Small Business Labs

Facebook Announces Libra, a New Cryptocurrency

Last week Facebook announced Libra, a new cryptocurrency. It's designed for use in transactions and as an easy and cheap way to transfer money. 

Expected to launch next year, Libra is what's known as a stablecoin - a digital currency built to avoid the large fluctuations in value that Bitcoin and other cryptocurrencies experience.  

And unlike Bitcoin, because the value will remain relatively stable Libra will usable as way to buy things. 

While Facebook is the driving force behind Libra, it’s created a foundation that other organizations can join. The foundation will be responsible for managing Libra and Facebook will have no more control than any of the other full members.

So far 27 organizations including Mastercard, Visa and Stripe and Paypal, Uber, Lyft, Spotify, several venture capital firms and 4 nonprofits have joined as founding members of the Libra Foundation. 

It is expected there will be more than 100 members by the time Libra launches.

Facebook also announced a new digital wallet called Calibra, which will provide users a way to store and spend Libra. Expect to see many others offering Libra digital wallets.

According to Facebook the main near term market for Libra is the 1.7 billion people around the world who lack access to the banking system.

Other early likely users include people who live in countries with unstable currencies, people who want to move money across borders and people who want to buy digital goods and services (in-game purchases, for example). 

But the longer term goal is for Libra to be used for everyday purchases by everyone. This is a goal Bitcoin and other cryptocurrencies have failed at, primarily because their value fluctuates so much.

It will be years before we know if Libra will succeed as common medium of exchange, but the broad organizational support Libra has attracted certainly makes success possible.

In the past we’ve suggested small businesses stay away from cryptocurrencies. We think Libra easily could be different.

Although unlikely to be an important payments option for most small businesses in the developed world anytime soon, it should be easy to add it as a payments option post launch.

So Libra will be worth looking at when it launches. 

More Freelancers Feeling Secure

MBO Partners released their 2019 State of Independence study this week.

This is the 9th year of this ongoing study, which provides an in-depth look at American's independent workers (freelancers, independent contractors, self-employed, etc.). Emergent Research works with MBO Partners on this study. 

The study covers a lot of ground, but we think one of the key findings is how independent workers view the security associated with independent work.

As the study chart below shows (click to enlarge), in 2019 a bit over half (53%) of full-time independent workers reported they feel more secure as independents than they would if they had a traditional job.

This is up from just 32% saying they felt more secure in 2011. 

When we ask in interviews why independents in this group feel more secure, we consistently hear 3 things:

1. Because they are in control of their work and business, they feel more secure than being at the mercy of a employer and a boss. 

2. They feel having multiple clients and/or streams of income is more secure than relying on a single source of income.

3. Due to layoffs, company failures, changes in corporate directions and a broader lack of corporate loyalty to their employees, they feel traditional jobs aren't secure and by comparison independent work is more secure.

In addition to the reasons above, there are several more reasons the percentage who feel more secure as independents has increased.

The strong economy has made is easier to be a successful independent worker. Independent work is also more socially and culturally acceptable than it was a decade ago. This makes independent work look better in general. 

Another factor is the strong job market has allowed independent workers who would prefer a traditional job (we call them "reluctant independents") get a traditional job. 

This has led to a decline in the share of full=time reluctant independents from 34% in 2012 to just 19% in 2019. 

Reluctants are much less likely to feel independent work is more secure. So the reduction in their share increases the share who feel independent work is more secure.

One of the biggest reasons people don't pursue independent work is they consider it too risky and insecure. For the reasons listed above, this is starting to change - especially since traditional jobs are increasingly viewed as insecure.

We'll have much more on the MBO Partners State of Independence study findings over the next couple of weeks. 

Most Small Businesses Still Have Less Than $400,000 in Annual Revenue.

According to data from the U.S, Census 2016 Annual Survey of Entrepreneurs (the most recent data available), the median U.S. employer small business (those with paid traditional employees) generated less than $400k in revenue in 2016.

Our title includes the word "still" because we posted on this data back in 2016, when 2014 data was most recent available.

An alert reader asked if there was more recent data. And as the chart below shows, there is.

But it hasn't changed much in the past two years.

