Guest: Alex Marlantes, Cofounder and CEO of Everlance
Air Date: August 21, 2018
Chad: Hi everyone, my name is Chad Nitschke, cofounder and CEO of Bunker, and also host of this podcast, Ready. Set. Work. Ready Set Work is a podcast series that focuses on the future of work, specifically highlighting all different perspectives, from the gig economy, to on demand platforms and more. Join us each episode to hear from thought leaders paving the way toward the future of work
Chad: Hi everyone, we’re here today with Alex Marlantes, Cofounder and CEO of Everlance. Alex, thanks for joining us, we’re excited to highlight your work with Everlance. Maybe to kick things off could you just describe Everlance, and how you’re all contributing to the future of work?
Alex: Sure, thanks, Chad for having us. Everlance is an app that allows people to automatically track their business, revenue and expenses. As more and more people become independent workers, we help them track their revenue and expenses, and taxes.
Chad: Cool, and I’m curious, how did you come to realize that that was a pain point for independent contractors and the self employed in general, and then ultimately, maybe, what inspired you to solve that specific problem?
Alex: Yeah, great question. So, actually, my dad growing up was a novelist, and so he would be working on books, and in the interim he’d have consulting assignments, things like that. And I actually remember sort of growing up, my job would be to sort of key in his expenses into Excel. So he was trying to figure out, like, hey can I deduct, you know, this piece of software that I bought, or other things like that, and one thing that always stood out to me is he would keep a paper mileage log. And so one of the larger expenses that we help people track is actually their vehicle mileage. You get a standard deduction of, today it’s 54 cents per business mile, and he would write in a from location, a to location, a date, a time, sort of all these details, and at the end of the year he would deduct those miles against his business. So I just remember, sort of, I think that was in the background. And then my sister actually became an actress in Los Angeles, and if you’re an actress, you’re really sort of a caterer, a nanny, a this or that, she had all sorts of independent income, and it just seemed like this big thorny problem that technology would be so good at solving. And so i think that was sort of in the background. And the I was coming of professional age in San Francisco, and a lot of my friends and peers were joining these really exciting companies like Uber or Airbnb, you know, Lyft, you all these things that participate in the gig economy, and so I initially thought there would be an opportunity to sort of help build the infrastructure behind all of those opportunities.
Chad: That’s great, so you effectively has some family members maybe that were like beta testers of kind of an early version of what you ended up building?
Alex: Yeah, that’s right. My dad’s certainly not a techie so he was a great person that was like, alright, if we can convince him that this is easier than the old habit, we thought we’d be on to something.
Chad: That’s really cool. Alright, so this might seem like a simple question, but I’m always a little surprised by how varied the answers are. When you think of Everlance and kind of the problem you’re solving, how do you define an independent contractor? And effectively I guess, what does that term mean to you?
Alex: Yeah, we think of it quite simply as someone who has 1099 income rather than W2 income, so we sort of draw the line there. We also help small businesses that might have a few employees, or for the sole proprietors sort of keep track of expenses but for us it’s just simply a tax definition.
Chad: Gotcha. No that makes sense. And I know you have a really large base of self-employed professionals on the everlance platform, and I think you’ve publicly stated that, I think, you have over 300,000, is that right?
Alex: Yeah, I think the last number we put out there was 400,000, towards the start of this year.
Chad: Wow, that’s great. And I’m curious, can you describe maybe what the typical customer looks like, if there is a typical customer on the platform?
Alex: Yeah, one thing that’s really surprised us is actually just how long a tail it is. You know, when we started this we thought it would be mostly sort of gig economy labor platforms, so Uber, Lyft, taskrabbit, doordash, postmates, those kind of folks, and it’s been really fun to see that there’s this huge huge economy that’s sort of been traditionally underserved beyond that, so people that work in home services, real estate agents, you know, nannies, wedding planners, wedding photographers, and now we’re even seeing sort of architects and attorneys. The number of people that want to either work for themselves, or to work as an independent contractor has really exploded.
