Talking with a friend about the Upwork business. As a marketplace, it's fragile. Many people find a trustworthy vendor, then go outside Upwork to pay them directly rather than pay the 30%+ commission. You own Upwork. How do you address that problem?
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So that begs the question: If you can't solve it, how do you minimize it to maximize margins?
A rare wrong comment from Moses! While he’s right that that podcast is really really good, you absolutely can fix this problem. The problem is that upwork has too high of a take so people take the payments off upwork. All upwork needs to do is lower it or switch the biz model.
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Their take is high because they offer insurance in case of bad work on new hires which happens often. Upwork also charges for an ad to make your ad more prominent. They could simply do more of that now that they’ve aggregated demand and supply. They could charge sellers for
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verification. I’m drawing a blank here but if I’m upwork I’m cutting the take and increasing the non-take business models. LinkedIn would be a good marketplace to copy.
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I'm wrong a lot!
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You’re wrong in this tweet, too
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I’m a service provider on Upwork, the fees reduce after certain client volume, and I find it well worth paying for all the infrastructure that allows me to run a small biz with minimal effort (leads, bookkeeping, communication, billing, etc).
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That’s cool. You’re the first non-3rd world service provider I’ve run across. Glad it’s working out!
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