The following interview was conducted by Sacra—August, 2022

Ved Sinha was VP of Product at Upwork. We talked to Ved to learn more about the role of vertical vs. horizontal gig marketplaces, how embedded payments can help marketplaces compete with staffing firms and global payroll companies, and how marketplaces intersect with vertical SaaS companies.

1. Can you give us a taxonomy of gig marketplaces?

2. What are the key trends you have seen that have impacted the gig work marketplaces?

3. Upwork was one of the first marketplaces to unbundle Craigslist. Now we have companies like Preply, Turing and Dribble, which are very specialized, and focus on one vertical. How do you see horizontal or vertical marketplaces competing with each other? What advantages do they have against each other?

4. Upwork has two sides—the customers and the contractors. Which is the more difficult side to build—demand side or supply side?

5. What was the GTM for the supply side? How did that evolve and inform the product strategy as the product evolved?

6. What was the GTM for the demand side? Did you start with SMB and move up the stack to enterprises, or start with enterprises and then expand into SMB?

7. What are the differences in the business model of a traditional staffing agency vs. Upwork?

8. With Upwork having a strong enterprise sales motion does it mean more bespoke, customized service with less tech? Do you see Upwork actually becoming more like a staffing agency and less of a tech company at some point of time?

9. We're seeing marketplaces built on top of software. For instance, Workrise has a full-fledged SaaS powering the workforce management contractor and payroll. What are your thoughts on the importance of embedded SaaS within these marketplaces? What role would they play, and who is deriving value from that? Is it the contractor or is it the companies?

10. What’s the advantage a company gets when paying contractors through a platform? If they ever decide to take those contractors outside the platform, what do they stand to lose? What stops them from doing that?

11. Contractors multi-tenant across different platforms. What does Upwork offer to keep them on the platform?

12. Is there also some component of a lower take rate? If I do more jobs on a platform, and spend more hours, I get better ratings? Does the company’s take rate go down, does it stay constant, or go up, how does that work?

13. On the competition side, a company like Deel came from nowhere and captured the contractor payment/EOR market. Upwork, Fiverr and Freelancer already had payments and contracting. Do you think this is something that was consciously not taken up by the marketplaces or is it a missed opportunity for these marketplaces?

14. What can marketplaces like Upwork do to improve the margin profiles? Is it about improving take rate, moving to enterprise, or more services, like layering in financial products?

15. We’re seeing the evolution of gig workers to solopreneurs, people who run their life and work as a business. Companies like Patreon, Memberful, and Substack, help creators monetize their talent. In some ways, that’s exactly what Upwork does, helping workers monetize their talent. Do you see these companies acting as competition? Or do you see them as catering to a completely different class of gig workers?

16. As the marketplaces evolve, what do you see as a persistent economic moat? Is it the scale of talent, is it SaaS, or is something different?