Andres Schabelman, VP of Expansion, Fiverr: "I use my own life as a model for how to build startups."
What's the secret ingredient of building a meaningful product that consumers will love, based on your experience?
Well, I think finding emotional resonance with your users is incredibly important and then, how you do that, is by building trust and appealing to the hearts and minds of users, rather than marginal benefits or marginal differences in pricing. For example, if you're just speaking a transactional language with your users- that's not good enough. We have to start talking about higher principles and appealing to higher principles like freedom and human connectivity. And I think listening is really important. A lot of times we have assumptions as leaders about what our users want and need, but actually, they're just telling us right then and there what they want and need, and all we have to do is listen.
We lack the ability to listen because nowadays people like to talk more than they like to listen, and that's a problem.
I think as humans, our journey of growing, is partially about figuring out what our blind spots are. A lot of times, especially young leaders, they're given a lot of external validation, and the process of questioning their worldview takes a lot more courage and a lot more humility than I think there often is in a tech space. Because we have to listen, and to be open to the fact, that we don't have all the answers, it takes an understanding, that these blind spots exist, and you have to listen to your users to find out where those blind spots are — an example from Airbnb. We were conditioned to look at what was considered moments of truth, and these were moments where our users felt uneasy or had a sense of fear.
So think about a host, that's coming back into their apartment after when the guest has left. There's always this feeling like was my place destroyed or ruined? The question for us was - how do you make it so that that user doesn't have that experience? Do you send updates to them during the guests' stay? Picture from the guest himself? Do you have the guests take a picture as they're leaving? Thinking about how to solve for these moments of truth and fear helped build that emotional resonance, that I think is really important for companies to grow into these massive and successful movements. Not just companies, but movements.
You mentioned Airbnb. You were one of the first thirty Airbnb employees. What would you say was the most valuable new knowledge lesson or skill that you acquired during your time with Airbnb that you carry on with you even today?
I think that the fact that things change so quickly at a high-growth company like that is one of the most valuable lessons that I learned. When we are in the new company and in a new situation, and people start staying tied to the reality that exists in a moment, I know that reality might change very quickly, and not only do I know that it will change, but it gives me the ability to dream beyond the state that a company currently is in.
I think that when founders buy into the reality that they currently have, they start building companies just for that moment, and in reality, the opportunity is limitless.
I give you an example of Fiverr. We are the largest freelance marketplace, we connect people who want projects done with freelancers who can do those projects online. If you're a company that is in the moment focused on purely user acquisition, you would realize that the cheapest, best and easiest way to acquire users, would be going after a logo design user. That user might not be the one that gives us the highest order value. It also might not necessarily play into our longer-term goals of going more upmarket. If you stay stuck in the loop of acquisition and acquiring the same users that are easy to acquire, then you're just building a logo design.
Yeah, you're not expanding as a company, you just stay stuck at one place.
Not only that. I'll give you an example from my own life. My mother published a children's book, she went on Fiverr, and she found an illustrator in Pakistan. Was it a seamless interaction? No, my mom wanted pictures of ducks in a New Orleans neighborhood, and initially, she got pictures of ducks in a Pakistani neighborhood. But they figured it out, and my mom is now a published author with a Pakistani illustrator.
And I have to imagine that Pakistani woman, for example, wouldn't have otherwise accessed the global economy, if it weren't for Fiverr.
We're talking about a truly transformational technology, and we're not just talking about a logo designer or just a person who's going to have an average sale price or an order value. We're not talking about the lifetime value of a customer; we're talking about transformational change within a society.
You're offering people options and possibilities that they otherwise wouldn't have access to…
Exactly, and if you as a company can't dream beyond the myopic view that you have, then it's not that you're going to die, it's just that someone who speaks the language of the heart and the mind, is going to come in and win that market. Understanding that where you are isn't where you're going to be is one of the values that I take with me from my time at Airbnb. Because I can spot aspects of a current situation and even small stories like that of my mother's, to understand that where we are, is a mere stepping stone for where we're going.
Let's say that I have a business and I'm going to focus only on one single market, but in order to keep growing my business, I know that I need to expand at one point. How do I know that I'm ready to expand my company? What should I look into to make sure to make the right call at the right time?
I think there are a lot of different reasons that make sense to expand. The first is that your users are asking for it and maybe they're even trying to hack it together. Enough users from a certain market who don't have the right payment processor but they're somehow hacking it together. They're asking a friend in another country to help them transact, then they're sending you the confirmation, and you're like, "Whoa, a bunch of French users are trying to use our product, but they can't. Let's build something for them! We must have some amount of emotional or resonant resonance within this community. For example, if at Airbnb a lot of people were putting their cars and motorcycles as listings rather than homes, you as a company would have to make a decision at that moment. Does it make sense for us to allow this and to figure out a way to create a business around it, given that we have such a demand for it? That is what happened in the case of both France and Germany for Airbnb. Many people had visited New York and experienced Airbnb, then went back to their home countries and wanted to set up listings. And we saw all this demand to set up supply in these markets.