The median small business still had receipts of about $390,000 in 2016 and about 4 in 10 (39%) had less than $250,000.  Only about one quarter (27%) of small businesses generated more than $1 million in revenue.

Uber and Lyft Offer to Compromise Over Driver Concerns

Yesterday the CEO's of Uber and Lyft published an op-ed in the San Francisco Chronicle offering to support efforts to improve the working conditions, wages and rights of their drivers. 

The offer is in response to a bill in the California legislature that would make it much more difficult for companies to classify workers as independent contractors. 

The new legislation would codify a ruling by the California Supreme Court in the Dynamex case.

The key part of the ruling is that contract workers should be classified as employees unless they are conducting “work that is outside the usual course” of the company’s business.

This is a very broad legal standard that if strictly interpreted would impact a lot of independent contractors. 

Uber, Lyft and pretty much all the gig economy companies (and most other companies) have been lobbying against this legislation. Labor unions, worker rights organizations and others have been lobbying in favor.

This Chronicle article nicely summarizes the views of both sides.

In their op-ed the CEO's argue making their drivers employees would cut their flexibility, which is something drivers value. Key quote:

“Very few jobs allow you to start or stop working whenever, wherever, as often as you want ...”

We agree and our research has consistently found rideshare drivers highly value the flexibility provided by this type of work. Our research has also consistently found the vast majority of rideshare drivers do not want to be employees. 

However, we also agree that rideshare drivers and other gig workers deserve better protections than they currently have.

The obvious answer is the creation of portable benefits (see this recent report from the Aspen Institute on portable benefits for more details).

But portable benefits has been a hot topic in DC for years, yet there has been little to no progress on making them happen. 

We think forcing rideshare drivers to be employees will benefit the small share of drivers who are full-time and don't value flexibility. 

We also think it will hurt the vast majority of drives who value flexibility. It will also hurt consumers because it;s likely prices will go up and driver supply will go down.

We've posted in the past on our view that traditional W2 employment cannot provide the flexibility that many are looking for, so we won't bother covering it again.

But we will end with our summary quote from our prior post:

We think companies can provide more flexibility than they currently do. But we also think they are unable both legally and culturally to provide the same level as independent work does.

Bankrate's Side Hustle Survey

Interesting survey resluts from Bankrate on side hustles.  According to their findings:

• nearly half of working Americans (45 percent) surveyed reported having a side gig in addition to their primary job. 
• 48% of millennials, 39% of Gen Xers and 28% of Baby Boomers reported having side gigs.
• side giggers worked an average of 12 hours per week
• side giggers earned an average of $1,122 per month

One quick note on earnings, 60% of the respondents reported earning less than $500 per month, so the average is swayed by a relatively small number of respondents reporting earnings greater than $2,000 per month.

As the study chart below shows, "3 in 10 working Americans with a side hustle say they need the extra income to help cover the cost of regular living expenses."

So as Bankrate points out, even though we have a strong economy a lot Americans are living paycheck to paycheck and just getting by. And a decent chunk are just getting by thanks to a side gig.

Outdoorsy - An Aribnb for RVs

Outdoorsy claims to be the largest recreational vehicle (RV) rental marketplace. And we certainly don't know of a bigger one. 

RV owners use Outdoorsy to rent their idle RVs to people who want to hit the road but don't want to own an RV themselves.

So think of Outdoorsy as an Airbnb for things that roll that you can sleep in. 

Outdoorsy nicely illustrates several trends we follow:

Asset Monetization: Just as Airbnb allows people to turn their home into income, Outdoorsy does the same for RV owners. 

Digital Nomads: These are folks who have a location-independent lifestyle that allows them to travel and work anywhere they can plug into the Internet. 

While the digital nomads that tend to get the most press are the ones that travel internationally, a growing number hit the road domestically in RVs and camper vans. Outdoorsy is obviously a good way for people to try out a nomadic lifestyle. 

Platforms supporting microbusinesses: Outdoorsy recently announced a vehicle purchase program geared towards very small RV rental businesses. With this program even a solopreneur can more easily start an RV rental business. 

And, of course, owners who rent out their RVs are creating a source of self-employment income.

Outdoorsy's short video below nicely describes the company.

