How Will Business Deal With the Gig Economy? Which Businesses Will Benefit and Which Ones Will Lose?

The gig economy for business is not much different than any transformational disruptive technology. There will be many winners that achieve an early foothold in the new technology, gaining a significant advantage.  Then there are those who will not be affected at all. There are also companies and industries that will possibly face significant disadvantages for decades.

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First we hope you know how the business freelance market works if not you should first read about how freelance market works.

We believe business freelance gig market that is revolutions the job structure has five separate categories:

  1. The Directly Affected who get the best benefit – they are the eye leading the revolution.
  2. The Indirectly Affected who enjoy some good benefits.
  3. Not Affected – They are neutral.
  4. The Indirectly Affected who are losing – not so good.
  5. The Directed Affected who are losing fast – they are probably losing to the revolution.

Who are the leaders of this revolution that have already directly benefited and are the clear winners? AirBnB, WeWork, Uber, Lyft and others. They are the platforms of choice in this market. This model is producing revolutionary change nearly everywhere, from the internet to electric vehicles, even rocket technology.

The next indirect winners will be the thousands, no, millions of smaller companies that utilize these platform and services to achieve a lower cost, more flexible, more aggressive work force.  The best example is the sizeable number of companies that are 100% virtual, meaning no real headquarters, no central office for their people. They all work at home or a place of their choosing.

Here is a list of the 11 largest virtual companies:

  1. Scopic Software – 230 employees
  2. Articulate – 169 employees
  3. 10up.com – 120 employees
  4. Clevertech – 119 employees
  5. Basecamp – 114 employees
  6. Buffer – 112 employees
  7. X-Team – 104 employees
  8. Scrapinghub – 99 employees
  9. Zapier – 89 employees
  10. Collage.com – 77 employees
  11. Fire Engine RED – 70 employees

Just because they are virtual, with hundreds of employees, does not mean they will be successful. It means that these companies will have a lower overall cost, more flexibility, a better ability to increase/decrease (scale) their employment, and they can introduce products and services faster.  Here is an example of how and why a very small company achieved higher success using business freelance gigs.

They will be lacking the commodity of team spirit and will likely have higher levels of communication failures. They will often be better structured to take on the bigger, more entrenched companies, but execution in many ways will be different. It could be harder to be a hands-on leader when weekly meetings can only be held over the internet.  The traditional facial clues, the nodding of heads, the understanding that the team is on the same page, these things will be more difficult to gauge and possibly so will the problems.

The neutral will feel little direct impact but they will notice wide swaths of the economy changing around them. They may not feel it as much in places like retail, service stations, restaurants, and other day-to-day businesses. It’s almost like a hurricane, ripping apart some businesses while providing an opportunity for others– and if you’re not benefiting directly (or very close) you do not see the change.

The indirectly negatively affected may decline slowly. Examples include the tradition newspapers, web development companies, internet services, one location SEO companies, even large corporations such as Oracle who now have their sales team and consultants working virtually. Almost every companies building an internet-based business, or wireless applications, will directly compete with low-cost virtual companies. The biggest losers in this group are companies with high entrenched costs who are hardened in their ways, refusing to adapt or doing so too slowly.

The big losers overall are the companies standing directly in front of the wave: the taxi companies, the traditional reservation and booking travel businesses, large amounts of internet services and specialty firms that do not adapt.

It is our belief that you are always better served by trying to migrate to the leading position if at all possible,  it might not be to late to begin.

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