Starting & Scaling Fiverr With Micha Kaufman | EM Group Chat #212

Welcome back to Everything Marketplaces, where we talk about founders and leaders from some of today's top marketplaces. So this is episode 212, which is a really good group chat we just had with Mika Kaufman, who's the founder and CEO of Fiverr. Fiverr is one of the largest freelance service marketplaces which connects businesses with freelancers and agencies for services across categories like design, development, writing, and more. Fiverr raised over $100 million in capital before going public in 2019. So it was a really great chat with Mika. We went back to the founding story and first steps for starting Fiverr, some of the early challenges, Mika walked us through how Fiverr has evolved and scaled. We did a deep dive into one of the largest freelance service marketplaces today, got to learn about their growth, how they're leveraging AI. Mika shared lots of tips for founders, and we also had a great group Q&A. We did unfortunately run into a few issues with the Zoom and had to make some edits, but I really enjoyed this conversation. You're going to find it a great watch to the end. So Mika, you've of course paved the way for many of us in the world of marketplaces with Fiverr and have been one of the most requested at GroupChat guests. It's great to have you join us here today. I want to start off by saying huge thanks for taking the time to do so in advance. We have a lot that we're going to dive into with your experience starting and scaling Fiverr, but I thought it'd be great if you could start off by briefly sharing a background for those here that might not know you.

Happy to be here. I don't know if you guys know Fiverr. I'm, uh, I think, uh, uh, it has been around for 16 years. It's my 4th company. I actually, being an entrepreneur is my second career. I actually started my career as a lawyer specialized in IP, so mostly patents, infringement litigation, trademarks, technology transactions, investments. As I've said, fourth company. Fiverr launched in 2010. Happy to talk about the company if this is of interest, if you don't know the company, but otherwise I'm not gonna repeat the pitch. The company has changed massively over the years and I think that some of the things that I've been pitching for in the past 16 years have been materialized in recent years. Obviously the appearance of AI is changing stuff for us, for the job market. We're probably gonna cover this. But anyway, I mean, if there's any other introduction, I'm happy to make it.

It's a great background. Of course, a lot of different topics that we're gonna get into, you know, but I did wanna go back to the very beginning. So, you know, what was that founding story for Fiverr and what were the first steps that you took to start at the time?

2010 was an interesting moment in time. If you backtrack to it, it's been What was interesting, you know, that ideas are all about timing. We all know this. And what was interesting about that moment in time was the fact that 2010 was just at the wake of the recession of '08, and it was also the year when millennials joined the workforce, which was really an interesting Convergence of things. On the one hand, millennials are the last generation where their parents preached that they need to hold on into good jobs and stay for as long as they can because it provides stable careers. The same parents lost their jobs in '08, and so that became kind of a conception that was, that was invalidated. So that was one. And the other is it's an always connected generation. And there was a generational change that was then accelerated by Gen Zers and soon, you know, Gen Alpha. And my thought was that the very basic constructs of the job market are going to be upended. And I was lucky enough to be right about this, but like I was, I'm half right about everything. So, but in that case, I was lucky and that actually turned out to be correct. In 2010, freelancing was about 20% of the American workforce. It's now about 50%. So this tells the story in a way. And the, the very basic notion of Fiverr, which again is something I'm preaching 16 years and I think it's just accelerating right now, but I, I didn't have that much audience at the time, was this idea that the work, uh, the job market and the way we value work is shifting from time-based, you pay per hour, to outcome-based. You pay to get something done. You don't care how much labor is put into it as long as it's the right skill. And it makes sense financially. Like you can, all of you can learn Photoshop, but if someone offers you something for $50, it just doesn't worth your time to learn Photoshop to do something.

Okay.

