Having closely observed the evolution of work marketplaces for over a decade, platforms like Upwork and Fiverr have undoubtedly reshaped how we find freelance talent. While I admire the opportunities these platforms provide to both employers and freelancers, I also see gaps, particularly in the American landscape.
From my conversations with American service providers, two common sentiments emerge:
1. Many avoid these marketplaces, feeling the earnings don’t justify the time spent.
2. Others leverage these platforms to expand their client base but often miss out on fostering lasting relationships since interactions are bound to the platform.
Our research in this domain further underscores the need for some next generation platforms that take what consumers like about the existing freelance marketplaces, but go upstream and upscale. It is our belief that Operators, especially of fast growth companies, want to use a lot of third-party service providers, but only a little more than half use the existing work marketplaces to find them.
Earlier this month we asked our audience about their preferences and uses of work marketplaces and third-party service providers and here’s what the data told us.
•10%: All the time, at least once a month.
•10%: Maybe once a year
•15%: N/A - I don't know what these are
•15%: Once every couple months
•20%: A couple times a year
•30%: Never or hardly ever
•5%: 10-15
•10%: None
•15%: More than 15
•25%: 5-10
•45%: A couple
•5%: $5,000-$10,000
•15%: $3,000-$5,000
•20%: $1,000-$3,000
•25%: < $1,000
•35%: More than $10,000
•65% of professional services decisions come from Co-founders.
•At Tech Startups spending more than $10,000 a month on professional services, COOs and Directors are involved in decisions 80% of the time.
•55% of respondents use work marketplaces.
•85% of respondents work with between 2 - 15 service providers at a given time.
•55% of respondents spend more than $3,000 per month on professional services.
•50% of tech startups spend more than $10,000 per month on professional services.
So, here’s what we’re taking away from this data and what we’re going to do next.
First, we believe the data validates our use cases. We have a group of Operators who spend more than $10,000 per month working with anywhere between 5 - 15 service providers. 55% of respondents use work marketplaces, which is good but has a lot of room to grow.
Next, we aim to delve deeper into understanding the challenges and potential solutions via focus groups. These sessions will provide insights into users' strategies for connecting with providers and their responsiveness to our proposed solution. One pivotal question will be the frequency of scrambling exercises they undergo annually. We theorize that frequent utilization is a critical milestone in a journey towards high lifetime value (LTV). Our objective is to position our platform as a premier choice, especially during those urgent, unplanned moments.
In this evolving landscape, we remain committed to innovating, understanding, and delivering solutions that bridge existing gaps and fulfill unmet needs. Join us as we give entrepreneurs and growing operators a new way to build their business in this environment of runway extension. We’ll continue to share what we learn and highlight what we are doing to enhance our product and customer experience!