Co-Founder, Fiverr International
TechAviv July 16, 2018: Fireside with Shai Wininger, Founder @ Lemonade & Fiverr
TechAviv's Yaron Samid interviews Shai Wininger, founder of Lemonade (www.lemonade.com) and Fiverr (www.fiverr.com) at the TechAviv Founders Club's (www.techaviv.com) July 2018 gathering. Over 120 startup founders joined the fireside chat which covered Shai's remarkable personal and professional journey as a 5-time founder.
Full event details and photos:
https://www.techaviv.com/events/july-...
This is an ongoing story of a high school dropout from Haifa who became one of Israel's most successful entrepreneurs. As you'll see from our fireside chat, Shai has a rare combination of world-clas...
About Shai Wininger
Shai Wininger, co-founder of Fiverr and Lemonade, has discussed the insurance industry's conflict of interest, stating that "every dollar that I claim is a dollar less on their bottom line." He described Lemonade's model, where the company takes a flat 20% fee and donates remaining premiums to causes chosen by customers, as a way to eliminate that conflict. Wininger noted that about 30% of claims at Lemonade are processed by a bot in seconds. Wininger has also spoken about Fiverr's growth and operational challenges. He recalled an incident where PayPal's anti-fraud system shut down Fiverr's transactions at midnight, which he said "we actually thought would kill us." He advocated for a data-driven culture, saying that "one out of eight things that you're gonna build will actually make an impact" and that "data wins and discussions end" when testing ideas. Wininger described the $5 entry point as "the ability to try something before you actually pay a higher amount."
Transcript (159 segments)
H
Host0:21
Shai from Lemonade and Fiverr, grab a mic. What side do you want? They like that one. What's your better side? A good side? You're good looking both ways, both are bad. Okay, okay, so hey, you haven't seen one of these before. So what we do here is pretend no one's here, okay? You and I, we're sitting at a coffee shop or a bar, and what we want to do is basically talk about your founder's story as honestly and openly as possible, as if no one's here, no cameras running, two founders talking about your personal founder's story. And before we start, I just want to say, and I wrote this in the intro to this session, so Shai has also been around Tech Aviv for many, many years and built five companies over the last 20 years. Is that right?
S
Shai Wininger1:26
Actually, a little bit more, yeah.
H
Host1:30
It's not perfect. I want to talk about that as well, okay? Because most of us fail, right? We have 3,000 members. I would say probably 80% of us in the last 10 years failed at least once in that time. So we're very familiar with failure, and sometimes you feel like you're the only one. And you look at a guy like you with all the headlines and all the fund raises and all the incredible success that you've had, and we think everything is just up and to the right for some people. And I know that's not the case for your entire career. And I want to start at the very beginning, okay? So first of all, we like to understand your personal inspiration from early on, from childhood. Is it a parent, your mother or father who inspired you to not get a normal job? Or how did you get to that? Say a bit about your childhood.
S
Shai Wininger2:20
Well, I grew up in a house where nobody had a normal job. So both my mother and my father had like their own small business. My father had a small factory doing some work around industrial plastic and things like that. I actually worked with him for a while. I woke up 4 a.m., went to work with all kinds of toxins and things. I don't know what I got from that stuff from the period that there was not a lot of awareness about cancer and all that. So I don't know what I got there, but it wasn't good, that's for sure. And I don't know, I mean, I was never good with, you know, with the establishment. I think, I mean, I sucked at school. I don't have a degree. School, sure, but bad grades at school, very bad grades. I don't think I attended most of it. I never finished school actually, and never went to the university.
H
Host3:25
Talk about high school.
S
Shai Wininger3:27
High school, yeah.
H
Host3:29
You never finished high school?
S
Shai Wininger3:30
No.
H
Host3:32
You do not have a high school degree?
S
Shai Wininger3:32
No, I don't. And so I think that, you know, getting to become an entrepreneur was mostly kind of a last resort for me. I mean, I didn't see myself getting a job. I didn't think I can actually spend time in a large company working day in and day out. So I started to think, what can I do by myself? And at that time, and now this is towards the end of my high school where again I didn't finish, and where when I was about to enlist the army, apparently that's a whole story and I won't take too much of various time about that, but apparently I couldn't enlist because I had this terrible disease in my liver and was diagnosed with a very bad liver condition that the army, once they discovered that, didn't want me. And so I was in pretty bad shape. And so what happened was I spent most of the time that my friends were in the army doing whatever you do in the army at home with fever, feeling really, really bad. And so I was becoming bored at some point, and one of the first things that I did was looking for something to do. And I remember, well, this is before internet, just internet just started, went to Steimatzky, which is one of the, I mean, bookstore back at the day, and got a book about HTML. This was the first thing I did, bare bones guide to just HTML. There was nothing there, you know, the first browsers, CommuniX by the, you know, the Israeli company, and then there was Netscape and all that stuff. Total garbage, but it got me excited. I really thought that there's something in there and started doing all kinds of just personal projects around HTML and stuff like that. And I think I was customer number seven with NetVision. I don't know how many of you guys know NetVision, it was one of the biggest, at some point one of the biggest internet providers in Israel. And I remember getting that, they were so small back at the time that when I was calling in to say that there was no connection, the CEO, which was Ruth, her name was, she actually gave me support on the phone. It was just, we're working out of an office, very funny. So that shows you how old I am.
