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Collective CEO on the growth of the soloprenuer industry amid COVID

Hooman Radfar, Collective Co-founder & CEO joins the On the Move panel to discuss the soloprenuer industry and growth in the area due to COVID.

Video Transcript

JULIE HYMAN: "On the Move"-- I'm Julie Hyman. As a lot of folks are working from home right now, many people are also even starting businesses from home, and some of them are solo businesses. Speaking of starting businesses, our next guest also started one to cater to those folks. Hooman Radfar is joining us now. He's the Collective co-founder and CEO. He's joining us from San Francisco.

And his company essentially provides back-office services to people who are so-called solopreneurs, which I have to say is a new term for me, Hooman-- these folks who are starting these businesses and working themselves So what kind of demand are you seeing from these folks who are maybe out of a job or shifting jobs amidst this pandemic and looking for support services?

HOOMAN RADFAR: Hi, Julie. Thanks for having me, first off. We're seeing a tremendous amount of growth. Actually one of the studies that we've recently seen from Upwork is saying that the number of jobs posted for contractors has increased 41% year over year, and that was from Q2. And on our end, we're seeing the same thing at Collective. It has been absolutely astonishing to see how many people not only have started new business, but one of the big surprises for us was that our businesses and our membership are growing. And that was something we didn't expect coming into COVID.

ADAM SHAPIRO: Congratulations on the growth. I'm curious. Help someone who's a bit of a Luddite understand what you mean when you talk about the back-office services. What does that look like in the real world, and how much would it cost me if I wanted to contract with you?

HOOMAN RADFAR: It's a great question, Adam. So in our mind, the core of the back-office service is pretty simple. It's accounting, tax, and compliance, so in lay terms we do all the paperwork so you can focus on your passion. And it costs about $199 per month.

[INTERPOSING VOICES]

- One thing that we're curious about during this time, as we look toward the next generation that's starting to become TikTok stars, they are growing their audiences on all social media platforms. In many ways, they're their own bosses, right? And we anticipate that that will only become a more popular career choice, you could call it, in the future. How do you anticipate this new workflow, this new system in which people want to be able to create their own jobs? Do you think that will be a sustainable, kind of formidable part of the economy, or do you think it will continue to be a niche sort of sector?

HOOMAN RADFAR: Well, I think already you're seeing that it's a massive part of the economy. What we call business of one-- freelancers, gig economy workers-- they've been around for a long time. You may call them other names like realtors, solo practitioners as doctors, dentists, construction workers. It's already, you know, a huge amount of people. I think it's 59 million people are counted as business of one and projected to grow to 51% of the economy.

So I think the creator economy is a huge part of that. You look at services like Patreon, Instagram-- that will continue to flourish. But overall I think this segment is not only today the largest class of entrepreneurs, but I think tomorrow will be the largest segment of the workforce if it continues at this pace.

JULIE HYMAN: And, Hooman, we are seeing sort of early on in the policy evolution to catch up with that structural change that's happened, right? You see some of the policy changes in California, for example. What do you think still needs to happen on a structural basis, on a policy basis, in order to adapt to the growth in this type of workforce?

HOOMAN RADFAR: So, you know, I had the benefit of being an investor prior to my life at Collective, was fortunate to invest in Uber, Convoy, a number of these platforms that have helped spur forward some of the growth in what's known now as the gig economy. And I think right now what's needed is a step back and a view on how you can help these businesses succeed in this new context in the way that they want.

I think, you know, initiatives like AB5-- the spirit is correct, but I think there's going to be a lot of work to do in implementation. You've probably seen in California, there's a lot of debate around-- I think it's Prop 22 and some of the amendments to that. So I think this is going to be a discussion that's going on for, you know, years, and California is the test bed for it.

JULIE HYMAN: Hooman, thank you for your perspective on that. Hooman Radfar is Collective co-founder and CEO. Appreciate it.