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Will Gumroad's strategy to align incentives by raising funds from creators reduce churn and retain them as they mature and earn more?


C-suite at creator economy company

Guest: I think it's a really interesting approach. I was fascinated when I saw that it was going to raise from creators. I think it's clever. I think it will certainly help with retaining creators who are able to invest in it.

But I think that we are also at such a nascent, early point in the creator economy. 99.9% of the creators who will ever exist on Gumroad, will not participate in this round. Either because they don't know about it yet or because they can't afford to. Maybe it will help with retention from the current cohort of successful creators, if they want to put some skin in the game.

I don't really see it as a long-term strategy for battling churn.

I think the only thing you can really do to battle churn is to make sure people sell and to make sure people are happy.

Those are really the only two levers that you have as a platform. 

Making sure people sell, that's building tools for creators to have whatever they need to do their marketing and a good customer experience for their end users.

Keeping people happy is making sure that you're delivering fantastic customer support, making sure that the NPS is really high. 

That's something I think is going to be challenging for companies with very low customer lifetime value, i.e. companies that are transaction-based.

Those creators who are very early in their careers aren't going to be worth very much money to the company. So it's extremely expensive to provide great customer support for them.

That's really the only reason that some platforms don't have a free plan. The reason for not having a transaction fee only plan is because some platforms want to invest heavily into customer support, and to keep NPS really high. Those are really the two things: making sure people are selling and making sure people are happy.

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