How to Build a Successful Start-Up Without a Single Employee
The number of tech vacancies in the UK is now 41% higher than pre-pandemic levels — and rising rapidly. Tech roles make up some 13% of all vacancies in the UK. And salaries are growing too: the average tech salary is now 50% higher than the average across all roles.
All of this means that tech companies are struggling to find the right talent. And, with so much opportunity out there, businesses have to do more to retain great employees too.
That’s not to say that this is a new problem: even in 2011, more than a decade ago, more than half of CEOs surveyed bemoaned a lack of key skills for digital roles. But by 2019, that number had reached 79%. And the unprecedented wave of tech adoption across all industries in the past two years has widened the gap even further.
There’s no sign of a ceasefire in the War for Talent: 40% of those currently in work are planning a job move, according to Microsoft’s 2021 Work Trends Index. With this mass exodus looming ominously on the horizon, it’s clear that companies need to get creative when it comes to sourcing talent.
For large enterprises, this could mean conducting talent audits or even implementing an internal talent marketplace to determine the skills they have in-house. Then, they can look into training opportunities and find ways to upskill their current workforce to meet their needs.
For start-ups though, this isn’t usually an option. So, they must turn to the growing freelance economy.
USING FREELANCERS TO PLUG THE GAP
According to an Upwork report, freelancers contributed $1.3 trillion to the US economy in 2021. And there are over 4 million self-employed professionals in the UK alone. Given that, for tech companies in particular, freelancers often work remotely (and thus could be anywhere in the world), there’s a huge market for start-ups to tap into.
So yes, freelancers can help start-ups to plug the gap when they can’t find full-time talent. But, when it’s done right, working with freelancers can be more than just a sticking plaster. In fact, innovative start-ups can use freelancers to launch a product and get to the funding stage without a single permanent employee.
How do we know? Because that’s exactly what we did. We built a Successful Start-Up Without a Single Employee.
HOW GIGGED.AI BUILT AND LAUNCHED OUR PRODUCT WITH NO PERMANENT EMPLOYEES
When Gigged.AI launched, we had no permanent employees. Our first freelance hire was a Glasgow-based UI designer, who helped us to figure out how our interface should look. Then, we brought in a UX designer to help us with customer stories.
All the copy on our website was written by a freelance copywriter. We brought in a freelance CFO — who is still our CFO today — for some financial projections. We worked with a team of data scientists in Portugal to build our algorithm, and our lead developer is a freelancer based in Denmark.
All in all, we built our MVP and raised over $1M in funding without a single permanent employee. And you can too: as Gigged.AI CEO Rich Wilson says, ‘if you do it right, you can absolutely scale and build a really meaningful start-up by using the right freelancers.’
THE BENEFITS OF ENGAGING FREELANCERS VS. MAKING PERMANENT HIRES
While many companies outsource occasional projects to freelancers, few are truly ‘freelance-first’ — that is, embracing the freelance revolution and favouring freelance support over permanent hires.
But, for some roles — in tech especially, freelancers can actually be a better option than full- time employees. Freelancers can provide innovative solutions, unparalleled flexibility, and actually improve your chances of getting a successful product to market. Here are a few benefits of using freelancers to launch your start-up:
Early-stage startups often don’t know exactly what projects they’ll need help on throughout the year — which makes it difficult to commit to hiring a full-time UX designer, copywriter, or developer, for example.
But by beginning a relationship with a skilled freelancer, you can ensure that you’ll always have the support you need, when you need it. An added advantage is that you can start working with a freelancer on a small project to test the waters, then scale up depending on how it goes.
You can also pause your agreement with a freelancer if you have a lighter workload from one month to the next. Or, assuming they have the capacity, you can assign them more work in heavier months.
The harsh truth is that 50% of start-ups fail by their fifth year. Those that don’t have many things in common, one of which is an emphasis on versatility and flexibility — which using freelancers can help you to achieve.
SIMPLIFIED (AND MORE AFFORDABLE) PRICING
Business leaders who have never worked with freelancers often assume that their rates are high — much higher than the cost of a full-time employee. And, in a certain sense, they’re right: in terms of hourly or daily rates, a freelancer will almost certainly cost you more than a permanent hire.
But this argument misses the point: you don’t pay a freelancer when they’re not working. You also don’t pay the various extra costs which go on top of a normal salary: in the UK, that includes employers’ NI contributions, pension contributions and employers’ liability insurance — not to mention the cost of equipment, office space and utilities.
When you take off these costs — and factor in the fact that you can stop and start your agreement with a freelancer when you want (or work with them for sporadic projects as and when they arise), that high day rate starts to look a lot more reasonable.
KNOWLEDGE AND EXPERIENCE
The best freelancers are highly experienced and skilled in their field. By shopping around for the right freelancers (on a platform like Gigged.AI, for example), you can find the perfect person to complete a project — often at a fraction of the cost of hiring an equally experienced professional full time.
Freelancers are also experienced at quickly learning about a company and how it operates, since they’re used to jumping from one organisation to another. This means you likely won’t have to invest in training and onboarding as you would with a permanent hire.
Innovative companies can also use these experienced professionals to help train and develop their internal team. For example, at Gigged.AI, we use experienced freelancers for coaching and mentoring more junior, up-and-coming talent. This means that, by using freelancers, we’re actually building strong tech talent for the future.
THE FREELANCE MINDSET SHIFT
We recently had a client turn down a qualified and skilled freelancer for a project, because they couldn’t commit to working to a standard, 9–5 schedule. This is not unusual: many company leaders who have only ever managed employees find the shift to working with independent contractors to be a difficult transition.
While you can get great value by using freelancers to grow your business, they are not permanent employees. And you have to be prepared for a shift in mindset when working with them.
This doesn’t have to be a bad thing, though. While many people turn to freelancing for a more flexible lifestyle, this flexibility can benefit companies too. The option to use freelancers only when you have work for them is crucial for start-ups, who mostly don’t have the budget for full-time support.
And, as we discussed above, freelancers bring an enormous wealth of knowledge and expertise that’s not always easy to find in full-time employees when budgets are tight. Helping build a successful start-up without a single employee.
According to Statista research, 50% of Generation Z and 44% of millennials report participating in freelance work — so this trend isn’t going anywhere.
And many big enterprises are already on board: 54% of Google’s workforce are freelancers. NASA has been outsourcing talent for projects including asteroid data mapping and cybersecurity architecture builds for the past decade.
It may be time for start-ups to join the freelance revolution too and build a successful start-up without a single employee.
As Rich Wilson says, ‘if you’re willing to trust people and embrace different ways of working, you can see increases in productivity and really scale a successful product.’
THE FREELANCE-FIRST START-UP
At a certain point, most companies do need to start looking for permanent talent instead of relying entirely on freelancers. There are certain roles — sales, customer success, and finance, for example — that tend to work better as permanent positions.
At Gigged.AI, we now have a core team of ten employees. We also still work regularly with some 30 freelancers, who we can use whenever we need them. We even have agreements with experienced freelancers — such as our lead developer — to offer coaching and support to our more junior staff.
Now that we have a product on the market, we wouldn’t be able to run without our core team. But, just as many companies are now proudly calling themselves ‘remote-first’, at Gigged.AI we are proudly ‘freelance-first’.