According to Matt Barrie (pictured), there has never been a better time than now to start a new business.
The CEO of Freelancer.com (ASX: FLN) recently posted some impressive half yearly results, driven in part by an influx of young people joining his crowdsourcing marketplace website in the midst of the COVID-19 pandemic.
Looking at unemployment data it’s hardly surprising that so many are turning to the platform to monetise their skills.
The effective unemployment rate is currently sitting at around 11.3 per cent, with young Australians the hardest hit by mass layoffs.
This trend has been reflected at Barrie’s Freelancer.com; since the COVID-19 pandemic began close to half (48.36 per cent) of the site’s new signups were people aged between 18 and 24.
While the employment figures represent nothing short of a disaster for Australian businesses, Barrie says this era presents an opportunity for young people to become their own bosses.
“The cost of building a product or service is getting cheaper and cheaper, thanks to the Internet, thanks to open source software, thanks to software as a service,” says Barrie.
“On top of that, if you’re stuck at home and you can’t really be distracted by socialising, so you’d better be doing something productive. Build a business, rather than sit around and mope and watch Netflix.
“In times of crisis it’s a great time to go out and start new businesses, do new things; the paradigm changes and while people are still trying to operate under the old paradigm you’ve moved on and you’re finding new opportunities.”
It’s this mentality that catapulted Barrie from startup to global success story since the Sydney-based company’s founding in 2009.
Freelancer.com is now the world’s largest freelancing and crowdsourcing marketplace, and since acquiring Escrow.com in 2015 the group has pushed heavily into the e-commerce space providing clients with a secure way to buy or sell products.
And while the company’s obvious opportunities for new business can be found by attracting young entrepreneurs, Barrie says the pandemic has thrown up some curveballs with major business clients taking advantage of the platform.
For example, because of work from home restrictions, multi-national consultancy Deloitte has signed up to Freelancer.com as a way to manage its more than 400,000-strong workforce.
Essentially, through Freelancer’s cloud-based system, Deloitte can hire its own workers for specific tasks.
“Deloitte said to us ‘there’s no way we can go 10x, it’s impossible’,” says Barrie.
“But now they’re in the process of onboarding 50,000 consultants onto the platform and they want to drive to deliver 20 per cent of all US consulting projects through the platform.”
“That’s the thing that’s really blown me away is just how nimble some of these larger organisations are actually thinking now and actually acting.”
Overall, Freelancer saw a 53 per cent increase in new paying employers and a 39 per cent increase in new funded jobs during the half underpinned by COVID-19.
Interestingly, when China went into lockdown at the beginning of the calendar year Freelancer witnessed a negative impact on its revenue. However, when the rest of the world followed suit its revenue went up, hitting a peak after a 120 per cent increase in June when the company would normally be floating through a seasonally low period.
Barrie attributes this to the global shift of working from home.
“No one is going to go back to the office 100 per cent,” says Barrie.
“Really at the very beginning of Q2 things started taking off, and now this is growing through April, May and June as people get more used to working from home.
“I think it’s going to continue to enjoy all of that, plus COVID isn’t going away anytime soon.”
Maths brains making bank off day traders on Freelancer.com
Take a quick scroll through Freelancer.com and you’ll likely stumble across a bit of a theme: graphic designers, Ikea furniture builders, and copywriters are not in short supply.
But according to Barrie it is the unlikely that has made its mark during a half footnoted by isolation, unemployment and the complete lack of professional sport.
“We get a lot of trends from the data in our marketplaceand the number one area remarkably was related to mathematics algorithms and statistics,” says Barrie.
“It ties to this whole day trading phenomenon going on. Because sports are not running in the US you’ve got all these people at home going ‘how am I going to make money?’ and they’re all jumping online trying to make money off the stock market.”
As for other trends, Barrie says builders of e-commerce websites on the Shopify platform are seeing success fuelled by entrepreneurs looking to launch their own products.
To round out the top three trends is video game developers, helping isolated creatives bring interactive projects to life.
“What’s not going well and what’s dropped off a cliff is local services,” says Barrie.
“People are not very happy about wanting to have people around to put together their Ikea cupboard or furniture when they’re at home with COVID.”
Australia’s “dumb luck” with China ran out ages ago
In 2017 we ran a column from Barrie in which he claimed Australia’s economy was on the “brink of collapse”.
Specifically, Barrie’s position was that our economy was too reliant on China, with one third of our exports at the time going to the Asian giant.
So we took the chance to circle back on the topic with Barrie. He says our economy’s “dumb luck” ran out ages ago and is in fact dead in the water unless some major transformation occurs soon.
“Covid-19 has exposed Australia’s economy for what it is,” says Barrie.
“We have a large, clean land and good weather. We dig dirt out of the ground which we sell as iron ore to China, which turns it into steel to build often vacant apartment blocks to pump GDP growth. We dig fossilised trees out of the ground which we also sell to China as coal to make that steel, and to burn in Japan for electricity while their nuclear reactors slowly get back online after Fukushima.
“And we sell immigration dressed up as education, mainly to China, which is now Australia’s third largest “export” market at $32 billion per annum- which is now halted. We are completely dependent on China which is now in a cold war with the US, possibly turning hot – where over one third of all merchandise exports go.”
So where to from here? Barrie says technology is Australia’s way forward and into economic prosperity.
“Technology and the elaborate transformation of our raw materials into sophisticated products with higher margins and a greater global market is the answer,” says Barrie.
“The fastest way to get there is to do everything we can to educate the nation with higher skills.
“I would be paying people to go to university or TAFE in the right areas instead of sitting around in zombie companies on Job Keeper, use the spare capacity from the drop in international students to educate our own citizens and dramatically ramp up the sophistication and skills base taught at TAFE to made it a world class trade school.”
Business News Australia