Gumroad faces backlash over alleged NFT ambitions

The radically transparent sell-anything platform turns evasive.

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February 8, 2022 4:00 PM
Sahil Lavingia, 19, Chief Executive Officer (CEO) of Gumroad, an online payments company he started, sits in front of computers at his home which doubles as his office in the SOMA neighborhood of San Francisco February 17, 2012. Lavingia, who was born in New York and grew up in places like London, Hong Kong and Singapore, dropped out of the University of Southern California to work at online bulletin board company Pinterest. He also developed the Turntable.fm app for the iPhone. Picture taken February 17, 2012.
REUTERS/Robert Galbraith

Just as many of the ugliest online fights begin these days, Brian "Box" Brown, an Eisner-winning illustrator and comic artist, sent a seemingly innocuous tweet. It read, in part, "my former regular freelance employer has let me know they'll be...Embracing NFTs 🙃 so...we had to part ways." The then unnamed business, Gumroad, shot back the next day with a now-pinned response denying it had plans to enter the controversial crypto-collecting space, and has since attacked detractors from its corporate account, provided conflicting information and alienated a growing portion of the artist community it serves. How did it get so bad?

Gumroad, for the unfamiliar, is a digital goods sales platform, which hosts anything from art to ebooks to self-help courses. It was built in 2011 by then-19-year-old CEO Sahil Lavingia, who is perhaps the only consistent figure within the company. Following a period of growth Lavingia had to lay off staff in 2016 after failing to raise more money. The company survived, but as it is presently structured, Gumroad is something of an anomaly. The number of full-time employees, according to one the CEO's blog posts is "none. Not even me," preferring to maintain a contractor workforce. It also espouses a version of radical transparency, choosing to make its product roadmap and board meetings public. 

The image of an all-remote workplace free from deadlines or meetings belies a somewhat haphazard business. Some former workers seemingly signed no contracts beyond basic tax forms. Some contract work was compensated through Venmo. At least one of the contracts signed by Brown related to royalties and IP rights for book illustrations listed one Kun Wu Yu as the primary party, and the address as what appears to be a cancer research center in Taiwan. (When asked about this he first glibly replied that "cancer research is an important cause" and later stated he didn't recall the contract.) To say Lavingia is not an especially careful founder might be an understatement. According to a former contractor, who we granted anonymity for fear of retaliation, "it's not the ideal work culture it appears to be."

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Brown by all indications was among the permalancers filling out the ranks of Gumroad, and a busy one at that. "There was never a time in the last two years where it even slowed down" he told Engadget from the "20 plus hours per week" he billed, which he estimates became a "large portion of my daily work" and contributed around $2000 to his monthly income. Then in January, he alleges, Lavingia ceased communication. In 15 years of freelancing, he said "I never experienced a situation where a regular gig for that long suddenly just disappeared without even an email being like, 'we're gonna let you go,' you know what I mean?" He believes he was no longer assigned work because of his refusal to get involved with the company's seeming NFT ambitions. 

Once the differences in opinion between Lavingia and Brown became open hostilities, that penchant for transparency turned into a cudgel. Both parties began posting screenshots from the company Slack (something which Brown claims to have since been removed from) which reflect uncharitably — though Gumroad has since deleted many of these tweets. 

In one, after Gumroad had ghosted him, Brown asks if there's any available illustration work, to which Lavingia states "the one idea I have is an NFT project, unfortunately 😔" — a possible commission to help make 7,777 generative art characters. "It sounds like you need someone who is into [NFTs] from here on out," Brown says. "Yep, probably," Lavingia responds. 

Lacking here is the context that the subject of NFTs had, according to Brown, come up repeatedly for the past six months. Each time Brown refused, though some more tactfully than others. (In another tweeted screenshot dating to September, Lavingia pitches NFTs as an options, and Brown demurs by claimed involvement in such a scheme would cause his readership to "cancel" him.) 

The aforementioned anonymous former contractor told Engadget that "my understanding is that Gumroad was going to get into NFTs at some point in 2022/2023." Gumroad has been in the midst of a site redesign, for which it appears to have retained the services of high-powered brand manager and former Google design director Karin Soukup; in an email introducing Soukup to Brown, Lavingia sent an email last October with the subject "Illustrations for Gumroad rebrand (+ NFTs...?)." (When asked via Twitter DM, Lavingia wrote "Yeah, don’t recall. But the parens and ? seem pretty clear 😂." 