H
Host6:19
Okay, by the way, I saw a bunch of nodding heads, so I think there's a, we can relate to those days. Yeah, but we're talking about now, we're in the 90s, yeah?
S
Shai Wininger6:28
Mid 90s, early 90s, early, yeah, yeah.
H
Host6:32
So we're in the early 90s and you're going through this book and teaching yourself HTML. And you were a coder, you started hacking, is that right?
S
Shai Wininger6:41
Yeah, I mean, I didn't have any background, of course, it was just the end of high school. So I started hacking and at some point I got a job.
H
Host6:51
How old are you at this time?
S
Shai Wininger6:51
Seventeen, eighteen.
H
Host6:56
All right, just army, army age, yeah.
S
Shai Wininger6:59
And so at some point I got a job after a while carrying vegetables, like deliveries. Sorry, I got better. Just start to get some kind of an income for myself because I have the highest dream. Do you guys remember Jurassic Park? So the first movie was just an amazing experience for me. I remember getting out of the cinema just shocked and I always actually went out and I looked around and I actually expected to see some dinosaurs walking around. I don't know if you guys remember that, it was like the first time you actually saw a three-dimensional, almost real-life experience. And I read about that and it apparently was made by like a bunch of very powerful hardware and software made by Silicon Graphics. And at the time it was my, became my dream to get a Silicon Graphics workstation and to earn enough money to get one because it was very, very expensive, as you can imagine. And so I'm, you know, kind of a late-days teenager trying to buy Silicon Graphics, the first one in Israel, I don't have a dime on my name. And so I started getting all kinds of jobs, you know, these delivery service and all that stuff. And eventually I didn't get to buy the Silicon Graphics, I bought a Mac. And the good fortune was that at that time, I don't know how many of you remember that, Apple was in a very bad situation. Steve Jobs was outed and this idiot came in and actually certified a bunch of hardware developers to make Mac clones. Do you guys remember that background?
H
Host8:46
Yeah, no, not that, that's not NeXT, NeXT, different company.
S
Shai Wininger8:50
So there was a time where you can buy a Mac for really low and really cheap. And so I got a Mac and that was the beginning of everything.
H
Host8:57
A clone, a clone, but it wasn't the original.
S
Shai Wininger8:59
I couldn't, it was running Mac OS.
H
Host9:01
It was running Mac OS, yeah, yeah. Okay, so then you start hacking on this Mac OS.
S
Shai Wininger9:06
Started hacking, and that was at the beginning of my first company. So I was really into 3D because of that Jurassic Park experience, and I bought some 3D software and went out to look for customers to do some 3D work for. Apparently there weren't many, but I ended up somehow, a crazy story by itself, with the Israeli Aerospace Industries. And apparently they needed to do some simulations for new gas tanks they were designing for the F-16. And that was my first kind of, I think, romance, long, long-term romance with F-16. It goes back later in my career. And I started working for them and doing all kinds of three-dimensional simulations. I wasn't, I mean, I didn't know anything I was doing, it was just one big, this is before 3ds Max, this is what led 3ds Max to be. And so what that evolved to was this idea, and then so I had these two kind of vectors, right? One is this huge passion for 3D and VR, and the second one for the internet, which was basically the first technological experience that I had. And at some point it just occurred to me that you have to combine these. I mean, these two things have to work together. It doesn't make sense that one is totally offline and one is, you know, just there's so much information that way, they don't converge. And that's where Tremors was born. Tremors was actually, it's the idea of creating a browser that uses the same information that you have online. You don't have to build any special, you know, websites for this. It's just you open it up, you type in a URL and you surf the web in three dimensions, no glasses. Content where content is presented in three-dimensional space where the relevancy determines the distance from you. So it kind of takes the browsing experience from a very cognitive situation, very cognitive experience where you have to look for stuff, you have to click links, you have to read stuff all the time, but there's no intuition, right? You walk into a gallery, there's something that catches your eye and you just walk up to it. This is not cognitive, this is intuitive, right? And so it's very emotional. So I wanted to kind of create this connection. I failed miserably. I mean, it was before its time. I mean, we actually managed VR before VR. So we are before VR. I actually wrote the patent and filed and got it approved, and I have the patent for the display of two-dimensional content in three-dimensional space, which Apple uses and Microsoft used it in the US, yeah, in one of the, I think it was Windows 7 that started the Explorer in three dimensions. And so this was my first kind of experience.
H
Host12:06
Did you get any royalties on this patent?
S
Shai Wininger12:07
No, I didn't want any.
H
Host12:10
You didn't want any. Now you're a high school dropout who taught himself how to code, wrote a patent on VR before it was VR, Apple used it.
S
Shai Wininger12:17
Yeah, nobody asked me. I just didn't want to go after that.
H
Host12:22
I see, yeah.
S
Shai Wininger12:25
Although I got an offer from several lawyers who told me, hey, we want to represent you. Apparently there's a whole industry around this, you know, today they call them the patent trolls. I didn't want to be one. I don't believe in getting paid for something you don't do. And so I was finding people using it, it was great for my ego, so that was it.
H
Host12:47
So this is getting at something that I think evolves throughout your career, which is a combination of just being technical, liking the technology, liking the hacking side of building stuff, but also having a very keen sense of user experience, a visual design, consumer intuition. Like those are sort of non-sciency things that most technical people are less instead of two, right? Where does that come from?
