We envision a future in which clients demonstrate how much they value freelancers by paying them on time, every time.
In August 2018, my co-founder Claire and I worked on a freelance marketing strategy project together. The client never paid. As I was researching how to handle the situation, I discovered that a great many freelancers deal with non-payment, and with time spent chasing invoices. More than 71% of freelancers struggle to collect at least once in their career, and the average unpaid freelance worker loses almost $6000 annually – which accounts for 13% of their total income. It struck me as ridiculous that salaried employees could collect a paycheck every two weeks, no questions asked, but freelancers were left holding the bag for work that had been delivered but not paid for.
Additionally, I knew from my time as the leader of a marketing department, managing several freelancers and other external resources, that there were substantial pain points on the client side, too. People put contracts in place, but no one likes legalese, and contracts aren’t flexible enough for the kind of dynamic, collaborative work that a successful “agile workforce” might deliver.
The more research I did and the more people I talked to, the more convinced I became that someone needed to do something about this - and that "someone" was me. The pain points are acute, and as more and more companies and independent workers opt for non-salaried work arrangements, this problem isn't going away any time soon. Better contracts and automatic reminder emails from invoicing software aren’t going to cut it; we need to fundamentally re-imagine what this kind of working relationship might ideally look like, and create a tool just for it. That’s our vision for Ditto.
Practically, Ditto does a number of things differently.
Currently, most people use CYA contracts which attempt to outline all of the ways a project could go wrong and protect against them. We take a more proactive approach, using rules and processes (i.e. the terms and conditions of working through Ditto) as guardrails to keep the project on track. This is beneficial in several ways - not least of which, it encourages a more positive and collaborative working relationship right out of the starting gate.
But - while beneficial in its own right - all of this is in service of Ditto's Big, Hairy, Audacious Goal. We want to change the way freelancers are paid, and ultimately, how they’re valued. We believe that long payment terms and unpaid invoices are unacceptable, and that the present power imbalance between clients and contractors must go.
When an invoice isn't paid for 30, 60, or 90 days, that amounts to the freelancer effectively extending their client a loan for a period of time. When a purchase is made, you expect to pay right away - not wait a month - right? And contractors aren't like other big corporate vendors. They're individual people, and should be treated as such.
We imagine a world in which freelancers can command timely, assured payment and never again be forced to chase invoices. To our minds, it's kind of like the contractor equivalent of employee benefits: if you want the best talent, you'll not only pay them well, you'll also pay them promptly.