2021 Predictions for the Human Cloud
The Year of the Freelancer
It’s been a rough year, yet for most leaders in the Human Cloud we can’t lie when our friends and colleagues ask if the pandemic has helped.
2020 has been a year of extremes.
For freelancers and freelance solutions alike, some have seen record growth – it’s not unique to hear from leadership teams that the past week’s revenue surpassed prior quarters.
While others, mostly freelancers, are not so fortunate.
But what can we expect in 2021?
Buckle up and enjoy!
Main Prediction: Golden Retrievers will overtake humans as the dominant power (okay that’s more of a wish).
Real Predictions…
Prediction 1: Demand for freelancers will double
From September’s Freelancing Forward:
– $1.2 trillion spent on freelancers this year
– 50% of Gen-Z (18-22) chose freelancing
– 40% of millennials (23-38) chose freelancing
Now why will demand double?
*Demand refers to client spend. I Intentionally chose client spend since I believe this is the lead vs. lag metric. We’ve passed the point where freelancing is more desirable for top talent (75% of freelancers earn more as a freelancer). But client spend is what makes freelancing feasible vs. desirable for top talent.
Because Covid slashed the two leading barriers to hire freelancers.
Barrier 1: ‘This couldn’t be done outside of these 4 walls’
Most freelance work is remote.
Some projects do happen in person (usually hybrid – meet in person then work & collaborate remote).
But both from a legal and collaboration perspective being remote is ideal.
However, Pre-Covid the leading objection to hire a freelancer is that the work itself couldn’t be done remote.
Covid obviously shattered this.
Covid showed that most work can be done remote, unlocking the leading barrier that work needed to be done within their 4 walls.
Barrier 2: The agency is fine
When helping large companies grow their freelance programs, leadership loved the benefits of hiring freelancers, but more times than not they’d stick with their agency.
Covid makes agency’s no longer feasible, bringing freelancers from cute to a necessity.
CASE STUDY: Large hotel chain building a mobile app
Budgets are slashed. 1/3rd of your workforce is laid off. Yet you need to reinvent yourself, and one idea is a mobile app for the guest experience.
How will you ideate, develop, then support/maintain this app?
An agency will take you 6-12 months while freelancers will take 3-6 months and are 50-90% cheaper.
The decision is obvious, since as changemaker Brandon Bright put it in our upcoming book The Human Cloud:
“Traditional consulting firms are expensive, lack agility, and have considerable talent restraints. Design agencies do not have the end-to-end capabilities for development and deployment. Local dev shops do not have the scale and diversity of skills for a large enterprise. The solution for enterprises if they need scale, agility, and top talent is to foster distributed software networks.”
Now to the content needed for this app. To get to market you need a press release, a landing page, a walking deck, a couple different social ads, and supporting help docs.
Maybe you can do this all internally (apologize in advance to your health).
But if the app works, how will you match the needed content to demand (hint…a traditional agency takes on average 30 days to hire)?
Freelancers, who take on average 2 days to hire, and with freelancer marketing & content agencies like Incredibble and TwentyThree you can match the speed and output what’s needed to support your customers.
The case is simple: Agencies won’t do. You need freelancers.
Covid has brought hiring freelancers from cute to a necessity.
Prediction 2: The Freelance Economy won’t be ready (initially)
While demand for hiring freelancers is great, I’m not sure if we’re ready for it.
Puberty is a fact of life, and let’s face it – we’re a pizza face.
Instead of pimples – we have a rough client experience – and the acceleration from Covid has amplified this weakness.
For companies that spend over $500k, I’d commonly hear feedback about hiring freelancers like:
Too hard to hire
I don’t want to manage freelancers
Results are all over the place, one freelancer blows me away, the next gets me fired
The reason is that the current infrastructure doesn’t match the expectations for our next wave of client demand.
This is natural within the technology adoption life cycle.
