Hey there. Here’s a look at our latest investor update we just sent out.
One of the interesting things about this update is the slower growth we had over the last few months. As a venture-backed company, it can be a scary thing when growth doesn’t go through the roof.
Whenever something doesn’t go exactly to plan, we aim to be upfront about it and share our suggestions for how to move forward. We believe that you need to treat your investors as part of your team. Challenges always come up. No one grows like a weed all the time (even Facebook). By being upfront about what’s going on and sharing what you’re thinking, your teammates, investors, and advisors will be better able to help.
Although we saw a relative decrease in top-line Approved Projects ($3.6M) compared to the previous 3 months ($4.1M), the last three months for Crew have been record months for Realized GMV and Revenue putting us slightly behind our year-to-date targets.
What went well:
– Defined company priorities for better focus
– Team quality, recruiting
– Refined product release process
What we can improve:
– Defining repeatable path to growth
– Product release speed/execution
– If you’d like to share our funding announcement: “Crew raises $8.5 million to make life easier for design freelancers”
– Intros to referral partners. We focus mainly on referral partnerships with select agencies and freelancers known for doing high-quality work. If you know anyone that fits this criteria, an intro would be great.
June 2015- August 2015 Metrics (click graphs for full size):
Note: We’ve made a slight revision to our metrics. To better visualize progress in our monthly updates, we’ve split Filled Projects into two metrics:
1. Projected Filled Projects. Because it typically takes 90 days for us to determine how many Approved Projects convert in a given month, we’ll be projecting Filled Projects based on the 12-month avg. Fill Rate of 27%. If the fill rate for the particular month is higher than the avg 12-month fill rate, then we’ll use the actual fill rate for that month.
2. Realized GMV (i.e. payments received). So we don’t only rely on a projection, Realized GMV will account for actual payments received in a given month. We are reviewing revenue recognition policies with our accounting team now so this may change.
1. We had an increase in Realized GMV/Revenue even though we saw a decrease in Approved Projects. This can happen for a few reasons. In this case:
– A larger percentage of payments from Filled Projects posted in earlier months were made in these months.
– We had a significant increase in Fill Rate (i.e. the number of Approved Projects that go on to pay and complete). We saw a 20% improvement in Fill Rate from June – August 2015 (34%) vs. our average 12-month Fill Rate of 27%. This increase roughly accounted for $290k in additional Realized GMV.
2. Addressing slower growth of top-line Approved Projects
We missed our monthly Approved Project targets for July and August 2015. June 2015 was on track. Missing the targets in July/August was partially related to a 5% decrease in Avg. Project Size. We’ve also historically (over 3 years) experienced a seasonal dip in Approved Projects Late Summer/Early Fall and Winter Holidays.
Fundraising overlapped with a high rate of team growth may have also slowed our progress in the near term. We doubled our team in the last 9 months while fundraising. Because we grew our team quickly, we didn’t have many internal processes in place to guide each part of the company to successful results.
Also, word-of-mouth, referrals, and inbound content have been our main growth channels so far but they haven’t been as predictive as we expected yet. A focus over the next few months is to continue refining our model to show a clear path to our year-end targets.
Nonetheless, it’s a good sign the Fill Rate is increasing. Ideally, we want to increase both Approved Projects and Fill Rate, but an increase in Fill Rate is just as good as a comparable increase in Approved Projects. They both result in increased Realized GMV and Revenue.
3. Record earnings/member (+30%)
We posted our highest earning per active member. From June-August $3,750 was earned/active member ($1,250/month, up 37% from $785/month). In the next 12 months, our target is $4k/month ($50k/year) earnings per active member. We’re happy to see this progress because our aim is to be a main source of work for each of our active members.
4. Crew Referrals
Based on the current rate of growth and upcoming product improvements for Crew Referrals, we expect Crew Referrals to account for 35% of Realized GMV by year’s end. Crew Referrals currently accounts for 10% Realized GMV.
GMV Realized (payments received from POs) from referred projects
Jun-Aug: $277,112.20 (+48%)
# of referred projects
Jun-Aug: 301 (-45%)
# of total referral partners
Jun-Aug: 309 (+100%)
Although we doubled the number of our referral partners, the number of referred projects decreased by half. This, along with input from our partners, tells us we likely need to simplify the flow to make referring work easier while maintaining a personal feel. To make referring work easier all our referral partners will get a custom link to refer work to. We’ll also track every referral and payout on a frequency (weekly/monthly). Here’s a preview (click to view/comment on the full design).
We recently launched partnerships with Creative Market, Eventbrite, and Marvel, giving each partner access to a subset of our vetted network of Crew professionals. We’ll pay attention to how these partnerships are contributing to Realized GMV to evaluate future investment toward these types of partnerships.
6. Unsplash growth
Unsplash continues to grow not only as a top referral source to Crew but also as one of the most engaged photography communities today. In Q2, over 1 billion photos were viewed on Unsplash.
Time spent Unsplashing (why we track this)
Q1: 5.2M minutes/mo
Q2: 6.6M minutes/mo (+27.0%)
Q2: 342M/mo (+17.1%) (over a billion photos viewed in the quarter)
Q2: 3.5M/mo (+29.6%)
Monthly active members
Q2: 677k/mo (+20.0%)
Upcoming Key Milestones (Q3 2015)
Milestone: Improve Fill Rate to 40% (current: 34%)
Confidence: On track
Comments: Member success; Improved product experience (specifically UX of matching/project management flows)
Milestone: Improve Avg. Customer Lifetime Value to $1,800 (current: $1,500)
Confidence: On track
Comments: Built-in product flows for follow-on work
Milestone: Reduce % of disputes to 0.5% (current: 2%)
Confidence: On track
Comments: Project Protection launch (increased transparency around expectations); Improved project process flow to encourage timely delivery (most common issue is delays/scope creep)