It’s not an easy thing defining the right metrics in a two-sided marketplace business like ours. A marketplace business brings buyers and sellers together, but each marketplace has it’s own spin. It’s own unique data to sort out.
At Crew, we’ve been working at the best way to look at our data since we started. Here’s what we’ve determined as a few of our most important metrics to determine the health of our business.
1. The Fill Rate
In the last year, 31.2% of projects that were vetted and approved on Crew have made a payment in the Crew system. This is also know as our Fill Rate. Over the last few months, we’ve been focused on increasing this Fill Rate. From February to April, our Fill Rate has increased to an average of 36% (51.7% in February, 33.5% in March, 23% in April). These percentages look like they’re decreasing, but keep in mind that it can take up to 8 weeks from the time a project is posted on Crew to the time that it becomes filled, so March and April’s data is still incomplete.
Here’s a deeper look at the breakdown of projects from the past few months:
February 2014 Metrics:
– Total Approved Projects: $449k
– Total Booked Work: $232k
– Fill Rate: 51.7%
– Projects in negotiation (still reviewing professionals or delayed start date): $24,000
March 2014 Metrics:
– Total Approved Projects: $425k
– Total Booked Work: $143k
– Fill Rate: 33.5%
– Projects in negotiation (still reviewing professionals or delayed start date): $52,000
April 2014 Metrics:
– Total Approved Projects: $665k
– Total Booked Work: $152k
– Fill Rate: 22.9%
– Projects in negotiation (still reviewing professionals or delayed start date): $355,100
Although the Fill Rate may seem lower in March and April, there’s still over $400,000 worth of projects in negotiation. Based on the time it takes for a project to start, these projects in negotiation will likely impact the Fill Rate for each of these months.
2. Average project size
In the last year, the average project size on Crew has been about $7k USD. Over the past couple of months, we’ve been honing our vetting processes and project estimation tools to make sure project budgets are respectable. As a result, the average project size has increased to $8,233 since February 2014.
$7,117 in February
$8,342 in March
$9,420 in April
3. Member activity
– There are currently 503 designers and developers accepted to work on projects in Crew.
– Of these 503 members, 280 are active (applied to at least 1 project in the last 30 days).
– Over the past two months (March & April 2014), Crew members have made over $250,000 USD.
Of the 280 active members on Crew:
– 91 have completed at least one project
-11 have booked over 20k USD in work
– 3 have booked over 75k USD in work
It’s important to note that these metrics only include completed projects, and not projects that are still ongoing. If we were to include ongoing projects as well, these numbers would be much higher since there are more projects ongoing in Crew than completed at the moment.
4. Booked Work
Booked Work refers to the dollar amount of projects that make a payment in Crew. Calculating this number can be a bit complicated because on Crew, project owners can break their project up into parts. Because of this, we don’t receive the full dollar amount of Booked Work all at once. The amount that we receive is usually spread over a couple of weeks/months, depending on the size of the project.
We calculate Crew’s monthly revenue by taking the total amount that we collected from project payments that month and we subtract what was paid out to our professionals. This doesn’t always paint the full picture of the health of our marketplace though, since some of the project payments come from parts of projects from previous months.
While calculating revenue this way does provide the accurate net amount that we earned in the month, I refer to Crew’s monthly Booked Work to get a clearer picture of how we’re progressing.
Here’s a breakdown of the Booked Work on Crew over the past 3 months:
– Total Booked Work: $232k
– Total Project Payments paid by project owners: $106k
– Total amount paid out to professionals: $77k
– Total revenue: $29k
– In negotiation: $24k
– Total Booked Work: $143k
– Total Project Payments paid by project owners: $176k
– Total Amount paid out to professionals: $145k
– Total revenue: $31k
– In negotiation: $52k
– Total Booked Work: $152k
– Total Project Payments deposited this month: $114k
– Total Amount paid out to professionals: $103k
– Total revenue: $11k
– In negotiation: $355k
If you take a look at the trend, March’s revenue was significantly higher than April’s (even though April’s Booked Work will probably end up being much higher than March). This is because a large portion of March’s revenue came from projects posted in February. With the decrease in Booked Work in March, there were less payments that trickled into April.
The number of overall projects accepted on Crew is important but it’s not as important as the number of projects that convert to starting work. We know that the more we focus on doing things that help convert projects from approved to paid, the healthier Crew will be.
What we did to impact our metrics
1. Mobile-ready: You can now submit projects easily from your phone and we’ve made it easier for members to reply to messages on the go. Optimizing for mobile is meant to improve the overall experience on Crew for everyone and to help our members respond to things quicker (without having to wait to get to their desktop computer).
2. Faster internal system: Our backend system for managing projects is now even faster and more efficient. This allows Marlee, our Happiness Concierge, to give each project the attention it needs while handling many more projects at a time.
3. Better project management: We knew that we needed to improve our current project management pages. They were the source of a lot of pain and inefficiency. We gave Crew a fresh new look. Angus and Luke did a great job. The new interface will allow our members to easily see which stage their project is at, and what the next steps are.
4. Improved project estimation: We want to make sure that each project submitted on Crew has a respectable budget and scope, before being accepted. Because of this, we were often taking a lot of time to help define budgets and scopes. We saw there was an average of 6 points of communication (emails, phone calls) before a project would be approved on Crew. We created a better project submission form and estimation tool. The questions are also less ambiguous, which will help pull in more information about the project, find the right match quicker, and cut down on the number of back-and-forth email and phone call exchanges.
What’s next – Solving the chicken-and-egg problem
Over the next few months, we’re dedicating a large amount of our time on inviting members that are on Crew’s waiting list. The reason we have a waiting list in the first place is to make sure there’s always enough projects for the number of members accepted in Crew. This is one way we look to solve the chicken-and-egg problem that is present in two-sided marketplace businesses. The chicken-and-egg problem is making sure you have enough buyers for the number of sellers and vice versa. In our case, this means having enough projects for designers/developers and vice versa.
It’s a constant balancing act.
This may sound simple, but it’s challenging. Different members want different types of projects and are available (or unavailable) at different times. Over the past year, we’ve been able to get a better sense of the ratio between the number of projects to number of members we need in order to release more invites. This, coupled with our month over month growth in projects, will allow us to actively release many more invites to designers/developers on the waiting list in the next few months.