Big Idea #1: Fractional work is on the rise

A deep dive on fractional work inside tech startups

Welcome back to part 2 of this 4 part series on the Big Ideas behind Hello Generalist and this phase of work — ambitious, right?! You can read the intro piece here.

Over the next 2 weeks, I’ll continue with deep dives on the following two Big Ideas in their own posts. I hope you’ll read along, and I hope you’ll share your feedback with me as it’ll help me fine tune these ideas even more.

Like each issue of On Work, this one has core content first, then a link pack at the bottom if you want to go deeper into the ideas I’ve been marinating on.

Let’s get into it.

The First Big Idea — Fractional work is on the rise

Fractional work isn’t new, but boy is it newly popular. Fueled by tech layoff panic, and a post-pandemic life rebalancing, a new group of people now want non-full-time work. In particular, formerly full-time tech leaders want part-time work across several companies, bringing their skills from one to many. For startups, this is huge — the people who used to cost them $250k+ a year (plus taxes and benefits), are now a fraction of the cost for similar impact.

And along the way, capital F Fractional has become a new identity for people, helping tech leaders find their home among the gig worker, freelancer, and consultant word soup. To me, this is one of the more interesting things going on.

In today’s issue, I’m going to put on my cultural anthropologist hat (I imagine it looks like this) and attempt to unpack a bunch of that here. I’ve got a few topics that I want to explore:

1. How I found my way to fractional work

2. A new identify

3. WTF is “fractional” anyway

4. Why this works for startups

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1. How I found my way to fractional work

To be real with you, I was pretty burnt out. In the decade leading up to quitting my full-time job, I had spent six years building a food delivery marketplace startup from 10 people in the founder’s apartment to hundreds of people across the country and an acquisition. From there, I took exactly 3 weeks off before I started as Chief of Staff at Yelp Restaurants in January 2020, right before the pandemic changed the entire restaurant industry overnight. Who would’ve guessed that all of that would’ve caught up with me?

Like so many things in my life, I did not walk into this phase with some grand plan to work fractionally, not that I even knew what that was to begin with. In mid 2022, I realized I needed a break, and a week later I was talking to my manager about a timeline to leave. I had no plan for what was next, other than joking to friends that I was going to buy a car (BIG MOVE for a San Franciscan), and go on a lot of hikes (again, San Francisco). My monkey mind, trained on the dopamine reward from work, was totally freaked out to sit with an identity not associated with a big title and a cool company, but I was glad I let the little voice and good vibes win.

A couple months into my time off, I happily got roped into advising a few founder friends on operational stuff for their startups. And it was fun! The income was great, I loved helping the teams succeed, and really enjoyed getting to close my laptop at the end of the day. Uhhh, this is a thing?!

I found it interesting that I was having success in the contractor world, even though my resume (filled with startup madness) looked nothing like the typical contractor (people who spent their whole career doing one thing). I had plenty of expertise, but not just in one thing.

But it worked for me, and my smartest friends (also with wild startup careers) seemed to want it too, so I started a company to get the word out. Sweet baby Hello Generalist is now in it’s third year of life.

2. A new identify

My story is just one path that’s led so many to fractional work (just type “fractional” into the LinkedIn search bar to see the 146,000 results for yourself).

Like many of the 146k, I would have never considered myself a “contractor” or “consultant” before. In the case of startups - my main customer - they’re pretty allergic to those words in the first place. Similarly, I wasn’t a “gig worker” or “freelancer” because they just didn’t describe my background or goals. “Fractional” hits the spot, representing someone who held high performing roles in high performing companies, and now shares those skills more broadly.

With the word, comes a new identity to try on. For high achieving tech folks, trading their C Suite titles, or investor backed company brands, for this word is a solid exchange. And I think there’s a great upward spiral at play: the more people with admirable careers who take this path, the more it becomes friendly and appealing to others. “If my smart friends are doing it, why not me?!”

This means that very talented people, who would’ve never been available to more than one company at a time, now see themselves in this light. I’m talking about people like HG members Shruti, Elliott, Jasper, Emily, Evan, Rachel, Danoosh, I could go on. Among them, you should spot professional experiences like YC Founder, Thiel Fellow, YouTube Chief of Staff, early hires at incredibly at brands like Rent the Runway, Farmer’s Dog, General Assembly. Not one would call themselves a freelancer, but they proudly call themselves a Fractional.

But like all independent careers I listed, this path takes some serious courage to pursue. You’re betting on yourself after all. After speaking with hundreds of people pursuing fractional work, I think it’a fair to sum up their motivations into 3 big categories:

• Desire to maximize income: Put plainly, if you’re top 5% at what you do, you have an opportunity to maximize your income by sharing your skills more broadly. In most cases, with effort, you can earn more money working independently for several companies than with a single full-time job. Some take this further, and consider fractional work to be part of their portfolio of work (#3 on the Big Ideas list), which I’ll write about in depth soon.

• Desire to maximize time: Some turn to fractional work and gladly take a pay cut in exchange for more free time. Admittedly, this was me initially. I was planning on not working for 6 months to recharge, and fell into the work through friends. It was a great exchange for both me and the companies I worked with.

• A need to rebalance amid life changes: Caregiving for children or parents, responding to personal health issues, embracing opportunities to move countries or travel. The life reasons are endless. I really admire the people who are in this group — they’re doing their best to respond to challenging or new life circumstances by getting creative and betting on themselves. All of these require courage, but this one especially.

