Greater than the sum of its parts
We’ve outgrown the classical agency model. And freelancing can’t fill the ever increasing gap. But when combining the best of both worlds, the result could be the future of the service industry.
Marketing unbound
Marketeers used to live in a predictable world where their power was directly related to to the size of their marketing budget. In other words, the firepower to bombard people on billboards, newspaper, radio, and TV.
But the world changed thirty years ago with the birth of the world wide web. Digital marketing emerged and it now requires marketers to manage more formats, channels, and tools: search engines, social networks, and blogs, to name a few. Across multiple devices. On a global scale. And most of these new channels require content including websites, eBooks, landing pages, blog posts, and custom apps. As a result, inbound marketing emerged as method to systematically transform marketing dollars into content (instead of billboards).
“…value of commodity content will just so collapse such that only really distinctive content will actually have value” — @goodberger
This shift in marketing budgets, in turn, led to a super-abundance of content that is making it more challenging every day to cut through the noise. Today, launching mediocre — or free — gimmicks simply does not cut it anymore. Thought leaders urge you to produce only 10x content if you want to be heard at all.
“…we will now see knowledge-worker jobs — salesperson, secretary, engineer — atomize into complex networks of people all over the world performing highly specialized tasks” — HBR
Gone are the days where one could simply hire a “web designer” that would do everything from content to coding. Today, in the age of hyperspecialization, successful marketing relies on more and more specialists: inbound strategists, interactive copywriters, certified web analysts, UI/UX designers, and front engineers to name a few. Having all those specialists in house — full time — is only really done by the Googles, Amazons, or HubSpots. But for a small startup, a mid-market company and even Fortune 500 companies, this is impossible. And usually, not even desirable. This has created the market for marketing agencies.
Enter the agency
In the old world, agencies were kings. Coked-up creatives specialized in re-selling hundreds of billions of advertising emptiness. In the new world, you can now find the evolutionary offsprings of these agencies: marketing agencies, digital agencies, digital marketing agencies, inbound marketing agencies, web design agencies, social media agencies. You name it.
Agencies are specialists focused on delivering services to selected industries and verticals. Just like there is a brake shop for your Chrysler, there is a web agency for your dentists. A great solution when you are solving “commodity” problems in a world of known problems. Again, a world where the agency’s primary role is to fill empty billboards with funny images.
But that world is long gone. Forever.
Shut The Door. Have a Seat.
Fifty percent of the Fortune 500 companies have disappeared in the last fifteen years and another fifty percent will likely do so over the next ten years. Meanwhile, in the same timespan, over one hundred fifty unicorns emerged. Almost twenty have already been acquired, many by non-tech giants who want to avoid being listed on that same Failure 500 list.
“Networked markets are beginning to self-organize faster than the companies that have traditionally served them.” — Cluetrain Manifesto
Markets are more dynamic, windows of opportunity emerge and close in no time. Gone are the days when you could comfortably plan from fiscal year to fiscal year. “Agility” is no longer just a company slogan or culture slide, it has become essential for survival and companies are trying to reverse engineer it into their DNA.
For marketers, this means that repeating proven formulas — often copied from competitors — is no longer a model for success. Digital marketers live in a world where the primary challenge is to battle accelerating change and its evil offspring: the unknown.
“Agile innovation has revolutionized the software industry, which has arguably undergone more rapid and profound change than any other area of business over the past 30 years. Now it is poised to transform nearly every other function in every industry” — HBR
Finding a single agency that can meet all of tomorrow’s unknowns is impossible. It’s like signing a retainer with an expensive heart surgeon as a preemptive health strategy.
Your own team of superheroes
Companies have turned to freelancers not only to save on costs, but also to increase agility. Compared with agencies, individual freelancers can be hired overnight and they can lend an extra pair of hands (or their “lance”) when needed. They can provide the missing expertise and specialization and they don’t need long term commitments or employment contracts.
“…9 in 10 independent workers (88%) would keep freelancing even if they were offered a full-time job.” — HBR
Today, more freelancers are available in various languages, locations, and specializations. Studies predict that by 2020, the majority of the US workforce will be freelancers. The abundance of freelancers seems like a great opportunity, not only to fill the gaps the agencies leave behind, but in many cases, to replace the agencies entirely.
The challenge is not in attracting self-proclaimed superheroes, but rather in making them work together. Productively.
