[Auren Hoffman] Welcome to World of DaaS, a show for data enthusiasts. I'm your host, Auren Hoffman, CEO of SafeGraph. For more conversations, videos and transcripts, visit SafeGraph.com/podcast.
Hello, fellow data nerds. My guest today is Hayden Brown. Hayden is CEO of Upwork, a $6 billion market cap workplace company. Hayden, welcome to World of DaaS.
[Hayden Brown] Thanks so much for having me on.
[Auren Hoffman] I'm so excited that you're here. Now I'm a big fan of your product. SafeGraph, where I work, is a customer. We've hired hundreds of freelancers on Upwork. Hiring an Upworker is a lot lower friction than hiring a fulltime person, but it's not yet as frictionless as an API call like Stripe or something. Is part of your job to figure out how to make it as little friction as possible, or is having some friction actually a feature and not a bug?
[Hayden Brown] That’s an awesome question. As we've grown the product over time, we've actually looked hard at where friction makes sense and where doesn't. And if you think about our strategy, which is to be the work marketplace for the world, there are places in the product where we do very intentionally have higher friction experiences and we think about them, where we need to collect a lot of information from users potentially, such as onboarding a new freelancer into the system. Historically, that has been a somewhat higher friction experience. When a new freelancer comes in, we need to get a lot of information about their skills or expertise, because the more information we have about them, the better we can do at matching them with exactly the right opportunity in our work marketplace. Over time, we've also added a lot of integrations and ways that they can, for example, upload a PDF of their LinkedIn profile or other things from places where they have that information already stored elsewhere, to reduce the friction. But at the end of the day, if they create a blank profile, that's not going to do anyone any good in terms of us being able to match them.
[Auren Hoffman] I am a company and I'm trying to hire like the fifth freelancer to do the same kind of task or something like that. I've seen even over the years where it's becoming easier and easier on Upwork to do that. Is there some sort of sense where the goal is to be able to get you to hire someone and X number of seconds or minutes or something?
[Hayden Brown] Totally, like we use your previous job post and do the same thing again. You can imagine at the other end of the spectrum, we have experiences like we just launched this thing called Project Catalog, which is like a one click hiring experience for the client, where they can just browse a catalogue of projects that freelancers have created, have priced, have basically packaged as like a one click purchase.
[Auren Hoffman] It could be something like SEO optimization, I'll do these things for you for $300 or something like that, is that what you’re talking about?
[Hayden Brown] Totally, it could be “I'll do a book illustration for you for 500 bucks” or “I’ll do an animation for you for 50 bucks”, whatever it is. And that is super low friction, like a one-click checkout type of experience, going to the full extreme of your Stripe API type thing, you can imagine in the future places where we could integrate talent into experiences like a Google Doc or a Google Spreadsheet, a Microsoft 365 spreadsheet or something like that. And literally, you can say “hey, I need help with this formula. Can I get a freelancer to do that?” And theoretically, if we did a partnership around that, you could actually pop somebody into that experience, who's pre-qualified, ready to help you. And it could be absolutely frictionless. The roadmap is very long in terms of the types of things you might imagine us doing, not just today, but also tomorrow to make these experiences completely frictionless as the future of work keeps extending out ahead of us.
[Auren Hoffman] There are certain parts of the organization, let's say engineering or marketing, where they're really used to hiring freelancers. There are other parts of the organization, maybe not so used to it. What do you think about that? Is it part of your job to do education to different parts of the org? Or how do you think and how is that evolving over time?
[Hayden Brown] Over the last year, we saw that companies got so much more comfortable with remote work. And for us, given that we operate basically a global platform for contacting and working with freelancers remotely, the fact that basically every company in the world suddenly got comfortable with remote work meant that overnight lots of people suddenly realized, “wait a minute, I can work with remote talent”. And that's huge. Historically, what we have seen is folks in teams like marketing, web development, and mobile development are very accustomed to working with vendors, with team members who might not be in the same office, whether it's because the company is geo distributed, or whatever else. And so, they've very readily adopted remote talent, such as remote freelancers into their teams, and that's a great place for us to start, we have over 10,000 skills represented on our platform, and that includes technical skills, design and marketing type skills, customer support skills, and then like this huge, long tail of everything else that can be done from a computer essentially. So certainly marketing folks, technical folks, they're a great place to start. They're very comfortable working with remote talent. But clearly the world has changed so much in the last year. And now, I think people everywhere have gotten comfortable with working with remote talent. And some are realizing “wait a minute, why have I been limiting myself to the talent in my office, in my local geo, why am I not thinking about people that are further afield, including the freelance talent?”
