Hosted by Jeffreys Henry. Published July 2020.
HOW HAS UNDERPINNED BEEN AFFECTED BY COVID-19?
COVID-19 has obviously had a big affect across the economy and it has been quite acutely felt by freelancers. They were probably the first to feel the impact of the economic restrictions, in that huge amounts of them lost 6 months of work at a time. This gave UnderPinned a greater responsibility to show that we were supporting the freelancers who were struggling, which meant that we immediately made basic access to our software completely free until at least September. We had to think about how we could support both freelancers and businesses. For businesses, it was about getting used to the idea of working remotely and using electronic communication as their primary form of communication, this actually meant there was a big increase in, or willingness to engage with the freelance economy from companies that previous hadn’t. We’re also seeing a greater independence from individuals to freelance, whether they’ve been furloughed or made redundant and are now looking to freelance as an opportunity to break their services down into smaller chunks to make them more accessible to clients. So, on the one side, it’s been negative – it’s reduced our revenues and we’ve had to produce a huge amount of support to the freelance economy, but on the other side it has actually led to a massive increase in engagement.
As a start-up, we’re a growth driven company building towards a profitable model which means that we’re reliant on investment. The first week of lockdown restrictions was the first week of a 4-week crowdfunding campaign for £500,000 – we hit 92% in the first few days and then boom, restrictions hit. By the end of the second week the Dow was down by 22%, our bigger investors who had already committed were still keen to commit, our much smaller investors from our community were still keen to commit, but the real issue was the middle tier of investors. Often reliant on cash flow from their own businesses, they just disappeared. So, almost overnight I went from having hundreds of people who were excited about investment, to emails from people apologising because their priority was to protect their cash flow and wait until things were a bit more stable. However, this still turned out to be a bit of a positive as we started focusing on how to build fantastic long-term narratives around investment to aid us for when we next approach investors.
WHAT NEW AVENUES HAVE UNDERPINNED EXPLORED SINCE THE LOCK DOWN? WHAT HAS BEEN THE SUCCESS OF THIS?
Our internal business operations have been very much focused on objective based communication. We’ve become much more reliant and focused on using project management software to make sure that everyone is on the same track. Looking at our marketing, creative and communications side, it has codified the way in which we work a lot more than we had done previously and has improved how people communicate. We also have a WhatsApp group for the team which is solely for social/non-work related talk, where we set challenges for the team just to keep people engaged.
In terms of our product, we have created an invoicing service which allows you to request money via an invoice and pay electronically which is about 10x quicker than other form of payment and is completely free. The technology that it’s built on is open-banking, which allows you to request bank transfers via an API, so as part of our COVID-support, we decided to build a dedicated native app for your mobile phone which allows you to request real-time payments, with 0% commission, via a link or QR code. This allows you to create a payment for say a plant for £20, present your screen to a customer who doesn’t even have the app but can use the QR code to scan and pay instantly on their phone. So, all payments can be contactless, no matter what the value of your transaction, and do not require your card or any equipment with no commission, so your vendor is no longer paying to accept payments like they usually would.
From a financial perspective, although we’re in quite a good place financially, there is still a greater, fiscal stress from the perspective of investors and partners so we’ve made an effort to make sure we absolutely refined all of our financial models so that every piece of spending is accounted for. Now we have monthly management accounts created which have line items so that we can be incredibly explicit about this is what money is being spent on and this is what that did for us.
WHAT WOULD YOUR ADVICE BE TO FREELANCERS IN HOW TO BEST HANDLE THE COMING MONTHS?
Take support that’s available to you, whether it’s COVID support, business, friends or family related. In terms of how to improve your business, this should be done at any time, but especially during economic difficulties. There will be more of a demand for bite sized chunks of labour that are more digestible for businesses and customers alike. If you are self-employed, now is the best time to take a long, hard look at your business and try to work out the core things that you can change or refine to improve your proposition and reach out to new networks.
The 7 questions you need to ask yourself are: 1) what is my vision/goal? 2) What can I do in the next 1-3 months to make sure that I’m comfortable? 3) What problem are you solving? 4) Who has that problem? 5) What is your solution? 6) Why are you the right person to solve it? 7) What is your offer?
