> How can anyone create a network of 30 million service providers at this stage in the game?
There are still people who doubt Ebay will see any network effects. After all, once you buy something from somebody you would never pay the ebay fees again once you know you can trust them!
For posters who aren't au fait with Internet businesses, network effects means each additional user (buyer or seller) joining the market place makes the whole market more valuable, causing a snowball as more users are attracted by the added value of all those buyers and sellers.
The barriers to entry are developing the software to run a marketplace, and attracting buyers and sellers. The lock-in is based on reputation. If you have 4.9 stars on Freelancer, starting in a new marketplace where you have zero stars is difficult.
WOTIF was an online travel agent. They spent money on marketing and got a level of brand recognition, but there were other online travel agents with similar offerings, plus offline operators that could bring their scale to bear online.
FLN competitors are Upwork and Fiverr. Neither are profitable, as far as I am aware. Then there is daylight, then there are the also rans (including Toptal, who focus on very few freelancers, but only list highly talented sellers).
Upwork is strong in the USA, but weak elsewhere. They are a legitimate competitor, and claim $200m+ revenue on a $7m loss. I don't know if the financials are directly comparable, as I believe a huge chunk of their revenue is legacy income from a finance/payroll outsourcing service they offered under the Odesk brand. Useful revenue, but not contributing to their growth in the freelance market.
Fiverr is a bit of a mess, IMO, as they have lost their main value proposition (little jobs done for $5) as they now try to be everything to everybody. Their main advantage is their sellers pre-package their services, so you know what you are getting. This is OK for low value stuff like a website logo, but doesn't really translate to bigger projects.
Either Upwork or Fiverr could leverage their plans to list on the stock market to be a buyer/merger candidate for FLN when they have access to more equity capital.
https://www.timesofisrael.com/fiverr-said-to-be-seeking-ipo-at-1-billion-valuation/
https://techcrunch.com/2018/09/06/upwork-ipo/
The first to move on FLN would substantially increase their marketplace size - cementing them as category leader. Fiverr would be complementary, combining with FLN projects and contests to cover all aspects of freelance engagement.
Upwork be a match with their USA focus compared to FLN's global positioning.
Interesting times. I don't see how the current low valuation on FLN will be sustained.
And add in Escrow for some cherry on top!
(20min delay)