Chad: And I’m curious, so you guys have a lot of experience then, with over 400,000 users on the platform, and what are some of the common questions that you get from independent contractors, and it would be interesting I think to have a little lens inside of the voice of effectively your customer.
Alex: Yeah, that’s a great question. So, a lot of times we’re introduced to a user when they’re doing independent work for the first time. So you might imagine that you were a W2 employee, and you had a job, maybe you worked at Starbucks or something like that, and all of your taxes were withheld, everything’s really straightforward, you get a paycheck, and you probably get a small refund at the end of the year, and that’s it. Maybe that person, their passion is to be a musician, and they start to get more gigs, so they might start to have independent income like that, and they think like hey, I might as well make a go of this, I want to become a professional musician. Maybe I can fill in, sort of, the low seasons, you know if they’re not getting gigs in the summer, by driving for Uber and Lyft, and delivering for Doordash. And so now, all of a sudden, they have four income sources, right? Music, doordash, Uber and Lyft. And at some point they might realize, or they might hear from their partner, hey you have independent income, you also have an independent tax obligation, we’re not withholding any taxes for you, and because it’s sort of this independent labor platform, they don’t really want to do too much education to those users because they’re worried about the employer employee status. They really want to make sure that relationship remains independent, so that’s when we’ll come in. They’ll either hear about us from the labor platform, who will provide us as a resource, or they’ll hear about us from a friend, or through like a search through the app store, google or something like that, and then really the questions they have is like, hey, what does it mean to have independent income? How am I supposed to pay taxes, how many taxes am I supposed to pay, we get a lot of questions like that. So, I’ll pause there but another interesting area that we’re starting to get questions on with regard to taxes is, as people’s business becomes bigger, they’re supposed to pay quarterly taxes, and so there’s a lot of confusion in terms of how to pay quarterly taxes, how much taxes to pay, whether they need to do it, those kind of things.
Chad: Yup. And is it fair to say, I mean I kind of see that as one of the barriers for independent contractors to work that way right, to have that flexibility, is, like, taxes, you know one example, and is that effectively kind of how you look at your business partially, at least, in terms of removing that barrier for them?
Alex: Yeah, I think that’s a great way of looking at it. You know, one of our hopes is, we think the trend towards independent work is, sort of, inevitable, and can we help remove some of that friction. And so one of those friction points today is just the way that the tax system is set up, you’re your own sort of one man tax authority, and that’s just a pain. And so can we, sort of, remove that pain and have that experience be just as seamless, whether you want to work for yourself or work for a large employer.
Chad: Got it, no that makes sense. And then I want to touch on something that you mentioned, so, some of your customers come through, like, referrals, maybe from friends they have that are independent workers, and then others come from the actual platform themselves. Can you talk a little bit more about how you partner with platforms and maybe that part of your business?
Alex: Sure, it can be anything from, we’re just a resource in their help center, so when someone has a question around taxes – to manbe give you a little extra context about what our app does is, essentially we replace the paper mileage log and the shoe box of receipts. And so it’s an iPhone or an Android app, we’re also available as a web app for your desktop computer, and so instead of recording all of those things, Everlance is automatically recording all of your mileage in the background for you, and then all you need to do is look at a feed of cards and swipe one of those cards to the left if it’s personal and you don’t want to claim it on your taxes, or you swipe it to the right and claim it on your taxes, and all the other data, the from location, to location, the gps map is recorded for you on the transaction side, very similar, you link your credit card to everlance, sort of like, you can think about it like mint or clarity or one of those apps, and then you see a feed of all your transactions, and Everlance will actually proactively go through and sort of help you understand what might, or might not, be a business deduction. So, if you thought you could deduct your cell phone plan, because you need your cell phone in order to do your independent income, Everlance will help, kind of, show you that. Or even more creative sources of deductions, and so a lot of new independent workers have questions around what they can and can’t deduct, and so we can show up in a help center resource. For some of our partners we can even be included in onboarding which is something, of course, we love, but there’s really a range of the things we can do.
