以共有模式發展技術分享平台之研究：以SKILLITY公司為例

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(1)國立臺灣師範大學管理學院管理研究所碩士論文 Graduate Institute of Management College of Management National Taiwan Normal University Master Thesis. 以共有模式發展技術分享平台之研究：以 SKILLITY 公司為例 SKILLITY Development of a skill-sharing platform with cooperative ownership model. 尤衲思 Jonas Reiner 指導教授：印永翔博士 Advisor：Yung-Hsiang Ying, Ph.D.. 中華民國 107 年 8 月 August 2018.

(2) SKILLITY Development of a skill-sharing platform with cooperative ownership model By Jonas Reiner. A thesis submitted to the graduate faculty of Management Master of Business Administration. Advisor: Frank Y-H Ying. National Taiwan Normal University, Taipei, Taiwan August 2018.

(3) Abstract The idea of social justice, brought up by Karl Marx, is as relevant as never before. Issues and problems in the digital space, freelance market and modern society demonstrate it. Nevertheless, this paper proposes a revolutionary business model of a cooperative platform, that aims to solve these issues by fully integrating the users and providing safety and social security for the freelancing market. For this purpose, it applies break-through technologies such as Blockchain and the digital platform model in combination with the well-tried theoretical concept of worker and consumer cooperatives and targets the local freelance market by matchmaking supply and demand of services. Our research shows, that potential target customers and a vast majority of respondents like and demand the potential business model. Connecting the dots seems to create a perfect match, where theories, technologies and market needs complement each other with value benefits. Our research also shows, which platform features are valued most, which services are demanded most, how the market can be divided into customer segments, how the customer segments look like and the qualitative feedback. Based on findings of literature review, secondary and quantitative market research (survey) we define a target customer, derive a marketing plan for growth and develop a first prototype.. Keywords: Platform, Start-up, Cooperative Ownership, Freelancing Market, Blockchain, Cryptocurrency, Customer Segmentation. 2.

(4) Table of Contents List of Figures ......................................................................................................................................... 5 List of Tables .......................................................................................................................................... 5 2. Introduction ................................................................................................................................. 7. 3. Definitions................................................................................................................................. 10. 4. Literature Review...................................................................................................................... 11 4.1. Cooperative Ownership......................................................................................................... 12. 4.2. The power of platforms ......................................................................................................... 18. 4.3. The Blockchain Revolution of societal agreements .............................................................. 21. 5. Market research ......................................................................................................................... 24 5.1. Freelance Market .................................................................................................................. 25. 5.2. The prevailing Trend of freelancing ..................................................................................... 28. 5.3. The grey labour markets ....................................................................................................... 29. 5.4. Competitor Analysis ............................................................................................................. 35. 5.4.1. Freelancing platform focusing on online services......................................................... 36. 5.4.2. Freelancing platform focusing on both online and local services ................................. 38. 5.4.3. Freelancing platforms focusing on local services ......................................................... 43. 6. 7. SKILLITY: The skill-sharing network with cooperative Ownership ....................................... 47 6.1. Vision and Mission ............................................................................................................... 47. 6.2. Problems to be solved ........................................................................................................... 48. 6.3. Business Model ..................................................................................................................... 50. 6.4. Value Proposition.................................................................................................................. 56. 6.5. Challenges and threats .......................................................................................................... 56 Quantitative Research ............................................................................................................... 58. 3.

(5) 7.1. Research Hypothesis and underlying Questions ................................................................... 58. 7.2. Market Research Design ....................................................................................................... 59. 7.3. Descriptive Statistics ............................................................................................................. 60. 7.4. T-Tests .................................................................................................................................. 68. 7.5. ANOVA ................................................................................................................................ 72. 7.6. Regression ............................................................................................................................. 73. 7.7. Logit Model .......................................................................................................................... 75. 7.8. Cluster Analysis .................................................................................................................... 78. 7.9. Qualitative Analysis .............................................................................................................. 86. 7.10. Key Findings ......................................................................................................................... 90. 8. Derived Strategy ....................................................................................................................... 92 8.1. Target Customer segment ..................................................................................................... 92. 8.2. Marketing Plan ...................................................................................................................... 94. 8.3. Prototype ............................................................................................................................... 96. 9. Conclusion ................................................................................................................................ 97 9.1. Key Findings ......................................................................................................................... 98. 9.2. Research contributions .......................................................................................................... 98. 9.3. Learnings from SKILLITY ................................................................................................... 99. 9.4. Limitations ............................................................................................................................ 99. Appendix ............................................................................................................................................. 100 Appendix 1: SKILLITY Market Research Survey ......................................................................... 100 Appendix 2: Competitor Logos...................................................................................................... 113 10. References ............................................................................................................................... 117. 4.

(6) List of Figures Figure 1: Global 300 revenue by sector (USDbn) ................................................................................ 17 Figure 2: 2016 McKinsey Global Institute survey ................................................................................ 25 Figure 3: Comfort using Cryptocurrency .............................................................................................. 66 Figure 4: Sum of the Distance from the Cluster Center by Number of Clusters .................................. 78 Figure 5: Sum of the Mean Error by Number of Clusters..................................................................... 79 Figure 6: SKILLITY prototype app introduction ................................................................................. 96 Figure 7: Prototype app account and skill view .................................................................................... 97. List of Tables Table 1: Motivational Factors for Entry into Grey labor market .......................................................... 31 Table 2: Competitor Comparison.......................................................................................................... 46 Table 3: Survey Collectors.................................................................................................................... 61 Table 4: Survey results; Gender Distribution ....................................................................................... 61 Table 5: Survey results; Age Range ...................................................................................................... 61 Table 6: Survey results; Respondents country of origin ....................................................................... 62 Table 7: Survey results; Independent worker status ............................................................................. 63 Table 8: Survey results; Experience with Cryptocurrency ................................................................... 63 Table 9: Survey results; Experience with Blockchain Assets ............................................................... 63 Table 10: Survey results; Experience with Freelancing Platform(s) .................................................... 64 Table 11: Survey results; Threat of bad sellers ..................................................................................... 64 Table 12: Survey results; Threat of bad purchasers ............................................................................. 64 Table 13: Survey results; worry about security..................................................................................... 65 Table 14: Survey results; worry as purchaser ....................................................................................... 65. 5.

