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My interview on CNBC

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10 years and counting!

Yesterday my little baby – PeoplePerHour.com – turned 10. I almost can’t believe that this little experiment that I started a decade ago as a scapegoat from my previous business, knowing nothing about the online or tech world, is now 10 years old, and a growing, profitable and thriving business serving over 2 million users all over the world. It’s just surreal to me.

 

This has been a journey of a lifetime, and one which would not have been possible without the great people that I’ve been so lucky to encounter along the way who showed faith in us. My amazing team, our awesome and passionate community, our investors, my parents first and foremost who trusted in me and were my first investors, our partners and stakeholders. Thank you all for making this journey possible

 

Any milestone we hit, no less a grand one such as this makes me reflect back on all that’s happened. There are way too many stories to cite here, but some that stand out are: fighting bailiffs out of our offices twice when we couldn’t make rent, an intern literally just disappearing one day after lunch (as soon as he got his pay-check coincidentally) without saying a word or answering calls which forced us to call the police, someone starting to break-dance in an interview (yes this  happened!), a new hire turning up completely off-her-face drunk on her first day after lunch break, paying people a fiver to sit in the office pretending they work for us so that we look bigger when a major broadcast station (no names just google it J) turned up for a TV interview which got broadcast on the 6 o’clock news (as they say you ‘gotta fake it till you make it’ :)…to the moment when we turned our first month’s profit  in November 2013   – one month ahead of our target – and I just felt like the  whole world’s  weight just dropped off my shoulders. That was a moment of bliss, as were many more to follow.

 

As I told my team yesterday in a short talk before we did cake and champagne, mainly two things still get me out of bed every morning 10 years in.

 

First, knowing that what we do actually makes a difference. We deeply share this belief that the freelance economy mattes. As our mission statement says, it empowers people to live their dream of being financially independent, working freely, when they want, for whom they want, from wherever they want,   for as long as they want, earning as much as they can without being capped by corporate beaurocracy and politics, doing what they love, and not being tied down by the 9-5 corporate machine.

 

Years ago when I sat down to think about a mission statement – normally no small feat – I actually didn’t have to think at all. I just recited that very testimonial that we heard so many times again and again, in writing and in person, almost word for word, from both our Buyers and Sellers as if they all conspired together to come up with one: because of PPH I was able to build my entire business from the ground up, be my own boss and financially independent. Thank You!

 

Doing something that matters means a lot to all of us at PPH. We are not in business JUST to make money – although that is a goal too, no denial – but in doing so we make the world a better place. We have a mission and a purpose that’s grander than our own. That matters to me a lot because I want the organisation we are building with so much toil to outlive us all. I’m a true believer that selfish organisations have a limited lifespan, no matter how much money they make in that lifespan. Eventually the world catches up on then. Purpose-driven organisations on the other hand outlive their people and their leaders.  It’s as If that purpose takes on a life of its own, it becomes this unstoppable force that transcends above all else, it makes them independent, fool-proof and unstoppable.

 

I’ve always been of the philosophy that given a choice I’d rather have a smaller business today that lives forever than a large one that dies tomorrow. We are in business for the long term.

 

Purpose has another benefit. It gives you tail wind that allows for a lot more screw ups and mistakes – something that people just starting off in business like I did will inevitably make  lots of, as I did. An organasation without a purpose needs to execute with surgical precision, it cannot afford any mistakes.  Having a strong purpose on the other hand buys you empathy from all around you and gives you momentum to march through your screw ups. People WANT you to succeed because you make the world a little bit better.

 

Secondly – to why I get out of bed every morning – I believe that we are still on Day 1 of this new phenomenon. The freelance economy is still at its infancy in terms of adoption at the business end in particular. Whilst statistics show that 1 in 3 people do some sort of side ‘gig’, only ca 3% of it is done digitally and only a small percentage of businesses (most of which are at the at the smaller nimbler end of the spectrum) do it systematically. In other words, whilst the supply and desire to work more flexibly exists, and whilst the benefits of cost, flexibility, reach of talent, diversity, are unquestionable, it still hasn’t gone mainstream.

 

We see our job at PPH to build products and services that will make that happen. And that’s what we are doing.

 

Yesterday’s tenth birthday coincided with the soft launch of our newest baby, a product that will allow the adoption of freelance working and Flexible Talent Management (which we acronymed FTM) at scale for larger Enterprises. TalentDesk.io takes all the learning we have amassed over the last decade from serving hundreds of thousands of small and medium sized business (which in many ways are much harder to please than larger organisations), all the honed IP and know-how, and gift-wraps it for the Enterprise. We spoke to businesses that employ thousands of people versus tens of people (which is the PPH end of the market), and tailored the on-boarding, procurement, discovery, project management and payment workflow end-to-end to work seamlessly for them. At scale.

