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The Three Stages of the Future of Work
First, a big personal update: this week, I joined the team at Index Ventures.
I feel incredibly lucky to work with this team. At Index, we invest across stages—from seed to early-stage to growth. One area where I’ll spend time is the future of work, and I thought I’d explore it this week through both the lens of Index companies and other innovative startups.
I tend to think of the future of work in three stages:
Job Readiness comes first and is about preparing for work. Job Discovery comes next and is about finding a job. Last comes Job Success, which is about doing the job well.
Education and work go hand-in-hand: one of education’s main purposes is to equip learners with the right skills to have successful careers, to earn income, and to contribute to society.
But education hasn’t kept pace with innovation in the labor market: today’s education systems aren’t teaching the right skills to tomorrow’s workers. This results in the skills gap, a mismatch in supply and demand for jobs.
The World Economic Forum estimates that closing the skills gap could add $11.5 trillion to global GDP by 2028. The most compelling Job Readiness companies align learning content with in-demand jobs.
Index has backed Flockjay, WhiteHat, and ApplyBoard.
I’ve written about Flockjay before, a company that uses income share agreements to teach tech sales. ISAs align incentives: Flockjay only makes money if it places students in high-paying jobs. The average Flockjay graduate sees a 2.5x salary increase.
The program can be life-changing. When Raven Winchester lost her job as a janitor last year, she enrolled in Flockjay’s 10-week course. She was hired as a sales development representative at LaunchDarkly—one of the businesses where she used to scrub toilets. As she tells it:
“The first day I stepped into the office an official employee, I just looked around at all of the things that I used to have to f*cking clean. It was an emotional moment. I cried like a baby.”
Too often, college stands as a barrier between workers and good jobs; WhiteHat breaks down this barrier. WhiteHat offers an alternative path into the workforce, through apprenticeships that lead to jobs. WhiteHat’s program better ensures that workers who are hired have the right skills for the job.
And ApplyBoard helps international students study abroad, removing complexities that keep students from being able to learn and skill build across borders.
There are two key pieces of Job Readiness that are broken today: (1) education isn’t keeping up with technological change, and (2) education is financially limited.
Given the pace of change, workers will need to reinvent themselves throughout their careers, requiring constant reskilling.
Many future careers haven’t been invented yet: 85% of today’s college students will have jobs in 11 years that don’t currently exist.
Edtech is also now inseparable from fintech: access to education relies on financial access. I wrote in How Technology and Covid-19 Are Reinventing Education:
If you bought a flatscreen TV in 2000, it would’ve cost you $5,000. If you go to Best Buy today to buy that same TV, you can get it for $75. That’s a 98.5% drop in price.
Yet a college graduate in 2000 paid $50K for her four-year degree at a public university; today, she has to shell out $100K (and $170K if she’s out-of-state).
The cost of education is growing 8x faster than real wages and Americans collectively hold $1.5 trillion in student debt. Startups like Mos, Goodly, and Edquity are making education more accessible by breaking down financial barriers.
For education to keep pace with the labor market, startups will need to build innovative solutions that train in-demand skills and that make education accessible.
Before the Internet, finding a job meant reading the classifieds, checking bulletin boards, or working with headhunters and employment agencies. I recently met a woman who got her first job by going to the local library, finding the postal address for a company, and writing a letter requesting an application form.
In the Web 1.0 and 2.0 eras, Craigslist and then LinkedIn transformed Job Discovery. One way to think through how Job Discovery is changing is to look at the “unbundling” of LinkedIn.
LinkedIn is unique among social networks in that its revenue doesn’t come mostly from ads. While Facebook earns 99% of its revenue from ads, LinkedIn relies on three main buckets:
These buckets roughly align with LinkedIn’s three core purposes:
Providing professional recruiters with tools to find candidates,
Helping workers find jobs, and
Giving workers a place to network and build community throughout a career.
Each segment is being disrupted by startups that offer more tailored, modernized offerings. Here are three examples:
Jumpstart is a Series A startup providing recruiting software focused on entry-level roles and emphasizing diversity and inclusion. By doing these two things better, it’s able to take market share from LinkedIn.
Workstream, also a Series A company, is modernizing the job board. Applicants can scan QR codes or text message to apply, lowering barriers. Workstream sits as a layer on top of job boards like Google, Indeed, and ZipRecruiter.
