The platform SKILLITY is the world’s first cooperative skill-sharing network for local services such as cleaning or photography; piano or tennis coaches. It can be seen as a social marketplace for services as SKILLITY provides social security and integrate every user into the ownership of the user cooperative. The platform combines the ease and functionality of an online platform with cutting edge transaction security and cooperative ownership for users provided by its blockchain enablement. SKILLITY functions as a peer-to-peer platform where people can offer their offline skills and services for sale and connect with other users who may be interested in booking those skills and services. SKILLITY provides match-making connections, a fair and secure environment, and access to professional business tools and social security.
The goal of the platform is to assist users in showcasing their outstanding talents and capabilities that are worth sharing in their immediate community, and to prove that every person has such abilities waiting to be drawn out. SKILLITY aims to support people as they give each other a helping hand, and key to this is the provision of an efficient, convenient and fair environment for their activities. In connecting the right people and enabling them to focus
51 on their activities, SKILLITY saves times, improves efficiency and provides safety and security for its users. SKILLITY thus enables people with exceptional skills and positive intentions to offer support in their local area and sell it to anybody who needs help. The platform enables users in need of such services and skills to find the best skilled people in their area to render affordable assistance within a time frame that is convenient for them.
On SKILLITY, the concerns that users have concerning transaction safety, job security, privacy, added value and localized usefulness are addressed comprehensively. SKILLITY as a platform has the power and potential to enforce the highest service quality and goes a step further than any other platform in the protection of skill providers and skill seekers. It provides an Escrow feature, to guarantee that all contracts are executed completely and satisfactorily; With this feature the payment from the customer is held by the platform and released only when the service is carried out by the provider. Barring this, funds are immediately refunded to the buyer.
This prevents a scenario where a skill provider bills a customer for non-existent or unsatisfactory work and incentivizes the service providers to carry out the service without betraying or cheating their clients. Rating and review will add transparency and comparability about the service quality. Moreover, SKILLITY provides the additional service certifying skills.
This means, that services offerings will be tested by SKILLITY employees on the validity, legality and safety of the service offering.
In summation, the combination of ratings and reviews, escrow function and certification ensures the highest service quality, privacy, transparency, visibility and comparability of skill offerings on the platform. Based on these values, a trustworthy network can be built.
52 On SKILLITY, in an unprecedented strategy, social security is provided for service providers that schedule more than 20 hours per week. This social security package includes health insurance, liability insurance, and even a pension scheme. This means that within the gig economy, which is notorious for having no social safety net, it is now possible to get the full benefit of a secure job and social welfare without sacrificing the perks of independent freelancing such as flexible working hours and arrangements and higher payments then being an employee.
Instead of gouging existing users, SKILLITY charges a 20% transaction fee from providers for every skill booking done by new and first-time customers. For every repeat booking done by the same clients for the same provider, the provider is charged NO fee for rebooking, which incentivizes them to remain loyal to the platform and bring in more participants whose initial 20% charge will make up a large part of the platform’s revenue and hence of the democratically distributed profits. In this way, SKILLITY can avoid being bypassed by skill providers for rebooking as the platform costs for rebooking’s are very low anyway. Most of the revenue comes from the magical moment of match-making, which also inherently represents the added value to the skill providers. This is the moment, when they are willing to pay a premium to the platform.
As previously mentioned our society currently faces the issues, that most platforms treat their users as resource for generating ad-revenue and the issue in our society, that workers are often exploited by corporate investors. Although workers contribute to the biggest part of value creation, their salary is often insufficient to make a living, investors skim off big dividends.
With the theoretical model of cooperate ownership, SKILLITY integrates every employee and
53 user of the platform into the ownership of the network. This means, that every user gets a say on strategic decisions and an equal distribution of profits. The strength of a cooperative ownership model compared to a mere investor focused capitalistic model is, that their data and privacy are better protected, participation is directly rewarded, and they feel committed, loyal and motivated, because they know they are contributing to a platform which is partly their own.
That is why they are more likely to refer other people to the platform. The user’s satisfaction leads to unknown social conditions within our society, where everybody feels equal part of the community. By applying the cooperative idea to SKILLITY we live the ideals of the Blockchain community, open source movement, stakeholder integration and decentralisation of power. We believe, that SKILLITY can start a social and digital revolution by giving power to the people.