Let’s say you want to develop a website. You hire a freelance consultant, who defines the site’s narratives, a freelance designer who produces the interfaces, and a freelance developer to write the code. To be efficient, these freelancers need to use the same tools, best practices, and follow the same processes. Process steps that might seem trivial — like handing a homepage from designer to a developer — are extremely important to produce high quality deliverables at high speed. Failures in these simple handoffs can produce a great amount of confusion, repetition, and delays.
Problems originating in collaboration and communication tend to exponentially increase with the amount of participants. Very similar to the complexity of integrating multiple separate software systems with different APIs and protocols. Productivity is not simply the sum of the individual skills but — equally important — the ability to combine these skills. This is driven by the ability of the participants to communicate and collaborate.
A collection of great athletes does not simply make for great soccer team.
Collaboration challenges are obviously not confined to the freelance world. Even if all your workers sit cubicle beside cubicle, it is hard. But imagine what happens when you distribute people across the world. Across multiple time zones and cultures.
The nightmare of distributed teams
The new workforce of freelancers is not only remote (as in “not working at the same office”), but also always on the move. A rapidly growing subspecies of freelancers, the digital nomads believe that working when, where and as much as they want is no longer a perk, but a fundamental right. They have grown up knowing that jobs can no longer provide the stability and protection their parents might have enjoyed. And they haven taken pride in it.
“Though it may seem strange to compare independent lawyers, marketing gurus, CFOs, engineers, and consultants to a movie star, talented people are going independent because they can choose what to work on and with whom to work. ” — HBR
Given a choice these “free agents” pursue their personal stream of projects that they deem interesting and worthy of their precious time. They are creating a new form of work “culture” only really comprehended by them.
Fortunately working with distributed teams has been a decades-long challenge tackled by the Open Source Community. This allowed a new generation of startups like Buffer, Automattic, Zapier, Hotjar and hundreds of others to follow in their path. But remote work is really still in its infancy and pioneers pay a high price.
“We canceled our upcoming team retreat to Berlin. Savings: $400,000.”- Buffer
To understand how big the challenge is, just look at the recent $1M cost reduction of Buffer. The single largest item was the $400.000 to allow 90 employees to meet face to face. Once per year. This makes roughly $3,000 per head. Pretty much the annual cost of an office for one employee.
For large companies, distributed teams are an even harder reality. There are hundreds of failed examples and one of them is Yahoo. When Marissa Mayer stepped onto the bridge in 2014, one of her most controversial, but also most decisive, actions was to abandon the home office. Yahoo simply was not able to make it work.
Sacrificing an office is easy. Finding and managing the people that can live without it is not.
Beyond the gig economy
While we have seen little innovation in the world of agencies, we have seen the freelance market evolve. Freelance marketplaces were born with the proliferation of the Internet in the late 90s. With thousands of freelancers registered on marketplaces like Upwork, access to a broad range of skills, from programming to legal advice, is only a click away. And with the demand for more specialized workers more specialized marketplaces emerged: 99Designs focuses on designers, crew.co on “creatives,” VideoBrewery on video production and voicebunny on — well — voices.
“Being an Uber driver moonlighting as Taskrabbit moonlighting as doggy-masseuse to your nearest branch of the Kardashian Dynasty”-umairhaque
All of them, let by UpWork, Freelancer.com, Fiverr, Taskrabbit, and recently LinkedIn are creating a gig economy. The gig economy is not that different from the old economy, just with different winners and losers and its own sets of benefits and mishaps.
“Unfortunately, more than 70% of gig workers in NYC report having been cheated out of payments…” — nydailynews.com
For workers, the gig economy means on one side more freedom. On the other, it means chasing payments and hustling from job to job. For companies, it means immediate access to cheaper talent and skills without long terms commitments. But it also means less commitment and more management. People that think of the gig economy as a new management style must be the same that enjoy herding cats.
Marketplaces have to come to recognize this challenge. TopTal not only “lists” but also “vets” freelancers. Big enough of an idea to raise money from Andreessen Horowitz. Flexjobs focuses on brokering “flexible jobs.” Rather than promoting gigs, it promotes long term relationships. UpWork started offering an “enterprise” solution an “end-to-end Freelancer Management System”. Unfortunately their ability to significantly add value to the production processes is limited. Their Enterprise services cover “talent sourcing” and white glove services (team administration). It also promotes a “technology platform” that includes a “Slack Killer.” Really? Pathetic.