(7) Table 15: Survey results; value of features ........................................................................................... 65 Table 16: Survey results; interest indication ......................................................................................... 66 Table 17: Survey results; comfort with Brand, Logo and Tokens ........................................................ 66 Table 18: Survey results; demanded services ....................................................................................... 67 Table 19: t-test group statistics ............................................................................................................. 68 Table 20: Independent Samples Test .................................................................................................... 68 Table 21: t-test with gender differences; Independent Samples Test.................................................... 69 Table 22: t-test with gender differences; Independent Samples Test.................................................... 70 Table 23: t-test Blockchain experience and potential usage ................................................................. 70 Table 24: t-test Blockchain experience and potential usage; group statistics ....................................... 71 Table 25: t-test gender and investing interest ....................................................................................... 71 Table 26: t-test gender and investing interest, group statistics ............................................................. 72 Table 27: ANOVA ................................................................................................................................ 72 Table 28: ANOVA Descriptives ........................................................................................................... 72 Table 29: Regression Coefficients, Gender and usage.......................................................................... 73 Table 30: Regression Coefficients, Age Range and usage ................................................................... 73 Table 31: Regression Coefficients, Freelancing status and usage ........................................................ 74 Table 32: Experience with Blockchain influencing the likelihood of token usage ............................... 74 Table 33: Experience with Cryptocurrency influencing the likelihood of token usage ........................ 75 Table 34: Logit Model Summary .......................................................................................................... 76 Table 35: Hosmer and Lemeshow Test................................................................................................. 76 Table 36: Logit Model Classification Table ......................................................................................... 76 Table 37: Logit Model Variables .......................................................................................................... 76 Table 38: k-means 6-Cluster Overview ................................................................................................ 83. 6.

(8) 2 Introduction Already 130 years ago, Karl Marx criticized capitalism for its injustice. If a needlewoman in Bangladesh earns $ 1 a day, but the company's investors make millions of dollars in profits, the injustice is that, according to Marx, most of the added value was created by the seamstress and she was exploited by investors. He therefore proposes workers or state ownership in which the public takes over the risk and the profit. (Marx & Engels, 1885) This idea has not proven successful in recent decades and has failed in many states. However, there is an ownership model that comes very close to the idea of Marx and has been successfully implemented in many places. A Cooperative is an “autonomous association of persons who voluntarily make common economic, social and cultural needs and aspirations through a jointly-owned and democratically-controlled enterprise.” (International Cooperative Alliance, 2012) Nalebuff and Brandenburger define cooperatives as “distribution of goods or the supply of services, operated by its members for their mutual benefit.” (Nalebuff & Brandenburger, 1997) In many cases it is the company's own customers or employees, who unite and operate the ownership of the cooperative in the larger group. Different types of cooperatives vary from consumer cooperatives, worker cooperatives, to housing cooperatives or credit unions. All these enterprises act in the interest of their cooperative owners and for their welfare. To date, this model has prevailed in many areas, but especially in regional limited areas. One reason for this may be that the people involved knew each other and could build mutual trust or that confidence has already existed. (Moura Costa et al., 2013) In the Internet and digital business, this model has not been applied yet, problems can be the anonymity but also the high numbers of users or data, which represent a major obstacle to the functioning of a cooperative with their complexity. However, a peer-to-peer platform seems appropriate for the model of cooperative ownership. The reason is that with a platform, the added value is not only provided by the employees of 7.

(9) the platform but above all by the providers and users – the network – of the platform itself. (Choudary et al., 2016) Many users already feel unfairly treated today when some platforms use the user data without consent or at the expense of the user to advertise and monetize elsewhere. So, if there was a platform where all users are certain to have ownership including dividend and voting participation, then one could expect the motivation to use the platform to increase dramatically and therefore the loyalty and identification with the platform. This is essential for platforms, as it generates remunerative and positive network effects by proactively attracting new users. (Choudary et al., 2016) The goal of this master thesis is to develop such a business model for a platform with cooperative ownership. This Business model integrates every user in a cooperative ownership model, in which the profits are distributed and passed on in a fair way and voting rights can be executed easily. Establishing trust and reliability is of great importance. These values can be achieved, and the revolutionary idea can finally put into practice using Blockchain for defining ownership on a trustworthy and distributed ledger. As a practical example and experimental subject, this master thesis chooses the Start-up SKILLITY (www.SKILLITY.io), which develops a skill-sharing network for local services. SKILLITY attacks problems of the freelancing market or so-called gig economy, that faces the next digital transformation in the upcoming decades. A McKinsey report states, that independent work is heavily evolving as digital platforms can build efficient and large-scale marketplaces. (Farrell, 2016) Other players have already detected the future trend and built successful online service platforms. Examples are Freelancer.com, Upwork.com or Fiverr.com. (Fiverr, 2018; Freelancer, 2018; Upwork, 2018) It can be expected that a cooperative model is suitable to this particular market because it gives the users the feeling of being in a secure, fair. 8.

(10) and neighbourhood-like community, likely resulting in higher platform loyalty and positive network effects. This paper will address topics and ideas of conscious business, the concept of cooperatives, power of platforms, Blockchain technology and the freelancing market. Hence it is instructive to first establish a few definitions. (chapter 3.) In addition to a literature review (chapter 4.) on the relevant theories mentioned above, we research the market and analyse the competition (chapter 5.). In chapter 6. we describe the idea of the business model in more detail. Attention is paid to the technical implementation and integration into the significant business processes to ensure a meaningful and fair implementation of the idea. In chapter 7 of the Master Thesis, the business model and its underlying hypothesis are tested by means of an international online survey. For this purpose, based on the business model, wide range of international and potential users will be surveyed. This survey provides information on how the users perceive the cooperative network approach and business model. Moreover, it will provide answers to the questions: -. Do people like the idea and business model?. -. Which of the offered features are demanded and valued the most?. -. What is the target customer segment?. -. On which services should the platform focus on?. -. What are the weaknesses and threats?. With the results given by the survey, we can finally derive some strategies. In chapter 8. we define strategies such as target customer and marketing plan for growth as well present the first prototype of the app and platform. These strategies are derived from findings of literature review, secondary and quantitative market research (survey). Chapter 9. concludes.. 9.

(11) In the end, this master's thesis follows the idea of Eric Ries's Lean Start-up Philosophy and the approach of Rapid Prototyping, which both aim to provide feedback to target customers as early as possible to ensure efficiency in business model development. This master thesis similarly aims to receive feedback from the target customers as soon as possible to determine whether the business idea is promising or not. (Ries, 2015). 3 Definitions Skill Seeker: A Person, who needs support with a certain problem or situation. He is willing to pay for the service offered to solve his need and issue. Skill Provider or Skiller: A Person, who has outstanding skills and capabilities. These skills and capabilities might be more developed than the same capabilities of other persons. Hence the Skill Provider can offer his capabilities and skills as service to people in need of this exact skill. Blockchain: A blockchain, according to the standard definition is a network that is decentralized and distributed across all its nodes so that the network cannot be compromised by any single node. It means, that a chain of little data ‘blocks’ being created, updated and stored across several different locations in real-time is called a ‘blockchain’. The major difference between blockchain networks and regular centralized databases is that blockchains do not have a “server” or a “headquarters” where isolated information exists in a silo. Blockchains instead make use of the entire network of nodes as their storage and processing capacity, and each node has a copy of the blockchain which is constantly in communication with the others, verifying transactions and comparing information to make sure the data across all of them is the same. If any single node has data that does not match with that on the rest of the blockchain network, it is immediately isolated as a compromised node and the network 10.

