Introduction

We're sure there have been worse presentations in the history of business. But our first effort to sell the idea for the company we now call Catalant was memorably weak.

It was the winter of 2013, and we were halfway through our first year at Harvard Business School. HBS, as it is known in the vernacular, had only recently created a mandatory class aimed at giving every MBA student a taste of start‐up life. That January, the entire first‐year class of 900 broke into teams of six. The assignment: come up with a real‐life business idea and then spend the next few months proving its viability. The first big test came a few days into the semester, when each team had to pitch its idea to their fellow students, who would then bid up or down shares of the company listed on a mock stock market. It was akin to a classroom version of the hit show Shark Tank. We learned the hard way that becoming a start‐up rock star at HBS could be just as brutal as the television version.

Back then, we were calling our fledgling company Rent‐A‐Nerd. The concept was relatively simple. Small, entrepreneurial, mostly owner‐run businesses needed help with issues like marketing and strategy, same as their larger counterparts. These well‐known corporate behemoths were well accustomed to turning to the stalwart, blue‐chip business of management consulting for their solutions. However, the smaller companies we were targeting couldn't afford the services of a big consulting firm like McKinsey or Bain. One of us had already worked at a large consulting firm prior to arriving at HBS. So had many of our classmates. Big company consulting was the lingua franca at HBS. That's where our concept took flight. What if we challenged these rulers of the universe and disrupted the traditional model? What if there was a way to help small business owners and in the same breath, turn old‐school consulting upside down on its head?

At the time we hatched our idea, we were suggesting the equivalent of a Craigslist website for small businesses and MBAs. Our company would be a matchmaking service that allowed small businesses to enlist, at an affordable price, the services of MBA students from the country's top business schools, to share their expertise. And just in case that database was not quite seasoned enough, what if we threw in the weight of the top schools' alumni as well? We proposed to “match” small businesses to a talent pool of tried and proven experts. The small business could post a project on our platform, and anyone enrolled at a top‐tier business school with an email address to prove it could bid on the job. What was our equation for success? The small business solves their work problem. The hungry grad student gets a paycheck, not to mention some very nice CV padding. And our fledgling company would take its cut as a percentage of completed deals, thus generating a revenue stream. On the surface, it made perfect sense to us. Why not put it out there?

There were 900 students in our first‐year class. The school divided us into 10 sections of 90 each. The 15 teams in our section, Section F, pitched the “investors” of Section J, who then would trade shares in our 15 companies on the simulated stock market. The stocks of the start‐ups that seemed most promising would rise, while the prices of those that seemed most far‐fetched would fall. This would be the first benchmark in a competition that lasted through the spring. The true winner would presumably be the company that won in this simulated marketplace.

Everyone sharpened their tools and dug in. It soon became apparent that our competition, the 14 other groups of Section F, had sharper pencils than we did. They were creating these incredible multimedia presentations. You'd think they'd all just walked out of the latest Microsoft PowerPoint refresher course with a gold star. No bells and whistles were too much. In contrast, we had thrown together maybe a half dozen slides, including one of Scrooge McDuck (yes, Donald Duck's uncle!) jumping into a pile of coins. We had wanted to reinforce the moneymaking aspect of our endeavor, but the sight gag fell as flat as day‐old coffee.

As Idea Pitch Day fast approached, our problems multiplied when one‐third of our brain trust, Pat, tragically lost a cousin just before our presentation. So now we were one man down with a Disney cartoon character as our ace in the hole, positioned against a roster of future wannabe TED presenters. It wasn't until late the night before Pitch Day that we even figured out who was going to say what. Suffice it to say, things were looking grim.

Come the Big Day, we sat in stony silence, watching as one Fortune 500–worthy pitch after another rolled off the tongues and laptops of our competitors. When our turn finally arrived, we took the stage and let it rip. We came off disjointed and ill prepared, not to mention the fact that our presentation was considerably shorter than the others. Our fellow judges—the faux potential investors—peppered us with questions, exposing our lack of preparation. Apparently, the future investors of Section J were thick with students who had worked for large management consulting firms prior to business school. They were dubious of our prospects, to say the least. The big firms, we were unceremoniously informed, had a “secret sauce” that our business start‐up could never replicate. And the smaller boutique firms offered access to a caliber of specialist we could never attract to our platform. One woman even stood to say that her group had thought of our very idea themselves, but they had actually done some market research and rejected it hands down after concluding that small businesses weren't interested. “What makes you think you're going to succeed?” she asked in an incredulous voice. We took turns looking at one another and intermittently inspecting the shoes on our feet. We didn't have a clue.

Once we had finished suffering through the 14 other meticulously prepared pitches, the school's simulated stock market opened for business. By day's end shares in our company were trading dead last—150th of the 150 companies launched that day. Nice job!

