Author Archives: Andrew Karpie



ProcureCon Contingent Staffing Conference: An Analyst’s Takeaways

Spend Matters attended the ProcureCon Contingent Staffing Conference this week in a very peaceful Minneapolis. The two days were fully packed with presentations, panel discussions, roundtables, conversations with contingent workforce practitioners and solution providers. The conference scale was small enough to support substantial networking and conversations, but still a very robust conference. Based on the published attendee list, there were just shy of 100 buy-side practitioners in attendance from roughly 80 companies (most Fortune 1000 companies and/or well-known brands from a range of industry verticals).

In this article, I’m going to articulate my own key takeaways from the presentations and panels that I found informative and valuable. Once caveat: My analyst orientation/focus is around technology and innovation — and I’m also a bit of a “datavore,” so there’s some subjective filtering going on here. But hopefully my selective treatment will bring into focus some key areas of change that are in play for contingent workforce procurement practitioners at this time.

Upwork announces new ‘agency experience’ at its Work Without Limits summit

Upwork, the global freelancer marketplace and enterprise solution for sourcing and engaging online freelancers and small-scale service providers (SSPs), announced key enhancements to what it calls its “agency experience.” The announcement, made at the company’s third annual Work Without Limits Executive Summit, describes the new agency capabilities as addressing “the fragmented agency landscape as more companies move away from agency-of-record relationships.”

The Contingent Workforce and Services (CW/S) Insider’s Hot List: July 2019

Hot List brings you a summer reading list that includes updates on Spend Matters' SolutionMap rankings of companies in the Contingent Workforce/Services space, insight into Japan's freelancer market by exploring an SAP Fieldglass deal, and a recap of Fiverr's IPO ups-and downs, as well as a raft of other suggested reading.

What I Learned About Coupa Contingent Workforce (CCW) at Coupa Inspire

While at the corporate event Coupa Inspire recently, keeping a watchful eye on Coupa’s progress with Coupa Contingent Workforce (CCW) unification, I found myself thinking about something. It was just over two years ago that Coupa dipped its toe into the services procurement solution space with the limited release of Services Maestro. Among other things, that narrow solution component for sourcing and managing SOW projects of low-medium complexity and scale left few doubts that Coupa was serious about providing its customers with lifecycle source-to-pay capabilities for the procurement of contingent workforce/services (or CW/S, as Spend Matters abbreviates it).

I found it a bit amusing, in retrospect, that in a Spend Matters brief at the time (Coupa Unveils Services Maestro: Will the Student Become a Master of Services Procurement and Contingent Workforce Spend?) we somewhat playfully lectured Coupa about the complex nature of the space: “If Coupa decides to use the current iteration of Services Maestro as a jumping off point to enable procurement in this journey,” we sternly warned, “it will need to question, at the very core, how it opts to deploy its product development and product management resources to address the challenge.” And so it did, in September 2018, opting to buy (vs. make) a well-regarded VMS solution to “unify” into Coupa’s business spend management (BSM) platform.

So as I meandered in and out of the recent CCW sessions, demos, conversations with product development folks and, above all, clients and prospects, it became clear to me that Coupa was now looking like a maestro after all or, at least, certainly a very motivated and able fast learner. What my experience at Inspire brought home for me was that, in a period of just two years, not only had Coupa gone from nibbling on the edge of the CW/S solution space to actually being a major player in it. Coupa was also progressing steadily in realizing its vision of full contingent workforce and services capabilities woven into its unified BSM solution fabric.

This PRO brief will separate what I learned in terms of CCW progress and what I learned in terms of CCW challenges, and it will close with a brief analyst summary-commentary.

Post-IPO Perspective on Fiverr — What Lies Ahead?

About two weeks ago, Fiverr — the online freelancer marketplace — priced its IPO at $21 per share. The first full day of trading opened at $26, and the share price had risen to $44 before closing out the day at $39.90 per share. That day, the media outlet Marketwatch brandished the headline “Fiverr breaks from gig-economy IPO curse, CEO says market ‘is like e-commerce 20 years ago.’ ”

Heady times, indeed.

As for the gig-economy IPO curse (a reference to the subpar IPOs of Lyft and Uber), so far so good. This week, Fiverr was priced at about $28 per share, two dollars more than the opening price of $26 and seven dollars above the original IPO price of $21.

As for the second assertion that Fiverr is addressing a market that is “like e-commerce 20 years ago,” we’ll have to wait and see (until 20 years from now, to be precise). But it is an interesting contention, and not the first time it has been discussed. About seven years ago, when I started the Online Staffing & Human Cloud/Cloud Labor LinkedIn Group, I asked: “Can we have an iTunes or Amazon of work and labor services?” At this point though, while we’re still waiting to see, Fiverr may be the closest thing like it today.

In Spend Matters’ earlier PRO series, “Fiverr, Online Services Marketplace, Is Going Public: What You Need to Know (Part 1 and Part 2), we looked at Fiverr in terms of its rise as a marketplace business, its unique go-to-market approach, to-date financials, and we offered a high-level comparison of Fiverr and the two other publicly traded freelancer marketplace companies.