(12) automatically excludes it and keeps on functioning. This means, that blockchains are very secure, possessing no single location that can be hacked or compromised in any way, and not permitting any variation in data across network nodes. Data stored on a blockchain is thus practically immutable, uncheatable and unchangeable, which make it ideal for recording sensitive data like transaction records, ownership records and medical records. (Berentsen & Schar, 2018) Smart Contract: A smart contract is a programmable binding contract on a Blockchain, that has the power to self-execute itself. Hansen exemplifies the situation, when a smart contract automatically revokes the right to use a leased car, if the payments were missed or releases funds only, when goods or services are received in a satisfactory condition. Using a smart contract, a seller and a buyer involved in a peer-to-peer transaction do not need to have a middleman interceding between them to ensure that the right exchange is made at the right time. Rather, a set of conditions, instructions and parameters is coded into the blockchain, and the buyer deposits their cryptocurrency into a safe wallet under the care of the smart contract protocol. Once the buyer confirms that they have received the requested value from the seller and it is acceptable to them, the smart contract automatically releases the payment to the seller. (Hansen & Kokal, 2017). 4 Literature Review Among other things, the business model of SKILLITY will be based on theories and ideas, that have already been proven successful. Therefore, we briefly mention and review these ideas, approaches, theories of previous literature. By comparing the theoretical foundations of Cooperative Ownership, power of platforms and societal Blockchain revolution we can not. 11.

(13) only derive a suitable business model but also understand its dimensions more clearly. Moreover, it helps to derive strategies based on renowned theories and findings from research.. 4.1 Cooperative Ownership The idea of cooperatives goes back to the beginning of the 19. Century. People joined forces without losing their economic independence to improve their lives during the industrial revolution. (Blome-Drees, 2012) Since then cooperatives are countering severe income inequality. (Huertas-Noble, 2016) According to the definition of Mc Leod “cooperatives are owned, controlled and operated for the benefit of their members. (…) on the basis of one member, one vote, and return dividends based on patronage.”. (Mc Leod, 2006) The international Co-operative Alliance defines a cooperative as “an autonomous association of persons united voluntarily to meet their common economic, social, and cultural needs and aspirations through a jointly-owned and democratically-controlled enterprise.“ (International Cooperative Alliance, 2012) The international Co-operative alliance states that cooperatives are based on values of democracy, honesty, self-responsibility, self-help, openness, equality, social responsibility, solidarity and caring for others. Members commonly believe in these values and trust each other. (International Cooperative Alliance, 2012) Similarily Georg Draheim perceives cooperatives as conservative, innovative, liberal, social, democratical, socialistic, individualistic, collectivistic, and anticapitalistic. (Draheim, 1952) Although some of these values seem to be contradicting, it shows the flexibility and sustainability of the ownership model. (Arando et al., 2015; Johnson, 2015) The international Co-operative Alliance further defined 7 principles, which help to put the values into practice (International Cooperative Alliance, 2012):. 12.

(14) 1. Voluntary and Open Membership 2. Democratic Member Control 3. Member Economic Participation 4. Autonomy and Independence 5. Education, Training and Information 6. Co-operation among Co-operatives 7. Concern for Community. Summing up the principles it can be said, that cooperative is open to all persons able to use their services and willing to accept the responsibilities of membership. These democratic organisations are fully controlled by their members. Hence ownership lies in the hands of people, who are usually involved in business activities of the same cooperative. (International Cooperative Alliance, 2012) Chaddad and Lee Cook define cooperative ownership structures with following organizational attributes: “ownership rights are restricted to member-patrons; residual return rights are nontransferable, non-appreciable and redeemable; and benefits are distributed to members in proportion to patronage.” (Chaddad & Lee Cook, 2002) An investor oriented firm on the other side, is defined by unrestricted, transferable, non-redeemable residual claims (common stock). (Chaddad & Lee Cook, 2002) Stockholders are unrelated from the value creation process or the business activities of the firms. Residual claims are freely exchangeable in secondary equity capital markets symbolize a right of dividends for the lifetime of the organization. (Chaddad & Lee Cook, 2002) Chaddad and Lee Cook find, that there are four different forms of ownership models for cooperatives. In their typology they differentiate among five non-traditional cooperative models in contrast to the investor-oriented firm: 13.

(15) -. Proportional Investment Cooperatives. For proportional strategies, cooperative members are disciplined to contribute to the equity capital in equal proportion as to usage of products or services. This is done by cooperative policies such as base capital plans. After calculating the optimal investment proportion based on the patronage, over and under-invested members must adjust their stake accordingly by buying and selling shares among each other. (Chaddad & Cook, 2004). -. Member-Investor Cooperative. This model introduces ownership rights, that are redeemable, non-transferable and restricted to member-patrons. Nevertheless, it distributes profits proportionally to shareholdings rather than patronage. For this purpose, dividends to members are accordingly distributed in proportion to patronage in addition to member shareholdings. This can be done on two ways. Either with appreciation of cooperative shares or distribution of dividends in proportion to shares. In this model, participants have more incentives to invest as they are properly remunerated for their investment. (Chaddad, 2006; Chaddad & Cook, 2004). -. New Generation Cooperatives. In this model, ownership rights are like tradable and appreciable delivery rights and restricted to member-patrons. Membership is usually closed, and members are also required to make a down payment or up-front investment to acquire delivery rights in proportion to expected patronage, such that capital investment and usage are perfectly aligned. Finally, supply is controlled and adjusted by means of marketing agreements. (Chaddad & Cook, 2004). -. Cooperatives with Capital-Seeking Entities. Ownership rights of these cooperatives are restricted to member-patrons and outside equity capital is only acquired by a separate legal entity (e.g. a trust company, strategic alliance or a publicly held subsidiary). (Chaddad & Cook, 2004; Chaddad & Lee Cook, 2002) 14.

(16) McLeod distinguishes between five types of cooperative forms: (Mc Leod, 2006) -. Consumer cooperatives are owned by the customers, who purchase products from these cooperatives. Successful consumer cooperatives have been applied in food supermarket and grocery stores. Other famous examples include REI (sporting goods).. -. Worker cooperatives are owned by its own employees. Motivation, loyalty and commitment of employees increases strongly. More and more companies apply employee stock ownership plans (ESOP) to increase employee motivation. However these plans do notgive democratic control to the employees in many times.. -. Producer cooperative, also sometimes known as marketing cooperatives are owned by its producer’s or suppliers. The cooperatives often operate shared distribution channels and facilities. Famous examples include agricultural co-ops or art distribution co-ops.. -. Purchasing/service cooperatives are owned and used by independent business owners to increase their visibility and take advantage of economies of scale. Famous examples include fast food franchises like KFC. The cooperative helps the franchisees to increase negotiation power for supply prices, advertisement and for franchise fees.. -. Housing cooperatives are owned by residents, that live together in a single house or apartment complex. This includes co-housing projects, that are cooperatively owned. Each member owns a stake at a cooperative, which owns the property. (Mc Leod, 2006). Cooperatives come along with many advantages compared to the traditional ownership model of stakeholders, that are not involved in the value creation process. Beuthien states, that 15.