[Auren Hoffman] If you think of the leverage stack, you start with maybe some no code tools to get yourself some leverage, then you maybe move to API's to get your leverage. If you need something a little bit more complex, then maybe you move to freelancers, or maybe even before that, maybe it's like a middleware solution, like Zapier or something, then you move to freelancers, and then the last step would be to move to other employees to get yourself leverage. Do you think about it similarly?
[Hayden Brown] What we see the smartest companies doing is forcing their teams to think Upwork first, frankly, and they give their teams a budget and say “look, do whatever you can, first and foremost on Upwork”, because the beauty of the model is that it's completely agile, it's completely flexible, you can turn on and off the resourcing, depending on the business need, you're not pre committed to any long term contract or anything that was difficult to unwind. That's what the smartest companies have been doing. They've also been trying to get out ahead of the burnout issue that so many of the teams are facing right now, especially coming out of the pandemic. And they're trying to figure out “how do I systematically and programmatically give my teams more leverage around how they're getting work done so that my employees can be doing the truly strategic necessary kind of highest order thinking?”, and then build out programmatically freelance models that are again very agile, because they've seen that they really need more flexibility in terms of how they're turning on and off programs, moving on a dime. The pandemic has shown them that they need that agility in the business, they can do that with the freelance models effectively, and so they're trying to wire that into the business up front, so that whether it's cutting a finance team coming into an earning season, whether it's a marketing team coming into a seasonal campaign, whether it's a technical team bursting capacity, because they suddenly need to rescan a website or build something new, suddenly they can use this model, to serve that business need and have their kind of fixed pool of FTE resources, not really changing much, but then they can kind of spin up and down the amount of leveraged resources through the freelance pool, as the business needs are changing throughout the year, throughout the quarter, etcetera. And that's really how companies are going to be managing agility.
[Auren Hoffman] I like to use the analogy of buying time. The two easiest things to buy are experience, so someone who has this very specific knowledge, going back to the SEO example, I don't know that much about SEO, they're an SEO expert, they're always doing SEO types of things to come by that knowledge. I don't need that forever, so I need that knowledge for a certain number of hours to help me. And then the second thing is buying more itemized work. These are like, in some ways, an API for people. Do you think about it differently, or how do you think about the arc of how to get leverage and how to buy time?
[Hayden Brown] I think we do think about it the same way. And that's kind of why historically, our core models have been an hourly model on the site where you can basically buy someone's time by the hour, and a fixed price model where you can basically purchase deliverables, essentially. And that kind of shows up in exactly how we've kind of built the different workflows and kind of units of purchase. Because that's kind of how I think people are like you Auren, and that's how they think about the units of what they're going to purchase. And they can put people on a retainer, they can put something on a stipend and say “hey, I want to have you 20 hours a week, every week”, or they can literally have it be billed by the hour as someone is doing the work. But that's how a lot of people think about it, and it depends on the type of relationship, that type of work they're building. One of the things that's maybe misunderstood, especially the hourly based work, although not exclusively, is, I think when people think about the model you and I were talking about with working with freelancers, they do think about it as maybe being very arm's length, like “oh, I'm going to work with these people in this kind of distanced way. It’s a very transactional relationship and I may not be able to count on them, they're not going to really get to know my business like me”, kind of like foreigners on the distant shore of my business.
[Auren Hoffman] Yeah, almost like an API, like when you deal with Stripe.