In this PRO brief, an addendum to the previous series, we focus not so much on Fiverr’s specifics today. Rather, we ask the question “Where to from here?” We offer a situation analysis and strategy assessment based on our own industry/market perspective, our own research of Fiverr (which began several years ago). We wrap it all up with some comments addressed to services procurement practitioners.

Fiverr IPO launches at $21, and share price nearly doubles

procurement

Fiverr (NYSE: FVRR), the online marketplace for digital creative services, priced its 5.3 million IPO shares Wednesday night at $21 per, raising about $111 million in new funding. On Thursday morning, shares began trading at $26, but when the market closed in the afternoon, Fiverr’s share price had risen to $39.96 (nearly doubling). Based on the closing price per share and an estimated 31 million shares outstanding, Fiverr’s market cap would be about $1.2 billion, or 16 times revenue.

We will provide further analytic post-IPO coverage soon. In the meantime, check out our recent PRO series: Fiverr, the Online Services Marketplace, Is Going Public: What You Need to Know — Part 1 and Part 2.

Fiverr, Online Services Marketplace, Is Going Public: What You Need to Know (Part 2)

Coworks

This two-part Spend Matters PRO series examines the online services platform provider Fiverr, which recently announced that it is going public (presumptively this month). The company — which has brought a fresh, distinct approach to the business market for freelancer-driven, platform-based work/services — will become the next business in the category to IPO after Freelancer.com (ASX: FLN) in 2013 and Upwork (NASDAQ: UPWK) in 2018.

Becoming a public company can be accompanied by opportunities for business validation, market awareness, access to capital, etc., but it brings new responsibilities, transparency and challenges (especially in a market that — despite getting kicked off in the mid-2000s — is still immature and evolving). Do these IPOs mark the start of a new stage of market development when businesses of all sizes may begin to accommodate and scale their new workforce models? If so, what do procurement practitioners and senior business executives know about Fiverr and the market that it and other work/services platforms operate in?

In Part 1, we examined Fiverr as an online work/services platform business (background, go-to-market strategy, solution offering and financial picture).

In Part 2, we will look at Fiverr in a broader industry context and provide a high-level comparison to Freelancer.com and Upwork. We also offer insights for procurement practitioners and executive leadership in larger organizations who are trying to get a handle on the potential supply channel of online/remote, freelancer-based work/services platforms.

Fiverr, the Online Services Marketplace, Is Going Public: What You Need to Know (Part 1)

low commodity prices

Spend Matters recently reported that Fiverr, the Tel Aviv-based online marketplace for digital creative services launched in 2010, had filed its Form F-1 paperwork to go public with the U.S. Securities and Exchange Commission. Fiverr is the third online work/services platform to IPO, preceded by Upwork in October 2018 (NASDAQ: UPWK) and Freelancer.com in October 2013 (ASX: FLN). Among other things, the Fiverr IPO represents a new opportunity for analysts to get significant insight into another online freelancer marketplace’s financials and other business characteristics, including business strategy, business model and go-to-market approach.

Years ago, when Fiverr entered the market, some may have dismissed it as a low-end “5-dollar store” of online freelancers. But there was more than met the eye. In fact, Fiverr had begun executing its differentiated strategy of creating a unique marketplace based on its service-as-a-product model. According to Fiverr, it had “set out to design a digital marketplace that is built with a comprehensive SKU-like services catalog and an efficient search, find and order process that mirrors a typical e-commerce transaction.”

In this two-part PRO series, we will further discuss Fiverr and its SaaP model, including why it may align to procurement practitioner mindsets and e-procurement solution models. In Part 1, relying partly on Fiverr’s F-1, we will focus on Fiverr as a company and as a unique online freelancer marketplace platform. In Part 2, we will consider the broader context of evolving population of other online freelancer marketplaces, with special emphasis on the public companies, Upwork and Freelancer.

Beeline vs. Coupa Contingent Workforce: Temp Staffing/VMS Head-to-Head Comparison

The market for vendor management system (VMS) solutions has undergone two major structural shifts over the last few years.

At the end of 2016, Beeline shrank the total pool of available vendors when it merged with IQNavigator, creating the largest independent, pure play contingent workforce and services procurement technology provider by a significant margin. The two VMS solutions — now a single entity under the Beeline brand — are being converged and replatformed into a unified offering (BeelineOne) while developing innovative approaches to external workforce sourcing and management requirements. Facilitating this effort is the private equity firm New Mountain Capital, which acquired Beeline in July 2018 and has been working to strengthen Beeline’s competitive positioning, especially against the VMS market’s largest offering, SAP Fieldglass.

