#2: Identifying the problem
“If I had an hour to solve a problem, I’d spend 55 minutes thinking about the problem and 5 minutes thinking about solutions.”
- Albert Einstein (allegedly)
In my last blog post, I wrote about taking the leap from corporate life into the world of being a startup founder. Today, I’ll chronicle the problem we’re aiming to solve with Flyp and how we arrived at the underlying diagnosis.
This is blog post #2: Identifying the problem.
Note: The term “essential professional” in the context of this blog describes candidates in essential industries such as hospitality, retail, customer service, and logistics. The definition excludes essential professionals such as medical or teaching staff.
During the early days of Covid-19, my co-founder Elliott and I caught up via Zoom. He was working at Grab in Singapore (where we had met in 2017) and I was with Atlassian in Sydney. After the usual banter between friends, we somehow ended up talking about a TechCrunch article that had traced the pandemic’s disproportionate impact on rideshare drivers in the US.
With millions of Americans either laid off or on a reduced income, Uber and Lyft’s driver supply had spiked amidst a significant decline in demand. As a result, average hourly driver earnings had dropped to unprecedented levels, leaving most with no choice but to abandon the rideshare industry and try to find work elsewhere.
While Elliott and I had a solid understanding of the many paths that lead people to sign up as rideshare drivers — largely due to our experience of working at Grab — we had little insight into existing alternatives (beyond other gig work) and where to find them. Recognising this as a sign of privilege on our end and curious whether there was a genuine problem to be solved, we decided to learn more.
Over the following weeks, both of us joined countless driver groups on Facebook, Reddit, and other platforms (e.g. Uberpeople.net) in an attempt to better understand Covid-19’s impact on people in the rideshare industry and how they were trying to make ends meet.
We reached out to countless members of each community and invited them to talk to us about their experience. However, disillusioned by big tech and sceptical of why we were sympathetic to their situation, most either ignored us or saw us as intruders that deserved a good troll. It took time to build trust and eventually convince people who were willing to speak to us via Zoom.
Looking back, these conversations were some of the most eye-opening user research sessions I have ever done and after running twenty-two interviews with both current and former drivers across the US, three things stood out:
- Apart from other gig economy platforms (e.g. food delivery), most full-time rideshare drivers rely on job boards (e.g. Indeed) to find work.
- Despite their popularity, online job boards are broken and everyone we spoke to complained about the terrible experience they provide.
- This broken experience isn’t limited to ride-share drivers and applies to most people who work in essential industries.
To better understand the problems around job boards, we signed up to every major platform in the US, Singapore, and Australia as both esssential job-seekers and employers.
What we experienced throughout this experiment strongly corroborated our previous research insights and revealed how little online job boards had changed since their emergence in the mid-1990s, despite generating billions in annual revenue.
As job seekers, we were overwhelmed with job posts that hardly matched our profiles, struggled to understand which ads were still accepting candidates, and received almost no guidance on how to write applications or promote our transferable skills in a compelling way.
Many ads lacked relevant information such as salary and most linked us out to third-party websites where we had to enter the same information (personal details, experience, motivation) over and over again.
Furthermore, there was no way for us to grow our professional network for informal advice or word-of-mouth referrals and out of the nearly 100 applications we submitted, only a handful received any response at all — including a simple rejection. Calling this experience demoralising would be a blatant understatement and illustrated how out of control most people who go through this process in real life must feel.
On the employer side, things were hardly better. We faced an overload of irrelevant applications with little ability to filter through them and each resume was formatted differently, often highlighting perceived weaknesses such as career gaps and grammatical mistakes more prominently than the skills and grit which the respective candidate would bring to the table.
The very nature of job boards as transactional marketplaces further limited us to active applicants only — the people who had seen and responded to our job ad — and there was no way to tap into passive talent; a cornerstone of recruiting knowledge workers.
Finally, we were surprised by the fundamental misalignment between the business model of these job boards and our objective of hiring reliable candidates. Instead of charging for successful matches, all platforms either required us to pay a steep fee upfront (pay-to-post) or monetised via an expensive CPM model (pay-per-impression). Clearly, this was driving some of the issues we had encountered, inherently incentivising quantity over quality.
As Elliott and I debriefed on yet another Zoom call and reviewed what we had learnt over the past months, it became clear to us that the problem we had initially set out to understand — how do rideshare drivers find other work — was real but that there was something much bigger at play: A fundamental asymmetry in tech-driven innovation that had largely ignored the needs of essential professionals and instead poured endless resources into solving problems for people in knowledge industries.
Some call this the Silicon Valley bias.
While candidates in both frontline and knowledge industries found work in much the same way during the 1980s (broadsheets) and 1990s (emergence of online job boards), LinkedIn disrupted knowledge worker hiring with its networked resume in the mid-2000s.
Reid Hoffmann and his team anchored on a few unique insights in order to create a hugely successful business and scale the company to its 700M+ users today:
- Massively valuable properties can be built off networks, as they enable viral growth and drive stickiness. As such, LinkedIn was able to escape the transactional nature of job boards and expand horizontally into other use cases (e.g. learning, content creation).
- There are different networks for different domains and the professional domain provides a massively valuable opportunity, given how closely our work is intertwined with all aspects of our daily lives.
- Great businesses can be built off networks in the professional domain, with the immediate value-add being the ability to tap into passive talent (i.e. people who aren’t looking for jobs but who may be persuaded by the right offer).
- As with all network effects businesses, a successful network in the professional domain has inherent defensibility. This makes it incredibly hard for new players to enter that market and compete.
However, in all of this, LinkedIn fundamentally failed to attract essential professionals. Hence, it comes as no surprise that 91% of Americans without college education don’t use the platform; something our qualitative insights strongly corroborate, also for other markets.
Despite some efforts in recent years to engage “Beyond Professionals” (LinkedIn’s term), its historic positioning, rigid product, and stiff marketing don’t cater to essential professionals who may lack a prestigious degree or glamorous job title but instead bring a wealth of real-world experience and transferable skills to the table.
Just imagine trying to showcase your latte art, culinary know-how, or customer service mindset in a few short bullets.
I clearly recall the day Elliott and I reframed our problem statement, adding the missing piece that was our unique insight: Essential professionals use job boards to find work. Job boards are broken. LinkedIn disrupted job boards with its networked resume. But only for people in knowledge industries.
It was almost as if both of us had gotten a new pair of glasses after having had to squint at the blackboard from the last row for the past months. A eureka moment, if you will, that put everything into perspective and outlined a clear path forward: A professional community for essential professionals that would move beyond the transactional nature of job boards, leverage network effects for both engagement as well as defensibility, and benefit from the ongoing trend of community unbundling.
The popularity of Facebook groups like Retail Worker Confessions (204k members, ~170 posts/day), Hospitality network Brisbane (49k members, ~34 posts/day), and thousands of others like them worldwide clearly proves that there is strong demand for career-related engagement among essential professionals. It’s just that no one has cared enough about this need to build a bespoke experience, thus leaving a massive gap (read: opportunity) in the market.
It’s time to change that!
Thanks for reading! Again, I’m flattered that you’ve read this far — it means the world to me. I would love to hear your thoughts in the comments below. You can also reach out to me at jascha.zittel@heyflyp.com and follow Flyp on Instagram as we gear up for our first launch in Singapore later this month.
Till next time,
Jascha
