A new start-up by a University of Northern Iowa senior is rethinking the gig economy, a fast-growing sector that now involves about one-third of U.S. workers.
Digital marketing major Maddie Palmersheim’s company Virgo wants to flip the script for freelance workers in this new sector, which offers workers a new kind of freedom but also raises serious concerns about labor exploitation and underwhelming wages.
Her efforts are already attracting attention. Virgo was named one of 25 finalists of the Schultz Entrepreneurship Challenge at e-fest 2021, a student entrepreneur contest that included submissions from almost 100 teams from 59 universities across the country, where the businesses compete for a part of a $215,000 pool of funding.
“I'm trying to make better equitable connections, where freelancers are paid a fair amount for the amount of work that they do, and businesses or clients who hire them are getting paired with the right people for their unique project needs,” Palmersheim said.
Palmersheim learned about the gig economy firsthand in the summer of 2020, when she briefly sought work as a writer on fiverr.com, an online marketplace for freelance services. She said the issues with the service were immediately clear.
“The people who offer services aren't typically paid fair amounts for the work that they do,” Palmersheim said. “And it's also difficult for businesses to find service providers that match their specific needs. So there's some barriers with communication and barriers with connection.”
Most gig economy platforms take a percentage of the fee a freelancer earns, while also charging the business that receives the service a smaller fee, Palmersheim said. But Virgo upends that model by charging a comparatively smaller monthly fee to use the platform, giving the worker a higher share of their earnings.
Palmersheim also has plans to develop a system to better match the unique skills of a freelancer to the needs of the client, ensuring businesses that work with her get the best worker for their needs.
Virgo is still a work in progress and Palmersheim has taken advantage of the R. J. McElroy Student Business Incubator program at UNI’s John Pappajohn Entrepreneurial Center, where she has access to business advisors and resources to help her with financial projections, networking opportunities and more.
“JPEC has been the best resource I’ve had in my college career,” Palmersheim said. “It’s a really good community that helps you get through all the challenges of starting a business.”
Palmersheim is one of eight students currently working on 10 businesses at the incubator, which has served almost 5,000 individuals and helped launch over 50 businesses during the 2020 fiscal year.
“Maddie has taken full advantage of many of the programs offered through the John Pappajohn Entrepreneurial Center throughout her collegiate career,” said Laurie Watje, associate director of JPEC. “I have no doubts whatsoever that she will be incredibly successful with her business because she is not afraid to put in the time and effort that it takes to launch a business.”
Lindi Roelofse, UNI’s T. Wayne Davis Chair of Entrepreneurship, said she describes Palmersheim in two words: “always winning.”
"Our UNI JPEC keeps a database of various student business competitions to fit the student and the startup ventures they are interested in pursuing,” Roelofse said. “Since knowing Maddie, she has always been busy winning one business plan pitch competition after the other, even coaching other JPEC students into winning competitions that fit their ventures. Always winning. I suspect her winning personality helps."
Owning her own business was something Palmersheim knew she wanted since she was in kindergarten, when she remembers helping out with her mother’s business, Purse~N~Ality, a small boutique shop in downtown Cedar Falls.
“From a young age I watched her develop that and I used to go on trips with her to get inventory, and sit in while she was working,” Palmersheim said. “And I just decided at a very young age that I've always wanted to do my own thing. And I have not always known what that looks like, but I've always had an interest in that and passion for it.”
Palmersheim said she chose UNI because of its strong business programs and the proximity to her family.
“I like the school, I like the size of it,” Palmersheim said. “And I've had a great experience with the professors that I've had and the resources that I've been able to have during my time here.”