Today, we present Coworks as our WIP of the Week. Coworks, launched in 2012, is a “work intermediation platform” that allows businesses to access and manage their creative talent, a large percentage of which are freelancers.
Freelance workers have been typical in the creative industry for many years. Creative freelancers are engaged by businesses and agencies alike. Management reports that freelancers comprise 6% of agency staff on average but points out that for WPP, one of the largest agencies in the industry, it is 12%.
Over the past 8 years, millions of creative freelancers all over the world have become accessible across a range of different types work intermediation platforms, including online contest platforms, like 99Designs, and multicategory online freelancer marketplaces, like Upwork and Freelancer.com.
Unlike the multicategory platforms, Coworks specializes in creative talent, and it offers both a creative freelancer online talent pool (reported to contain about 10,000 freelancers), what it calls a freelancer management system (FMS), which supports freelancer sourcing and management by businesses and agencies, and finally a range of services, including selection of freelancers from the talent pool.
In this post, we provide an overview of Coworks’ business, platform and services and offer some thoughts on what a supplier model like Coworks implies for services procurement.
- Founded: As a software company Mancx in 2009, and the commercial launch of Coworks in 2014
- HQ location: Stockholm
- Founders and co-leaders: Henrik Dillman and Mattias Guilotte
- Corporate status: Privately held
- Investment to date: $2 million in two rounds, and most recently a $1.7 million venture round led Almi Invest and Chalmers Innovation in June 2012.
- Investors from contingent workforce industry: None
- Annual spend (revenue) on platform: Not disclosed
- Annual growth rate: Not disclosed
- Other platform dimensions: The company website states it maintains an online freelancer talent pool of about 10,000 freelancers, as mentioned above, and that it has served over 2,000 business customers in 30 different countries. Management reported that the market segment where it is engaged today is agencies but also has its sights on video production and gaming business segments.
Enabling Agencies and Businesses to Source Their Creative Talent
Coworks started as a kind of online freelancer sourcing, engagement and payment platform, differentiated by its focus on creative freelancers and more recently by its approach to vetting freelancers. According to the company, it is now receiving thousands applications from freelancers seeking to join the growing Coworks talent pool but only accepts about 10%, based on the following considerations:
- Portfolio quality — 60% pass
- History of work and achievements — 47% pass
- Two client references — 28% pass
- Professional communication skills and reliability — 14% pass
This gets freelancers into the online talent pool. Coworks can also select and present three freelancers “optimized” to a client requirement as well as recruit new freelancers or onboard those of the client.
Today, Coworks is more than just an online sourcing, engagement and payment platform. Coworks considers itself an FMS, a platform that allows agencies and other businesses to have direct access to and manage all of its creative talent in its own private talent pool — which can include its own freelancers and its own employed in-house staff — as well as manage projects. The platform capabilities and private talent pool can be shared across departments or business units of a larger company.
According to co-founder Mattias Guilotte, “In the past year, we have seen a real uptick of businesses interested in and seeking out our platform. It seemed like prior to that, the concept was novel — a bit alien — for an industry not accustomed to the technology and the model. Perhaps it was because platforms became mainstream in 2015, with public exposure to Uber, Airbnb and others. In any case, there’s been an upshift.”
Coworks has two solution offerings: Pro, for use by small businesses, and Enterprise, for larger businesses. The features included in each offering are delineated here.
Notably, within the range of capabilities is access to extensive data about staff, work and process (including spend analysis) — something businesses typically do not have access to with their agencies. In addition, there is mention of full tax Compliance, but we will need clarify this further at a later time.
Pricing for the two offerings is as follows:
Pricing for the PRO offering is transactional: 3.95% on top of the amount paid to the freelancer(s). Pricing for Enterprise is dependent on a number of factors.
Spend Matters Comments
Coworks is another example of a unique business in the emerging work intermediation platform space.
Although its main market focus right now is agencies, it is and can be used by other businesses directly as a way of aggregating spend on creative services, which are frequently scattered across the enterprise. As with other platforms, Coworks’ rich data set brings visibility into spend that may not be visible inside the enterprise, or when there is visibility there, enables visibility into spend and services that agencies do not offer. The Coworks’ FMS model would seem to give procurement visibility and control, relative to the current status quo, while providing internal business users with improved access to creative talent without the cumbersome, indirect and lengthy processes of working through high cost structure staffing suppliers and agencies.
The technology enablement of direct sourcing and procure-to-pay solutions for non-employee workforce is now happening though a broad range of work intermediation platforms, including Coworks. Each year that goes by, these platforms are themselves becoming part of a new normal that contingent workforce and services procurement will need to address.