An open letter to Sahil Lavingia re: NFTs

I am against NFTs.

I am an investor in Gumroad, not because I expect my shares to ever be worth anything but because I love Gumroad’s mission. It’s probably the best place online for independent creators to sell both digital and physical goods. Every now and then I look to see what other merch-fulfillment options exist out there, and none of them are nearly as fair to creators as Gumroad. The next-best one is Etsy, which charges monthly per-item listing fees and is part of a bigger problem with long-tail economics in this day and age. I do not have an Etsy store, or any plans to open one. (Most of my physical merch I sell on Storenvy just because I’ve been too lazy to migrate it over to Gumroad. Storenvy is pretty awful too, although for different reasons than Etsy.)

I am concerned that when you post polls like this, you are still leaving the possibility open to invest in NFTs if the market has spoken. I might remind you that Gumroad only exists despite the market “speaking;” if you had listened to the market, Gumroad would have been gutted and destroyed by venture capitalists ages ago.

I am completely against NFTs as they currently exist. It is possible, in the future, that there might be some variation on NFTs that isn’t awful. I see that possibility as extremely remote, and it rounds down to me having essentially a 0% chance of ever being NFT-positive. It still leaves enough wiggle room that if you say Gumroad has no interest in NFTs “at this time” then that’s good enough for me; it’s not good enough for a lot of people, though, who as you may have noticed are leaving Gumroad in droves because of the possibility that you might adopt NFTs in the future.

This is the unfortunate reality of doing business on the Internet right now. Everything is extremely polarized and absolute. It’s a shitty situation for everyone. All nuance is lost, and all evidence is distorted to fit the narrative of who’s the bad guy of the week.

That said, I feel like there are a few things you’ve done to make the situation worse:

  1. Referencing peoples' user accounts when talking about whether someone “has never” worked with Gumroad. This is a HUGE violation of privacy, and violates your own privacy policy for that matter, and it shakes peoples' confidence in the company.

  2. Using the company Twitter to post opinions and flippant responses. That should be relegated to @shl or, better yet, not done at all.

  3. Having it both ways with the conversation around NFTs; leaving the door open to NFTs as they currently exist is a huge problem for a lot of people.

  4. Having a company Twitter that makes it seem like “a big company.” I don’t think most people who are upset about Gumroad right now realize that Gumroad is a tiny company with an unconventional structure. For that matter, the 100% freelance-based structure could, in a certain light, be seen as a potentially-exploitive situation. (I don’t, for the record, and I think it’s a brilliant way to run a tech company. But it’s unconventional and comes across as a “gig economy” thing, like you’re basically finding random programmers on Fiverr and underpaying them.)

I am not in your position, and I have never been a CEO of a public-facing company. I’m not exactly experienced in how to deal with these matters. That said, I have some advice on things you might try to make things better. Take it all with a grain of salt:

  1. Post an apology — a real one — to Box Brown and to everyone you “outed” as being a secret Gumroad user and so on, explaining how what you did was wrong and how it will never happen again.

  2. Take steps to ensure it will never happen again. Hire a social media person to run the Twitter account. Don’t ever post to the Twitter account yourself again. Make all of your direct Twitter posts informative, factual, and representative of the company and its values; use replies only for support of creators and customers.

  3. Reflect how in 2022 it still feels a bit gross for a CEO to refer to building a sustainable, comfortable business as a “failure” because it didn’t gain a $1B valuation overnight; understand why the lessons you learned from Gumroad’s troubled past could have a better message to come across. (Perhaps, “Build a business that’s sustainable and valuable, rather than looking to become a billion-dollar sensation.” That lesson still doesn’t seem to exist in your reflection article.)

  4. Be up-front and clear and precise about how you do not support NFTs and will not support them without a very good reason. Make it clear that the “very good reason” has to involve a complete reinvention of the idea. Heck, just say you do not and will not support NFTs, and just quietly hope that anything that is NFT-like but not an awful ultra-capitalistic clusterfuck has a different name to distance itself from this ugly stain on our history. Because the term “NFT” is absolute poison to the very audience that has built your business in the first place.

I will be posting this as an open letter on my blog, as well. Feel free to respond as you see fit.

j. “fluffy” shagam


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