Fiverr co-founder and CEO, Micha Kaufman, says luck and timing have more to do with business success than you would think.
Fiverr co-founder and CEO Micha Kaufman had a simple mission when he started the global freelancing platform more than a decade ago: to make the experience of “finding and working with a freelancer as easy as buying something on Amazon”.
Today the New York Stock Exchange listed company – headquartered in Tel Aviv, Israel – offers more than three million services on its global freelancing platform. It reported revenue of almost $US300 million for 2021, a 57% increase year-on-year.
While Kaufman acknowledges that a lot of hard work and determination has contributed to Fiverr’s success, he says luck has also played a huge role. Fiverr is Kaufman’s fourth company, and he’s learned many lessons along the way – including developing a framework around investing in new ideas.
Kaufman’s guide for backing new ideas is to find a very large, existing market that is plagued with inefficiencies and solve those problems with software.
What was the most formative thing in your childhood that made you want to succeed in business?
Probably the inspiration coming from my parents. My parents emigrated to Israel a few years before I was born. When they came to Israel they were pretty broke and they had no fallback plan. Seeing them building themselves, the family and their careers and eventually becoming very successful. It was probably my main inspiration [for] what you can achieve if you put your heart into something.
How have you managed to build Fiverr into such a recognisable brand despite such a challenging market?
If there is just one thing, I would have to say it was luck. The definition of luck is preparation meets opportunity. Yes there’s a lot of hard work put into Fiverr, obviously, however the timing was just perfect.
Picking the time was not a total coincidence – Fiverr is my fourth company. In my previous company, my third one, it was years ahead of its time. So much so that it was just impossible to make it successful. It was successful, but not at the magnitude of Fiverr. It was so much ahead of its time that it was constantly an uphill battle. In that sense, timing is critical.
When I was in the process of setting up my previous company and starting to have the juices running, thinking about my next business idea, I decided that I wanted to build a framework on how to pick an idea. It turned out to be a fairly generic framework. It’s not the framework – it’s just a framework that I use.
The framework was: look for an existing market that is very large already. Meaning, don’t invent a market that you need to pay the huge price of educating the market of why it should exist. Pick a large market that has built-in inefficiencies in high friction that you can potentially solve with software. Sounds pretty broad – but what I have described is Fiverr – and I will explain why.
What I described is Uber, AirBnb – all of those. Uber, Airbnb and Fiverr pretty much all started at the same time. So, when you look at it from Fiverr’s perspective – the freelancing market was already very large but was in the process of making a larger leap ahead. This was 2010 – it was a terrible market for freelancers. It was terrible for contracting, invoicing – all of that. It was an existing market, largely offline, inefficient, full of friction. The question with Fiverr was: can we make the experience of finding and working with a freelancer as easy as buying on Amazon? That was it. That was the business.
“The question with Fiverr was: can we make the experience of finding and working with a freelancer as easy as buying on Amazon? That was it. That was the business.”
– Micha Kaufman, co-founder and CEO Fiverr
What do you think is something most entrepreneurs have in common?
I’ve been an entrepreneur for 20 years – it’s my second career, I used to do something else. I’m invited to speak at different things, and I am trying to work out what the common traits are of successful entrepreneurs. There’s probably a long list, but there’s one to me that stood out. It’s this idea of curiosity that can never be filled. You never satisfy that curiosity. It’s exploring new areas and things, in learning new things, it’s figuring out things that you don’t understand right now – it’s understanding why things work and how they work – that’s something that has always stood out for me when looking at common traits of entrepreneurs.
When choosing which trends to back, what’s your decision-making process?
If I am looking at investments that I have done both within Fiverr and outside of the business, I would say that largely that I tend to invest less in trends and more in things that have deep roots. Things that I can actually understand, because trends are trends – tomorrow there’s going to be something else. I am looking for something that’s one layer deeper than that.
As an example, a number of years ago, we’ve created this product based on AI and machine learning, to help graphic designers on Fiverr to be able to produce their graphic designs much more effectively, and for customers to actually play with these designs without the need to actually bother a freelancer.
This was a few years ahead of what we see now, with generated AI and all of that. I could see that machine learning and AI was not a trend, it was longer term. Now it’s trending because everyone is talking about it…but it started years ago. Understanding that this is something that’s going to stay with us for the future, that’s part of it. You don’t always get it right, but this is how I think about it. There are so many more lessons in failure that there are in success. Success is often at times is coincidental and it has 100% to do with luck.
Is there anything in your daily routine that keeps you sharp, sane and motivated?
I don’t feel like I need to do anything to stay motivated. What really motivates me is the fact that every day that passes [holds] the opportunity of doing something big – or making changes to make the world work better – feels even larger.
I don’t have any issues with waking up and jumping out of bed every morning. I exercise: for me that – running, doing sports – is a way of self-medicating. That and reading – I read a lot. I probably spend more than two to three hours every day reading. Sports, taking showers, and reading are the things where my best ideas come.
If you had $10,000 to invest, perhaps for a niece of nephew, where would you invest it?
On a risk scale, I am a high-risk taker. That would probably be seen as bad advice for other people. It would probably be on stock indexes like the NASDAQ or S&P – because if you think five, ten years – I wouldn’t bet against the five most successful tech companies in the world.
I don’t think that tech is going to be something that is going to go away. So, if you think about that, it is probably the most solid investment. I [personally] would probably do a different portfolio that is a little bit more diverse, and probably more on the riskier side and rewards side, but that is just me.