One of the most impressive features of the freelance revolution is its constant innovation. An area of particular interest at present is how different startups are evolving. The challenge: how can a platform deliver greater value to their freelance members. In a tough economic environment, helping freelancers grow their business is a golden ticket This is often described as platform intelligence. The term reflects the ways in which platforms provide freelancers with better information that leads to decisions, smarter initiatives, and better outcomes.
The best known freelance platform communities are known as two-sided marketplaces. Freelancers join for access to projects attracted to the platform by small or large corporates or not-for-profit client organizations. There are several hundred platforms serving clients and offering opportunity for freelancers around the globe. But, while freelance marketplaces continue to proliferate across the globe, the largest like Upwork or Fiverr, and those offering the broadest range, like Malt in the EU, YunoJuno in the UK or AppJobs in Sweden are typically able to only provide work for a small fraction of their total membership. Few marketplaces are able to offer regular work to a large segment of their freelance platform members. After all, their goal is to provide as broad a slate as possible of experts in order to meet the various needs of clients.
And, as the freelance revolution continues to mature, we see more new types of platforms rising up. For example, strong vertical platforms like Mash, Uncompany, and Indielist are focused on marketing expertise. Trees-engineering, Handiss and Estiie offer construction and architectural expertise. Spacely focuses on satellites and space. LifeSciHub emphasizes pharma project management. Fintalent delivers expertise in finance and M&A. Vertical platforms are generally smaller and more highly curated. Platforms like 9am invite freelancers from multiple marketplaces to be profiled on their site. Uplink.tech, Freelancermap, and Fring offer client organizations and freelancers the opportunity to meet and interact with one another informally. Platforms like Jelber and Proteams, both in Denmark, and Vicoland in Germany, emphasize teams over providing individual freelancers.
Some freelancers are finding IBO (or independent business owner) platforms attractive. The best known are Honeybook.com, Wethos, and Collective but newer platforms like Doerscircle in Singapore are coming up fast. All are attracting freelancers who previously would likely have either joined one or more two-sided marketplaces, or operated independently. Historically, platforms like Honeybook, the category pioneer, appealed to solopreneurs and small business owners who directly served consumers: photographers, trainers, coaches, therapists, and independent journalists and copywriters. Members joined for the services that the IBO (independent business owner) offered, and for the opportunity to network with other solopreneurs. IBO’s were sometimes known as offering “business in a box” providing the tools to help independents incorporate, start their business, arrange for banking and tax support, access to a variety of discounted supporting services and information sources, and becoming part of an active and engaged peer-managed meetup network.
High in-demand (HiD) freelancers are becoming increasingly interested in the services offered by IBO platforms. The first wave of freelance members were high income earners. These professionals typically obtained regular project work primarily through their personal networks and relationships. As a result, they tended to be less actively engaged in freelance marketplaces, although many retained membership to avoid FOMO.
But things have changed along with the growth of side-gigs, now representing 40% of the US workforce. More freelancers and side-giggers are finding IBO platforms of interest. Wethos, one of the largest, offers an interesting vantage point to see the fragmentation of freelance market choices. I sat down and talked with CEO Rachel Renock. Here’s what she had to say.
As a starting point, Wethos markets directly to freelancers. From its start at the beginning of 2020, it has grown to over 70,000 users, 85% of whom are focused on B2B clients ranging from very large and global brands to small and medium sized businesses, startups, and nonprofits. To give readers an appreciation of the growth of IBO platforms to freelancers, consider the growth stats: At the end of 2021, Wethos counted 18,500 subscribers. As of December 2022, 65,000 or a 250% increase YoY.
Nearly 30% of Wethos freelancers earn over $100K per year and would be characterized as HiD freelancers. An additional 20% make between $50 and 100K per year. The other half of Wethos subscribers are a combination of small studios (freelancers who hire other freelancers for larger projects) and side-hustlers.
The mix is interesting: most are creatives, including marketing and design professionals, video and photo production, and almost 20% web development.
What’s Wethos’ pitch to freelancers? Renock says a big advantage is their pricing recommendations. Wethos offers a robust library of scope of work templates that include a full breakdown of services to include with suggested pricing. That means for over 100 “studios” or business categories, they offer the best data on what others are charging for their services. The pricing recommendations, backed by tens of thousands of data-points, gives Wethos users the confidence to charge more and win bigger projects. This also creates a network effect: The more users use Wethos the smarter it gets, creating impressive platform intelligence and unlocking an incredible growth loop that makes the product attractive to both new and existing users. According to Renock, 2022 pricing recommendations helped Wethos users earn an additional $5M in projects through price actions. As users grow, the quality and reach of data increases.
A second attraction that draws freelancers: Wethos offers a unique twist on community building. In this case, a focus on helping users work together to win larger, more interesting projects, what in an earlier article we called “hunting in packs.” 51% of projects created on Wethos are involve independent freelancers teaming up. Doing so, freelancers expand their networks and increase their opportunities for projects. Community is a major source of new business leads for Wethos users.
Renock characterizes Wethos this way: “We combines a strong social networks, and B2B SaaS, and financial technology to create a powerful growth loop for users: a market-network. We see teaming up as an way to help freelancers form Virtual Studios. This makes it possible to compete with large agencies for better projects and bigger paychecks, and is transforming a legacy industry into a market larger than e-commerce.”
The best marketplaces are noticing the success of Wethos and other IBO platforms in attracting freelancers, and starting to pay attention to their offering. In challenging, uncertain, times, freelancers appear to value the services they receive from IBO platforms, particularly assistance in pricing and teaming up to grow their business. As a result, platforms like Contra and others see the potential for a service and support rich community, and are moving fast to close the gap.
Viva la Revolution!