At Ekipa, we view ourselves as a software development market, where clients who want enterprise level service can get it from qualified software development teams with our help. What does this have to do with AirBnB?
In his article ‘from social networks to market networks‘, James Currier explains that there is a convergence of social networks with marketplaces. The first decade of this century, we saw the rise of pure marketplaces like Ebay, Etsy and Alibaba. The last five years, it has been all about social networks like Facebook and LinkedIn. The next 5 years, we’ll see these two merge into what James calls ‘market networks':
What Is A Market Network?
“Marketplaces” provide transactions among multiple buyers and multiple sellers — like eBay,Etsy, Uber and LendingClub.
“Networks” provide profiles that project a person’s identity, then lets them communicate in a 360-degree pattern with other people in the network. Think Facebook, Twitter and LinkedIn.
What’s unique about market networks is that they:
- Combine the main elements of both networks and marketplaces
- Use SaaS workflow software to focus action around longer-term projects, not just a quick transaction
- Promote the service provider as a differentiated individual, helping to build long-term relationships
An example will help: Let’s go back to HoneyBook, a market network for the events industry.
An event planner builds a profile on HoneyBook.com. That profile serves as her professional home on the web. She uses the HoneyBook SaaS workflow to send self-branded proposals to clients and sign contracts digitally.
She then connects to that project the other professionals she works with, like florists and photographers. They also get profiles on HoneyBook, and everyone can team up to service a client, send each other proposals, sign contracts and get paid by everyone else.
This many-to-many transaction pattern is key. HoneyBook is an N-sided marketplace — transactions happen in a 360-degree pattern like a network. That makes HoneyBook both a marketplace and network.
A market network often starts by enhancing a network of professionals that exists offline. Many of them have been transacting with each other for years using fax, checks, overnight packages and phone calls.
By moving these connections and transactions into software, a market network makes it significantly easier for professionals to operate their businesses and clients to get better service.”
Ekipa.co is also a market network. It brings together everything companies need to build great software: consultants, local project managers, software teams, test teams. And we provide a workflow to support the work: finding the right team for each project, a dashboard to manage the projects, and an escrow payment system.
James writes ‘A market network often starts by enhancing a network of professionals that exists offline’. I believe we can take this even one step further: a market network can challenge the model of professional service companies. In our case, the IT industry, has been dominated by IT giants for several decades. The market is mature, so there’s only a handful of service providers (Accenture, IBM, Infosys, Cognizant) who take over any incumbent. There’s a very high barrier to entry, so most ‘challengers’ only get a tiny fraction of the market and remain small.
The model of the traditional IT service firm is: an expensive sales consultant roams the market to spot opportunities. Then an expensive consultant comes in to identify pain points on the IT side and offers solutions. Then a system or department is used to identify an internal solutions team to build a solution. And once finished, it goes to a maintenance team. The company needs fancy offices and big cars to make a good impression on customers and to satisfy the expensive consultants. The aim is to sell as many hours as possible, although we see a move to value based pricing the last couple of years. Clients pay a premium to move ‘risk’ from their company to the service provider. Who wins here?
Ekipa.co functions as a market network to change the above story. We’re building a network of independent consultants worldwide to service customers locally. These consultants understand the needs and develop solutions (or requirements) with the customer. Then they use Ekipa to find the right, solutions team. All teams are vetted and work at (smaller) independent IT firms worldwide. Coordination and payment happens with the workflow of Ekipa.
In our market, another example is Experfy. Their offering:
‘Our Managed Marketplace brings you experts on-demand to solve your pressing data, analytics and business intelligence problems.’
They bring together corporations, big data and analytics experts. An interesting part of their model are their expert panels. This is basically an on-demand advisory service at a subscription. Instead of pay by the hour expensive consultants from a big firm, you get experts globally ‘on demand’. They also have execution teams on the platform who can implement big data systems or customized solutions. And their workflow supports the whole process from matching with the right experts to coordination and payment. Their vision is ‘McKinsey from the cloud’.
