Seth Godin recently re-published a blog post about the fundamental difference between a freelancer and an entrepreneur. His core thesis is that entrepreneurs create scalable organizations that print money, while freelancers simply exchange their time for money. While we agree with many of the differences he’s highlighted, we also think the analysis is much too simplistic.
In tech, freelancers and entrepreneurs are interwoven groups — they each rely on the other and often are the same people shifting from one role to the other and back again. The massive proliferation of startups (which is really just entrepreneurship with a different name) has provided a fertile ground for freelancers to find work. In fact, many freelancers are former entrepreneurs or are budding entrepreneurs working to bootstrap their own startups. It’s no wonder that the burgeoning freelance economy has grown in tandem with the growth of funding to startups.
Over the last few decades, as investment into startups has exploded, the size and scope of the Freelance Economy has grown at the same pace. The environment for both worlds has matured and changed in several ways over that same time frame as well. For startups, 2015 was a pivotal year with equity crowdfunding’s passage in the JOBS act which allowed, for the first time, millions of individuals to invest in the funding of a startup – which was once the domain of VCs and other institutional investors. In the freelance world, the passage of the Affordable Care Act has made it substantially easier to obtain health insurance if you’re an individual which once was an impediment to leaving a job; and coupled with the massive proliferation of technology within every company and government, the demand for tech talent has been pushed to ever growing heights. It is widely predicted that 50% of the workforce will be freelancing by 2025. Along with this growth has come a range of companies that help freelancers find engagements. But the growth in both of these sectors has helped to blur the lines a little between entrepreneur and freelancer as well as fusing each together in order to survive – freelancers need startups to provide engagement opportunities and startups need freelancers to build mvp’s and find product market fit.
Our own experience offers a perfect example of how entrepreneurs and freelancers are interwoven. We have often been called serial entrepreneurs as we have two for profit and two not-for-profit companies with which we have been deeply involved or founded. There are many other ventures in which we’ve had a hand in creating and operating. Part of what has always enabled us to build these entities is the abundance of capable freelancers bringing a broad range of skills to meet our ever-changing needs.
In our most recent, and most exciting venture, 10x Management, we’ve applied our past experience working with freelancers along with our past experience managing talent, in a new talent agency model for the technology industry (yes, we believe developers to be “talent”). At 10x we have a unique vantage point into both the freelancer economy and the world of startups. We deal with both worlds on a daily basis. We see that some of the people we deal with fit neatly into the category that Mr. Godin described as freelancers and some of them fit much more into the category of entrepreneurs.
We represent several former startup founders who have either sold their ventures or handed over daily operations to simplify their lives. Many others are freelancing to build up a war chest with which to bootstrap their next venture. In the span of a career an individual may shift from entrepreneur to freelancer and back again several times. Successfully wearing both hats either separately or concurrently.
This is, perhaps, a long-winded way to say that while some of Mr. Godin’s distinctions are accurate, there are many who cross the dividing line in both directions frequently as it suits their needs and desires. In much the same way that the on-demand economy provides access to goods and services where and when we want them, the Freelance Economy is giving freelancers the tools to scale up to be entrepreneurs when it suits them and then just as easily scale back down when they prefer.
That’s why we believe it is possible to be both an entrepreneur and a freelancer, and why we are so excited to continue to play a pivotal role in helping those who wish to wear both hats to do so.
Do you agree or disagree? We’d like to hear from you. If you liked this article you might also enjoy reading, The Best Freelancers Use 4 Strategies To Protect Themselves.