"The Venture Capitalizaton of Belonging"

Fast Company's Social clubs died out in America. Now, venture capital is bringing them back provides an interesting look at the changing landscape of American social clubs.

The article starts by pointing out the long decline in the membership of traditional clubs. Key quote:

"Over the last few decades, sociologists and political scientists have found that American clubs of all stripes–from youth service clubs to bowling leagues–have experienced steep declines in their memberships. ... The Freemasons has lost 3.8 million members since the late 1950s. The Elks ... has seen its membership drop from 1.6 million in 1980 to 803,000 in 2012. The Rotary only has 330,000 members now and only 10% of them are under 40."

It then covers various kinds of new types of clubs that are mostly in urban areas and cater to those with relatively high incomes:

"These are stylishly designed, members-only spaces that often come with a high price tag, thereby limiting membership to the wealthy and privileged. There are social clubs like Soho House, Spring Place, and the Battery, which serve as gathering spaces for well-heeled professionals.

There are special-interest clubs like The Cultivist, which, for $2,200 a year, gives art-lovers access to museums and galleries without the hassle of making bookings. There are private gyms like Equinox and Peformix House where you can work out with celebrity coaches using top-of-the-line equipment. There are beautiful coworking spaces like WeWork, the Wing, and the Riveter."

The broader point of the article is that the new wave of clubs need to charge high prices because they are ventured backed, have lots of amenities and high costs. This is very different from the traditional grass roots, self-organized clubs where membership is either cheap or free. 

Our favorite quote is final sentence in the article:

"But we need to ask ourselves: Are we, as we are building community, creating a Tocquevillian society full of associations, or are we creating the Gilded Age of Louis the 14th.”"

Good question - and one that can easily be asked more broadly about income equality in America.

We've long covered the shifting nature of social clubs. This is due to our coworking research.

We've also dug into the topics of loneliness and belonging. This is because solopreneurs, remote worker and home-based workers report loneliness and lack of belonging among their biggest work challenges. We also look at these topics because of the community building aspects of coworking.  

Because of this, we've been exposed to some fascinating work on these topics.

A great example is the How We Gather project, which is a collaboration between Harvard Divinity School, the Fetzer Institute and the On Being project. 

It's an extension of a Harvard Divinity School report that looked at declining church membership.

It too is called How We Gather and it has become a very influential paper on this topic.

It also inspired coworking pioneer Tony Bacigalupo to create The Gathering Summit, which is an online conference that brings together community builders from all over the world to learn from and support each other.

The list of presenters at the Gathering Summit is a who's who of the experts these topics. So if you're interested in this area, visit the Gathering Summit homepage. 

The need for belonging and community is part of being human and it impacts many aspects of our lives and work. Included are impacting the future of work, the future of small business and the future of self-employment and the gig economy.

So we will continue tracking and reporting on this topic.

Fiverr Going Public

Despite choppy equity markets, gig economy companies continue to go public.  Next up is the online talent marketplace Fiverr, which filed their IPO prospectus a few weeks ago.

Launched in 2010, Fiverr got it's name from its original business model, which was connecting services buyers with sellers would do a wide variety of tasks for just $5 dollars. 

But it quickly branched out beyond this and today it provides a wide range of services - most of which are in the creative fields - at price points ranging into the thousands of dollars. 

And like other online talent marketplaces, they started targeting large enterprises several years ago. 

As with many of the gig economy companies, Fiverr is growing fast and losing a lot of money. This is illustrated by the prospectus chart below (click to enlarge).

We've long followed Fiverr (we're also a customer) and we've always been impressed by their management team, strategy and business model. We particularly think their focus on creative work is well thought out.

We also see Fiverr as an excellent example of many of the trends we follow. These include the hyperspecialization of jobs, the taskification of work,and the growth distributed teams that include traditional employees and contingent labor. 

And, of course, the growth of the gig economy and independent work.

Coworking Software Provider Essensys Goes Public

Essensys, which is based in London and describes itself as providing "The world's leading coworking software and technology to power your workspace business", went public this week on the London Stock Exchange.

The company sold GBP28 million (about $35 million) worth of stock to the public and garnered a marketcap of GBP83.5 million (about $104 million). 