Early adopters are what we think of as the ‘gig’ economy – individual freelancers for solo focused tasks like copy writing.
BUT the next wave of client demand is complex work with multiple stakeholders and collaborators, not ‘gigs’.
CASE STUDY: America’s beloved motorcycle manufacturer.
They weren’t just doing translation (a common ‘gig’ economy task), they were building a full digital experience for their riders and needed up to 30 freelancers.
Think of this like a full content strategy rather than just an article. Or a full website rather than just a landing page.
If done internally, this would need working teams of 5-10 within org’s of 50-500. If done externally, it would be an agency with strong processes and org charts to take on the work. Either way, the new wave of client demand is the full spectrum of complex outcomes rather than better staffing through individual freelancers.
Most freelance models aren’t ready for this – they were built to transact talent in an auction model (client posts a job, freelancers race to the bottom to win the project) – and the result is that either A: agencies win out (and secretly hire freelancers), or B: the project doesn’t leave the shelf.
Either way, we lose out on client spend, and can’t catch the increased demand.
2021 is the year to catch up on a poor client experience
There’s no one solution and the problem is complex as I outlined in a 2019 talk for industry leaders ‘How the Enterprise Works With Freelancers‘.
But here are some exciting models we’ll see prioritized in 2021:
1: Prioritizing Outcomes over Individuals
Why isn’t hiring a freelancer as easy calling an Uber? Both are matching talent (driver) with clients needing talent (rider).
Well…I say this semi-vicariously because comparing hiring freelancers to calling an Uber is like comparing the Mona Lisa to my middle school art class painting (I got a C+). For the person doing the hiring, there’s more variables than location, and for the project itself, there’s more variables than arrival and destination.
Yet the ‘gig’ economy treats both the client and freelancer like Uber (Uber for staffing to be precise).
The problem is that clients don’t need individuals, they need outcomes. They need a mobile app. A landing page. Etc.
Which is where 2021 will see exciting solutions like Upwork’s Project Catalog where clients can buy outcomes at the push of a button. Fiverr was built off this ‘push button, get outcome’ menu experience and arguably is what led them to a successful IPO.
But we’ll see more than features.
New companies are being built off this premise of freelancer outcomes vs. individual freelancers like Superside for design. They might say nothing about freelancers. Instead, they focus on the outcomes and behind the scenes freelancers are making these solutions better, faster, and cheaper than agencies.
2: Mastering a niche instead of everything
The ‘gig’ economy was built off an ‘everything store’ concept. All freelancers and all clients will go to one platform. But unless both parties know exactly what they want, the experience is like me at my first middle school social (awkward with lots of punch but no one to actually slow dance with).
Insert platforms like Paro for finance & accounting, Parker Dewey for student internships, Instant Teams for customer success, Gigster for software development, and We Are Rosie for marketing. Since they understand the intricacies of their niche, they can provide a superior client experience.
New vertical platforms are popping up daily, feel free to comment those I’ve missed 🙂
3: Managing Internal & External Workforces
A dirty secret is that finding freelancers is maybe 10% of what makes a good client experience, and once you’ve found a good freelancer the relationship with that freelancer takes priority over finding others. It’s like friends. Most of us don’t want 5,000 Facebook friends we don’t actually know. Likewise, we want to keep working with the freelancers we trust. My favorite thing about hiring freelancers is that the project ends, but the relationship only grows. Whether hiring them as a freelancer myself or hiring them as a full time employee myself, I have a tribe of 30 collaborators that I bring wherever I go.
The ‘gig’ economy was built for having 5,000 Facebook friends.
The new wave of client demand needs to organize, mobilize, and engage their existing workforce, both internally and externally. Which is why 2021 will bring more solutions like Catalant, Kalo and Jobbliss.
Again, I definitely missed great companies here so comment those I’ve missed!
Prediction 3: Freelancers will come first (finally)
2021 is the year of freelancer-first solutions for two reasons:
1: There’s a business case.