[Hayden Brown] And they're on the other side of the wall, like my business and my team are over here. And these foreigners are on the other side, I don't know if this is true to your experience and your experience working with Upwork. I actually talked to some of your team members, so I think I know the answer. But what we see with the majority of our clients who really invest in this model, is that they end up building very substantial relationships with the freelancers that they're working with on a repeat basis. These become like extended members of their team, they call it the “virtual talent bench” that they have. They really rely on these folks, these people know their business, they know the lingo, they know the brand guidelines, or the code base, or whatever it is. It may be a very clean interface in terms of how information is exchanged, and how requirements are shared. But in terms of the value that these people are able to add, because they really do know and understand what's going on at SafeGraph or Upwork or whoever the client is, it's super valuable just the way it is if this person was an FTE working in house.
[Auren Hoffman] I don't have a full time doctor or full time plumber, or any of these other types of things. There's no reason to have someone full time, who has this very specific knowledge.
[Hayden Brown] That's a great analogy. You don't need that person to be full time for you in order to add a tremendous amount of value for your business.
[Auren Hoffman] One of the reasons I admire Upwork as a business is that it’s a super successful marketplace. There's always this debate of what's more important, supply or demand, do you have a dog in that fight?
[Hayden Brown] My colleague John Horton always says, answering the question is like saying which side of the scissors is more important to cut with? And I think it's so true that you can't build a successful marketplace just with supply or with demand. It is really about managing that equilibrium. It'll be my 10 year anniversary in December that I've been an Upwork, so I've seen us over many years, building the supply side, building the demand side and it to me it's about achieving that healthy balance. I've seen periods in our business where I felt like we over indexed on one or the other we over indexed for a period of time, focusing on features, functionality, messaging, just for the supply side or just for the demand side, and when the pendulum swings too far to one side or the other side, I think you start to pay a price in terms of eroding the value proposition, trust, etcetera, that the other side has in your market.
[Auren Hoffman] If you were advising a company to get one off the ground, is there one versus the other, or do you still think it really is that harmony and balance that's so important to do it?
[Hayden Brown] I think the harmony is critical. That's where we focus today. I think most marketplaces do find that one side is more constrained than the other, like one is more constrained for us as the demand side. Our business, we've always had freelancers come to the platform and sign up. We've never got side marketing and advertising.
[Auren Hoffman] Really? Usually, it's very hard to get supply. And is that just because you have this brand and Upwork’s been in the business for a really long time? And is that why you think that you have that advantage?
[Hayden Brown] We're the number one largest player in our space, we've been an industry pioneer for 20 years, I think we have such strong brand recognition, and word of mouth amongst talent, who I think they come on the platform, they get very successful, they earn a ton of money, they see how all this works for them. I think there has been this recognition amongst talent that child individuals want freedom, flexibility, control over where and for whom they're working. I think everyone's talking about that now with the great resignation and the push for remote work. And this kind of surprised people like “oh, workers actually want flexibility around how they work”. People have known that for a long time, that's one of the reasons I think freelancing has been on the rise way before the pandemic. And even now we're seeing with this great resignation, a lot of former employees are not going from firm to firm, they're actually leaving their original employment to actually become freelancers. Last year, 20 million Americans joined the freelance economy for the first time. 60% of them said there's no amount of money that they could be paid to go back to a traditional job. So anyways, I think there's been a lot to the value proposition of Upwork and freelancing for a long time, we've never had to do advertising there. But the demand side of our marketplace has been constrained for us. We have focused our marketing efforts on awareness and category building and all of that. But in terms of features, functionality, etcetera, is something where I think we strive to achieve real parity in terms of the level of focus, because we know we need help on both sides of the business to really serve the market.
[Auren Hoffman] There's been a lot of talk of different types of take rates for marketplaces. And there's a big debate around different take rates. And obviously, there's a whole epic Apple debate that's going around take rates on that marketplace, how do you think about it? Because obviously, it can't be zero, or you can't make money. But if it's too high, people might go somewhere else, and maybe you won't grow the business as fast. How do you think about that as you move forward in the business?
[Hayden Brown] Yeah. So we've always focused on GSV, growth services volume, which is the total amount of spending on our platform as the golden metric for us, much more so than take rate because we believe that it really indicates if we are creating value in the world. Is this an ecosystem that is growing and is healthy that ultimately people are spending on and take rate is definitely a concern, but it's definitely a secondary concern. And for us, given that we measure our total addressable market at over a trillion dollars, and last year, we had two and a half billion dollars of GSV on our platform…
[Auren Hoffman] …you have a lot of ways to go.
