It was 2009 and the global Great Recession was wreaking havoc on the job market when Micha Kaufman and Shai Wininger conceived the idea for Fiverr. The free agent lifestyle had long been hailed as the future of work, and platforms to enable freelancing such as oDesk and Elance had already been around for years. But Kaufman says their idea was “out of the box and very disruptive.”
It was to flip the conventional approach to worker-contractor deals. Kaufman and Wininger rejected the “reverse-auction,” whereby sellers try to underbid each others’ prices to win a contract, and the buyer who manages the bidding process often gets what he pays for: the lowest quality for the lowest cost. That process involves “too much friction,” Kaufman says.
Instead, they “wanted to make this demand for talent come together in a marketplace that is going to eliminate frictions tied to freelancing.” In other words, Kaufman and Wininger set out to build a task outsourcing platform that would simplify the arrangement for the buyer, and enable quality providers to get paid their worth in the freelance gig economy.
Today, three and a half years since launch, Kaufman, who is the company’s CEO, claims it’s working: Fiverr boasts over 2 million active buyers and sellers in 200 countries, and 3 million services offered across 120 categories.
Through Fiverr you can buy custom-made birthday gifts, personalized greeting cards, drawings of your home, animations of your family members, logos and letterhead designs, website management services, editorial and social media content, and foreign language translations or your writing. You can pay someone to pick the perfect beer for you, photograph your message written on her lips in sequins, interpret your dreams, or make a prank call in Hindi. You can pay a Polynesian ukulele player $5 to upload a YouTube video himself singing Happy Birthday on a Cook Islands beach to the person of your choice.
Kaufman says 4,000 new services are exchanged per day and a new order comes in every 6 seconds. Fiverr, which takes a percentage of each successful transaction, employs 90 people in New York and Tel Aviv, with support staff in Amsterdam, Chicago, Miami, and San Francisco.
More importantly, Fiverr freelancers—65 percent reside in the U.S., Canada, the U.K., and Australia—are “working on things they’re passionate about” and making money. “We see people buying houses and cars and paying back student loans while still studying by working on Fiverr,” Kaufman says.
There’s little to lose, he suggests. “We designed Fiverr as a marketplace where the seller takes about 5 minutes to create a post and it takes 20-30 seconds to buy something,” Kaufman says. “You come in, you see the profile and reputation of the seller through reviews from buyers who bought something. You get to see samples of the work they delivered to other customers.”
The site’s name is a holdover from its launch days when every service was priced at $5. “A single price-point triggers higher quality,” Kaufman explains, because “when sellers don’t compete on price they only compete on quality.” Now sellers can charge up to $500 for a service, though first-timers start out offering services at $5 to get orders, show they can deliver, and achieve ratings.
Kaufman says the freelancing market this year is over $1 billion, and believes “it’s going to be a multibillion dollar market. Some claim that 10 years from now 40 percent of the US workforce will be freelance.” He compares Fiverr to an eBay for services: some sellers will offer a service just once to make a few bucks, others, like the Polynesian ukulele player, will make a business out of it.