Services and Indirect Content

Upwork’s Share Price Slumps, But Online Staffing Platform Soldiers On (Part 2) [PRO]

independent workers

In Part 1 of this two-part Spend Matters PRO series, we discussed what might have been behind Upwork’s share price decline following its report of Q1 2019 financial results, and we came to focus on potential investor concern about growth deceleration over the past several quarters. We could not say that this was what led to the share price decline, but that was our main finding from the 10-K filing.

Upwork’s actual revenue (to be distinguished from gross services value, or GSV) represents the transactional and service fees that (business) buyers and (work/service) sellers are charged when they use the platform (these can take a variety of forms). Upwork has stated that the majority of its total revenue is comprised of the service fees paid by freelancers as a percentage of the total amount that supply-side freelancers charge clients for their freelance services and, to a lesser extent, payment processing and administration fees paid by buy-side clients.

Growing revenue therefore depends on the volume/value of work/services transactions on the platform (i.e., platform liquidity) and pricing (i.e., the structuring and setting of transactional fees and the fees for Upwork services). Upwork may be able to influence revenue by market segmentation and tuning of offers, quality of service (broadly speaking), structuring and setting of fees (given degrees of price elasticity), and lastly, execution of sales, marketing and support services.

In Part 2 of the series, we will review the handful of updates pertaining to growth initiatives that Upwork provided in its financial results report and earnings call. We will also offer our own perspective on Upwork’s current position as a high profile player in the changing contingent workforce space.

Afternoon Coffee: Freelancer Marketplace Fiverr Is Going Public; Google Cools on Doing Business with Huawei

Fiverr, the Tel Aviv-based online marketplace for digital creative services, has announced that it filed its Form F-1 with the U.S. SEC just days ago. Google had deferred doing business with Huawei in some areas like the transfer of hardware, software and technical services. Seeing the massive jump in tariffs, big investors in Apple's iPhone and its supply chain are evidently bailing. And San Francisco-based Starsky Robotics and the Tampa Hillsborough Expressway Authority recently completed tests with a self-driving truck near Tampa, Florida. Afternoon Coffee: your source for procurement and supply chain news.

Field Nation ONE is launched, Walmart supply chain costs, Hub Group adds real-time ETAs

The workforce management provider Field Nation has released its latest solution to manage full-time workers, freelancers, contractors and vendors, the company said. Field Nation ONE is a single platform meant to help business simplify workforce management. Walmart's investment in its supply chains cuts into profits. And Hub Group is offering real-time ETAs on shipments. Afternoon Coffee brings you the latest in procurement and supply chain news.

Upwork’s Share Price Slumps, But Online Staffing Platform Soldiers On (Part 1) [PRO]

Being a public company is not always easy, with performance vs. market expectations being put under the microscope every quarter. And Upwork (NASDAQ: UPWK), the global online freelancer marketplace and managed services provider, found that out Wednesday, May 9, after it announced its Q1 2019 financial results, which seemed to pack few, if any, surprises.

At the same time, while the shares fell swiftly from just over $20 to under $17 in after-hours trading, it bears remembering that, just months ago at the start of October 2018, Upwork offered its IPO shares at $15. Though this may not be a consolation to investors who acquired shares when the stock was trading between $20 and $25 in February and March, it may be somewhat reassuring for more conservative investors that expect a company’s share price to be linked to its fundamentals, including uncertainty.

In Part 1 of this two-part Spend Matters PRO series, we attempt to understand what was revealed shortly after 4 p.m. Eastern time May 9, that caused such disappointment among investors. In Part 2, we will look at Upwork’s several updates to new growth initiatives in the business (e.g., the creation of four service/pricing tiers for buy-side businesses), and we will offer our own perspective on Upwork’s current position as a high profile player in the changing contingent workforce space.

Shiftgig Changes Course — What Can We Learn? (Part 3) [PRO]

In Part 1 of this three-part Spend Matters PRO series, we overviewed Shiftgig’s seven-year evolution from an online marketplace/online staffing firm that matched hourly workers and open shifts that were offered by businesses (mainly in the hospitality, food and event industries). The company recently completed its pivot to a pure-play software solution/technology provider with the sale of the staffing operations part of its business to Headway Workforce Solutions and LGC Hospitality (the two established staffing firms will be using Shiftgig’s on-demand worker matching technology solution called Deploy). In Part 2, we talked with Shiftgig’s current CEO, Rick Bowman, about the company’s shift, its emergence as a technology solution provider and where Shiftgig may be heading now that the pivot is effectively complete.

In this final part of the series, we will step back and take a more analytical perspective and look at Shiftgig’s strategic shift in the broader context of the evolving contingent workforce technology solution and intermediation space. The Shiftgig story may raise more questions than answers. But they are good questions, such as: What happened? Was it Shiftgig’s execution or its strategy? What is the optimal role of online marketplaces and staffing firms? How is technology reshaping the established contingent workforce supply chain?

Shiftgig Changes Course — What Can We Learn? (Part 2): A Talk with CEO Rick Bowman [PRO]

Spend Matters recently had the opportunity to talk with Shiftgig CEO Rick Bowman, who joined Shiftgig as its CTO in mid-2017 before becoming CEO in July 2018. Since then, he has led the company through the launch of Deploy, its technology platform, and the recent deals with Headway and LCG, discussed in Part 1. For this Part 2 Q&A, Bowman provided his refreshing insider perspective on what has been happening at Shiftgig and what it means for the business. Part 3 will conclude with our analyst commentary on Shiftgig’s strategic shift in the broader context of the evolving contingent workforce technology solution and intermediation space.

