Brains Behind 'Micro Jobs' Sensation Fiverr Have Amazon, eBay in Their Sights

You can buy services for as little as $5 on the Fiverr website, but cofounder Micha Kaufman is thinking big.

Ayala Tsoref
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Fiverr cofounders Micha Kaufman (left) and Shai Wininger.
Fiverr cofounders Micha Kaufman (left) and Shai Wininger.Credit: Tomer Neuberg
Ayala Tsoref

Last month, I decided to make a new business card and searched for some quotations. The smallest I found was for 150 shekels ($38) and the largest 400 shekels ($100). Then I turned to the website set up by Israelis Micha Kaufman and Shai Wininger.

The result – a business card design for $5 – really surprised me. A service that could have cost me several hundreds of shekels worked out at $8, including tip, for a talented British designer.

Established five years ago, Fiverr is a marketing arena for freelancers who offer a variety of services for $5 (or multiples thereof). For only five bucks, you can, among other things, find various types of graphic design (logos, presentations), video production and animation, Web design, programming, copywriting, search engine optimization, and content translation in a range of languages.

This field has received the name “micro jobs” – websites based on the potentially “long tail” of hundreds of millions of consumers and small businesses worldwide, each willing to pay a few dollars for a specific job.

The online marketplace for services is far smaller than the market for products, which is dominated by giants such as China’s Alibaba, eBay, Amazon and other U.S. companies.

$5 too much? Try Fourerr

By comparison, the online services market is at the beginning of the road, alongside private players such as TaskRabbit, a small-job outsourcing site, and others. However, the large companies also have a foothold in this market: Amazon has a crowdsourcing marketplace called Mechanical Turk; eBay has areas for physical service providers such as plumbers and technicians; and there are also services that can be performed from afar, like those offered by Fiverr. Imitations have sprouted in the United States and Europe – including Fourerr, which offers services in multiples of $4.

Fiverr’s Kaufman says the target is to reach the scale of sites like Amazon and eBay, and makes no apologies for that ambition.

“For the first time in history, we have brought the e-commerce experience to the services market,” Kaufman says. “We have turned service into a product. We are giving talented people a way to turn their talent into a tradeable product. We are the eBay of services – the largest arena for freelancers on the Web.”

The Fiverr website is built like a catalog, where you can choose the service you are interested in purchasing. The site includes over 150 service categories, and has so far registered over 3.5 million transactions between freelancers and consumers, in more than 190 countries.

Fiverr raised $30 million from Series C funding last August.

“I’m here to build a company worth more than a billion dollars,” says Kaufman. “I’ve been saying that for a long time, but now I can say we’re very close – it will happen within the next three years.

“The market for services on the Web is at exactly the same point as eBay’s market was before its big breakthrough. When the field of trade broke on the Internet, eBay broke through with it – what happened to eBay will happen to Fiverr,” he predicts.

Fiverr takes a 20 percent commission on every transaction via its website, and its income was estimated at some $15 million last year. Kaufman refuses to reveal data about the company’s revenues or to discuss the figures. He thinks Fiverr can break $1 billion because of the expanding freelance market in the United States.

What about the traditional industries?

“The freelancers’ market in the United States alone is worth $180 billion annually – 30% of the American workforce,” he states. “It is estimated that within five years this market will grow to $280 billion and employ over 40% of the American workforce, but only 0.5% of this work currently takes place on the Web. The market we are operating in will grow fortyfold in the next five years. The most exciting companies right now are Uber and Airbnb,” Kaufman says, referring to the taxi app and room-letting startup. “They represent activity that was 100% offline that has become completely online.”

Indeed, Fiverr and similar companies are directly affecting many traditional industries and diverting budgets away from them – for example, the advertising industry and the fields of design, Web design and search engine optimization. “They don’t have anything to worry about,” says Kaufman. “Even if five big companies like Fiverr emerge, offline service trade will always remain alongside the online trade – there will still be a demand for a business card design for 400 shekels.

“Thanks to technology,” he adds, “we can take a graphic artist from some far-flung town in the United States, whose clientele was previously limited to those situated close by, and now he can provide a service for clients in Sydney, Tel Aviv and Berlin.”

But this graphic artist doesn’t have any social rights because of Fiverr and others, which enhance the model of freelance work at the expense of direct employment. Is this the workplace you aspire to?

“The people who work via Fiverr realize there’s no such thing as employment security – they’ve sobered up. In the United States, there are pension and private insurance solutions for the self-employed, and there’s also a freelancers’ union that represents them. There’s no doubt that this is a significant and important question, but like in many other cases, technology is advancing and bringing great changes to the market, and lawmakers have to keep abreast of the pace and adapt to these changes.

“We are not a technology company. We’re developing a new culture, and many people will have to get used to this culture. People all over the world are already thinking differently about work. People want the freedom to work from wherever and whenever they choose.”

One of these freelancers is Rei Samat, who lives in China. His official occupation is foreign currency dealer, but on Fiverr he offers his services as a Mandarin-English translator. He takes $5 for 300 words.

”I heard about Fiverr three years ago from an article I read online,” he says. “So I decided to try it, to see if it works. I was surprised to find that it works excellently. People from all over the world order translations from me.” Samat says he earns $1,200 a month on average, on top of the regular wage from his day job.

Venezuela-born Simon Levine now lives in Florida and has a decade’s worth of experience as copywriter for leading U.S. ad agencies. Now he offers his copywriting services via Fiverr: article headlines (five headlines for $5), copy for campaigns and radio broadcasts, etc.

“A good friend told me he’s making lots of money on Fiverr. For a long time I didn’t believe him. I thought, ‘A deal for five bucks? What a joke!’ Now I’m a great supporter of this method,” says Levine. “Last month, I earned $1,476 from over 150 jobs ordered from all over the world. The most-bought service of mine is to help businesspeople think up a name for their new products. I help startups think of good names for their products. I plan to turn my Fiverr work into my primary work position.”

“There are graphic artists and website builders who have earned more than $200,000 since they joined Fiverr,” claims Kaufman, “and there are those for whom Fiverr is their major source of income.”

What kind of workplace is Fiverr itself? A typical startup where everyone works until midnight?

“At 6:30-6:45 P.M., most of the building empties. A year and a half ago, I announced to everyone that they have the right to chose on which day of the week they go home at 3 P.M. The fact that I shortened the working week by half a day had no effect on efficiency. I never understood the companies that enslave their workers until the middle of the night. We’re not interested in making people slaves until they die.”

The writer is a digital consultant for companies and brands.

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