Upwork, 99designs & Horizontal vs Vertical Marketplaces | In Practise

Upwork, 99designs & Horizontal vs Vertical Marketplaces

Former Chief Operations Officer at 99designs

Learning outcomes

  • 99design’s positioning vs Upwork and Fiverr
  • Fundamentals of horizontal vs vertical internet marketplaces
  • How 99design’s focused on the customer experience
  • Evolution of CAC for internet marketplaces
  • Challenges for Upwork moving into the enterprise market
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Executive Bio

Pam Webber

Former Chief Operations Officer at 99designs

Pam has over 20 years of internet marketplace experience and is the Former COO and CMO of 99designs, a vertical competitor to Upwork and Fiverr. She started her career in Investment Banking before moving to eBay to run marketing for apparel and jewelry. Pam then joined PayPal as Director of Marketing for the US before building her own ecommerce home decor business. Pam joined 99designs in 2014 and enjoyed 6 years running marketing and ops. She is now EVP at JustAnswer, a leading question expert marketplace. Read more

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Disclaimer: This interview is for informational purposes only and should not be relied upon as a basis for investment decisions. In Practise is an independent publisher and all opinions expressed by guests are solely their own opinions and do not reflect the opinion of In Practise.

Pam, can you provide a short introduction to your background, please?

I am a consumer internet professional. I’ve spent most of my career on the marketing and business side of consumer internet companies, specifically focused on marketplaces. I’ve spent 20 years in that space and have worked for companies such as eBay, PayPal, 99designs and, currently, I work at an expert marketplace called JustAnswer.

What was your role and responsibility at 99designs?

I was with the company for six years; I spent three years as chief marketing officer and took on other operational responsibilities for my last two or three years there, as chief operating officer. That was a combination of, not just marketing, but analytics, finance and customer support.

When you first joined in 2014, what was 99 designs’ core business model?

99designs was fairly well-known among entrepreneurs – a lot of Silicon Valley entrepreneurs – as a place to get the logo for your venture. The business model had evolved over the years. The company was founded in 2007 and it evolved based on a design ping pong that was happening on a website that the founders were managing. There were these designers who would refine designs. If someone put something out there, another designer would say, I think it needs a little bit of this, so there was this crowdsourcing going on, in the design space. A business person or a customer would go on the site and say, I would actually pay money for that. Can I buy that from you? So the business model was born.

In 2014, 99designs had grown and honed that business model so that you, as a customer, could come to the website, have access to designers from all over the world, with all different types of skill sets, who would, essentially, refine designs, to help you come up with the best concept for your venture.

Was that the contest format or was it pre-contest?

Essentially, that was what we call the contest format. In the early days, there wasn’t really a name for it. As we came to the market and packaged it and thought about how to present it to customers, we did pitch it as a contest. You are a customer, you come in and designers will compete for your business. The way that worked was that designers would present concepts to you and you would look across them and say, I think these five are my favorite. You, as a customer, would tease it out, work a little bit longer with the designer and make a decision on which one was the one that you liked best.

If I’m In Practise, I go to 99designs, say that I want a blueish logo, send it out to the designers on the site and they will pitch their vision of what the logo could be and I could then choose one and work further with the designer, to hash it out in more detail?

Exactly. One of the reasons why this works – especially in the design space – is because for many people in business, unless you are in the creative field, you don’t spend a lot of time in design. You don’t know what to ask for; you don’t even know the verbiage or the terminology. One of the really great things about a place like 99designs is that you don’t have to pick a designer that you are going to work with, that you have to commit to and you are not sure how that working relationship is going to go, because you don’t have a lot of experience in those types of professional relationships.

99designs gives you the opportunity to work with different designers and see how they do their work, how you work with them, such that you can find the best match for you.

99designs seemed to have evolved into more of a true marketplace, where I can go on and find a designer and contact them?

Exactly. Back in 2014, one of the things that was very valuable is that you worked with a designer, you picked the design you liked which meant, essentially, this is the designer that I think I work best with, as well. As a business, you probably have other design needs. Great, you’ve got your logo but you may need web materials, email templates and so on. 99designs helps introduce you to that designer and you can then have a long-standing relationship with them. There are many, many companies and customers who would use 99designs in that fashion, as a way to meet the designer that is best for the business.

Later on, we did pull that part of the business out and put it more front and center to the customer because we found that there were some customers that did appreciate and need that contest model but then there were others that were fairly savvy and had worked with designers in the past. They were looking for a specific skill set and were confident in assessing portfolios. That projects product gave customers the opportunity to go that route, without having to go to the contest product that they felt wasn’t best for their needs.

How do you think about 99designs’ positioning in the online freelance marketplace?

As I mentioned in my intro, I’ve spent years involved in various marketplace businesses; everything from broader horizontal marketplaces, like the eBays of the world, to more vertical marketplaces, like 99designs. That is the distinction. There are definitely opportunities for marketplaces to thrive in verticals and, generally, you find those opportunities where it is challenging for supply and demand to connect and where a technology solution enables that to happen more freely; that is where the magic happens.

That was the case with 99designs. In the design vertical, there are a lot of designers out there. It is challenging for them to meet and find clients. There are a lot of customers out there that want design and don’t know how to get it. They don’t know if they should go downtown to the local designer. They might have a friend that says, I know someone who knows someone who is a designer. There was just a lot of efficiency in that matching of supply and demand. Again, the design vertical was ripe enough that it had those elements where demand and supply was really challenging; there were no efficient solutions to make that a great match. 99designs came in and was able to make a dent in that market because those inefficiencies existed.

Within the freelance marketplace space, how do you compare the likes of Fiverr and Upwork, that are more horizontal marketplaces, versus a 99designs?

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Upwork, 99designs & Horizontal vs Vertical Marketplaces

June 19, 2021

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