Chad: No that’s great. And shifting gears a little bit, so we all know that the gig economy is growing incredibly fast and I think resources, so kind of similar to what Everlance is building and even more broadly than that are still playing catch up. And so I’m curious from your perspective of engaging with over 400,000 independent workers, where do you still see the biggest gaps are in terms of resources that need to catch up?
Alex: Yeah, I think just understanding your business is a big one so, you know, that’s something that we try to help folks with, so understanding how much money you’re actually making, I think that’s really important. One of the things that we see is that as a category, it tends to be high churn, and I think that part of the high churn is that people aren’t really making as much money as they hoped or they thought they would once they internalize the costs associated with the income, how much time it takes them, all those kind of things. So we try to help people sort of see those things. And I think another interesting area would be insurance, so I’d love to ask you, you know, for a typical gig economy worker, what kind of insurance products do you think they’re missing, or what would you want to see available to them?
Chad: Yeah, great question, I mean it’s definitely one of those areas that is emerging that – you know the insurance industry hasn’t really kept up with the pace of change of the gig economy, or the future of work, and as you know there’s a lot of regulation involved in insurance and so it takes time. The good news is, there’s selfishly speaking, companies like Bunker, but then other companies that are really pushing forward to kind of lean in and drive some of that regulatory and just product changes that are necessary. But yeah I would still say it is very very early days when it comes to that. And our goal is, maybe similar to everlance, in that we want to remove insurance as a friction point in the onboarding process, but then also make sure that the worker has adequate protection, and ultimately benefits that they might not get working independently naturally, so we think about it, I think probably somewhat similarly, solving a different pain point, but yeah no that makes sense.
Alex: Yeah, one product, you know just thinking out loud, that I think would be awesome for the industry, and I’m not sure if it’s an insurance product or something else, is just allowing sort of like work continuity. So I think one of the things that’s scary about being an independent worker is you don’t have an employer that sort of understands your situation and will continue to pay you if something bad happens. And so if you get in an accident and can’t drive, and you’re an Uber driver, those three weeks of income can be crippling for you, you know? Especially if you’re sort of close to the wire on a credit card bill or a rent payment or something like that. And I think, across the spectrum, whether you’re an Uber driver or a software engineer at home who might get sick and not be able to work for a few weeks or months, you know I think that’s really interesting, and I also think that as industry participants can offer products to make independent work less scary and more appealing, more and more people will become independent workers, which will attract even more people to offer products at lower costs and I think if things go well, it will be a sort of virtuous cycle that kicks off and allows more people to do independent work.
Chad: Yeah definitely. And I’m kind of curious, so if you weren’t building Everlance, what do you think you would be building in terms of helping the future of work? What problem would be most enticing for you to solve?
Alex: That’s a great question. I think, hopefully we can actually tackle some of those problems with Everlance, I think where we want to start is really kind of become the independent worker system of record, so, you know, how much money are you making, how much money are you spending, who are you spending that money with, and then I think actually if we can really sort of nail that – I think it’ll take years, you know it’s not a simple problem – and help them organize all their data, once that data’s organized, maybe we can help them make better financial decisions or decisions on how they’re gonna work, where they’re gonna work, so actually, I think, hopefully, some of those things we can do with Everlance, it’ll just be a few years from now.
Chad: Yeah, I mean it kind of feels like one of the questions I was going to ask you is maybe, where you see some of the biggest impacts from technology have been in the gig economy, and it kind of feels like what we’re talking about here, I mean there’s been a lot of advancements with technology and helping workers find work, and helping organizations find workers, so kind of the marketplace impact, but now it’s maybe the next extension of that is focusing on, how do we help those workers work effectively and be protected and have resources and have training and I’m curious, how do you – I guess one, do you see it similarly and do you have any other, kind of thoughts on that?