[Hayden Brown] Yeah, exactly. We are far from achieving our total TAM, which is super exciting in terms of the growth opportunity for the business, but it also means that when I think about take rate as a priority, it's less of a priority than driving overall GSV growth. When we look at is our take rate healthy we and how do we expand it over time, which certainly there are those opportunities, we look at our product portfolio, our different monetization levers and are we growing into those different opportunities to expand take rate as we continue to add value, as we continue to add new products, whether it's some of the products we added recently, such as the one I mentioned earlier, Project Catalog, which by definition, because it is a one click Checkout experience, for our business, a kind of smaller project, which tends to monetize at a higher take rate based on just our current fee structure, generally would move our take rate up overtime if it becomes a much bigger part of our business, or other aspects. In the future, can we add advertising services, those types of things.
[Auren Hoffman] You do have advertising today already, which is a common thing that marketplaces will do that will allow supply to advertise.
[Hayden Brown] We actually don’t have that yet.
[Auren Hoffman] Oh, okay. I'm sorry, I thought you did. Okay.
[Hayden Brown] We don't, that's something we could add in the future that would give additional, value-added services for customers to be able to add on.
[Auren Hoffman] I can imagine you can add things like background checks, services, or all these other types of things, or even a currency converter.
[Hayden Brown] A lot of marketplaces do make money on things like interchange and foreign exchange fees and stuff like that. That is part of our monetization model, but I'm also wary of a lot of hidden fees like that, which I think in general don't serve customers well, and I want our monetization to always align with customer value creation. I think, for example, one area to your question about take rate that we've looked at a lot in the past is, we've been able to make a lot of choices around take rate over time. And we've always chosen to keep our take rate aligned from a value proposition perspective, with places where we feel our customers are winning. For example, because our take rate is basically a percentage of freelancer earnings, when we’ll be able to charge more, we make more. And we've always felt that's really important in comparison to platforms like Uber or others, when they cram down rates of their drivers, they take a bigger spread. And that's kind of the inverse of our model. When our funds are able to go more, we earn more whereas Uber, when they're able to press it down they earn more. From a value proposition perspective, it’s important for us to stay value aligned with our talent earning more, because we want to create this cycle where we're incentivized to match the highest quality people who can drive the best outcomes with our clients. And once we have to burn in the other direction, it could get challenging. So yes, we have like some other products where we do take a spread on things, but we want our core model to stay very value aligned with our customers.
[Auren Hoffman] I'm super fascinated with these marketplaces. Do you study other marketplaces? And if so, which ones do you look at and say “oh, this is really interesting, they're doing this new thing over here”? How do you do your own research about that?
[Hayden Brown] I am so fascinated by them too, marketplaces are like the coolest businesses around and they're all so interesting. I love looking at other marketplaces, I think some of the most interesting ones that we look at are things like dating websites.
[Auren Hoffman] There are two sides of a dating marketplace, the supply is also the demand, right?
[Hayden Brown] I think what's interesting, too, is because we run a services marketplace, any given freelancer only has 40, 50, or 60 hours in their week that they put in for work, unlike a goods marketplace, where potentially a seller could have some very large number of goods that they can just keep reselling. You can only go on so many dates, or only be matched up so many times as an individual, and some of the nuances around services and the things like soft skills, do we have chemistry working together, and some of those things are also parallels to the things that are harder to quantify. I think in a dating website matching scenario, versus if I'm looking for an iPhone case on eBay, or Amazon, I can just put in my requirements or things like that, which are very different.
[Auren Hoffman] It's interesting, because the analogies in dating marketplaces, one of the key constraints of getting things moving is geography. Right? You generally want to date somebody I presume, in one's geography, where, in your case, geography is not a constraint. But the constraint is a particular type of talent. Going back to the SEO content, you need to have SEO consultants, and you need people who want SEO consultants, this niche sector that you're looking for. Are there other types of marketplaces where they have other weird constraints that are out there?
