Business strategy

Fiverr CEO Micha Kaufman reveals the 3-step framework to come up with a $1 billion idea

- March 12, 2024 3 MIN READ
Micha Kaufman
Fiverr cofounder Micha Kaufman

The Startup Playbook Podcast, hosted by Rohit Bhargava, is a weekly must-listen for anyone who wants to know more about how founders and investors think and execute. As the 2024 season gets underway, we’ve asked Bhargava to share the highlights from his conversations. To know more and dig deeper click on this link. He kicks off with Fiverr cofounder Micha Kaufman on how to make a unicorn

Whenever we think about innovative and new ideas, we often think that it spontaneously happens as a light bulb moment in the shower or over a random conversation at a bbq.

But is there a way to develop a framework to create a $1 billion idea?

This is one of the topics I discussed with Micha Kaufman, Co-founder & CEO of Fiverr for Episode 171 of The Startup Playbook Podcast.

Most readers of this article would be familiar with Fiverr, a global marketplace for freelancers that employs hundreds of people, serving millions of freelancers and businesses around the world.

Fiverr listed on the New York Stock Exchange in June 2019 and has a market cap over $1B.

However, back in 2010, Micha, who was in his late 30s at the time, had recently made the difficult decision to shut down his last company. 

“Sometimes when you close a company that you believed in and this was a passion project for you, you go through the 5 stages of grief…it’s very important to do a retrospect” said Micha Kaufman.

Rohit Bhargava

Startup Playbook Podcast host Rohit Bhargava

Going through this process he wanted to learn lessons for his next company and started pulling together a think tank, a group of “internet entrepreneur friends” to discuss what’s next for software and innovation.

“Innovation comes in waves and we were trying to work out what’s the next wave to ride” said Micha Kaufman

The think tank would have these conversations where they would brainstorm ideas and topics in a group setting and Micha would then follow these up with individual one-on-ones with each of these members.

These think tanks created very high level conversations, topics and ideas and through this process and by analysing historic data on waves of company creation, Micha developed a simple framework to assess ideas and identify the right opportunity for him to focus on.


The simple 3 step framework to identify $1 billion startups ideas is:

1. Growing Market

As alluring as it is to grow your own category, that can come with its own set of challenges around  educating and building awareness for the problem you are trying to address.

Micha’s suggestion is that instead of creating your own category, look for a market that is already quite large, but has the potential to be much much bigger.

2. Friction & inefficiency

The second step in this framework is to identify opportunities that have a high degree of friction and inefficiency in the way potential customers currently solve these problems

3. Solve with software

The final step of the framework is to identify if you can solve these issues around friction and inefficiency with software, and if so, whether it would grow the market.

This framework seems simple, but it applies to some of the most successful companies in the world

E-commerce was already a large market, but at the time had significant friction in shopping and fulfillment, something that Amazon solved through depth of inventory and focused customer experience on fulfillment.

Uber has replaced the need to hail or call a dispatcher to order a taxi.

Airbnb has done it for hospitality and so on.

And now Fiverr has grown from an idea in 2010 to a global company that helps to connect and remove the friction between businesses looking for services and millions of talented freelancers around the world looking for work.

  • This story was taken from Episode 171 of The Startup Playbook Podcast, which is hosted by Rohit Bhargava. The full interview is available on iTunes, Spotify and all major podcast channels. All links are available here.