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An online startup makes waves in the professional services market

An online startup makes waves in the professional services market
Written by publishing team

SkillSetz—a software startup that specializes in matching freelance consultants, tech professionals, and other service providers with businesses looking for help—is making a name for itself in a crowded field.

Think Amazon and Linkedin in blender. SkillSetz is the juice you’ll get.

Matt McCarrick, CEO

SkillSetz

“Our goal is $100 million in project business in 2022,” asserts founder and CEO Matt McCarrick, who founded SkillSetz in 2018 and launched the online marketplace in January 2021. “We are very ambitious, we don’t play here.”

Matt McCarrick, CEO of SkillSetz: “We make source-to-pay for professional services a true e-commerce experience.”

With just three full-time employees and 22 subcontractors, Naperville, Illinois-based SkillSetz has so far 40 service providers as clients. But there’s a lot more in the pipeline — McCarrick expects the company to have 500 to 600 by March plus “a few thousand” buyers.

SkillSetz has also attracted investment from a larger company in the same industry, and did not mention MBO Partners Inc. MBO has publicly announced the size of the investment in SkillSetz, but an MBO spokeswoman says she will soon have more information about the startup.

Targeting small and medium businesses

With a background in procurement, McCarrick held various senior executive positions from 2013 to 2018 at BuyerQuest Holdings Inc. , a provider of purchase and payment technology platform acquired by ODP Corp. last year. ODP operates the Business Solutions B2B platform for selling office products to businesses of all sizes, and is the parent company of the Office Depot/OfficeMax series. (ODP announced on December 31 that it had sold its technology services company CompuCom to a subsidiary of Variant Equity in a deal worth up to $305 million.) McCarrick says he left BuyerQuest to launch his own advisory firm, JAG Advisory, to generate income and raise money to found SkillSetz. “I wanted to address what I thought was a huge gap at the time, which was the automation of professional services expenses,” he says.

Citing Dun & Bradstreet First Research estimates, McCarrick sees the market opportunity for SkillSetz as 488,000 small and medium-sized players in technology services, architecture, engineering, consulting, advertising, marketing, human resources and graphic design. Combined, these companies generate $706 billion in annual revenue, according to D&B.

But there’s no shortage of platform providers that aim to match freelancers with organizations you might want their services, including Catalant, Upwork, and Fiverr. The problem McCarrick saw in the matchmaking scene of professional service providers was that the shows were “designed for goods, not services,” he claims.

What makes SkillSetz different, according to McCarrick, is that it takes cues from the procurement industry on the one hand and people-oriented services like the LinkedIn social network on the other. He adds that most competitors aim to serve “lower skilled customers rather than highly skilled customers.”

Besides a B2B marketplace for service buyers, SkillSetz provides e-commerce storefronts for service providers, enabling direct communication and collaboration between buyers and sellers. Its system manages workflow, creates work orders, invoices, receipts, payments, and handles taxes and regulatory compliance. SkillSetz’s primary payment processor is the e-commerce specialist Stripe Inc.

“We make from source to pay for professional services a true e-commerce experience,” McCarrick says. “Think of Amazon and Linkedin that have been thrown into the blender. SkillSetz is the juice you’re going to get.”

Service buyers typically pay a fee of $2,500 per month for the basic account, while SkillSetz takes 5% of the payments to providers.

MBO Partners, based in Ashburn, Virginia, operates in the same space as SkillSetz, although it is geared more toward helping enterprise clients that include PricewaterhouseCoopers, KPMG, McKinsey, Microsoft and other large companies find independent contractors. MBO Partners is collaborating with SkillSetz “to help MBO realize its market opportunity,” says John Dahlberg, Vice President of Solutions Design.

Focus on B2B Payments

Several features attracted MBO to SkillSetz, including the open architecture and “simplified approach” of its system, according to Dahlberg, who is now a member of the SkillSetz board of directors. He also says that MBO was impressed by SkillSetz’s ability to carry out development so quickly. They are a small and fast team.”

Another feature of SkillSetz, according to Dahlberg, is its relationship with Stripe, which, among other things, adds options for international e-commerce. “This is a pivotal relationship they bring to the negotiating table,” he says. “Being able to get cash flow related to purchases is something we are working on right now. This is where Stripe has some good solutions. We are exploring options.”

Founded in 1996, MBO Partners says it has served 60,000 independent professionals and 4,000 companies. In late 2020, MBO acquired MineSumo Inc. , a so-called “innovation platform” that allows companies to crowdsource ideas and insights by posting challenges online. MineSumo has over half a million Millennial and Gen Z users.

In a research report released by MBO last month on the state of the independent workforce in the United States, it noted a record 34% rise in the number of people choosing to work independently, to 51.1 million in 2021 from 38.2 million in 2020. Among other trends, it found The report over the same period is a 42% increase in the number of “digital nomads” who have traveled from one place to another to work remotely rather than one location on site.

Jim Daly is Mount Prospect, a freelance journalist in Illinois covering business and technology.

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