S
Shai Wininger13:16
So actually, skip that part, the high school that I went to, they threw me out of normal high school and I went to a high school that was kind of a more creative side for people like me who couldn't handle like normal schools. And so...
H
Host13:29
What school was that?
S
Shai Wininger13:32
It's called Vitsoe. Yeah, I don't know how it's mostly known in Haifa. Actually, I didn't say that, I grew up in Mitzpe Ramon.
H
Host13:49
Laughter. Giddy. All right. By the way, I live there now. Shai, it's too far. I still live there, but still.
S
Shai Wininger13:58
Today you live in Haifa?
H
Host14:01
Today I live in Haifa, yeah. No, yeah, you don't do it every day though.
S
Shai Wininger14:04
I commute three times a week and two times I work from home. I've been doing this for many, many years. I believe in this, really, in a system.
H
Host14:13
Yeah, where a father... question in the comment, where... yeah, okay, you don't want to say the exact address, yeah. Well, I'll be coming over to your house. Wow. Yeah, just a quick word on that, why did you choose to stay there and not, I mean, Lemonade's offices is downstairs for those who don't know here in Sarona.
S
Shai Wininger14:30
Yeah, just life took all kinds of crazy directions. I think when I was just ready to move, my kids wanted to hide into school actually, which was so great and so amazing that I said that I'd rather have them, you know, continue there and have me do all the work then instead of the other way around. And so because I know how important it is to be in a great school, great school.
H
Host15:00
And so you have an apartment here?
S
Shai Wininger15:03
No, no, I actually use the train. I love public transportation.
H
Host15:06
You use a train, yeah? Three times a week, three times. Oh, that's amazing. Okay, and so you get a lot of work done, the laptop, Wi-Fi.
S
Shai Wininger15:12
Actually, I don't work on the train.
H
Host15:13
You don't?
S
Shai Wininger15:13
I either read, write, or do meditation.
H
Host15:16
Yeah, really? Yep. Can you say words?
S
Shai Wininger15:20
Headspace.
H
Host15:23
It's interesting how many entrepreneurs in this room meditate? Raise your hand. We need to change that, right? Do you agree? The benefits of meditation for the crazy life of a founder, unbelievable.
S
Shai Wininger15:35
Changed my life.
H
Host15:36
Really? Yes. When did you start?
S
Shai Wininger15:39
A year ago.
H
Host15:40
A year ago. Yeah. And Headspace?
S
Shai Wininger15:43
Yep, that's it, yeah.
H
Host15:45
Amazing. Quickly, the benefits, how do you see it in your work and a regular basis?
S
Shai Wininger15:50
It's not only, it's also personal life, but I think that clarity, and we'll get to that maybe later, I think that clarity is basically everything. Understanding that there's so much going on in our lives today, there's so much going on our phones today, there's so much going on, you know, around us. Being able to disengage from that very noisy reality and transform yourself to a secluded place where you can think clearer about what's the right thing, what's the next thing, what's the right priority for you next, what's just noise and what's substance. I think that's one of the things that I really learned from that. And I actually tried some meditation before, but Headspace is by far the best experience. Fantastic app. I think it's a life-changing, it's one of those rare situations where an app can really change your life. And by the way, going back to one of the comments made for Lemonade, I actually think that Lemonade has that potential. I didn't get a chance to talk about that too much, but I think that it's one of those situations where having the right software with the right communication can really be habit-forming. So I really love you guys, it's gonna be huge.
H
Host17:18
So Headspace for anyone who wants to go download the app, highly recommend it.
S
Shai Wininger17:23
Yeah, by the way, in a very, very well done user experience in terms of onboarding you in the first ten minutes, actually.
H
Host17:31
Let's spend a minute on that. So this app is perfect. I don't think I can find a single bad thing to say about this. And it's just, I don't think you can plan for that, actually. I think it's almost a happy accident that happens for companies. I think that both Fiverr and Lemonade are happy accidents. I think it's really, really hard to plan for that. You can improve your chances, but this guy has the most perfect voice. It just, it starts with that, just his voice. He didn't think about scale. If he would be here, people would say, think about scale. How can you get more people in? Maybe create a marketplace, maybe others can come in and record their voice and do meditation. Oh, I'm just gonna use my perfect voice, that's it. And then there's the perfect accent, and then there's the perfect animation and color scheme and gamification and messaging and push notifications. It's just like they got it all perfect. It's just so, even if you're not gonna do meditation, I think it's one of the best things, I mean, one of the best examples of a perfect application you could get on a mobile today. Okay, so let's go back. I don't have any shares in this company.
S
Shai Wininger18:47
Yeah, no, no, everybody who uses it is equally.
H
Host18:51
So back to the, this special artistic high school, Vitsoe, that you started. So this is the equivalent, I guess, of Reed College for Steve Jobs, where he started learning, you know, typography and so forth. Was there at that point a sort of, that sent you on a path to be a product guy, a UX guy versus a tech guy?