So it's a nice arbitrage of skill. In time and effort and price. So those ideas were kind of the backbone of Fiverr. But what was also very— as you think about this notion of moving from time-based to outcome-based, we've pioneered this idea of what we— I called at the time service, you know, as a product. And what I mean by that is unlike e-commerce where you have a SKU system, think about Amazon or eBay where you have super well-defined. If I look, if I put this on sale on Amazon or eBay or whatever, Craigslist, it's an iPhone, in this case 16 Pro Max. It has a very well-defined standard. And it's the same product wherever we sell it. But services, when you think about services or skills, they didn't have a system, a standardized SKU system to define services. And the idea was to create that, which was a shit show. Seriously, it was really hard. But this was the task and this was what we wanted to do. So these were the kind of the, the, the pieces, the puzzles, the puzzle that we tried to put together, which later became what we know now, which is a, which is a horizontal marketplace, 800 categories, infinite amount of skills, infinite amount of offerings, super easy browse, search by. experience. But this was, this was really a huge, huge undertaking at the time. And I remember the maybe 20, 30 people, the first 20, 30 people I told this idea to told me that it's either stupid or just too crazy, which just energized me more to do it, to be honest. But today it's more of a common concept. And again, don't get me wrong, I was very lucky to be able to pull this through. And luck is, you know, it's preparation meets opportunity. So it's very much about timing and timing was right in hindsight and the rest is history.

Yeah, no, I'm glad you mentioned the note as far as that timing, 'cause, you know, the why now is something that we're always discussing, you know, and the—

Why you, why now? Yeah, right.

Exactly. And, you know, you mentioned the, you know, taking the more horizontal approach I guess, you know, today being across what I believe, what, around 800 categories, you know. So what led to that like initial approach and what do you think are some of like the pros and cons of, you know, the horizontal strategy for marketplaces?

The approach of being horizontal is more about not being a one-trick pony, meaning are you able to create a relationship with your community of customers over multiple, multiple needs. And this was really attractive. And at the beginning, I'll be honest, as I was sitting on the couch in my home and trying to envision what are the types of things that people or skills that people are going to be offering, I came up with a list of maybe 150 things like this. This was as far as my imagination went through. I believe that we ended up the first day of launch with thousands in what became tens of millions of different offerings. So, and we started from like 6 big verticals that we envisioned, which then became like 11 verticals with 800 different categories and many thousands of subcategories. But this approach allowed us to entertain customers over a very long period of time, which changes the way you think about flywheel effects. And how you think about retention, how you think about engagement, how you think about relationship, how you think about the function that you fulfill into the business cycle of your customers. And having those relationships allows you to do all kinds of funky stuff like moving from just organic acquisition of customers to inorganic or paid and build these interesting models of, of, you know, lifetime value to cost of acquisition or time to return on investment and things that allowed us to, to really extrapolate the organic growth and fuel it and accelerate it.

And, you know, you did mention as far as like, you know, on the, on the demand side. So, you know, over the course of time, how has, you know, demand evolved for Fiverr?

So for the first, I would say for maybe 5 years, 100% organic, like word of mouth, most of it. And when you think about the word of mouth, it sounds pretty straightforward, but I don't think it's obvious because it's— none of it is obvious. But you think about this and you think about customers, you think about, oh, customers that are getting something and saying, oh my God, Like, you wouldn't believe what I just did. But a lot of the word of mouth actually came from the supply side, meaning those who offered their skills, who participated in creating this flywheel effect and created tremendous amount of noise. Now, granted, we gamed it a little bit, so we created these incentives. We created mechanisms where you incentivize people to be a little bit more proactive about their success, to be more involved, which is not obvious. But that created this flywheel effect where more supply brings more demand. And the same goes for quality, meaning the more high-quality supply you bring, the more high-quality demand you bring. And this coincided with you know, the beginning of social media and, you know, things that today are maybe less obvious because the signal-to-noise is a little bit more problematic. But, but this— it was this flywheel effect where we didn't spend a dime on marketing, but we did spend tremendous amount of energy in creating a community, which I actually think it's more than a community, it's a movement. It's a cultural thing where you talk about this idea of like, maybe it started from like the culture of getting rich fast or like, you know, putting your skill to a test. But it became something that for us was really important as a cultural moment where we can have like-minded people share their experiences, empower each other. Sometimes you have these super successful people on the platform that we want them to inspire up-and-coming talent. And the same went with businesses. And so we did all kinds of things like, which are less obvious, like offline events where we, you know, we closed the bar in New York and we just invited Freelancers to come in and have a drink with us. And it turned out that half of the people that turned out to these events were actually customers and not freelancers. And we said, what the hell? But it turns out that the persona or the profile of a freelancer in a microbusiness are pretty much the same. They're both entrepreneurs that are struggling. They're feeding each other, they're helping each other. And there was this something really interesting about this success which fuels itself. And they exchange ideas, they exchange best practices, their, you know, highs and lows there. And this was a— this was really something that was in the, you know, in the, in the founding, you know, basics of the business. And then over time, as we got our, the dynamics of this flywheel together, it was pretty obvious that we can, we can start being more proactive on like putting marketing dollars on either brand marketing or performance marketing, but, but do it very picky and very deliberate through this mechanism where you have a short What we call TROI or time to return on investment on a net basis, on every cent that we deploy out there gets back to us in a very short amount of time. And then the multiples, the LTV to CAC, the lifetime value to cost of acquisition is multiples over a period of time. But this also goes back to this idea of a horizontal marketplace where you can entertain customers over long periods of time, solve for many of their needs, become a, you know, create a trustworthy, you know, platform to engage on and so forth.

