If you’re starting or growing a business, you’re going to love this chat. 🤑
Listen to my full conversation with Micha below or keep reading to check out my key takeaways.
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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.
Great business start with a pain point. NOT a “get rich quick” scheme.
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.
Your north star needs to indicate the real growth for your company.
For example, for a healthy ARR figure you need:
- New customers coming in
- 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. 🌱
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3. Grow by selling to your current customers
Fiverr is known for being affordable.
But recently, they branched into premium services.
Today, on Fiverr you can hire:
- The person who designed the Google Chrome browser logo
- A guy who used to write press releases for Apple
- The lady who used create videos for Sony and Saatchi and Saatchi
These are the kind of people you just can’t hire normally.
But what made Fiverr tackle the high-end market as well as offering affordable freelance services?
It all started with customer feedback. 👂
Fiverr users wanted to do more with the platform. They already spent $20, $50, $100 on Fiverr services, but why did they have to go elsewhere to spend $500 and hire premium freelancers?
This was a huge opportunity for Fiverr and a great way to learn from their customers pain points.
To continue growing your business, keep doing more of what your customers want.
Your customers use your business because they like your stuff. Chances are they want MORE from you.
Instead of sending your customers elsewhere, try to grow your business alongside their needs.
For example, with AppSumo, we had a huge mailing list of entrepreneurs who were keen to grow their businesses. So we found a way to help them by building Sumo.
It’s so much easier to sell to existing customers than go away and find new customers.
4. Avoid burnout by loving what you do
Burnout is a real challenge for entrepreneurs.
No matter how passionate you are, it’s impossible to work 24 / 7 / 365.
One of the main reasons I took my trip to Israel was because I wanted to disconnect and refresh myself.
How do you avoid burnout? What weird stuff do you like doing to keep you motivated?
Micha’s been running his own companies for 7.5 years now and experimenting with a bunch of ideas before that.
For Micha, it’s all about purpose.
“What else can I do? Sit on the beach with money. What’s the purpose in that?”
Having the opportunity to actually make a difference is is something extremely motivating and it gives Micha a reason to go out of bed every morning.
He knows that Fiverr has the opportunity to change the way people work. And even help unemployed people find work.
“What more can you ask for?” he remarked.
Even at Sumo, people say to me “Oh, wow you guys are huge”, but the truth is we’re on like 0.1% percent of the internet.
Our mission has only just begun.
I’m going to keep it 💯 with you here…
- Growing a company is not easy
- You won’t be working on a beach, watching your bank balance grow
- If you want to build something successful, it’ll take at least 10 years of your life
Still want to be an entrepreneur? Awesome.
Listen to my conversation with Micha — the CEO and founder of Fiverr.