An Online Startup Makes Waves in the Professional Services Market

Posted by SkillSetz Team on Jan 24, 2022 2:50:28 PM

This article was written by Jim Daly and was originally published by Digital Commerce 360. It is republished here in full.

SkillSetz—a software start-up specializing in matching consultants, technology professionals and other self-employed service providers with companies looking for help—is making a name for itself in a crowded field.

“Our target is $100 million in project work in 2022,” asserts founder and CEO Matt McCarrick, who founded SkillSetz in 2018 and launched the online marketplace in January 2021. “We’re very ambitious, we’re not playing around here.”With a mere three full-time employees and 22 subcontractors, Naperville, Illinois-based SkillSetz so far has 40 service providers as customers. But a lot more are in the pipeline—McCarrick predicts the company will have 500 to 600 by March as well as “a couple thousand” buyers.

SkillSetz says it is also working with a bigger company in its industry, MBO Partners Inc., in pursuit of its growth goals.

Targeting SMBs

With a background in procurement, McCarrick held several senior executive positions from 2013 to 2018 at BuyerQuest Holdings Inc., a provider of a procure-to-pay technology platform that The ODP Corp. acquired last year. ODP operates a Business Solutions B2B platform for selling office products to companies of all sizes, and is the parent company of the Office Depot/OfficeMax chain. (ODP announced on Dec. 31 that it had sold its CompuCom technology services subsidiary to an affiliate of Variant Equity in a transaction valued at up to $305 million.) McCarrick says he left BuyerQuest to launch his own consulting 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 automation of professional-services spend,” he says.

Citing Dun & Bradstreet First Research estimates, McCarrick views the market opportunity for SkillSetz as 488,000 small and midsize players in technology services, architecture and engineering, consulting, advertising and marketing, human resources, and graphic design. Collectively, these firms generate $706 billion in annual revenues, according to D&B.

But there is no lack of platform providers aiming to match independent professionals with organizations that might want their services, including Catalant, Upwork, and Fiverr. The problem McCarrick saw with the match-making scene for professional services providers was that the offerings “are built for goods, not services,” he claims.

What makes SkillSetz different, according to McCarrick, is that it takes cues from the procurement sector on the one hand and people-oriented services such as the LinkedIn social network on the other. Most competitors, he adds, aim for serving “less-skilled rather than higher-skilled clients.”

Besides a B2B marketplace for service buyers, SkillSetz provides ecommerce storefronts for service providers, and enables direct communication and collaboration between buyers and sellers. Its system manages workflows and generates automated work orders, invoices, receipts, payments, and handles tax and regulatory compliance. SkillSetz’s main payment processor is ecommerce specialist Stripe Inc.

“We’re making source-to-pay for professional services a true ecommerce experience,” says McCarrick. “Think about Amazon and LinkedIn thrown into a blender. SkillSetz is the smoothie you would get.”

Service buyers typically pay fees starting at $2,500 a month for a basic account, while SkillSetz takes a 5% cut of payments to providers.

Ashburn, Virginia.-based MBO Partners works in much the same space as SkillSetz, although it is more oriented toward helping enterprise clients that include PricewaterhouseCoopers, KPMG, McKinsey, Microsoft and other big firms find independent contractors. MBO Partners is teaming up with SkillSetz “to help MBO flesh out its market opportunity,” says John Dahlberg, vice president of solutions design.

 

A Focus on B2B Payments

Several attributes attracted MBO to SkillSetz, including the open architecture and “streamlined approach” of its system, according to Dahlberg, who is now a member of SkillSetz’s board of directors. He also says MBO liked SkillSetz’s “ability to execute development really fast. They’re a small, rapid team.”

Another SkillSetz attribute, according to Dahlberg, is its relationship with Stripe, which among other things adds options for international ecommerce. “That’s a pivotal relationship that they bring to the table,” he says. “Being able to capture the flow of funds related to purchases is something we’re working on right now. That’s where Stripe has some pretty good solutions. We’re 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 businesses to crowdsource ideas and insights by posting online challenges. MineSumo claims more than half a million Millennial and Gen Z users.

In a research report MBO released last month on the state the U.S. independent workforce, it noted a record-breaking 34% surge in the number of people choosing to work independently, to 51.1 million in 2021 from 38.2 million in 2020. Among other trends the report found over the same period was a 42% increase in the number of “digital nomads” who traveled from place to place to work remotely instead of from a single on-site location.