(17) cooperatives are long-term oriented and therefore participants do notchange their business relationships very often. Moreover, cooperatives cannot be acquired easily. This is due to the fact, that ownership cannot be exchanged and traded on capital markets easily and quickly. (Beuthien et al., 2008; Beuthien, 2008) Stability provides safety trust, reliability and efficiency. Members of a cooperative can expect advantages and benefits from products or services, when doing business with the cooperative. The human being is in the focus and capital just has a complementary function. Cooperative collaboration works best with the democratic and personal participation of its members for their own good. Economic decisions of a cooperative are long-term oriented and therefore in contrast to short-term shareholder value orientation. This different perspective on decision making allows cooperatives to decide for the best valuable outcome for its members and not focusing on dividends primarily. Blome-Drees perceives cooperatives as the corporative form with the highest degree of democracy and justice, that helps to free human beings from economic, social, legal, political and other dependencies. It is mostly lower social classes, who recognize their problems and needs for collaboration. (Blome-Drees, 2012) Usually the scope of cooperatives is limited on regional business models. They act on local markets such as local banks or agriculture trading cooperatives. (Blome-Drees, 2012) The International Co-operative last released a global 300 report in October 2011 publishing an overview of the 300 biggest co-operatives and their field of business. Among those are famous, powerful and large co-operations, categorized in sectors and countries. The total generated revenue of these 300 co-operatives would exceed the GDP of Spain, the ninth largest economy. A big majority of the cooperatives are from Europe (more than 70%) and the four biggest sectors are agriculture/forestry (28,9%), banking/credit unions (26.3%), consumer/retail (21.7%) and insurance (17.2%). (International Co-operative Alliance, 2010) 16.

(18) Figure 1: Global 300 revenue by sector (USDbn) (International Co-operative Alliance, 2010). The biggest agricultural cooperatives are Zen-Noh and Zenkyoren from Japan. In banking/credit union Crédit Agricole Group from France and Rabobank from Netherlands are famous examples. The consumer sector of the global 300 report consist entirely of European co-operatives with ReWe Group and Edeka AG from Germany or Coop Swiss and Migros from Switzerland leading the sector of consumer co-operatives. The fourth big sector of insurances is led by Eureko (Netherlands), Nationwide Mutual Insurance Company, (USA) Groupama (France) and R+V Insurances AG (Germany). (International Co-operative Alliance, 2010) One of the currently most successful and modern co-operatives is Suma Wholefoods (Suma), which has been recently awarded as 2017 leading Co-operative of the year by Co-operatives Council’s innovation network. (Coop News, 2017) Suma is a worker co-operative and the largest equal pay employer in Europe. Every worker in of Suma has an equal share, vote and salary in the business. Suma claims transparent decision-making processes with low hierarchical decision structures. Moreover the cooperative commits itself to the seven cooperative principles, as set out by the international co-operative Alliance and introduced above. (Suma Wholefoods, 2018). 17.

(19) Since 2001, the number of cooperative start-ups has grown continuously. Especially in the commercial sector, there has been a boom of new foundations in Europe. (Stappel, 2011) Cooperatives nowadays suit well to the model of shared economy and attract more and more people. (O’Brien, 2014) Huertas Noble believes that the growing interest in cooperatives helps to democratize the workplace and reach income equality by patronage based profit distribution. (Huertas-Noble, 2016) Enke concludes that, cooperatives have the potential to “achieve economic efficiency while simultaneously serving important private interest.” (Enke, 1945) However success stories such as Suma help to tackle societal inequality and support the continuing trend of co-operatives becoming an integral part of our society.. 4.2 The power of platforms The value of platforms is based on their power over the market and its participants. Without the need to produce physical goods, there is no inventory required. Platforms can be accessed easily on demand from everywhere and from anybody due to the digital nature of online and mobile solutions. The business model of platforms focuses on facilitating the exchange between two or more interdependent groups instead of building products or services. It is the magic of match making, nothing else then connecting consumers and producers or other peer groups. In doing so they create large, scalable networks with reduced transaction costs and increase efficiency. Theoretically, it leads to large future profit margins. (Zysman, 2015) Chaudary, Parker and Alstyne point out one critical success factor of platforms. It is the emergence of network effects. Positive network effects mean the impact that the number of users have on the value for each platform user. The more user’s participate, the more value is offered to every single one, due to the increase of possible connections. (Choudary et al., 2016). 18.

(20) Network effects create economies of scale on the demand side of a business in comparison to the twentieth-century prevalent monopolies based on supply economies of scale, driven by production efficiencies. Nowadays platforms use the latest technological improvements to shape the demand side efficiently using social networks, app development, demand aggregation, and other methods to increase networks and value to users. “Demand economies of scale are the fundamental source of positive network effects and thus the chief drivers of economic value today.” (Choudary et al., 2016) Together with more attractive pricing, the network effects can achieve extensive market expansion and massive market adoption. This power can result in oligopolies and monopolies. Choudary et al. highly recommend to internalize and foster platform business models with positive network effects. (Choudary et al., 2016) One of the biggest challenges for the platform business model is to overcome the chicken and egg problem. In a two-sided peer to peer platform both peer groups value depends most commonly on the number of users from the other peer group. Consumer won’t use the platform if there are no providers and vice versa. The value results from the network and if there are no active users, the network does not seem to be valuable. (Choudary et al., 2016) To overcome the chicken and egg problem of platforms Choudary suggests eight ways to launch a successful platform: (Choudary et al., 2016) 1. Follow the rabbit strategy: Approach users from other platforms and convince them to offer their services and skills on SKILLITY. 2. The piggyback strategy: Crawl the internet with automated data-gathering software tools to obtain information about service providers who are already active in the internet. (e.g. craigslist or Facebook groups) Create new accounts immediately for these service providers and give skill seekers the impression, that these providers are participating. 19.

(21) already. At the same time inform the merchants about the solution and automatically created account and invite them to use the platform. 3. The seeding strategy: The platform offers other value rather then the network to one side of the users in order to incentivize them to move to the platform. Other users will follow, because they want to engage with them. 4. The marquee strategy: This strategy provides incentives to a key user set to use the platform. With the “influencing” key user set being on the platform the rest of users will follow. 5. The single side-strategy: This approach converts a business, product or service, that benefit a single set of peer users into a platform by attracting a second peer group who wants to interact with them. 6. Producer Evangelism strategy: offer business tools and other platform features (Escrow etc.) as main incentive to motivate skill providers to bring their clients on the platform as well. 7. The big-bang adoption strategy: This strategy uses traditional push marketing strategies to attract a high volume of attention and interest t (Cowen & Sutter, 1999)o the platform. The effect is a simultaneous onboarding, that instantaneously creates an almost fully-developed network. 8. The micro market strategy: this strategy selects and begins with a tiny market that comprises participants who are engaging in interaction already. On this way, the network can provide effective matchmaking even in the earliest stage of growth.. 20.

