AI Enhanced Workforce

AI is going to be changing the workforce and we want to surface the best opportunity for early adoption. We have been reviewing AI marketplaces, infrastructure tools for deep learning developers, and tools for non-developers to leverage the benefits of AI. These models are heavily reliant on access to data and numerous developers building, training, and in some cases sharing machines. More open data sets create more opportunities to start machine learning training.

Data comes from a few places: developers, existing data sets, or scraping/cleaning data from other sources. Developers train on these platforms, build and share so others can replicate/use, and create additional data feedback into the ecosystem. The more people that run the platform’s models or train their models on the platform's data, the smarter the machines get for both the platform and the developer. Marketplaces and model builders require more feedback loops of data into their ecosystems to strengthen them. Building the right concentration of developers and sharing is important to allow more innovation in this field.

We continue to evaluate companies in this space, weighing the team, focus, tech, and target users. Companies are either too early in their concept but we are keeping an open door and others are not differentiated enough in their thinking from existing competitors. We believe the team that is focused on providing accessible machines to the right market will be the winner.

More Benefits For All Employees

In the US, the three largest pieces that contribute to a healthy society are tied to full time employment: financial stability, health coverage, and opportunities for education. As the labor landscape shifts more to part time and contract work, it creates a gap for the 1099 and part time workers seeking these services.

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The chart shows 18% of the employed workforce work less than 35 hours a week. This chart excludes 1099s or part-time employees that work more than 40 hours a week across one or multiple jobs. (Source: https://www.advisorperspectives.com/dshort/updates/2017/02/06/the-ratio-of-part-time-employed-remains-high-but-improving)

Full time employers attract and retain talent by offering easy access to or subsidized plans for the following:

• Health programs: health insurance, disability, workers compensation
• Financial programs: 401k, transportation reimbursement, equity as a non-accredited investor, pensions, stock options
• Training and education: education reimbursement, on-the-job training, specialized skills, learn and earn programs
• Family benefits: child care or reimbursement, paid leave, paid sick leave

Access to these benefits is lost or limited if you are not employed in a traditional full time job. Though government will continue to play a role in providing access to benefits, we believe the more interesting opportunity is for tech entrepreneurs to fill this gap with a profitable and sustainable business to continue to meet changing needs.

The existing market offerings for individuals to patch together benefits, insurance, and financial services are difficult to navigate and still rely largely on paper to set up. Even tools that only cater to full time employees are stuck in a web 1.0 model. The path to change will likely involve many separate players focused on niche services.

A great example in healthcare is Oscar Health. They set out to change the way people obtain health insurance by making it easier to understand and sign up for. They began with a more bottom up approach by selling to individuals first, before they expanded to selling a B2B product. This approach ensured that they were satisfying the needs of individuals, full time employees or not, before expanding to serve employees of large enterprises. They started with any individual before offering a product exclusively for W2 employees. 

Finding ways to make it easier for more people to access these outside of their employment creates a powerful way to serve a population that have the potential to be more loyal to your service than they are to one employer. Already Millennial and Gen Y employees are reported to have 45% job turnover, representing a low percentage of employer loyalty. There is a huge market to be served.

Better online tools, easier administration, and leveraging data across a broad group of customers is still missing for many of these services. Entrepreneurs passionate about the need to serve part-time and contract employees have a lot of room to provide tech-enabled services and build a big business. Those superior solutions may end up creating better alternatives for W2 workers as well. Better tech in employment services and benefits is a win for everyone.

The 1099 Workforce, a Labor Market Opportunity

There comes a point when a high skilled employee reaches a point of deceleration on growth and the career trajectory is focused more on depth of expertise and knowledge. The employee realizes that they could potentially do this work for themselves and the idea of taking the grand leap to setting up an independent practice is exciting and intimidating.

We believe there is an opportunity to serve the highly skilled independent consultant workforce. One of the biggest pain points from people that take the leap to set up their own practice is sales or simply keeping the top of the funnel full and utilization rate high. An engineer is not a specialist in business development or sales as they would rather focus on the work they are best at accomplishing.  

The investment opportunities we seek should address the pain of access to customers and increase in full time utilization.  Unlike the gig economy, which has proven to be mostly true for supplemental income roles only, i.e. picking up uber shifts in off hours.

We are focused on full-time high skilled labor. As an example, we invested in WorkRails, which helps software companies deliver professional services. They are also providing opportunities to qualified expert consultants, which addresses the utilization rate pain point. WorkRails does much more for consultants to increase utilization, manage payments and eliminate marketing costs. They let the consultant focus on the delivery of their work freeing their time to do more.

People want to focus on the work that matters to them, not the sales pipeline, back office pains or administrative burden. We continue to review more interesting startups, marketplaces and creative concepts that address the potential of highly skilled talent to set up their own practice. If you are addressing this pain in any form, then we would love to hear from you.