Whatsa six year old startup doing entering Y Combinator? Plotting a new growth trajectoryafter a pivot. Pilot may be a veteran inSilicon Valley startup terms butit reckons the freelance contractor marketplace model itswitched toaround a year and a half ago is ideally positioned to serve a future of work thats increasinglyfragmented and distributed.
So while the business haslong been profitable its now getting putthrough its paces at YCs bootcamp,and will likely belooking to raise VC funding once it graduates tohelp it step on the gas, says co-founder Matt Drozdzynski.
Were focusing on enterprise customers right now, because thats where we feel like the pain is strongest and where we can make the most impact.But long termwe think of ourselves as more of an enabler of the future of work of an environment where every company could be working with a vastly distributed talent pool, everywhere in the world.
The ultimate end game here [is] where we could be this talent infrastructure, almost, for a lot of companies not only the Fortune 500s that were going after right now, but also for early stage startups. And any company in between.
Pilot is not the only startup thinking how it can serveand tap into growingdemand for more flexible and piecemeal, gig economy style ways of working. Lystable is another that springs to mind, though unlike Pilot, Lystable is just making the platform not seeking to operate a contractor marketplace of its own. And a curatedtalent marketplace is key to Pilots proposition, with in-house vetting and ongoingassessment of its freelance talent pool(and currently a wait list to get ontoits books).
Its also not just matchmaking contractorswith vacancies and then walking away aftertrousering a hiringfee, like some in this space; Pilots role (and fee) continues for the duration of any contract, acting asa support platform to help resolve issues that might arise during the term of the project.
Itsintending to develop machine learning tools to automate performance tracking in future to aidmanagement of its remote contractors. Though at least at this point its employer clients are large enough that they do have in-house staffwhose primary role is to manage teams, including Pilots remote freelancers, so its only aiming to offerassistance rather than fullyreplace human managers.
Thetalent-vetting process Pilot users does involve a lot of manual work, to ensure its identifying high quality contractors with strongcommunication skills to allow onto its platform (it says its prioritizing comms skills because of its focus onremote work). But it reckons it can scale that in future by looping in relevant expertise sourced fromits own marketplace. So, in other words, itsvetted talent can become paidvetters to help it scale the size of the marketplace, as and when needed.
In terms of core tech, Drozdzynski says thats its matching algorithm for connecting contractors with vacancies (again with a little human input looped in at the end of the process to select candidates from an algorithmic shortlist). This is another area it intends to enhance with machine learning going forward, as it pulls more performance data and learnings off its platform, he adds.
The key is understanding or matching contractors to projects andthis is something that were able to do much more efficiently because of the software that weve written, he argues. We dont have to automate all of the [vetting] tests to make this process much more efficient, by just using software to co-ordinate some of these human efforts. So I think by being smart about the features that we build into the platform were able to maximize our efficiency when it comes to using human labor.
One thing that were also really excited about is some of the things that we can do by connecting different tools that our contractors use like time-tracking software, GitHub, Trello, project management tools connecting them into our system and then being able to infer whats happening on the project, what are the potential issues, and basically entirely automate the function of a project manager. Our contractors are managed by project managers within large companies but we can make sure that theyre as effective as they can be by helping them out in this automated fashion.
Thats something we are really excited about long term this notion of giving our talent superpowers. Giving them all of these tools that they would need to be extremely effective remote workers.
So thats something we are really excited about long term this notion of giving our talent superpowers. Giving them all of these tools that they would need to be extremely effective remote workers wherever they happen to be around the world.
Pilotspivot away from its original, more traditionalconsultancy firm/dev shop model, where it had some 60 paidcontractors on staffto fill a mixed bagof clients needs, came not so much froma flash of inspiration about theinexorable riseof the gig economy, saysDrozdzynski, but more gradually; from analyzingits operational data and realizing there was a anotherneed it could move into serving.
We werent very happy with our model, hetells TechCrunch, discussing how thepivot came about. We found that our developers were happiest working for companies that were a little bit larger, a little bit more established, and theyd already had engineering teams because they dont want to be the only developer on a project, they wanted a stable paycheck, they wanted to work on a team so they can learn from other people so this is kind of what led us to realize that we should only work with companies that are large enough to support a full engineering team. As opposed to say a small, early stage startup.
We realized that if we opened the company up to independent contractors then we can not only pay them more in some cases double or triple what theyre making before but we can also lower the cost for our customers, and allow them to hire better quality talent for the same price that they were paying before. And the reason we were able to do that is if you work with larger companies these tend to be longer term projects, six months+.
At this point Pilothas no contractors on its payroll; its marketplace ofvetted talent isfree to work elsewhere should they wish. Its not disclosing the number of contractors on its books at this point, nor the number of employers its working with. Nor will it name many customer names either, though there are a few examples on its website such as long time clienttravel publisher, Lonely Planet. Drozdzynski agrees a target employercouldinclude a company such as Google which clearly has ongoing needs for the kindof developer and design talent that Pilot is working to pullin.
