show for it. Because I I have to say that I have an idea. Emails do not strike is a zip, actually, as you think they may. Where, um, I have more and more. It's about what have what have you done. And it doesn't have to be this major cost us money or anything like that. So you have 1.1. What are the first?

A few years like And I remember you and I sat down in Salt Lake where you used to live. Can can you sort of summarize what you talked about? That the trough of sorrow basically part where this was going swimmingly. It sounds like things got really, really real fast.

How that Yes. Yeah. So things really went swimmingly. we raised at 1.1 and then months later we raised seven million more, started building out the team grew the team to 20/2 and 1/2 years. Both the product that the growth was up into the right. We're growing for doubling, I think, roughly doubling every year. And I started meeting with, you know, we're running out of money. We're burning 3 $400,000 a month, and I started meeting with investors that I trusted, saying, Hey, you know,

we're gonna need to raise more money, really excited about this, all that sort of stuff. And they were like, The numbers are not good. Like, if you want to raise a $15 million series, they are serious. Be sorry. Um, like you need to be doing way better than this like and, you know, they'd give me a certain compass of different companies that they had recently talked to investigators. Things like that and the number in my head through I took from that was 20% month over month and you need to be which roughly leads to a 10 acts every year. Which of two x 2 10 x is a dramatic difference. And I just think I'd given myself.

Things have gone to swimmingly almost. I had so much of ah sort of leash that there is nothing no accountability that like 2.5 years had passed and built this great product. I thought that was the end all be all of everything and that's all. That was what I was really good. And I love doing uh and just didn't really sort of consider, I think is strongly like the value of growth, the value of distribution, the value of the end of the day. Investors are looking for a return, and if they see three or four years worth of data that says this might not return at 1000 X, it might be a great investment, even right. But But But, like we were, we'd much rather make making investment in something that has a 1% chance of being worth a $1,000,000,000 than something that has a 90% chance of being worth

10 million. That's very traditional. We're talking about traditional venture capital investment planner Perkins Sequoia. A lot of times more and more we're talking about I mean, this is a great case for that. Like we're talking more and more about alternative methods are sure you're familiar with many of them, including Bryce. But even now, Joel Berk's who was ah was a guest on the show before starting a fund with revenue sharing mind and things like that for him to keep ownership awesome. Um, I think, but that's with the That's with all of us having the luxury of hindsight. So you're right in the thick of it. Yeah. Do you feel like you at this point right before this point, you had a little hubris going Or do you feel like you're pretty grounded?

I honestly, I think just to be honest, I think I'd had very little hubris. I just was naive. I I think I told myself a story that, you know, we had a really great team. We had really great investors. I just assumed that it was really gonna be a hard has ended up being someone

so telling would tell me. Yeah. Ah, these people, with all this experience ahead of you who have been there before Yeah, conceivably.

What I think I realize now is that every investor is in a bunch of different companies and service your job as CEO. You're you care more than anybody else about this thing and everyone. It's almost like due diligence, like every investor thinks every other investors on the due diligence, I thought I think was like that where they're like, Well, all these other investors that you have are amazing. So they must be helped helping you like, um and there's not a huge incentive for people to tell you that you might be screwing up, because if they tell you that you don't screw up when you raise more money, you're not gonna go to them. Presumably, you know, like there's just not a huge incentive.

So you have to be self reflective, self critical in sometimes ways. And you also need to surround yourself. Maybe not all the time, but at some point, maybe it's a quarterly, conversational monthly conversation. Surround yourself with people who will tell you the truth, you know, if they're not in your lane and they don't necessarily get everything that you do, someone who will say to you, Yeah, look well, or your team. I talked to your team. Your team doesn't seem to like being at the office this many hours, Giving you that inside information is probably the one of the best things you could ever do for yourself. Is to put that in place and not expect other people. These are all things we learn as we get older. Yeah, we want to be ableto save some other

people sometime. Yeah. And you know, like I think if I if I if I could talk to myself from 10 years ago, I would have been like, if you're not growing at this rate, which just statistically, the startups that raise money are growing at this rate, Serves that don't raise money, aren't it's almost black and white in that in that sense freeze hiring, you know, recalibrate. But I was I think, you know, I was talking to somebody else and he said, I think the thing that you've changed the most on is your level of patients. Because now I spent three hours oil painting.

