The Future of Freelancing: How to Get Started and the Favor Economy
34% of Americans — which is around 53 million people — currently freelance in some capacity. That number is expected to rise to 40% by 2020 (1). Sounds great, right? It is indeed. But can this also be a problem? I think so and that’s what I’d like to discuss.
The Problem: Market Saturation
A rise in the number of freelancers will have the same impact as a rise in the number of t-shirt printing companies, auto repair shops, or dentists. Saturation. When a market has too much of something, it becomes saturated and saturation can lead to problems for those who are not already established in the marketplace. For example, a dentist that has been around for 20 years has an established patient-base and doesn’t worry much about new grads leaving college. However, the new graduate, along with many others, face the problem of finding new patients.
This same concept applies to the digital world. If you’re a freelance writer, graphic designer, web developer, marketer, video producer, or basically anyone that provides digital services, your market can also become saturated. Although your market is much larger (as you can technically work with anyone in the world), your competition is far greater. Saturation in the digital marketplace will provide the same struggle as it does for the new dentist graduates. As the number of freelancers are expected to rise by 6% over the next 4 ½ years (in the United States alone), you better ready yourself for some stiff competition, as your competition spans worldwide.
If you’re not already established with a portfolio or a clientele, then how will you thrive?
How will you get your first customer and accept your first payment?
How I Broke into Freelancing
I’ve been freelancing for over three years now and when I first started, it wasn’t easy. There were times when I would go weeks without having any work. How did I find consistency to maintain a steady flow of income? Well, my breakthrough moment was when I decided to donate my time to a charity. While doing work for the charity, I had absolutely no expectation of monetary compensation as I figured that at the very least, I’d be helping a charity as well as expanding upon my skill set and would have one more completed piece to add to my portfolio. This simple addition to my portfolio helped me land three new paying clients very shortly after completing the charity project.
A short time later, I see a friend request help on a project through a Facebook post. I decided to offer assistance, again, as a favor. Just as before with the charity, I went in with no expectation of monetary compensation as this was merely a way to continue building my portfolio while helping out a friend simultaneously. When I finished this project, not only did I have another addition to my portfolio, but this time I was given a “tip” for my work. I never once mentioned my hourly rate or even an estimated cost for the job. I was simply doing the work as a favor for additional experience and portfolio building — the tip was bonus!
This is when it hit me. This is the future of breaking into freelancing.
The Future of Freelancing and The Favor Economy
Today, consumers are the heavy hitters of search. If you need a logo designed, you can search Google or other freelancing sites to find someone to help you with the task. It seems simple enough, but if you’ve done this, then you know it can be a daunting task looking for that perfect match with the best available price.
My thought is, what if we reversed this process? What if you had the ability to post what you needed help with, and someone found you and completed your task — all without going through a bidding frenzy or extensive research?
From a consumer standpoint, this results in a decrease in time and effort that you need to put forth for getting a task completed. From a freelancing standpoint, this is gold. Where else can you pick and choose the projects you’d like to work on without barrier?
I’d like to welcome you to the Favor Economy. Remember my personal experience? The favor I provided that led to new experience for me plus a monetary tip? I’ll elaborate.
The Favor Economy, in the freelance space, is just as it seems. People post their needs and freelancers complete these tasks as a favor. Why?
- Because they are new to freelancing
- Because they still need to gain more experience
- Because they need to build their portfolio before they can compete with experts in their field
- Because there is no complex pricing model (simply produce quality work for the right to earn monetary tips)
The experienced freelancer can use this model to fill voids in their workflow and continue enhancing their skill set.
Is there risk? Sure, but it’s minimal.
Consumer risk: having a freelancer complete your project(s) on a first-come, first-serve basis opens the door to uncertainty on the quality of work you’ll receive. In the event that the completed work is average or above average, then you may be inclined to leave them a fair tip for helping you out. If the completed work is sub-par or just plain awful, then you can simply decide to leave them a small tip or not to leave a tip at all. Holding the power on whether or not you pay — and how much — eliminates any serious risk to you.
Freelancer risk: completing work as “favors” may not seem inviting, but you’ll need to weigh the risk of not being able to compete. As this article has mentioned, competition is on the rise and flourishing as a successful freelancer is becoming increasingly difficult. You can limit your risk of freelancer-failure by continuously adding to your portfolio, receiving client feedback, and enhancing your skill set. Produce quality work and clients will tip. Which risk would you rather assume?
The new economy is here. It’s built around favors and driven by freelancers.