 

We have no doubt that TalentDesk.io will be a success, but more importantly, even if it weren’t, it’s another step towards our long term strategy. Another hill-top toward the mountain-peak. Which is to be the innovator in the space, investing in creating an innovation engine that churns out new products that serve different segments of this burgeoning yet still infant ecosystem that has the power to be a game-changer for businesses large and small.

 

Studies conducted by McKinsey, PwC and other consistently cite forecasts that in the next decade or two over half of the talent in organisations will work flexibly.  Studies that we conducted internally working with research bodies such as the University of Westminster show that over half of the working population (from 30% today) will be freelancers in one capacity or another by 2020.

 

If we succeed in our longer term goal, those people will be using products designed and launched by us. That’s what I obsess about all day, every day, for a decade already, and I don’t plan to stop until it becomes reality.

 

Lastly, 10 years in, I feel as proud as ever to be surrounded by such an amazing team. From people like Tom my first Engineering hire and Spyros my CTO who’ve been with us almost from the very start – 9 and 7 years year’s respectively! WOW (thanks for putting up with me folks)-  to people who even joined the last year alone yet elevated the business to a different level, making it so much more of a pleasure to get to work every morning and march on towards making that mission a reality. Super intelligent and highly qualified people who literally could get a job anywhere, choose to work with us fostering a culture of collaboration, passion, creativity, openness, ideation, but equally discipline, precision on execution, focus and accountability.

 

Folks, thanks for trusting in our purpose and being part of it. Salute to many more years to come.

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Colour is liberation! Creations of a rainy August Saturday morning

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This is what that gets me out of bed every morning!

I’ve always said that doing a job that has no sense of real purpose would have me disinterested in a day (or less!). No matter the sum of money it would earn me, doing work that’s ultimately a zero-sum game, that doesn’t create value, that doesn’t create something more from something less, to me,. that kind of work is totally uninspiring.

Yet never in my wildest dreams did I expect that the company i started almost 10 years ago would have such a profound impact on peoples’ lives. This  below is just one email from one of the millions of users on PeoplePerHour.com that happened to come my way, addressed to Yannick our CMO. It just put a big smile on my face and reminded me that, all the success aside, what we do actually MATTERS.

 

Hey Yannick

Thank you a lot for your prompt response. I know everyone has a unique story to share and I’m nothing more, but another human on his journey on this planet (existential stuff, I know), but I do firmly believe that my take on freelancing is quite different. 

I’ve started out freelancing since I was 16 and I’ve build my whole entire career online (even dropped out of college) … my skillset and everything I’ve learned is from experience .. Today, I even help businesses at times as a consultant .. not to mention that I’m a content creator and writer. 

That being said, I’m also planning to write up a few tips/tricks/guides/thought pieces/etc. to contribute to your blog and to help both clients and freelancers on the platform, but currently I can’t allocate the time to do so. I will definitely contact you/Kelly in the future with such ideas and ready-to-go articles. 

What’s more, here in Bulgaria people aren’t aware of the amazing opportunities that freelancing presents both individuals and companies. Part of my vision for the next few years is helping Bulgarians be more aware of what online freelancing truly is. 

I’m sorry for the over-sharing long message, I just wanted to state that I’m a freelancer at heart and I push towards the dream that the gig-economy is the future. 

I also want to express my deepest gratitude towards you and the whole team at PPH, as joining the platform was a completely transformative experience for me. I stopped being the random low-paid worker I was on other platforms and instead became the professional I always striven to be. 

I love the fact that PPH takes care not only of the clients, but of the freelancers as well. On other platforms, I’ve had the experience of being a worker bee among thousand worker bees. Here I feel like a professional, who offers their services to clients that also have a respect towards the work you provide them with. Here I feel surrounded by professionals, whether established or up-and-coming. I love the community and I love the positive-ness of the blog as well. Constantly featuring stories to motivate us and having this platform that helps you become your better professional self, while presenting you with new career opportunities is truly an amazing thing. 

Again, sorry for the long message and thank you for the prompt answer. 

I wish you the best in your future as well and know that by being part of PPH you are not only helping thousand of individuals around the world in different ways, but also helping shape the future of what a ‘career’ means. 

