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Make, tweet, sell: that's the pitch from this start-up

Marco della Cava
USA TODAY
Gumroad's founder, Sahil Lavingia, 22, was one of Pinterest's first employees.

SAN FRANCISCO — If the Internet age can be defined by one thing, it would be the ability to connect directly with other humans across the street or across the globe.

Sometimes we just want to share things. But often, we want to sell them. The so-called maker-movement consists of 135 million handy Americans, whose various home-brewed businesses have poured billions into the global economy.

That stat helps explain why an idea born of a 19-year-old's frustration at not being able to easily sell software graphics for $1 a pop has turned into a venture-backed company that's gathering steam.

"What should have been a drag-and-drop operation turned into 22 hours of coding," says Sahil Lavingia, now 22, whose brainchild — called Gumroad — allows makers to get e-payments by means of a link that is disseminated to buyers via social media networks.

"Big companies have set up ways to help you pay with a click, but today more and more people who make things are becoming those companies," he says. Lavingia's recent innovation, which he unveiled for Gumroad's 10,000 sellers last year, is the ability to steer a buyer to a payment site from a tweet.

"When I think about communicating with people, it's about tweeting and Instagraming and Facebook sharing," he says. "Much of (Internet shopping) still is about Amazon and eBay, but increasingly it's about one-to-one connections between people. And that's where I wanted to fit in."

Author Amanda Palmer quickly sold out of books when she used Gumroad's technology to allow people to purchase the book through a link embedded in her tweet.

Lavingia (pronounced lah-VIN-ghia) may seem young, but he's already got an impressive tech name on his resume. Raised in Singapore, the precocious programmer shipped off to the University of Southern California to get a computer science degree. Not long after landing in Los Angeles, Lavingia started blogging about coding and graphics, and a few San Franciscans smelled gold.

"These four guys who had started a company got in touch, saying they had a website but needed an app for mobile and could I help them with it," says Lavingia. After doing contract work for a few months, he was convinced to quit USC and move north to take a lead developer role in the company, which was called Pinterest.

"Things there went well," he says with a smile. In fact, many tech-scene watchers think Pinterest may be poised to have one of the biggest IPOs of 2015, with some reports putting the social-sharing site's value at $11 billion.

Lavingia's conviction that home-bound entrepreneurs needed an easier way to sell their wares caused him to dedicate himself full-time to his new venture, which was built out in 2011 with a seed round of $1 million and launched in 2012 with a Series A round of $7 million led by Kleiner Perkins Caufiled & Byers and former Twitter engineering vice president Mike Abbott.

Gumroad's business model is to charge 25 cents per transaction and collect 5% of the sale. Lavingia says that to date some 150,000 products are represented by the company, skewing heavy toward books and music.

Author Amanda Palmer sold out the first 100 copies of her $27 The Art of Asking book in 20 minutes last December after shooting out a tweet with a Gumroad-facilitated "buy" button. The company also got a publicity boost not long after it launched when Eminem and Coldplay opted to use Gumroad for so-called D2F — direct-to-fan- sales, a space also catered to by companies such as Chirpify.

"In many ways (Gumroad) is a great idea, and VCs get very excited about the thought of people selling directly to consumers," says Sucharita Mulpuru, e-commerce analyst with Forrester Research. "But the biggest issue here is that one of the most difficult things to do online is get people to part with their money."

Gumroad launched in 2012 and now has 22 employees in its San Francisco headquarters.

Mulpuru divides most e-commerce purchases into two categories, the "guilt buy" where friends and family encourage a purchase, and "the item that is good enough to make you pay for it."

Smaller and cheaper products that seem interesting at first glance but aren't must-haves are a tougher sell, she says.

Which is precisely why Lavingia felt that if the leap from impulse to purchase wasn't instant and frictionless, it wouldn't happen.

"For me it's about helping people who are making stuff make money," he says with a shrug. "There should be more creators out there. I think we could move soon to a world where people who did things they loved as hobby can now do it for a living."

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