Ultimately, hereckons workers want the flexibility of being able to work remotely from home (as essentially all Pilot workers do) so they can be with their family or so they can travel, but combined withthe reliability of a steady wage. And contractorscan get that fromPilot because it offers longer term project work, and lets themline up the next gigas needed. (He says its longest serving gig between one of its contractors and one of its employershas gone on four years at this point.) Its able to attract talent because he says it takes a lower cut ofwages than an average dev shop, for example, charging a fixed 30 per cent fee over the duration of any contract withthe rest (i.e. 70 per cent) going to the contractor.
The imperative on the employerside whichPilot is seeking to tap is the pressing problem for enterprises of filling in-demand talent vacancies giving businessesan incentive to accept a vetted contractor as a remote addition toan existing IT or design team if it means they get totap into skills they might otherwise find hard to secure. Pilots philosophy is that a globally distributed talent pool ultimately means more choice and, statistically speaking, access tobetter choices (We believe talent is evenly distributed across the globe, is how Drozdzynski puts it). And demand for engineers and designers typicallycontinues to outstrip supply hence in part Pilotsfocus on those two skills.
Hereckons the model could work for other product development roles, and perhaps more widely still for all sorts of other work that can be done remotely. But with a lot of job specific expertise and knowledge needed to support the smooth running of theplatform, and to underpin the development of additional tech features (such as its machine learning plans), he says it makes most sense for Pilot to constrain itself to those two (in-demand) skills for now.
Were trying to stay focused on what we know right now, and I think its more likely to be other areas in product development, broadly speaking, where we can be of help. If you look at some of the recruiting marketplaces, like Hired, they branch out to other verticals like sales and marketing and the reason for that is that their core competency is just on the screening part. Thats where they focus 99 per cent of their time because as soon as a customer has hired someone they never see that person again, at least until theyre looking for another job. Whereas the difference with a platform like our is that that moment where somebody gets hired is almost the beginning of a journey, as opposed to the end of it.
So the reason why it makes sense for us to constrain ourselves to certain domains is that if we want to build up the machine learning features around predicting what makes for a good worker, what makes for a bad worker, based on the output that theyre producing then thats very output specific. Even doing design and development is already quite difficult because the tools that each contractor uses are very different; a developer will be using GitHub and writing code, a designer would be using Sketch and sharing files with Dropbox. So if we want to integrate with all of these tools, these are very different problems.
Why is it operating a marketplace at all? Why not just provide the platform and tools to help companies manage their own freelancers? Drozdzynskis take on that is thatthe most pressing need for most businesses is filling vacancies rather than gearing up for themore distributed, on-demandworkforces that are coming down the pipe. So the strategy is to securea working relationship with enterprises now, by firsthelping them fill their empty seats; after which the teamhas a foot in the door so isbetterpositionedto sell the advantagesof its contractor management platform, and to add smarterfeatures over time to serve its users changing needs.
On the companies side I think the talent problem in terms of not being able to find great talent is a more pressing one, than I have too many contractors that I have to manage today, arguesDrozdzynski, adding: I think we would rather bring a client to a contractor and then have them realize how great our systems are, and how great out platform is and then bring their customers into the platform, than the other way around.
Were working towards that [bigger] vision [of becoming a talent infrastructure for all sorts of companies]. Building tools that make it easier for contractors to work with anyone in the world and vice versa, building tools for companies that make it extremely easy to find and hire these talented individuals, wherever they happen to be in the world They wont have to figure out the logistics of that, they wont have to be scouting for people in all of these different cities, figuring out the legal/administrative work required to event hire that talent pool.
In terms ofcompetitive landscape, hesaystheteams current focus on enterprises recruitment needs puts itin competition with the likes of Accenture, IBM, Infosys and Cognizant so its competing for customers with the big, management consultancy type firms, rather than (at least most of the time) smaller recruitment startup players.
Theres also dev shops and smaller consulting shops that we run into occasionally but those typically cant meet the very growing needs of large enterprise customers, he says. We can deliver better talent faster, and because its a software platform they can use we dont get in their way they dont have to schedule a call or a meeting with an account manager to get anything done.
Given the size of some of itsrivals Pilots desire to step on the gas now (via YC and probably also by taking VC) makes sense. He says itslooking to build out an enterprise salesteam as a priority now. Its also continuing to work on the product, with a new version of its client app due to launch in the next few months to further streamline identifying and hiring contractors, especially for the target enterprise user.
Were definitely looking into raising a venture capital round because were seeing this model as something that can scale and can grow into a really large company. If were competing with the likes of Accenture it will take capital to get there, he notes, adding:Were already talking to some investors so thats something that will come after YC so in a couple of months.
