Freelancing is largely a choice these days

April 28, 2021 by No Comments

What does the ideal labor market look like? “The utopia would be: everyone is a freelancer,” says Peggy de Lange. With a smile – of course she is not really advocating a complete abolition of permanent employment. “But the fact that companies are increasingly moving to the model of a core with permanent employees and a freelance network around it is ideal for us.”

By ‘us’, De Lange means Fiverr, an online marketplace for freelancers. The American-Israeli company, founded in 2010, offers self-employed entrepreneurs the opportunity to offer themselves for jobs at a price that they set themselves. For each contract won, they pay Fiverr 20 percent of the proceeds.

Internationalizing the freelance market, that’s what Fiverr does. Self-employed people on the platform no longer only compete with fellow citizens or compatriots, but with the whole world. A shopkeeper in Papendrecht who wants a new logo can award the contract to a designer from Purmerend – but also to a freelancer in Pakistan, who can probably get by on a much lower rate. For that reason, Fiverr and competing platforms like Upwork have been criticized for contributing to the race to the bottom in the freelance economy.

De Lange (49) has been working at Fiverr since 2012. She is ultimately responsible for international growth, outside the American home market. And growing does Fiverr. Revenue in the first quarter doubled year on year, after revenue for 2020 had already increased by 77 percent to $189 million (EUR 156 million). Although there has been no net profit so far, Fiverr is currently worth about $6 billion on the New York Stock Exchange — more than five times as much as it was at its IPO in 2019.

In part, Fiverr owes its rapid growth over the past year to the corona crisis. The cafe on the corner suddenly had to have a site with a reservation system, the shopkeeper further down started a webshop. „Companies that are not digital at all mindset had,” says De Lange, “were forced to develop them.” Freelancers often offered a solution. The company would not say how many self-employed people are active on Fiverr. It is clear that there were 3.8 million clients at the end of March, 1.3 million more than a year earlier.

The corona crisis is once over. So is Fiverr’s rapid growth a thing of the past?

“We expect to continue on the path we have started. The whole work process is changing. You used to hear when someone went freelancing: oh, how pathetic, did you lose your job? Today that is really a choice. Full-time freelancers especially want to be independent.”

Freelancing is not a choice for everyone. There is hardly any permanent work in some fields.

“I think it is a choice for the vast majority of freelancers. This also has to do with the millennial attitude, people no longer want to work for the same company for twenty years. They want more freedom, maybe three jobs with three clients.

“Once people have tasted success as a freelancer, they don’t want anything else. And if you’re good, we’ll make sure the audience comes to you. You don’t have to worry about acquisition with us, you don’t have to ring after invoices. And for companies, with many permanent employees you are vulnerable, so if you notice that you can also be successful with a more flexible organization, I can’t imagine you going back.”

Some of the freelancers will have such a millennial attitude. But there remains a group of self-employed people who would rather take up permanent employment, for example because they cannot buy a house at the moment.

“I think we need to look more at the system around it. That it should be possible for freelancers to get a mortgage. I’ve been a freelancer myself for years, so I’ve had to deal with the same problems. I hope that will change.”

Resume writers, tattoo designers, session musicians, speech writers, market researchers – they can all come to Fiverr. But not all of them will get rich from the assignments there. For example, copywriters often do not charge more than 3 cents per word. A Dutch copywriter who works for such a rate has to fill up about 125 A4 pages per month to get to the minimum wage.

Is it important to you that freelancers can always charge fair prices on Fiverr?

“The freelancer can decide for himself what he asks. And clients are willing to pay for quality. Some freelancers have only been active for six months and are already earning an above-average income.”

Success stories, aren’t those the exceptions?

“We recently ran a small sample that showed that half of the freelancers on Fiverr offer their services full-time with us. That says enough. Being a full-time freelancer with us shows that you can make a living through our platform.”

But Fiverr makes rate differences between freelancers very insightful. That’s pushing prices down, right?

„We have nothing to do with that race to the bottom to make. Companies that are doing well and have a little more money to spend are also willing to spend more. They work with freelancers who charge higher rates. It’s about quality. Freelancers do not compete with us on the basis of price.”

According to Dutch freelancers and clients active on Fiverr, price is the most important factor. In poor countries you will always find freelancers with lower rates.

“We don’t get those signals so much. A company’s average spend on Fiverr was $177 a year ago, which is $216 today. And this is of course no different in the offline world: if three parties compete for an assignment, there is also competition. But it’s good that these freelancers mention this. I would say: go to our forum and see how other freelancers have solved this.”

So you say: people who can’t charge the desired rates, can’t get by, can they do something about it themselves?

“If you want to become active on Fiverr, I would first look: who is successful and why? How do you advertise yourself? A little research, going to the forum and talking to other freelancers – I think you’re off to a really good start.”

But a freelancer who now charges 10 euros and raises the price to 20 euros, won’t the next assignment just miss out?

“One company may think: I think that’s too much money. The other may be willing to pay for it. It also depends a bit on how freelancers market themselves. Enough of them have little or no experience. They need to learn how to best describe their service. There is still a lot to gain.”

You believe that Fiverr has not grown for a while. Is that because freelancers are so eager to freelance, or because the business community wants to expand its flexible shell?

“A combination of both, I think. Companies are finding out that there is an enormous amount of talent online. They can literally find someone with us in three minutes for a project, which can be completed 24 hours later. On the other hand, there is the convenience of the platform for freelancers. And the more companies use freelance services, the more work there is for everyone.”