We were back in our room licking our wounds when an email popped in from our section professor. Kudos was not the order of the day. “You phoned it in,” he began. The presentation was flat, the support materials sketchy. Even we didn't seem excited by the idea, he cajoled. Adding insult to injury, he brought up the holes in our pitch that our fellow students were able to poke entire fists through. “If you still intend to pursue this as your business project, you need to pick it up,” he warned. Our humiliation was complete.

Criticism is sometimes easy to slough off. Dismiss the source and with it the negative feedback presented. But these were our HBS peers and presumably some of the best and brightest young business minds in the country. And they were telling us that our idea was so bad they were valuing it at less than the six T‐shirt companies that were pitched that day. We even lagged behind an app for free hugs.

We were embarrassed, as well we should have been. But we were also furious. We knew we were better than our subpar performance suggested. We also believed our idea was better than the lion's share of what we saw that day, and we were determined to prove it—to our classmates, but even more so to ourselves. We grabbed a screenshot of the class rankings to remember how horribly we had performed. Pat laid down the gauntlet for our team and vowed to tattoo the company logo on his backside if we could regroup and end the year in first place. He was challenging us to shame him for life on the backs of our success.

Rent‐a‐Nerd had been Rob's idea, and he seemed to take the rebuke from our classmates even more personally than the rest of us. “They're basically telling me I'm the stupidest person on campus,” he said. Based on our stellar pitch and end of day one ratings, it was hard to argue with him.

But out of the ashes, something else was going on. This spirit of injustice, tempered with our fierce will to compete, was creating a spark of something in our room that night that refused to fizzle out. Looking back, honestly, if we had done a half‐decent job of selling the company in the first place and ended up in the middle of the pack at the end of Pitch Day, there might not be the company we run today known as Catalant. There was something uniquely humiliating about our dead‐last finish that fired up our competitive juices. We commiserated over our failure, wrote it off, and threw ourselves into the project of converting Rent‐a‐Nerd into a real business.

As the year unfolded, there would be more stumbles and more setbacks awaiting us. Still, the root of our idea felt like it was sprouting wings, and we had aspirations that far exceeded our classroom on the Charles. Emboldened, when the semester ended, we decided to take a flyer and travel to the West Coast to talk with potential investors. Between us, we were able to dust off enough connections to secure meetings with partners at nearly two dozen top‐tier Silicon Valley venture firms. As awesome as that felt in the planning stages, the reality translated into a far gloomier tableau. Anyone who ever suggests that pitching to the Valley is sexy has not spent days listening to West Coast venture capitalists tell you how little they think of you and your idea. What's more, truth be told, we had not ventured all that far from our original less‐than‐impressive Pitch Day debut. Case in point, one morning we found ourselves sitting in the parking garage on Microsoft's Redmond campus, chugging coffee, pumping ourselves up to music, and counting down the minutes until we were ready to go in and shake things up. It's amazing we even heard the phone beep with a text. “Where the hell are you guys? We're all sitting here waiting for you!” It seemed we were well on our way to becoming an HBS case study in how not to start a business!

Still, we muscled—or muddled, as the case at times was—through our West Coast tour. The summer between our first and second year of graduate school began with days of rejections up and down Sand Hill Road. However, and most improbably, it ended with a big check from Shark Tank star and business maven Mark Cuban who, along with an angel investor named Bob Doris, gave us the seed money we needed to see if our idea of a marketplace for high‐priced business talent might be a real business.

“Careful what you wish for” should be taught on day one at every business school in America. We were still in our second year at HBS when we raised a Series “A” round of venture financing totaling in the millions. Despite the skepticism expressed by some of the visionaries who populate the Bay Area, three of stodgy Boston's best‐regarded venture firms saw the potential of our fledgling company. Beyond our earliest and wildest expectations, there'd be a “B” round and then a “C” and then a “D” round that gave us a paper value in the hundreds of millions, much of that coming from New England. It was fortunate that we were die‐hard fans of the Patriots, now that we were included in the roster of the Kraft family, who owns the fabled five‐time Super Bowl–winning football team. Intuit founder Scott Cook, Rent the Runway founder Jenn Hyman, and several other tech luminaries also jumped onboard.