That's right, And I was at pictures for nine months, and that felt like a J. You know, like I obviously I'm older now, too, but I think I was so impatient. I don't think I would have listened to any of my own advice because and I think that's maybe where that hubris would have been. It was all about just like this hyper confidence in my own abilities to break through any wall but forgetting that, like, I need other people to help me do that.

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All right, everybody looking forward to seeing you in those shirts. Did you have that time? Say, I used to say I was gonna be a millionaire, But when I was in high school, I said it was. But by the time I was 21 when I was 22 is by the time I was 30 and once every 30 I realize, Oh, I don't need to even put a number on it. But back then you would have been that age. You would have been sort of Yeah, it would have looked like it could have happened where you all were. You chasing the number? Part of the med iness of this podcast is that it's not necessarily all saying you should go towards the 1,000,000. It's not like what happens. Ria's So did you have ever had this numbering? I want to be a millionaire

by? Yeah, I'm sure I did. Yeah, I'm sure. I'm sure I did. I remember having like an apple note little document, and it would have all these goals. And I remember that like doing the same thing. I was like, I'm gonna learn this many languages, but I knew

I was gonna Well, you already do what? I was going to be like six languages going to try everything and yeah,

life will will throw you surprises. And they're almost never in your favor. Like very rarely will you have learned those languages three years at a time. Yeah, it's always too late. It's your products. Never too early. It's always gonna ship too late the buildings and to take too long. We're very bad at factoring in the things that

we don't know about. What's that phrase to say that we tend to overestimate what we can do in a year and underestimate what we can do in

five or 10. I think Bill Gates said

that, Yeah. Where it's like, you really think you can do the whole lunch and that you just kind of disappoint yourself? But if you really set back and said in 10 years I want to do this, you can probably overshoot that. Yeah, yeah. Now I think in terms of I'm gonna be 30 nine's, and I think in terms of 50 50 I want to have accomplished X y z, How do you at that point, you've raised eight million things were getting a little weird. You can't raise. Where do you go from

there? So I started having some of these conversations with investors, and they were You know, at that point, I was like, Hey, would you invest in a serious be with and they're like, Maybe that is a no.

Yeah. Uh, you know, I was like, Okay, cool.

I'll tell the team maybe

they can pay their rent with and and And that's actually

what I did. I like January. We had our our yearly sort of the big all hands. And I said, We're going to try to We have, you know, basically we have, like, a year's worth of runway left. Kleiner gave us $2 million Bridget a four x liquidation

preference. Well,

for folks that don't know

what that means, it means that they had your ass in a sling. They did. I mean, no, it means it was it was favorable to Kleiner Perkins.

Yeah, it was. It was, but, you know, desperate sort of desperation. Uh

oh, yeah, I've been there.

Been there? Yeah. you do what you have

to document It had been there, So you had a breeze. You talk to your team, you have a year. Which is a hell of a lot more than what most people walk in to the system situations you're able to say to

their team. Correct. So I was like, This is the deal that Kleiner gave us like it's gonna be tough. We're gonna work really hard. We worked super, super hard, long hours, basically de prioritize anything that we felt didn't move the needle. And we said, I said, basically, we're gonna raise money by September or we're gonna basically have to let everybody go because and we get either sort of let Everett like a huge chunk of the team go now. But we really do believe we can get there. There is a possibility, a path to getting that growth, pulling it off,

raising money and continue on the path. And no one's ever gonna know that any of this stuff sort of happened. And we did that. We were super. Are we shipped like an insane amount of futures. And I talked to investors and they all passed and that was a brutal experience because you talked to the best investors. They all pass. Then you talkto worse investors. They all pass. And then you start having meetings with people and you're like, I don't even respect

these people. Don't want them to say yeah, yeah.