Really cool to hear about the earlier stages and what was key for, you know, breaking through. And, you know, I'm sure we could probably have an entire conversation on each stage of the company, but could you briefly just walk us through, you know, Fiverr as far as like the business, how it's evolved as you scaled? Maybe what some of the pivotal moments are?

First 9 years, crazy. Half of it was super like organic. I make it sound like it was fun. It was super hectic. There were terrible moments where we thought we were lucky enough to succeed organically, but success was like, we were very close to having success killing our own business. In many occurrences, I can tell horror stories where I thought the business was done. Competition was crazy because once you have something that succeeds, everybody wants to copy you. So we had thousands of copycats and it was like, and you need to make a decision if you are going to be obsessive about about engaging with the competition, or you're obsessive about running as fast as possible so that whatever happens, they always need to run you and you'll outrun them. And so, you know, just move on and they'll, they'll die on their own. 9 years into it, that was in 2019. We— I took the company public at the New York Stock Exchange. That was still a moment in la-la land where, you know, interest rate was negative, which is an aberration of, you know, if you learned, if you studied economy, you know that it doesn't exist, but it did exist at that moment in time. The company was small. We were doing, I don't know, maybe $90 million in revenue and we were losing about 16% on EBITDA. Crazy rollercoaster as a public company. We went public at a market cap of about $650 million. And then now the company does over $400 million in revenue with like 20% positive EBITDA. So we're printing a lot of free cash flow. The company trades at like $400 million, which is a joke. But in between that $650 and what's now $400, we were trading at $11.5 billion. So really, like, the public market is basically a pendulum. It either undervalues you or overvalues you, but it rarely fairly values you. Because it's a little bit of a herd mentality with investors, and most of them are very shortsighted. And if you view this as a grading system or a scoring system to how well you're doing, then you're going to be miserable. So I wouldn't recommend this to people that measure themselves by, you know, the stock price. But as a business, I mean, it's, it's, it's, it has grown tremendously well, became very profitable. You know, becoming a public company is a, is a, is a moment. But beyond just doing a V on a like whatever, if you have a checklist of, you know, things you, you want to do and one of them is taking a public, you know, company public, It's a cultural moment for a team. It changes the way you, you know, the team dynamics, the culture of the company. It's a crazy ride. And also, I mean, just, you know, building a company over a decade and a half is not obvious. Like, you need to challenge yourself to ask if you have the energy to do it. You have the talent to do it. You like, you're interested, you're motivated. What motivates you? Because it moves from just being about, you know, success and money and whatever to being, to challenging yourself to do things that weren't done before and break your own boundaries. And so it's been, it's been a really interesting and super crazy journey. And I'm still here, so it says something about you know how I you know how I do this ceremony of validating if if if I'm the right person for the company, the right energy. And I do this; it's a ceremony that I do every year, and I'm still excited. I don't know if you know most people don't know this, but um. This year, we're actually—I don't know if celebrating is the right word for it—but we're, you know, 2026 is marking 100 years to the nine-to-five way of working. And the 5-day workweek. This happened 100 years ago, and the dude that changed that was Ford. And this came with the assembly line. People used to work 7 days a week, and hours were whatever you're told to work. And this is changing. I'm really intrigued about who's going to determine, or at least put the infrastructure for what's going to be the way people work in the next 100 years. And I think we're pretty well positioned to be that company, or at least that's my aspiration. So I think— and this is interesting enough.