Nonetheless, though the approach (and the results) may be far from ideal, the direction is a good one: give customers what they need: cohesive teams. The diversity of skills, culture and proficiency of their freelancers — let alone their lack of commitment — really makes it impossible for an UpWork to add value beyond basic administrative features. It’s a mint. Not a pain killer.
In short, agencies are trapped in their specialization while marketplaces are trapped in the gig economy they created. It’s time for a new model.
Service as a Service
In order to adapt to the unknowns of tomorrow, companies will increasingly need to recruit highly specialized, distributed workers and quickly enable them to collaborate efficiently to deliver high quality deliverables. The ability to do this will be — without a doubt — a key factor to compete in the digital tomorrow. And it will change the freelance economy.
What is about to happen to the freelance economy has already happened in the software market. Boxed “desktop software” got replaced by “rigid client-server software” got replaced by “the cloud.” And in this cloud, companies like Google, Amazon, and Salesforce are the “operating systems” for a new generation of Apps. This in turn has led to the proliferation and adaption of API and related standards. Today companies (like ours) are run on over fifty specialized applications that talk to each other. Not yet seamlessly, but every day more so.
The freelance world is similar. To maximize the potential of people we need better ways of collaboration. Just like applications need better APIs. When APIs are standardized, cost and time of integration decrease. When best practices and processes are shared across workers, cost and time to ramp up effective teams decrease. In both scenarios, by an order of magnitude.
Just like Google, Amazon, and Salesforce are today platforms for applications, the freelance ecosystem demands an operating system. Today, in the freelance world we have the App Store without the iOS. There is no guarantee that the freelancer you hire will work out for you. Even less if he will work well with other freelancers you hired.
“We will never have this chance again to create a gig economy worth getting excited about. An alternative market is emerging. A future of work that fosters genuine agency for its participants ..” — ArtPlusMarketing
We need a platform of vetted specialist with diverse background and skills that share a basic stack of tools, best practices, and processes. A single point of contact for the customer to assemble and reassemble teams overnight. Continuous 24x7 service delivery anywhere in the world. With redundancy and fallback. In the cloud. The new SasS: Service as a Service.
This platform for freelancers would combine the best of two worlds: effective team collaboration like an agency with the diverse and dynamic talent pool of today’s marketplaces. An “unagency” that breaks with conventional agency structures the way unconfernces break with conventional conferences.
“When we are happy, we do better work. When we do better work, we get more (and happier) customers.” — InboundLabs
For this unagency to emerge, we will have to rethink many aspects of traditional organizations. To start, we need the right people, a new generation of leaders, engineers, and marketeers. These people need to be empowered to build self-managed teams to allow the organization to scale. And finally, we need to give people the freedom to do the job they like. Where they want it, when they want it. We need to cut the bullshit that prevents us from getting work done and allow all of us to focus on getting shit done.
As a result, the value of the platform — for all its stakeholders — will not simply increase linearly with the amount of its participants, but rather exponentially. It won’t be an agency but this collection of agents that becomes more than the sum of its parts.
Notes and credits:
“Screw it! I will just publish it now. Then fix it later.” was my thought yesterday night. I have been doctoring with this post for several month now. Maybe even since we “accidentally” started InboundLabs about two years ago. This post (and the company itself) have been on a journey of self discovery. And this is an invitation for you to contribute, share your ideas, comments questions and criticism with me. Shoot me!
I appreciate the help I got. First of all, thanks to Billy Winburn from Community Aviation, a fellow founder and customer. In a review he described us as “The Seal Team Six of Inbound Marketing”. Liking or not the military analogy he deserves the blame for distracting me from generating billable hours.
Our own superhero team has been essential in getting the thoughts in order, the narrative to an acceptable level and a 3217% reduction in spelling mistakes. Thanks Christian Hindemith, Ikey Greene, litalb and Alberto Contreras as well as John Aikin of Web Canpoy Studios and Adriano Pianesi of Leadership 1p for their feedback and Steve Chenoweth of SQmedia for hours of exploration.
Update 9th of April
Since I published this post a few things have happened.
- Crew.co sold to Dribbble.
- IBM ended remote work policy showing yet again how difficult remote work culture is specially for larger established organizations.
- TaskRabbit is doing a “fire sale” that happens to be the first “public” signal (beyond venture capital drying up for a while) that gig-economy is facing real challenges.
- Rob shared an almost 20 year old HBR article with me that unlike any other predicts the future of freelance. Well, it actually coins the term “eLance” that then brought about elance.com (now upwork.com).