The other side is having a financial health check. Work out what your finances are and if they make sense, and set yourself objectives that you can relate to your provision of services based on the money you need to get. Make your proposition revolve around targets that make sense for your health as a business and your lifestyle. Ultimately, in order to build a successful business at this time, it’s about really honing in on what your business is and how you’re positioning yourself in order to try to build your business as successful as possible. Now is the time to be as efficient, lean and as refined as possible in your freelance business.
FREELANCERS HAVE HISTORICALLY SUFFERED FROM POOR AND LATE PAYMENT PRACTICES, HOW DOES UNDERPINNED HELP OVERCOME THIS?
There are multiple issues with why people are paid late, but there are actions you can take which directly affect how likely it is you’ll be paid on time. The best way to secure your payment is by setting out a contract. One of the prefaces of UnderPinned being built was making sure that it was as easy as possible to do all the admin related tasks around freelancing. One of those tasks was making a contract that makes sense to the client and freelancer. UnderPinned have taken a basic services agreement which outlines all the specifics of a contract, including your warranties, IP rights and your payment security, and built them into a system which takes about two minutes for somebody to easily build a contract. This system outlines what your deposit is, outlines your cancellation fee and clearly references what the project is. So, when it comes to getting paid, you have something to refer back to to show you’re right in the right. During a contract, if the scope of the work changes, you can refer back to the contract and ask them to amend it, which only takes a few minutes.
At the end of the work, sending an invoice clearly and on time is important, but also how quickly and easy it is for them to pay. With UnderPinned, you can send an invoice which directly relates to the contract. If you don’t have a contract, you can attach an email to the invoice of the agreement so it’s easy to see what you’re being paid for. We’ve attached this to our open banking system, so it only takes about 10-30 seconds to make a payment using the UnderPinned invoicing system. I’d also suggest sending reminder emails and also having a clear avenue to take if payments are late. For example, stating in a reminder email what the late payment fees are.
ONCE GOVERNMENT SUPPORT SUCH AS THE SELF-EMPLOYMENT INCOME SUPPORT SCHEME STOPS AT THE END OF AUGUST, DO YOU THINK FREELANCERS WILL STRUGGLE?
Simply put, yes. There has been a very significant restriction in our GDP in April alone, and the impact of that is going to be felt for quite a significant period of time. On the one hand, freelancers who have already lost their jobs who then lose this support are going to lose a significant amount of their access to capital. On the other hand, there are also going to be a big opportunity for freelancers. The increase of remote working is a great opportunity for freelancers to start reaching out to new clients and building new structures. Freelancers could be a massive driving factor behind the rise of new work and the rise of the economy as a whole. This will be largely based on the fact that, if you’re a company with a strict budget, you’re much more likely to turn to an expert for a piece of project based work than you are to hire someone to fulfil a long-term role. If people successfully use this opportunity to make their work more efficient, freelancing as a whole could take a massive surge forward and improve the quality of work of the UK labour force and be a cornerstone of rebuilding the economy.
WE EXPECT MASS-REDUNDANCIES IN THE COMING MONTHS AS THE CORONAVIRUS JOB RETENTION SCHEME ENDS. WHAT WOULD YOU ADVICE BE TO THOSE THINKING OF BECOMING AN FREELANCER?
I think freelancing will be one of the core parts of work that will help rebuild the economy quickly and effectively. My 3 pieces of advices would be:
- Write out a structure for your business from a financial perspective and from an administrative perspective so you know what all your processes look like.
- Start thinking about the services you provide within the context of the problems you solve and who you solve them for.
- Start to build your professional network by reaching out to people in a way that builds genuine connections with businesses you’re interested in who might then want to acquire your services.
WHAT IS THE FUTURE OF UNDERPINNED POST-COVID?
The future of UnderPinned is going to revolve around quite rapid growth over the next 2 years.
We’ve spent a long time refining our proposition. We wanted to spend a long time looking at the administrative tasks in detail and build a system that fully supported freelancers and the clients that they were working for so that they could go from proposal to payment with a slick user experience. Now that we’re starting to build on that understanding, the period between now and Christmas is going to be focused on finishing and releasing the product in its near final form. From Christmas onwards, we’re going to be very focused on growth, initially in the UK, growing rapidly across the whole of the British economy, looking at freelancers in all sectors. We’re then going to look towards global expansion, with the key markets being Europe and America. If I had to define the next 2 years post-COVID, it would be taking what we’ve learnt, implementing the product in the way that we want it to be and growing as quickly as possible.
