The world is more online than ever. Along with that trend is the growing ability to earn money and make a living solely online. Not only that, but people have been able to move and deploy their money by way of a growing number of platforms and tools, collectively called fintech (financial technology).
There has perhaps not been more stark evidence of the sign of the times (or the future) in terms of the power of the opportunities that the Internet offers individuals, than what happened yesterday. A platform built for the online creator economy has completely shattered all precedents on a platform built to make everyone a venture capital investor, raising $5,000,000 from 7,770 investors (the round technically was $6 million, with $1 million being raised from more traditional sources of VC). And what is most exciting for all is that it seems to only be the beginning.
Gumroad is a platform for creators to allow them to charge for their work, being able to make a living therefrom. While other platforms such as Fiverr have done a lot to connect people for on-demand jobs, Gumroad is a place where an effort has been made on putting creators and what they do on display. It seems that Gumroad has hit on a happy medium of somewhere in between Fiverr and Patreon. Its founder, Sahil Lavingia, elucidated an aspect of Gumroad’s story in a blog post earlier this year that makes this money raise all the more intriguing, and that also makes one believe that Gumroad is a possible forerunner of what the company of the future looks like.
“I started Gumroad in 2011. In 2015, we reached a peak of 23 full-time employees. In 2016, after failing to raise more money, I ended up back where I began: a one-person company.
"Today, when I’m asked how many people work at Gumroad, I respond with “ten or so.” That’s how I convert the number of people we have into what others expect. But the truth is more complicated: If we include everyone who works on Gumroad, it’s 25. If we include full-time employees, it’s none. Not even me. We have no meetings, and no deadlines either. And it’s working: our creators earn over $175 million a year, and we generate $11 million in annualized revenue, growing 85% year-over-year.”
Republic is a fast-growing equity crowdfunding platform, where everyday people can invest in private companies and startups, gaining access to opportunities previously unavailable. The platform offers people the opportunity to invest in startups, fractionalized real estate, even video games and regulated digital coin offerings. Equity crowdfunding seems to be a great way for people to build wealth and also for companies that are looking to raise capital to have access to it from many different people who collectively have it, and who may be looking for investment opportunities like the one the company in question may present.
As was seen in the case of Gumroad on Republic, users on the platform really did appreciate and jump on the opportunity, the crowdfunding round was over in less than a day. Gumroad even limited the maximum investment in the crowdfunding round to $1,000 an investor, in order to give more people an opportunity to invest, and it still reached its goal at lightning speed.
It was also the first day in which US companies were legally able to raise up to $5 million in an equity crowdfunding offering. The limit had previously been set at $1,070,000 under the JOBS Act of 2012, and has now been updated via the Securities and Exchange Commission (SEC)’s new policy in carrying out the contents of that law. One could say that Republic and Gumroad welcomed the new limit with a bang, as investors hurried to get in on a round of a technology platform that looks to empower creatives and others to work for themselves and to easily get paid for what they do.
Digital products such as software licenses, digital subscriptions that can have flexible options as to their length, or any digital downloads of valuable information or know-how can all be sold through Gumroad. Creators can be followed by consumers, making it easy to keep those interested in their work up to date. Customers get emails every time a new version of the product they purchased, like software, is available. Creators can also choose to let consumers name a price they think is fair for the digital goods offered.
Gumroad becomes then a place for the digital files to be accessed by those who purchased them, and, like in the case of software, to be able to see and download all previous versions. Creators can get started for free, only paying Gumroad a percentage of each sale, or can also opt for a monthly subscription that allows for greater customization that scales in price depending on the number of customers the creator has.
Recently the world has experienced a shift in work, companies becoming more decentralized and also individuals being able to (or forced to) become more enterprising online, looking for additional income streams. Gumroad looks poised to be a significant part of that with its new raise, and when looking at what the future may be for the world. On Gumroad creators can sell physical products or memberships, in addition to digital products.
Other companies do offer tools for people to be able to sell their digital work or services (think Patreon, Squarespace or Wix, and Thinkific (affiliate link), which gives people the ability to create, host, sell and distribute online courses of any topic with their own branding).
Though it may seem like online platforms are crowding each other’s space, it may be that the pie is simply going to get bigger, which bodes well for the likes of Gumroad. Creators and consumers should ultimately benefit from the competition.
The world as a whole looks to be entering into a place where more and more people are able to work from home, or wherever they may be, and make a living while holding on to their freedom of movement, as well as freedom of creative direction.
Whether one is a creator, consumer, entrepreneur, investor - or all four at the same time - it is clear that Gumroad and Republic are letting a bright spot of the Internet shine through them, one that one would hope would only grow in brightness: people empowering people.
Note: The author is an investor in Gumroad and owns Republic's return-sharing token.