Alex: Yeah, 100%. Couldn’t agree more. I think one question that we have is, I guess like as the industry evolves, how many of those resources will be provided by the labor platform and so if you’re a labor platform and you’re basically matching a buyer and seller, if you can provide more guarantees, and make life easier for both parties it could be payments, like you’re going to facilitate the payment, but it could also be like work protections. I think that could be really interesting, versus will the marketplaces sort of remain independent, and be like look we do a fantastic job of matching buyers and sellers, but for all these other things like worker protections, or taxes, or tools you might need for your job, you’re out on your own, I think that’ll be an interesting area to watch, because there’s also sort of – it’s not just just cut and dry business, like what makes good business sense or even what makes good social sense in terms of helping folks, there’s also layers and layers of laws and regulations that make it difficult for some of those labor platforms to provide those things.
Chad: Yup, no that makes sense. One question, a little more specific to Everlance and the problem that you’re solving, so I’m curious maybe what has been the biggest surprise or unexpected thing that’s come up from the day you started the company to fast forward to today?
Alex: Yeah. I’d say two things. I’d say the first thing is, my cofounder Gabriel, he’s our CTO, we were in business school together, and he had started a business before that helped small businesses in Latin America and the US build their first website. Kind like a Wix or Weebly if you’re familiar with those. And I think he had internalized a lot of good habits about just sort of following the user and seeing what’s important to them. And when we first launched Everlance, we thought the most exciting data to organize would be transactions. You know, the idea that all of a sudden, for the first time, a user could link their credit card, we could see those transactions and help them sort through and see what would be a tax deduction and what wouldn’t be and what their true income is and stuff like that. We thought that was a really exciting problem to solve, and also just a really rich set of data to start working with, and we did some interviews with folks and they said hey, for my job as a gig economy worker, most of my expenses are actually mileage. You know, so if I’m earning $40,000, I might have $8,000 in expenses, $6,000 is my mileage – which is comprehensive of the gas you put into your car, maintenance, wear and tear, license and registration fees – and then $2,000 is sort of everything else. And we’re like oh, wow, like that’s interesting, and I could sort of remember my dad having a mileage log, and so we built a mileage tracker that was a really simple mileage tracker, and it just sort of had like a crazy amount of usage. So we kept iterating on it, and he was a big proponent of like, hey people really seem to be needing this, let’s sort of keep refining it, let’s make it fully automatic so your don’t need to hit a start button or a stop button. And so I think that was a big surprise, where I think, we thought, what would draw most people in would be transactions, and now we’ve spent 2+ years like really starting to refine transactions and we’ll be coming out soon with some very exciting, sort of, new ways to automatically process all of the transactions, but I’d say the first surprise was that mileage was this thorny problem, and I think it’s something that you don’t really think about unless you have that job, or maybe you’re a travelling salesperson. And so I’m really thankful that we, you know he kind of saw that insight and we spent a lot more time on it because it’s a hard problem to solve elegantly. And I’d say the second one is just like the long tail of work. I think we’re always surprised by what people do, and it’s shocking like how many dog walkers there are, or we’ll see all sorts of crazy jobs like people who are like crawfish fishermen, you know, and they’re driving around, like picking up crawfish traps, like wow I didn’t know that that was a job, you know? And so I think, just the variety of independent work and where they’re doing it, you know, all around the US, that’s been kind of a fun surprise.
Chad: Yep. And that’s actually a great segue into the next question, so if you think about like, basically predicting what is the gig economy going to look like in, let’s say, 5 years, and what do you think some of the biggest changes will be
Alex: I think one change will be, there’ll be many more types of gig economy work, so the gig economy, like we said, we kind of just think about as a labor marketplace, it’s a way to match someone who wants to sell labor, and they get to pick how much labor they sell, which is amazing. It makes it so flexible, it’s like hey, I want to drive Uber for 1 hour or I want to drive for 6 hours, I don’t want to do it this day or the other day, and so if you’re a stay at home dad, or an entrepreneur, or someone bootstrapped to another business, that’s so valuable. I think that value also applies to other types of labor besides rideshare, delivery or home services contracting. So, I’m excited to see what else, sort of, comes up and I’d imagine it’s going to, sort of, hit every angle of the economy, so whether it’s attorneys doing part time legal work, and all of a sudden an attorney doesn’t have to work at a big law firm in San Francisco, and have an expensive mortgage, they can live in, you know, Boulder Colorado and like enjoy a higher quality of life. Or whether it’s piecemeal design work or consulting work. I remember looking at jobs on hourlynerd when I was an MBA student – I think it’s called Catalant now – and I thought that was a really fun example too, that you can have – you can sort of gig economyize kind of anything and everything.
