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What is the best way to categorize the freelancer/contractor market?

Matt Brown

Co-founder at Bonsai

I wish I had a better answer for this, but having spent a few years on it and taken a couple runs at this, it's just so messy. Part of it’s a legal definition issue or a tax definition issue. Part of it is a self-definition issue. But like I said, we ran multiple surveys and the same person who is doing design full time, is a sole proprietor, earns a certain amount per year, has been doing this for a couple years, you ask 10 people and they will describe themselves in 10 different ways. That's one challenge.

Then you may have somebody who, from a client's perspective, is effectively doing the same work. They're selling their time by the hour or on a project basis or whatever it is. One person may be a sole proprietor and one person may have  an LLC or whatever it is. Even when you talk about agencies as an entity are probably incorporated in some way, and the client's working with this incorporated entity, but oftentimes, these agencies will in turn be working with contractors. That's what has led people, at times, to overestimate, and at times, to underestimate the size of the market and the opportunity of the market, like what really is a cohesive set or a persona of users to go after.

There's a ton we could talk about here, but there's also an incredible amount of churn, structurally in this industry. That obviously counts a lot of gig workers, which is very large. 

Every Uber driver who does at least one ride in a year is probably counted in that, as well. It counts people who again, almost from the surface, come into an office and do a certain kind of work and are on a longer term contract, but are still paid under a 1099 basis. 

For better or worse, the way work is perceived by the person that's hiring somebody, as well as the person who's doing that work, compared to the actual underlying tax and legal definition, they're all different lenses on the same thing.

Find this answer in Matt Brown, Co-Founder of Bonsai, on the rise of vertical ERPs
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