The stock had a good opening, ending the first day of trading up 15%. 

Essensys isn't a big company. They had revenues in the $20 million range in 2018 (the financials below are from their prospectus). But they're growing nicely and forecasting strong growth over the next few years. 

In a world where WeWork is raising billions of dollars and has a marketcap of $47 billion, Essensys's IPO almost seems quaint. 

But the fact that a software company that positions itself as a "pure play in the high growth flexible workspace industry" can go public is another sign that coworking has entered the mainstream. 

The Great Risk Shift - and Economic Insecurity - Continues

"Risk shift" is the trend towards economic and other risks - and the responsibility for risk management - being shifted from institutions to individuals. 

Examples include corporations shifting more responsibility for retirement, career planning and healthcare to their employees and governments reducing social safety net programs.

Political scientist Jacob Hacker explored this trend in-depth in his 2006 book The Great Risk Shift.

We consider this one of the 3 books that best explain how the economy and jobs have changed over the past couple of decades.

Hacker recently released an updated 2nd edition of The Great Risk Shift with new data and insights. 

It's on our "must read" list.

He also recently wrote the NY Times Op Ed The Economy Is Strong. So Why Do So Many Americans Still Feel at Risk? 

His answer to this question is economic insecurity. Key quote from the article:

"... many Americans feel insecure. They may be doing well at the moment, but they fear that, however high they are on the economic ladder, a single bad step or bad event could cause them to slip. A booming economy hasn’t quieted these concerns, because insecurity remains a huge and growing problem in ways that voters and candidates instinctively get but the sunny job numbers largely hide."

Reinforcing this, the Federal Reserve just released their 2019 Survey of Household Economics and Decsionmaking study. 

It shows that 39 percent of Americans said they wouldn’t be able to scrape together the cash to meet a $400 emergency expense, 6 in 10 said losing their job would mean they couldn’t cover three months of expenses, and only a bit over 1 in 3 (36%) said their retirement savings were on track. 

So despite strong overall economic numbers, a large share of Americans are dealing with economic insecurity and uncertainty.

We see the impacts of the risk shift all the time in our research. It's a key reason for the growth of the gig economy because increased financial insecurity has resulted in more people needing to supplement their income.

We consider the risk shift one of the most important trends we follow. 

See our economic uncertainty section for more on this topic. And read Hacker's book. 

Food Delivery Firms Continue Fund Raising and Expansion

Over the past couple of weeks both DoorDash and London based food delivery company Deliveroo announced substantial funding rounds. 

Amazon led a $575 million funding round in Deliveroo and DoorDash is raising a new round of financing that could value the company at as much as $13 billion.

This is up from a $7.1 billion valuation DoorDash got in February when it raised $400 million and almost 10x it's valuation in early 2018. 

Given what many say are lackluster IPO's by Lyft and Uber, these are impressive fund raising rounds.

There's 2 key reasons food delivery is considered a big opportunity and attracting these investments.

First, the potential is huge and the market is rapidly growing. Key quote from Manhattan Venture's research report on Postmates, which is yet another food deliver company:

The current U.S. food delivery market is estimated to be around $30 billion and will likely grow to $365 billion or more by 2030. Food delivery is a small fraction (5% to 10%, depending on ranking criteria) of the overall restaurant sales and is set to grow at a CAGR of roughly 20%. 

Second, investors believe food delivery business models can be profitable. This is confirmed by food delivery firm Grub Hub's financial performance. It's been a profitable, public company for several years.

Amazon's renewed interest in this space - Amazon Restaurants pulled out of the U.K. last year and is only available in a limited number of U.S. cities -  is worth watching. It's clear they see the delivery of anything and everything as within their target market.

But the consensus among investors so far is food delivery is a big enough market with room for multiple players to be successful. 

U.S. Birth Rates Continue to Fall

The Axios article The American Baby Bust covers the latest fertility data from the U.S. Centers for Disease Control. Key quote:

"The U.S. fertility rate has reached a record low, and the total number of births in 2018 was the lowest it has been in more than 30 years ..."

As the article chart below shows (click to enlarge), in 2018 there were 59 births per 1,000 women ages 15-34. 