To ensure, that every participant automatically becomes a cooperative owner of SKILLITY we reward every user registration with a number of shares of SKILLITY in the value of $10.
SKILLITY pioneers the concept of cooperative ownership on the blockchain, making use of the platform’s native cryptocurrency and share of ownership as a mechanism by which the platform distributes its profits at regular intervals. The HEART token can be seen as a Share of the platform and categorized as a security as it entitles token holders to receive the profits from product operations. This is possible in forms of Airdrops, available to coin holders at the point of events, which will be announced ahead of time. Key to this vision is the use of an ERC-20 cryptocurrency token called HEART, which has a dual function on the SKILLITY platform as both a medium of exchange and an entitlement to a share of platform profits.
Operating in a way similar to that of a corporate share, the token allows users to receive a portion of profits which are regularly distributed, as well as participate in the platform’s democratic processes. It can also be used by users if they wish as a preferred medium of
54 exchange in lieu of fiat currencies. The usage of the HEART token as a means of payment automatically includes all participants that held or receive HEARTS into the ownership structure of the platform, and therefore drives motivation, loyalty and commitment for the platform. To put it in a nutshell the ease and trustworthiness of the Ethereum Blockchain as explained in chapter 4.3. allows us to let our network participants also use the share for payments to each other. By using the HEART token as means of payment many people will automatically invest and fund the project indirectly by their platform usage. The periodically possibility of consensus voting gives all holders of the token a means of involvement in the strategic decisions that would be carried out within the platform.
HEART Token
SKILLITY will offer a securities token called “HEART”. The HEART Token will be an ERC20/Waves compatible token to be developed on the Ethereum Blockchain Waves platform and designed to be used by members within the SKILLITY platform. Following this standard, HEART tokens are easily transferable between users and platforms using ERC20-compatible wallets and can be integrated into major exchanges around the world for transactions. The HEART tokens are not only a medium of exchange but also a share of the platform. It grants partial dividends, democratic voting rights and can also be used to pay for the service bookings.
The token HEART symbolizes the gratitude and appreciation that is payed and felt when helping services are offered to people in need. It also reflects the interconnectivity and eternal value of long-lasting relationships towards the network and each other.
On SKILLITY, users may generally prefer to book the services in USD or their respective local currency, but skill providers can opt in to receive the Heart Token. In this way they can immediately save the platform transaction costs which could be 20% for first bookings and 0%
55 for every rebooking. This scheme prevents skill providers from leaving the platform as there will be no more transactions fees after the first booking. The real value is based on the first booking.
Approximately, 80% of skill providers want to get paid in local currency, yet 20% would opt in to receive HEART tokens as corresponding currency. The short-term incentive for Skill providers to receive equal value of fiat currency amount in HEART is a 5% better exchange rate than they would get compared to average market prices.
The platform thus acts as an exchange for its own shares, either by distributing tokens from stock or purchasing them on the currency market from other exchange websites in steady and continuous operations with the advantage of partnerships that enable lower spreads due to the high trading volume. Using the token’s smart contract capability, monthly distribution of profits takes place via airdrops. Also, in the event that both the provider and the skill seeker choose to use HEART as their means of payment, their ETH wallets connected to their accounts will be debited and credited accordingly.
With the HEART token, skill providers can:
1. Hold and participate for monthly profit distribution (Invest and participate)
2. Vote at strategic meetings of the platform with their proportionate voting rights (voting) 3. Book skills on SKILLITY (usage)
4. Send token to any ETH address outside of SKILLITY (Transfer and storage)
5. Sell at any time they want on SKILLITY or other exchanges (immediate liquidation)
56 6.4 Value Proposition
SKILLITYs value proposition can be divided into four categories:
1. Platform function a. Match Making b. Ratings and Reviews
c. Certification of Skill Providers d. Escrow
e. Safe payment
f. High listings by levels 2. Business Tools
f. Client management (tasks, notes, documents, info) 3. Social Security
a. Health insurance b. Liability insurance c. Pension fund
d. Support with official business registration 4. Blockchain values
a. Cooperative ownership b. Distributed profits
c. Democratic consensus voting 6.5 Challenges and threats
The Business Model of SKILLITY and the foundation of the corresponding start up faces multiple challenges and threats that must be overcome or avoided. The potential challenges and threats are:
- The chicken and egg problem as described in chapter 4.2 that scares potential users.
