Fiverr Community Forum

Have you applied the 80/20 principal?

*principle

It teaches you to try and think of everything in an exponential curve

ExpReal

Examples:

  • 80 percent of your work comes from 20 percent of your clients.
  • 80 percent of money comes from 20 percent of your gigs
  • 20 percent of gigs on the site make 80 percent of the money and 20 percent of the 20 percent make 80 percent of the 80 percent and on it goes.
  • if each year you sell 100 gigs for $5 you could on average sell 50 gigs for $10, 25 gigs for $20, 12.5 gigs for $40, 6.25 gigs for $80, 3.125 gigs for $160, 1.55 gigs for $320.

It varies from business to business by 70/30 to 90/10 but it’s always exponential. You can draw some interesting conclusions. For example is it worth your time to do 100 gigs for $5 or do $10 and up and earn more?

5 Likes

Your exponential theory doesn’t seem to apply to my Fiverr account. Here’s why:

  • On Fiverr, 100% of my work comes from 100% of my clients.

  • I have only one gig. So, 100% of my Fiverr money comes from 100% of my gigs (AKA my one gig).

P.S: It’s “principle,” not principal (principal is what you call the head of a school/educational institution, for example). :wink:

8 Likes

Which means potentially you aren’t applying the principle and you’re missing a lot of money.

And I doubt 100% of your work comes from 100% of your clients. Are you trying to say they all demand equal work or are some more difficult than others? Do you have repeat customers?

You can look at it from a different perspective, too. :wink: On Fiverr, all the money I earn (100% of money earned) comes from only my customer on Fiverr (100% of my Fiverr clients). I do understand the OP’s perspective. :wink: I was just trying to counter the OP’s claims. :smiley:

I doubt it. I only have a limited time to work on Fiverr-related stuff. And, I am almost always flooded with work/orders (when I have my gigs active) that I often have to turn a few buyers away. So, how am I missing out? If anything, I am intentionally restricting the number of order I work on. It’s a deliberate/conscious choice I make.

1 Like

I’m not sure you understand, one of the points is you could do less work and earn the same or more money.

A couple simple ideas from the principle:

If you do $500 worth of $5 gigs a year you should be able to do $500 of $10 gigs with half the client base, the question is if you’d have to do twice the amount of work for a $10 gig or less.

Potentially you could filter your repeat customer base to only take on the easier clients and do less work then free up time to take on more easy repeat clients.

1 Like

I’d say there’s a linear dependence. In other words, I will have to do the same amount of work for $500 worth of work - irrespective of whether it comes from hundred $5 gigs, ten $50 gigs, or just one $500 gig.

P.S: I do understand the OP’s perspective. :wink: However, the OP made it sound like it was a universal principle which was applicable to everything/everyone! I was just trying to counter that. :smiley:

1 Like

It is universal if your business is scaled enough and the platform you’re working on doesn’t force some sort of equity.

2 Likes

I think it’s also worth noting when you sell a $5 gig versus a $500 gig the type of work you do changes.

Not for me at least. :slight_smile: It’s exactly the same.

The only variable is the amount of work (# of words).

But I have to admit… what you say might be true for a lot of sellers/categories.

I’m with @hanshuber16. You can’t really apply the 80/20 principle on Fiverr. There are too many variables which you can not account for.

Say you have 5 gigs and realize that 80% of your orders come from just one. In this case, you could decide to up prices, giveaway free extras, or replicate that gig somewhere else to try and increase profits. Then though, the Fiverr search algorithm could suddenly kill exposure to that gig by throwing it out of the search.

Alternatively, a buyer could use chargebacks or repeated cancellation request to try and sabotage your success. In short, several things could go wrong.

That aside, earlier this year, I did discover a way to use Fiverr to predict the price of Bitcoin!

I realized that in advance of significant Bitcoin price rises, I start getting several spam messages from people I term ‘Fiverr Bitcoin Beggars’ who all ask me to sell them some Bitcon or try and lure me into a Bitcoin scam of some kind.

As Bitcoin prices do rise shortly after Bitcoin begging on Fiverr starts, I realized that I could use spam messages as an indicator that I should buy Bitcoin myself. I also illustrated this with the following graph:

I posted this in another forum in March. Since then, the Bitcoin price has almost doubled, proving my hypothesis in the process!

In this case, divining trends using Fiverr gig behavior is possible. In practice though, there are a lot of variables to be taken into account and everything at some point still becomes a game of chance.

6 Likes

One of the quotes in the book “The 80/20 Principle: The Secret of Achieving More with Less” is God plays dice with the universe but the dice are loaded.