(22) 4.3 The Blockchain Revolution of societal agreements Blockchain is a break-through technology, that opens possibilities for innovative forms of contracting and cooperation, exceeding that of monetary currency transaction such as the first blockchain Bitcoin by far. (Nair, M. and Sutter D., 2018) It has the power to reconfigure all human activities. Apart from its technical details, this chapter focuses on the potential for voluntary society. In medieval times the social constraints or reputation of people in small villages enforced trust, certainty and transparency for business activities. When trade expanded to people that did not know each other, a trustworthy “middle-men” was required as a neutral authority with enforcing trust on both sides. Yet these middle men developed into complex and inefficient institutions. According to Hansen and Kokal, Blockchain has three properties, that disrupt the system of middle men: Disintermediation of trust, immutable record and smart contracts. They point out the advantages of having an incorruptible record and the benefit of storing data such as ownership rights and personal information. (Hansen & Kokal, 2017) The Blockchain is a distributed ledger with a permanent record of all transaction maintained on user’s computers. This publicly verifiable ledger, the decentralization of power through a distributed mining and computational network, open entry, and open source nature of its code all allow the creation of trust (trust machine) without the need for a middle man who requires impartiality and authority to trust in. (Nair, M. and Sutter D., 2018) This is why Nait and Sutter find, that the technological nature of Blockchain enhances voluntary cooperation and create trust among participants by replacing the need for a third-party enforcer of rules, or so called “middle-man”. As they point out, the power of Blockchain is to be seen in its stability and efficiency and that no singular person can control it alone without the consensus of the other participants. The complete ledger is stored by each node or participant of the Bitcoin network 21.

(23) on the respective persons computer. For verifying transaction and maintaining this ledger, the so called “miners” are rewarded with Bitcoins for their voluntarily supply of computational power. The resulting system is a publicly verifiable, distributed ledger of information, that engenders transparency and creates trust. There is no way of cheating by faking false transactions, altering or concealing in any way, due to the cryptographical sealing. (Hansen & Kokal, 2017; Nair, M. and Sutter D., 2018) Other factors that lead to increased security, viability, transparency, democracy, trust and cooperative efficacy are (Nair, M. and Sutter D., 2018): -. Blockchain has low barriers of entry and is easily accessible for everyone online.. -. Nodes are geographically dispersed. -. Open Source Code of the Blockchain is publicly visible and verifiable. -. Code is necessarily visible to all users publicly and can only be adjusted with a consensus of an existing group of preapproved senior members.. According to Nair and Sutter, Blockchain enhances cooperative efficacy. (Nair, M. and Sutter D., 2018) The cooperative efficacy generally defined as joint effectiveness of voluntary mechanisms, contributes to a common cause and can overcome free-rider problem or achieve lowered transaction costs. (Cowen & Sutter, 1999) Nair and Sutter conclude, that the Blockchain indeed lowers transaction costs and overcomes the free-rider problem by creating trust and hence increases cooperative efficacy. (Nair, M. and Sutter D., 2018) According to Hood and Heald, both publicly visible source code as well as publicly verifiable data help to increase viability and trust for the users. (Hood & Heald, 2006) Blockchain combining both, finally leads to full transparency and highest possible governance in the Blockchain. 22.

(24) Applications and possible use cases of Blockchain can be seen for digital currency, automated contract enforcements, assurance contracts, property-title registration, dispute resolution and regulation of corporations. The letter two are crucial for the business model, that we propose in chapter 6., which is why we explain these applications shortly. Regulation of Corporation: Nair and Sutter present the idea, that Blockchain can revolutionize the form of corporations with much better governance and effective or decision rights (or better protection of decision rights) for shareholders over the strategy of the corporation. The distributed ledger innovation can eliminate the principal agent problem efficiently offering more direct participation to the shareholders when executing their voting rights. The principal agent problem describes the conflict of interest between owners and the manager’s. Increasing cooperative efficacy through the Blockchain finally eliminates this issue and protects better against fraudulent management. Blockchain can also reduce the transaction costs of governance as for example allowing stockholders participate in the decision making process with consensus voting for the corporations they own. This means, that the distribution of profits, execution of voting rights and the release of accounting data or financial statements could be exercised by a smart contract on the Blockchain and therefore cut third-party’s by offering more direct participation, cooperative efficacy, security, trust and increasing the relative performance of voluntary mechanisms. Dispute Resolution: The Blockchain can also create trust among trading partners by resolving disputes automatically with an Escrow function written in a smart contract. The payment is deposited and hold back into an escrow account, which releases funds only once the service client confirms the receiving of a service or good and the client releases the funds. Being written in a Blockchain the Escrow is publicly visible as verifiable, therefore trustworthy. In case of a dispute, “trust agents” can intervene and decide who gets the payments. Because the 23.

(25) trust agent has no full control of the escrow account and locked money in it and does not know the personality of the related party’s his only interest is to decide in favour of fairness and dispute resolution. With such a multi-signature escrow account, being publicly visible the risk of appropriation by the trust agent is eliminated. Naiv and Sutter call it the creation of a marketplace for trustworthiness and reputation. On this market trust agents would compete with each other on the basis of reputation and fees charged (Nair, M. and Sutter D., 2018) The company or platform offering such an Escrow function for dispute resolution benefits from the increased fairness, trust and can even outsource the activity of customer support to the crowd of Blockchain participants, hence offer to pay an automated reward to the service of dispute resolution to the “trust agents” in the network. Customer Loyalty Programs: According to Kowalewski, even loyalty programs are vulnerable to be disrupted by Blockchain and Smart Contracts. The advantages are to be seen in a bigger variety of redemption options and tradability on crypto markets for loyalty reward assets. Even the loyalty programs most valuable data can be attached to the rewards with support of the smart contract enabling the users to decide what to do with this peace of data. (Kowalewski, D. & McLaughlin, J. & Hill, A., 2017). 5 Market research This section analyses the global freelance economy and gives insights about the world of freelancing and its estimated size. Secondly, we analyse the prevailing trend from formal employment towards freelancing. Thirdly, we analyse the grey labour market with its inherent issues and threats for workers. Finally, we research the market for competitors and their freelancing platform strategies.. 24.