This translates to a fertility rate - the number of babies a woman of childbearing age is expected to have over her lifetime, of 1.72, which is a record low. It's also well below the replacement rate, which is 2.1.

The fall in fertility is being caused by a variety of reasons, many of them good reasons.

These are nicely covered in Time Magazine's It May Not Be a Bad Thing Fewer U.S. Babies Were Born in 2018 Than in Any Year Since 1986.

It points out births by teens are at an all-time low, mistimed/accidental pregnancies have also declined and women are choosing to have fewer babies because of greater career choices and increased levels of education.

But as we pointed out in 2014, kids get a lot of bad press due to the cost of raising them and the potential problems they can have or cause. This leads to fewer adults wanting them.

Also, the decline in birth rates is another example of the impact of economic uncertainty. Simply put, if you're uncertain about the future you're much less likely to have kids. 

Immigration has offset the declining U.S. birthrates and helped keep the U.S. relatively young.

So we're in much better shape demographically speaking than most developed countries and especially countries like Japan, Spain and Russia which are experiencing population declines.  

But obviously the U.S. is hardly welcoming immigrants these days, so we may not be able to count on them filling the gap going forward.

Declining fertility rates have enormous social and economic implications. We'll have more on this in the future. 

According to the National Labor Relations Board, Uber Drivers are Contractors

The U.S. National Labor Relations Board (NLRB) ruled this week that Uber drivers are contractors. The major impact of this ruling is gig workers are unlikely to be able to form or join unions.

This follows a ruling by the U.S. Department of Labor finding that gig workers are independent contractors and not entitled to minimum wages and overtime pay under federal law.

Neither ruling was a surprise.

The Trump administration has been quite clear they prefer less regulation, including in the worker classification arena. 

While both rulings are good news for Uber and other gig economy companies, it's not the end of worker classification battles and lawsuits.

Key quote from Bloomberg Law's article on the NLRB ruling:

“The crazy quilt of state law tests for independent contractor status is not affected by the issuance of the Advice Memorandum,” Reibstein told Bloomberg Law. “The primary battleground for independent contractor misclassification issues remains at the state level.”

Worker classification at the state level vary substantially by state. Some states - including Texas, Florida and several others - have passed laws declaring gig workers contractors.

Other states - with California being a key example - have had legal rulings that make it very likely most gig workers should be classified as employees. 

And, of course, if a Democrat wins the White House in 2020 their administration is likely to reverse the recent federal rulings. 

So the confusion (and lawsuits) around gig worker employment classification will continue.

Deloitte on the Future of Work

Deloitte has become, in our opinion, one of the key go-to sources of information and analysis on the future of work. Their recent article Redefining work, workforces, and workplaces is a good example.

In a relatively short article, it nicely synthesizes and explains "multiple converging trends and how they are already fundamentally changing all aspects of work ...". 

As the article chart above shows (click to enlarge), they focus on three main areas: work, workforce and workplace.

The work section discusses the impact of automation and points out that technology will in some cases replace humans, but tech will also augment human workers. Key quote:

"The jobs of the future are expected to be more machine-powered and data-driven than in the past, but they will also likely require human skills in areas such as problem-solving, communication, listening, interpretation, and design."

The workforce section discusses the changing nature of talent and the growing use of contingent labor. Key quote:

"Organizations now have a broad continuum of options for finding workers, from hiring traditional full-time employees to availing themselves of managed services and outsourcing, independent contractors, gig workers, and crowdsourcing."

The workplace section covers the shift to more remote work. 

"Organizations are now able to orchestrate a range of options as they reimagine workplaces, from the more traditional colocated workplaces to those that are completely distributed and dependent on virtual interactions."

The future of work is complex. With this article Deloitte has done an excellent job simplifying it. 

Accor Hotels Major Coworking Push

Accor, which is a large French multi-national hotel and hospitality company, announced a plan to develop 1200 coworking spaces over the next 3 years.

If they do it, they will become the leading coworking brand in Europe by 2022 and one of the largest in the world. 

Accor is planning on rolling out 3 different types of spaces under the brand name Wojo:

Wojo Spots: touchdown spaces located in the lobby's, restaurants and bars of Accor hotel properties and meant to appeal to those who need a place to work while traveling.