Thank you and have a great week ahead, 
Ivan D. Ivanov

 

Thanks to my wonderful team for making this a reality – this is because of our collective effort and hard work. Be proud! Together we’ve put a small dent on the universe. And it will only keep getting bigger.

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Why I invested in Rebagg

This week I completed an investment in Rebagg – a company based out of New York that buys and resells luxury handbags.

 

I see increasingly more investment opportunities and consistently I find the way that sits with me the best in terms of evaluating them is along three very simple heuristics.  I truly believe that in consumer internet today (other tech sectors like Enterprise or Bio, Cleantech etc are a different  game altogether)  you can only compete in one of three ways fundamentally. That’s it – by the process of elimination almost.

You can compete on

  1. Inventory
  2. Fulfilment, or
  3. Customer Acquisition

Most startup founders knee-jerk reaction is to say ‘we are good at all 3’ but the reality – and the evidence out there – is that you can onloy really win in one, at least at the start,

Put simpler, you either

 

  1. have a way to produce or  curate products that others don’t have access to or at least as readily as you do (Airbnb, Warby Parker, Uber and eBay at its start fell in this category)…. OR
  2. you get them delivered faster or cheaper than others (Amazon being the master at this of course) or with better customer experience service  (e.g. Zappos, which is now Amazon too not surprisingly)…OR
  3. you have homogenous inventory (just the same SKUs as the others in other words like Amazon), you are NO better than the rest on fulfilment (you may be using Amazon’s fulfilment in fact or another third party) BUT  you somehow are (for a window of time at least) better at customer acquisition. I would put gaming in this category as they live and die over their ability to generate powerful viral loops that become their acquisition channels, although as we’ve seen, rarely sustainable or predictable for that matter.

 

Of these the third is my least favourable or investable. People who believe they have a sustainable advantage in acquiring traffic over others are like fund managers who delusion themselves that they can bid the index in the long term. They can’t. Trading – be it in stocks or keywords – is an arbitrage play, and like any  arbitrage  play, the margin trends to zero in the long term.

 

Of course if you’re Oprah or Kim Kardashian maybe you have a scalable unique customer acquisition channel. But otherwise you’re just kidding yourself that you can buy keywords or Instagram/ Facebook likes better – consistently – than anyone else. You can’t.  One could argue that SEO is more defensible if you just happened to be one of those brands that got in early and got indexed well by Google with a stronghold that’s harder to break, but even then you run the risk of  your business being shattered one day because of a change in Googles algorithm as we’ve seen happen many a time.

 

To the second heuristic, i believe that fulfilment i.e. speedy, reliable delivery of whatever it is your buying (be it a tangible product or a service), with great customer support at your fingertips, is important. However, with e-commerce at least, its now near impossible to compete with Amazon on that front. If you’re selling a non-differentiated homogenous SKU and think you can deliver better fulfilment than Amazon you’re deluding yourself. Amazon has been investing billions in building the most sophisticated logistics distribution infrastructure in the world for over two decades. The best you can do is be on it.

Of course not all consumer internet businesses are e-commerce businesses; arguably Uber transitioned from being a prime ‘Inventory fit’   in the above to now being both an Inventory AND Fulfilment play … but only after amassing unique inventory that no one else did (at least as efficiently as them) and put it a click away from the consumer. Now, of course, it also boasts a huge distribution network that its smartly using to go into other inventory categories like food  with UberEats (although there the inventory is homogeneous.. the food you get on Uber Eats is not differentiated, it’s the same stuff you can get yourself in the high street or by calling the restaurant themselves so clearly it’s a fulfilment play)

 

continue reading »

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The worth of software

I had an interesting debate this weekend with a friend of mine who’s also in tech which triggered this thought: will software in itself be worthless in the future?

 

The paradox is that software is finding its way into everything in our lives – from how we order food, a taxi, to how we run a business and increasingly recreation, gaming, education… virtually nothing is left untouched by software. And as hardware becomes more pervasive it literally will be distributed everywhere, from our attire to our kitchen appliances, the couch we sit on, the toys we play with and so on.

 

Yet the cost of writing software is also dropping exponentially, or seen conversely, the ease of writing software is increasing exponentially.  The cost of building a simple website in 1995 was easily in the tens of thousands, would have taken months and would require deep technical knowledge. Today anyone can build a website for free on sites like Wix.com, or WordPress, or even from scratch with minimal coding.  Or if you’re lazy you can hire someone for a few hours on PeoplePerHour.com and be done with it within hours.

