Flexibility On Demand
Instawork’s Mission to Modernize Hourly Work
The chaos and uncertainty that has become the baseline of everyday life has brought many people to the same conclusion: a desire for flexibility and control of their working lives.
Technical innovation has followed this preference. From the must-have tools that enabled the pandemic-induced shift to remote work; to the wave of advanced productivity, collaboration, and other technology products that have made hybrid office models and distributed teams the new default; to the much-needed evolution in attitudes and expectations of work-life balance, today’s working environment is arguably more functional than in the past.
While this level of innovation hasn’t historically been focused on the more than half of the American workforce that is paid hourly – and often at jobs that must be done in person, such as those in the hospitality industry or healthcare – that, too, is changing.
“Being on the front lines for so long, especially the past few years, has given hourly workers the opportunity to now advocate for themselves and decide what’s best for them and their families, says Instawork CEO and co-founder Sumir Meghani, whose company provides an online marketplace connecting local businesses with talent. “ I think flexibility is a permanent change that’s happening before our very eyes.”
Instawork, which was founded in 2016, has witnessed this shift firsthand. From the outset, the platform was a welcome change for employers and talent who relied on word of mouth, window signs, or job boards to find one another. The company has become an increasingly necessary partner both to businesses that struggle to find high-quality talent in today’s extraordinarily tight labor market, and to professionals who want more autonomy and freedom with their work schedule.
The company also has a valuable vantage point into the changing dynamics of the labor market. Although millions of people now find employment on an hourly basis via apps, they aren’t counted in the Labor Department’s standard data-gathering efforts. So Instawork is filling in that gap: in January, the company launched an economic research division, and is finding there is much more to the narrative about today’s workers – and the overall economy – than what is known from observing payrolls.
Greylock general partner David Thacker, who led the firm’s investment in Instawork’s Series C round, recently sat down with Sumir on the Greymatter podcast to discuss the new world of hourly work. This episode if part of our Work From Anywhere series exploring the future of work. You can listen to the interview on our YouTube channel here, or at the link below.
EPISODE TRANSCRIPT
David Thacker:
Sumir, welcome to Greymatter. Thanks so much for joining us today.
Sumir Meghani:
Thank you. It’s great to be here.
DT:
All right. Well, let’s get started. Let’s hear about Instawork. Can you give us a high level description of the company and tell us where the company has a presence today?
SM:
Yeah, so Instawork is a flexible work platform. We connect local businesses who need staffing with over one and a half million hourly workers around the country. And so, for example, if a hotel or restaurant needs an extra bartender for the weekend or a warehouse needs to scale up to deal with a big order coming in, they can tap into our marketplace.
Skilled hourly workers – or professionals as we call them, the businesses we call partners. They pay us and we pay the professionals instantly after the shift is over. Instawork is live in 25 markets today, and that number is growing every month. Internally, we’ve got a growing global team across seven countries.
I want to emphasize growing, David, we’re hiring in every function. I just want to highlight that we’re all really excited to be part of this vision to create economic opportunity for local businesses and professionals globally.
DT:
Great. Now, you and your co-founder started Instawork in 2016; I think you went through Y Combinator. At that time, the gig economy had been on an upward trend for a few years. Why did you decide to launch a company then? I mean, what made it the right time to launch? Where did you see your entry point?
SM:
I grew up near Detroit. As you know, David, my parents were small business owners. They had immigrated here from India. I have vivid memories, whenever they have a surge of orders or someone not showing up, I get this phone call to come over to the office. And so, the earliest memories I had from the start of my career was helping my parents manage through labor shocks, when my mom would come pick me up. And by the time I was in high school, I’d have a car, and they would tell me to come on over.
If you fast forward to our experience working together at Groupon, David… We’re going to date ourselves here, so for those listeners who don’t remember Groupon, Groupon created marketing campaigns to help a lot of small businesses like restaurants get new customers and fill empty seats. I still remember sitting in the dining room of an Italian restaurant here in San Francisco in North Beach with my team when I was at Groupon, and we’re meeting the owner. We were pitching her on running a Groupon. The restaurant was maybe one third full, 100 empty seats. David, I remember, our team pulled out this ROI analysis on why the owner should want a Groupon. There were empty tables. This seemed like a no-brainer. We had examples already of similar businesses nearby that had succeeded with us.
She stopped us 30 seconds in, and we were confused. “What did we say? What did we do? Why won’t you let us sell you on this?” And she pointed to a sign on the window, and the sign read “Nosotras necesitamos lavaplatos,” which in Spanish translates to, “We need dishwashers.”