- Blockchain scares potential users.
- Competition of freelancing platforms is high and does not allow a new market entrant in a market that favours monopolies, due to the nature of networking effects.
57 - SKILLITY cannot find investors. This threat depends on many other factors such as the business model, the market size and potential and the overall economic situation.
- Legal issues, that arise by offering social security solutions and freelancing solutions that mean disruptive innovations to many countries.
- Privacy issues. This threat focuses on the unwillingness of users to allow the platform to use data for further analysis and predictive processing. Nevertheless, this threat is negligible, because users are highly valuing the solutions offered by the platform and will feel being part of a social and fair network, that they are owning and having a say. (e.g. strategical decisions on how to handle data)
- Platform is used for sexual services or legal services. Although prostitution is legal in some countries it would destroy the nature and spirit of the platform. Hence, this can be seen as a threat that has to be mitigated.
- Potential users dislike the brand design, logo or name.
- Potential users are lacking knowledge in blockchain and cryptocurrency - Price for features such as business tools or social security is too high.
- Income tax issues might arise for the users. This challenge can be mitigated by supporting users with their filing of documents automatically or the use of cryptocurrency for transaction anonymity.
- Imitations of incumbents, who also offer a platform model or offer cryptocurrency or cooperative ownership or business tools. This threat can be overcome by offering the right combination features and execute quick growth.
- Specific labour law regulations in different countries, that could harm the offering of SKILLITY. (e.g. Uber, Airbnb etc.)
58
7 Quantitative Research
As we saw in above section 6.3 the business model of SKILLITY proposes and contains hypotheses, that are based on the literature review and secondary market research. These hypotheses shall be tested on their validity with a primary market research survey. In the end the cluster analysis segments the market and qualitative answers will show the feedback of users. Moreover, the quantitative analysis aims to provide insights, that are relevant to derive a target customer segment, marketing plan and prototyping.
7.1 Research Hypothesis and underlying Questions
Following hypotheses shall be tested in the quantitative research:
1. People are willing to use an online platform for offering and searching of skills and service.
2. Cooperative Ownership increases the motivation, commitment, identification, and loyalty of customers to the platform.
3. The cooperative ownership model suits well to a freelancing platform for local services.
4. People struggle to easily find and connect to Skill Providers, when they are in need of a service.
5. Skill providers struggle to find new customers and connect to skill seekers.
6. Freelancing platforms are seen as offering shady and incompetent services.
7. Freelancing platforms enable users to deny payments for services to easily.
8. Online payments via platforms are seen as unsecure and unreliable
9. Users fear insufficient service quality (safety, legibility, reliability), when booking on online platforms.
10. Most users are unfamiliar with Blockchain and cryptocurrency.
11. Some few people are willing to use tokens for payments on online platforms.
12. People perceive the proposed innovative features offered by the business plan as valuable-adding.
13. People have capabilities, that they are willing to offer on a skill-sharing network.
14. The SKILLITY logo symbolizes the values of the business model.
59 15. There is a high market demand for a skill-sharing network with cooperative ownership
model built on a blockchain.
Additional research questions:
16. Which kind of local services do users prefer to offer on a freelancing platform?
17. Which kind of local services are people seeking?
18. How big is the potential market share?
19. How many users willing to accept tokens for payments?
20. What is the demographical and geographical target customer segment for skill providers?
21. What is the demographical and geographical target customer segment for skill seekers?
22. What suggestions or concerns do potential users have?
7.2 Market Research Design
In May 2018, a survey (Appendix 1: SKILLITY Market Research Survey) was conducted to gather data on internet users’ opinions on a newly developed freelancing platform called SKILLITY. This survey included 37 questions, 4 of which collected demographic information (independent worker status, gender, age, and country). The rest focused on respondents’
experience with freelancing platforms, their concerns about buying and selling on freelancing platforms, their experience with cryptocurrency and blockchain, how valuable they found SKILLITY’s features, their overall feeling about SKILLITY’s brand and logo, their likelihood to use the platform and its cryptocurrency, and any concerns or suggestions they had about using SKILLITY.