Upwork’s Q1 Financial Results Are In — As Growth Continues

Upwork, a global online freelancer marketplace and managed services solution, on Wednesday announced its Q1 2019 financial results, which reflected continuing double-digit topline growth. Upwork’s shares on Thursday were trading early at $18.80, down from Wednesday’s high of $20.90. Upwork reported a gross services value of $487 million for the first quarter, up 21% period over period (Q1 2018). The company posted $68.9 million in revenue for an increase of 16% over Q1 2019 (and fitting nicely into last quarter’s guidance range).

Globality Uses AI to Transform Complex Services Sourcing

The sprawling, and often poorly managed, domain of services spend in procurement has not been fully solved by the digital transformation, but as companies adopt technologies to support their efforts, they are discovering the great potential that technology can unlock.

Managing services spend requires assisting the many stakeholders who are sourcing for a variety of needs. To help support all of those sourcing processes, procurement professionals need a robust technology like artificial intelligence (AI), which offers unprecedented capabilities and potential to streamline the process and improve the vendor match. To shed light on that topic, we talked to Globality, a solutions provider with an AI-based procurement platform that helps clients around the world source services.

“Digital sourcing reduces time and improves the quality of the process,” says Yuval Atsmon, Globality’s Chief Customer Officer.

In this Q&A, Atsmon explains the value of bringing AI to B2B sourcing and how Globality uses AI to deliver results that save global clients and service providers time and money.

CRO-to-CRO Video Series: Episode 4 Grapples with Contingent Workforce & Talent Management Challenges

Think about this: A decade ago in the U.S., statistically there were about 700 people looking for 100 jobs. Today, by comparison, there are only about 90 people looking for 100 jobs.

Meanwhile, in India, over 25 million people are applying for just 90,000 positions with India’s state-run railways.

Those vastly divergent scenarios, shared by Michel Janssen, chief research guru of Everest Group, a research and management consulting firm based in Dallas, Texas, paint a fascinating picture of global talent markets — and the need to effectively manage them.

In the fourth episode of our “Chief Research Officer to Chief Research Officer” video discussion series, Janssen and his old friend and former colleague Pierre Mitchell, chief research officer of Spend Matters, explore the key talent management challenges faced by enterprises and what it means for digital transformation projects.

(Not to mention Mitchell’s self-admitted attempts to alleviate the talent shortage in procurement and supply chain by persuading his kids to join the profession; that effort is currently stymied by YouTube gaming, among other pursuits …)

Afternoon Coffee: U.S. Unemployment Rate at Historic Low; Big News for Gig Economy Companies?

The U.S. unemployment rate hit a 49-year low of 3.6%, according to today’s Labor Department data release — the lowest since 1969. The Labor Department also decided, in the specific case of one gig economy company, that the company's workers were contractors, not employees, which has the potential to shift the paradigm for many similar companies. And at least 100 organizations have joined a new initiative by the World Economic Forum called “Redesigning Trust with Blockchain in the Supply Chain.” Afternoon Coffee: shifting the paradigm for procurement and supply chain news.

Microsoft 365 Freelance Toolkit: Retooling How Enterprises Work (Part 4) [PRO]

talent management

Previously in this series, we took a deep look into the Microsoft 365 freelance toolkit: what it is, how it organically took shape inside of Microsoft and how the supplier/partner collaboration with Upwork established a complete set of enterprise-grade, full lifecycle source-to-pay capabilities for the engagement of remote/online freelancers.

— In Part 1, we took a “product development perspective,” focusing on and explaining the toolkit itself. In addition, based on our interview of Paul Estes (Gig Economy strategy lead at Microsoft and the product lead of the Microsoft 365 freelance tool kit initiative) we also looked at how the toolkit was conceived and how it evolved from a set of internal of capabilities at Microsoft into a new solution for Microsoft customers.
— In Part 2, we took a “procurement perspective.” Based on our interview of Chad Nesland (Microsoft’s director of strategic sourcing and the procurement lead in the Microsoft Gig Economy initiative), we looked at how procurement, from the very start 2 years ago played a key enabling role in the cross-functional team and process that guided the evolution of the toolkit from idea to customer solution.
— In Part 3, we took a “partner/supplier perspective.” Based on our interview of Eric Gilpin, (SVP at Upwork Enterprise), we looked at the Microsoft 365 freelance toolkit coupled with the capabilities of Upwork Enterprise. We also examined Upwork’s role as a strategic supplier/partner, what Upwork brought to the table and what the partnership has meant for Upwork itself.


In this briefing, Part 4, we step back and take an analyst’s perspective on the Microsoft 365 freelance toolkit and Upwork partnership, offering our observations and potential insights for procurement and HR practitioners as well as other executives/managers who are grappling with how to address and optimize the use of freelance talent in their organizations. Taking things up a level of abstraction, we provide a more comprehensive business context; we highlight and discuss a number of important aspects of the Microsoft 365 freelance toolkit and the more comprehensive solution that includes Upwork Enterprise; and we suggest what possible opportunities and considerations executives/practitioner could encounter down the road.

The Contingent Workforce and Services (CW/S) Insider’s Hot List: May 2019 [Plus+]

Welcome to the May 2019 edition of Spend Matters Insider’s Hot List, a monthly look at the contingent workforce and services (CW/S) space that’s available to PLUS and PRO subscribers. For those new to the Hot List, each edition covers the prior month’s important or interesting technology and innovation developments in the CW/S space. The latest edition looks at Uber's IPO, Shiftgig news, Moonlighting's blockchain news, Visa's move into fintech for fast payments, and Ernst & Young acquiring a UK-based alternative legal services provider (ALSP).