How to Focus Your Business to Be Successful — with Fiverr CEO Micha Kaufman

1. How to come up with billion-dollar business ideas

Fiverr is one of the most transacted marketplaces in the world.

They’ve processed over 30 million transactions on the platform — for around 1 million transactions every month.

This all just started because Micha spotted a trend amongst young professionals.

It began in 2009…

Millennials were joining the workforce, the financial world was in meltdown and many young workers were losing their jobs... and seeing their parents losing their seemingly safe jobs, too.

This accelerated the growth of the freelancing industry.

In 2009, around 30% of U.S. workers were freelancing — and today, studies show this might be 40% by 2020.

In other words, freelancing is a HUGE trillion-dollar industry. 💰💰💰

Micha set out to make buying a service as simple as buying a product on Amazon.

When it comes to starting a business, most people do it for the wrong reasons:

• They want to get rich
• They want to work from a beach
• They want to work three hours a week

Those things take time. I started out making under $40k in my first business.

For Micha, simplifying transactions for freelancers and clients was the pain point.

Before Fiverr, freelancers needed:

• Clients to sign offline contracts
• PITA payments via bank transfers
• Old-school hustling to get clients (paper flyers anyone?)

Now freelancers can make thousands of dollars selling their services in one click. Simple is better.

AppSumo and Sumo also started to solve clear pain points:

AppSumo: Discounts for entrepreneurs on the best digital tools to grow their business.

Sumo: Free tools to help entrepreneurs grow their traffic and email lists.

What are all the problems you have where you can't find a solution? This is a great way to come up with your business idea.

2. How to define your most important metric

In business, you need to have a clear focus on what you want to achieve.

This is often seen as your “north star metric.”

For example, at Sumo we have one clear goal every year. Here are a few from previous years:

• 2014 - 1 billion visitors across Sumo 📈
• 2015 - $1 million ARR (annual recurring revenue) 💸
• 2016 - $5 million ARR 💰

The number you choose as your business’ north star must represent growth for your business.

For example, you could choose a “satisfaction” score as a North Star metric. But what happens when you reach 100? There’s nowhere else to grow. 😞

Instead, use a north star metric to push your business to the next level. For example, our #1 metric helped us grow Sumo from 7 to 8 figures in revenue.

For example, for a healthy ARR figure you need:

1. New customers coming in
2. Retained customers

If Sumo only retained current customers, our ARR wouldn’t really budge.

And it may even decline due to churn. So alongside ensuring our product continues to provide value to current customers, we need to also attract new customers.

The north star will vary from company to company. But whatever you choose, make sure it focuses on GROWTH. 🌱