Platform for consulting?
A few ex-consultant friends and I mused over this concept several times in Marriott hotel bars across the country. “Why not set up a two-sided platform (think: VRBO, UBER) where companies can hire consultants for 1/3 of the price? Cut out the middle man.” Yep – an online market for consulting.
Uh, already exists
With a quick Google / Quora search, here are the ones I found. They all have case studies and reputable Fortune 500 client rosters. Some specialize in HR, or IT etc. Some have VC backing. This is truly the gig economy.
- Talmix (United Kingdom)
- Business Talent Group (New York, USA)
- Toptal (California, USA)
- Go Catalant (Connecticut, USA)
- GLG (New York, USA)
- Expert360(California, USA)
- QuantifyE (Texas, USA)
- Gigster (California, USA)
- A-Connect (Switzerland)
- Bhive (Brazil): now 404 error
- SpareHire (California, USA): now 404 error
Yes, Proof of concept
There is a market for this. It’s disruptive innovation, “less for less”. You might not get the shiny brand name, but you get the work done.
Yes, Low fixed costs
What assets do you really need beside a good website, a robust database to store names, and algorithms to match people with projects?
N0, massive marketing costs
Gotta get your name out there. With so many similar websites, how do you differentiate yourself? Look at the side-by-side comparison of these two sites.
Client testimonials
Selling professional services (on demand) definitely requires some testimonials and “evidence” that there is some minimal level of quality. Good press.
What services?
While a few sites specialize (Toptal: Developers, Designer, and Finance), others offer almost everything: strategy, marketing, operations, risk management, organizational design, IT advisory, you-name-it-they-got-it. On one hand this makes me skeptical, on the other had, business problems are often more similar than different.
What about scope?
Without good scope, clients feel cheated, clients get exhausted, and the marriage usually ends in divorce. When I looked that variables for “creating a project” here, this is what I found. Looks a lot like a SOW outline, right?
- Area of expertise: Finance, Marketing, Operations, etc. . .
- Industry: Agriculture, Airlines, Consumer Goods
- Onsite / Virtual? If onsite, which country
- Languages required
- Level of Experience: Junior, Mid-Level, Senior
- Schedule
- Budget
- Project Title
- Project Objective / Deliverables
Does this have a future?
Of course. With the big 3 and big 4 firms continually hiring / promoting / laying off staff, there are literally millions+ qualified top-shelf consulting alumni in the job market. Many/most of them are full employed, but clearly many of them are also available for hire. Expect to see a lot of M&A among these websites. A two-sided platform becomes more valuable with demand+ (client projects) and supply+ (consultants for hire).
Toptal got $1.4M in seed investment from Andreessen Horowitz and had a revenue run-rate of $80M annually in 2015. Apparently, they only send an average of 1.7 candidates to clients before one is hired. Yikes, that sounds pretty accurate. Talk about HR analytics.
In some cases this works really well BUT the difference between UBER/Amazon and talent is that in the former you are buying a commodity (a taxi ride, a book) while in the latter you are buying a person. That doesn’t mean there isn’t potential for automation but even in the most simple cases where arguably you ARE buying a commodity (can this person code Python competently?) there are many, many other considerations that make the potential for disruption more difficult. The death of recruitment agents and our ludicrous fees (ha ha) has been predicted for years but the sector is still thriving.
Yes, I completely buy that argument. The lower end of the market will always be available for commodity-type work. But consulting is a lot about relationships. Agree.
Interestingly, one of the websites notes that they have 95%+ retention rate for Fortune 500 clients.
Interesting! I also mused over that. Here are a few thoughts.
I agree there are some special challenges for this to take off in an Uber like way.
Evaluating the service/product before purchase has been mentioned by chrissale26. Other than Uber, AirBnB does sell a service where no two offers are identical, yet it is still a success. It achieves this by applying industry knowledge on the part of the market place owners, to disclose the most relevant filters with minimal amount of clutter. This results in an end-to-end procedure that is only slightly more complicated than Uber. With a combination of market driven ratings, and relevant categorisation, travellers, surprisingly, often find what they expect.
But compared to AirBnB, a simple market place for professional services adds more challenges: subjectivity of scope, and value of the service. While AirBnB does offer dispute resolution, delivery is seldom in question. If a room is dirtier or noisier than expected, the market will punish it with a low rating, but the funds are still transferred because the service was still rendered. With professional services, subjectivity in scope is vast. Because the service is more expensive than a room for the night, clients are less likely to be content with the ability to give poor ratings as the only course of action. To avoid these messy areas, the market place may be tempted to only be involved up to placement.
Unlike the personal touch of recruitment agencies, a high volume online market cannot police to differentiate placements from fruitless introductions. A quality introduction will make it difficult to hide the identities of parties to encourage payment. Hence the market place vendor will probably charge for all introductions. Perhaps a list of candidates, pay to view more. Or pay to subscribe to view profiles for a month.
Watered down to that level, it is hard to distinguish from premium services on LinkedIn. And the Uber like one click end to end experience is gone. But of all the problems, the relationship part is the biggest, it is hard to commoditise. It is hard to differentiate even in a good review. And it’s hard to justify why a consultant who charges a double hourly rate for what is on paper the same service, may actually be the bargain of the year.
The market place service that can find the right balance between simplicity and power, added with timing, and a sprinkling of luck to achieve critical mass, may be the one that takes off.
Agree with everything you said. Also, what a big difference in commitment ($250 1 night room rental) vs. $100,000 project and your professional reputation at risk. Per the linkedin comment, I could completely see Linkedin moving into this part of the business.
The Platform Business Model is fast becoming a “thing”. Wise money says that for today and the future, you should build Platforms not Products. Many see it as money while you sleep.
MIT even offers a programme “Platform Strategy: Building and Thriving in a Vibrant Ecosystem”.
Talking about UBER, I am currently working on a possible UBER for Higher Education, would love to get your views on it…
Thanks for reading and saw your email. Will reply.