That's definitely, you know, quite the journey. And that's actually a great transition into talking about the next topic that I wanted to discuss, which is AI. Right. And that's something we're always talking about today. And, you know, the kind of future of work. And I guess like, how have you approached AI at Fiverr? And, you know, how is it impacting the marketplace? What's AI?

Just Not sure. Haven't, haven't heard of it. Look, I, I'm half joking, and the reason I'm saying I'm half joking is we're all, I'm assuming, and sorry if I'm like overgeneralizing, but probably if you've tuned into this, you know, into this discussion, you're probably a geek at some level. And, and, and we're all, and we're all sure that whatever we're exposed to, our jargon, the The things that we obsess about, everybody else in the world obsesses over. The reality is very far from it. And so AI burst— bursted in our lives in the form in which we all know it, which is mostly LLMs and RAGs, because AI has been around for like 40 years. We've been using AI in its earlier incarnations for at least a decade. It was called machine learning. It was whatever. But essentially, it has been around. What was really this first asymptote was LLMs. And the way LLMs were introduced in our lives was in a very radical way because it was free for all, essentially. Which made it one of the craziest launches in history. But the thing is, as much as AI empowers us, it empowers all of us in the same way, meaning we all have access to the same AI. It's not like premium AI that only the rich and famous and the biggest companies can afford. It's everyday people. So on the one hand, it makes us more powerful, more efficient, but it makes all of us more powerful and efficient, which means that it gives none of us any advantage, right? And so, and so, and so what is the advantage and why certain people or companies are doing more than others? It is not because of technology, because you have the same access to the same technology. It's how you use it. It's how you instruct it, is how you build it, is how you hack it, is how you connect different technologies together. It is how fast you can move by utilizing technology. And so this was my understanding, but the fact that we have access to technology also gives the responsibility of maximizing the usage of this technology. On the one hand, how we operate as a team and how we use this to increase our velocity and the quality of what we do to the benefit of how we work and the product that we build for our community, but also use technology to empower our community to be more effective, faster, better, and so forth. So that's on the one hand. The other hand is it has changed the nature of the things that, that people are interested in or willing to pay for. So if you think about the genesis story of Fiverr and the go-to-market of Fiverr, Fiverr started from Simplistic, pretty cost-effective service, microservices for micro and small businesses. If I'll tell you, if I'll give you an example, you would start laughing. I'll give you an example. I'll hire someone for $20 to remove the background from one of my images. Which you, you can do in a long click on a photo now. But, but I was worth it because it was, it was hard. Now, what was considered to be hard back then is nonsense these days. So like everything moved up and to the right. And what it has changed for Fiverr is it's starting to eliminate low skill. small scope services, and it is moving the focus into high-end skills and larger scope type of tasks. So it's changing the function of what we do, what our talent does, what our customers are coming for, and we're changing with it. Okay, so that, that's kind of the change. And obviously, The halo effect of it, and this is going back to being a public company, is that the public market is trying to understand who's going to be around in 2 years. Is SaaS going to be around in 2 years or is it done? Are marketplaces going to be around in 2 years or not? Is e-commerce in the way Amazon is doing it going to be around? Because today you go on a marketplace and you browse and you look for stuff. Tomorrow it's going to be your agent saying, oh, just Buy me something, and your agent is going to go on Amazon and buy something. So, so like everything is changing, and every every business needs to go with it. I think that there's a there's a massive fear of dislocation of businesses, and I think the public market is really really concerned that SaaS businesses, marketplaces like us with labor now with cyber are not going to be around. Or are going to be materially impacted. And so this is why they're being super, you know, bearish on, on these, and they're waiting to see what, what's going to happen. Now, I'm, I'm, I'm not stressed about it, but, um, but, but everybody's looking to see how the world is going to rearrange. So that, that's, that's the very short of how AI is, is, is impacting us.

That's great. I'm sure it'll lead to some more questions when we get to the group Q&A. I guess more broadly speaking, you kind of mentioned the future, but how do you think the freelancer marketplace model will evolve in the age of AI?

