![](\"http:\/\/www.websiteplanet.com\/wp-content\/uploads\/2013\/04\/Upwork1-1024x563.jpg\")
<\/p>\nUpwork is a two-sided marketplace, connecting freelancers with short-term work.<\/strong> The two parties\u00a0on this platform include:<\/p>\n (1) Freelancers searching for short-term work<\/strong> (typically a one-time gig). These individuals include: Web\/mobile developers, designers\/creatives, writers, sales and marketing experts, accountants, consultants, customer service agents, etc.<\/p>\n (2) Employers looking for\u00a0a job to be done.<\/strong> These employers may include standalone businesses or individual consultants. Upwork’s clients include: AirBnB, Zendesk, Juniper Networks, Dropbox, and Instapage.<\/p>\n From an employer’s perspective, when logging onto Upwork, you would post your job, get matched with potential freelancers, browse\/interview potential matches, and hire your top pick. Upwork then serves as a communication platform between you and your freelancer and also ultimately handles the financial transactions.<\/p>\n How does Upwork capture value?<\/strong><\/span><\/p>\n In addition to taking a cut of the freelancers’ pay, Upwork generates revenue by offering three tiers<\/strong> for their employers including Basic, Pro, and Enterprise. These different versions offer improved features related to pre-vetting of freelancers, account management services, and tailored onboarding \/ payment options. Upwork also charges a payment processing fee. By serving as a medium for all communication, Upwork is able to retain its status as a platform.<\/p>\n What are the challenges of scaling a freelancer platform like Upwork?<\/span> The primary challenge for companies like Upwork is\u00a0balancing demand and supply on\u00a0these two sides of the marketplace.<\/strong> In the early days of oDesk (the larger of the two companies in the merger), the leadership team decided to open up the market to any client and any freelancer, soon finding that the lack of a vetting process led to haphazard results. By being a\u00a0middleman platform without having control over the ultimate outcome, oDesk ultimately incorporated checks and balances into the system such as adding a double blind rating system to filter for the best freelancers [4].<\/p>\n oDesk’s strategy ultimately first focused on building the employer client side of its platform<\/strong> (paying to acquire employers), finding that freelancers flock toward the platform with the most jobs.\u00a0While two-sided platforms often struggle to build out one side without the other, oDesk was able to successfully grow both sides, further expanding its platform after merging with\u00a0Elance [4].<\/p>\n There are clear indirect network effects in a platform like Upwork’s, where the more freelancers there are, the better the experience is for employers and vice versa<\/strong> [5]. Ultimately, there are more options for both sides and with increased usage, more ratings enable filtering of the best freelancers and employers.<\/p>\n Sources<\/em><\/p>\n [1] https:\/\/www.upwork.com\/blog\/2015\/05\/odesk-is-now-upwork\/<\/p>\n [2] https:\/\/www.upwork.com<\/p>\n [3] https:\/\/www.ft.com\/content\/8273edfe-2c9f-11e6-a18d-a96ab29e3c95<\/p>\n [4] https:\/\/mixergy.com\/interviews\/gary-swart-odesk-interview\/<\/p>\n [5]\u00a0https:\/\/hbr.org\/2016\/04\/network-effects-arent-enough<\/p>\n","protected":false},"excerpt":{"rendered":" Upwork connects freelancers with remote work on-demand. As a two-sided platform, Upwork built and scaled both its freelancer and employer client base. With indirect network effects, this platform captures value by serving as a connector, facilitating matching, communication, and payment.<\/p>\n","protected":false},"author":1240,"featured_media":3632,"comment_status":"open","ping_status":"closed","template":"","categories":[1181,389,1180],"class_list":["post-3631","hck-submission","type-hck-submission","status-publish","has-post-thumbnail","hentry","category-freelancers","category-indirect-network-effects","category-two-sided-platform"],"connected_submission_link":"https:\/\/d3.harvard.edu\/platform-digit\/assignment\/growing-businesses-in-the-age-of-platforms\/","yoast_head":"\nIn May 2016, Upwork introduced a ‘sliding service fee,’ ranging from 5-20%, a change from the previously flat 10% rate<\/strong> [3]. This change represents the power Upwork has as a platform to grab more of the pie. A longer-term questions remains: How far can Upwork go longer-term in raising its prices yet still retaining its freelancers?<\/p>\n
![](\"https:\/\/udemy-images.udemy.com\/course\/750x422\/729636_3fa6_3.jpg\")
<\/strong><\/p>\n