Wojo Corners: dedicated coworking spaces located in Accor hotels designed to appeal to locals as well as travelers who need more privacy than provided by a touchdown space.

Wojo Coworking Spaces:  large stand-alone coworking spaces located in commercial buildings that provide both workspaces and hospitality services ((bars, lounges, kitchens).

Coworking is part of Accor's broader "augmented hospitality" strategy designed to engage consumers where they live, work and play. 

We find this strategy quite interesting because it's based on one of our favorite trends, work/life integration. It's also another example of hospitality and coworking merging. 

The short Accor video below explains their coworking push in more detail.

Intuit's Pursuit of Prosperity Study

Intuit recently released The Pursuit of Prosperity, a study designed to to better understand how Americans:

• define prosperity
• view the factors that impact their ability to live the life they want
• feel about your current financial standing
• plan to achieve greater prosperity
• view their financial future

The bad news from the study is 78% of Americans feel prosperity is currently out of reach. But the good news is 58% are hopeful that they can achieve prosperity in the future.

The study chart below shows some of the key challenges facing many Americans. These results are consistent with other studies on this topic.

These numbers make it clear that many Americans are just getting by or struggling financially despite the health of the overall U.S. economy. 

We cover this topic in more detail in our Economic Uncertainty section.

Disclosure: Intuit is an Emergent Research client but we didn't work on this study.

What Independent Consultants Want

The Forbes article Breaking The Faustian Pact: What Motivates Professionals In A Gig Economy World? covers a study comparing the motivations of independent consultants with consultants working at big consulting firms.

As the article chart below shows (click to enlarge), there are big differences.

Key quote on the differences:

"... the freelancers emphasize the flexibility of when and where they work; their peers employed in big firms focus on financial security, personal development and having a tangible career path."

The study findings illustrate the classic trade-off people make when choosing between traditional jobs and independent work. 

Independent workers value and choose work autonomy, flexibility and control. Traditional job holders value and choose security. 

We've chosen to be independents, so we agree with that path. 

But it comes down to risk profiles. The reality is most Americans prefer the stability and predictable income that comes with a traditional job. 

Which is one of the reasons why traditional jobs aren't going away anytime soon. 

Deloitte on the Alternative (Meaning Gig) Workforce

Deloitte's article The alternative workforce: It's now mainstream is taken from their 2019 Human Capital Trends report.

It covers the use of alternative labor - contractors, freelance/independent workers, gig, and crowd workers - by corporations.

Key quote on the their conclusions:

"... the alternative workforce is now a critical mainstay of the workforce for a growing number of employers."

The data in the article comes from Deloitte's annual global business survey. One of the key findings, as shown the article chart below (click to enlarge), is alternative workers perform a broad range of activities.

They summarized the article by saying:

For many years, people viewed contract, freelance, and gig employment as “alternative work,” options considered supplementary to full-time jobs.

Today, this segment of the workforce has gone mainstream, and it needs to be managed strategically.

Given growing skills shortages and the low birth rate in many countries, leveraging and managing “alternative” workforces will become essential to business growth in the years ahead.

We certainly agree.

Gartner says Half of All Job Postings Target Just 39 Roles

Gartner's Most Competitive Roles 2019 provides an interesting look at the jobs big companies are hiring for. 

The key finding is there is a lot of demand for a relatively small number of critical jobs. 

According to the report, "49% of all job postings by S&P 100 companies in 2018 were for just 39 roles. The remaining 51% were for 872 other roles."

The report chart below (click to enlarge) lists some of the high demand roles. 

Not surprisingly software developers, marketing managers and computer system engineers/architects are in high demand. So are sales managers and customer service reps.

And despite everyone saying accountants are being automated away, it's one of the 39 top jobs of 2018.  

This report nicely illustrates where the war for talent is being fought - functions such as IT, research and development, financial management, marketing, sales and customer service.

Because recruiting full-time talent for these jobs is so hard, corporations are increasingly turning to independent contractors to do this work. We'll have more on this in the near future.

See the report for the full list of the 39 high demand jobs.

More Small Businesses Turning to Online Lenders for Financing

The Federal Reserve recently released its 2019 Small Business Credit Survey.  A key finding is the use of online lending sources by small businesses is rapidly expanding. 

