As the global gig economy grows, small and medium sized businesses are finding themselves challenged when it comes to the search for quality creative content. This is especially true when the demand is for affordable, local talent. This can lead to suboptimal branding, marketing and advertising, and result in a finished product that isn’t up to date. A common problem faced by content creators, meanwhile, is inconsistent work. This, combined with the absence of back-office support, can make it hard to turn a passion for generating creative content from a hobby into a career.

One company that claims to have the solution to these problems is Blended Sense. This solution takes the form of a SaaS (Software-as-a-Service) platform that matches local creative content experts with small and medium sized businesses that need their services. Examples of creative content experts would include photographers, graphic designers, artists, and both audio and video professionals. This managed marketplace takes into consideration the needs of the business in question. It also considers the services and experience of the content providers. It then matches the two parties together on an as-needed basis.

This process differs from the bidding process used by platforms like Fiverr. Of greater relevance than price are the skills, equipment, and interests of the participants. These are monthly arrangements, all done at a set rate. Blended Sense’s Creative Intelligence technology handles the accounting, project management, and customer service for its professional users. Before any team is matched up with a company, Blended Sense assigns a ‘producer’ dedicated to the company in question. That producer takes note of what work needs done, the skills needed for it, and any other relevant information. It is that producer who goes on to match the team with the business. From there, the content desired gets built and on a monthly basis the company paying for it receives what has been done up to that point.

Management claims that this process is superior to other methods of outsourcing creative work. It’s between two and three times faster and around three times more affordable than “traditional production solutions.” They make these claims based on the more than 80 customers they have worked with spread across five different states. Their network today also consists of more than 150 vetted creative professionals.

Some individuals familiar with the market might view this as, essentially, a knock-off of Fiverr. There are other platforms that it is like as well, but by management’s own admission the platform is most similar to Fiverr. Like it, Blended Sense provides customers with access to a dedicated content producer. It also offers content tracking. The type of services offered through both platforms includes photo, video, and graphics work. Other services like SEO (search engine optimization) and email marketing are also available. Both platforms also provide a copy of the material to users. What’s different between them are two things: the delivery of a monthly content kit and the local matching that Blended Sense offers.

There are three ways that Blended Sense intends to generate revenue. The first is through a monthly subscription plan. An example provided by management was charging $1,499 per month for multiple videos, photos, and a copy of all material created. They compared this with services that might be offered by a different firm in the space. In this example, a customer might have to pay up to $2,000 for a single one-minute video. A second source of revenue would be wholesale subscriptions to vertical companies that might have three or more clients. The last source, planned for the future, is a creative service fee for its professionals on its platform.

Since launching, the company has posted attractive growth. In its 2019 fiscal year, Blended Sense saw revenue of just $40,000. Its net profit was -$38,771, and its operating cash flow totaled -$38,727. Official figures for 2020 have not been provided yet, but management has said that revenue is growing at a rate of 60% month-over-month. Their goal is to reach $700,000 in annual recurring revenue by the end of the current fiscal year. As a rule, investors should be cautious about forecasts like that, but if growth is as strong as management has stated, that’s a positive.

In its filings, Blended Sense’s management team positions the company at the intersection of three markets. These are the gig economy, digital content, and small-to-medium business advertising. Their belief is that this market opportunity is large at around $412 billion. This sounds enticing, but when you drill into what is more realistic, the opportunity, while attractive, is not that attractive.

According to a 2019 report by Mastercard, the gig economy was worth around $204 billion in 2018. Current forecasts call for the market to grow at a rate of 17.4% annually through 2023. At that point, it will have grown to $455.2 billion. That is quite a large amount of upside and isn’t too different from what Blended Sense’s management has cited. However, this all requires context. Today, 58%, or $117.8 billion, worth of this market is occupied by transportation-based services. In fact, a surprisingly small portion of it is made up of what would constitute professional services.

Based on the data provided, the market in the gig economy for professional services is worth just $7.7 billion. That’s 3.8% of the gig economy opportunity as it stands today. The expectation is for this segment of the market to grow at a rate of about 17.7% per annum. If this comes to fruition, it will result in the market expanding to $17.4 billion by the end of our forecast period. For investors thinking there’s still hope in the other two markets for opportunity, it’s best to reconsider. This is because the digital content market is only relevant to the extent that it relates to the gig economy. The same applies, we believe, for the small-to-medium business advertising market.

It is also important to keep in mind where the market opportunity for gig economy workers lies. Today, 44% of the market is located in the US. That’s excellent, but Mastercard believes that international markets offer more potential in the long run. With the ability to work remotely, this will be even truer for participants involved in the professional services side of the market.

The management team at Blended Sense is quite diverse in terms of experience. At the helm of the firm is co-founder and CEO Abigail Rose. Previously she worked as an Actress for Page Parkes Center of Modeling and Acting. Before that, she was employed as a Group Fitness Instructor and Studio Director for KNOCKOUT Austin. And prior to that, she was a Sales Specialist at Austlen Baby Co. The second key individual at the firm is Albert Baez, co-founder, President, and COO of Blended Sense. At present, he also serves on the Advisory Board for OutThere Community. Previously, he was a Sales Director for Video Review Labs, and before that he was an Area Sales Manager for Main Street Hub. The last co-founder is Georgina Elizondo, Blended Sense’s CPO. Elizondo used to work as a Marketing and Admissions Specialist for Austin Coding Academy. She was also a photographer for her own firm, Georgina Elizondo Photography.

Conceptually, Blended Sense is an interesting business. Their emphasis on local content providers and their subscription model can have a nice niche appeal. Their initial traction also looks encouraging. This is especially if they can hit their target this year of $700,000 in annual recurring revenue. There are, however, some problems. For starters, we feel the point of differentiation for them is not significantly different from existing firms — particularly Fiverr. Competition from the market will be severe. Plus there’s the pain associated with building both their list of clients and their roster of content providers. The market that Blended Sense operates in is growing rapidly, but it’s quite small compared to management’s thinking. This could limit upside as well. Because of all of these factors taken together, our team has rated Blended Sense as a Neutral Deal.