Also disrupting LinkedIn’s “Job Posting” category are vertical labor marketplaces, which have emerged across sectors:
Some of these labor marketplaces double as community hubs, LinkedIn’s third core purpose. Contra, for example, is a professional network for freelancers and creative types. It’s like LinkedIn, but built for a more modern and untethered workforce.
Companies like Chief (Series B; a women’s professional network), Lunchclub.ai (Series A; an AI-driven networking platform), and Ladder (Seed; a hub for job referrals and reviews) are all building community-centric places for Job Discovery.
Overlooked within Job Discovery are the platforms that create new forms of work. Within the Index portfolio, Etsy is an example. There are 3 million active sellers on Etsy—modern day small businesses, often one person working out of their home. The Etsy marketplace facilitates this new form of work, and solopreneurs in turn power Etsy’s flywheel.
The broader trend here is the disaggregation of work. Younger people are more distrustful of institutions and “traditional” careers—having been burned by both the Great Recession and the Covid-19 economic crisis—and are turning to freelance work.
Freelancers in the U.S. will grow from 65 million today to 90 million by 2028. This trend is more fundamental than finding a job; it’s a complete rethinking of the meaning of a career.
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Job Success includes SaaS tools that improve productivity, collaboration, and communication. Historically, this meant Microsoft’s Office 365 and Google’s G Suite (now called Google Workspace). More recently, it’s meant best-in-class tools that are picking apart Microsoft and Google.
Slack, an Index company, was arguably the first to popularize the consumerized, bottom-up go-to-market motion that today’s work tools embrace. Other best-in-class tools have emerged for different roles in an organization, including Index companies Figma (designers), Productboard (Product Managers), and Deepnote (data scientists).
Over the past few years, there’s been an explosion of work tools. Below is my take at a market map, a slightly updated version of the excellent market maps from Stride’s Pietro Invernizzi here and Lightspeed’s Merci Victoria Grace here.
Beyond SaaS tools, vertical SaaS platforms also make work more productive. Within the Index portfolio, Shopmonkey builds software for auto shops; ServiceTitan builds software for plumbers, electricians, and other home service workers; and Boulevard builds software for salons and spas.
These platforms let workers do their jobs better. As new industries emerge, they’ll demand new solutions. The creator economy is an example: it’s a nascent “industry”, and companies like Stir are emerging as vertical SaaS solutions.
In my days moonlighting as an Instagram influencer (I’m not sure I ever deserved the moniker “creator”), we used a haphazard mix of Google Sheets and Gmail and PayPal to manage payments, collaborations, and projects. Stir solves this problem. It digitizes pen-and-paper workflows in the same way that Shopmonkey and ServiceTitan do.
Business-in-a-box platforms can also facilitate Job Success. Oftentimes, these platforms blur the lines between Discovery and Success: Virtually both gives teachers a new way to teach, and enables success as a solopreneur; PopShop Live makes “livestream commerce seller” a job, and layers on tools to facilitate that job.
Building on the creator economy example, Pietra lets creators launch product lines. A creator no longer needs to be Kylie Jenner to launch a make-up line.
Job Success is the final piece of the puzzle: it gives workers the underlying toolkit to ensure that they’re able to thrive in their work.
Final Thoughts: Collapsing Cycles
Over time, the three stages of the future of work will blur together. Companies will offer all-in-one services across training, discovery, and on-the-job tools. It’s easy to imagine Figma, for example, training workers in Figma and helping workers find jobs where they can use Figma.
Future of work “cycles”—Readiness, Discovery, and Success—will become more frequent as workers refresh skills again and again. Because of the pace of technological change, a worker may have three or four cycles in a career.
I like the future of work because it’s a collision of so many things: education, productivity software, the creator economy, labor marketplaces. Work is also uniquely personal—it’s a source of tremendous self-worth and purpose—and is deeply tied to economic mobility and opportunity.
Across the board, work is shifting: the skills needed are different and changing faster; the meaning of career is being revisited; and new tools are changing how and where we work. The pandemic is a catalyst for all these changes. We’re living through the greatest disruption to work since the Industrial Revolution.
Sources & Additional Reading
Check these out for further reading on this subject:
The Race to Power Legacy Industries | Nina Achadjian, Index
LinkedIn Is The New Craigslist | David Sacks
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