On a radical thinking, if half of US workforce are freelancers or engaging in freelancing in some capacity, do we still need to talk about freelancers at all as a concept? Like, oh, like, I don't know who's on the call, but I'm a full-timer, right? I'm a full-time employee of this company. I don't present myself as like, oh, I'm a full-time employee of Fiverr. Is it important to define yourself as a freelancer or not? It's just another way of engagement with talent. And I think that over time there's going to be more types of engagements that are not going to define you. They're just going to define the specific arrangement that you have with those who seek access to the skills that you have. And that might be fractional hiring, that might be fractional equity based arrangements. Like, who knows? But this is what we're trying to help the world define because we think that the world is rearranging. And like, people ask me, do you mind that freelancers are using AI to do their— I think they're stupid if they're not, right? But I promise you that the way I use Claude is super unique. Like, my Claude produces the type of work that no one in this call is producing. And I'm not saying it's better. I'm just saying it's very different. It's not the same because I have— my Claude has a 100-page instruction that reprograms it and it has 1,000 memories and a billion artifacts and whatever, which is like, so, so that becomes a tool. Like, I don't, I don't care what they use as long as the quality of their work outperforms anything that people can just do, do a quick search and just do it.

Okay.

This is what people are paying other people to do. And it's— it actually— I said once that I think that AI, in a very funny and non-obvious way, actually allows us to discover our humanity again because it forces us to define what makes Well, cool.

So I feel like you and I could probably, you know, go on for quite some time here. And I promise founders we'd save time for the group Q&A. You know, right before we get into it, you know, what would be your top tips for founders starting marketplaces today?

It's been 16 years and I feel that I know a little bit about marketplaces, but I'm not being— I'm not being modest. Like, it's such a complex creature. It's such a— like, one time I made the analogy. I don't know if you guys had the opportunity to go into a recording studio. So you go into a recording studio on— if you're not the vocalist or the player or whatever, if you're on the mixer side, there's a huge— it's like a room full of knobs. This is a marketplace. And if you've been to a recording studio, you know that you sit on this huge mixer and there's knobs that you, you change. You can't hear any— like, you, you turn around, there's no change, nothing. You can't, you can't hear it. In some, you just touch and it's like, oh my, like, what is that? That's a marketplace. So it's a, it's a re— it's like And I'm not trying to scare you. I'm trying to tell you how interesting it is. There's no easy shortcut to running a successful marketplace. There's infinite amount of components. And, but there's, but there are some best practices. I wrote about some and like, I know that there's always this This question about the chicken and the egg, like supply comes first, demand comes first, all of this. Good questions. And to some I have pretty straightforward answers and to some I just don't. And there's no one way of doing it. But unlike 16 years ago, there's so much data out there. And there's so much, there's so much content. And, and it's really hard. Like, the number of really successful marketplaces that have been able to, to build the business at scale are very, very few. And it's not because like the people that have done it are super talented. Maybe some of them are. But, and, but it's also like, it's just a convergence of so many reasons that, and luck is one of them that made it possible. But if there's, yeah, but, but, and look, I've, I've been, I've been mentoring or at least advising or spending time with so many marketplaces and, and some are just brilliant entrepreneurs with amazing ideas and it just doesn't pick up. And it's really hard to explain why. And some, and some do try it. I mean, it's going to be fun. That's the worst that would happen. It's going to be fun, but it's tough. It's tough and you need to be lucky.

There's going to be helpful tips. Hey, Michael, saw you raise your hand. We'll just go ahead and jump into the group Q&A. You want to come on?

This is such a thrill to have you here. I've worked with services marketplaces for a long time, so you're taking the time today is so appreciated. Um, I had a question about the evolution of Fiverr's monetization model, and specifically when it's just transactions, you can optimize everything to just facilitate, uh, booking, right? Your best converters, you want to get them all the business. When you start adding on things like premium subscriptions for sellers and you start having to kind of make sure you spread the wealth around, so to speak. You might be putting walls up for pros that could benefit from having some of those premium features even though they're not paying for it. How have you navigated this as the monetization models has evolved over time?

