Micha Kaufman is the Founder and CEO of Fiverr (NYSE: FVRR). Operating in over 160 countries, Fiverr offers a platform to connect businesses with over 1 million freelancers.
HIR: For our readers unfamiliar with Fiverr, can you introduce the company and talk about your mission for changing how the world works together?
Kaufman: Fiverr’s mission ever since it started back in 2010 is to change the way people work together. We have created what today is, the world’s largest marketplace for digital services, connecting businesses of all sizes with a global freelance talent network. The novelty behind Fiverr’s unique approach is making the experience of buying a digital service as easy as shopping on Amazon. Fiverr has productized services and created a catalog with over 450 SKUs, making the task of getting something done using a freelancer as easy as browse, search and click to order—we call this our “service-as-a-product” model.
This e-commerce system allowed Fiverr to develop a proprietary digital service catalog, a sophisticated matching, quality and liquidity engine powered by years of transaction data, a highly efficient and scalable marketing infrastructure, and a global brand and community with millions of buyers and sellers. These allowed us to execute and grow with tremendous momentum in 2020 and expand our leadership position during a time when businesses and freelancers needed us the most in terms of digital transformation and income opportunities.
HIR: Since the beginning of the year, Fiverr’s market cap has grown over 700 percent to reach over 6.5 billion dollars. Can you speak to this growth and how Fiverr has responded to COVID-19?
Kaufman: Remote work has been at the core of our model and COVID-19 has been an accelerating factor in demonstrating the power and efficiency of remote work and delivered the experience to every business in the world. Fiverr has always been a fast-growing business and this year that rapid growth accelerated. Our results speak for themselves and in Q3 this year we delivered 88 percent revenue growth year on year. The ability to access the right remote talent was especially important for companies that needed to make the shift from offline to online. We also recently launched Fiverr Business, a new platform that helps teams within companies better manage and collaborate with freelancers.
At a time when the world is facing unprecedented challenges, we don’t take our responsibilities lightly. We strive to create opportunities for anyone in the world to build their business, brand and dreams, and to provide anyone with access to those opportunities through our marketplace.
One of the programs we launched recently is Fiverr Empower which partners with universities to help students with disabilities to get equal opportunities, build their professional careers, and establish financial independence.
HIR: Earlier, you spoke about the distinction between the “gig economy” and the “freelance economy.” What’s the difference between the two, and how does Fiverr fit into the picture?
Kaufman: While we often get brought into the gig economy conversation, we are on our own journey to define the skilled freelance economy. Unlike many traditional “gig economy” companies, freelancers on Fiverr need to be extremely skilled and creative to sell their service, and they do so on their own terms.
HIR: A critique of the freelance economy is that workers are prone to lower wages, longer hours, less routine, and increasingly blurred lines between home and work— each of which can cause burnout. Is this a fair characterization, and if so, how does Fiverr address and/or avoid this problem?
Kaufman: Freelancers on Fiverr get to define what they work on, where they work, when they work and how much they charge. We do not dictate any of these aspects and therefore their earning potential is not capped. Freelancers set their prices based on the value they place on their experience and time. For us and for people on our platform, it’s not a race to the bottom, but rather a race to the top—freelancers are only making more money year over year. Actually, in 2020 their income grew twice as fast as in prior years.
We found that freelancers who have been doing this for a while are much more in control of their work-life balance than those new to remote work.
We also built a number of features to help freelancers to manage their time effectively. We have an “out of office mode” that freelancers turn on whenever they go on vacation or want a break from their work. We also have “queue limits” that allow freelancers to limit the number of orders they get—this way they can ensure they are giving themselves the necessary time to complete their work.
Freelancers on Fiverr enjoy the freedom and flexibility that comes with “being their own boss” and we provide them with resources to help them.
HIR: Fiverr has freelancers from 160 countries, and you’ve spoken about geographic expansion as key to your growth strategy. What economic and cultural considerations are you taking into consideration as you think about expanding beyond English speaking areas?
Kaufman: We view international expansion as a massive opportunity. That means localizing the platform, not just translating it into different languages, but allowing people around the world to communicate in their native language, and transact in local currencies. We believe that by reducing these barriers to entry, we will see more customers from around the world coming to Fiverr and more professional and talented freelancers signing up on the platform.
In the wake of the pandemic, there has been a heightened sense of nationalism around the world. Some people want to work with other people from their own country, and with Fiverr now localized into seven different languages (including English) and tools that allow businesses to search for freelancers in their country, we are providing a more personalized and customized experience to make this possible.
HIR: Some of the most prevalent postings on Fiverr are by highly educated individuals such as accountants, writers, and computer programmers. How do you think about the difference between the “high-skill” freelance economy and the “low-skill” one?
Kaufman: Fiverr welcomes all freelancers to its platform, whether it’s those who have been working in an industry for years or someone that is testing out their skills in a certain field. That is why we have certain levels for freelancers on our site. For instance, someone who is a true industry expert in their field should apply to be a Fiverr Pro seller. Fiverr Pro is our tier of hand-vetted, verified talent. Fiverr employees personally verify each Pro talent to ensure exceptional and quality service.
On the other hand, we have plenty of resources on Fiverr, including our e-learning platform Learn, for people to learn new skills and improve on what they already have. If they then want to try their hand at selling those services on Fiverr, they’ll start out at Level 1, and as they continue to provide quality service to their buyers and deliver quality work, they will advance to higher levels.
HIR: Finally, in your opinion, what is most misunderstood about the modern-day freelance economy? Where is the freelance economy headed in a post-COVID world, and how does Fiverr plan to adapt?
Kaufman: One of the biggest misconceptions is that freelancing is temporary. A decade ago, freelancing was considered something people did in between jobs or as a way to gain qualifications to be hired for a full-time position. This is no longer the case. Freelancing today is a career choice and a lifestyle preference. This trend will only continue to grow post-COVID as it was already one of the fastest-growing sectors of the economy.
Because so much talent wants to engage in this new lifestyle, companies, businesses, and organizations will have to deal with the fact that this generation of skilled workers are not available full-time. This means businesses will need to figure out how to integrate freelancers into their workflows and how to augment their full-time team by adding flexible talent. This is not just a challenge but also a meaningful opportunity to rethink the organization's efficiency and agility. The global pandemic has underlined the need for financial efficiency. Adding flexible work into the mix allows organizations to think about how they manage their budgets, separating work into fixed expenses (full-time team) and variable expenses (freelancers). This is very powerful because it allows them to quickly scale their organization up or down as needed.