Matchmakers

Fiverr And The ‘Other’ Gig Economy

 

What will a person do to earn five dollars?

Something of a random question, maybe even a slightly silly-sounding one – but for Fiverr founders Shai Wininger and Micha Kaufman, it was the query that, in 2010, launched a marketplace for skilled freelancer workers and the buyers who wanted their services.

It was a very deliberate question, intended to remove any barriers to getting a buyer and a seller to do business online. After all, the founders surmised, even if the buyer didn’t get a product as advertised, all they were out was $5.00, Fiverr’s global head of community, Brent Messenger told Karen Webster in this week’s Matchmaker Is In.

“At first, there were all kinds of things, and some of them were kind of silly – people who offered to sing ‘Happy Birthday’ for five dollars,” Messenger recounted. “But we also started seeing other, more skilled stuff, people who would do 100 lines of data entry, people who were offering to do voice-overs or quick graphic designs – all for $5.00, to get themselves and their brands established online.”

It quickly became apparent to the founders that their platform had much bigger potential than just enabling cheap jobs to get done – what they had was a unique meeting ground for people to offer up all kinds of professional skills on demand.

“Today, there are still $5.00 jobs on Fiverr, but that is far from the core of the business. We see people selling skills for $10,000 on the platform,” Messenger said, adding that over the last seven years, Fiverr has evolved its focus to make it easy for millions of highly skilled gig workers to make their services available to buyers.

Today, the Fiverr marketplace lists millions of gigs, across more than 100 categories and from over 200 nations worldwide. Messenger said that it is the largest marketplace on the planet for finding skilled freelance work.

And while Fiverr is far from the only gig economy marketplace around – or even the only marketplace for skilled workers – they do, Messenger told Webster, bring a unique outlook to the purchase and sale of skill services by treating them as products.

Productizing Services

A normal freelance process, Messenger explained, often entails a lot of back and forth between a seller and a buyer. There might some negotiation for pricing and payment, perhaps samples that have to be submitted and a review and vetting process. That all adds up to a lot of lost time and productivity for both sides of a transaction, especially when both sides are essentially looking for a fairly straightforward service – immediately.

One of the secrets to Fiverr’s success, Messenger said, is taking a page out of Amazon’s book, and productizing the services that its skilled gig workers want the world to know about. That means that enabling online payment is a critical part of the value proposition for buyers and sellers.

Messenger said that Fiverr’s model is that of a true marketplace, complete with a visual catalogue with reviews and ratings. If a seller wants to list a service, they simply add it to the catalogue, scope out the job and indicate how much they wish to charge for it. A buyer can then decide they want that particular service, add it to their cart and check out, just as if they were buying a product.

No need for a seller to generate an invoice, no need for a buyer to have to initiate a PO. Fiverr’s eCommerce-based catalogue approach eliminates multiple steps and gets to a done deal in just a matter of a few clicks. At that point, the checkout process happens just like it would for any other eCommerce product. Fiverr makes its money by charging a small fee to both sides of the platform, and a transaction fee to the seller at checkout.

Who Uses Fiverr To Sell?

Given the breadth and scope of the marketplace, there is no one good description for a Fiverr seller, since they represent a very wide range of workers, skill types and aspirations.

Messenger describes its marketplace sellers as the “entrepreneurial doers” – the small business owners and freelancers, one-person businesses and non-employer businesses. He said that in the U.S., there are 26 million of those types of establishments, and Fiverr is creating a community of support for all of them.

Some of those workers, he noted, bring in over a million dollars a year in revenue by being on the platform – or close to it. Others are using it as a place to generate their side-hustle, using skills they already have to bring in extra income.

And sometimes, he said, it is much more than that: “Some people use the platform to pursue a dream of some kind, where they have a fairly rare skill and are looking more for affirmation than money.”

Messenger told Webster about one woman on the platform whose skill was making mosaics and then photographing them. When one buyer questioned the authenticity of the product, the maker actually posted a video of her entire end-to-end process.

“And what we learned is that for this artist, the platform is really about expressing this thing they love to do – and finding out if anyone else has any interest.”

Whatever the motivation, Fiverr offers a way for all of these various types of skilled players to test-drive a skill with monetization potential, without investing a lot of time or treasure beating the bushes to find leads.
 
Who Users Fiverr To Buy?

The majority of the buyers on Fiverr today, noted Messenger, are still small businesses looking for a specific service set. But, that, he said, is starting to change. Messenger said that they have now adapted the product to accommodate larger businesses who learn about the platform through employees and want a corporate account to enable access to Fiverr hires across departments.

Demand inside the enterprise is less often motivated by a need to manage headcount, although that sometimes happens, but is mostly about making their employees more productive. It’s the employee who’s stuck working on a spreadsheet and needs a couple hours of expert help. Rather than spend eight hours of their own time trying to master a skill they only use once in a blue moon, they can hire an expert for $50 for an hour and get the job done, done right and done immediately.

As for what people buy?

A large range of things, Messenger noted – though company logos seem to be a perennial favorite among business of all sides, along with web development, social media and a variety of multimedia services.

The Evolving Skilled Gig Worker Marketplace

By 2020, some estimates indicate that about 40 percent of the population will be employed within the gig economy – a number borne out by the PYMNTS Gig Economy Index, which reported 37 percent of those surveyed were involved in some form of gig work.

That’s great news for a firm like Fiverr – but Messenger noted that the Fiverr teams views that with a bit of an asterisk.

“We are not set up from a legal perspective in this country for that,” Messenger told Webster, particularly when it regards healthcare.

Because however ready the economy and the workers are for a more efficient wave of freelancers, the healthcare system is organized to distribute benefits through full-time employment. Fiverr doesn’t want to be a full-time employer and doesn’t want to be in the business of provisioning healthcare, but it feels a responsibility to the freelancers on its platform to be part of a conversation about fixing a system that isn’t set up for their work preferences.

“Being an entrepreneur is about risk, and knowing you may fall,” Messenger said, adding that Fiverr would like to make the distance they fall a little shorter and safer. Education, workforce, the importance of health insurance, 401K accounts and HSAs are all important areas – and ones in which we want to become the voice of the entrepreneur to help them get the things they need.”

Messenger said that, to he and his colleagues at Fiverr, the gig economy – and the skilled gig economy, in particular – looks a lot like what the eCommerce opportunity looked like in 1996: small, important and with the potential for explosive growth.

Today, Messenger said what we are seeing is just the tip of the iceberg, particularly since 97 percent of the freelance market is happening offline. And yet the Fiverr marketplace continues to add 6,000 new gigs per day over hundreds of sub-categories.

“It is truly massive,” Messenger told Webster. “There is a transaction on Fiverr every 3.75 seconds.”

Because, as Fiverr’s continuing growth demonstrates, Messenger said, the economy is ready to evolve to a new, task-based space for a lot of workers – and it’s in everyone’s interest to make that evolution as smooth as possible.

 

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