2024 Predictions for Freelance Economy Leaders
Matthew Mottola
CEO, Human Cloud
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1: Budgets will return, but for strategic, not transactional relationships.
‘Gigs’, or task based work, has been most hurt from budget cuts, and where leaders have cut when saying “cut freelance spend”.
On the contrary, strategic work has increased. Strategic looks core to the business. It is usually termed fractional, interim, or independent X (X being the specialized skill, like CRO/CMO, Python developer, etc), and typically spans months, not days or hours.
How to position yourself for this:
- Be of value, not of service
- Position yourself as the IP leader in your niche. This means reports, webinars, keynotes.
- Prioritize strong client relationships, measured by growth within account and proximity to client (QBR’s, standups, real testimonials, wearing their t-shirt)
- Help your clients think beyond the req. Help them scope, understand what’s possible, and scale the full department, not just match 1:1 freelancer req.
2: Existing Enterprise relationships will be the leading revenue driver.
Why Existing? According to Freelance Trend Tracker, client relationships are the #1 factor for business performance, while sales/marketing is #5. This signals expansion of existing accounts yielding higher impact than top of funnel growth.
This matches what we’re seeing across our portfolio and our conversations.
Why Enterprise? According to Freelance Trend Tracker, platforms prioritizing Enterprises are doing better than those not prioritizing Enterprises.
How to position yourself for this:
- Follow everything in bullet 1
- Have Enterprise expertise, from the leadership team, to the account managers. Specifically, understand (1) the sales cycle of Enterprise versus small to medium sized businesses, (2) the legal and procurement process, (3) the hierarchical org chart and stakeholder maps required to drive change.
- Have an Enterprise specific service level, including account management, classification support, program measurement. You do not need to do this yourself, it is expected that you have a partner ecosystem.
- Partner with marketplaces and solutions that have existing Enterprise relationships.
*Disclaimer: While company size is an indicator, a high TAM for potential freelance budget is the leading driver.
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3: Partnerships will be the second leading revenue driver.
The freelance economy is unique in that no one solution or platform can scale a freelance workforce. While client leaders want it, there is no “uber for freelance economy”, or “Amazon for freelance economy”, nor do we see this potential for the next 5 years. The reason is multi-layered.
- Layer 1: Marketplaces can’t be the everything store for talent. High complexity, high skill, and highly subjective roles create the need for vertical marketplaces that specialize in a skill or industry rather than just a marketplace.
- Layer 2: There are multiple parties involved just to hire, manage, and pay freelancers at scale (existing VMS/MSP providers, freelance platforms, compliance/classification, payroll, EOR, etc).
- Layer 3: There is internal support, education, and change management required to drive adoption. Typically, clients think they can just onboard a marketplace as a vendor, when they really needed a transformation approach from use case, to pilot, to scale.
- Layer 4: Each enterprise has unique requirements that can’t be repeated into a software application.
We always say scaling a freelance workforce looks more like starting a business than it does onboarding a vendor or migrating to a new tech stack.
The result, is that partnerships provide the scope, and scale, for growing freelance spend across these 4 layers.
How to be ready for partnerships:
- Go beyond a partnership agreement.
- …
*We will be hosting a partnership webinar in 2024. Become a panelist to have first access to this!
4: Venture funding won’t move the needle like profitability will.
According to Freelance Trend Tracker, over 65% of freelance leaders don’t view funding as important.
This is consistent with our conversations and portfolio. Although there is a caveat…
*We will be hosting a funding webinar in 2024. Become a panelist to have first access to this!
5: Tech will be important, but it is not as important as investments that directly lead to close relationships with your clients.
According to Freelance Trend Tracker, leaders rank tech as their 6th priority to business impact.
How does AI relate to this?
- We’ve seen early signals that AI demand, specifically companies hiring AI experienced freelancers, has risen. According to Freelance Trend Tracker, AI and Data related skills are expected to be most in demand.
- We’ve seen AI used to enhance platforms, but it is still too early to validate the impact.
6: Consolidation will continue.
We were torn, whether this should be the first or sixth prediction.
We have seen in the past 6 months, and predict it will continue…
7: Fractional is important.
According to LinkedIn’s 34 Big Ideas that will change our world in 2024, the third big idea is fractional, specifically the 35% CFO.
This is a rapidly developing area. There has been an interim, fractional executive industry for decades. What’s different…
*Listen to Adrian Tan, fractional CMO, to understand the ability to lead while fractional
What We’re Watching
The below trends have clear potential, early signals, but there is not material validation that we can make it a prediction you should be investing in.
1. The rise of Platform/Marketplace MSP Offerings
Most vertical and specialized platforms like Toptal for developers, Catalant for consultants, or Paro for finance/accounting, already look more like an MSP or agency than an open marketplace. Instead of self service matching, they can provide scoping support, curation support, classification and EOR support, and program level support in a consulting relationship rather than an Uber or Ecommerce marketplace relationship.
Yet the disruption of the freelance economy is that technology can remove the middle layer between talent and hiring manager, thus isn’t MSP level support a contradiction to the value of freelance models? Yes and no. Yes in that it adds layers. No in that the layers are needed, especially at scale, and an MSP like experience can provide a superior experience to open marketplaces the higher up the value chain freelance projects get.
So will all marketplaces need an MSP layer…
2. Integration with VMS/MSP/Staffing Solutions
Will early partnerships and integration with VMS/MSP solutions increase freelance adoption?
Theoretically…
*We will be hosting a VMS/MSP webinar in 2024. Become a panelist to have first access to this!
3. An aggregator, consolidation, or the “Amazon of Marketplaces”
Will freelance marketplaces be rolled into a single pane of glass that Enterprises can access multiple marketplaces from?
Theoretically…
Want to see the full article?
Clients and Panel Members have full access to Matthew, Jon, and Human Cloud Network analysis.
For a limited time, join our panel to access this full article. We expect access to be paid seats by Q2, ’24.
What We’re Watching
The below trends have clear potential, early signals, but there is not material validation that we can make it a prediction you should be investing in.
1. The rise of Platform/Marketplace MSP Offerings
Most vertical and specialized platforms like Toptal for developers, Catalant for consultants, or Paro for finance/accounting, already look more like an MSP or agency than an open marketplace. Instead of self service matching, they can provide scoping support, curation support, classification and EOR support, and program level support in a consulting relationship rather than an Uber or Ecommerce marketplace relationship.
Yet the disruption of the freelance economy is that technology can remove the middle layer between talent and hiring manager, thus isn’t MSP level support a contradiction to the value of freelance models? Yes and no. Yes in that it adds layers. No in that the layers are needed, especially at scale, and an MSP like experience can provide a superior experience to open marketplaces the higher up the value chain freelance projects get.
So will all marketplaces need an MSP layer…
2. Integration with VMS/MSP/Staffing Solutions
Will early partnerships and integration with VMS/MSP solutions increase freelance adoption?
Theoretically…
*We will be hosting a VMS/MSP webinar in 2024. Become a panelist to have first access to this!
3. An aggregator, consolidation, or the “Amazon of Marketplaces”
Will freelance marketplaces be rolled into a single pane of glass that Enterprises can access multiple marketplaces from?
Theoretically…
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