[Hayden Brown] On the geography point, I think it was Bill Gurley who told me recently that something like 40% of marriages now actually originate with online dating, which is a mind-blowing stat. When you realize that that's a pretty nascent market and how quickly the world has shifted from offline to online, and I think that's another one that's really interesting for our scenario because we match online, obviously. And you're right, geography is less of a factor, although a time zone sometimes is more dynamic. People do want to have those constraints and you think like, “how quickly can we move the offline world of recruiting to truly online?” We look at a lot of the traditional, the SEs of the world, eBays, Amazons, a lot of those that are interesting. And then looking at smaller companies that are doing things in vertical niches are always interesting, to see what are people doing specifically, like designing creative or tech, there's always a bunch of startups that usually try to get going in different verticals that we serve, and then they kind of scale up to a certain point, realize that their customer acquisition costs can't really scale beyond a $10 million business or something like that, because the customer doesn't have like enough repeat buying behavior, they kind of get tapped out and then they usually come to us.
[Auren Hoffman] What do you think of Cameo, which is in some ways a similar business, right? Obviously with a different type of supply and a different type of demand. And I guess in the demand’s case, maybe people aren't buying from Cameo that often, I don't know how that works. A lot of times people buy once or twice a year or something. How do you think about that type of business? And in some ways very similar to Upwork.
[Hayden Brown] I think it's interesting because we straddle sometimes on the supply side. But they're more like individuals making individual decisions. And then on the client side of our business, it is more B2B. We tend to look at more B2B analogues at times. Cameo is an interesting one. We're always looking for inspiration around everything from how different marketplaces are driving viral growth loops, or how they're signing up teams and getting not just one user from the company. Maybe like Cameo, they're getting the marketing departments and start using it like, are they doing something clever to get other teams in the company signed up? Can we learn from them there? We do look very broadly for inspiration because our mindset is that we can learn from everybody. There's no limit on that. And what I've seen is that the more broadly we cast our net and get our team talking to other companies, bringing in and hiring people from different places in the ecosystem, who learned things, that's always a huge benefit for us.
[Auren Hoffman] If you think of GLG, which is like an expert network, you could see Upwork moving into that more, where today, a private equity firm or a hedge fund or something like that might want to learn a little bit more about a software product. And they might want to try to get some software users and interview them and try to understand why they like that they might use a GLG for that, that might be a very perfect thing for Upwork. Have you thought about these kind of ring expansions as well in the marketplace?
[Hayden Brown] Yeah, so I think that's exactly where when we have this strategy of being the work marketplace for our customers, that's kind of the single destination where they can come to and know that whatever their need is, and with a freelancer serving that need or as a freelancer coming and being able to sell their services and basically monetize their time, through any range of ways. That's exactly what we're trying to do. So today, we don't have a built-out use case for specifically offering no paid advice services. Certainly, our freelance talent is monetizing their time that way with clients all the time, it's not something that we've narrowly productized yet. But given our strategy, you could imagine over time, as we see more demand in that space, either on the marketplace today, with more job posts flying around for that, or potentially, freelancers packaging their services through our catalog offering that way etcetera, we might more narrowly build an experience around that. Or, potentially, we could buy a provider there, if we felt like that was strategic for us, not today, but potentially down the road. But that's kind of where the wrapper of our work marketplace strategy sits, is basically enabling us to keep innovating for customers, all of the ways that they want to do this stuff. And I think that's how this trillion-dollar market opportunity will be won, is by giving people all these things in one place because they don't want to go to like a fragmented set of solutions and also have to onboard, offboard. Talent has to credential themselves into these different use cases, and have to upload information. I think the benefits for customers are basically being served in a single place full of this and having also within corporations, knowing there's like data privacy, and all of this handled, there's a lot to that that we see with customers. The path that we're basically on is being able to do that all in one place.
[Auren Hoffman] Upwork has a lot of data. In some ways. It's really deep, macro-economic data. And of course, I'm sure you use it internally for pricing and helping freelancers and helping people looking for freelancers, but have you ever thought about packaging that data? I imagine a global macro hedge fund might want to buy it, the Federal Reserve would probably be really interested in it, the World Bank would probably find it super interesting as well. Have you ever thought about packaging or even giving it away to academics or things like that?
