The independent consultant, freelance and on-demand workforces, engaged through online platforms, are real and growing. As increasing numbers of workers arrange their work through platforms such as MBO Partners, Upwork or Uber, to name just a few, there are challenges that arise. By now, we all know about the classification problem. But we may only be starting to become aware of another set of challenges that involve providing members of these workforces with capabilities and critical services that will support workers and enable them to flourish.
In recent months, Spend Matters has been covering what we call the “independent worker-facing support services ecosystem,” which we consider essential to the continuing growth of the independent workforce. We have also acknowledged a number of key players that have emerged in this space, incluidng Intuit Quickbooks Self-employed (accounting/tax filing), Stride Health (health insurance) and Payable (payments).
In this post we cover another new entrant into this ecosystem, Crowded.com. We recently had a chance to talk with the co-founder and COO Mark Roth and get an understanding of what this platform company is about.
Crowded.com, founded in 2015, is an online platform that can play a unique and important role in the on-demand space where platforms directly intermediate between workers and those who consume and pay for the workers’ services, such as, in the case of Lyft, car drivers and the people who pay for rides. Crowded.com’s role is to support both on-demand workers and on-demand companies — in this example, on-demand workers who may work for Lyft, and possibly other platforms, and the on-demand companies.
Crowded.com refers to itself as “the marketplace for on-demand workers,” which means a marketplace where on-demand workers and on-demand platform businesses can connect and engage. As the on-demand economy expands, both on-demand workers and on-demand platform businesses start to face challenges that are really two sides of the same coin. On-demand workers can struggle to find an adequate flow of gigs, and on-demand businesses — especially as they scale and expand geographically — can be challenged with recruiting additional workers.
This is one of the big problems that Crowded.com intends to solve: on the one hand, aggregating the supply of on-demand workers, and on the other, aggregating the demand of on-demand platform businesses. Eureka: Bring supply and demand together on the Crowded.com platform, and you have what may be called a virtuous circle — or in today’s platform parlance, a “network effect.” Workers may now find gigs across multiple platforms, and platform businesses may now find the workers they need, even across different geographic markets. According to Roth, “Crowded.com is creating a marketplace in the on-demand ecosystem by recruiting independent workers ‘at scale’ and aggregating gigs from hundreds of on-demand platforms.”
And there’s more to say.
On-Demand Worker Value Creation
While Crowded.com focuses on meeting critical needs of on-demand platform businesses, Roth said, it really considers serving the on-demand workforce as the keystone of what Crowded.com does.He pointed out that the world of the on-demand worker can be challenging, not just in terms of securing an adequate volume of work but for other reasons as well. Accordingly, Crowded.com offers a range of other benefits to support and sustain these workers.
Today these benefits include:
- Training and education on how to best function as independent worker. Roth mentioned the development of best practices and sharing of useful strategies and tactics by experienced workers.
- An interactive community to create a “sense of community” among workers, and ways to communicate. Roth mentioned that Crowded.com is also starting worker Meetup groups in different locations.
- “Office Hours” is a period of time each week when workers can speak and confer with Crowded.com staff to discuss needs and issues.
Today, these are the main services Crowded.com offers to workers. Certainly access to gigs is a big driver of workers to Crowded.com, but these other services are also helping to recruit workers, and Roth indicates that additional services will likely become available over time.
While on-demand workers may be the keystone, the potential value created for online platform businesses has to be enormous. Roth mentioned the following:
- Worker acquisition, as noted above, can be very valuable to on-demand platform businesses, especially as they are scaling and expanding. Roth noted that Crowded.com does actually perform a recruiting function. In addition to attracting workers with the community and training, Crowded.com also actively recruits workers by leveraging media buying and job boards.
- On-demand businesses also gain visibility into on-demand workers, including their capabilities and availability, making matching more efficient.
- To the extent that it provides services to workers, Crowded.com helps on-demand platform companies mitigate classification risks by performing these functions as a third party.
There is potentially another benefit that Crowded.com can provide platform businesses and perhaps others — something Roth did not mention in our conversation but which was described on the Crowded.com website. That is data analytics, which the website describes as “extensive regional and national data on the on-demand industry, its workers, jobs and platforms.” That seems pretty useful.
Where is Crowded.com Today?
Crowded.com is underway and heading for a full launch in January 2016. According to Roth, there are already 10,000 registered workers who, at this time, are mainly leveraging the training and education services, while the demand side of the platform expands.
Today, Roth told us, there are 25 on-demand platform businesses integrated into the Crowded.com platform. (See some of them below.) In addition, Roth said the company is in discussions with about 400 on-demand platforms, and he expects that the demand side will ramp up rapidly.
Roth explained that the current monetization model is based on “referral fees,” which Crowded.com charges the on-demand platform for each worker they “recruit” through the platform. Roth said that a typical referral fee would maybe $300; however, the fee could be considerably higher if, for example, it is tied to an agreement under which the worker must successfully perform some number of specific work activities, for the subject on-demand platform business, with some specific period.
Crowded.com seems to have developed a platform that may solve some crucial problems and relieves some constraints on the growth of the on-demand freelance economy. So far, it seems the company has been bootstrapping, perhaps with some help from some angel investors. We don’t know if a seed round lies ahead in the not-so-distant future, but in the meantime, Crowded.com will be a work intermediation platform to watch as it moves forward in 2016.
Why Crowded.com Matters to Contingent Workforce Professionals
Some of you may be scratching your heads and asking, “What does this on-demand economy have to do with me, a procurement professional?”
There are at least a couple of answers to that question.
First, the on-demand platform, “gig economy” is not all consumer-oriented. Some of these platforms have a business orientation and thus could very well be of interest to services procurement — for example, Uber for Business and Gigwalk. If you think about it, a variety of business services could be supported by on-demand platforms — courier delivery, quick questions answered by experts, fast office/equipment support and more. Consequently, on- demand workforces may increasingly become a part of your contingent workforce.
Second, procurement should acknowledge the development of on-demand platform ecosystems and, specifically here, a platform that can attract, aggregate and support a workforce that, in turn, can be accessed by other platforms that use those workers to provide service in a particular market. The point here is that the development of workforce ecosystems that include different digital platforms and services providers like Crowded.com is really happening. This means new workforce and services channels are emerging.
Overall, contingent workforce and services procurement professionals can look to on-demand platforms as potentially a source of workforce and labor-based service and, more importantly, as a harbinger of future developments — workforce ecosystems— a topic that Spend Matters is on top of, analyzing and writing about.