At some point, I was like, There's just this is just absurd, like, just ridiculous. And so I told the team, like there's a sort of a go big or go home situation like we have to go home. We went from 20 to 5, and the whole time nobody left the company in that in that night month, period. So we went from 20 to 5. Everyone got jobs in days or weeks, you know? And then, with that fire, we got two profitable. And then we went from 5 to 1,

just me running the thing in 2007 to 2016 men to down 16 and then for two years, that was basically in to find, you know, the whole time. Like the crazy thing is, this roller coaster is happening on the inside, but the products just continuing to kind of do its thing right, going up all right? And so I was like, Okay, in two years, we'll have enough sort of cash flow, will be ableto higher team and get back to this thing or figure out what we want to do. Then,

um, I have to say, this is tripping me out so much because it's exactly how I feel about backstage right now. We have had to have layoffs this year. We've had Thio go lean and in a lot of ways it was expected. In some ways, it wasn't. It's always painful no matter what, uh, when you start to develop a family. But at the same time, I think about all of the macro indications that air going that are happening. And I think about what, 15 months from now looks like and I think about what, how lean we are and where we're going to be in 15 months. And I think men and two years, 18 months, we're gonna be turning down capital. Yeah, and we're gonna have less than 10 people on

our pain. It's so much better now because obviously, like I love all those people,

they made it. They made

gum road what it is to get 100%. Yeah, And when I'm next in that article about reflecting on my failing ability a $1,000,000,000 company, they all got No, I think the mall, because they're so important. But that process made the company and me and the product so much stronger for it. And when if and when we get back to some of the grander aspirations that we had were gonna be so

much better for him and they were part of, I think about people in seasons, I think about life and seasons what my value to other people are in seasons. I don't think that I'm necessarily valuable to everybody in my life all the time. I think I come in at the right time and people come into my life with the right time and building. This company has really proven that out like that. There are things that we could not have accomplished were it not for certain people on our team. But I wish for better and bigger for them. Yeah, I wish for us to be a stepping stone

in every way. Correct. I think the only way is up a cz long as long as you don't basically die like your company doesn't die or you don't I really I just just believe Ana, my micro and macro level like things just consistently get better. Not always, but long term they do. And it's just goes back to that quote, right? Like you want to perform in a year and you overperform in it in 10 years or 15 years or what have you? I just really strongly believe that you have to trust your intuition. You should always be working to learn more. And if you do those things, you don't die like you. Almost inevitably, I think find grander success and much, much better than what you were expecting Anything. Where I'm at now is as a human being compared to even where I would have been if I did raise the money, did the whole thing like I feel like I'm just much

better human being I want to talk to you about now. Before I do. You touched on that You released a a medium post. What was it called? And

how can people find it? Yeah, it was. It's called reflecting on my failure to build a $1,000,000,000 company. Ah, you can find on medium Just Google that title or if you go to my Twitter account at S H L. It's my pinned tweet. And it will be until I write something better.

S h l is your twitter handle and how many clap. So you think it has fingernails? Whatever it is when you put stuff out, here's what I mean, I've noticed this. I don't know how you're I don't know what the thing is, but when you put stuff out when Jason can put stuff out, you guys remind me a little bit. He was just was also on the previous episode. Check that out. You you put out these sort of sad realism, so I'm gonna say your name, right? Said he'll ISMs and people are they come to the mountain top to listen. Thio Yes. So this I imagine this post that was so you know, it gives even more detail than what we've talked about today.

It breaks things down, and it's so eyes and vulnerable and self, you know, reflective. And it sounds like it's pretty popular.

She did well, yeah, I got 100 things. 100 10,000 collapse or

some 110,000. I don't think I've seen that before.

Yeah, I haven't. I haven't seen in any other article yet. Nothing for? For something. Now. It's now I'm getting the hubris.

