This is the latest in a series of posts explaining the decisions we make that affect our users, as well as the results of those decisions (positive or negative).
In recent weeks, Dribbble has taken some important steps to facilitate larger transactions for design services through the platform:
- We just released Milestones, a feature that enables designers to receive payouts incrementally as each phase of their project is completed (and even before work begins if they negotiate an upfront payment with their client). This has been one of the most requested new features by both clients and designers.
- We implemented a graduated platform fee for clients, meaning the larger their transaction, the lower their effective fee. For example, a client’s effective fee is 4.3% on a $1K payment, 2.2% on a $10K payment, and 2% on a $100K payment. Previously, the fee was a flat 7.5% across all amounts.
- We introduced Project Briefs, a feature that allows clients to submit projects directly to our team, who will then help them identify and hire the perfect designer for their project (at no additional cost).
- We reduced the processing period for designer payouts from 7 days to 1 day (once the milestone or project is completed) to get money in our designers’ hands faster.
The primary objective of everything we do – every new feature, policy, and campaign – is to maximize the number of users searching, interacting, and transacting through the platform.
That’s the context for these new features, which we expect to increase the number of Project Requests that receive a Proposal from designers, the number of Proposals that are accepted by clients, and the average value of Projects completed through the platform.
Since we began facilitating transactions last September, the average transaction size has been ~$600. However, the average budget for Project Requests during that period has been 10X higher. We’ve also received (and qualified) project briefs with budgets that are more than 100X higher.
Five-figure transactions occur regularly on the platform, but we’ve observed that disintermediation increases with client budgets, even though the peace of mind we provide – including secure payments, fraud protection, and dispute resolution – becomes increasingly important as more is at stake. This is because, until recently, our platform didn’t really support the complex payment terms and schedules typically required for five- to six-figure projects.
While we haven’t addressed every reason why some users transact off-platform (for example, many large enterprises require vendors to onboard in a specific way, invoicing in arrears, or contractual terms that conflict with our Terms of Service), we now better support and de-risk complex engagements for both parties:
- Milestones highlight issues with alignment, communication, ability, or pace of execution earlier in the engagement. I recently spoke with a client who had just completed a $7.5K UI design project on Dribbble. They had a very positive experience (rating the designer 5/5 stars), but they almost didn’t move forward because they were concerned they might lose critical days or weeks before discovering that their requirements had not been met. Milestones would have given them additional peace of mind by providing an early off-ramp had the engagement started poorly.
- Designers can now configure their Project Proposals and Services to include an upfront payment and/or incremental payments as they complete each phase of the Project. Milestones allow designers to generate income as they execute longer engagements, whereas previously, they had to complete the entire project before funds could be released. This wasn’t a sticking point for projects that take days to complete, but became challenging for designers with weekslong or monthslong engagements (and this issue was further exacerbated by the seven-day processing period for payouts, which we have since trimmed to one day). To learn more about adding Milestones to a Project Proposal or Service, designers should visit our Help Center.
- Clients now pay a lower platform fee as their transaction amount increases: 5% on the first $500, 3.5% on the next $500, and 2% on amounts exceeding $1,000. For example, a $2,000 payment now incurs a platform fee of $62.50 ($25.00, $17.50, and $20.00 for each bracket, respectively), for an effective fee of 3.1%. Under our previous flat fee of 7.5%, this same transaction would have incurred a platform fee of $150. While our median client benefits from this new graduated fee, it’s really a difference-maker for those clients with five- or six-figure projects.
- Clients can now work directly with an account manager by submitting a Project Brief. Account managers recommend trusted, accomplished designers, and help both parties execute their engagement through the platform. This is a free service but we require clients to have a minimum budget of $2K.
With these new features – as well as other UX/UI improvements in development now – we expect fewer and fewer clients and/or designers to transact off-platform. Minimizing disintermediation is a top priority for us for several reasons:
- Disintermediation exposes both parties to risks such as scams, other fraudulent activities, intellectual property issues and other disputes - without the safety net we provide. Additionally, when transacting off-platform, designers must worry about late payment or nonpayment, while clients may receive incomplete or substandard work and miss deadlines.
- The more users transact through the platform, the more data we collect to improve search relevance and, in turn, the user experience. For example, when a client performs a search and then transacts with a designer that appeared in their search results, it gives us a very strong signal that the designer is relevant to that query and should rank higher the next time. Similarly, when a designer receives positive ratings and reviews for projects completed through the platform, we know to rank them higher in results.
- Circumvention of our transaction fees means we have fewer resources to develop new features and deploy paid marketing campaigns that help designers generate and convert high-intent, viable leads. In the long run, disintermediation results in less revenue for both us and designers.
We’re still just getting started, but in the five months since we enabled users to transact through the platform, adoption of this functionality has exceeded our expectations.
Without any marketing, transaction activity has increased significantly each month, and this is now the fastest-growing part of our business.
Average M/M growth of 40.0% since September.
Average M/M growth of 56.7% since September.
Average M/M growth of 55.9% since September.
Average M/M growth of 47.2% since September.
Other key takeaways from these first few months of transaction activity:
- Customer acquisition cost of $0.
- 49.4% of clients and 57.0% of GMV came from the US, 64.4% of clients and 75.6% of GMV came from the US, UK, Canada, and Australia combined.
- Completed projects received an average client rating of 4.96 out of 5 with 98% of completed projects earning a 5-star rating.
- 15.8% of clients placed multiple transactions (probably too early to look at retention).
- Cancellation rate of ~5.1% (most competitors are around 15-20% so this could increase).
- Pro subscribers received 64.1% of Project Requests and were 75X more likely than non-Pros to generate a lead.
- Pro subscribers generated 76.2% of transactions and were 100X more likely than non-Pros to convert a lead (however, non-Pros may be more inclined to transact off-platform to circumvent the fees that are waived for Pros).
During this same period, we radically improved our search UX/UI, resulting in far more users placing searches and interacting with search results (as detailed in previous blog posts), and introduced advertising products for designers, which piggyback on these improvements and provide designers with new levers to increase their lead flow:
- Promoted Designers which gives designers’ profiles a fixed ranking in Designer Search for null/relevant search queries for a period of time.
- Native Search Ads, which are display ads that appear in Shot Search. Unlike the self-serve ‘Boosted Shot’ feature, which ranks a specific Shot higher in search results, Native Search Ads give designers much more flexibility with the advertising assets used and link to the destination (internal or external) of their choice.
Both Promoted Designers and Native Search Ads are sales-assisted products, and designers work directly with account managers who help them deploy and optimize their campaigns. Advertiser demand and retention have been very strong, and these products accounted for ~22% of all advertising revenue last quarter. We expect growth to accelerate as we introduce new products (as early as next quarter), and as we continue to improve our search UX/UI. To speak with our team about these products or join the waitlist, reach out here.
Today’s releases bring us a step closer to completing the business model transformation we began last year.
In the coming months, we’ll continue to introduce new functionality around search (for Shots, Designers, and Services), communication, and payments, which will help more designers generate and convert more leads. There’s a long road ahead but we’re on our way to becoming the platform we aspire to be.
