Having a minimalist business prepared them for the pandemic
Sahil Lavingia raised $8 million between Seed and Series A rounds, opened offices in San Francisco, and managed 23 full-time employees. He planned to build a billion-dollar company and he was well on his way to doing so, all he needed was a $15 million Series B.
For Lavingia, during the six years he spent in San Francisco, his business Gumroad was his whole identity. He did nothing but eat and work, and he can’t recall going out on a single date during that time. He read business books on the weekends and had an office in SOMA. He was flush with cash and there was always the enticement of more to come.
And it worked, for a time.
The problem was, revenue wasn’t doubling fast enough. Though he had plenty of customers and $2 million in monthly processing volume, the product his company offered was still somewhat niche. He would have to find a new, larger product-market fit to justify raising more cash.
In the end, Lavingia wasn’t able to do so. In 2015 he reduced his staff down to three people, got rid of his offices, and kindly asked his backers to write his company off. He wouldn’t be able to make them their return on investment, he said.
“At some point, I had to ask if it was an ego thing―did I just want to have the biggest event space and the biggest creative space? Yes, that’s exactly what it was,” says Michael Ori, describing his vision for two buildings in Salt Lake City’s granary district.
The plan was to take Studio Elevn, his creative studio space, and Ori Media, his photo and video production company, to a whole new level. At one point there were plans for 45,000 square feet of mixed-use office space, event space, studio space, courtyards and rooftop gardens―even a swimming pool.
His plan was to create an artistic hub in Utah where artists, photographers, and filmmakers could gather and work. His mortgage was going to cost him $90,000 per month, but he would more than be able to cover it with the creative entourage who would rent the space.
A chance encounter with the architecture point on the project made him reconsider. “He started really digging deep into what drives us and what we’re really good and what we’re really passionate about,” Ori says. In the process, he realized his true passion was the creative part: photography and videography. Taking on unique projects and working on indie films.
As it turns out, Ori actually didn’t like being a manager―or a landlord. He hated hosting events. And here he was trying to build a legacy that would have him doing all of those things into perpetuity. “It’s really weird, when you’re full-force, putting everything you have and every penny you own into something, and you realize that it is all wrong,” he says. “And then you wonder when it went wrong, and whether it was ever really right to begin with.”
There is only one rule in the fashion world: all fashion ends in excess. It means that when pant legs get super skinny, the next trend will be wide-leg. When sunglasses get really big, their next move is to go small.
So has minimalism become a salve for the generation that came after the Great Recession and lived through the Great Whatever-This-Is. If the boomers once lived in a thriving metropolis of jobs, riches, houses, and cars; the millennials saw that toppled by an inability to afford any of those things once jobs were lost and stock prices plummeted.
The aftermath was a generation left to explore what we really needed to get by in life. We contented ourselves, not with our parents’ notion of “more,” but with our own notion of “enough.” As Kyle Chayka says in his book, The Longing for Less, “Up through the twentieth century, material accumulation and stability made sense as forms of security. If you owned your home and your land, no one could take it away from you. If you stuck with one company throughout your career, it was insurance against periods of economic instability.”
“We contented ourselves, not with our parents’ notion of more, but with our own notion of enough.”
By contrast, “little of this feels true today. The percentage of workers who are freelance instead of salaried grows annually. Real estate prices are prohibitive in any place with a strong labor market. Economic inequality is worse than ever in the modern era. To make matters worse, the greatest wealth now comes from the accumulation of invisible capital, not physical stuff: startup equity, stock shares, and offshore bank accounts opened to avoid taxes.”
In other words: if our parents owned houses in the suburbs with two-car garages and granite countertops, we rented hovels near our jobs for entirely far too much money and bought a van so we could get away from it all on the weekends. If our parents worked hard so they could afford all of those nice things, we freelanced our time so we could afford the next trip to Indonesia.
In one generation, it seemed, the cost of “having” gave rise to the joy of “doing.” We Marie Kondoed our homes down to only a few things and we pared our closets down to a few essentials. And because we never knew security, we had no aversion to risk. We built businesses and reimagined them, less as big, behemoth cubicle factories and more as remote adventure enablers.
So it was that Ori decided to downsize his business significantly, cutting the space he was renting in half and getting rid of the events arm of his business. His rent is now $3,000 a month―3 percent of what it was going to be―and he has the time and money to focus on his creativity. “I feel like I can actually get back to being me, versus the me that I thought I wanted to be,” he says. “As it turns out, I’m just much happier when I have a camera in my hand and I’m making cool [expletive].”
Building a sustainable business
Lavingia too, saw the benefits of focusing on what really mattered. When his business dipped beneath 18 months of runway, he left the shining lights of the city and retreated to Provo, Utah where he could take a science fiction writing course at BYU.
“In San Francisco, 98 percent of your identity is ‘where do you work, how much money have you raised, how many employees do you have, where is your office?’ It’s very company-centric,” Lavingia says. It took moving to Utah to see another path. “In Utah, they ask, ‘where are you from, are you married, who is your family?’ It’s more community-centric.”
The change was a good one. It reinforced his initial idea for the company: that it wouldn’t be a billion-dollar one, but it would be a helpful one. “I’m still building a business,” he says now, “but I wanted to pick a community I’m really passionate about and help that specific group of people, and that’s not a billion people.”
“At some point, I had to ask if it was an ego thing―did I just want to have the biggest event space and the biggest creative space? Yes, that’s exactly what it was,”-Michael Ori
The change in mindset allowed him to minimize the company down to its most essential. Though that reimagined business was no longer a good investment for his shareholders, it proved a very good investment for himself. And his customers.
“My identity used to be being a founder. Being the CEO. It’s how you introduce yourself at every meeting. When you minimize the company, it takes your ego out of it. I feel dishonest if I say I’m the CEO of Gumroad now, because it’s no longer how I spend the majority of my time. And I think that is a healthy separation. Attaching yourself so strongly to this emotionless legal structure is probably not the best thing for your soul.
“Now I say I work on a software business called Gumroad, and I write, and I paint. I always pick three things because it feels more comfortable to know that not one of those things defines me. Because each thing is only 33 percent of my identity, I can lose one thing and still have 66 percent of my identity.”
That mindset proved very successful after the onset of the coronavirus pandemic. When I followed up with him a month after we’d been working from home, he reassured me: “Honestly it’s been great. Being remote/async means we were already doing business the way many others are making the transition to now. We’ve had to change virtually nothing about the way we work. And because we’ve played it safe and stayed profitable, we can give folks as much time off as they need without putting the business on hold.”
Ori found the same. Focusing on what really mattered most to him wound up working in his favor when events were canceled and businesses started working from home. Though the pandemic has put a significant damper on his photography and videography business, he’s grateful that his $3,000 rent is much less troubling to support without customers, than a $90,000 one. “Minimizing was honestly at the perfect time,” he says.
Photos in this piece are of Michael Ori, founder of Ori Media, shot by Julianne Morris