Category Archives: My new book

The Sharing Economy versus the Gig Economy

gig economy

Thriving in the Gig Economy - Scholarly Research

Since I am working on a new book, Thriving in the Gig Economy, I am reading  every scholarly item I can find on new alternative marketplaces.  As such, I was thrilled when  The Future of Work Podcast (1)  recently included an interview with Arun Sundararajan,  the author of The Sharing Economy: The End of Employment and the Rise of Crowd-Based Capitalism.  I had read Sundararajan's book already so was eager to hear him discuss it.

I appreciated the fact that he recognized that the advent of digital platforms is really an extension of age-old marketplaces.  The fact that they now happen to be powered by technology rather than a central urban location was somewhat incidental.  Technology was able to become the purveyor of these markets in part due to the increase in trust that the medium affords.  Millenials, interestingly  enough, have grown up in an era where trust in institutions and society is at its lowest level.  (which does not bode well for the upcoming election) .  Conversely, though, they are the most likely to trust a digital platform; since they grew up in a digital age, technology can provide a layer for legitimacy and trust to this cohort, more so than it does to Gen Y or boomers.

What did not resonate with me though was the way sometimes, the gig economy was used as a proxy for the sharing economy.  With all due respect to Professor Sunderararajan, I do not see it quite the same way.  To me, although the sharing economy term is often used interchangeably with the gig economy, it is not the same.  The sharing economy refers to the economic activity generated from the sharing of physical assets on a peer-to-peer level.  The poster child for the sharing economy is AirBnB, the home sharing service.  It enables individuals to rent their property or a portion of it to people in need of a vacation rental.  Although the host may need to prepare the house for the guest, that is not the service that is being purchased.  The product is the temporary housing. By extension, the preparation of the host is not a gig, but rather his/her role to get the financial benefit from the short-term rental of physical assets.

Other assets can be involved as well. There are several peer-to-peer lending platforms, like Lending Club, where individuals can pool financial assets and make loans to individuals or enterprises in need of funds.  Share a Mortgage is a London-based start-up that allows individuals to pool resources for the purchase of real property. E Bay, of course,  is also a sharing platform, allowing individuals to sell handicrafts or grandma’s antique dining room set.

There is some intersection with the gig economy when the asset being shared is in part intangible. SofaConcerts in Hamburg, Germany for example, allows people to host musicians in their home.  The home is being shared, but the experience, the performance, is also shared. Similarly, EatWith in San Francisco, allows hosts to open their homes to put on a dinner party.  The home and meal are shared, but the host has done the work to prepare the meal. The host could be an expert chef, so in that sense expertise is being purchased.

That said, the key distinction between the sharing and gig economy is that the former involves the purchase of a service or experience that involves a physical asset. At the high value end of the gig economy, the transaction can include an intangible asset in terms of the intellectual property that is developed on the gig, but a physical asset isn’t involved.

Despite our difference in perspective on this, I heartily recommend "The Sharing Economy: The End of Employment and the Rise of Crowd-Based Capitalism"; it is a good read.

 

I welcome your thoughts. 

 

The Gig Economy Eco System

Employment in the Gig Economy

As the politicians debate the implications of the gig economy, they typically just talk about jobs.  They lament that so many gig workers don't have benefits and are being taken advantage of by those running the powerful digital platforms. As I have said here often, they seldom mention the professional gig economy workers, 91% of whom have self selected this career path.  But perhaps the bigger oversight is that they fail to recognize the jobs that are being created serving the new needs of the gig economy and its workers.

Take a recent press release from ShiftPixy. http://www.shiftpixy.com This app is a way for

From the ShiftPIxy website

From the ShiftPixy website

companies in need of shift workers to recruit contingent gig workers to fill their scheduling gaps. This means that a small business can use this app, rather than trying their luck at all the digital sites. what Kayak did for travel, it is doing for low-end contingent labor.

Employment Laws and the Gig Economy

Moreover, the Shift Pixy guys have paid attention to the employment law issues that have bedeviled some of the large talent platforms like Uber and Handy.  ShiftPixy employs the gig workers on behalf of its clients.  By employing them, it enables them to accrue enough part-time hours from various clients to qualify for benefits typically only accorded to full-time employees.

In case you are wondering, I don't have an investment in Shiftpixy so this is not a commercial.  It is recognition that someone has solved not just one but two key problem with the gig economy. First they just bit the bullet and made the employment call. Since the laws are murky ( another favorite subject of mine) they built an employment infrastructure that is easily accessible via an app that takes the employment risk away from their clients.  "You want a shift worker to bag groceries, great, they would have to be an employee.  Since you don't want them to be your employee, we will handle that. " Most of the digital platforms put the onus on the buyer to figure out the employment law issues, so ShftPixy took that off the table, making it safe for any size company to engage a gig worker. In the spirit of full disclosure I  think that is especially brilliant idea, since I did the same thing 15 years ago, when I started Collabrus, a company designed to employ consultants when they need to be employed by nature of the work or as a risk management strategy.