 

Moore’s Law, one can argue, applies to software too.  But whereas for hardware what powers that is advancement in microprocessor technology, in software it’s mainly the open source phenomenon.

 

Coders are willing to work on projects for free, for the greater good of the community. Equally the sheer number of coders is increasing exponentially as writing software becomes easier and easier and penetrates into our earlier education system. Kids now can write programs that were a challenge to software engineers in the 90s. That trend will only grow.

 

Microsoft which arguably was the first software company has been battling with this for decades as has its founder Bill Gates who’s always been very vocal about coders writing software for free. Yet the business model of selling pure software has been undermined largely by that trend. Operating systems, word processors and spreadsheets are now accessible for free (Linux, Google docs is just one example of each). Microsoft in the end had to adapt its business model – arguably the most powerful business model in the world to date – to survive and launched Microsoft 365.

 

That’s scary: even the most powerful business model in the world, that created the worlds richest man (or vice versa arguably:) was eventually undermined and had to adapt.

 

Equally, compilers that translate code to a functioning program have – and will carry on – becoming more sophisticated. Its quite imaginable that soon we will be able to input English language  which gets translated into the end product by the magic black box in-between. The need to be able to code in zeros and ones (Assembly Language) has already become virtually extinct. The first coders had to write in zeros and ones; now there’s a myriad of ‘higher level languages’. The cap for that trend is simple written language – the first language we learn as kids. So if one can explain what is needed to be done by the program, the compiler will do the rest.

 

Seen differently, we’ve gone from a world where companies had to go to specialist to write their software – the Accentures & IBMs of this world – and spent hundreds of millions on bespoke systems that enables their business to function. Now, they can rent Software as a Service (SAAS) at a click and tailor it to their needs with very little coding needed.

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Why a 3-year-old makes for a better leader than most adults.

I just came back from week long trip to Dubai where I got to spent a good amount of time with my 3-year-old niece. The more time I spent with her the more the realisation dawned on me that kids really exhibit the raw traits of great leaders better than most adults! Here’s why

 

  1. Kids keep asking WHY

 

Spend time with any kid and you’ll be drowned with a series of Whys. Why are you here, why are you leaving, why are your trunks wet? Then you say “because I got in the pool” which in turn is followed by ‘Why?”.

 

Kids start with Why. And so do great Leaders, as Simon Sinek so eloquently argues in his book by that name: Start with Why.
Why are we building what we are building? Why does doing what we do even matter? Why are we doing things this way? True that was a good way to do it yesterday but Why is it still relevant today? Why have we made these decision? Or – more importantly – why have we not?

 

If you keep asking why firstly you will eventually – with a few more wrinkles under your eyes – foster a culture of always ALWAYS challenging the status quo.  This is a must for any company that wants to stay relevant. You cannot afford to take anything for granted in business.

 

Secondly, you will instil a sense of purpose within your organisation. People will understand why things are happening, why they’re happening in the way they are happening, why their sweat and hard work matters, and therefore why they should get out of bed tomorrow and come back to work.

 

This holds true for customers as well. Tell a customer what he is getting and –  unless it falls in the rare category of being a total giveaway – they will consider it sceptically at first. But tell them WHY that thing will change their life, or that of others, and you’ve got them hooked. Their purchase now has a purpose, not just a utility.

 

  1. Kids like story-telling

 

Kids don’t do well with matter-of-fact talk as I found out the hard way. Dry factual statements don’t engage them. Stories do

 

It really is the same in business. Present your team, shareholders or customers with a matter of fact statement and they will at best give you a nod.  Dress it up in a story and you may put a smile on their face. You win people with stories.

 

Which is why great leaders are great story tellers. They are anecdotal, witty, humorous, and engaging. Think Winston Churchill.  They get the message across to you via mesmerising story telling.

 

Perhaps the best known example of this is Steve Job’s Stanford commemoration speech where he famously opens up by saying “today I want to tell you three stories from my life… that’s it, no big deal, just three stories

 

That speech was literally three personal stories, but within them a wealth of wisdom dressed up in such a way that it made the messages unforgettable. Had he just recited his words of advice like he famous ‘stay hungry, stay foolish’ in a straight matter of fact way it would not have resonated the same.

 

  1. Kids like to say NO

 

Ask a kid to share their candy with you, give you a hug, come play with you… unless you hit them in a good moment or bribe them with something their instinctive reaction is to say NO. Not ‘No because…’; just ‘No’

 

Running a company is quite the same. People will keep asking for more no matter what you give them. No customer is eternally happy. Give them a discount, they’ll keep coming back for more. Until you say NO. Give your employees some perks, a salary rise, a pat on the back… they’ll keep coming for more. Until you say No.

