Call to Action: The On-demand Business Model

New technology waves ultimately force all companies to hop on for the ride or get left behind. The force of such waves has increased over the past decade, laying waste to outdated business models, while vaulting disruptive entrants to leadership status.

To catch a glimpse of one oncoming wave, Toptal Insights recently sat down with Paul Estes, Senior Director Office 365 at Microsoft. Opening the discussion with a look back over recent trends that have propelled the most valuable companies in the world into their current position, his message is clear:

“Companies had to have a personal computer strategy in the 80s, an internet strategy in the 90s, and a mobile strategy in the 2000s. In 2018, companies need to have an on-demand strategy.”

For enterprise companies, the on-demand business model means establishing the necessary relationships, infrastructure, workflows - and critically - cultural mindset. With these elements in place, they can access the increasingly rich pool of workers who intentionally work remotely, for multiple companies, and on a project-by-project basis.

According to Estes, companies should embrace what he calls the “gig mindset,” what he describes as “the inclination for people and organizations to engage on-demand, expert intelligence to reclaim time, drive innovation, and rethink what is possible.”

In this article, we explore practices that have been transformative for Estes in both his work and personal life, and which he prescribes to companies aspiring to leverage the on-demand economy.

Customer-centric innovation targets the right problems

Technological disruption, the common thinking goes, kills outdated business models. Recent tombstones support this assertion: the Netflix on-demand, flat fee model shuttered Blockbuster; the seamless Uber experience rendered cab-hailing a crude act by comparison; Apple Music offered single-song, immediate purchase, reinvigorating music label sales in the wake of illegal downloading.

While disruptive technology appears the deadly weapon, Estes suggests a more potent force in play: extreme customer centricity.

Companies must take a customer-centric approach to innovation. For example, Uber recognized customers wanted - and were equipped to summon - seamless, high-quality transportation through their smartphones.

Estes encourages fellow executives to “look at the pain points in the customer’s business, asking them which KPIs repeatedly suffer.” All companies struggle with at least one critical workstream, and those who expose - and find ways to fix - the roots of these problems stand to secure lasting relationships.

In a customer-centric approach, Estes also recommends reviewing how competition is innovating to relieve customer pain. For example, leaders such as Google rely on crowdsourced efforts to continue refining their AI-driven image recognition algorithms. With human-supported AI, Google draws on historical practices. “Early AI training depended on crowd-sourced support,” notes Estes, “and the use of distributed training helped computers learn to ‘see’ images and ‘hear’ speech.”

Executives must keep their fingers on the pulse of emerging technologies such as blockchain for enterprise applications, and devops for rapid product development. For pervasive challenges such as data security, migration to cloud, and meeting rising consumer expectations, companies should carefully monitor how comparable large enterprises marshall emerging resources.

Cultivate curiosity about on-demand to build organizational momentum

To shift organizational perception, executives must cultivate a culture of curiosity about the on-demand economy. While seemingly obvious, culture drives synchronized action from leadership down to sole contributors. Developing culture requires deliberate, modeled, behavior. As models, executives can directly influence the broader attitude towards the on-demand economy.

According to Estes, thought leaders should “treat on-demand as a trend, just like AI, cloud technology, or any other mega tech trend.” In doing so, they should encourage their organizations to start the conversation around how to harness on-demand talent, in particular.

While freelance labor completes relatively low-value tasks, on-demand talent solves highly complex, value-driving business challenges and therefore stands to most significantly impact the enterprises that engage it.

Treat on-demand as a trend, just like AI, cloud technology, or any other mega tech trend.

To best foster curiosity, nothing beats face-to-face interaction. Inviting speakers to present during informal “lunch and learn” sessions, and traveling off-campus to visit would-be partners are common calls to action. Estes also encourages executives to attend conferences and meetups held by talent platforms and staffing companies, both of which rapidly accelerated his learning and thought leadership position within Microsoft.

Start small and focused

Summoning Simon Sinek in his final piece of advice, Estes reminds executives to “Dream big. Start small. But most of all, start.” For action-biased leaders, this reminder might seem obvious, but they will certainly appreciate the tendency for “analysis paralysis,” particularly when evaluating the best launch point for a new technology.

To shorten this cycle, Estes implores fellow executives to start applying on-demand solutions to internal or customer problems. “Don’t be paralyzed by the law of big numbers,” says Estes, citing the tendency for managers to adopt the mindset of “If I’m not managing a multi-million dollar project, then it’s not important.”

Don’t be paralyzed by the law of big numbers. Start with small budgets and focused projects.

Instead, start with small budgets and focused projects. “Don’t think the pilots will be at-scale,” advises Estes, as most of the successful pilots he sees focus on specific divisions where teams can implement, learn, and then broaden scope.

Sharing recent examples and inspiration, Estes noted a few cases that illustrate how large enterprises are tapping on-demand resources to remain competitive.

Ikea and TaskRabbit - “If you asked two years ago if Ikea would buy TaskRabbit, everybody would have thought “that’s kind of interesting. I wouldn’t have expected that” Yet, according to ReCode, Ikea recognized the opportunity to “bolster its digital customer service capabilities… [with this] first step into the on-demand platform space.”

TurboTax – With its recent TurboTax Live! Launch, the traditionally DIY software-based service now offers a hybrid approach that pairs technology with a network of CPAs. Such “assisted tax prep” meets growing market demand amongst tax filers.

Have your pancakes, and eat them, too

A single ritual can form the rallying point around which to build new habits. “I still make pancakes with my family in the morning,” quipped Estes, as he neatly summed up his motivation to adopt on-demand resources, and thereby free up time for his personal life.

Estes advises those new to on-demand talent to start with their personal lives. Recounting recent personal experience, he faced the competing responsibilities of an accelerating career at Microsoft, and an expanding family at home; Estes faced a decision: burn out or hit the refresh button. He chose the latter, and in so doing, managed to have his pancakes and eat them, too.

Essentially, Estes began to farm out components of his work and personal life that no longer required him to do them. One might think, “Sure, that’s easy. People have been hiring house cleaners and lawn mowers for years.” While such substitutions are thematically comparable, the approach Estes recommends is far more systematic, and as a result, capable of freeing up far greater bandwidth.

“Above all, everyone needs to learn how to build a system. We’re not consuming less information or getting less busy,” says Estes. Building a system means identifying resources and technologies to which we can map our time-sapping tasks, either those that are repetitive and a lower value use of our attention, or those that require specialized skills which can be easily accessed by engaging on-demand talent.

Above all, everyone needs to learn how to build a system. We’re not consuming less information or getting less busy

Estes relies on a variety of talent to work more efficiently in both his home and work life. In the professional setting a consortium of talent helps him complete research, script writing, video work, newsletters, meeting scheduling, and prototype design. Outside of work, Estes relies on similar support to complete work ranging from simple tasks - such as scheduling appointments - to complex project management - such as managing multiple contractor quotes for a home renovation.

Central to such system building is the “network of doers.” Estes has assembled a network of 35 individuals who augment his ability to perform a variety of critical work, often in a more efficient manner, given their specialization.

Finally, when engaging on-demand talent, remember that leadership exists at every level. Although the customary notion of leadership evokes images of loftier titles, a bigger office and larger teams, Estes points out how the concept is evolving with the on-demand economy. “I’ve seen independent contractors manage teams of 10 freelancers and gain all the benefits of managing a system.”

The positive impact seems contagious, as Estes adds “These managers start to see themselves not as a cog in the wheel, but someone with control of their destiny. That attitude then impacts company employees, who recognize that leadership opportunities present themselves every day.”