It struck me: Here is a business that couldn’t handle more customers because it lacked the basic infrastructure any business needs – quality talent. And quality talent is as important to Greylock or Instawork or any other business that wants to be successful. This owner, she didn’t need more customers, she needed more staff to handle the customers she was already getting.
At that moment and over the coming weeks and months, I reflected on that problem and realized the labor market for hourly workers was quite broken. The mechanism to find hourly workers or to get a relevant job were basically a sign on the window, word of mouth, a job board, maybe a staffing agency if you’re big enough.
With all of these solutions that I just mentioned, there are a lot of challenges of high search costs, distributed quality signals about both sides that didn’t exist online, and most of all, lack of a good mobile-first interface, which was increasing what both sides were using in their lives at that moment.
DT:
Yeah, no, that’s really interesting. I mean, we see this with all types of businesses. I can certainly see a small business like a restaurant, but even a Silicon Valley startup, they can’t grow their business faster because they just can’t find the right talent, right? There’s such a scarcity of talent for any type of skilled professional job.
Let’s talk about other platforms you may have looked at as you went off and started the business. I mean, there’s been some innovation in this space for the last few decades. Were there things that, in terms of hiring platforms, that inspired you, that you thought had done a good job? And also, are there things that showed you what not to do?
SM:
Well, there are certainly several companies or movements that have inspired us along the way.
First, we’re not the original company to evangelize flexible work. I think Upwork and Hayden, they’ve done a fantastic job promoting this. Hayden’s a great CEO. LinkedIn, of course, David, where you were an executive, it invented this notion of building professional identities online, which I think is super powerful and really drives a lot of our product thinking.
Finally, years ago, I remember Matt Kohler spoke about this idea of the mobile phone being the remote control for our lives. It really couldn’t be more true. We’re seeing that today. We use our phones for everything. We spent a lot of time thinking about why we can’t leverage that remote control, that technology to help people find work, make extra money. Some of the most popular apps we use today use technology to solve the challenges I mentioned earlier. Uber is lowering search costs by matching you with a car at the touch of a button. You don’t need to wait outside to hail a cab, and drivers don’t need to drive around aimlessly waiting for their next pickup. Everyone is better off because of easier onboarding, better matching. The smartphone really makes this easier.
With a lot of these platforms and marketplaces, especially where supply is more heterogeneous versus homogeneous, quality is very critical so you can make the liquidity high fidelity, high quality. So, that really inspired us at Instawork to assess and develop our talent pool of pros around quality.
We collect dozens of data points around our pros. [This includes] areas like skills and certifications and attitude, reliability, job performance, and more, and then our team of data scientists and engineers use this data to improve the quality of their skills by identifying training opportunities for them that’ll help them increase their earning potential and get access to more work opportunities.
Every Instawork pro is making a profile of record where they can add their experience and their qualifications. And today, all of these signals are really scattered, offline, across many sources. And so our pros, their profiles get stronger, they pick up new skills, complete training, build their reputation, and grow their network. And then this also helps them separate signal from noise as they look for new roles and opportunities on Instawork that may be a good fit for them.
DT:
Yeah. I can see how the pros on your platform could build a really rich profile which would help them find other relevant opportunities in the future.
There’s been systems in place for job seekers for a long time. I mean, there’s been online job boards that have been targeted at hourly workers, but Instawork really changed the game for the hourly workforce, and you’ve streamlined the process of finding work opportunities that leverage these skills and experience on the profile you’re building. And it’s so critical to have a great product experience that’s intuitive and easy to use for these job seekers. How did you approach building a platform that was attractive and easy to use from both a business and a worker perspective?
SM:
Yeah, one of the big lessons from the early days, in Y Combinator especially, is to spend a lot of time with users and doing customer development, and so we did a lot of that. After reflecting on our early journey and the conversations we would have with partners and pros regularly, it came down to really three things that matter to both sides: quality, reliability, and convenience. And these three tenets really became our value proposition for how we craft great products at Instawork in how we solve problems.
Let’s take local businesses, for example. What do they want when they’re looking for stunning colleagues, David? They want great workers who can actually do the job at hand, they’ve got the right skills, the right attitude, the right expectations. They want colleagues who show up on time, and they want a system that’s really easy to use, it’s very convenient. And so, it’s really about quality, reliability, and convenience.
I’ll jump to the pro side, the workers. We give them the quality and flexibility that they’re looking for. We did a recent survey, and 90% of our pros said flexibility was the single most important reason they’re using Instawork to find work.
The app is really high quality for them as well because they know exactly what they’re going to make, what the job responsibilities are. When they accept a shift, there’s no smoke and mirrors around how much money you’re going to make, and the wages are significantly higher than alternatives.
And so, when it came time to think about how we solve our users’ problems, our first principles approach was really just rooted in fundamental roots that we believed would never change.