(26) 5.1 Freelance Market History & Growth As mentioned at the outset, “gigging” has witnessed a significant growth within the past two decades, driven by advances in technology and changing global economic conditions. Indeed, a recent report by global consultants McKinsey states that up to 162 million people in the United States and Europe—or between 20% and 30% of it is population at working age engage in some form of independent work. US government statistics from the Small Business Administration agency show that the entry rate of non-employee businesses is now as much as three times that of employee businesses in some cases. (Farrell, 2016) The McKinsey report outlines four major classes of individuals who partake in the gig economy as independent workers. They are: -. Free agents, who “actively choose to work independently work and derive their primary income from it.” (Farrell, 2016) Casual earners, who “use independent work for supplemental income and do so by choice.” (Farrell, 2016) Reluctants, who “make their primary living from independent work but would prefer traditional jobs”. (Farrell, 2016) Financially strapped, who “do supplemental independent work out of necessity.” (Farrell, 2016). Figure 2: 2016 McKinsey Global Institute survey. 25.

(27) It further states that casual earners and free agents (doing independent work by choice) report greater work satisfaction than reluctants and financially strapped, who do so out of necessity. Interestingly, free agents also are more satisfied in multiple dimensions than those holding traditional jobs. This indicates, that nonmonetary aspects of freelancing are valued by many people. (Farrell, 2016) What this means is that coming from a situation where traditional employment has been perceived as the desirable norm (and still generally is), independent employment is not only becoming more of a widespread due to push factors, but also because more people are choosing to use that route to navigate through the world of work. The flipside of this is that as freelancing/flexible employment/on-demand work gains prominence, there have been a number of negative consequences in terms of offered compensation, employee rights, work benefits, working hours and even healthcare plans. Uber for example, has spent a lot of time in court trying to prove that its drivers are not actually its employees, and hence are not entitled to workplace health insurance. Other gig platforms with less visibility than Uber continue to fly under the radar as many complain that they are in fact being exploited – required to work full time hours or longer for essentially no benefits and less pay. The rise of freelancing in their view, is merely the rise of corporate greed which is exploiting the millennial generation and depriving them of the guarantee of income, homes and security that their parents had. Independent work is rapidly evolving, supported by the emergence of digital platforms. As of today, just 15% of surveyed freelancers have used a digital platform to offer their services, but this could change rapidly as the burgeoning on-demand economy continues its linear growth. (Farrell, 2016). 26.

(28) State of Present Market A market research by Askwonder puts the total market size of the global gig economy at $ 1.5 trillion. Half of the world's freelancers are US-citizens. The total number of independent workers worldwide can approximately be put at 77 million. (Askwonder, 2018) The gig economy is growing fast. Presently, platform-based freelancing is not yet displacing the traditional payroll employment. Yet this could change soon and fast. Available data shows that online freelancing is concentrated in large metropolitan areas so far. (Hathaway, 2016) The rise of digitization allows skilled workers to become self-employed. 41.9% of freelancers obtain their training from universities and colleges, 43.8% are self-trained, while 13.4% learn on the job. A research by Askwonder in 2014 breaks down freelance work in terms of earnings as follows (Askwonder, 2018): -. Technology jobs ($486 million) Admin Support ($110 million ) Writing and translation ($109 million) Design & Multimedia ($83 million) Mobile ($71 million) Sales and Marketing ($49 million) Finance and Legal ($33 million) (Askwonder, 2018). The global distribution of freelancers is as follows (Askwonder, 2018): -. North America: 50.7% Europe: 29.3% Asia: 11.3% South America: 4.0 Australia: 3.3% Africa: 1.4%. It should be noted that records distinguishing freelance work from payroll employment hardly exist around the world, so the available figures (which may have debatable accuracy) are used to extrapolate on a global basis. The continuing rise of independent work suggests that 27.

(29) companies will need to adapt and develop new tools and processes to efficiently handle the new independent way of working. (Askwonder, 2018). 5.2 The prevailing Trend of freelancing According to the Intuit 2020 report, countries presently recognized as less economically developed will become the drivers of global economic growth, and at the same time, the cost of starting a business will fall substantially. (Intuit, 2010) What this means is that freelancing is set to explode in popularity and application all over the developing world, from Africa to Asia through South America as young and ambitious populations of tech savvy people become economically active. While this is happening, small businesses will be affecting a shift in their expense models from fixed-cost to variable cost, adopting a pay-as-you-go approach to minimize the business’ investment risk exposure and liquidity requirements. The same report predicts that work will undergo a fundamental shift from full time to free agent employment. Freelancers and part time workers will replace the traditional employment type. Hiring contingent workers will become a long-term trend. Even more than 80% of large companies plan to extend their use of independent and flexible workforce. (Askwonder, 2018; Intuit, 2010) The Huffington Post reveals how fast the freelancing market grows and projects that ''if even a small fraction of inactive youth and adults use these platforms to work a few hours per week, the economic impact would be huge — amounting to some $1.3 trillion annually by 2025, according to projections.'' (Askwonder, 2018; Lund, 2015) Lunds research expects, that current freelancer growth rates lead to a high level of freelancing in our societies workforce by that year. (Lund, 2015) According to Wald, the growing prevalence of independent work brings tangible economic benefits, such as boosting productivity, providing opportunities for the unemployed and raising 28.

(30) labour-force participation. Digital platforms can amplify all these benefits through their faster matches, seamless coordination, larger scale, richer information signals and enabling trust. Consumers finally benefit from the improved matching, greater availability of services and fulfilment of their needs. (Askwonder, 2018; Wald, 2014). 5.3 The grey labour markets The so-called “grey labour market”, also sometimes known as the “informal labor market”, “shadow economy”, or “black economy” is the part of the economy that is not regulated by government. That’s the reason why it is excluded from national GDP figures. It is generally characterized by low-skill “neighbourhood services” and activities that cannot be fulfilled in whole or in part over an electronic connection but must be done in person with physical encounter. (Turek, 2015) For example cleaning, painting, personal training, piano lessons, babysitting, grocery shopping, hardware installation, electrical work and plumbing. In most of the cases there are even tangible goods, such as tools or spare parts involved to carry out the service. Within the offline freelance market space, there are two basic business models that generally characterize the way skill providers interact with their clients. There is the model whereby a labour hire broker or agency connects skill providers with local customers, handling all financial transactions including taxes, and withholding a service charge from the freelancers’ pay for this service. There is also the model whereby skill providers connect directly with their offline clients and usually accept cash payments which are incredibly difficult to track on a large scale for tax purposes. The consequence is tax evasion and the lack of social security.. 29.