The survey was created and distributed on the SurveyMonkey platform and distributed to respondents via six individual links shared on different social media and freelancing websites, to best approach the target audience of digital natives and freelancers:
1. Facebook 2. LinkedIn
60 3. Whatsapp
4. LINE 5. MTurk 6. Reddit
During the first wave of data collection, 604 responses were collected. Upon reviewing the responses, it was determined that some respondents were filling out the survey without reading the questions. To ensure that further responses were legitimate, two attention check questions were added to the survey (i.e., “Please choose 5 (extremely valuable) for this row.”). A new link was created, shared and 456 more responses were collected.
In total, 1,060 responses were collected. The responses were reviewed for legitimacy (i.e., respondents that were reading the questions and answering accordingly) and removed from consideration if:
1. They answered less than five questions.
2. They failed both “attention check” questions.
3. They responded to questions on experience using a freelancing platform
inconsistently (e.g., they reported that they had used a freelancing platform before, then later reported that they had never used a freelancing platform).
4. They provided answers to the open-ended questions that did not make sense in context.
This process resulted in 402 responses being removed, leaving a total of 658 legitimate responses for the analysis. IBM’s SPSS statistics 22 was used to analyse the responses, and the tables come from the SPSS output. Unless otherwise noted, all Likert scale questions are reported on a scale from 1 to 5.
7.3 Descriptive Statistics Respondents
61
Collector Frequency Percent
Web Link 1 Facebook 49 7.4
The majority of responses came from MTurk (n = 602), with Facebook making up most of the other responses (n = 49).
Gender Frequency Percent
Male 325 49.4
Female 247 37.5
Missing 86 13.1
Total 658 100.0
Table 4: Survey results; Gender Distribution
About half of the respondents reported their gender as male (49.4%). Nearly three out of four reported that they were female (37.5%) and the rest did not indicate a gender (13.1%).
Age Range Frequency Percent
Under 18 1 .2
Table 5: Survey results; Age Range
The majority of respondents fell within the range of 18 to 39 (63.0%). The largest group was the 25 to 29 group (21.9%).
Country Frequency Percent
Algeria 1 .2
62
Table 6: Survey results; Respondents country of origin
63 The majority of respondents indicated the United States (56.4%) or India (7.9%) as the country in which they resided, with another 4.1% from Germany, 2.3% from Canada, and 2.1% from the United Kingdom. About 13% did not report what country they resided in.
Independent Worker Status Frequency Percent
No 247 37.5
Yes 326 49.5
Missing 85 12.9
Total 658 100.0
Table 7: Survey results; Independent worker status
Nearly half of respondents reported that they were an independent worker of some kind, whether full-time, part-time, or to complement another job (49.5%). About one out of every eight respondents (12.9%) did not respond to the question.
Experience with Cryptocurrency and Blockchain Assets
Experience with Cryptocurrency Frequency Percent
No 451 68.5
Yes 186 28.3
Not sure 17 7.1
Missing 4 .6
Total 334 100.0
Table 8: Survey results; Experience with Cryptocurrency
Only 28.3% of respondents reported that they had used cryptocurrency before, while nearly 69% indicated that they had not.
Experience with Blockchain Assets Frequency Percent
No 455 69.1
Yes 172 26.1
Not sure 23 3.5
Missing 8 1.2
Total 334 100.0
Table 9: Survey results; Experience with Blockchain Assets
Similarly, just over a quarter of respondents (26.1%) reported that they had invested in blockchain assets before, while about 69% had not.
Experience with Freelancing Platforms
64
Experience with Freelancing Platform(s) Frequency Percent
Both 66 10.0
Buyer 145 22.0
Seller 202 30.7
Neither 245 37.2
Total 658 100.0
Table 10: Survey results; Experience with Freelancing Platform(s)
Most respondents also reported that they had used a freelancing platform before, as a buyer, a seller, or both (62.7%). Nearly a third had only used a platform as a seller (30.7%), while 22.0% had only used a platform as a buyer. About 10% had used a platform as both a buyer
Most respondents also reported that they had used a freelancing platform before, as a buyer, a seller, or both (62.7%). Nearly a third had only used a platform as a seller (30.7%), while 22.0% had only used a platform as a buyer. About 10% had used a platform as both a buyer