James has described some characteristics of a market network, which are interesting to look at:
Six Attributes Of A Successful Market Network
“Market networks target more complex services. In the last six years, the tech industry has obsessed over on-demand labor marketplaces for quick transactions of simple services….However, the highest value services — like event planning and home remodeling — are neither simple nor objectively judged. They are more involved and longer term.”
In the recent past, platforms aimed at on demand workers have become popular. If you need a freelancer to get something done, you go to Upwork or Freelancer.com. If you need some simple things done, you pay $5 on fiverr. In Holland, if you’ve got some home construction work, you go to werkspot. In the US, I believe you’d do that at Taskrabbit.
For complex services, the online space is still empty. The big challenge I see is that people need a big change of habits. For IT services, people are looking at several things: track record, ‘size’ and especially ‘who is accountable’. People go with referrals from their network and choose a provider that comes recommended. Big firms work with big firms. And companies want to move liability to the provider. For high value transational market networks, especially the last point is challenging. In Ekipa.co we’re still working on this. Right now, we’re liable. We sign the contract and hire the teams. In the future, we want to facilitate the contractual agreements so liability is arranged between client and provider.
“People matter. With complex services, each client is unique, and the professional they get matters. Would you hand over your wedding to just anyone? Or your home remodel?… Each person brings unique opinions, expertise and relationships to the transaction. A market network is designed to acknowledge that as a core tenet — and provide a solution.”
In the IT industry, this is at the core, it’s all about trust. But of course, it would be strange if the most knowledgeable professional would always be employed by one of the giants? Our market network brings together top experts from all over the world andlink them to projects that match their capabilities.
“Collaboration happens around a project. For most complex services, multiple professionals collaborate among themselves — and with a client — over a period of time. The SaaS at the center of market networks focuses the action on a project that can take days or years to complete.”
This is where our Saas workflow solution (to be built) will bring a massive benefit. IT projects get derailed all the time. Many people all involved and any mistake made by someone in the chain brings problems. A central dashboard giving overview of the project, by presenting data taken from existing systems (teamfoundation, jira, github, svn). Visibility on who’s working on what, invoicing history, hour sheets.
“Market networks help build long-term relationships. Market networks bring a career’s worth of professional connections online and make them more useful. For years, social networks like LinkedIn and Facebook have helped build long-term relationships. However, until market networks, they hadn’t been used for commerce and transactions.”
Here’s one of our valuable features: as described above, trust is the number one factor to decide what team to work with. Our platform enables customers to give reviews on projects by logging in with linkedin. So person A gives a review about team X. Now person B comes and explores working with team X. He’s logged in to our platform with his linkedin. In the team profile, he can see who from his network has worked with this team. He sees that person A gave a review and he knows person A, so he can get in touch. Or he doesn’t know person A, but linkedin tells him how he’s connected to person A through person C, so he calls person C.
“Referrals flow freely. In these industries, referrals are gold, for both the client and the service professional. The market network software is designed to make referrals simple and more frequent.”
Today, companies decide on what firm to work with by asking their network and/or by doing an expensive RFI-RFP cycle. Everyone is in the dark as to which firm is reliable and what peers say about them. If I go to a restaurant, it’s an open book, I can easily see which one comes recommended. The same for hotels, freelancers and more. But for professional service firms, there’s nothing. Trustpilot is bringing some change there, but in only a fraction of the service industry, mainly online.
“Market networks increase transaction velocity and satisfaction. By putting the network of professionals and clients into software, the market network increases transaction velocity for everyone. It increases the close rate on proposals and expedites payment. The software also increases customer satisfaction scores, reduces miscommunication and makes the work pleasing and beautiful. Never underestimate pleasing and beautiful.”
In conclusion, Ekipa.co is a market network that is changing the way companies build great software. No more huge IT projects with giant service providers, but a network of niche specialists, available on demand from the cloud.
Teams available on-demand at Ekipa