(31) Offline Labour Broker for Grey Market The labour broker is increasingly becoming an obsolete entity as technology makes it possible for providers of handy skills to connect with clients and offer them their services directly. Previously, the role of the broker was to connect people from the shadow economic realm with customers who would not ordinarily be able to access such people due to the socio-economic differences between them. It would handle the financial transaction between the two parties, collecting payment from the customer and passing it on to the skill provider less an agreed commission. Such arrangements can still be observed in the provision of services like facility management, concierge services, factory work and security. As technology marches on, it is becoming increasingly unnecessary to go through a middleman to connect with people who need these types of manual labour, so this is something of a disappearing model. (Turek, 2015). Modern Grey Labour Market for “Neighbourhood Services” The major identifying feature of the grey labour market is that its participants are overwhelmingly more likely to accept payment in cash to avoid the taxation burden that comes with the fully-recorded part of the economy. Other people find the registration process too difficult to understand and avoid it instead of to cope with it. Another motive for taking part in the informal economy is to avoid detection by authorities for reasons such as illegal immigration status or criminality. In return for the invisibility offered by the informal economy, skill providers in that space are often willing to accept extremely unstable employer-employee relationships (or even abuse in some cases), especially as the cash earned is often vitally important as a matter of sheer survival. The table below outlines the decisive factors for entry into grey labour markets around the world. 30.

(32) Table 1: Motivational Factors for Entry into Grey labor market (Turek, 2015). Despite the obvious appeal of such an arrangement to poor workers in both developed and developing countries around the world, there is a mounting body of evidence to suggest that such unrecorded economic activities are not just starving governments of tax revenue, but are actually hurting the economies of the countries the take place in. Dr Schneider determined that informal economy size in 2000 in developing countries was equivalent to about 41% of their total GDP. In Turkey and Brazil, around every second nonfarm worker belongs to the informal sector. In Zimbabwe, it is even 60%. OECD countries report a lower, but still relatively high proportion of informal economy at 18%. What this means is that as the grey economy is basically unrecorded and unreported, most developing countries are losing an average of 41% of their GDP figures to the grey economy, and 31.

(33) specifically Zimbabwe’s GDP figure is being under-represented by as much as 60%. When the potential for desperately-needed foreign direct investment and foreign portfolio investment is juxtaposed with such data, it can immediately be deduced that this part of the economy is living parasitically off the other. (Schneider, 2012; The Economist, 2018) Farrell’s analysis shows that the existence of a large grey economy leads to substantially lower overall productivity ratings for the economy. The reason for this is that the so-called grey operations have an incentive to remain small since any attempt to scale might alert the authorities about their existence. While in many ways a small size is a good thing that enables them to perform many activities flexibly and nimbly, it eventually becomes a hindrance when it comes to adopting technology and up-to-date business practices. (Farrell, 2016; The Economist, 2018) According to Farrell and the McKinsey report, if the grey sector in Portugal were formalized, it would add approximately 0.8% to the country’s overall GDP growth rate – a very significant figure in a region where 3% growth is seen as optimally desirable. Formalizing the grey sector would likewise add 1.5% to the GDP growth rate of Brazil and Turkey. Individual industries would substantially improve their efficiency, an example of which is the Brazilian construction industry which would no longer need to hire lookouts whose job is to alert unregistered workers about the presence of government inspectors, so they can rapidly disperse. (Farrell, 2016; The Economist, 2018) Aside from reducing the overall economic performance of a country, the prevalence of an unregistered grey labour market also has the effect of reducing government revenue inflows which should come in from taxes and levies, and it effectively increases the costs of whatever social benefits offered by the government, since there are fewer resources with which to service both economically registered and unregistered residents. This fact further retards economic 32.

(34) growth and additionally hinders the ability of governments to effectively administer and implement labour market policy. Another negative attribute of the grey labour market is that when it attains a certain size within a country, it exerts a negative effect on the country’s ability to maintain law and constituted order. Informal labour market participants have little incentive on a personal level to uphold business and ethical standards or observe basic civic conventions. Government on their part cannot enforce standards and laws within this space, and so this leads to a situation where unfair competition becomes rampant, an example of which would be the utilization of substandard inputs in the provision of whatever service or product is offered, so as to compete favourably in terms of pricing. The effects of such a race to the bottom are sadly predictable and undesirable. Honest businesses may find themselves strangulated and unable to compete with such undercutting, and consumers eventually suffer as the quality of their goods and services drops. (The Economist, 2018). It is noteworthy, that the grey labour market also offers several benefits to counter its undoubtedly negative effects. For instance, this sector has the effect of extending the labour market and creating actual employment within the system. If the jobs that exist within the grey economy did not exist at all, a country would be in a worse economic situation than it is, with lower overall demand and possible deflation, eventually leading to an economic recession or even a depression. Though the jobs created consistently have low productivity as their distinguishing feature, it cannot be denied that such work creates direct financial flows between individuals and families of different economic positions (e.g. between a doctor and an unskilled immigrant working as a housekeeper) this would not be possible vice versa. Administrative obstacles, ineffective 33.

(35) bureaucracy and unfavourable law all can effectively thwart various types of activity in the official economy. Workers are not protected by labour law, which gives their employer significant space for abuse. Without paying for social security contributions, unregistered employees lack security for the future. Without public health insurance their access to health services is limited. Moreover, the informal employment cannot be mentioned when seeking legal employment nor can it be included in seniority. (Górniak, 2015; Schneider, 2012) Nevertheless, the grey market can also act as a buffer mitigating the consequences of the loss of employment. It can allow workers to survive the period of unemployment. (Górniak, 2015) Summary of issues in the grey labour market: -. Employer-employee relationships are very unstable.. -. Lack of social security (e.g. health insurance).. -. Tax evasion reduces governmental tax revenue.. -. No record of work, that is needed for future job applications.. -. Labour is not protected by labour law and results in abuses of freelancers.. -. Governments cannot combat unfair competition.. -. Drop in service quality.. -. Invisibility leads to illegal immigration and criminality.. -. Informal workers have little incentive to comply with ethical or legal standards.. The uprising of freelancing platforms has already changed a substantial amount of the landscape within the offline freelance world by making it possible to regularize grey labour to an extent. Such platforms maintain the ability of the users to keep their autonomy at a small scale since they are still recognized as self-employed, but they offer a crucial level of security that was not present before by first of all requiring a basic set of standards from skill users in terms of behaviour and transactions. These platforms make it much harder for an unscrupulous skill user to stiff an unregistered worker after they have rendered the agreed service, and user identification is required. 34.

(36) This leads to users engaging in desirable self-policing behaviour, knowing that any abuse is likely to be detected and prosecuted by the authorities. Such platforms also aid governments with data that can be used for planning and taxation purposes because for the first time, the state has access to a repository of previously unavailable information about unregistered work, which can be extrapolated to give them an idea as to the size of the overall grey economy and how to effectively deal with the social and economic issues it creates. Many things have already been improved, yet many other big problems as explained above remain unsolved.. 5.4 Competitor Analysis As we have seen previously, the market for service platforms can be divided into services carried out online (such as programming, text writing, design, translations, online courses) and local services (such as cleaning, tutoring, repairing, live music acts or photography). Similarly, the major platforms in this market focus on either or the other part of the market. Firstly, the competitor analysis shows the main freelancing platforms, that are focusing on online services. These successful platforms could easily expand their activities to local services and some are even trying. Secondly the analysis shows early stage start-ups, that focus on both online and local services and thirdly, we analyse those platforms, that focus on local services specifically. Most of them are early stage start-ups and have not built a functioning product yet. Anticipating the conclusion and outcome of the competitor analysis, we can say, that the market of freelancing platforms for local services has been touched but not successfully penetrated yet.. 35.

