Shift Conference 2015 - In Conversation with Shai Wininger

Okay, thank you. That's a lousy last name. Where is everybody? Can't see what the... Can someone call someone and tell them that I'm going to talk about porn? Because I'm actually going to talk about porn. So I was thinking, you know, it's a long day and I kind of expected that turnover. And I think that instead of talking about Fiverr, which is boring, why don't I show you some pictures of boobs? Actually, these are pictures of boobs coming from Fiverr because one of the first things that we had with Fiverr, like many other user-generated content sites, is the kind of the darker side of the internet. And so I prepared a presentation, hopefully it will come up in a minute, with some very cool pictures of boobs. So what the...

You know what, this clicker thing... The entire day we had this... What the... Okay guys, it's back. My presentation doesn't look good. You know what, I'm just going to go for a swim. Saw like a very cool beach just by the way, the venue here. And you guys can stay here while I'm having fun in the cold water. So it was fun guys, bye.

I hope I'm getting paid for this. Okay, now... Okay, you didn't understand there's a better beer than this in Croatia, right? Like, one lousy water, that's what it's coming all the way from Israel and this is what they gave to present... Whoops, give you some beer. So how was the swim?

Yeah, yeah. Well, boobs I can show you afterwards if you don't mind, but in presentation... Well, that's good enough. That's good enough. So okay, I have no idea what the... you do. You said Fiverr, I saw that you were selling stuff for five bucks, right? So anyone from this room can go and sell stuff for five dollars? Yeah, a little Fiverr. I'm going to risk it and ask how many of you actually know Fiverr? So great, the people who didn't raise their hand, can you please raise your hand right now? Okay, now and the ones who didn't raise their hand also... So how many people know 500? That's better. Okay, that's great. So as you see, most everyone knows Fiverr everywhere. Again, so Fiverr is a marketplace for creative services. So it's not sending stuff for 57 cents. Yeah, if I... but well, you know, the five bucks, it was the idea behind the five bucks and most people, the first question I get all the time, the idea behind five bucks was to kind of frame people's mind around something else and not the marketplace model. Because when we started, and that's back in the beginning of 2010, we figured out that most people would not understand what a marketplace is. And so why not... well, the actual notion of a word marketplace, so how do you explain what's Fiverr in a short sentence without saying the word marketplace? So we understood we needed something else to kind of catch people's attention. And the fact that we introduced the five dollars, that was the solution for that. So most people, they say this is the site where you can get everything done for you for five bucks. They don't say it's a marketplace for blah blah blah blah blah.

Like, it's a matter of quantity, right? And also you need to think that, you know, five bucks is... the magic of the five dollars is actually the ability to try something before you actually pay for it a higher amount. So that when you order something, you don't have to risk like $2,000 on some random designer just to find out later that it's not the one you wanted. So the five dollars actually, generally, it's like an entry point where it's very comfortable for you to try even more than one person. And then once you've kind of settled in and found your own pace, personal taste, or you kind of gain trust with that person, then you can take it further and go up to thousands of dollars. In fact...

A wave of that, I unfortunately cannot share the exact number, but we're... wave later on, let me get you some beer. Beer, yeah, yeah. So okay, and when you said that people wouldn't understand what a marketplace was, right? So it was a matter of your opinion that no one would understand that? Well, we actually did some experimentation with messaging. And the thing is, Fiverr is not a company which started in San Francisco and had its own ecosystem in there where everybody is very informed about what's going on in every term. Like marketplace, you know, most people would know what that means. We're a global marketplace and so many people that used Fiverr when we started didn't know about eBay. So these are really kind of diverse users who not necessarily know what you and me know about that. And especially at least at the beginning, what that means a lower quality of users? Like, because again, people especially in this world talk about going for the B2B customers, the customers that can pay well, and then going for someone that's targeting getting service for five bucks or more, isn't that selling yourself short? How is that a good strategy in the long term, right? So the thing about, you know, when you have the kind of an underdog, we really wanted the product to stand by itself. And if it's going to grow organically, then it will have to do that by itself without the fact that we're coming from Tel Aviv. And the media attacked you at the beginning because you were just like... there looks anything like it's a cheap marketplace. That was the media's view. Well, one of the things that really contributed to grow through Fiverr, I think, was the timing. And I should say that we didn't plan that at all. That was when we started, was the beginning of 2010, just elements of the economic downturn. And American media was all about either what to do if you lose your job or if you're a small business, how can you generate more income without going into too much expense. And so Fiverr kind of catered to both worlds. And it's a lot the right message, but really kind of caught the wave. I think the first time we saw that was actually in TechCrunch, that were the first media that got it. And we kind of understood it was... the person who wrote the piece really kind of gave us the idea of how to present that and how to ship that, you know, kind of wrap that message to the media. And from that point on, we really kind of rode the wave. And I think today we have thousands of media mentions each month. It's really powerful.

