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Marketplace products take a lot of time and care to tweak before they can really be profitable. It's (relatively) easy to become profitable if you're bucking le

Marketplace products take a lot of time and care to tweak before they can really be profitable. It's (relatively) easy to become profitable if you're bucking legal boundaries like Uber is, but Fiverr doesn't have any of those advantages. The company providing the marketplace has to add enough value to both sides of the market to justify its existence as opposed to potential customers just using traditional methods of finding each other. So they have to burn capital to learn those lessons. Trying out models takes time, and time is expensive. They were able to get a bunch of users using their brilliant pitch, but they weren't able to make it profitable. It doesn't make sense to give up on the company yet, as they still have a huge user base that they can test out new product strategies on. The investors are betting $60M that they'll be able to find their way. I see no reason to get cynical about it.

notahacker 11y ago
Isn't the bigger difference with Uber that it's a service that many people need multiple times a week and everybody needs sometimes, and the average transaction value is a fair bit higher? Sure, Uber obtains an advantage from flaunts more laws than even the most aggressive copyright/TOS-violating marketer advertising themselves on Fiverr, but even law-abiding fully-licensed taxi firms have tended to be profitable. There are possibly more lucrative areas of the market for Fiverr to explore, but Amazon is an unusually savvy and price-competitive 800b gorilla in the Mechanical Turk space, and I'm not sure how helpful the Fiverr brand is in the Upwork space. They already own their own space, it just isn't necessarily as big as a dubious claim like "the gig economy workforce expected to hit 43 percent of the total workforce by 2020" might suggest. If they're doing 1m transactions per month (>$1m revenue per month) as claimed in the article I'd have thought the reliable route to profitability lay with trimming expenditure rather than doubling down...
ThomPete 11y ago
Fiverrs advantage is that their operation is fairly simple without a lot of moving parts. I can understand a company like uber needing capital but a marketplace isn't that complex to create or run.

notahacker 11y ago

Isn't the bigger difference with Uber that it's a service that many people need multiple times a week and everybody needs sometimes, and the average transaction value is a fair bit higher? Sure, Uber obtains an advantage from flaunts more laws than even the most aggressive copyright/TOS-violating marketer advertising themselves on Fiverr, but even law-abiding fully-licensed taxi firms have tended to be profitable. There are possibly more lucrative areas of the market for Fiverr to explore, but Amazon is an unusually savvy and price-competitive 800b gorilla in the Mechanical Turk space, and I'm not sure how helpful the Fiverr brand is in the Upwork space. They already own their own space, it just isn't necessarily as big as a dubious claim like "the gig economy workforce expected to hit 43 percent of the total workforce by 2020" might suggest. If they're doing 1m transactions per month (>$1m revenue per month) as claimed in the article I'd have thought the reliable route to profitability lay with trimming expenditure rather than doubling down...

ThomPete 11y ago

Fiverrs advantage is that their operation is fairly simple without a lot of moving parts. I can understand a company like uber needing capital but a marketplace isn't that complex to create or run.