ShiftPixy is solving another more intractable problem though, by creating a structure that consolidates part-time hours to enable benefits eligibility.  It sounds straightforward, but it is actually a pretty complicated business model.

In the end, Shift Pixy is a small start-up with a little staff, but none the less, they are themselves a job creator.  They have their own employees, but they will also be creating opportunities for various part-time workers to get additional shifts in a way that suits their lifestyle and financial needs.

So as the politicians lament the loss of traditional jobs, I say lets applaud the innovators who are creating the economic infrastructure to strengthen the new world of work.

Matchmakers in the Gig Economy

erasmus

Matchmakers and the Gig Economy

On my way to Rotterdam to see my daughter compete in the World Rowing Championships, (Go USA! Sorry I digress...) I finished the book, "Matchmakers, The New Economics of Multi-sided Platforms" by David Evans and Richard Smallensee. Although I wished they had spent a bit more time on talent marketplaces in the gig economy, they provided wonderful examples of successes and failures in the new world of two-sided digital platforms. One point in their conclusion I particularly appreciated was this:
 "2.    A lot of what the new market darlings do is old stuff. They just use technology to improve on things that other matchmakers have done for many years. "

How right they are!

In my research for "Thriving in the Gig Economy", I have met many talent platform entrepreneurs.  I think many of them have been surprised at how facile I am with the issues they face as they grow their business. I have been out of my firm for several years now, and my firm was. It a technology platform. But we were - and it is today - matchmakers. As such the challenges a digital platform may encounter when recruiting talent, finding consultants or establishing contract terms are not dissimilar from those I faced over the years.

They conclude with the fact that passed on the long history of matchmakers, dating back to the Greeks and the agora, the current crop of digital platform firms will not be the only ones to  disrupt economies.  In fact another quote I liked is this

"With all due respect to the brilliant entrepreneurs behind today’s unicorns and yesterday’s huge IPOs, the telegraph was a far more important multisided platform in terms of its impact on the global economy than anything the Internet has yet spawned."

They got that right too. On the whole, I solidly endorse this book. I welcome your thoughts on it and the gig economy.

The Name Game in the Gig Economy

Catalants and the Gig Economy

I love to be right.  A few months back I blogged about my amusing experience applying to join the Hourly Nerd  digital talent platform.  I asked the question, "$22 million in funding and they couldn't come up with a better name?"  This week they announced a new name -- "Catalant".

I have been involved as a client in several corporate naming exercises.  With only good thoughts for my old friends at Landor Associates, I just love the whole explanation about why a certain combination of letters will be a good new name.  Now that owning the URL is paramount, most existing English language words are taken, as are well-known Latin or foreign terms.  (My son who was a Classics major could be a source of some good ancient Greek phrases though...)

So Catalant is a combination of catalyst, talent and brilliant, or so they say.  The name change theoretically ushers in a new future for the well-funded digital talent platform  where they tout the new world where " companies can instantly access the precise talent they need  when they need it." The video is lovely, despite its obvious overstatement.

The world they describe is not that new.  I am fairly sure I had virtually that same verbiage in the marketing  materials of my company, M Squared,  25 years ago.  Similarly, other firms that have been around a while, like The Business Talent Group (BTG) and Cerius Executives are demonstrating how companies are using on demand expertise.  Maybe this model is new for Catalant, but it is not so new for the world.

In an article in BostInno, the founders mention that the original intention was to go after small businesses but now they see that big companies can use them as a source of flexible talent. Their algorithms are key to that value to large companies. Their platform can index all skills and find the right person.  That may be so. For me, it is all about trust.

My former company -  and BTG and Cerius for that matter -  provide  our big company clients more than algorithms; we provide trust and judgement.  If I told a client he really should talk to Harry for a sensitive, strategic project even though Harry may not seem on point, they did it because they trusted me and my understanding of the consultants, the gig and their environment. Perhaps algorithms may get there, but as someone in the Hourly Nerd, excuse me, Catalant network, I have yet to be matched with a project appropriate to my skills. As such, I am still a bit of a skeptic about the perfection of the algorithm.

And by the way, I learned from the Bostinno article, Hourly Nerd isn't going away entirely.  It will be the product offering to the small business marketplace So big companies get brilliant talent and little companies get nerds...go figure...

“The Millennial Mindset and the Gig Economy”…not…

The Gig Economy and Career Advancement

Journalism today is not what it used to be.  Gig economy pundit that I am, I get my daily google alerts on anything to with this new economic dynamic.  More often than not, the article is not quite on point, and or has more to do with the sharing economy than the gig economy -- they are related but not synonymous.

