Why do Startup Succeed? - Fiverr


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Why do Startup Succeed? - Fiverr

  1. 1. Why do startups succeed? Startup Name: Fiverr
  2. 2. What is Fiverr? • Fiverr is an online marketplace that allows users to buy and sell gigs (tasks) for $5 – Has become one of the top 100 most popular sites in the U.S. and top 200 in the world – “Micro-entrepreneurs in more than 200 countries use Fiverr to monetize their skills” • A similar competitors is TaskRabbit – they are an online marketplace that allows users to outsource small jobs and tasks for a fee to others in their neighborhood
  3. 3. Fiverr.com vs. TaskRabbit.com Founded February 2010 September 2008 Funding based on Crunchbase.com $20 Million $37.7 Million Founded in Binyamina, Israel Boston, U.S. Alexa Ranking in U.S. as of 09-22-13 72 3,956 Statstool Daily Unique Visitors as of 09-22-13 40,893,81 27,485 Current State as of 09-22-13 Hiring employees Laying off employees
  4. 4. Implication of the comparison • Being first does not matter – E.g. Before there was Google there was Yahoo and many other search engines • How much money you have does not guarantee success – E.g. eBay started as a side hobby with practically no money • Location doesn’t matter – E.g. Fiverr founded in Israel is conquering the U.S. task/gig online marketplace
  5. 5. 5 Reasons for Fiverr Success 1. Simplicity – Easy to use, easy to understand what it is, $5 fixed fee, etc. 2. Solves a real need – People actually use the service 3. Worth sharing – An idea worth talking and sharing about with others 4. Benefits > Costs 5. Speed – Execution, Growth, Iterate, etc.
  6. 6. 1. Simplicity • The name Fiverr and slogan makes it easier to understand what they are about (similar idea to 99cent Only Store) – “The world’s largest marketplace for services, starting at $5” • Website functionality is intuitively easy to use – Takes less than 2 minutes to open an account • Fixed $5 service – For users it eliminates the difficult task of figuring out how much to price their service • Limited features/options – Less to think and decide about (Paradox of choice) makes decision making easier • Simple transactions – Accepts credit cards and Paypal (most already have this) – Takes less than 20 seconds to buy something
  7. 7. 2. Solves a Real Need • From day one, people actually used the service not just say I think I will use it – The idea came out of a real need by the co-founder • Everyone wants to make money this provides them with an opportunity to do so with little risk • For writers, artists, freelancers, this allows them to reach a global audience • Everyone thinks they can do something, this gives them that opportunity • If you are unemployed or under-employed this satisfy your need for other income
  8. 8. 3. Worth Sharing • One of Paypal’s ability to grow was it’s shareability factor – Paypal gave monetary incentives ($5) to Paypal users for every new user they referred • For Fiverr, it has social incentives – The opportunity to talk and share something new, unique, and interesting with others (whether it was sharing the idea of Fiverr or their own gigs offered) • Fiverr is relevant enough for media outlets to write, talk, and share to their audience • Worth sharing = power of word of mouth
  9. 9. 4. Benefits > Cost • Benefits – Easy to use, fun factor, risk only $5, doesn't require a lot of time commitment to try out, interesting user ideas, opportunity to make money and offer my services/ideas, can get work/tasks done for $5, etc. • Costs – What if the site is not legit (seems legitimate so risk factor is very low) – What if the user’s work sucks (it’s only costing me $5, a small amount of money I can afford to lose)
  10. 10. 5. Speed • The speed in which they made the idea real – Instead of thinking of the idea or writing a business plan they created a site and prototyped • The speed in which they were able to get users – Fast user acceptance is a great indication you have something useful/valuable  translates to a successful startup • The speed in which they were able to iterate/adapt to users needs – How fast can you mold your idea to fit how users actually use the product  improves usefulness, satisfaction, and frequency • The speed in popularity – Since they were known first, others that followed were viewed as cheap imitators regardless of whether they were the first with the idea or not
  11. 11. How do you know when your startup reached success? • When investors are salivating to invest in your startup and you don’t need them anymore • When you are able to easily get bank loans with favorable interest and terms • Profits ≠ Success – Instagram generated $0 profits when they were bought out by Facebook for $1 Billion
  12. 12. Conclusion Fiverr = eBay (service) (products)