Will ‘Moonlighting’ Startup Help Newspapers Regain Classified Revenue?
When we think of online job sites, we think of Craigslist, Indeed, Monster, CareerBuilder. But what about Moonlighting.com? It’s a three-year-old startup that caters to the fast-growing gig economy, where handy people, dog walkers and piano players (and tuners and movers), among others, connect and bargain with their hirers.
Three major local newspaper groups — McClatchy, Gannett and tronc — are partnering with Moonlighting to build a new, mobile-first base for their job classifieds, which were a big revenue source in the print era but have been devastated by new-generation digital sites. The partnerships include a $2.3 million investment in Moonlighting by the three news media companies.
In this Q & A, Jeff Tennery, founder and CEO of Moonlighting, talks about the growth of his firm and why it fits into the digital-mobile strategy of local newspapers:
How big is the gig economy?
It’s worth has been estimated at $1 trillion and it involves 50-60 million people doing freelance work.
Your company has signed up 600,000 freelancers in its three-year existence. What’s your growth target?
Our original plan was to reach 7 million users by 2020. With our upcoming initial coin offering we believe we can accelerate our timeline and reach that much earlier. We are seeing interest to expand our platform globally, and if we execute properly, could reach 5 million users by end of 2018.
Moonlighting has been called the “Uber of everything.” But isn’t your company very different from the digital ride-hailing service?
When people think of the gig economy, they often compare companies to Uber as many companies refer to themselves as the “Uber of this” or “Uber of that.” And over the past five years, investors looked for startups to cop the Uber model. We started with the model, but became disillusioned for two reasons.
First, it was going to take too much capital to execute. The second problem was the payment process – taking a slice of every freelancer’s paycheck, like Uber does with its drivers, is very unpopular. And it causes freelancers to go off line and circumvent your platform. Taking 2% or 3%, to cover credit card fees was one thing. But when we tried to take 10% to make a little bit more money, users fled the platform. When you start messing with people’s paychecks, they start leaving your platform and we didn’t want to be in the disputes business when business goes awry.
So what did you do?
We pivoted and opened up our platform, just as we were engaging the news media companies. Working with our news partners, we developed a new revenue strategy by adding advertising and subscription services for freelancers and hirers. We began monetizing both sides of the marketplace — offering helpful solutions to people who wanted to be hired and the people who wanted to hire them.
What’s the next step?
We’re introducing blockchain technology to help make the platform more trusted and more democratically governed. Once we have blockchain in place, users profiles and the tools they use to manage their freelance business will be portable and governed by the open freelance community. Transactions, reviews, recommendations will be “immutable,” as the term is used to describe the process, and place reputation management in the hands of the marketplace itself. This will make for a more authentic and safer hiring experience for all parties.
You are creating your own crypto-currency with this technology. What do you call it?
The Moonbit. It’s a token that can be used to advertise jobs and services on our platform, and make and receive payments. One of the key benefits for users is that they won’t have to give up 20% to 30% of their paycheck like they do in other gig-economy marketplaces. With our Moonbit token, those who freelance will be able to receive payment without having to pay a commission or expensive bank and currency exchange fees associated with international payments. This will be important as we look to expand Moonlighting globally in 2018.
Beyond your relationships with McClatchy, Gannett and tronc, are you working with other companies in the news media?
We have commercial relationships with Gatehouse Media and Digital First Media, and will be announcing new international partners in Q1 of 2018.
To connect with freelancers, why didn’t you just focus on a relationship with Facebook?
We did initially reach our freelance audience using Facebook on the supply side of our marketplace. Meaning millennials using social media are typically gig seekers and were attracted to our platform for employment but not as much for hiring. But once we started marketing through our news media partners, we were able to tell our story to an older, more affluent audience who not only sought gig opportunities but also used our platform to hire.
The demographics for local media readers is strong, and in the communities they serve trust is very high which has helped Moonlighting establish credibility.
What’s the worth of your transactions over, say, the past year?
We’ve helped freelancers and small businesses generate $50 million in transactions over the past two years.
What about expansion beyond the U.S.?
In 2018 we’re going to expand operations to Canada and the U.K., and Latin America with several partnerships to help us build native solutions for those countries.
Here’s how Chris Hendricks, the just-retired corporate vice president of strategic initiatives at McClatchy who helped to engineer Moonlighting’s partnership with his former company and Gannett and tronc, answered questions I put to him about the emerging freelance platform and the potential of its relationships with daily newspapers:
Can gig-type firms like Moonlighting be a significant new source of revenue for newspaper companies to replace traditional job-related classified advertising that was so strong in the print era?
When I started in media, and yes, I’m dating myself, gig-type jobs were commonly found in daily and weekly local newspaper classified advertising sections. Gig-ers paid to advertise their services to the vast readership base of these publications. The exchange was efficient, given people needing a job done simply called the gig-er and set up a time to get the job done.
Today, the existing marketplace is digital and there’s still plenty of opportunity for media companies to garner market share and revenue in the space. Moonlighting’s exchange coupled with media companies’ reputations and vast reach is a solid path to developing new and solid revenue streams from the gig economy.
What would prevent craigslist or similar firms from moving into this new marketplace as competition to McClatchy and other newspaper groups that are part of the Moonlighting story so far?
The objective is to quickly move forward with a top-technology company and leading media partners focused on leveraging collective strengths to delight users and drive results. Others may elect to move or have moved into the gig-economy arena but I believe Moonlighting’s platform and the company’s maniacal focus on users, both supply and demand side, coupled with its partners’ vast audiences and sales expertise, create a formidable challenge to competitors.
Moonlighting’s next step is to adapt the blockchain technology with its Moonbit token. Do you see blockchain technology having any significant role in how newspapers adapt to the digital space?
I believe blockchain and crypto-currencies present a significant opportunity for media companies in quite a few areas. In the past few months, for example, I’ve run across startups already creating block-chain-based products for consumer subscriptions, content syndication and advertising reconciliation. It’s still early, though, and while media companies won’t be at the vanguard in this area, they’ll be quick to adopt the many opportunities available. Moonbit is a fine example of how media companies, whether partners, investors or both, will and can stay close to emerging and valuable opportunities.