We take a look at some common freelancer problems and how a collaborative startup of freelancers could provide solutions
I was reading the founder backstory of a business travel app called BizAway that just attracted a EUR35m funding round when a thought popped into my head: If this two-man start founded by Luca Carlucci and Flavio Del Bianco could grow into a 300-strong 8-office business, what’s stopping more freelancers from banding together and building businesses together? Building freelancer-owned cooperatives?
As any freelancer knows, our way of working is enticing for its freedom and flexibility, but it’s not without its challenges. From feast-or-famine workloads to chasing late payments, many freelancers find themselves struggling with issues that could be solved by, ironically, banding together.
Many freelancers dream of building a bigger business, but the challenges of being a freelancer and juggling a personal life can get in the way. Here we go into the common problems freelancers face and how a collaborative startup of freelancers could provide the solutions:
1. The Feast-or-Famine Cycle: One minute you’re drowning in projects, the next you’re staring at an empty inbox. This unpredictable workflow makes financial planning and securing consistent income difficult.
Startup Solution: A freelancer-owned cooperative could act as a shared platform for acquiring projects. By pooling their resources and networks, freelancers can access a wider range of clients and ensure a steadier flow of work for everyone involved.
2. Chasing Invoices and Late Payments: Getting paid on time can be a constant battle for freelancers.
Startup Solution: A cooperative could handle invoicing and payment collection for its members, leveraging collective bargaining power to enforce contracts and ensure timely payments. This frees up freelancers to focus on their work, not chasing clients. Virtual assistants would be a great source of talent for this.
3. Lack of Benefits and Security: Freelancers often miss out on benefits like health insurance, retirement plans, and paid time off that traditional employees enjoy.
Startup Solution: A collaborative startup could negotiate group rates for benefits like health insurance and create a shared fund to provide a safety net for members during lean times or emergencies.
4. Isolation and Lack of Community: Working solo can be isolating. Freelancers often miss the camaraderie and support that comes with being part of a team.
Startup Solution: A cooperative naturally fosters a sense of community. Members can share resources, offer support, collaborate on projects, and even socialize, combating the isolation often associated with freelancing.
5. Marketing and Administrative Overhead: Finding clients, managing a website, and handling administrative tasks can be time-consuming and take away from billable hours.
Startup Solution: A cooperative can centralize marketing efforts, provide a shared website or platform, and offer administrative support to its members, reducing individual overhead and increasing efficiency.
So, how would members get paid in this cooperative model?
There are a few different approaches a freelancer cooperative could take:
Project-based pay: Members are paid directly for the projects they complete, with the cooperative taking a small percentage to cover administrative costs and shared resources. This is similar to how many freelancers currently operate, but with the added benefits of a stable support system.
Hourly rates with profit-sharing: Members could be paid an agreed-upon hourly rate for their work, and then share in the profits of the cooperative at the end of a designated period (quarterly or annually). This model encourages collaboration and rewards everyone for the collective success of the business.
Salary model: Depending on the nature of the work and the structure of the cooperative, members could receive a regular salary, similar to traditional employment. This provides greater financial stability and predictability.
The chosen payment model would depend on the specific needs and preferences of the cooperative members and the nature of their work.
Beyond these solutions, a freelancer-owned startup can:
- Increase negotiating power: Collectively, freelancers have greater leverage when negotiating rates and contracts with clients.
- Offer professional development opportunities: The startup could organise workshops, training sessions, and mentorship programmes to help members upskill and stay competitive.
- Build a strong brand reputation: A unified brand identity can lend credibility and attract more clients.
- Create a subscription model: As the cooperative startup grew, more owner-members could be invited or offered a subscription instead.
By joining forces, freelancers can create a supportive ecosystem such as the one outlined above that addresses the challenges they face individually. A collaborative startup offers a powerful way to achieve greater stability, security, and success. But like all startups, it will need a varied group of people, skills and experience to get it started and work like clockwork.
