“All the research shows that the biggest growth segment in the U.S. labor market is freelancers – it’s a segment that has grown at three times the rate of any other since 2014. The estimates are that by 2027, more than half the workforce in the Western world will be freelancers. It’s a phenomenon you can’t ignore.”
So says Gali Arnon, chief marketing officer at Fiverr, the Israeli-based online marketplace for freelancers and their customers. She says the force for change isn’t just technology but the work habits of the up-and-coming generation of millennials – Generation Y – who are “kicking the 9-to-5 work habit.”
Others who naturally gravitate to freelance work are women with young children who prefer to work from home, retirees who want to earn some extra money, and people in countries where the job market doesn’t provide enough employment.
The internet opens up for them opportunities, but Arnon admits that online marketplaces like Fiverr don’t solve all the obstacles. Below are three Israeli entrepreneurs who are working to ease the way.
In September, a new collaborative workspace opened up on Tel Aviv’s Menachem Begin Boulevard in a location that for 60 years sold men’s suits. Like other such shared workspaces, it’s carefully designed. But in place of desks for laptops, it’s furnished with cutting tables, sewing machines, mannequins and a variety of equipment for fashion design and sewing.
Called Beit Habad (Fabric House), it was started by Lidar Avittan and Avigail Koren, two graduates of the Shenkar School of Engineering and Design who then worked in the fashion industry. “We encountered all the difficulties young fashion designers have who are trying to set up their own studio or find their way to working in the industry,” Koren says.
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A young designer who wants to establish a label has to rent studio space and buy a lot of equipment and services just to get started. “All this requires a lot of money and a lot of space. You have no choice but to run up a lot of expenses because you also need a lot of professional help. Buttons, loopholes – every detail of a garment needs a certain kind of professional,” Koren says.
“Designers starting out on their careers have to run between a template maker in Bat Yam and a seamstress in Ashdod. It requires a lot of money, and no less important, it’s inefficient.”
Beit Habad aims to solve these problems – in effect doing for designers what WeWork has done for freelancers and small businesses. It provides a workplace with all the equipment they need. Service providers come to them rather than the other way around.
Perhaps most important of all, it’s a place where they can meet and mingle with colleagues and feel part of a community. “It’s lonely to be a fashion designer,” Koren says.
Beit Habad occupies 120 square meters (1,292 square feet) of floor space, enough room for 15 workers. Users can choose either to pay a monthly rental fee or buy a card entitling them to 10 to 30 hours of time at the place. Using a dedicated app, times are allocated for tables and equipment. The app also coordinates times for meetings with service providers like seamstresses.
“No one is obligated. They have the flexibility to come and work on a light table or a pattern cutter for a few hours,” Koren says.
To enhance the community spirit, Beit Habad runs workshops and other events as well as courses on design, textiles and marketing. Koren says she hopes to use Beit Habad for group purchases of materials and other inputs that beginning designers typically pay more for because they’re buying in such small quantities.
Shiver me timbers
When Roy Bendor Cohen started Q Behavioral Thinking, he aimed to help organizations overcome complicated problems with the help of the behavioral and cognitive sciences. He had previously worked with SIT, a part-Israeli firm that helps organizations improve their business performance by challenging their basic assumptions and thinking.
Bendor Cohen, who has a master’s degree in cognitive psychology, says he tried to develop a basket of services based on methods he had learned. But he immediately encountered a critical problem in his own company: He had one scarce resource, himself.
“I quickly realized that if I’m a lone worker, the time I have available is very limited,” he recalls. “But to set up a company with employees is very risky, because I don’t know how many contracts I’ll be getting.”
For the same reason, he rejected recruiting an investor to back him.
As he went to meetings, he met people with exactly the same training and skills he needed; they could help him offer a wider range of services. The question was how to work with them and, no less important, how to build a profitable business model.
The solution came from an unexpected place: the Wikipedia entry on pirates. Despite their reputation of plunder and cruelty, they wielded an advanced organizational model that employed a fair degree of equality.
Every ship had a captain but the sailors were free to decide whether to join him on each voyage. The captain got the largest share of the spoils, followed by the officers, those with special skills and finally the ordinary seaman. But the differences in how the booty was divided wasn’t that great. The shares were apportioned in advance but only paid out at the end of the voyage.
The captain got a bigger share not just because he was the meanest of the bunch, as portrayed in movies, but because he was the entrepreneur who set the targets.
And that has become the way of life for the people at Q Behavioral Thinking. Using the “pirate model,” they band together for a specific project, with each getting a share of the profits based on his or her contribution. Hiring freelancers might have left Bendor Cohen with more profit, but the pirate model lets him share the risk. He isn’t the captain for every project; sometimes other partners undertake the initiative and invite others to join.
“Because we’re not a business firm but freelancers, we have no overhead, so the price we can offer organizations are more competitive than classic consulting firms,” he says.
Bendor Cohen believes the pirate way of doing business will become more widespread. “Today people don’t want to work for one company, and they want to work in several areas,” he says. “We’re talking mainly about people from Generation Y who try to ‘go with and feel without’” – a Hebrew phrase.
The kibbutz model
More than 400 people filled out the online questionnaire sent out by Pilat, a personnel services company, and scores showed up for its inaugural meeting. These were the first steps in an undertaking by the firm to establish the first marketing and advertising cooperative in Israel.
The vision is to set up cooperatives like this in different fields, with members receiving shares and working together to ensure success. Zohar Maimon, Pilat’s CEO, says the idea was born out of a need to fund work for people over 50 and the need to devise something other than the classic model of employer-employee and a manpower firm to bring the two sides together.
“In the world of older workers it isn’t enough,” Maimon says. “It works all right for the ultra-Orthodox and Arab communities and the disabled, but it’s less appropriate for job seekers over 50.” Even retraining often doesn’t work. “Usually, when you’re retraining people 50-plus, it’s for a lower-status job. I don’t think that’s a good-enough solution.”
Maimon says he thought about alternatives for five years and finally hit on the cooperative model, one that was once widespread in Israel.
The cooperatives bring together people with shared interests such as high-tech, cybersecurity and marketing. Pilat screens candidates for their appropriateness, their ability to bring in business for the cooperative and their willingness to play by its democratic rules.
“In contrast to a business where the members’ strength is measured by the number of shares they hold, each member of the professional cooperative has the same relative weight,” he says. “All decisions about the cooperative’s business are made by the members. They decide who can join, who has to leave and what role each has. I bring them together and provide them with a platform that takes away all the legal and accounting headaches, and so on.”
The plan is for 15 such cooperatives of 10 to 15 members each over the next three years. A cooperative bigger than that wouldn’t be manageable and would lose its collegial atmosphere, Maimon says. He collects a fee of 500 shekels ($144) a month from each member.
“The cooperative is an experiment in working with a community of experienced people. It gives an answer to people who can’t or don’t want to have a salaried job but don’t want to jump into the deep waters of self-employment,” Maimon says. Self-employed people have to handle their own marketing, pricing and administration. “It’s hard to be one person doing it all.”