Naturally, the more clients spend on freelancers, the more leverage and purchasing power individual freelancers have. I’ve been timing the moment when we can start building solutions just for freelancers my whole career. I badly mistimed it in 2016 trying to create a LinkedIn for freelancers. But now, as freelancers are a $1.2 trillion dollar market and over half the workforce will be freelancers in the next 7 years, FINALLY I believe there’s an opportunity to build businesses that put the freelancer first.
What does it mean to truly put the freelancer first? I believe it means aligning your success with their success.
The old ‘gig’ economy doesn’t care about individual freelancers. It cares about the freelancer-client transaction. There could be 100 freelancers or 100,000 freelancers. All that matters is transaction volume, which is why less than 10% of freelancers actually make money in most networks (that means over 90% of these freelancers are unemployed…unacceptable).
At Venture L, we put the freelancer first by NOT being a platform or making money through a client-freelancer transaction. Instead we make money through a monthly freelancer subscription. It’s simple – if we don’t add value for a freelancer to scale their business – they stop paying us. Thus for every decision we make, whether we want to feel like Mother Theresa or not, the freelancer comes first.
Expect this freelancer-first ethos to increase as it’s increasingly economically feasible.
Freelancer-first solutions will increase since freelancer purchasing power makes it economically feasible to distance from the ‘gig’ economy
2: We’re screwed if we don’t
If left unchecked, the freelance economy will become a dystopia.
As Benek Lisefski, a freelancer based in Auckland, New Zealand said about younger generations jumping into freelancing:
“Generations of young minds, tired of employment norms that no longer served their needs, thought gig working was their ticket to career freedom and meaningful work. Now they’re realising they’ve traded one prison for another.”
The ‘gig’ economy is exploitative.
It isn’t inherently bad. But the early adopter models, what Jon Younger would call the Hub and Spoke model, put the client first.
According to Jon,
“Most freelance platforms are designed in a hub and spokes format. That means the center – the platform team – have relationships (more or less) with platform talent, but the platform is designed not to encourage relationships among members. That’s a problem because most smart people in this space think less than 10% of total freelance spending goes through platform website landing pages.”
At it’s core, a freelance platform isn’t exploitative, it’s just a spreadsheet with two columns – clients and freelancers. We dress it up with bells and whistles, usually in the form of sexy dashboards.
But delegating the relationship between client and freelancer to an auction bidding matching process is what makes me lose sleep (client posts a job, freelancers race to the bottom to win the project).
Add issues like lack of insurance & benefits and we can sort of understand why lawmakers tried to bring us down through AB-5.
BUT good news! As Jon said in his own 2021 predictions, “The era of hub and spokes platform design is nearing its end.”
Ironically the incredible freelancer Holland Webb had an AWESOME reaction to Jon’s article:
“I hope and pray point # 7 proves true sooner rather than later — The era of hub and spokes platform design is nearing its end. Freelance platforms that have muscled their way between us and our clients deserve to perish. And platforms that empower everyone, take risks, and treat freelancers like adults…where are you?”
Rest assured Holland, 2021 is putting the freelancer first.
The vertical platforms like We Are Rosie listed above deviate from the auction bidding matching system. There’s also incredible communities we listed in our article Freelance Communities You Need to Know ASAP.
And not to totally toot our own horn – but at Venture L we give freelancers the tools to take control over their own business and not need platforms.
Freelance platforms will have to distance from or provide value beyond the hub and spoke model that the ‘gig’ economy was built off
Thus my final and favorite prediction is this:
2021 is the year of the freelancer.
2021 is the year freelancers will earn more, control their career, and be put first.
How Can You Be Ready for 2021?
Here’s my shameless plug…if you’re a leader ready to embrace 2021, The Human Cloud will be in your mailbox on January 26th.
And if you’re an eager freelancer ready to meet this demand – Venture L is your secret to scale. Get started HERE.
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