Okay, when you think about the 2-sided marketplace, Every marketplace is either supply constrained or demand constrained. And I'm not talking about what comes first. I'm just saying, I'll give you examples to maybe illustrate this. Uber is supply constrained. Why? Because you need very high density of supply to be able to provide A high-quality service. Why? Because people are impatient. And even though when we hailed the taxi 20 years ago and the dispatcher said it's going to be 20 minutes, we said, okay, that's fine. Today, if Uber shows you 3 minutes, you're like, fuck that. I'm not waiting. It's too long. To be able to do that, you need high density. of supply in a very close proximity. Okay? So it's supply constrained. You need drivers. Amazon is more demand constrained. Inventory is infinite. It's not unique to Amazon, even though they have their own brands. That's fine. But it's more about customers that, that they compete with the rest, with Walmart and others. Airbnb supply constraint. You need high density of like many options in specific cities, specific neighborhoods, blah, blah, blah, whatever you get. You get the point. And Fiverr is demand constraint as well. Supply came to us and still does 100% organically to the point where I don't want this to be misunderstood, but almost like we have too much supply. We don't need that much supply because we can't meet. So we're being picky because quality is important. Because if you don't provide the quality match, the likelihood of satisfaction is low, retention drops. You get the point. So it's really important to, to, to, to focus on that as a, as a, as a really— and so building tools, building mechanisms to support supply is, is really important. And so we, we develop tools for those who, who, who kind of screen themselves into being very serious about what they do. Okay, and and so they they they get this advantage if they're invested in their success. And it's not about just monetization; it's also about understanding who's serious and who's not. Right? It's um and so and and when you think about the business model Fiverr, the business of model Fiverr is success based. Like we don't charge to. To play. And if we don't generate money for you, then we don't take a cut. So nobody wins or everybody wins. Now you might say, oh, whatever your business model, too high, too low, it doesn't matter. The point is, if you're a freelancer and you just started, you spend 100% of your time marketing yourself. It's not free. Okay. On Fiverr, you do no marketing. We do it for you. So basically we replace your sales and marketing. So you might say, oh great, so if you take a cut out of my $200 transaction, I get— I— it makes sense. But what happens if I get a $20,000 transaction? Why should you get the cut? Did you try to win a $20,000 transaction as a freelancer? Good luck, dude. Like, it's really, really hard, but we do it for you. So that's amazing. Like, so the idea is it's a partnership where no one wins or everybody wins. So as long as it makes sense, it makes sense. If it doesn't, then the model breaks. So building these tools, creating, you know, giving hyper-transparency, deep data, You know, good deep understanding of how to build. This is the reason why we have endless amount of millionaires on the platform. These are people that are super invested in their success, started sometimes as individual freelancer and became mega agencies that are doing millions every year. It's amazing. It's amazing. It's a dream, right? Anyway, so so that's kind of how we thought about the. You know, and the business model is not set in stone. Like it, it, like whatever it makes, if, if, if it needs to change, it will change. We're not married to any specific structure, but the idea is it needs to create wealth and everybody in some sense need to, to be incentivized to enjoy that wealth, both the platform and those who Participate and use it. I think about this more as an economy than a marketplace or a 2-sided marketplace because it is an economy. Like, people make a living. We, we help them get discounted medical insurance. Why? Because it's, it's an economy. Do they need, uh, an advance on their payment? Well, give it to them. So we're also kind of providing them bank services. Do— can, can we work to grow their business and give them tools and access to talent and access to bigger customers? We should do it. It's an economy. It's more than just thinking small. It's thinking— this is why, you know, I'm thinking in notions of community movement economy and not like the utilitarian function of just, you know, having a listing page and a click button?

That was a great question. Yeah, we can get, you know, bogged down in the weeds of things here, you know, as founders in the community. So it's good that we kind of zoom out and keep us high-level thinking at times too. So cool. Hey, David, saw you raise your hand. You want to jump on here? Then we'll get to Lisa.

Micah, thanks so much for joining us. I was wondering, what were some of the key muscles you needed to build or moves you had to do to start to scale? Not you've got something repeatable, but just the starting to scale after you validated, hey, there's a here here. I love the notion of doing things that don't scale, but it's not just for the sake of doing things that don't scale, but actually do things that don't scale in a way that would determine the course of business over time. I'll give you an example from Airbnb.