S
Shai Wininger19:19
So the one thing you learn in this school is to question everything. The first project that you get, and that's kind of, you know, it's the beginning of the path towards an art career in arts, they give you the first project, they give you a page and they tell you, I think they give you some kind of a sentence to write on it, and then you post it on the wall and, you know, spend an hour talking about how you wrote that and designed it and laid it out and all that stuff. And the first thing I remember doing is using the smaller piece of the paper. And at the session when we did this thing, they said it's almost always the frame is the beginning of all the creative process and never say differently. People usually don't change the format, right? And so they teach you to break the format, to break the mold, to change the frame. And I think it has a lot to do with entrepreneurship. I mean, not getting things as they are, questioning everything, doing things differently. I think that Olive has those great sandwiches, they use that, you know, different is better than better. I love this, it's so true. And I think that's like the creative basis of product thinking.
H
Host20:45
So Tremors, this VR-style browser does not succeed.
S
Shai Wininger20:56
Right, so our biggest customers were companies that failed. There was the .com bubble, if you guys remember. I got my investment check for two million dollars late '99, I think it was, maybe a month or two before the bubble burst. And all our customers who were supposed to be those tripod companies, who else was there, a bunch of big ISPs that were at the time kind of the beginning of what today is Wix, you know, the equivalent of, they were customers who just failed, just in a single day, finished. And so we had to shut down. I gave back investors about, we had left, how many points? 20 something.
H
Host21:42
20. And you were the founder CEO?
S
Shai Wininger21:44
I was founder CEO. That's where I learned that I'm not gonna be CEO again.
H
Host21:48
Really? Yeah.
S
Shai Wininger21:50
Because I suck at it.
H
Host21:50
You don't like it?
S
Shai Wininger21:52
No, I know, it's not that I don't like it, I just...
H
Host21:55
Okay, you're gonna... yeah, really? Yeah. What is the most important... how many of you are CEOs? Raise your hand. This is a room full of aspiring CEOs. Okay, what is the most important trait, and you work with an amazing CEO today in Daniel, yes, what is the most important trait a founder CEO needs to be a good CEO in your opinion?
S
Shai Wininger22:22
I don't think I can name just one, but I think it's a, maybe I'll say it from a different direction, that for me at least it was a big challenge. I'm an introvert. Okay, first, I'm an introvert. I don't think it works to be a CEO and an introvert, not as strong introvert at least. Sorry if there are some CEOs here who are introverts. My personal experience is that you need to maintain a constant and ongoing and very in-depth network of relationships with a lot of people. You have your investors, you have your customers, you have your partners, you have your employees, and, you know, potential of each one of those. And that's just something that I find myself really bad at, maintaining those kinds of relationships. And so it's, and I really hated it. I mean, doing all that. So at some point I just decided that I'm not going to do it anymore. And my path would be to build things, because that's what I like doing, and find someone else to be the front and B2C, you, me.
H
Host23:26
So moving on to, let's go to your third company, Moby.
S
Shai Wininger23:31
Oh, all right. So right now, Moby, yep.
H
Host23:33
Used, you created this new title.
S
Shai Wininger23:36
Oh, it's a clear one step before, yeah. So I had a company called HandSmart, which is, it's the beginning of the mobile devices. Windows, I mean, Microsoft just released at that time the Windows CE 2 and Windows Mobile. It was a bunch of, you know, PDAs that use, it was a kind of a small version of Windows. But I think for me it was really inspiring because I thought that there's suddenly there's all this power in your hand, there's so much we can do about it. It's like years before iPhone. And so I decided, you remember as I told you that there was a kind of a relationship going on with F-16? Yeah, so that's where I came back to it. So back at the time when I worked with the IAI, I noticed that they were doing, they were working on the F-16s and doing pre-flight checks and all that with paper, like, you know, big piles of paper just going page after page, check, check, check, going like this in every flight, in every week and so on. These are very, very complex systems, super expensive, you don't want to get anything wrong there. And so my first idea at that point was, hey, why don't I take this device and put all this paper inside and then by showing it back to user experience, but showing just one at a time, I'll be able to know when the user has gone through that process or failed or succeeded, and then that could drive a kind of Google Analytics on, you know, office side to show how the maintenance is going on, how is making progress. And that was the first kind of step towards mobile, which is a company I merged with this idea into.
H
Host25:29
And how does this company do?
S
Shai Wininger25:32
So they're still alive and kicking. They are now moved to, so this product has been used to deploy it in work for the F-16.
H
Host25:43
So it did not, it did work for...
S
Shai Wininger25:45
So they still use paper now?
H
Host25:48
Any Air Force, but yeah, using that.
S
Shai Wininger25:51
They still use paper. Long story, it didn't work for some airlines, and then we moved to other industries, and it's now being used for oil and gas.
H
Host26:04
So original, okay. But no, no big financial success for you. And you reinvented yourself from a CEO to a CPO/CTO, which is something you sort of still do until today, right? This combination of product and technology, which is again very, very unique for any entrepreneur to have both sides of that coin. Fiverr, which today you literally cannot drive in Tel Aviv without seeing this massive Fiverr building, and you can't surf the internet without running into, which today is one of the top 100 most visited websites in the world, right? It's one of the most popular.
S
Shai Wininger26:50
Finally, yeah.
H
Host26:52
The very early days, after not having any success, you've had one failure, one kind of company that's just kind of coasting along, I would call it a failure as well.
S
Shai Wininger27:01
You would call it a failure, yeah.