So now we're as you mentioned, a couple to be alluded to a couple times we're in Hollywood, California, right now. My home office, podcasting studio. I have to say, I'll probably say this in the intro. That's a Hill is the first guest that I've had in the pod casting studio sense of had it sort of almost installed fully. So we're here and you're here, and it's not like you're visiting L. A. For a moment. You're here. You've been here for a few weeks. A few moms down. Tell us what you know. What

are you up to? Yeah, I like moving. I mean, I moved as a child, but I moved to USC, and then I moved to Sir Francis going to move to Provo, Utah, which we didn't talk a lot about, but just briefly on that. Like, I mentioned the two years of waiting it out. And I was like, I don't need to wait it out in San Francisco, spending that much money. Uh uh. Just hearing stories about people that we're killing it when I wasn't,

you know, um and so I So I left move to Provo and then and then came out here. He had a few months ago to work on an animated Siri's pitch. Basically called gum Rodion ce, which is about these content creators. The living this sort of U B I fully automated world.

What is U B I Universal basic income?

Um, yeah, basically this idea that everyone did Everybody just gets money. Just get

people may recognize that from Andrew. Yea, they may recognize it from a few other people.

Talked about it. Definitely kind of been the news.

Yeah, I think even even the group that's listening now, um, it's something that we it's kind of like something we've probably been is probably looked down upon when we try to think about it is like, um having, you know, a stipend from the government, something. But it's an idea of like what if everyone didn't have to? What if everyone was kind of more unequal footing and didn't have to worry about where the where the rat was coming from or where their food was coming from. And much like food stamps, they could have the stipend of $1000 a month or $3000 a month. What would happen as an experiment? So it's something that a lot of money, Yeah, What? What?

They're what could that unlock when it comes to their came to their dreams and their potential and so people? Because it's such a huge undertaking. Some people have been sort of experimenting with it in certain cities or groups and like like a Petri dish to Stockton, California around the. So this this is a creative animate. Why did you think of animated

So that the whole thing started because we helped content creator cell content And I wrote this medium post that wasn't intended to be content marketing. It was just I needed to get my thoughts out. I would have conversations with people that have no idea what I was up to fit last, like, three years. They wonder why I was living in Provo. All these sorts of things I was like, This is I'm just gonna correct the record. This is like the sort of the what happened and it just It became a much larger thing, and I just was like I fell in love with contact. I think now what? Twitter? I think it's been really fun, but I just loved. I love telling my story and telling, sharing my thoughts and being introspective and fiction is a way to do that. I think in a different context and animation,

specifically, I think combines so many art forms. And I think that's sort of the thing I love about L. A is just like the diversity of creative pursuit here is incredible. Like you have musicians, you have writers, you have directors, you have illustrators, painters and somehow they all make it work. It works here. It feels like as close to the future as we see it as Gum Road, you know, as a company that wants more creators out there in the world, more creative people. L. A's our largest city.

I think part of that is because so many of the union's provide the health care, so it's easier for people to not work and still make sure that they're gonna be okay and to try starting their own thing and explores for more flexible working options in a way that's hard to do in places like San Francisco, where everything sort of bundled with a sort of a 40 hour week job benefits and everything like that and all these perks, et cetera, in this frozen cause. I think I'm sure to both approaches. But anyways, animation to me is just like, just beautiful. And it combines music, sound, design, all these different things. Technology, software. I just I just think it's awesome.

Uh, and so and it's hard. I like doing hard things because I think I learned the most and threw gum road Gummer. It has a lot of, uh, awareness. And they are animation entertainment industries. Ah, lot of painters, writers. And because of these, you know what we just talked about? They're all these people that have supplemental income through Gum Road. And so it's been a little bit easier, I think for me to get in, then a sort of a total newbie meet folks and just ask questions like,

Okay, I want to make an animated thing about these concepts. Yeah, like how? Right? Just like what? I what I did with gum right in the early days like How

do I do this? What is What is your hope for the next few weeks and months here?

I think Best case scenario, I haven't Anna Matic by the end of the year. So in an o Matics, basically take a pilot script sort of a screenplay. And then you turned that into storyboards, which is like an illustrator, sort of like makes it little comic panel of it. And then you get voice actors to use those two things and and and voice act. And then you take the audio and storyboards in the script and you basically compile it it into a sort of a super low fidelity movie, a timed thing, Then you can watch and to end. That's so black and white, really scrappy kind of the M V P.

