The pandemic-induced recession of the last year has been a unique one for many reasons. But one of the biggest surprises? New business applications in the U.S. have surged to record highs. Several million businesses -- most of them small or single owner-operator outfits -- have fired up since COVID-19 struck.
Technology can be thanked for helping the new trend along. With software management tools and flexible e-commerce options available like never before, it's never been easier to get started down the path to self-employment. Three companies that are helping disrupt the status quo and helping more people start small businesses are Shopify (NYSE:SHOP), Wix.com (NASDAQ:WIX), and Fiverr (NYSE:FVRR).
Shopify: Next-gen logistics for everyone
A lot has been said about website and e-commerce management software firm Shopify. The company notched an 86% year-over-year revenue increase in 2020 (on top of 47% year-over-year growth in 2019) to $2.93 billion. It's unclear how much of the momentum will carry into 2021 as effects of the pandemic start to wear off. Shopify itself said not to expect a repeat of the performance from last year. However, it did say it expects merchants (most of them small) from around the globe to join its platform at a faster pace than before 2020.
Shopify is being turned to as a trusted partner by existing mom-and-pop businesses and aspiring entrepreneurs. It's easy and affordable to launch a website using the cloud-based software, and myriad tools from shipping to payments are built in. Shopify also launched the Shop app last year to help consumers discover new vendors and products from one convenient location.
And since Shopify doesn't retail anything itself, it isn't in competition with its merchant customers like some other online marketplaces. With some 457 million consumers shopping with a Shopify merchant last year, it's clearly a powerful platform for a small biz to reach new audiences online.
But this is more than a software and e-commerce management platform. In 2019, Shopify announced its Fulfillment Network service. The idea was to put advanced warehousing and order fulfillment management into the hands of small businesses that don't have the scale to match what Amazon (NASDAQ:AMZN) or Walmart (NYSE:WMT) have. Powered by robotics, the Shopify Fulfillment Network helps merchants get product delivered to customers faster, all the while allowing them to remain in control of their data -- again, since Shopify doesn't itself sell anything and thus isn't a competitor.
Fulfillment Network is still in the early stages of development, but it's a powerful tool at the disposal of small businesses selling in the U.S. If it works, expect to see similar services roll out in other countries too. Fast and flexible shipping isn't just the domain of the biggest online marketplaces anymore. Retail -- especially of the online variety -- should level the playing field for everyone, and Shopify is helping do just that.
Wix: E-commerce isn't just about retail
Wix is another cloud-based software firm making online selling a cinch for more people. Its website management toolkit overlaps with Shopify in many ways, and it too had a record showing in 2020. Total registered users increased 19% last year to a whopping 197 million worldwide, leading to a 30% increase in revenue to $989 million. At the end of February 2020, the company reported it hit the 200-million-user milestone.
Where Shopify specializes in online retail, though, Wix is helping facilitate a web presence for a slew of other types of small operations and professionals -- from local restaurants to photographers to financial services. If it can be thought up, there's a good chance Wix has a template available to help even those unfamiliar with web development to get a site up and running.
The pandemic forced all sorts of companies to the internet for the first time last year, and armed with efficient capabilities to manage business, most will never go back to the way they operated before. Wix is flexing its muscles here and launching new services to help. For example, Editor X went from beta to fully fledged collaborative design platform early in 2021 for marketers.
Wix also recently acquired SpeedETab to help its restaurant site builder integrate with online point-of-sale systems. And an expanded integration with Alphabet's (NASDAQ:GOOGL)(NASDAQ:GOOG) Google was also announced to make it easier for businesses to manage their Google business profile, search, and map presence directly from the Wix platform.
Wix is an often overlooked player in the e-commerce space, but it shouldn't be. The software company is making it easy for all sorts of businesses around the globe to get started in a new digital era of commerce and make money via the internet.
Fiverr: Leverage your skill set using the world wide web
Speaking of making money online, Fiverr is making some serious waves in the business world. The company thinks the way people work is in dire need of some digital updating, much like what retail has experienced over the last couple of decades. Specifically, Fiverr believes the power of the internet can help people monetize their unique talents in new ways -- they just need a new platform to help facilitate.
Enter the gig economy. The term may conjure up images of ride hailing services (cars driven by non-employee contractors) and property sharing (like Airbnb (NASDAQ:ABNB)), but the gig economy is far more encompassing than that. All sorts of services and individual skill sets can be marketed and sold on a part-time basis, and Fiverr has a long and growing list of categories.
Dropshipping, graphic design, marketing, data science, modeling, and acting -- Fiverr is unlocking all sorts of skills and bulldozing barriers to self-employment for millions of people. Once upon a time, a gig was just a side hustle to make some extra coin. But thanks to Fiverr, many people are quitting their day jobs and turning a steady stream of part-time jobs into their primary income.
As with Shopify and Wix, Fiverr got a big bump in 2020. Layoffs and uncertainty surrounding their jobs were the final straw for many employees, sending a flood of new users in Fiverr's direction last year. Revenue surged 77% higher to $190 million as a result, and as the gig economy expands, Fiverr thinks it's just getting started. It estimates the industry is worth $100 billion a year in North America alone, and expansion into other countries makes the total opportunity even greater.
Small businesses turned to the platform for help as well last year -- and not just to make money by leasing out their services. Rather than hiring a full-time staff member, many small local businesses hired a freelancer to get smaller tasks done.
Fiverr has also launched new tools like subscriptions, giving businesses large and small the ability to hire a freelancer for slightly longer gigs lasting a few months. It's a win-win proposition. Self-employed freelancers get to take back control of their time and work on more flexible terms, and businesses can tap freelancers for part-time work without the burden of adding a new permanent position to payroll.
The pandemic has wreaked havoc on the global economy in the last year, but there is some silver lining. Technology has helped trailblaze a new path to self-employment and business ownership for millions of people around the world. Shopify, Wix, and Fiverr are doing more than their fair share to help and have long growth opportunities ahead of them as a result.