Gig Economy

Freelancer.com CEO: Platforms And The Future Of Product Development

A good electrical engineer can be hard to find, which can serve as a massive friction for any firm that needs one.  And as Freelancer.com CEO and Chairman Matt Barrie told Karen Webster, it really can be almost any firm that needs that kind of expert help.  Electronics makers, healthcare firms, designers, event planners, construction — the list can go on almost infinitely, he noted.

But there are often fewer engineers on the plan than are needed, a problem that becomes more acute as the projects become more specialized or larger in scale.  Additionally, electrical engineering is an area, Barrie noted, where close isn’t good enough —  a firm needs exactly what it needs in terms of skill set and capacity, and any variation from that is going to have serious, and potentially severe, consequences.

Moreover, he said, access to talent is a competitive advantage.  The firm that can assemble the team they need can ultimately build and put their products into market faster than one that can’t, or can’t do so as quickly.

 

Which, Barrie noted, is how Freelancer.com ended up working with Arrow Electronics, the largest electrical component supplier on Earth, to build a specialized gig economy platform to connect electrical engineers to the firms that need them. Instead of searching through haystacks to find the needle engineer that can get the job done, Barrie noted, Freelancer and Arrow want to change the nature of the game entirely for both sides of field.

“The magic is in seeing something, a project, that has taken your firm some time to get going on tap into this marketplace and see how fluid and easy it is to get things going. The talent is all there and it is affordable and quick to get things done.”

How It Works

This project got off the ground, according to Barrie, when Arrow approached them with a problem.  As a massive B2B electrical components supplier, it was often getting asked for recommendations for an electrical engineer to work with. And though is has its ACE (Arrow Certified Engineers) list to refer to, that list isn’t appropriate for every project, particularly smaller ones.

And even when it was, the whole process was an unproductive black box for Arrow — it would offer up a recommendation to the ACE network where appropriate and that would be the last it knew of it.

The new platform works very differently.  Firms can upload their project specs to the Arrow/Freelancers marketplace for free. From there, two individuals work with that posting to start surfacing potential contractors: a concierge from Freelancer.com and a subject matter expert from Arrow.  From there, the platform begins sending back suggestions on freelancers on the platform who have the right skill set to get it done, and strong customer ratings that indicate they are good on the jobs. The most complex and largest jobs go to the ACE network.

“It is a very dynamic and competitive process that above all surfaces choice for the firms.”

This is all free.  Payments comes into the equation when a job is booked, at which point the booking firm is charged three percent of the job price, and the freelance worker is charged 5 percent to 10 percent depending on the job.

Freelancer, he notes, also controls the flow of payments so that funds can be put into the system for the contractor to start work, or payouts can be pegged to certain deliverables.  That is all made possible by Freelancers’ acquisition of Escrow.com, and it creates the environment of trust necessary for business to move forward. The firm knows it is going to get what it contracted for, and its funds will not be paid until the job is complete.  The engineer, on the other hand, knows they aren’t going to be running down an invoice or fighting for their funds — the money is there and waiting to be delivered upon completion of work.

Everyone knows what they are getting, Barrie noted, and getting what they paid for — in a field where both can be hard to know before a hire in many cases.  This gives all parties a reason to keep coming back.

Solving For Stickiness

Among the problem that matchmaking firms can run into is that once they’ve made that initial match between a firm and an engineer, there is a risk the happy pair will run off together and leave the matchmaker behind.

And while Barrie noted that risk is real, it is mediated by two realities.

First, he noted, for the businesses that tap into the platform, the 3 percent charge just isn’t high enough to send them looking off platform to save money and giving up all the features the platform offers.  There is an electrical engineer shortage, and because different projects require different engineering skill sets, they have every reason to want to be able to continue using the platform as opposed to the previous method of guessing and checking through a variety of referrals as needs come up.  Moreover, he noted, for those that are Arrow customers already, they can tap into their preexisting services like their line of credit, and that one big holistic umbrella is a draw.

For the Freelancers, he notes, they have a reason to want to gain a reputation on the platform so they can book more jobs in the future. They might be able to save themselves the fee on one client or other, he noted, but what every freelancer on the platform actually wants is an opportunity to build out their network, and they can’t do that without working through the platform and getting the kind of positive reviews that place them higher in search results.

Plus, he noted, because they have built a global market with Arrow, the reality is for contractors all over the world, this marketplace is a chance to hook into a much larger global opportunity.

“If you look at a freelancer with a niche or specialized skill set, you can now get a good value out of your skills that might not otherwise be possible. If you live in the Midwest, for example, your niche skills might not draw a high enough volume of work — but on a global scale it is a totally consistent stream.”

And, he noted, the platform itself has engineers of all kids — and all skill sets and sizes.  There are major electrical engineering firms with hundreds or even thousands of employees on the platform, he said.  There are retired engineers looking to keep a toe in the industry, independent proprietors — even hobbyists.

“There is a wide market of needs — and there is actually just as wide a market of skills to meet them. The challenge has been in building that trusted meeting place for those groups.”

The Race For The Future Of Talent

This electrical engineering platform, Barrie told Webster, is actually a smaller part of a bigger global story that is just getting started right now: the race for intellectual capital.  The world has more need of skills than it has even distribution of people with them, he said — and the challenge of the future is going to be about filling out those gaps.

They can start to answer the questions about how to do that with Arrow and this new platform — and by figuring out at global scale how to make need sets match up properly.

“Education is the defining characteristic across fields, and the big question is how do we find talent, how do we engage with it and how do we find a way to make those engagements happen seamlessly at scale.”

 

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