As the study chart below shows (click to enlarge), in 2018 32% of small businesses seeking credit applied to an online lender. This is up from just 19% in 2016.

The top reasons small businesses say they turned to online lenders is their speed of decision making and the view that they had a better chance of being funded.

According to the report, they were right. Small businesses seeking financing were approved at higher rates by online lenders than traditional lenders.

This is especially true for small businesses considered a medium to high credit risk.

Add in how much easier it is to apply for an online loan and you can see why more small businesses are turning to online lenders.

We'll have more on this report in the near future.

GCUC 2019 - Coworking's Surge Continues

The 2019 U.S. version of the Global Coworking Unconference Conference Series (GCUC) happened last week in Denver. Over 500 attendees showed up to discuss the state of the coworking industry and learn from one another.

It was clear from the discussions and presentations that the state of the coworking industry is excellent.

The industry continues to grow at a rapid pace, niche and independent coworking spaces are thriving, and the big coworking chains continue to expand. 

One thing that caught our eye was the number of attendees from coworking spaces serving new industry segments and vertical markets.

A good example is Palletized, a coworking and cowarehousing space that provides logistics services and warehouse space in addition to office space. This vertical market is quite large and because of ecommerce, growing quite rapidly. And now there's a coworking option for this industry. 

Coworking rapid growth has been driven by 3 waves of customers. The first group were freelancers and independent workers who were coworking's first customer base. Quickly following them were startups and micro businesses. More recently large corporations have embraced coworking.

Going forward we think all three of these groups will continue to drive coworking's growth. But we also see a fourth wave emerging. This wave will be driven by niche and vertical market growth (like Palletized) and geographic expansion. 

Coworking started in the urban cores of large cities. But now it's diffusing across geographies into the suburbs, smaller cities and even into rural areas. 

These areas, BTW, are the home to most Americans. About 98 million Americans live in urban core counties. But 175 million live in suburbs and small metro areas and 46 million live in the nation's rural counties. 

This means coworking is just starting to expand into markets where 2/3rds of Americans live and well over half work. 

Bottom line - the industry has a lot of room to grow.

Allwork's articles GCUC 2019: What Coworking Members Really Want and GCUC 2019: Is the Coworking Market Saturated? - quick answer - no - nicely covers several of the panels and related discussions.

We "borrowed" the picture above from Allwork's GCUC coverage.

The Rise of "Superjobs"

From Jobs to Superjobs covers the results of a Deloitte study looking at how automation and A.I are changing work and jobs.

The key finding is Deloitte sees automation changing jobs instead of simply replacing workers.

By this they mean many jobs are evolving and requiring new combinations of human skills and capabilities.

In particular, they see jobs increasingly requiring both hard and soft skills.

Deloitte see two types of jobs emerging due to increases in automation and the growing use of A.I. 

One type they call "hybrid jobs", which they describe as:

"Roles that perform work using a combination of skill sets drawing on both technical and soft skills. Historically, these types of skills have not been combined in the same job."

The other type are "superjobs", which are:

"Roles that combine work and responsibilities from multiple traditional jobs, using technology to both augment and broaden the scope of the work performed and involve a more complex set of domain, technical, and human skills."

The emergence of superjobs is going to require new types of thinking by both organizations and workers.

In particular training people for jobs that require strong hard and soft skills will not be easy. It will also require major shifts in thinking. 

It's not just traditional employees who will become super. According to Fast Company's A Growing Crop of Supertemps is Changing Work, independent workers are also becoming super.

So whether you want to be a traditional employee or an independent worker, you're gonna need a mix of skills - and a cape. 

TV Sitcom Explores the Blending of Work and Life and the Barriers Between the Professional and Amateur

Salon's Mike Schur's new sitcom "Abby's" is "Cheers" for the gig economy is an interview with the producers of a new NBC sitcom that takes places in a backyard bar. 

The interview covers what a show set in an illegal backyard bar says about modern culture. 

The interview explores multiple themes. But the most relevant to us here at Small Business Labs are the blending of work and life and break down between professional and amateur.

