Fiverr, a Microtask Marketplace, Raises $60M | Hacker News Reader

Fiverr, a Microtask Marketplace, Raises $60M

venturebeat.com

39 pointsjsnathan11 comments

While I wish the team all the best - this site always has 501 gateway errors. Their service portal or website is terrible and constantly keeps crashing. While their supply and demand is ok and you get what you pay for.

Still amazed at the crappy technology that backs up this business and the money being raised by a team that has no interest on customer experience.

If they aren't currently profitable why continue to sink more money into this? Isn't this exactly the kind of service that should be able to grow organically?

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.

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...

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.

Often, startups try not to be profitable on purpose. They drive all profits into growth. It's better to use $1 earned into getting more customers than to have it sit in the bank or give it back to investors as a distribution.

Of course, this mentality depends on the investors mindset and goals but many investors into new businesses feel this way. Fast growth today, profits/buyout tomorrow.

You're more likely to see a focus on profits from founder owned businesses because they tend to not have the deep pockets that allow profits to come second to growth.

This strategy is also only distinguishable from the "there's always a bigger fool" strategy in retrospect.

Have zero profit to drive growth, growth brings investors, rinse and repeat. Just make sure you're not the last one opening up your checkbook...

They're spending it all on spamming my inbox.

I get an email daily from them about great jobs, free $5, etc etc.

Am sure you could unsubscribe from those emails if you wanted to though, right? It's not like they're raising the money specifically to spam people.

How much of that $60M is going to end up sunk into legal battles of "employee" vs. "contractor"?

I doubt it applies, if it did any rent a coder site and even craiglist and forums with marketplace would be susceptible to it.

Uber has that problem because they have a partnership with their drivers that is more extensive than just what is basically a "for hire" classifieds listing on fiverr.

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