Luck was definitely smiling on us when we landed General Electric and its $140 billion in annual revenue as a true, paying customer. Going back to our drawing board days, a mere 18 months previous, we had initially thought we were creating a platform for small businesses. But bringing GE on board while we were still in grad school opened us up to a future that we had hardly imagined. General Electric proved more than a marquee customer. Its investment arm, GE Ventures, would take an ownership stake in our company and, more importantly, help champion our cause. Then‐CEO Jeff Immelt, one of the business world's most highly regarded executives, would host a dinner in Boston on our behalf in the fall of 2016. Talk about executive buy‐in! Jeff himself sent the invite emails to the CEOs of 15 of the country's largest companies, encouraging them to learn more about how our company could help them both manage costs and provide access to a wide array of top talent. Multiple senior leaders from the Fortune 100 showed up for our little dinner—a gathering that might have ranked among the more impressive turnouts of corporate firepower in Boston that year. Standing before the group, Jeff encouraged them to use Catalant and told them that our business had the potential to change the world. At the same time, a small part inside all of us recalled that screen grab of our 150th place finish, which Rob still regularly reviewed for motivation.

By 2017, more than 120 of the Fortune 1000 would be using Catalant to supplement their workforce, including GE, Staples, Medtronic, and IBM—to name just a few.

We can flatter ourselves and claim investors and corporate icons were drawn to Catalant because they saw something in the three of us. Perhaps. But we know the primary reason these influential movers and shakers became interested in our small company was our initial idea of creating a marketplace to find side work for MBA students and recent grads, wedded to the needs of a talent‐starved corporate America. In fact, we still pinch ourselves that our classroom brainstorm has morphed into a platform that has the potential to upend the way businesses manage their talent. We had only wanted to prove that our idea wasn't as lame as our fellow students thought. Instead, we had stumbled onto a new way for businesses of all sizes to get tasks done.

In 2015, Rob cowrote an article with Andrei Hagui, an associate professor in the strategy group at HBS, called “The Dawning of the Age of Flex Labor.” It began, “The prevailing paradigm of people working as full‐time employees for a single organization has outlived its usefulness.” The point was that technology was fueling a seismic shift in work—and businesses that chose to ignore this did so at their own peril. The paper continued, “Our vision is straightforward: most people will become independent contractors who have the flexibility to work part‐time for several organizations at the same time, or do a series of short, full‐time gigs with different companies over the course of a year.” What Rob and Professor Hagui were basically acknowledging was that despite our humble beginnings, we were offering a vision that threatened to disrupt the workplace.

We weren't surprised that those on the supply side—the workers—would see merit in a talent marketplace like we were building. The era of Dilbert and a workplace satirized by the comedic and the cubicle had been replaced by Office Space, with its maddening futility and fathomless promise of life married to an unfulfilling job. We weren't just grad students who had lucked out in the VC world. We were also employees who understood that we are fated to spend more time working than we do anything else, including sleep.¹ And with that knowledge, we were painfully aware that too many people are unhappy in their work. Polling shows that a majority of us find work a grind; as many as three in four feel disengaged and unfulfilled. Who wants to set off on that cruise?

Our young business was building on the sociological capital that disaffection instinctually numbs us as millennials. The data show that this group—our colleagues—demand more of a work/life balance than previous generations. And if that means receiving 1099s each year from several places of work rather than a single W‐2 from a single employer, so be it. We are the foot soldiers in a generation that insists on more flexibility at the workplace and less constrictive, more accommodating working relationships. A study by Deloitte, a giant of the consulting world (yes, we recognize the irony in quoting the likes of Deloitte), showed that three‐quarters of millennials want the freedom to work remotely. Our generation is clamoring for a different relationship to work. Now that we represent one‐third of the workforce and soon will represent the majority, it's quite possible we'll make it happen. As the founders of Catalant, we just happened to have the good fortune to unearth a missing piece of the equation: a platform that lets people work as free agents. Catalant has given the next generation access to a range of interesting, well‐paying projects to keep them as busy as they need or want to be. Already more than 40,000 experts have found our marketplace, and it seems inevitable given the broader trend lines that eventually that number will swell to 400,000, if not 4 million—so long as we can provide them with a steady river of business that is accessible through the site.

The shock for us was on the demand side—that companies of all sizes were also clamoring for change. We found one study showing that 79 percent of large businesses felt they had an engagement problem with their workforce. And 85 percent, according to that same research, were struggling to retain top talent.² Since the 2008 Great Recession, corporations have been beggars in the war for talent, we learned from Joseph Fuller, a professor of management practices at HBS, who eventually would serve as a board observer for our company. And given the strategic advantage of a business remaining nimble, not to mention onboarding complexity and the like, businesses might logically choose to shift their mix of permanent employees and free agents. That was the conclusion of an Intuit report predicting that by 2020, “traditional employees will no longer be the norm, replaced by contingent workers such as freelancers and part‐time workers.” The rub, according to the literature, was how the more agile, forward‐thinking businesses would find the talent once they had made this shift. More than one in five businesses (21 percent) identified “finding qualified freelancers” as the single biggest employment challenge, according to a study by Tower Lane.³ Two‐thirds (68 percent) expressed a “strong” or “very strong” interest in a tool that would enable easier and quicker hiring and onboarding of freelancers.