 

The groomed ‘MBA way’ is to be transparent with them, engage in dialogue, present them with your limitations, with your annual budget, you may even transparently share your P&L and show your razor thin margins expecting naively that they will just know better than to ask given how transparent you’ve been. Wrong. They will keep asking. Until you just say No.

 

Not that long ago I made this mistake. After I overheard whispers in my company PeoplePerHour such as ‘but if we are doing well why aren’t we getting salary rises or why are we sensitive to costs’.. I thought I’d address the issue the civilzed way. I spent hours explaining to my people, team by team, drawing charts on whiteboards showing transparently how our costs are rising in comparison to our revenues. I explained that the ‘delta’ (a terms that’s now become anecdotal in the company’) needs to be widening for a healthy business. That’s it plain and simple. An undisputed statement of fact – not a story.

 

Total waste of time. None of that stuck. And given that not everything can always be packed in story telling, sometimes its just commanding to simply say NO.

 

  1. Kids are instinctive

 

When you try to bribe a kid with candy they will look at you judgingly with piercing eyes, as if thinking “what’s this guy up to…”. They are too shrewd to fall straight in the trap.

 

The logical decision would be to take the ‘candy’ if it’s up for grabs. Customers would certainly do that without blinking once! So would your employees and your shareholders. Do you think they’d be like “hmm wait why is this guy offering us a dividend, sounds fishy”. Not a chance.

 

Lacking the tools to make a fully formed logical ‘analysis’ of a situation or follow the empirical evidence forces kids to use their intuition, or instinct. They operate ‘from the gut’ as Jack Welch used to famously swear by, much more than most adults do. It’s refreshing and almost always gets a better result.

 

Conversely having an over developed logical brain can be a handicap both in life and in business. Its like having a tool that’s too sharp for its own good. You tend to over-analyse, over-think things and get stuck in indecision. Indecision is – in the end – much more expensive than even the wrong decision. Have you ever seen a kid be indecisive?

 

There’s good reason why instinct matters. Firstly it’s the thing that differentiates us from a machine. Logic is limiting by definition, whilst intuition and its derivative – imagination – is boundless. Einstein put it perfectly:  “Logic takes you from A to B, but imagination takes you everywhere”. Man can no longer compete with computers in processing logical sequential thoughts. But we do better in scattered imaginative thinking.

 

Secondly, our limbic brain – the part of the brain that’s responsible for all our feelings such as trust, loyalty and intuition -– is actually more developed than the rest of our brain, and forms first at the core of the human brain. It’s the part of our brain that controls all emotions but can’t for example process language, numbers or logic. But its what tells us if something ‘feels right’. Decisions made with the limbic brain tend to be faster higher-quality decisions but our logical brain tells us to ignore them. Simon Sinek in Start with Why calls this the ‘overthinking’ syndrome and explains

 

“The more time spent thinking about the answer, the bigger the risk that it may be the wrong one. Our limbic brains are smart and often know the right thing to do. It is our inability to verbalise the reasons that may cause us to doubt ourselves or trust the empirical evidence when our gut tells us not to”

 

Very simply the reason gut or instinctive decisions feel right is because the part of the brain that controls them controls our feelings too.

 

  1. Kids are fearless

 

Being indecisive and fearful one could argue are both different expressions of the ‘overthink’ syndrome. But not quite. Kids demonstrate this too: sometimes you’ll see a kid go for it after evaluating the odds, whilst adults won’t.

 

If logic is our brain’s desire to process information in order to make a decision, fear is HOW MUCH information we need in order to be comfortable with it. To feel safe.  A high threshold on both is a double handicap.

 

Jeff Bezos recently said in another amazing memo to his employees   “most decisions should probably be made with somewhere around 70% of the information you wish you had. If you wait for 90%, in most cases, you’re probably being slow

 

So true.

 

Speed matters in business (and in life), so if you multiply all the decisions that are taken daily across an organisation by that extra 20%, it could easily be the difference between success and failure.  ‘High velocity decision making’ as Bezos puts it is crucial in remaining nimble or ‘Day1’ as he likes to call it.

 

In other words, seen in context with intuition: trust your initial gut as a first port of call, your limbic brain is telling something for a reason. But if you must deploy logic and analysis, make sure it doesn’t become paralysis.

Or hire a three-year-old!

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