Chad: Yeah, no I completely agree, and I think fast forwarding five years, I just think it’ll become more of the norm right? It’s just one of those maybe generational changes where you’re seeing different elements of this emerge today where you have, you know, people that are full time gig workers, but then you have people that are doing it as a side hustle, then you have people that are underemployed that use it to kind of augment their income, and I really do think that over time, that’s going to be more of, kind of the cloth of society and how people think about working, it’s this ultimate flexibility
Alex: Yeah, so I think one thing that’s interesting that I don’t know if you guys have thought about this at all, and it has nothing to do with our business, but like how do people differentiate themselves and earn higher wages as a gig economy worker, right? I think one of the dangers of a marketplace is it’s going to make everyone put in the lowest bid right, so hey, my hourly rate isn’t 20 it’s 18, and if that’s the lowest rate, the most people will look at me on UpWork or any other sort of marketplace. But I think in order for it to be like a healthy, awesome, sort of long-term thing for people in our economy people should be earning more money as they gain more skills and, I don’t know if you have any ideas, but I think it’ll be interesting to see how folks learn how to differentiate themselves and justify higher rates so they can have similar economic progression that someone would have climbing the corporate ladder
Chad: Yeah, I definitely, I agree, I think there’s an opportunity there, and I don’t have a great answer for you on that one, I mean part of it, I guess just my opinion, could be around just expressing how independent worker reviews – so like independent workers that have done a great job, I think there’s an opportunity for that to be demonstrated even more kind of within a marketplace environment. So like for an example if I’m going to hire a graphic designer, or the crawfish fisherman right, like how am I going to find the best talent and ultimately be willing to pay for it, and I think that’s one opportunity is maybe marketplaces can do a better job of drawing out, like, who is that top quartile worker on their platform by that specific opportunity or problem that they’re solving.
Alex: Yeah. I like that idea a lot it’s interesting it’s – I was talking to a friend who thinks about, kind of like, the future of education and one of the things he says is that colleges and grad schools do – you know, half of it’s Wikipedia, right, it’s just sort of teaching people stuff which they could just learn on their own, and the other half is credentialing them. So if you went to a fancy, well known school, everyone’s like oh, you know let’s hire him or her. That makes sense. And I think, you know, a rating is very simplistic, you know 1-5 stars, but it’s kind of similar, so it’ll be interesting to see how people get more nuanced and allow people to sort of have a badge of the great work that they do and get credit for it.
Chad: Yep, definitely. Cool, well is there anything else that you want to share with our listeners just about your experiences, or just general observations with the future of work?
Alex: Man, well I’d love to hear from folks. If anyone has any thoughts, we help freelancers, independent contractors, solopreneurs, track their revenue and expenses and we’re excited to see what we can do after that. So if you need expense tracking, please check out our app, you can search for it it’s just everlance, or if it’s a space you’re excited about and you’d like to chat, please feel free to shoot me an email, I’m Alex@everlance.com.
Chad: Alright, so that is a wrap, a huge thank you again to Alex for taking the time to share his experiences with us here on the Ready Set Work podcast. And of course to all those gig workers out there, just keep hustling, because like Alex and I talked about you definitely are the future of work. And, as always, thanks to our listeners, if you have ideas, thoughts for guests, or suggestions for future podcast topics, please reach out. Tweet us @BunkerHQ using the hashtag #ReadySetWork, or email us directly at email@example.com. Alright. Back to work.
Next Episode: “How to find a Steady Gig” ft. Adam Roseman, CEO of Steady