[Hayden Brown] So we have a really long history with academics, economists, a lot of folks that we've always had this great relationship with who actually have run a bunch of studies on our platform, we have done a lot of data sharing. I think since we went through the go-public process, we have been a little more careful with some aspects of our data because of some of the sensitivity around that just because of the company. But definitely, we’re on a journey now with our chief economist, Adam Osmek, and some of the work that our product team is doing to figure out what other data can we externalize, because basically, we're running like a two and a half billion dollar economy on our platform, with all of this risk insight around labor pricing in different pockets of the world, how trends are moving in terms of the freelance economy specifically. We publish some of the stuff through our research studies, our annual financing report we put out.
[Auren Hoffman] You mentioned, you had a chief economist, is that a full-time person? Or is it they’re a professor somewhere else, and they do it part time for you? And how do you make a decision of one versus the other?
[Hayden Brown] He is a full-time person with us. And he's awesome. Basically, he is crunching numbers on the platform all the time, publishing reports. Also, he's prolific on social media sharing and engaging with other academics, experts, etcetera, around the insights that both we have from our platform, but also connecting that to some of the other reports and studies.
[Auren Hoffman] Similar to what a Redfin would do for real estate. That's so interesting.
[Hayden Brown] Totally. So there's a lot that we're doing. We're basically trying to even bring more of that to the fore, especially this moment when there's tectonic change in the labor marketplace that is happening so rapidly. And we're seeing the data on the platform, and we're going to try to get more of that out into the ecosystem. For us, it's not about monetizing it, it's more just about helping educate folks who really don't have the visibility that we have into this really exciting part of the economy, which is frankly, becoming such a bigger part of how people are working. Right now, more than half of Generation Z is freelancing.
[Auren Hoffman] What’s generation Z again? People born in the late 90s to mid-2000s or something?
[Hayden Brown] Yeah, it's people who are in the workforce, the current 18–25-year-olds, the next generation after the millennials.
[Auren Hoffman] These people, do they have a W9 and they're freelancing on the side? And is that how they start doing it? Like, “I've got a job right out of college, I'm working at General Electric, and then on the side I'm freelancing”? Or is it “I'm a freelancer first, and it's a van life forever and I never want to go back to doing anything else”?
[Hayden Brown] It's all of the above. But I think what this generation has really seen, they grew up seeing the 2008 recession, they basically realized from very early on, as they were going through college and coming into the workforce, that the employment contract essentially was broken, and that they could not count on being an employee as kind of a safety net for themselves. And frankly, I think their value system is much more aligned with this idea of being independent, paving their own way, carrying with them a set of skills and a portfolio of experience, that really is something that they can count on to be the way that they're going to earn their income. It's a very different value system and outlook on how they're going to be successful and paving their way as part of the creative economy. It's all of that coming together so that people may have a day job, so to speak, but really, even if they're doing a side hustle, it may be that that's part of how their passion economy side of themselves shows up is part of how they're making a living and maybe is what they're aspiring to do full time if they're not doing that already as their full time way of earning. I think this is a generation that has just a very different outlook on what employment means to them, it's almost like employment may be what they need to do for now, but until they're building their portfolio, they're established way of actually being independent and earning this way.
[Auren Hoffman] Are different freelance systems symbiotic? Like, if I drive for Uber, I may be more likely to try out Upwork or vice versa? How do you see all these different systems interacting with one another?
[Hayden Brown] I don't have data on that. We don't anecdotally have any indications there's a real overlap between Uber drivers or DoorDash delivery people and Upworkers, because really, Upworkers are not part of the gig economy in the traditional sense, because they're really highly skilled people chosen to freelance as the way that they're earning their living, which tends to be very different than the profile I think of other folks. But what I would say is, we have seen increasingly in the Independence economy, people doing this out of choice rather than necessity, and the data backs that up more, for the first time, it was in 2019, more than half of the people freelancing in the economy as a whole, not just not Upwork, we're doing so out of choice, not necessity, which was the first time that that was the case in all the years that we have been doing a study. Moreover, as we went through the economic downturn last year, when we were serving freelancers on our platform, we heard from them that they actually felt more secure being freelancers than if they had been in traditional FTE jobs. And the reason they said that was that they were on average working with five or more clients. And they knew that if they had lost one of those clients or one of those five businesses, they had this safety net of other ways of earning. Whereas if they had been in a full-time job, that good job could have gone away, they could have been furloughed, etcetera. So I think there's this mental shift that's happened with the Gen Z folks, the young people in the workforce, people who've now been moving into freelancing by choice where they actually see it as more secure than this kind of broken employment contract, which has been kind of revealed over the last 15 years or so to be less secure, and less of a safe place than what I think in America, we see the employment thing as the gold standard. But now people are looking at it like, “really, is that really what it is?”, and people are reconsidering that.