Another reason why we decided to do international expansion at Airbnb was that we had a competitor. They were not as good as us, in fact, they were a copycat, and they were one of these like Samwer Rocket Internet companies called Wimdu. We felt that if we weren't showing who we were with our far superior product, then it would cost us a lot more in the future.
So we felt inclined to expand as a result of competition. I don't normally think that it's a great reason, but it was a reason.
I think for the sake of Estonian startups if you've hit your stride in terms of the marketing, you're business is still growing but the number of learnings that you're getting by onboarding an additional user in Estonia, it's not as impactful as it was once. Meaning that you're kind of going through the motions, you've got a pretty identifiable and consistent way of doing user acquisition, and you're not learning as much anymore about your users. I think at that point if you can be honest with yourself, and say, "Listen, if I keep going down this route, I'm going to have an OK business, but am I growing as a leader? Am I growing as a company? "I'm not talking about bottom-line growth, I'm talking about understanding, and then it's time to expand into a new market or a new segment.
I use my own life as a model for how to build startups, so when I feel like I'm stuck in a place when I'm too comfortable, then it's time for me to find a way to challenge the comfort that I've been sitting in. Because on the other side of comfort is learning and growth. If you've gotten too comfortable and you're just going through the motions, it's time to switch it up. And one way to do it is international expansion.
It's also, of course, important to look into all the data that you have, right? If you see that people inside your application or whatever product you have, are asking about the same kind of feature, and asking you to come to their market, then you have to act on this data, if it's valid.
Yeah, totally! I think, for example, one thing that we knew at Airbnb early on, was that we had emotional resonance within the gay community. We saw that in the data, and we were like, "Well, let's start doing acquisition at pride parades. Let's target specific organizations within this community". For example, when we expanded into New York - guess where we started? We started within a community that we already knew we had emotional resonance.
So, if you are an Estonian startup, and you find that your product resonates with single parents, then maybe the issue about expansion isn't about expanding specifically into a new market geographically. It's purely about expanding a community within your platform, within which you have emotional resonance, and you expand access to that.
Now let's assume that I have a startup idea, but I even haven't started yet. How should I choose the right market for my product to launch? How do you move forward from the idea? How should I approach this process of choosing to the right market to get up from the ground as fast as possible?
I am not a fan of doing user research, especially doing too much of it before you launch a product. I think launching in a very lean way to a wide variety of people, is a really valuable way to begin.
At the beginning of the company, I would start with a wide market and not make any assumptions about why are users using you or not, because 90% of the time there is a reason underneath the surface that you don't know yet. It's something you don't expect, and that's where the magic lies. It lies in the subtlety of what unites and excites your users. I'm a big believer in the deep psychological stuff, and certainly, there is a data aspect to it, and the data is what drives you to dig deeper. The data is not the answer, but it gives you a direction.
Listening is the key. If you're a startup founder, you really want to get funded, and funding from the value system of the investor requires you to give off an impression of having all the answers, and then you get funded. So, you get rewarded for the behavior of having all the answers, so you start to believe in your own bullshit. I think a really good leader is capable of playing both games - understanding what they have to give across in order to get money and to give confidence to an external stakeholder. Or you found an investor that is value-aligned and values the fact that you have the humility to question your own assumptions. But on the other hand, to stay firm in your commitment to finding the truth within your product or yourself.
I think that's a really hard thing to do when you have a strong value system which is dictated often by the people that you need to get money from. And it's not a knock on the value system. It's a matter of not confusing the values of the people that are giving you money, with the values which you need to build your business with. I think that's something that we don't often teach in tech.
Let's talk about connecting people and the world. At Fiverr, you're working on expanding the business so professionals around the world could connect with more businesses. And at Airbnb you were working on the international routes, so more homeowners around the world could connect with travelers and vice versa. So, if I'm not wrong, I'd say that you like to make the world a more connected place, but what's the essential element that you cannot miss when you're working towards the goal of connecting different people?
I think it's obvious- trust. I do think that building trust within a system is incredibly important, it is the thing that is required in order to connect people that need to come together and to transact in some way. What I think is often overlooked with the conversation of trust, is the role that the company plays, as a trust-building mechanism. Of course, I could give you an answer, which is like, "Let's have a profile picture of the user, and a description of the buyer that is quirky and personality-filled, and therefore, that will lead to trust. "I think that is important but, first and foremost, the company has to model the behavior they want to see on the platform.
For example, one of the core values that we had at Airbnb was, "Be a host! "It's not literally that every single person that works at Airbnb had to be a host, although it was highly encouraged. It was that the behavior of a host needed to be exemplified by an employee. Meaning- if I'm talking to you, am I welcoming you into a conversation? Do I make you feel comfortable? Am I going out of my way to ensure that you are included in a conversation? Am I exemplifying the values, that we know are required to build trust on the platform internally at every step of the way in our company?
I think that's often overlooked and is probably the primary mechanism that trust is built with on a platform.
The company has to think through and through, from the moment that you hire someone, to the way you do external and internal communication, are you exemplifying the values that you're asking your users to take on, in order to build trust.
I think that matters, because consistency and commitment to these values, is what in the end will allow for a product and in operations to develop those trust models that you want to see in the system.