But in late 2018, a new competitive threat emerged, one that could turn the current “Big 2” VMS provider dynamic back into a “Big 3.” This of course was Coupa’s acquisition of DCR Workforce, which catapulted the source-to-pay suite provider (and arch competitor with SAP Ariba) into the top tiers of contingent workforce and services procurement technology capability. Coupa has branded the current and eventually integrated and replatformed capabilities as Coupa Contingent Workforce (CCW). While Coupa previously did provide baseline support for contracted-SOW services through its Services Maestro module, the acquisition allows Coupa to expand its offering and provide the same range and types of capabilities that would generally be found in leading VMS solutions. Even as the full integration of the acquired DCR capabilities will take time, CCW already poses a competitive threat to the likes of SAP Fieldglass (recently consolidated with SAP Ariba and SAP Concur in the newly formed SAP Intelligent Spend Group) — and, of course, Beeline.

The rapid evolution of the “new” Beeline and Coupa’s surprise leap into the upper tiers of the VMS market raises the question: How do the two vendors stack up in a head-to-head bout? After all, competitive matchups between the two are already becoming a more frequent event, and both help set the average functional benchmark score in Spend Matters’ Q4 2018 Temp Staffing SolutionMap. (The Q4 results are labeled Coupa but look specifically at the DCR solution pre-acquisition because the integrated Coupa-DCR solution is still pending and has not been reviewed for SolutionMap.)

Join us in this unfiltered SolutionMap results analysis from our Q4 2018 dataset as we look at the two top ranked contingent workforce/VMS providers, along with the commentary of the Spend Matters analyst team. Bear in mind, the scores/ratings in this analysis are now approximately 9 months old, and some of the score differentials may have changed — however, we have no reason to believe significantly.

These “Head-to-Head” reports share the insights of each quarterly SolutionMap report for SolutionMap Insider subscribers, providing unique comparative cuts of SolutionMap benchmark data along with the trademark quips that Spend Matters was better known for in its early years. So buckle your seat belt, prepare for some real data and expect a few sparks to fly as we pit Beeline and Coupa against each other in the vendor management system evaluation ring.

Not yet an Insider member? Here’s a preview: In certain temp staffing categories — which include Supplier Management, Candidate Evaluation/Selection/Submissions, Change Order Management, Engagement Management, On/Off-boarding, Rate Management, Requisition Creation and Approvals, Time and Expense and Worker Compliance — Beeline convincingly comes out on top. In others, it’s darn close, with Coupa coming out on top, or the two achieving a statistical tie. And in at least one area, Beeline delivers an unquestionably superior score.

Overall, the results suggest that the right solution will vary based on different organizational requirements. There’s no debate that VMS/temp staffing selection processes will reward procurement organizations that tailor provider selection to their specific needs.

The Contingent Workforce and Services (CW/S) Insider’s Hot List: June 2019

Welcome to the June 2019 edition of Spend Matters Insider’s Hot List, a monthly look at the contingent workforce and services (CW/S) space that’s available to PLUS and PRO subscribers. For those new to the Hot List, each edition covers the prior month’s important or interesting technology and innovation developments in the CW/S space. Uber, Deliveroo, Doordash and Fiverr are among the companies making news.

Businesses, Just Turn It On. Go with My Favorite Persona — Turn-Key

Andrew Karpie

When considering a technology solution, businesses trying to maximize their objective functions face trade-offs among different factors, including costs, capability, speed and risk.

I’ve been thinking about this as the analysts at Spend Matters consider their favorite SolutionMap persona: Nimble, Deep, Turn-Key, Configurator, CIO Friendly as well as Optimizer for sourcing providers and Global for CWS vendors. The first two personal essays on buying personas went Deep and with Configurator.

I’m going with Turn-Key, and here’s why.

Upwork’s Share Price Slumps, But Online Staffing Platform Soldiers On (Part 2)

independent workers

In Part 1 of this two-part Spend Matters PRO series, we discussed what might have been behind Upwork’s share price decline following its report of Q1 2019 financial results, and we came to focus on potential investor concern about growth deceleration over the past several quarters. We could not say that this was what led to the share price decline, but that was our main finding from the 10-K filing.

Upwork’s actual revenue (to be distinguished from gross services value, or GSV) represents the transactional and service fees that (business) buyers and (work/service) sellers are charged when they use the platform (these can take a variety of forms). Upwork has stated that the majority of its total revenue is comprised of the service fees paid by freelancers as a percentage of the total amount that supply-side freelancers charge clients for their freelance services and, to a lesser extent, payment processing and administration fees paid by buy-side clients.

Growing revenue therefore depends on the volume/value of work/services transactions on the platform (i.e., platform liquidity) and pricing (i.e., the structuring and setting of transactional fees and the fees for Upwork services). Upwork may be able to influence revenue by market segmentation and tuning of offers, quality of service (broadly speaking), structuring and setting of fees (given degrees of price elasticity), and lastly, execution of sales, marketing and support services.

In Part 2 of the series, we will review the handful of updates pertaining to growth initiatives that Upwork provided in its financial results report and earnings call. We will also offer our own perspective on Upwork’s current position as a high profile player in the changing contingent workforce space.