Today's headline was from a piece by CBS Boston and was entitled "The Millennial Mindset and the Gig Economy". It opened with Gallup Poll data on the priority the younger generation puts on career advancement.  The challenge though,  is the interview , since many employers want 4 -5 years of experience. A  recent graduate laments that he just does not have the requisite background to be considered.  The piece then jumps to the fact that the gig economy has changed the social contract and it is not clear how it will all settle out.

Really??? I wouldn't blame the gig economy for the fact that may jobs require some level of work experience.  That has nothing to do with any type of social contract, eroded or not,  between employee and employer.  It has more to do with the level of expertise and or training required to successfully perform the tasks associated with the  role.

Maybe the author of the piece should get a new gig that doesn't involve writing about the gig economy...

 

Adventures in the Gig Economy

Thriving in the Gig Economy and the Hourly Nerd

So I am working on a new book, "Thriving in the Gig Economy", a subject I happen to know a lot about from my experience at M Squared Consulting.  That said, though, there are many new players since the days when I ran M Squared.  As fodder for my book, I am walking the  talk and exploring new platforms and using gig economy resources along the way.

I have registered as an expert at a number of sites.  The most remarkable experience was with Hourly Nerd.  (Really, they thought that was a good name, but I digress.) The Hourly Nerd pitch is that the consultants or "nerds"  on their platform come from only select business schools.  To underscore this, they ask that all potential consultants sign up using their business school email.

Now there is the rub.  When I went to business school, email had not yet been invented.  I know I date myself, but that doesn't make me any less qualified as a consultant.  I must say, to Hourly Nerd's credit, they responded immediately  when I pointed out that I did not have a Haas Business School email since that would have been impossible in 1985,  and  since I knew that they were not intending to discriminate against older MBAs,  there had to be another way for me to apply.  Needless to say I was vetted rather quickly after that.

In my 3 weeks of  being in the nerd ranks, I have received 2 inquiries, neither of which was really appropriate for me.  Since I chair a not for profit humanitarian NGO, I received a request to do research for another non-profit in a totally different field.  Clearly they need to work out the difference between functional expertise and industry expertise in their algorithm.  The second was a bit more on point, looking at employee utilization in consulting firms.  However, since the consulting firm I ran was a hybrid firm, providing independent consultants, gig folks or nerds in their parlance ,  to projects my expertise was not quite on point.  As they say, three is a charm, so I wonder what might come next...

In the meantime, I am securing some programming talent in this gig economy as well as research time from some other platforms.  I am intrigued to experience the customer side...I will keep you posted.

 

Lessons of Surfing, a great upcoming read

My good friend and former board member is about to come out with a great book, Make your own Waves, The Surfers Rules for Innovators and Entrepreneurs.  I knew Louis was a great baseball player – he has two World Series rMakeYourOwnWaves-NewDesignings  as part of the United States  Masters team, which is the best an amateur can get – but I had no idea he surfed.  He does surf, but he isn’t great at it,  he says with self deprecation.  But his lack of expertise may be precisely  why he was able to glean such insight from the sport; experts don’t always question, because they just  know, so the outsider can sometimes be the better observer of nuance.

Writing a book is like launching a specialized  business; there is an entrepreneurial element that I did not appreciate when I wrote my first book.  As I work on this one, I am cognizant of those surfing lessons, and  many of the surfer’s rules have resonated for me.  I already knew how to swim, but rule #2, “just get wet”, may be my mantra these days.  At some level, when you are writing based on your own insight, whether a report, a speech or a book,  flow happens.  When research is added to the mix, the flow changes, since more elements are being added.  Especially when every interview turns up new insights, there is a natural tendency to keep investigating.  New insights turn into new avenues to explore, which can delay the ultimate writing process, since  I do want to be comprehensive and provocative.  But I am also impatient, so I decided to parallel process and write while I research, because the truth of the matter is I just need to get wet, to decide to get into the water and ride the waves.  I just need to write and take it from there. Surf’s up…thanks Louis…

 

Just because it has an app, doesn’t make it a gig

A recent article in Forbeshttp://ww.forbes.com/sites/parmyolson/2016/03/21/gig-economy-app-blue-collar-job-on-demand/#51a7380f74e2, illustrates a problem with the media's focus on the gig economy.  The article, entitled "This App for Blue Collar Workers Offer a Twist on the Gig Economy" describes a well-funded start-up in Spain called Job Today which has launched an app to place workers in hospitality jobs that have "the Old School idea of a job where you are an employee."  I am sorry, Forbes, but being recruited into a job as an employee is by definition, not a gig.