How do you successfully launch and manage strategic operations in multiple different markets at the same time?
The short answer is that you have to hire really well. You have to hire on a set of values that isn't just about the ability to get the job done, it's also about the ability to understand cross-cultural differences, its ability to be able to have integrity.
The longer answer is that, first of all, the core central business has to have a pretty clear idea of who they are. What are the values that they stand for? So when we do go higher in these different markets, we're hiring for people that are aligned with our values, even if there are cultural differences.
Second of all, there has to be someone like me. Or an international operations team that understands how to build trust globally, because sometimes you are adding operations in a different market that exists in a centralized operation, and sometimes people in the business world can be a little bit territorial. They have to say, "Hey, central! We're all part of the same team, we're all working towards the same goal, and if there are times when you are uncomfortable how things are being done, then let's have a conversation about it. "And to the team in the local markets, "Look, listen. We've hired you to be entrepreneurial, but we've also hired you to be able to play nice. "
So these two worlds were working towards the same goal, but sometimes the perception of that isn't what it is. To the team on the ground you have to say, "Look, I know you want to run fast, I know you want to do things in a very startup way, but the reality is that you also have to include the people that have some knowledge, that may have even the data capability, that may have the experience. Include them in the conversation, even if it takes a little bit longer!". So you have to watch for these dynamics to arise, and facilitate communication, and to build trust across those different geographies
We talked about the secret ingredients for building a meaningful product. But in your opinion, what are the three most necessary skills that you have to have nowadays when you want to make a company or a product?
I don't really care about someone's experience when it comes to hiring them, and I've hired over 400 people and have interviewed over 5,000-4,000 people. I'm not even sure I'm able to define it, but I think I look for its soul and passion and soul. I think you can learn metrics, you can learn how to do a PowerPoint presentation if you really wanted to. When I ask a person, "What's something you're proud of yourself? "And if I get an answer, which is like, "Oh, I built a 400 person sales team." Are you really going to tell me that the story touched you on a soul level to the point? Are you're literally going to just read off something from your resume? It's as if someone doesn't have the capacity to go deep to talk to me on a soul level about things that actually matter in the world. But can you, and are you willing to go deep? Can you express from a deeper soul level? Frankly, that's who I wanna work with.
It's not that I don't believe that most people aren't good and decent with a good soul, it's just that some people aren't ready yet to ask themselves questions, and have that perspective. And I'm not asking for someone to look like me. You can be an engineer, and nerdy, and not be the most social person in the world, and still give me an answer about something that is deeper than the work that you do.
I think there are so many things that happen specifically internationally, where you have to be aware of people's emotions and your own feelings and be able to bring that to the surface. And like that, skills become secondary.
Speaking about humans, could you name some of the influencers in your life, who have led you to a position where you are today?
I think it's a fault of mine, in a way, but it's also been a huge advantage, but I really have felt like somewhat it's not that people can't inspire me, it's that I have an aversion to people on mass giving away their own power to other individuals, and so I'm like really sensitive to it.
For example, there's a person named Joe Dispenza, and he is a meditation leader, and 30% of what he teaches is really valuable to me, and 70%of it is problematic, dangerous and complicated. He has a bit of a guru status and cult following, and I reject that. So do I sit here, name someone like Joe Dispenza as one of my influencers, chances are he has influenced me, but I wouldn't want people to take my recommendation of Joe Dispenza at face value. Because there are complicated aspects of him, and anyone else that I would mention. So I like the question, but I think it's problematic because it's part of a wave in our society, where we give away power to individuals that are equally as imperfect as we are. And yet, we put them on a pedestal where we assume that they are perfect and I think that's really dangerous.
We're human, and we're imperfect, and I like the imperfection. I think the imperfection and the parts of us that that we're ashamed of, that's I think where our power and our magic lies. Turning towards people that give off an impression of perfection at all times, makes all of us run away from our shadow and the things that I think we need to bring more to the surface, in order for us to show up in the world of service to others.
What drives you the most as a professional, and what gets you started every day? What makes you roll your sleeves up and start doing what you?
I'm motivated by a vision of the world that is more connected, that blurs national lines, that allows people to see the commonality that exists in the world, that celebrates differences at the same time, that reminds people of our humanity, that makes people question the rules that have been set forth before them. I think that human connectivity and human interaction, in its most imperfect form, is the way in which we remind ourselves of our humanity, and our connectivity, and our collective. So I am excited to wake up and work on projects and with people who are building towards that future.
And the second that I feel that a company or an individual has gone down the path of only listening to the extra buck, that's the moment when I'm out. I'm no longer inspired.
There's an ego aspect to which is that I don't care just about the one-on-one interaction, I also care about impact, and I want to leave this world a better place than when we found it. And I feel like I've been given a lot of opportunity and privilege, and I want to return it. I don't know why I feel like I'm one of the luckiest humans on Earth, and I feel a responsibility to return that. And that motivates me to wake up and work on the projects that I work on.
Andres is one of the speakers of sTARTUp Day 2020. He will talk on the 30th of January about the lessons from Airbnb and Fiverr and how to scale companies (and yourself) with heart.