These shifts are happening across our society. A good example is when friends reach out to sell you something, which is increasing common thanks to the growth of side gigs.

Abby, the bar owner in the show, faces this on a regular basis because her customers are also her friends and neighbors. Key quote from the article on this:

There's one part of your question that I found interesting, and it is something that we talk about in the writer's room a lot. That is, where does the relationship between our patrons and Abby, when does it become personal and when is it professional? We dealt with that in a really explicit way in one episode with Beth [Abby’s next door neighbor] grappling with, "I thought this was a friendship and the way you're behaving, you're making me feel like you don't see me that way."

The blending of work and life is making answering this question both increasingly challenging and important.

We also find the show's view on the blurring distinctions between professionals and amateurs interesting. Again from the article:

There's also this weird thing in our culture now, where if you want go out somewhere, but you don’t want to drive, you use your phone and you get into some guy's Toyota Camry. It’s his car. It's like the barriers between what you would think of as a professional and amateur are completely broken down now, right?

These are both cultural and work shifts that are happening at least in part to the growth of the gig economy. It's interesting to see TV shows picking up on and exploring these trends.

Somewhat related, the popular online game The Sims is adding "freelancer" as a career choice. Sims will be able to be a writer, artist or programmer.

Just like in the real world, freelancing Sims can choose not to take gigs and instead take more time off.  Or, if they need more simoleons (money), they can take on extra gigs.

Having both TV shows and online games adding freelancing and alternative work arrangements illustrates the growing role independent work is playing.

Podcasting Entering the Mainstream

In case you hadn't heard, podcasting is booming. 

According to The Infinite Dial 2019, an annual survey conducted by Edison Research and Triton Digital, more than half of all adult Americans have listened to one.

And as the report chart below shows (click to enlarge), 32% of all Americans aged 12 and older listened to a podcast in the last month. This equals about 90 million people.

There are a number of drivers of podcasting's growth. These include:

• There's now a diverse array of interesting podcast content.
• Large audio/music firms like Spotify, Pandora and Apple have embraced podcasting.
• So have big media companies like the New York Times, the Wall Street Journal and the Washington Post.
• Smart speakers have made it easier to find and listen to podcasts.
• The use of internet audio in cars has become easier and more widespread.
• Successful business models are emerging.

Most revenue estimates for the podcast industry continue to be small - ranging from $500 - $700 million in 2018. But as the TechCrunch article Y Combinator Bets on the Booming Podcast Industry points out, revenues are expected to rapidly increase. 

Podcasting is interesting to us here at Small Business Labs because it's yet another example of small businesses and even individuals successfully competing with large corporations. 

In fact, many successful podcasts come from solopreneurs and micro-businesses. This is due in part to podcasting's low production and distribution costs.

The other part is creating compelling content, which a lot of solopreneurs and micro-businesses are capable of. This is especially true for podcasts designed to build community or used for content and/or influencer marketing. 

Medium's 10 Big Takeaways from 2019's Infinite Dial Research covers the study in more detail.

23% of Traditional Full-Time Job Holders Plan to Switch to Gig Work

According to MetLife's 2019 U.S. Employee Benefits Study, 23% of Americans with full-time traditional jobs intend to switch to gig work over the next 5 years. Another 14% say they are considering it. 

As the study chart below shows, younger workers more likely to say they're intending to leave their job for gig work than older workers. 

 

The reasons those with full-time jobs say they are interested in gig work are increased schedule flexibility, the ability to work where they want and the ability to take on multiple, different projects.

The high level of interest in the gig economy is tempered by the concern about the lack of financial security associated with gig work. According to the study, the top reason cited for not joining the gig economy is “I prefer the stability and security of a full-time job"

This reason is consistent with other studies. Concerns about job stability and security will also result in most of the people who say they plan to switch to gig work not doing so.

But some will - likely about 10%-15% of those saying they plan to and this still results in a lot of new gig workers. 

Another interesting finding is 1 in 5 full-time employees have a side hustle and spend on average 25 hours per month on it. Most, according to the report, do this out of financial necessity. Over half of those with with a side hustle say they are planning on turning it into full-time work.

The study reinforces findings from other studies (including ours) that interest in joining gig economy by traditional employees remains high.