Micha Kaufman on the Future of Freelancing

The co-founder of Fiverr says the new gig economy is changing people’s lives

By SHARE
Micha Kaufman
Micha Kaufman

The idea for Fiverr, the website that lets you sell and buy services for $5, started with a phone conversation between co-founders Micha Kaufman and Shai Wininger, two entrepreneurs. They had been talking about how time-consuming it can be to hire freelancers and how there should be an easier way. That’s when they came up with the concept for their site, where everything, at least at first, costs $5, and purchases can be made with a few quick clicks.

Our story published today explains how to make money on Fiverr. We also spoke more in-depth with Kaufman about how he expects the freelance marketplace to grow in the coming years and how people, both buyers and sellers, can take advantage of that. His responses have been edited:

How did you get the idea for Fiverr?

Looking back at what really started it, it was the realization that we are at a special point in time. Two very significant phenomena are occurring. The first is that for the new generation, the post-Internet revolution has provided unlimited access to knowledge… [People] have the ability to gain knowledge and skills at a young age. Second, the Internet gives you unlimited access to other people. That made us realize: Today, everyone has a talent that someone else needs.

We thought, ‘How cool would it be to put these amazing talents together in one place?’ We call it the ‘gig economy’ – it’s changing the way people think about work, their career, their financial independence, and we noticed this is a huge opportunity… If you look at the freelancing market this year, it’s already above a billion dollars.

How is Fiverr different from other freelancing websites?

Freelancing online started probably eight or 10 years ago. In our view, the [existing] models are broken because they are outdated and full of friction. Everything from joining those marketplaces to posting and then negotiating the project, and managing it – it becomes a full-time job. In reality, a lot of the services that we all consume are not huge projects.

If I’m a small business and I need to put up a few Web pages, I don’t want to spend the next month doing that. I want to find talented people who can do the job for me and off-load the task. We created a very simple, intuitive, fun marketplace to do that. Buying shouldn’t take more than 20 or 30 seconds.

Why the focus on the $5 price point?

We thought price negotiation was a huge source of friction. It also triggers an environment that pushes service providers to come up with cheaper offers, so everything is pushed to the cheapest level. We said, ‘We don’t want to do that. We’ll put a single price point to put price negotiations out of the equation.’ Then [sellers] can do five to 10 gigs an hour, and it adds up to a nice income. [Advanced Fiverr sellers can now sell gigs for more than $5.]

Who are the buyers?

Everyone – people who need photo editing, greeting videos, small gifts. One of the greatest things about it is that you buy from a person, so everything you buy is personalized. It’s produced for you.

Who are your sellers?

We currently have 1.5 million active users and more that visit every month, and the talent comes from everywhere. It’s not just cheap labor. Over 65 percent of sellers come from the United States, the United Kingdom, Canada and Australia. For us, this is huge, because it means we’re creating jobs for Americans… We hear success stories of people who can buy homes and pay back student loans because of this. These stories prove the mode is sustainable.

We’re serving 200 countries worldwide, and we currently have nearly 2 million services listed, covering a range of 120 categories. They range from individual services, like personalized greeting cards, to anything you can think of for business – graphic design, Web development, video production, voice-overs. To give you a sense of the volume, a service is being purchased every six seconds. Now, most of the transactions are in the tens of dollars, so the minority are $5.

What do you think is motivating the sellers?

Sometimes it could be that they have a day job but they’re not making enough money for their dream vacation. For others, this could be a full-time job. It depends how much time and effort they want to put into it.

Fiverr is a community; people have the same desire to achieve financial independence on their own terms. When you join, you join a family of entrepreneurs. That’s why I get out of bed in the morning – Fiverr is changing people’s lives.

Twitter: @alphaconsumer