Yeah, it's like when that when the Oscars were playing and they show best animation, they show a flip book basically to show the the construction of something

at the time. You see all the different steps that go into the final compositing, a rendering of the image, and I want to get there because I think at that point I'll have a pretty good idea of like, Is this a good story? Yeah. Is it funny? Is entertaining. Are people gonna learn something and think about something? Are the characters compelling their dynamics? Interesting things like that. And so I would love

to get there. OK, yeah. Tell me, as we start to wrap up, you said you get $6 million like revenue. From what? How does that translate to how many creative people and other types are able to sell their wares on gum root per year and how much is being spent out to them? Are deployed to them? Yeah. So

why don't we send out? So I think we just crossed a couple months ago. $6 million a month. So every month we send $6 million plus two creators, artists, designers, writers,

filmmakers. Yeah, because they individually are selling items or things Or files or what? Having e books, et cetera, videos, courses, all of that and $6 million worth of their wares are going out. And you take a small fee of that that equals over those 12 months. A total of of six million. Correct. Right? Exactly How many people use gum road to sell each

year. Um, we have last month 11,623. So I think to day around 40,000 people have made at least one sale s. Oh, yeah, a little bit over 11 11,000 I think. One of the probably collectively, over a year on 20,000

people. Do you think you'd ever get back in the rat race and do Because what I think of now is like the sky's the limit for you. You seem to have, like, a control of your life that you didn't have before, which is really attractive to someone like me into most people, I think. Yeah, but you also now, because you've been through that kind of I feel like you're kind of there's a resurgence of the company itself being attractive, for instance, and we can you tell me not to at this but for instance, someone like a patri on to me Seems like tailor made to come in and say, Hey, we love what you're doing. We wanted just extract that from you hear some money and you go off into the sunset. It sounds to me that you're you're always gonna be creating something.

Yeah. What do you What do you I remember you put something in you wanted. You wanted gum Road, too. It has a certain mission now. Yeah. How do you view all

that? Yeah. So the way I think about it is Bill Gates actually has another little line that I love, where he talks about creating value versus capturing value, and the best companies create as much value as possible, not capture as much value as possible. And we helped creator. So I aligned with that strong. And so it's all about creating value. You know, the Post. We publish our financials every month. We're constantly experimenting with different ways to educate people are creators and other entrepreneurs. We just had our first open board meeting, which is the first time at least that I've been able to find where you can watch like, a startup board meeting, like what even happens in these things.

So I think that's number one is like, how can we maximize how much value we can create? Um, I think to I want to keep control. I have control over my life, I think is you mentioned, and I'm willing to give some of it up, for sure. I think there's always compromise is to be made, but I just really value it. And so there has to be a really good option. And I think Gummer it is such a great vessel for me to explore both the creative side of myself, which I sort of discovered in the last few years with writing and painting through gum rodents and these other projects. And it allows me to sort of contribute on all these different other vectors, like product design, people management,

recruiting, um, thought leadership etcetera at whatever rate I feel comfortable with. And honestly, I kind of have, like, the personality of the last person I talk

to you. So, like, if I

if I mean

what you're gonna be a very attractive gay black woman like waiting,

Uh, we live in a new era. Uh, it's great. Uh, well, you know, like we actually talk back into down 16 when we talked to Patron about about being bought, and I just couldn't I just couldn't give up control of the thing. I just I think I'm the best shepherd for I really believe that.

And there's a freedom that you have talked about this recently. I was like, I would like Tyler Perry's freedom. That money? Yeah, I'll take bull. I'll take it. But this is the freedom that you seem tohave right now where you can chart your own course at the same time, have a thriving company, and we talk all the time about what is a successful company who gets to decide with

that. Yeah. And also, I think, one thing I had to ask myself pretty deeply because I started having, you know, Gummer got profitable. I didn't have to work as much as most people have to work. And so I was like, if gunman was that building to our company that I wanted in the beginning, if we just hit every metric and just did it, like what next? Like, what would I have done? All right, Um, like, what happened if I had $200 million in my bank account?