Okay.

Another marketplace, which I love. The thing that they've done that doesn't scale is at the beginning sending photographers to people's homes to take fancy, high-quality photos of assets. But obviously it cannot scale. And by the way, the founders were some of these photographers and they hired some people and it's not going to scale. But you think about it like, why? Why is it important? And the reason is that if the first assets on the listing have great photos, it kind of imposes on other asset owners to have great photos or else they cannot play the same game. They have a disadvantage. So over time, people started bringing their friends who happen to be photographers or hire photographers because whatever, it's going to cost you a few hundred bucks, but you can play. So these are some of the examples. And in our case, it was being really obsessive about understanding the type of people that were using the platform. Like I was doing, I was doing customer support for about 5 months. This was my main function as a CEO, as a founder. Just, I was at the beginning, I was the only one doing customer support. I was just answering emails all day long. And the reason was that, you know, you build something and you have a You have a, you have an idea in your mind of how people are going to use your magnificent creation, but it happens that they come and they use it the way they want to use it, not the way you intended. In some, in some cases, how do you understand who are these people? How did you hear about us? What are you doing? Tell me a little bit about your business. What are you trying to do? Oh, that's really interesting. Let's have a discussion. Let's— and you create this relationship and you learn so much and you get some really great hints about what can be done, what can be built that would unlock other things with that community that could make you 10x. And you start implementing them. And you get the feedback and that becomes a feedback loop. And so, so there's, there's multiple things. And then, and then, I mean, when Fiverr, when I launched Fiverr, Fiverr was, I mean, it has some, something to do with the name, but it was services that people offered for $5. And that was pretty much the beginning. So it was a single price point, which was also a reduction of friction because, because there wasn't this idea of like people saying, is it worth 5 or 10 or 20? No, 5. Everything is 5. And the idea was that people will scale down their offering into 5. I'll give an example, like I'll translate something for you for $5, but it's not something, it's one paragraph or 100 words for $5. Okay. So it was like, and people were smart enough to scale down their offering to meet the price. But then how do you get out of $5? It was really hard because it was, it was also ingrained in, in the, in the brand and how people knew and what was viral. So that was, that was one of the biggest unlocks that we've done. And I'm not gonna lie, I didn't know how to do it. Like, I didn't even have a clue on how to go beyond the $5, and we had to conceive an idea of how to do it. But, but these were some of like, how do you create a SKU system that doesn't, doesn't scale? How do you scale it? So we had these tricks where you create a list of categories and the last one is called other. Oh, and then you look at the other. And you look for concentration of categories of talent that didn't find a home. Like it wasn't one of the 6. You look for concentrations. Oh, there's a concentration around whatever, software development. Okay, great. That should be a category. Okay. So you find ways in which you take systems that have boundaries and you find how to unlock those boundaries. And so I really like thinking about the concept of doing stuff that doesn't scale. So as long as you— that allows you to actually figure out systems to how to scale stuff.

That's a great question. Hey, Lisa, do you want to jump on here?

Hey, Micah. I'm really— was really excited for this chat and it hasn't disappointed. I'm building a marketplace, B2B recycled metals marketplace. And I was just wondering, you know, you spoke a little bit earlier in this last question around doing things that doesn't scale, which is great. But what was the inflection point? What was the tipping point? Was it from when that flywheel started to turn and you're like, hold on a second, we're not curating supply, we're not pushing on the demand side. This thing is just happening beautifully all on its own. Did it have anything to do with like maybe supply density or a change that you did in product? Or I don't know, what was that inflection point for you? And then if you don't mind me asking a second part, it's And how might that be different now in the world that we're building in with AI?