What we've learned in talking to Catalant customers is that even those at the top echelons of the country's better‐known, big‐brand name companies are feeling frustrated. Recruiting and employee retention are huge pain points for just about any corporation located outside of a New York or San Francisco. As lovely as Cincinnati, Peoria, or Moline might be, most of today's most coveted college graduates want to live in a short list of major urban centers. The action, it turns out, is a big draw.

We also heard our share of complaints about the inefficiency of the system under which large, unwieldy companies operated. Sometimes they felt as if they had too many people on staff. At other times it felt as if they didn't have enough. One executive, who oversaw a staff that numbered in the tens of thousands, told us he often felt he didn't have the right talent in‐house to start with. Maybe the biggest surprise in our on‐the‐job education was that even the seemingly powerful inside most U.S. corporations felt powerless. As a result, when faced with a challenge, they turned to a giant consulting firm because they often could see no other way. Yet for all those millions of dollars companies paid, the consultants rarely delivered the news management most needed to hear. There's an inefficiency baked into a company that can't grow or shrink as the product cycle demands, and add or subtract skills sets as they are needed.

Technology is doing its part to usher in a more decentralized workplace. We can videoconference via Skype, Google Hangouts, or Cisco WebEx. It's easy to share files using Google Docs, Dropbox, or Box—and for those who really are serious about online collaboration tools and networks, there are cool new products like Slack. There's also been a corresponding rise in co‐working spaces that allow people to rent a desk by the hour, day, or month. That strikes us as some of the early infrastructure work needed to build out the free agent economy, much like gas stations were needed to create a car culture.

The last technological piece of the puzzle? Unicorn stars of the gig economy have brought marketplaces up to speed for people wanting to sell their services to consumers. But what about those who want to sell their services to businesses? Fortunately for us, this notion of a human cloud that allows any company to find any expert no matter what the task or project was gaining currency worldwide.

It's our view that much of what is said and written about the future of work seems overly narrow in focus. It's never more obvious than when one of us is asked to speak at a “Future of Work” conference. The field seems to have spawned its own cottage industry of soothsayers and experts eager to charge lots of money for their advice. Small, incremental steps to “transform your workplace” are the coin of the realm at these gatherings. Workers seem desperate. So do their employers. Yet the solutions offered are mere Band‐Aids: airier workspaces, or more flexible schedules to accommodate both early and late risers. The more innovative voices recommended doing away with a count on vacation days, or allowing employees to figure out for themselves what tools or systems they needed to work at peak efficiency. Still, when a company perceives a crisis in its culture or its numbers, it responds with a new version of casual Friday, or free bagels in the mornings and permission to telecommute every other Thursday. Not exactly the stuff of sea change.

We saw these issues rear their heads at a private gathering we held at our offices in the fall of 2016 for the HR directors of 15 of the country's most innovative businesses. We spent a day‐and‐a‐half brainstorming ideas and hearing from experts in the field. Among the things we learned from such cutting‐edge software and technology giants? Everyone seems to be feeling their way through the various crises and logjams. The good news is that the most successful businesses are open to thinking in a different way. They want to learn about the possibilities and opportunities of a project‐based approach to work that gives them the flexibility to access the best people in a dynamic talent market.

But it goes further than that. What we're advocating for is nothing short of a complete disruption in the way businesses spend money on labor. A company needs permanent employees, of course, but technology allows for a radical shift in the mix of full‐time and free agents. While one group may stay in‐house and hold up the fort, there can still be a stable of regular go‐to talent that is called in on a need‐be basis. Think of it is as more of a Hollywood approach, where the talent is brought on board whenever a company needs the horsepower to take care of a given project. Companies will no doubt have their core of reliable stars. Just as a director tends to go back to the same cinematographer, a business would have its regular consultants whose invoices fluctuate quarter to quarter depending on the project load. These stars can hunker down as full‐time employees because sometimes that just works better for people. But others may want to test the waters of the on‐demand workplace.

Managers don't need to bear hug their employees and never let them go. What about giving them freedom, if that's what it takes to retain their occasional services and keep them both happy and working part‐time for you? Maybe a person wants to travel less for the job because of kids, or conversely, just likes the challenge and stimulation of working on different kinds of projects each month. These on‐demand pioneers would be free to say yes or no to a project depending on what else they had going on and what else they needed. For us, the goal should be giving both sides the flexibility to operate at peak efficiency. Businesses have access to talent when they need it—and people are able to do their best work every day.

Shouldn't that be the future of work?

REIMAGINING WORK

Strategies to Disrupt Talent, Lead Change, and Win with a Flexible Workforce

About Us

About the Authors

ROB BIEDERMAN

PATRICK PETITTI

PETER MAGATHLIN

Introduction

Notes