Where is the Market for Leveraging and Monetizing Peer-to-Peer Work?
Update: I just happened to be searching for a domain name for an idea I have and ran into this: ShuffleApp.com . The short description of which sounds an awful lot like what I’m describing below! Here’s hoping!
The other day I encountered this post by venture capitalist Fred Wilson wherein caught my interest by talking about Coase’s ‘The Theory of the Firm” and plugging Work Market. It turned out his post was serendipitous for me.
Read Fred’s post, he links to Coase’s essay, the Wikipedia page, etc. Read those as well. For the sake of brevity I imply a lot of things below that are spelled out in detail by Coase. He was thinking about these things before he published his work in November, 1937.
I’ve been thinking a lot about the future of work since I made The Offer. I’ve been having a lot of conversations with solo founders, some of whom are in out-of-the-way places. The majority of these founders are non-technical but have some other valuable skill-set. They feel passionately about their endeavors and are pursuing them to the best of their ability. Many have hit a roadblock with respect to technical implementation. I would say that most of these people are open to a technical co-founder but live in places that potential co-founders are hard to come by. Others are just a bit cautious about ‘founder dating’ and finding the right person to invest so much time and energy and emotion with. Trust can be a hard bridge to build.
So off to Work Market I went. I didn’t have any set expectations, I was just mildly curious. I’d checked out other work marketplaces before, they seem to be cropping up just about everywhere.
As I was clicking around on the Work Market site, I found myself thinking about all those entrepreneurs I’ve been speaking or corresponding with and I began to feel some disappointment. I wasn’t disappointed with what I saw in Work Market, it seems like a great site. The disappointment stemmed from that fact that I’ve been looking for a more adequate, bundled, solution for the set of problems that I hinted about above. Basically, I’m looking for a way for people, especially those outside ‘The Valley’ to get the help they need to overcome some of the initial inertia in getting their minimum viable product launched and rolling. Maybe more than that, but at least that. I was (and still am) looking for a way for these people to create the opportunities for serendipity that residents of places like Silicon Valley, San Francisco and New York City take for granted. What better way to do this than to do a lot of work for and with a lot of other people. It’s one of the primary ways we network.
And because I’m that kind of guy when I can’t find something, I start thinking about how it might look or how I would go about building it:
You have a large group of people all working toward their own goals. Some of these people have extra cash. Perhaps we can throw some more successful organizations, seeking freelancers, into the fray as well. Perhaps 60% of these people are ambitious but underfunded. They will trade labor for cash. Moonlighting to earn enough to stay on track and pay to fill gaps in their skill-set. Just to be clear, a pool of motivated talent willing to trade their work for something that they will then be able to trade for the work of others. Obviously, we’re talking about currency but the value comes from the work. Could you create a currency much like MMO game designers do? You do what you do in a game, you make some game cash, you trade that cash for whatever. Thanks to Gold Farmers these currencies even trade against national currencies. So my solution would be a peer-to-peer Work Market with a built-in currency (point) system. Why the currency system? You’ll see.
So let’s say I help someone to RAD out a Ruby on Rails proof-of-concept, we’ve decided this work is worth $2000 BAPBucks (BPX). I need some help with my pitch deck and a critique of my presentation. There’s an MBA here who used to work for some VC’s and is doing a pretty good business in coaching up-and-coming entrepreneurs. He has great peer-review feedback ratings. That person is charging just $200BPX for a deck review and an hour of pitch critique via a Google Hangout, Skype, whatever. You get the idea.
So this almost exists. I can put some money on sites like oDesk, eLance or ScriptLance. I can hire some people, get deliverables, pay them. I can do some work to earn more money, I can turn that money around and spend it on others’ labor. I can take the money out and go off to other sites, like 99Designs, to try a different transaction model for getting my work done.
What doesn’t exist is a very well executed way of building this community specifically around peer-to-peer labor trade. Wherein labor is whatever you can do for someone else that they value. Right now I’m mostly thinking about small, mostly online startups but technically I could do some development work and use my created wealth of BPX to hire a plumber.. Or donate it to a nonprofit that could use it to further their own mission.
So where’s the monetization model? Here are some possibilities: Some fee for each transaction, maybe a standard 2.5%BPX. Second, exchange handling fee for taking money out of the system. Third, we can sell BPX to entities who don’t want to use labor to get labor. In fact we can use arbitrage to sell it at a slight profit. All of the value in our market comes from the work, just like in MMO games where all the value comes from some worker in a sweatshop that looks like an internet cafe grinding away for in-game currency and prizes. We as a company add value by creating a place for that market to happen and incredible tools to help the people doing the work. Yes, the tools have to incredible because this is one key to our ability to compete with all the other markets that are about to (or already are) springing up around us. Obviously things like the network effect and the exchange and transactions rates, etc would have to make us competitive as well.
We could just build a fantastic user experience around these concepts and activities. Provide great tools for accomplishing these goals and base the whole thing on the USD, that would probably be a lot easier, a smaller problem to solve, an easier answer to find. Still, I think there are certain advantages to building a point trading system which is effectively a currency. One of them is very self-evident, the IRS is already on to us though. Further, I know from experience that you can find people who do great work outside of U.S. borders (Hello awesome Gilt Ireland team.) Wouldn’t it be nice to not have to constantly calculate exchange rates when buying and selling work? Create a neutral system and you only have to worry about exchange when you’re exchanging. Or build the exchange rate calculator right into every price on the site for your chosen currency. “10 hours wordpress plugin development $500BPX ($250USD).” In fact you could build up work in our system, store value, and trade it against whatever ‘Real World’ currency gave you the most bang. Perhaps you sell your work to the our company who then sells it to highest bidder (arbitrage again.) Obviously we have to be very careful about inflation. I have no idea if some of this makes sense, I am not an economist and I am a poor game theorist.
These aren’t new concepts, I guess I’m just surprised that the solution I see in my head doesn’t exist yet. I’m hoping someone will see this and explain where the giant flaws in this idea are. Maybe these things are already in the works and we just haven’t seen their realization yet? Maybe someone will contact me and explain how their startup is doing just exactly what I’m describing!
UPDATE: Talk about serendipity, I just backed this Kickstarter Project. I greatly look forward to these guys roaming around and ferreting out “The Future of Work” in a way I can only be envious of. Good Luck!