So we definitely had an advantage that, that I, and I don't know your business, but you don't have it, which is not being B2B. But what was interesting about the, and it was all about the go-to-market, because, and this is why I created this go-to-market. Because what I realized was that both freelancers and micro businesses are like consumers. So essentially it's like a C to C or whatever, if you want to call it B to C, doesn't matter. But the idea was that, and the notion was that exposing larger businesses to Financing is going to be really hard and it's going to be mostly probably sales-driven. And I was looking for an audience that was, that were early adopters, didn't think 5 times, but did not need corporate approval to do whatever. The owner has a credit card and or a PayPal account and they can just, just do it. And so that strategy allowed us to move super, super fast because it was, it was really consumer-based and that allowed us to get into scale. And consumers are chatty as well. So they, the virality is much easier. And the number you think there's, I'm not up to date, but Last number I remember from recent years, 31 million SMBs in the US. So let's call the US 25% of the global market. So multiply this by 4. Look, it's a huge number. So yes, you can extract less out of it because their wallet size is smaller, but the decision-making is like Snap. Okay. Which is not the same for B2B, by the way. We're doing B2B now. It's— and it's fucking hard. Yeah, it's harder. The cycle is more complex. It's longer. The level of confidence, trust, quality is different perception, what you need to do with the brand. So this— so the first inflection point was really fast, was 3 weeks into it. And it was, it was like it was picked up almost not exactly like this, but pretty steep. And, and so it was really also easy to, to engage with the audience. B2B is a little bit more complex, but again, once you have a sales motion and you figure it out, And then you, you, you, you get to a certain amount of customers that you can use as success proofs for, for this. It does become easier as, as like scale. It's almost like a self-fulfilling prophecy. You know, if you have some success, that success feeds other success and But again, it's the different nature calls for different tactics. And by the way, if you think about AI, and this was— so I'm— there's too many AI companies right now, and there's a tiny, tiny portion that actually succeed. And those who succeed do not succeed on technology because technologies, everybody is, you know, we all have— it's all about go-to-market. It's everything is about go-to-market. Those who like— there's 1,000 companies in every little niche, and those succeed, succeed only on go-to-market. It's amazing. So it's— so in a B2B, it's mostly about sales. It's about the sales motion and creating something that would that would have a momentum. And the momentum is just like once you become a known brand in a specific niche, you do— first of all, you kill all the others by definition without even trying. But then it also feeds into future success. Sorry, I don't have better tips for that.

So we're almost out of time. But, you know, huge thanks for taking the time to join us today for the group chat, Mika, and sharing about all your awesome experience and learnings with Fiverr and also, you know, helping answer some of the questions that we had during the group Q&A. So, you know, as I mentioned at the, at the start, you know, you've paved the way for us all in the world of marketplaces. So this is a real treat. And, you know, I want to ask my usual closing question, which is, if you could go right back to before you started Fiverr, what would you tell yourself about marketplaces specifically?

Here's the thing. Since I've been building companies for 25 years, the one thing I do know is that over time, and this is not— I'm not Saying a positive thing. The one thing that you lose over time is naïveté. But this is also like courage because because being naïve makes you do both silly but also super ambitious things. And and maybe if if I knew what I know now and the chances of succeeding with something, I I would discount on my own dreams. I would be my my own worst enemy, like saying oh no it's too it's like too complex. It's it's a you know it's a recording studio. It's what are the chances that you're going to be able to fine tune it? Like but to be honest, you know when I started as as an entrepreneur, ninety five percent of the things that I've that I was doing were wrong. And today I'm down to about 80. So it's a, it's progress, but I'm still like, it's still a learning process. I'm at work and there is, and there is no end. There is no finish line. It's just a, it's a constant, you know, refinement thing. So I, I don't, I don't have these pearls of wisdom for my young whatever, because being young is, is being courageous and being curious and being And sometimes you lose it over the years and that's sad. It's like, I'm combating this right now in myself and with my team. It's like not fall into conceptions. Like, you don't know, like, I don't care what you know. I care what you learn.

This is great. So we really appreciate you taking time to join us here once again. And, you know, last but not least, time for a quick plug. Where can we keep up with you at and follow along?

X, LinkedIn. I don't know. I post occasionally my random thoughts and stupid ideas, but happy, you know, happy to talk with anyone. Just DM me or just happy to engage if I can, if I can be helpful.

We once again really appreciate, you know, taking the time to join us and paying it forward today. So I'll include all links. I'm sure we'll have lots of founders coming your way. Thanks for the awesome chat, and thanks everyone for the great questions today.