A new business model for remote work

I’ve been a freelancer for over 11 years. I created my first profile on oDesk (now Upwork) back in January of 2008. Since then, I’ve had successful profiles on Elance (merged with Upwork), Freelancer, Guru.com, PeoplePerHour, Clarity and more. 

Each platform has its own pros and cons, and it wasn’t long before I outgrew the pros, couldn’t deal with the cons, and decided to launch my own website at aPitchDeck.com to attract clients directly. 

If you’re an entrepreneur planning on building the next Upwork/Freelancer/etc, here’s a business model that I hope you will consider:

  1. Charge freelancers for each “keyword” that they want to rank for, on your platform

  2. Do not charge the companies posting the jobs.

Let me explain.

Companies/Individuals that post jobs online today have a lot of free options available to them 

These include popular connection-based networks like LinkedIn and AngelList, in addition to well-known older platforms like Indeed or Craigslist, not to mention the army of commission-powered independent recruiters scraping the web for resumes. 

The painful reality is that you’re just never going to be able to offer enough features to entice companies to pay you (at least not substantially) because they have already come to expect these features for free from your competitors. Worse, they may only pay you to post one gig/job/project and then disappear, leading to a lot of churn. 

Secondly, if given a choice, most companies today will still prefer individuals who can come-in to the office if they are paying them the same amount of money, as opposed to having them work remotely (a.k.a the remote worker could be as likely to be working from a co-working space as they could be from a beach sipping on a mojito). So what’s the incentive for them to pay you to find a remote worker over a regular worker?

Freelancers on the other hand are generally loyal, naturally enterprising and will find ways to stand out from other freelancers. And yet, there aren’t many paid ways to do so! 

Take my case with Upwork: I had steadily moved my freelance rate from $20/hr in 2013 to $250/hr in 2016. 

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I was the leading “pitch deck designer” on the platform working on multiple $3-4K projects per month with 5* reviews from all my clients. I was even one of their earliest “Top Rated” freelancers.

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Within the next couple of years, other freelancers recognized this niche and began under-bidding for the same projects (and not surprisingly, offering lower quality work as I came to find out from their clients later). I decided that I didn’t really want to compete on price and focused on other platforms and on my own website as a source of lead-generation. Upwork’s flaw here was that although they took a percentage of my earnings, they never really gave me the opportunity to promote myself to more targeted clients through their platform.

In addition to the % commissions, I was paying Upwork $10/month as part of their monthly subscription fee. To be honest, I would have been delighted if I had the opportunity to pay Upwork a flat fee (say, between $200-$300 per month) just to keep sending “pitch deck” seeking clients to my profile because of my confidence in my high conversion-rate for this keyword. This brings me to the key point of my post - the business model that I propose for the next cohort of freelancer platforms.

Business Model: Charge freelancers to rank by “keyword”

(Ask yourselves, what would Google do?) Encourage professional freelancers to bid for the in-platform search keywords that they want to be ranked for. Over time, freelancers tend to specialize in certain fields based on their experience and feedback from existing clients. Although I started out with writing business plans in 2008, I began offering financial modeling services in 2010, research services in 2012 and finally found my strength in investor presentations or “pitch decks” by 2014. If your platform can drive a lot of job posts (from the free postings available to companies) I might be motivated to budget $200-$300 per month in search-advertising on your platform’s search box to rank for specific keywords for jobs that I am certain I can close.

The key insight for the likely success of this business model is this:

The “professional” freelancers today are a different breed of individuals when compared to the amateur freelancers that are looking for side-work. These “professional” freelancers are full-time freelancers, usually have a registered company somewhere, have a specific niche, have a diverse portfolio of work, are capable of managing complex projects and/or are digital nomads who depend on a steady source of income to fund their world travels. They see their freelance/remote work as a business and a lifestyle and are willing to pay the necessary expenses (a.k.a your platform’s keyword-advertising fees) to grow.

Give them the opportunity to do so.