The incumbent online writing marketplaces were built around the following strategy: create a large population of users and writers, charge a high transaction fee and punish people that try to conduct business outside your walls.
Building a substantial worker and user base was easy for the first movers. As the only game in town it meant you could quickly garner significant transaction volume and once you had it (and little competition) charging a relatively high rake was natural. To protect their revenue, marketplaces tried to hide the users and workers from each other – don’t let people share phone numbers or email addresses or they are going to take their business offline where you don’t get a cut. However the times are changing and I believe that over the next 3-5 years we are going to see the following fundamental shifts in online writing marketplaces:
- Base transaction fees (the “rake”) will continue to lower and approach 5-10%
- Full transparency between users and writers will be achieved
- Writer data on marketplaces will become portable – the new writer resume
Why Low Transaction Fees Matter
Bill Gurley published a fantastic article on marketplace “rakes” – the money that each site takes out of the transaction. Go ahead and read it here and then come back, it’s that good.
On Content Runner we take 15% of each transaction and relative to the competition that is a low percentage. Most of the other writing marketplaces charge 30%+, but why does this matter? As a user you might say no big deal it’s not money coming out of my pocket – I pay $50 for an article so who cares what the writer gets? That’s the wrong way to think about it, because the higher the transaction fee, the lower quality writer you’re going to get. Over time writers will flock to the sites where they get paid the most.
I know that our transaction fee of even 15% is too high, if we were venture funded and/or had a lot of money we would have launched Content Runner with a transaction fee of 5% – that is ultimately where I want to be. I want our transaction fee so low that writers are begging their users to load projects into Content Runner so they can track everything in one place and get paid on time every week from a reputable company. I want to continue to attract the best writers and to do that writers need to be paid their fair share – it’s also why we launched our Writer Offerings section of the site this summer.
Full Transparency is the Answer
Users and writers want to know who they are working with. When I need blog posts for my legal client, I want to know if my writer ever worked in the legal profession. I also want to know if they have ever written legal articles. Do they have a blog I can read? What about their social profiles? Maybe there is a past job that would shed some light on their industry expertise.
As a user I’m not contracting with Content Runner, I’m working directly with a writer that I know and trust. Content Runner provides the framework to establish, nourish and maintain that connection, that’s our #1 responsibility.
Portable Writer Resumes
Writers spend a lot of time on marketplaces and many of them are working full time and earning a good living. However most writers don’t have a resume that shows off their experience, because all of their data is locked up in their marketplaces where they perform all their work. We want to create portable resumes, so writers can show off their accomplishments on their blog, their social profiles and pretty much anywhere.
This is where Content Runner is headed and we’d love to have you join us for the ride!