So that's actually a great question. I think that if I look back at the beginning of the company, and we had the first two years, we were pretty much, I guess, like most companies, most startups, it's mostly driven by the kind of the core founding team. If you have a product-oriented founder between the founders, then he's going to be very kind of funneled in terms of defining what the company is going to do and how the product is going to look. And we did that for two years. And suddenly, and we were very successful, we had about five hundred percent year-over-year growth. That's massive. And at some point I was starting to feel uncomfortable and I couldn't explain why, because we were successful and everything was going great. And then it occurred to me that we don't control our fate. In what sense? Because if we're doing great and it's just the way things are, and when we ship new features to the product or take out some features and test, we didn't feel that we actually can affect the amount of traffic that we get or the engagement of people and the amount of transactions that we have in the marketplace. And so even though things were going great, it wasn't, at least in our perception, it wasn't our direct contribution. And so that's what I think we had like a major change of mindset in the company where we decided to really go data-driven and to kind of gain control of what the company is doing and how we can actually affect the growth of the company, not just ride it but actually steer it. Right. And so this was a major, major... So what does it mean? Like, okay, so we have a point where you say we are going to be data-driven. What did you do before? What did you do after? What was the changing point? So before, just a simple example, you could go and have a great idea about the marketplace and say, hey, you know what, if we do that, that would be really cool, you know, that's what I mean, people would love that. And at best you talked to a couple of sellers and they say, you know what, bring it over. And so you do that, but it's not based on any informed opinion, right? It's just... How big was the team at that point when you would still make a decision like that? I guess about 50 people. So you were not small. Yeah, really growing. Yeah. And you know, it's very natural. I mean, most companies work like that if you think about it. And so what they don't talk about it, but they work like that. And so after the change, and it took some time, it took us about a year and a half to really restructure the entire company. We were working in a method called squads. If anyone here knows squads, you read about it? Avengers, right? Yeah, well, more or less. I think it's something that Spotify and I think started. But anyway, we really restructured the entire company to work data-driven. And it took us about a year and a half to get right. But we now know every element in the system. It's like having the heartbeat of everything that goes up and gets shipped in the product. So what does it mean? It's like looking at Google Analytics every day or what? Just like installing a couple of... Let me say, Google Analytics is not data-driven, it's vanity-driven. To become data-driven, one of the first things they need to do is to really understand how to test things and how to make the right decisions, how to prioritize what you're going to ship out. And I think that, you know, if you guys want to look it up, there's a very smart guy called Marty Cagan. He's talking about a methodology called product discovery. He was one of the head of product at eBay. And that idea where you actually don't develop things to the full, you know, it's the idea about MVPs, everybody talks about that, but how do you actually put that in a working company? How do you actually put the value into the hands of the team? And so what we started to do is really rely on experimentation. Every small thing goes live, goes through an experimentation process. And so we really build things really, really slim. You can go 250 in some cases and actually see a page, it looks like a web page, but it's actually a photo. It's that ugly. But that's the idea. So invest like a few hours in a concept, you test it out with a lot of traffic, and then you know if it's worth taking it to the next level, and so on and so forth. So that's just the tip of the iceberg of that concept.