H
Host27:02
Okay, how is your psychological state? How was your personal life? How are you doing?
S
Shai Wininger27:08
Great at that point, yeah. So I don't know if that will make sense to you guys, but at some point at that time I was just totally out of money. I didn't have a dime. And back home I had my second child born, my young daughter. And this kind of drove me into a situation of living very, you know, in a kind of a safe mode situation where you're very modest about your spending, you know that. And I really like that. I mean, there's something about it that's kind of putting you into a different mindset. And at that point I think that I was very, very happy. It's just one of those cases where there's no direct correlation between money and happiness. There's just zero, zero correlation.
H
Host28:12
What about your confidence in yourself as an entrepreneur?
S
Shai Wininger28:15
I really enjoyed those experiences with those companies. I don't think I ever had this, so when you start a company in many cases you see your success and then you say, okay, let me draw a line towards the success and I'll start walking towards it. Success is like this event, there's an imaginary exit or an IPO, whatever, this is like your target and then you walk towards the target. If you fail to reach a target, you call it a failure. I never thought about that as the angle. I mean, I thought I was pretty naive, I guess, but I just thought that it's fun to build stuff. And so why exit if it's gonna stop you from doing that, having fun? So just, you know, let's just continue building cool stuff.
H
Host28:57
So that's the goal, just build cool stuff. Yeah, no financial goal was the goal back then. You've evolved a bit. Okay, so you were in a good state of mind, yeah, financially not so good, two kids at home, yep, and you decide to not get a normal job but start your fourth company, Fiverr.
S
Shai Wininger29:19
Yeah, well, it wasn't that romantic. I mean, I was looking into all kinds of transaction models. So I got interested in marketplaces for some reason and started looking into, you know, the eBay, eBay that started kind of booming at that time, and Amazon was kind of taking shape as a new type of company. They were just making the transition between a bookstore and something else. And I got really interested in all kinds of transaction models, you could say, and started reading about it. And at some point it just occurred to me that services are underserved. Nobody's doing anything around that space. And there's so many talented people, creative people around me, and they have zero way to monetize their talents online. There's no scalable solution for that. And so at some point it's just, you know, the number five, I don't know why, it was something magical about that number. It keeps, by the way, I used the name, the number five in Lemonade as well. We started off with five-dollar policies in New York. Yeah, but there was something complete about that. And it felt like, okay, if we take five dollars and one dollar, 20% would go to us and four dollars would go to the seller, having this basic concept of non-negotiable transaction between two parties, then what happens is that suddenly the only variable is talent, right? It's not about price, it's about who's better. And so at that point, I mean, I got really excited about the idea, called my best friend at the time, Micha Kaufman, told him about it. I think we spent every morning talking about ideas. And at that time he said, okay, this is the one, sounds great, let's start looking into it.
H
Host31:22
Wow, okay. And you have money to start the company at this point?
S
Shai Wininger31:28
So we used up some savings, didn't have a lot of money, but we did bootstrap it. By the way, and we decided that if that, we're not going to force it. Again, pretty naive, I wouldn't do the same thing today. I don't think that was a very, we had a very clear view about how to start a company. And we said, okay, if that doesn't lift off the ground by itself, then we're just gonna let it go and move on to the next thing.
H
Host32:01
Today I don't believe that that's the right approach.
S
Shai Wininger32:02
You do not?
H
Host32:04
But it did work. Interesting. I don't think it's right for a job. Okay, interesting. So for the sake of time, and because Micha was here two months ago and we dove into the story of building Fiverr, which is an amazing, amazing story, we're gonna jump forward to Lemonade, okay? Fiverr, maybe you can say a few words about the current state of Fiverr before we move on.
S
Shai Wininger32:26
Yeah, sure. So just maybe just before that, just a couple of words about the process. So one big thing that I learned with Fiverr is that you have to watch out when things succeed. When things go bad, everybody knows what to do, you try a bunch of things. When things succeed really, really fast, there is a very dangerous moment where you either harness that power or you can fail by a company that's going in a very high-growth, you know, velocity just by not being able to scale it. And we both learned a lot from that process. One thing that I learned though is that the size of the business and the amount of people that you have in the company doesn't have to correlate directly with the volume and this, you know, the financial success or the business success of what you're doing. Meaning you don't have to hire like crazy. I would actually argue the opposite today. I think that efficiency has to go much more into, you know, into entrepreneurs' way of thinking when building your company. When building a company, it's almost a reflex, you get funded, I hire people. You hire people, the company becomes slower. The company becomes slower, you have to hire management. You hire management, you have politics. You have politics, things suck, you know. And then turnover goes up. So there's so many bad things that happen just because of that. I'm not saying that companies should remain small, I'm just saying that companies should kind of, you know, keep kind of family size or small size of our business as long as they can before they explode.
H
Host34:18
So is that a mistake at Fiverr, growing too fast?
S
Shai Wininger34:20
It was, interesting, yes. And so, and they're not that big, right? It's how many people today?
H
Host34:25
It's a few hundreds.
S
Shai Wininger34:28
If you have young people, but I think that the culture and the culture of the company is very different than Lemonade. Let me just say that. And a lot of it has happened because we hired too fast, grew too fast.
H
Host34:47
Are you involved personally with hiring?
