When I bought the stock, it was not cheap. It had already had a significant run-up close to 500% or more since March. So yeah, I was super late to the party. But I don’t think this party is ending anytime soon.
I think that Fiverr has a long way to run.
In other words, this party is just getting started.
I’m invested in Fiverr
I bought the stock when the price was in the $140s, going long in early October, and the position was a pretty decent size for me. It has had a good ride up so far. And I just recently added to the position yesterday.
As of this morning, it’s up close to 18 to 20%. That’s solid for less than a month of holding a stock.
The prospects of how the stock will perform are looking very bright for Fiverr and anyone who holds a position.
Here’s why I think that.
Macro forces are favorable for Fiverr
We are increasingly in a digital world. People use websites more and more, not just to market their websites but to transact on them, communicate with their customers, create communities, etc. requiring a developer or designer or copywriter.
In the US alone, there are over 30 million small businesses. That’s not counting any of the other countries in the world. And that’s not including the larger businesses.
Also, people are starting businesses, amid the pandemic and the recession it caused, at a faster rate in more than a decade.
And most of those businesses need someone to help them set up a website or a digital presence. And they won’t want to pay a company like mine or an agency to get that done for them—no. They will go to a small gig worker, a freelancer.
They’ll go to Fiverr, or someplace like it.
Fiverr’s a marketplace, which is a moat
They provide a marketplace for individuals and business owners to find freelancers to help them with their website or creative-services-needs that won’t break the bank. And that’s not the only thing that sets Fiverr apart.
Their prices are often otherworldly low. You can find a developer who is willing to put together a package that would build you a website for near to nothing, some for less than $100. It sounds absurd, but it’s true. There are all kinds of options for a scrappy small business owner.
Fiverr is a marketplace that isn’t just for the US, no. It’s for the world. Anyone who starts a business or has an established one can find a person to build an e-commerce website, produce a video, or design designs, create copywriting, etc.
And freelancers can find customers on Fiverr’s platform and work as they wish. They log into Fiverr from anywhere in the world, and they can be on their couch in their underwear or in a business suit at a high-rise office. They can be in a remote country or a first-world nation. It doesn’t matter.
Fiverr also removes friction, which makes it a bigger moat
Fiverr is a two-way marketplace that connects freelancers with individuals and businesses, focusing on creating frictionless transactions. And that’s a magical place to be. This marketplace connects two different parties around a synergistic area. For Fiverr, that’s creative work. It essentially connects buyers with sellers and vice versa so they can do business and create something together. Fiverr makes it as easy as possible by removing friction on both sides.
Building a two-way marketplace is hard enough, but making it super frictionless is another. And it can make all of the difference.
Look at Zoom. Zoom entered a space where huge incumbent companies were playing. You know, like Google and Microsoft. And many people and investors thought Zoom was crazy and didn’t think it could succeed. But they did. What set them apart was this. They were obsessed with making video conferencing easy to use. They focused on the user experience above all else.
And because of that laser focus on the customer experience, they won.
That’s what Fiverr has and is continuing to do.
That’s why I believe they will continue to win.
I’m betting on it.
Disclosure: None of this is investment advice or the like. It’s just one investor sharing his learnings and stories. Consult a professional advisor if you want help in investing.