Should Fiverr prioritize increasing the number of gig categories to attract more sellers or focus on improving existing popular categories for better buyer satisfaction?

Introduction

The trade-off we're examining today is whether Fiverr should prioritize increasing the number of gig categories to attract more sellers or focus on improving existing popular categories for better buyer satisfaction. This scenario touches on the core of Fiverr's marketplace dynamics and growth strategy. I'll analyze this trade-off by considering the impact on key stakeholders, evaluating potential outcomes, and proposing a data-driven approach to make an informed decision.

Step 1

Clarifying Questions (3 minutes)

• Context: I'm thinking about Fiverr's current market position. Could you share any recent changes in market share or competitive landscape that might be driving this consideration?

Why it matters: Helps understand external pressures influencing the decision Expected answer: Increased competition from niche platforms Impact on approach: Would emphasize differentiation strategy in new or improved categories

• Business Context: Based on Fiverr's business model, I assume transaction fees are a primary revenue source. Is there a specific revenue growth target we're aiming for with this initiative?

Why it matters: Aligns solution with financial objectives Expected answer: Yes, targeting 25% YoY growth Impact on approach: Would prioritize options with higher short-term revenue potential

• User Impact: I'm curious about our user acquisition and retention trends. Are we seeing any significant differences between buyer and seller churn rates?

Why it matters: Identifies which side of the marketplace needs more attention Expected answer: Higher seller churn in saturated categories Impact on approach: Might lean towards new categories to retain sellers

• Technical: Considering our platform architecture, how complex would it be to add new gig categories versus enhancing existing ones?

Why it matters: Assesses feasibility and resource requirements Expected answer: New categories require more backend work Impact on approach: Could favor improving existing categories if resources are constrained

• Timeline: Is there a specific timeframe we're working with for implementing this change?

Why it matters: Influences the scope and ambition of the solution Expected answer: Aiming for implementation within next quarter Impact on approach: Would focus on quick wins and iterative improvements