Freelancer case: the role of crowdsourcing

In recent times, the term Freelancer has become viral to designate people who work independently collaborating for different companies under the subcontracting modality. Companies become customers of freelancers who are paid to provide their services.

<<< Uber case: the importance of added value >>>

But the term Freelancer goes beyond people who perform a particular service for other companies without being hired by them. Freelancer.com is an online freelancer, crowdsourcing, and outsourcing marketplace for small and medium-sized businesses. The business allows you to request services from different branches and is based in Australia, although it has branches in different parts of the world.

The objective of this new case study is to explore the crowdsourcing model implemented by the company Freelancer and how this methodology became a trend to promote selective collaboration between companies. Find out what the Freelancer case is about.

What is Freelancer.com?

Freelancer is a company whose business model corresponds to online outsourcing. It was founded in 2009 by Matt Barrie and has had an international expansion to cities like London, Buenos Aires, Manila, and Jakarta. It charges commissions for projects depending on the user's membership plan and works with an escrow system, through which the contracting company deposits the payment money in Freelancer.com before the subject in question begins to work.

Once the work is finished and in common agreement between both parties, Freelancer releases the money to the worker. Freelancers and companies are rated by their counterparts at the end of the job, accumulating points to build a reputation in the market.

Freelancer has expanded into several outsourcing markets, including GetAFreelancer, EUFreelance.com (Sweden), LimeExchange (a former business of Lime Labs LLC, USA), Scriptlance.com (Canada) - one of the pioneers in freelancer work-, Booking Center, Freelancer.de (Germany), Freelancer.co.uk (UK), Webmaster-talk.com (USA) - a webmaster forum -, Worker (USA) and Nubelo (Argentina - Spain).

Freelancer is responsible for classifying users as employers or freelancers. Employers are generally companies looking to outsource their work, while freelancers are professionals who offer to carry out a project and help other companies decide which user profiles they should choose. For the skills that freelancers demonstrate, the company gives them a badge that is displayed on their professional profiles.

<<< MercadoLibre Case: The commitment to e-commerce >>>

The crowdsourcing model at Freelancer.com

Crowdsourcing is a low-cost business model that seeks to create value in the provision of a service or solve a problem through the contributions of an entire community, especially professionals in a sector.

The term comes from the English “crowd” and “outsourcing” external resources. It constitutes a tool to subcontract tasks through the contribution of external collaborators to reduce the workload of the company's internal employees.

The main advantage, in addition to cost reduction, is that it provides a different and critical view of certain business processes. Likewise, crowdsourcing offers different variants within the same business model. The best known are crowdfunding, co-creation, and outsourcing.

1. Crowdfunding.

Within the same crowdsourcing model, we can find other ramifications such as crowdfunding, whose purpose is to seek financing on very diverse topics. Crowdfunding can be aimed at the art industry (buying and selling books, music, video games, movies, etc). It also supports startups and emerging companies looking for alternative financing to improve their income and growth possibilities.

2. Co-creation

Another alternative that integrates crowdsourcing is co-creation which allows developing close experiences with groups of potential customers or loyal customers, who, by collaborating with the company, favor teamwork. It refers to a joint activity between the company and customers that add value. Unlike crowdsourcing, co-creation teams tend to be more selective, choosing people with unique skills who are innovative.

3. Outsourcing.

Finally, the third variant of crowdsourcing is called outsourcing, which is the assignment of specific activities to be carried out by third parties. The objective is, through the subcontracting of specialists, to execute the tasks in the best possible way to overcome the most critical difficulties of the processes that would be more expensive to carry out within the company by the hired personnel.

All these outsourcing variants of the crowdsourcing model are the ones that are generally implemented in the company Freelancer.com.

Although over time outsourcing activities diversified in different sectors of the industry and the concept of freelancing became an employment condition in itself par excellence, the platform that designed this trend continues to exist and encourages collaboration between companies and professionals in various functions.

<<< Sky Mavis case: The new play to earn model >>>

In final words, the Freelancer case is another example of a company that was able to develop a disruptive business model that found a new way of managing work, where, although the subcontracted parties do not receive a formal and fixed salary, it allows them to have the time to work and set the price for their service themselves.

While companies can save budgets by paying only for certain essential jobs that cannot be done by internal employees. In the long term, it contributes to generating greater synergy between companies and private service professionals.