In his personal capacity, Lavingia has been a minor booster for NFTs and crypto generally. He minted an NFT of his Twitter avatar and sold it on OpenSea, seemingly to Unacademy founder Guarav Munjal for the equivalent of around $3,000 USD — and pledging to split the proceeds 50/50 between himself and the artist (his own wife.) "NFT ownership is much more accessible than equity ownership," he tweeted last September, a statement only made stranger by the knowledge that Gumroad is itself financed in part by equity crowdfunding.  

It's unclear how any of these screenshots lend credence to Lavingia's position that the company is not pursuing NFTs; conversely it seems evident that had Brown agreed to the project Gumroad most likely would be entering the crypto space. On his personal account he attempted to make a distinction between "doing an NFT collection" and "pivoting to NFTs" — later stating "we may do an NFT collection in the future, but no plans."

While an abundance of evidence suggests Gumroad is not being entirely transparent about the degree to which it's investing in some sort of NFT play, it's also not entirely clear digital tulip mania is to blame for Brown's loss of a steady gig. According to the same anonymous former contractor, there have been several similar cases in recent months. "Most of the marketing team got let go recently and it came as a surprise to all of us," they wrote. Others confirmed they were no longer working for Gumroad but declined to go into detail as to the nature of their departures. It's unclear why the company many be thinning its ranks yet again, and Lavingia declined to comment on the matter. Gumroad's jobs page states that the company is in a hiring freeze until April. 

Employees aren't the only ones leaving Gumroad — or at least trying to. Some of those who abhor NFTs, as well as bystanders who felt the company's public spat with Brown was inappropriate, have pledged to leave the platform. However, a number of them — including Brown — found themselves unable to delete their accounts. "We found the bug around deletion, and are working to fix it now. The issue is that these users all have made money with Gumroad but haven’t been paid out yet (due to not connecting a bank account for example)," Lavingia told Engadget, "working to allow them to delete if they wish to anyway." The bug seems to be impacting at least one creator with no outstanding monetary balance on the platform. 

Lavingia has been about as tactful with irate users of his site as he has with his former illustrator — at one point, and in apparent contravention of California privacy laws, he cross-referenced an account's email address against the site's user information. "Never used Gumroad, never going to," Jacob van Loon tweeted. Gumroad replied "According to your bio's email address, you already have." The response was hastily deleted. Van Loon maintains that no such account was ever created.

Backlash against crypto has been a recent source of strife for a number of companies. Creators of various stripes were incensed to learn Kickstarter was a drifting into blockchain technologies; comic artist Spike Trotman to recently launched her own crowdfunding initiative in order to avoid involvement in the crypto space. Chat app Discord walked back plans to NFT and crypto integration plans last November following user backlash while Electronic Arts softened its own bullish outlook on the technology for similar reasons. A growing number of artists have voiced concerns about NFTs, in general, as a vector for theft, while the entire market for these digital goods seems, at best, wildly inflated and riddled with bad actors. These incidents have also been an opportunity for some firms to win over to skeptical creators, such as unabashed indie game marketplace Itch.io: 

But it's not just customers who companies stand to lose by stepping into this space. While Brown maintains that working for Gumroad, until recently, was an excellent gig that paid well and afforded him plenty of freedom, when asked if he'd consider working for the company again in a non-NFT context he responded with an emphatic "hell no." He considers the whole affair a breach of trust. "I'm married, I have two children, I have a mortgage, I have all kinds of bills [...] and so I need to plan for that. I can't just suddenly lose my regular gig and they don't tell me. They lost all my trust there," he said "And then when they lied online from their account on Twitter, you know, I would never work for them again, at this point. I just have no trust at all, with them. It's irrelevant whether they actually make NFTs or not, because they already made an action on NFTs by making me leave the company because I didn't want to work on that." 

Have you worked in some capacity for Gumroad? I'd like to hear from you. Download Signal messenger for iOS or Android and text me confidentially at 646 983 9846.

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Gumroad faces backlash over alleged NFT ambitions