[Auren Hoffman] Are there different cultural things? Because it does seem like in America, it's an entrepreneurial place. Being a freelancer in some ways is like running your own business. Maybe it's a company of one, but it's your own business, you have a lot of agency over it. Maybe stereotypically, in Europe, maybe you would think that'd be a little bit more frowned upon there than it would be in the United States, or have you seen that getting talent might be different in different geographies, because of that? The status symbol of working for Siemens, or something like that in Germany might be a lot higher than the status symbol here?
[Hayden Brown] It's a great topic, I think that the stature of freelancing globally has definitely improved significantly in the last couple years. I remember talking to freelancers, for example, in India, even like five years ago, and they said “wow, I can't tell my mother-in-law that I'm a freelancer, because they're like, what is that? That's not a thing, who do you work for? I need a brand name”. Fast forward to where we are today, increasingly, people are proud to say “I'm a freelancer on Upwork”, it's a status thing. We see on LinkedIn people reposting when they get a top-rated badge on Upwork and things like that, it's really something that they can celebrate now. I think the stature is changing, but many of the negative stereotypes do still remain. And I think we see this in the research where there's still a stigma, and people think freelancing is not like a serious career, or they think “oh, you're freelancing, you're in between jobs”, and that type of thing. And so, even though we've come a long way, both in the US and globally, we're not where we need to be yet. And I think when we talk to freelancers, they still run into these things, either in their families or at a cocktail party or whatever, where people are still trying to figure out like, “what do you really do?” And they're like, “No, I'm a serious freelancer, you know, $300,000 last year on Upwork”. And people are like, “wait, what?”, the disconnect is still there. And there's work to be done to change the stereotypes.
[Auren Hoffman] COVID really did seem to have massively accelerated the freelance market, it accelerated obviously Upwork, and it seems the wages for at least these technical workers have really gone up quite a bit because of those supply constraints. Do you think that the wages will go back down? Do you think they'll plateau where they're at? Do you think they're going to still go up? Where do you see that moving in the future?
[Hayden Brown] It's hard to predict the wage changes overall. Historically, what we've seen is that the fringes our platform has consistently year over a year been able to continue to raise their wages, in keeping with inflation, or above that, and I think, as we look at the global supply of labor in technical fields, and other places, there is a good supply of that. I think businesses typically have not been good at looking in the right places for the labor, but the labor does exist.
I'm not sure that I would expect it to go down for any reason, I think that there is a lot of demand. The demand will keep increasing, there is a lot of supply, people are having been successful and looking on platforms like Upwork to find it, but they're figuring that out now. I think the demand will continue to be really strong. I'm not worried that freelancers will have any trouble kind of continuing to negotiate really strong rates for their work, and be very competitive on what they deserve. And it also a great opportunity for clients, because I think clients have been overpaying in many cases, other providers, like staffing firms and jobs, or adding these big premiums for not adding a lot of value, frankly, and when they shift over to other models like this one, they frankly get a much better deal. And the talent is going to actually charge more and get more out of the equation, even then what they were getting through like a staffing intermediary. It's really a win-win.
[Auren Hoffman] I'm super interested in you personally. So you went from running product at Upwork, to CEO. Now, that is actually a pretty common path in a startup. But it's extremely uncommon, at least I have not seen that very much at a public company. Do you think we're going to see that more happening now in public companies? Are more people looking to you for this type of career change?
[Hayden Brown] You know, I do talk to a lot of product leaders who want to make that next jump to CEO. I think the appetite from product leaders is there to move to the CEO chair.