S
Shai Wininger34:50
With hiring, with hiring, I'm at all of you, every single employee, company, every, ever seen a single employee, ever seen, I'm the last one in the funnel. Okay. But I interview everybody. And in some cases people go through the entire process to get a yes, yes, yes, yes, and then I can also shut it down because of cultural, you know.
H
Host35:16
Is that what you optimize on, cultural fit or something else?
S
Shai Wininger35:20
But for me that is the single thing that I would not compromise.
H
Host35:26
Is there any other best practice for hiring? That's not me, we're all challenged with a lot.
S
Shai Wininger35:31
Yeah, I think it goes maybe to one of the subjects you wanted to talk about, the big ideas, right? Big things. And one thing that, you know, as an, I'll get back to the promise to put a pin on it, but one of the things that I knew when I decided to leave Fiverr and do my next thing is to do something really, really big and really challenging. And little did I know that that approach would help in so many different avenues. For example, working on a huge problem makes raising money really easy. Working on a huge problem makes hiring the best people really easy, or easier, you know, it's never easy, but easier, because everybody wants to be associated with the big problem or a big solution. And so one of the things that I discovered, and I didn't plan for that as well, was that just by choosing the right problem to work on, you can change the entire dynamic of the business.
H
Host36:30
Interesting. Okay. Hiring, any best practice? Yeah, so one tip, one interview, how about this, give me your favorite interview question.
S
Shai Wininger36:43
Oh, no. Well, I'll give you a tip. The way that we look at hiring is by research. So we look at it from a data perspective. It's basically, it's a sales funnel. And we do a lot of research. We scan the entire ecosystem. We look for the most successful companies. We look for the most successful entrepreneurs. We look for the people who work for the smartest people we know. And so a lot of research. And then we do outbound, just headhunting from within the company. One small tip, maybe hire your own recruiter in the company, in-house, full-time.
H
Host37:20
For Twitter? Yes. When you get to a certain size?
S
Shai Wininger37:22
No, early, yeah.
H
Host37:25
Really? Yes. Worth the salary?
S
Shai Wininger37:27
I think the first employee of my next company is after your what series, A, seed?
H
Host37:32
After you seed, yeah.
S
Shai Wininger37:34
Wow, maybe the second. You want to pay that salary. That's the one. Hire a full-time recruiter.
H
Host37:40
Okay, yeah, well, that's interesting. The first one should be a designer if he's not a founder, and the second one should be a recruiter.
S
Shai Wininger37:46
First hire a designer, yeah. So you found her, I would look for a founder as a designer. Okay. And always have a founder who can code.
H
Host37:56
I'm not sure, depends on the kind of the project. That's more of a commodity today. The recruiter should go and design, yeah. That's an interesting, very, very interesting approach. By the way, we started the hiring for Lemonade by code. We wrote a scraper that went over all the GitHub repositories and open-source projects that were always here in Israel and sorted all the people based on their number of commits and successful commits. And then we did outreach to those people and hired them. So yeah, so core team.
S
Shai Wininger38:32
So just two, this is a very interesting point that I want to clarify. The reason you need a recruiter is because you want to get a lot of top-of-funnel applicants. You're doing the interviewing, it's not like you want somebody else to interview for you, but you just want to get more outreach of more talent in through your funnel that you're gonna see.
H
Host38:49
So not on a volume basis, on a quality level or the quality base.
S
Shai Wininger38:54
It depends on how you, you know, how you kind of bring them into the role. I hired someone who I thought could be really good at research and outreach and headhunting. And so we are after not the quantity but the quality. And so then it starts, there's a whole funnel that people go through, including tests and stuff like that. So it's really hard to get a Lemonade. By the way, that's another tip, the harder the process is, the more people would want to work for you. It's kind of counterintuitive, but it works.
H
Host39:28
Yeah, I think Google sort of pioneered that, making it harder to get in. Yeah, once you're in, right. Okay, so let's go to Lemonade just because we have ten minutes left, if that's okay. And if you can sprinkle in the tips and lessons learned, because I'm sure at Fiverr there were some hard times, right? And before that you had a few failures, but you're now a guy with a track record. You're the Fiverr guy, and you go out to, I mean, talk about trying to solve big problems, probably the last industry to be disrupted by software, like they're still standing, there's a bunch of them, and you decide to take a crack at this. How did you come to that decision? Was it a brainstorm or you have a particular problem with insurance or how did it all start?
S
Shai Wininger40:14
I think like many other things in my career, and that's why I say there's so much luck involved in those things, the stars align somehow, just like they did with Fiverr. That's why I think with my next company, if I have one, the chances of it succeeding is very low because there's so little chance of getting it three times in a row. But funny story, Michael Eisenberg, you know, one of the great guys, good friend of mine for many years, he introduced me to Daniel. And the reason he could move me to Daniel was that at the time when I left Fiverr, I decided to do some investing and I understood that I don't know anything about money markets, financial markets, stock.
H
Host41:01
One practical question, yeah, you're investing your own money as an angel, yeah. You haven't sold Fiverr yet, which means you've done some secondary, like how do you have money at this point in your life?
S
Shai Wininger41:12
No comment. No comment, really. Yeah, okay, no camera and stuff like that.
H
Host41:20
It's true, we turn off the camera for thirty times. I'll ask you later. And the idea for Lemonade?