(37) 5.4.1 Freelancing platform focusing on online services www.upwork.com: 1. Upwork is widely recognized as the world’s biggest and most used freelancing platform, with over 14 million registered freelancers and five million registered clients in 180 countries as at December 2017. It records an annual job volume of more than 3 million, cumulatively worth a total of $1 billion USD. Its service offerings are restricted to skills that can be executed and/or monitored online, mostly within creative, coding and professional services. An empirical appraisal shows that it offers ordinary users no real extra functionality over its competitors and it charges a very high platform commission of 20% on each job into the bargain. Upwork’s continued attractiveness to them lies in its size and reputation which gives clients and freelancers a measure of assurance. To professional and enterprise users however, Upwork has an unparalleled range of skill and talent management tools that enables it service everyone from small creative agencies to Fortune 500 companies. Since launch, it has raised more than $160m USD in multiple funding rounds. Its service can be accessed in 3 different ways – the marketplace, Upwork Pro and Upwork Enterprise. The marketplace is where most ordinary freelancers and their customers meet each other and transact business. Skill seekers post a job for free, and freelancers can then respond to the advert with a bid. Once a bid is selected and the job is confirmed, the client funds the job either hourly or in milestones. Upon successful completion, Upwork takes a 20% commission and releases payment to the freelancer using their preferred payment method which may be Skrill, Paypal or a direct transfer to their bank account. Upwork Pro does something similar, but instead of using an open bid system, a selection of premium, vetted talent is provided to. 1. Logo can be seen in Figure 7 Upwork Logo (Upwork, 2018). 36.

(38) the seeker to improve their search quality. (Upwork, 2018) Upwork Enterprise describes itself as “an end-to-end technology and service solution customized to fit individual companies.” (Upwork, 2018) Using the Enterprise platform, HR managers and business owners can literally put together a highly skilled remote team and begin work in a matter of hours as against the days or weeks it would take a traditional staffing agency. In summary, it would seem that the strategy being employed by Upwork is to evolve into more than just the preferred freelancing platform for the existing freelance community, but to become recognized as an alternative to offline staffing companies and ultimately to disrupt the traditional workplace even further by creating vast, productive and highly skilled distributed work teams operating at high efficiency with next to no risk to employers. (Upwork, 2018). www.fiverr.com. 2. Fiverr markets itself as the preferred freelance services marketplace for lean entrepreneurs to focus on growth & create a successful business at affordable costs. Its basic model is that skill providers put up a “gig” stating what they offer and for how much, with a minimum gig price of $5 and a maximum price of $995. In comparison to Upwork it applied a different approach to Upwork, where Skill developers describe and offer their services, that can finally be searched and booked by the Clients directly. (Fiverr, 2018). 2. Logo can be seen in Figure 8: Fiverr Logo (Fiverr, 2018). 37.

(39) 3. www.freelancer.com. Platform offers the exact same functionality and user experience as Upwork marketplace. It does seem to get a bit of traffic, and there is some indication that they place a premium on user security, but apart from that there is very little to stand it aside from the competition. It is also written almost exclusively from the point of view of a skill buyer, and no mention is made of the commission that will be charged to the freelancer by the platform. (Freelancer, 2018). https://www.peopleperhour.com. 4. This platform offers a mix of the functionality of Upwork and Fiverr, with buyers able to browse through fixed price gigs as well as post jobs and receive bids for them. The uniqueness of the business model / strategy seems to be that all work is billed hourly, and not in milestones of service completion. (Peopleperhour, 2018). 5.4.2 Freelancing platform focusing on both online and local services www.localancers.com 5. This platform is offering both online and local services. in the sense that it makes use of strict geolocation in order to assign work to skill providers, but the services it advertises do not require geographical proximity, such as writing, design and coding. It markets itself as a freelance / digital nomad directory which charges no commissions, but rather provides only. 3. Logo can be seen in Figure 9: Freelancer Logo (Freelancer, 2018). 4. Logo can be seen in Figure 10. 5. Logo can be seen in Figure 11. 38.

(40) listings & contacts organised by location, in the manner of an online Yellow Pages directory and accessible across all kinds of devices. The operational logic of this platform is to assist techy people do all the techy stuff that does not necessarily require proximity, but to make sure that while they are at it, they are working with time zones that are pleasure to work in and people who they want to work with. To this end it advertises itself as “a place both for local cooperation and international outsourcing.” (Localancers, 2018). https://vanywhere.com 6 Vanywhere is a token-based freelance platform which uses voice, video and text chat to connect Skill providers directly with their customers in order to guide them through various processes such as cooking or design in real time. Therefore, Vanywhere actually does not support and focus on local services, that require a personal encounter or tangible goods. The idea is that the Skillers only provide their advisory expertise in the form of video, voice or text conversations, and the users pay the Skillers for their time. The platform makes use of the VANY token to create alternative revenue stream which allows for minimal platform commissions. Its operational logic is as follows: -. Find a Skiller that meets your needs Choose how to connect: video, voice or chat Get instant, personalized advice, answers and solutions Seamlessly transfer VANY tokens Leave a review and rate your Skiller. Thus far, it seems to have gained substantial traction through the iPhone app platform. It achieved a 26% conversion rate from download to action during testing in Q1 2017, and it also. 6. Logo can be seen in Figure 12. 39.

(41) achieved an average call time of 4.5 minutes as well as 1 million Google search requests. In that time, it became the largest live video provider of Apple tech support in the world. Summing it up, Vanywhere seems to be more like a Social Network for online support, that a freelancing platform for offline services. (Vanywhere, 2018). https://blocklancer.net 7 This freelance platform operates as a Decentralised Autonomous Organisation (DAO), which means that it has no central human management. It is set up to function in a completely trustworthy automated way using a series of linked smart contracts to solve disputes between the freelancer and client via a “token tribunal”, which works a public consensus of token holders on the blockchain. On this way Blocklancer aims to increase fairness by public consesus. Blocklancer places a specific focus on simplicity and fraud elimination. The platform aims to solve the following issues: -. Inauthentic reviews Unreliable payments Expensive fees Unfair disputes/fraud Uncontrollable influence of a central authority.. In addition, it also offers a relatively low commission of 3%, as well as zero possibility of censorship resulting from being completely decentralized and free of human oversight. Aside from this, the platform promises to offer a fair dispute resolution system leveraging the platform token as an incentive for platform users to adjudicate fairly. (Blocklancer, 2018) https://ico.talao.io/ 8. 7. Logo can be seen in Figure 13. 8. Logo can be seen in Figure 14. 40.