Indeed Job Today is excited about the number of people it puts into jobs, not gigs.  It is a staffing segment that does not even represent white space in the staffing industry; there have been companies servicing  the hospitality industry with servers, bartenders and maids for decades.  Granted, the founders wanted to do a bit of  disrupting, since so many people find jobs in hospitality  by walking into a bar and offering up a paper resume.  This was a market inefficiency that technology could potentially address.

Using technology differently in the space is where the  confusion, probably arose.  Job Today has a Tinder Like app, where the user swipes to see different candidates. (The old HR Professor in me, sees some inherent potential discrimination issues in that, but hey... they are in Spain...) Just because there is a cool app, doesn't make a staffing firm a gig economy player.  Yes, sophisticated platforms for matching talent has enabled the freelance economy to be targeted and engaged more precisely, but this is sophisticated technology designed to help people get regular jobs. That said, they do handle some temporary ones, for vacancies or seasonal work, but their bread and butter is in the full-time regular hires.

So just to be clear, for any journalists or bloggers who might not understand my nuance here.  Regular employment  where people are hired as employees are not gig economy jobs even if a cool app is involved.  As McKinsey defines it, the gig economy is "contingent work that is transacted on a digital marketplace." Job Today has the second condition, but its goal is not the first.

The Freelance Marketplace Platform Race

Now that I have embarked on my research for the next book on the high-end of the on demand expertise marketplace, I am having a lot of deja vu moments.  Certainly, there is the fact, that though I have been gone from my old firm for several years, things have not changed that much. Tremendous, credentialed  expertise of just about any type is available on demand. Companies continue to avail themselves of this resource in new ways, and new competitors continue to arrive touting different points of differentiation.

It is this last area where the deja vu comes in, because the new platform competitors appear to be cropping up everywhere.  My twitter feed is cluttered with entreaties from one firm to beta test a new platform that "won't suck." (I couldn't help but wonder if they shouldn't get a free

ipo-flops3-1

The Pets.com sock puppet

lance copy writer to come up with a better ask...) Quite frankly, I am reminded a bit of the frothy days of the internet when pets .com  became the 4th ( yes 4th) online pet supply store.  Despite the fact that dog food is not a high value shipping product, the firm had an amazing IPO valuing it at close to $100 million  in 2000 and was out of business 9 months later.

 

I am not suggesting that the online freelance marketplaces are headed for the same fate.  Indeed, I think technology is creating the platform to enable a market to be made in talent, in the true economic sense of the word market. I look forward to better understanding these business models to see how differentiated they really are.  Certainly, some are defined by the type of talent they seek to attract; the sites working with copy writer won't appeal to CFO's, but dancers will do... Interestingly, one in the UK, combines a totally automated service with consultant mixers, so freelancers can gather together.   I can't help but wonder if freelancers will subscribe to all that operate in their area of expertise, or if they will  choose just one.  If it were me, I'd definitely go for the one with the mixers...I am a sucker for cocktails...

 

 

The “Gig Economy” and the employment data problem

A recent news item little noticed apart from gig economy wonks like me was the fact that  the government is planning to get data on how many workers actually populate the "gig economy."  Labor Secretary, Thomas Perez, announced at the end of January that the department would team up with the Census Bureau and  restore the Contingent Worker's Supplement  as part of the May 2017 Current Population Survey.

It is being restored because in 2005, in the infinite wisdom of governmental agencies, the decision was made to discontinue data collection in this area. The Supplement had only been published 5 times and in fairness, it had its share of critics.  A major failing, was the fact that  it aggregated all contingent work arrangements, from  senior management consultants to security guards to cab drivers.  As such, drawing conclusions about income trends, potential wage and hour infractions or economic security was difficult.  Similarly, no attempt was made to try reconcile the differences between the self employed - a broad category which  consultants, architects and dry cleaners - and 1099 tax filers.

Now that the gig economy appears to be fundamentally redesigning work and income structures in the US economy, the Labor Department  wants to try to get a handle on the phenomenon in large part to better inform policy decisions. They do acknowledge that it will be difficult, since just the definition of what qualifies as contingent work is controversial. Additionally, one would hope that they will make strides to refine the data to be able to draw more meaningful conclusions.    That said, we should not get too excited, since this  there won't be data until early 2018 at best.

What is ironic to me, as someone who has been involved in the  high-end of the contingent work force for nearly 30 years,especially now in this political season is the constant emphasis on jobs creation as a metric of economic success.  When you consider 53 million people, according to The Solo Project, have chosen to define  themselves as  independent consultants , free agents or free lancers, the magnitude of the data problem becomes apparent.  These people do not want traditional jobs. What labor statistics are capturing this? Lets hope Perez can fix the data problems inherent in the Contingent Workforce Supplement, because the world of work is being redefined quickly and the government needs to catch up.

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