S
Shai Wininger41:26
So I started looking into financial markets. I got really interested in that because I understood it, you know, I don't know anything about investing, I don't know anything about financial markets and all that stuff. And I read a bunch of books. I did the Finance 101 Stanford from afar.
H
Host41:44
Did you do that? You took a Stanford course?
S
Shai Wininger41:47
Yeah, online, online. Super interesting, by the way.
H
Host41:51
Another, what was the name of the course? Do you recommend it?
S
Shai Wininger41:54
It's a Finance 101.
H
Host41:58
Finance 101, a Stanford course, yeah, okay, yeah.
S
Shai Wininger42:01
Really cool course, especially if you hear it while you run, which got me to run, so that was also good. But one of the things that were said there that they started talking about insurance and, you know, the foundation of banks and all that stuff. And then it occurred to me that so much money is being handled by insurance companies. Actually, insurance companies now hold about, their annual turnover is about 8% of the US GDP, just insurance companies. And this is like a huge market. But then again, how many startups do you know back then that try to tackle this market? No one was doing this. And this is like one of those moments where you understand that there's so much opportunity. So I go out and I talk to Eden and Michael, and then Michael says, hey, you know what, I just met Daniel, my amazing co-founder, and he is just talking about the same thing. Daniel went back, we just came back from Singularity University session, and he said, you know, Peter Diamandis, the guy who started SpaceX, went on stage and said, you know, there's so many exponential businesses out there who have never got a chance to see B2P or any type of disruption. And he said, you know, hospitals and, you know, banks and insurance companies. And then Daniel kind of caught up with that. And just an amazing alignment of stars that, you know, we both did the same thing, we both knew Michael Eisenberg so well that he made a connection. He was kind of the godfather of Lemonade.
H
Host43:50
So by the way, I'm glad you said that. Michael has quietly made a lot of these introductions between founders and investors and so forth, and it is a lot of work behind the scenes. It's not just directly his business.
S
Shai Wininger44:03
And that's why he's as successful as he is. Yesterday, he's amazing, yeah. And it was the best VC knees, right? By the way, by far the best.
H
Host44:14
Really? Yeah. Wow. For that stage, and I've seen a few and I've sat with a few on the board, I'm sure Michael is the best one, board member I ever had.
S
Shai Wininger44:23
Somebody tweet that and tag him or he deserves it. No, seriously, he does.
H
Host44:30
Okay. And so you and Daniel off to the races, and what do you do differently this time from lessons learned from Fiverr? And Fiverr is a success, but lessons learned that made you do things differently. Lemonade, as you said, is a different company than Fiverr. Maybe point one or two.
S
Shai Wininger44:46
Culture. Daniel and I shared a lot of the values about transparency and warmth, like empathy within the organization. Give Back is a, you know, kind of a child of that thing, giving back to the world, doing good, creating amazing experiences for people, not just collecting their money, creating real value. Actually, I think we really enjoyed that stuff. And, you know, putting aside the fact that the company's successful and making money, coming to work every day, spending time with people that you love, who love, hopefully love coming to work as well. And you're not too big yet, you're in a, so many employees?
H
Host45:39
Almost ninety. I speak between the New York office and Israel, so it's about fifty people here.
S
Shai Wininger45:48
Having the opportunity and doing things that, you know, really change industries and also do good to the world, that's amazing.
H
Host45:55
So ninety people only, two locations. How many policies?
S
Shai Wininger46:01
Over a hundred thousand, yeah, yeah.
H
Host46:03
Yeah, well, well soon be around two hundred thousand.
S
Shai Wininger46:08
Thousand. How many states?
H
Host46:12
Homes, 20, about 20 states. Okay, wow, yeah, amazing. Well, at the rate of launching a new state every couple of weeks, okay, which is really, it's not, it's a big deal. Can you say, and I know that those insurance companies who are watching you and going, okay, what, I mean, yeah, he's got really, they're using the color pink and it's a beautiful UI and it's a great app and they have, and by the way, the voice, whoever writes it's a native English speaker, right? You have somebody who does the voice of Lemonade, all the writing, really? Who is it? You? You are the person who writes all the copy for...
S
Shai Wininger46:49
On stage, I suck, really, yeah, yeah. Wow. I mean, it's not all me, but that's like, that's one of the only things that I still kind of do on the product is the tone. I own the tone of voice.
H
Host47:07
If you would have told me at some, English major, you know, in the United States who, you know, works on television or whatever it is, it is a perfect voice for changing the entire narrative around insurance. To know that it comes from you, which is UX guy, product, technology, and now we're gonna add brand, like the same thing, because microcopy of course is basically UX.
S
Shai Wininger47:30
Yeah, I don't want to claim too much for myself. I mean, the voice that Lemonade, one of the beautiful things about it is that it has so many different levels of this kind of messaging. And there's the deep, you know, articles about behavioral economics and psychology, which is, I mean, they're all the insurance kind of, yeah. Danielle is just an amazing, brilliant writer, and that's kind of the more kind of in-depth material. And then there's the microcopy and the product and how did the tone of voice of the bot itself, which really created a personality around. So about 30% of all claims are processed with a bot, right?