Are you excited? Yeah. Well, I should say, I actually had an alter ego because, you know, when you start, you need two stars. This being green beans? No, no, no, it's not. Yeah, we started it. It's not, maybe. Anyway, there's someone here cutting. Anyway, when we started, we needed to find a way to bring the first customers, even right there. I mean, the first users, it's always the hardest thing. And I'm not talking about friends and family, that doesn't count. And so there's this notion about hamster strategy, I'm sure you guys heard about it, where you actually go out and grab people by the ear and bring them to the service. And in some cases you need to be a little bit cheeky about it, you know, you need to find ways to do that that are not like the standard, I'm going to throw like ten thousand dollars on Google ads and get some people paid. And so I had this... you guys remember MySpace? Is it like... yes, this generation, really old. It's like cool... something. Yeah. And so I had this really great-looking guy profile, really great-looking, found photos somewhere, Google, to this day I don't know who this guy is, but he was very famous in our offices. And we had this user, and he actually went out and through this fake profile, we would go out and talk to people and kind of recommend that they come and check out Fiverr on MySpace, right? So that's, you know, today you'll call it growth hacking. I don't think it's growth hacking because it's not such as you or other people use it. It's probably just me and my partner. With a decade, almost, to me it was kind of the things that is that scale. So it doesn't scale. It's not the point of scaling it at that point. You just need to... because here's the thing, when you build a marketplace, there is a famous question that comes up every time: what do you need first, demand or supply? What do you guys think? Who thinks when you build a marketplace, what do you need first? Supply? Right. Of hands? Or demand? Supply. Demand. Demand. Okay, let's go with demand. So say I bring... I know how to bring you guys, you build an amazing marketplace and I just throw it to you what we do, one hit from Yahoo Finance, if you get a link from Yahoo Finance on page, this is going to melt this entire country. It's just unbelievable amount of traffic. So you get this amazing traffic coming in, but then there's nothing to buy. So how can you start with demand if there's nothing to buy, right? So demand is great, but you need it a bit further down the road when you have something to offer people. So we decided to start with supply. And that's kind of the first thing that... yeah, so you should go and tell people to go there and sell stuff for five bucks. Yeah. So yeah, one of the things that we do is we find really great-looking girls and tell them, you know, why not just come over and hold the sign, for example, hold a sign with any message that you want. Now if I was expecting... you're great, you would go and... it's completely different direction, so I'm happy with... no, no, I remind you it's recorded. So no, but we actually... they're talking about just like pouring... I'm just in this mood today. It wasn't... it's not great. Yeah. We would really offer real people with genuine opportunity to do whatever they do for free to come and do it for, you know, on Fiverr for... and actually basically very similar services to offer for that kind of money, right? Just like start the process. Exactly, exactly. Okay. And that's how, going back to my point about supply and demand, so we had like, you can get 50 people like that, right? That might make sense, like 100 people make sense. So if you get two per day or two per hour, you can scan it. And so it's not scalable in terms of a business, but it's enough to fill the need for supply when you do bring in the demand. So it's not an empty website, it has some content in it, right? So that's basically the first step. Yeah. Do you think that's like others, startups can use that? And knowing for sure, I don't see any other way. I mean, today there's... depends on what you're doing, but I think that some of the startups are already even early stage already buying traffic even for, you know, in small amounts. That wasn't around when we started. It was not focused enough for the people that we really wanted to get. But I think it's a valid attempt. I would think that getting to talk to people, to actual customers, and bring in the demand, at least the first few users, you learn so much in this process. We actually... that's a good point. We actually did our own customer support when we started up until I think at least five, six months where we had, you know, thousands of users already. We did, both me and my partner, we did our own customer support. We'd stay up at night and talk to people because that's how we really learned about how people experience your product. But can't you just hire someone and they can tell you most of the people wanted this? Yeah, but you don't hear the music. It's not the same thing. It's technical. And also you get to talk to people and you understand that there's so many things that are broken in the process that you need to have the right kind of combination of skills, both understand product, understand the vision of the company, and what's in there right now very well to be able to make the connections between things that you read in a subtext and actually make new features out of that. So that's a very... I mean, I would recommend everyone here, if you have a company and you start something, you have users already, be the one to talk to them for a long time. And we actually continue to do that. People in the company would spend an hour a week, even when we were pretty big, regardless of their position, developers, HR department, would do customer support and feel the pulse of the user. It's very, very important.

I think every company is different. I don't think we have the truth to anything. It worked for us, but I guess there's other ways to do that as well, which would be good. What we were like coming to the end of this talk, like knowing what you've done with Fiverr, what would be your recommendations for founders like in the beginning stages of the company? Choose the right partner. Okay. That would be my first and by far the most important. Find the right partner. You need to share, you need to make sure that you spend a lot of time with that person. You need to make sure that you share a set of values that will last for a long time. Now, in many cases when you start a company and you even think about the product or the people involved, you have this black book, you know, I call it black boxing. I have something bothers me, but I'm going to black box that right now. I'm going to put it aside and do not think about that because I need to be optimistic, right? That is very dangerous. And doing that with things that you feel about your partner or people that you hire is not a good thing. So I need to make sure that you really are in line in the way that you think. And you at least once, and I don't know if that's feasible, but you should try to at least once be in a difficult situation with that person to see how they change. And I don't know, go drink, get wasted. Okay. So you get in difficult situations when you drink a bit? Me? It might be. Yeah, could be. Okay. So now for the later on, yeah, I can test this with you. Have the guy in a second. Tip, second tip: make sure you go drinking with your investors. Why? Because that stores... investor is, in my opinion at least, is somewhere between the co-founder, you know, your partner, where these are people that you're going to need to spend a lot of time with. But most importantly, it's not the time, it's the lack of distance. You want to sit with someone and feel totally free to share everything with that person and really get their help or opinion. And if you're afraid to do that, these are like heavyweight bankers or very famous people that you and them are not aligned, you're very small, early stage, first time entrepreneur, and this is like undressing, right? Marc Andreessen, you're not gonna... it's not going to be a simple thing to tell bad news, right? And even though you know it could be the best guy in the world, you need to have that kind of a balance between those things. And so when we started, we made sure that there's always at least a close thing between us. And we actually, you know, we spend a lot of time together, we're pretty much friends with all our investors, so we hang out with them regardless of the company. And I think that is a good example of how you can choose your investors: go drinking with them, get wasted, and make sure that they're open to these kind of things. Okay. So for summary: fake growth at the beginning to build a base of users, get drunk with your partner, and get drunk with your investors. Exactly. Okay, sounds like we can agree, right? Makes sense. Nice. Please, a round of applause very much, sir.