In an article posted at various media outlets yesterday, Upwork has filed for a $100 million dollar IPO.
As one of the most frequented online places to look for freelancing gigs, freelancers who use Upwork should be aware of how this might affect their relationships with the site.
Freelancing is a big market
Providing services online is a big market. Just look at Craigslist, Fiverr, and Upwork — nevermind the dozen or so other marketplaces where freelancers compete with other freelancers for business.
As the world move towards a gig economy, freelancers will become the de-factor position for most of us.
According to US statistics, freelancers make up 35% of its workforce, earning a total of $1 trillion dollars in 2016.
How does the Upwork IPO affect me?
An IPO is when a company begins offering its shares of the business on the public market. That means it will be accountable to shareholders, and not just private investors.
With this, it will have to report quarterly earnings, which will then affect its share price.
Executives within the company oftentimes have compensation packages that are determined by share price.
What this all means is that Upwork, if it’s operating as any public company should, will be under pressure from its shareholders to produce higher and higher returns.
For the common freelancer, this might mean additional services (at a cost) or an increased fee. It remains to be seen how Upwork might change, but based on the behaviour of how publicly traded companies operate, seeking a higher profit in all areas of its business is a reasonable assumption.
Will it become harder to find gigs?
It may or it may not.
As more freelancers compete for a job in marketplaces like Upwork, the proportion of “winners” will be less.
What this will do is decrease the rate of your services — in other words, you’ll be paid less — as services will likely compete more on price and less on quality or qualifications.
The “race to the bottom” isn’t a new thing, as anything that’s commoditized loses its pricing power.
This is one of the biggest reasons why you (the freelancer) need to start selling services where you’re in control and start differentiating your offerings from others.
Selling outside a marketplace
Workorder, being an app that lets you set up your own order and checkout page to sell your services, aims to help freelancers sell without the frustration of being on a marketplace.
When you send your clients to order from you on a separate website, there are a few major benefits:
- Recognition that you provide a higher level of service at a price
- Ability to offer upsells that make sense for both the client and for you
- Foster a brand and create loyalty amongst your customers
As the world forges ahead in having more freelancers, it’s important to sell on all sales channels. This means being present on both marketplaces as well as developing your own presence on the web.