H
Host48:14
Yeah, no human involved. Okay, seconds, I'm on it. This is 30 seconds, I want to show this quickly just because maybe some folks don't understand what Lemonade does. It's different. When you pay us, we take a small flat fee, but the rest goes to covering your stuff. So if something happens, we pay super fast. That's what you get when you have bots instead of brokers and algorithms instead of paperwork. Best part, leftover money goes to nonprofits you care about. Seriously. That's Lemonade Insurance, powered by AI and driven by social good. You should probably show this, the second one, because that shows that, okay, it's really short, so it's worth it. Insurance companies have apps, other ones, psycho, does think, you know, the Train app in Israel. So this is actually when we started working on the bot, there were no bot apps out during the apps. The part that really sucks is when we're working on this product was that we were unlike any other company, we had the product ready after a few months and we couldn't launch because we didn't have license. And so we were sitting on this beautiful app and couldn't launch it. And we sat on it for about nine months. And so by the time we launched, it was the absolutely mostly used chatbot in the world.
S
Shai Wininger50:10
Absolutely.
H
Host50:12
What's the number one reason why Lemonade succeeds where traditional insurance companies fail?
S
Shai Wininger50:17
Well, first, they succeed. They make hundreds of billions, so we have a long way to go.
H
Host50:24
Let me ask it differently. How is a newcomer able to grow so quickly when you're, it's a market littered with incumbents who have all the money to spend in the world?
S
Shai Wininger50:45
There's almost an expectation from us, you know, people who are used to consuming digital products. We have Netflix, Spotify, you know, we have so many apps doing, you know, we spend so much time on our phone doing most of what we need to do during the day. And then at some point we hit the wall. We have to go to the bank, we have to fill out an IRS form. These are experiences that once you're getting used to, it's almost becoming the new norm where you have things at the tip of your fingertips and then you don't. That moment is a huge void and it's a huge opportunity because people have that momentum that they want to continue using a digital experience and they don't have it. They will go to the first one they'll get. And I think that, you know, many people said that, you know, trust is going to be a huge challenge for a new insurance company. I think that overcomes trust. I think, you know, people will find ways to explain to themselves why even though it's not an insurance company that hasn't been there for hundreds of years, it, you know, I don't have time for this, I'll just go and get a Lemonade policy and that's it. And that's what people do. And one of the interesting things we discovered is that people buy insurance, people buy Lemonade as an impulsive buy. This is like crazy, buy insurance as an impulsive buy. I've never heard of that before. So that's how, these are people who are now buying insurance for the first time. This is people buying insurance for the first time. Okay, we now, I mean, last time we checked, were more than a third of the, by the way, in New York is a huge market for us, first market we launched. So more than a third of the people who have renters insurance who bought it for the first time bought it through Lemonade. And so we're probably the fastest growing insurance company in the US right now.
H
Host52:45
The fastest growing insurance company in the US, yeah, amazing. Listen, I can't, we're out of time. I have so many more questions to ask you. I would like you if you can summarize any piece of advice, like a last thing, last word of advice you have for entrepreneurs who obviously, you know, not at this level of success with two major companies and their track record, but are very, very talented and are in the middle of that trajectory. If you could speak to yourself maybe a couple of years back, a few years back, what would you say?
S
Shai Wininger53:16
So I just start of consciousness and stop me, be aware of time and go for, you know, stop me, feel free. First thing, choose your partners well. Choose your partners well. Your friends are not your partners. Your partners most likely people who you have never met before. And that's a good thing. Don't find partners who do the same thing as you. If you are a coder and you have another coder, you have fun coding together, that's not your partner. You need a CEO, you need a marketing guy, you need a designer. And so double parking is not only an inefficient situation, it's a toxic situation. People start fighting when they have the same talents. So choosing the partner. Second thing, focus. Everybody says that. Very hard, very hard to do. Deciding what's going to be the story that this company is gonna tell. Starting with a story, starting with the narrative, starting with the marketing material and then working your way down from there. So you have your presentation, your Apple does that, they create the posters and the website design before they even put the first engineer to work. I think that makes a lot of sense. Clarity, getting the product out, figuring out what's the next thing I'm going to work on, what is the most impactful thing with the lowest complexity and the highest delightful impact that I can get to work on. Because, you know, in many cases with the MVP concept, where many cases company will just go full MVP and drive shitty products out there and be surprised that nobody's using them. I think that MVP is a very risky situation. We call it MWP, which is the Minimum Viable Product. So work on things, invest in the experience, even though behind the scenes it's all make, things manual, you know, nobody cares about the code, nobody cares about it. Software is a commodity. Design isn't. User experience isn't. Branding isn't. Tone of voice isn't. Sales isn't. And obviously leadership.
H
Host55:48
Wow, okay, that was, no, I'm gonna have to look at the recording and play it over again so I can write a summary. That was fantastic. I am very grateful that you came and you spoke with us. I want to say on behalf of everybody here, and I'm sorry I didn't have time to take questions, but the fact that you are doing what you do, the way you do it, and the fact that you're doing it here in Israel, which is so not obvious for two massive B2C companies, is inspiring beyond what you can probably appreciate, not only in this room but thousands of entrepreneurs who are watching what you do and realize, as someone else in the back, you can do a B2C company, you can build great, beautiful product out of Israel, and you are leading the way for us in this community. And we are very, very grateful for what you do and the fact that you're doing it here in Israel. Keep going, push on, and make us all proud. Thank you very much for coming. Thank you very much.