Loretta McCarthy, Managing Partner of Golden SeedsApril 18, 2019
Golden Seeds was recently joined at a meeting by Elizabeth Eiss, Founder and CEO of ResultsResourcing, an online talent curation platform. The company curates freelance talent to help startups and small and mid-sized businesses (SMBs) get more done for less capital. She discussed the benefits of the “gig” economy for investors and companies to scale, accelerate time to market and use finite capital efficiently.
It’s a modern term referring to contract or freelance work. Everyone knows someone who works as a freelancer, or has worked with one in their job. Perhaps you’ve even done it on the side, or full time. Either way, the gig economy is here to stay. It’s grown to include an almost endless variety of services, including consulting, independent contractors, and even non-labor related online services like Airbnb, Lyft and Zipcar.
In 2017, the gig economy accounted for $3.7 billion, and over 35% of the U.S. workforce did freelance work, according to Edelman Intelligence. By 2020 it’s estimated that the number will reach 40%, and by 2027, more than 50% of workers will be doing gigs.
Elizabeth, who is also a Golden Seeds investor, doesn’t just talk to talk. She has worked and consulted extensively with entrepreneurs, and through this work, has curated and integrated a lot of gig workers. She knows both the buyer and seller sides of the equation. She believes the gig economy is key to accessing flexible, skilled talent that enables organizations to be nimble and compete bigger, on demand. The gig economy is changing the way startups and SMBs do business, for the better.
The nature of work is changing. Workers and companies value flexibility more than ever, and technology and connectivity allow people to work from anywhere. The freelancer arrangement delivers this flexibility at a lower cost for companies, and when it comes down to it, many workers and businesses simply prefer it.
Then there’s the fact that freelancers do good work. In fact, 83% of SMBs that frequently hire freelancers agree that freelancers and contractors greatly help their businesses get the job done.
“Full-time employment may not be the only solution anymore, and it’s an expensive one compared to freelance talent,” Eiss explains. “Freelancers are a great option; they’re highly abundant, highly skilled, flexible, and they’re really available anytime, anywhere.”
Here are four of the biggest benefits.
1. “Do what you do best, and outsource the rest.”
This quote by Peter Drucker gets to the heart of the gig economy — offload non-core work so you can attend to your core business. Or, as Eiss says, “You have to focus on what your special thing is; everything else should be on the table for outsourcing.” And startups know there’s a substantial amount of “everything else,” including administrative tasks, bookkeeping, accounting, marketing, social media, copywriting, data analytics, and even things like programming, design work, websites and IT.
2. Be nimble
Hiring someone full time is great; you have a lot of work or a big project, and that person comes in and does it. But what happens next? Oftentimes, companies hire someone without a full plan of what to do with that person after the project ends. Freelancers give you the flexibility to add expertise when you need it — and only when you need it.
3. Lower overhead and capital
Startups know that resources are at a premium. Every expense potentially takes away from something else you’re able to do. With freelancers, you get great talent with lower overhead and capital requirements, letting you stretch those valuable early stage funds.
4. Think “big”
Working with freelancers and contractors lets your company take on projects and ideas that would usually be reserved for much bigger organizations. By bringing in the right mix of targeted talent, your small company can act much bigger than it is — and accomplish things that you never thought possible. Eiss refers to this as the “blowfish effect” of the gig economy.
“A startup or early stage company may be ‘small’, but can, frankly, be big,” Eiss explains. “Because you can hire great freelance resources that augment your core team, you can be, and compete, bigger, if you put the right team around you.”
Remember, when everything is on the line — and everything is always on the line when you’re a startup — you need great talent behind you, and that talent needs to be flexible. When you have that talent, and remain nimble, you can compete in ways you never thought possible.
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