[Auren Hoffman] It's kind of the obvious place because product is kind of like the central place in a company, you have to interact with sales, with marketing and with engineering. You already have those relationships; you're developing the long-term strategy for where the company goes. So it makes sense, but does seem for many public companies, they're taking the sales leader, or maybe the finance leader, or somebody else off and promoting them rather than like the product leader.
[Hayden Brown] Yeah, I haven't looked at any data of what's happening, especially in tech companies, where product does play such an important role and the things you mentioned, you’re driving the strategy, long term planning, and having such a cross functional view of the business and those partnerships. No, I think in our case, it was a pretty logical transition, because I was in a situation where I was in product and marketing too and how to have those relationships in such a great view of the business from my time here, after so many different chapters in the business, and a big vision for where we could go. But I think the product management role has also evolved so much. I mean, you've seen this over the last 10+ years. I think when I got into product management, it was still like a really poorly defined field. Even today, it looks so different at different companies, like a PM at Google versus a PM at Apple or a startup down the street is probably doing pretty different things.
[Auren Hoffman] The org is generally going to be smaller, right? Because product does get a lot of leverage or interest. The product org might be 10%, or 20% of what the sales org is, or something. I could see how a company may be biased to picking the sales leader or rather than the product leader, because the sales leader may just be managing more people.
[Hayden Brown] Yeah, I mean, products, you're not usually leading an army, right? I mean, it's a highly leveraged org. But I think a lot of the skills around like communication, vision, leadership, those translate pretty readily to the C suite and the CEO chair, so it'll be interesting to see what happens in the next 5-10 years as I think a lot of the product management function leaders who kind of grew up in product over the last decade, are getting to that point in their careers where they're really ready for that next role.
[Auren Hoffman] If you're looking at venture-funded startups, so many of those CEOs were PM. I think maybe you're right, maybe we will see a real change in the future. Okay, last question that we ask all our guests. If you could go back in time, what advice would you give to the younger Hayden?
[Hayden Brown] I think I would say maybe set more concrete goals for myself. That's probably what I would have done.
[Auren Hoffman] You seem like a very honest person.
[Hayden Brown] I may appear that way, Auren. I've always been ambitious and hardworking and hold myself to really high standards. But I never dreamt of being a CEO. Weird. And it took until the chairman of our board a few years ago was like “Hey, you should be a CEO someday”. And I was like, “Oh, yeah, maybe I should”.
[Auren Hoffman] Why did that not pervade your mind? I've known you for a long time, you've always been a super high achieving person. And I would say a lot of super high achieving persons do think they shouldn't be CEO, right?
[Hayden Brown] I know. And I'm embarrassing myself that that wasn't a concrete ambition that I had.
[Auren Hoffman] Maybe that’s why you're such a good CEO, though, because you didn't have that desire.
[Hayden Brown] I think the advice I would give my younger self would be to set more concrete goals and then don't be afraid to fail at them. I think that's part of it, too, maybe one reason I didn't set them was I didn't want to miss them.
[Auren Hoffman] Because a CEO is like a bigger goal, whereas you can just say” I want to do good work”.
[Hayden Brown] Right. “Be successful, do good work, be excellent”, whatever. I think that's one thing I could have done differently. And I don't know if that would have led to any different outcomes. Why not aim really high? And then if you come in halfway, that's fine, too.
[Auren Hoffman] Alright, this is really great. Now, where if people want to find out more about you, where should they go?
[Hayden Brown] Well, www.upwork.com. I have Twitter. @HydnBrwn, but with none of the vowels. LinkedIn also, I'm on there somewhere. And I try to post stuff that I think is interesting and provocative. So those are probably the best places.
[Auren Hoffman] Awesome. Well, great. Thank you so much for joining us on World with DaaS.
[Hayden Brown] Auren, thanks so much for having me.
[Auren Hoffman] Thanks for listening. If you enjoyed this show, consider rating this podcast and leaving a review. For more World of DaaS (DaaS is D-A-A-S), you can subscribe on Spotify or Apple Podcasts. Also check out YouTube for the videos. You can find me on Twitter at @auren (A-U-R-E-N). I’d love to hear from you.
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