Here’s a fun list (+ or -10%):

  • 20% of picnic goers eat 80% of food
  • 20% of the population has 80% of the wealth
  • 20% of music released has 80% of the sales
  • 20% of words account for 80% of word occurrences in books
  • 20% of Italians own 80% of the land
  • 20% of patients use 80% of health resources
  • 20% of bugs cause 80% of crashes (Microsoft 2002)
  • 20% of customers make 80% of complaints
  • 20% of customers are responsible for 80% of profit earned
  • 20% of carpet receives 80% of the wear
  • 20% of your clothes are worn 80% of the time
  • 20% of production defects cause 80% of problems (Dr. Joseph Juran)
1 Like

Yeah. I used to do the work that would take me 15 minutes to complete for $5. That’s the only way I could rationalise $5 price for myself. Now it takes me a couple of hours on average which is reflected in the price.

The thing is, though, that all the high concepts and business speak would apply here if we had any control over the buyers we get or the algorithm. You can somewhat control the buyers by being vaguely discouraging or blocking them (but I suspect fiverr doesn’t like us doing the latter too often) but other than that it’s basically “work hard, be polite, block those who make you uncomfortable” and that’s it.

2 Likes

Nice to know I’m in the top 20% of something. :smiley:

7 Likes

I feel like the application could be much wider ranging. It’s a new concept I just came across and got excited about, so I’m probably explaining it terribly.

Here’s an application of 80/20 in creating music. Let’s say I’m trying to create an effective sad song and I have tight schedule so only 3 hours to make it. Is everything in a song equal in value when creating an effective sad song?

If I spent 2 hours thinking about which instruments to use and only 1 hour creating the rest would it convey sadness more effectively than spending 2 hours on the melody and 1 hour creating the rest?

If you divide time into 80/20, 36 minutes would be how long I spend on creating 80% of the sad songs effectiveness. What am I spending this time on and can I increase this time and lower it in other areas to create a more effective song?

Maybe this time is spent in the planning of the song. For example if I spent no time planning and ended up using a major instead of a minor key most likely the song would become worthless as an effective sad song.

There’s something to think about in terms of efficiency in 80/20.

IDK if this was ever true at any point of time in recorded human history, but this is far from accurate right now.

In fact, a mere 7% of the world population holds 80% of the wealth. Some sources even claim this can be as low as 1%. Also, as you can imagine, the wealth distribution has fluctuated a lot from one century to another, and the two world wars have also had a significant influence on this wealth distribution.

While this may be true for some music artists, this cannot be a universal principle that works for 100% of artists (perhaps, 80% of this principle works on only 20% of artists). :wink: Everyone is different!

For example, while it might be possible for some artists to create 80% of the song’s effectiveness in just 12 minutes (7%), while having to spend the rest of the available time (93%) actually producing the piece, others might need much longer, say 1 hour, to do the same (33%) while requiring far lesser time actually producing the piece (67%).

In my opinion, this 80/20 principle is extremely generic and is also not a universal principle.

1 Like

True, but if you acquire business on Fiverr from outside of the platform, this could work.

For example (I’m in a slow period myself), people well known in their fields would probably scale here more easily as their influence could engage people in their work here and then their influence would make a sale more likely.

And, as many of us here have found, you make more sales after you’ve completed sales or when you have orders open, so it could, in theory, support you getting sales within the platform itself.

1 Like

Even if that’s true, the point is to think exponentially rather than linearly.

Saying that about music is just plain wrong. That’s like saying when creating an effective sad song the drums are as important as the melody. Some things will be more or less important and the relationship between those things will be exponential.

I would say picking a minor key would be the absolute most fundamental in creating a sad song, that takes seconds to decide.

Then deciding on a slower a tempo, perhaps a minute to decide how fast you want the song.

Then deciding on a basic motif for the melody which takes a few minutes

Creating the whole melody, varies but much longer.

Exponential amounts of time for each, layers of importance. This is an example so it would obviously vary with what you’re trying to accomplish and the times arn’t exact.

If you decide to work twice as long the relationship to the quality of the song isn’t linear, it depends what you work on.

1 Like

I’d say its a symptom of our lazy, workaholic, ever more digital, rather than real-world way of thinking about the world. For example, only 5% of e-book authors on Amazon make $10K a year or more. Of those, half are authors who are already famous bestselling authors.

The disparity in earnings largely comes down to the fact that most people who publish a book on Amazon devote a maximum of 1-year to the overall creative process. They decide to use formulas to write X words a day etc, as well as other formulas to identify what they should write about in the first place.

By comparison, people like George RR Martin focus on the creative process first and write organically. It’s a slow and much longer journey, but it proves to be the most lucrative for the majority.

Of course, 80/20 does work well in retail. If you stock 100 items in a store and 20 account for most of your sales, you give those 20 products more visibility and expand on the accessories that you offer etc.

1 Like

80/20 time management is not about working less. It’s about putting more time in the important things that make up the majority of the value in the work you do.

1 Like