Probably not much. I don't

know, Like I don't know. I I love what Tyler Perry's doing nothing. That's phenomenal. And I'm like, I can do a small version of that now. Like why? Wait?

Wait. The company itself is doing a small version of that.

Yeah, I think there is. This, I think, you know, sort of historically, culturally, there's this idea that you you you put in the time and then you get paid. You work until you're 65 then you retire. And I just don't like that model I wanted. I want to work until I die. But I also wanna retire until I'm like, I want to do both of the thing. You know, that makes sense. I think the way we think about it, it feels like this black and white switch that goes off.

And I want to think about it like, Well, I do life, love working. I absolutely love. You know, sometimes people refer to government is the lifestyle business. I have no problem with that. I have a great life style, but I don't want to just have a great life. So I still want to have an impact. I still wanna create value. And so I think the zero want the blitz scaling approach isn't exactly where I'm at right now. Even though I empathize with and I see the value and I certainly done that I've done that on that. But I'm also not the super like Tim Fares for our work week. Just retire on the beach as soon as you can,

because that's what you would do if you had a bunch of money. Oh, God, it's too far. And it's funny, because when I when I tell you when I tell people like this other thing, they're like, Oh, you're just that's what enormous like you're just building a profitable business. That's what small businesses in America

are have been and have been started.

Yeah, and that's the real that's the through. The premise of the book I'm trying to work on is this idea that there's the kind of the default has been forgotten, and I almost feel stupid for saying we're a profitable business, like you have to say that now, instead of the default is now unprofitable

kind of glow. That's what's in the

headline exactly. I think people have forgotten this. I think I'm a relatively smart person, but when you're surrounded by a certain culture and certain way of talking about things, you just kind of forget honestly, that, like this isn't the norm. The headlines aren't the norm, The default that very few companies. I think something like one in four or 5000 companies in the US are venture capital funded at

all at all. Yeah.

Um, I believe the vast majority of the jobs are created by small businesses and entrepreneurship, not venture capital funded business. I think venture capital is great tool. I think they're great things that have come out of it. Certainly. But

it is just a tool. Absolutely. I think about that. It's capital as well. I could go on and on about why I choose to call myself a venture capitalist and why I chose this route, but has nothing to do with wanting to be a venture capitalists. And choosing this round is absolute tool to get for a means to an end and representing something. And by the way, it's it's working. Yeah, it's doing what I had hoped it would do. So capital is incredibly powerful.

Yeah, and it has not been evenly distributed, and it needs to be shaken up.

Yeah, that's what this is. I mean, I I almost put on like this is like, this is my my costume. The VC world is my costume to do the things so that you can see me do the thing so that you could be inspired and others can be inspired to do the thing. But it's it's to inspire and not to aspire. They're so winning with things, I'll get it. And I to, uh, have just written a book. And, uh, all of that is in there, too. So check it out and quarter to 2020. Tell us again, How can we stay connected

with you? Yeah, the best places is Twitter for sure. So at S H l? Yeah. My email newsletter. Every month I send out, like an update on something related to the company. I wanna basically open source a different part of the company. Every every month, I'll email out whenever my I have paintings. I also a Twitter account on instagram account at acid gel paints

s h l paints and finally means you're listening to this podcast. You dig what you have to say. And you also realized hey, have stuff. I want to sell that like file like give me two or three things people do sell. And then how do they

sign up? Yeah, I think e books You books educational content videos are probably up their software. APs html Five video games Now, like every every year. It feels like there's just do stuff that's possible. That's great. Yeah, go, go to gummer dot com. You can sign a free get started and let me know if you have any questions.

Join 11,000 or so of your closest friends. Yeah,

and it's starting to be a community. It's really

cool to see. That's fantastic. All right. Thank you so much. Really enjoy this. Thank you. Hey, so I'd love to talk to you and keep the conversation going. Finally on Twitter and Instagram and Arlen was here. That's a r l A n was here. Stick around too, because I will let you know when my new book is going to be in pre order. Now that's coming out. Yeah, that, uh, 2020. It'll be out as the real book home again, and it'll be you'll be able to pre order it most likely this year. So stay tuned.