Taking a different lens, I also see varying commitment levels to fractional work:

• Trying it on for size: “I’m not sure this is forever, but I’m gladly trying it now.” This was me. I wasn’t ready for my next full-time job, and I wasn’t sure that fractional would be my forever path, but I was game to explore.

• Decidedly all-in: “I’m a Fractional! This is my main source of income, and I want to do this as long as I can.” I hear from so many HG members who start with the first bucket, then jump into this one.

• Founders in the making: “I’m starting a company, and I want to trade my skills for income while I kickstart it.” As bootstrapping cash-flow businesses gain popularity with the tech set, I see many go down this route. They land an anchor client to support their income, and get to spend other time building their business. Fun fact: Paasha, on the HG team, is in this category :) Hi Paasha!

Something uncomfortable that’s worth naming: Thanks to all the tech layoffs, there’s a group of people signing on for fractional work to tie themselves over until they land their next full-time job. They have no intention of exploring this path beyond the interim period. You can’t hate on someone doing whatever it takes to support themselves, but the unfortunate reality is that they bail on their contract commitment once a full-time job comes in. I’m ok with this when there’s strong, up front communication on the plan, but too often, this is kept quiet, and a rapid exit leaves a bad taste in everyone’s mouth. I do find, however, that most people are honest about this, intending to do right by everybody around them while also protecting themselves – more good actors than bad actors here.

Overall, this movement means that for the first time in tech, some of the most talented among us don’t want full-time jobs. Talented new supply ripe for hiring.

3. WTF is “fractional” anyway?

I’ll give it to you as simply as possible: Fractional work is like full-time work in that a person works for a company without an end date, instead working part time (a fraction of time) instead of a 40 hour work week. Likewise, unlike a full-time employee who’s paid through a W2, fractionals are independent contractors, paid through 1099, responsible for their own taxes, and usually offering services to other companies at the same time. For companies, this shouldn’t feel too different than having a full-time employee.

The main felt difference is that fractionals will gate their time spent to balance multiple clients. Like, they might work with you Mondays, Wednesdays, and Fridays. Others might join for key meetings, then just do work as needed throughout the week, filling up roughly x hours of total committed time. Others will commit to deliverables each week or month, and just get that work done in whatever time it takes. If this sounds a lot like a full-time job to you, then you’re right — they’re like any other teammate, though not full-time, and not always able to respond, to like, Slacks, immediately.

Is this the same as advising? Coaching? Freelancing? Yeah, the word soup is kind of wild, but they do each mean something different. I hope the chart below is helpful here.

So, are these just techy part time jobs?

Hmm, not quite? Kind of?

Some folks want to keep the word fractional reserved just for exec roles, like Fractional CFO or Fractional COO. And I understand the urge — Part-time exec roles are where this whole movement got started. After the 90s tech bubble burst (and maybe even earlier), startups needed to do more with less, plus a whole class of execs were newly out of jobs. You match supply and demand, and boom, fractional work is born. Chris, one of our HG members talks about doing this work 15 years ago, before “Fractional” was even a word. He halfway jokes that he would call himself a part-time CFO to get the point across.

Today, I hear from many HG customers that they’re weirded out by (or not ready for) big exec titles. They still want to tap into this talent base, but more often, they want someone mid career who can just jump in and help them solve problems. The execs-only approach excludes the bench of very talented doers who want this work — roles like Fractional FP&A, Fractional Data Analysts, Fractional Chiefs of Staff, Fractional Ops Leads. Most folks in those roles haven’t had the years experience needed to claim exec titles yet, but they’re just as just as valuable to teams — and just as eager to pursue fractional work.

Worth noting that a few graveyard startups have tried to make “part-time jobs in tech” a thing before, but they didn’t work out for roles at this skill level. Over the last 10 - 15 years (thanks to low interest rates) startups were flush with cash to compete for top talent, and pay top dollar. Because of that, the supply was simply working high paying full-time jobs.

So, I don’t hate the “part-time tech jobs” describer, even if it does have a wink to it. If the shoe fits, you know?

4. Why this works for startups

This should be pretty obvious at this point. Startups, whose life depends on maximizing cash and hiring remarkable people, now get to hire from elite groups of people for an affordable rate.

Especially when you expand “startups” to include ambitious tech companies who have not raised capital, hiring fractionally means they can attract a talent pool who likely would not consider working for them full-time in the first place.

Beyond the obvious, an often overlooked perk — they don’t work for you in the same way as your full time employees do. Their work will not include the politics of the office, or perhaps kissing your ass in advance of a performance review, but instead, their sole goal is to drive results. Another way to look at it is that you’re not hiring an employee, you’re hiring another entrepreneur who manages their own business and whose success is directly tied to their results for you. Simply, if they don’t drive clear, quick results, they don’t have the work. It’s a different mindset than your core team, who typically have more flex and time to show results.

A couple questions I get from founders:

Why not just hire someone full time? Put simply, if you have the budget and you’re ready for it, hire full-time. I know plenty of teams who only have fractional workers (mine included), but for most, consider fractional hiring another tool in your tool belt.

Will they be as committed as me? I need my team to grind 24/7. A fractional will not work for you 24/7 in the same way your full-time team will. So, if you need to hire full-time, then hire full-time (Of course, even among full-timers, a select few will be as committed to the mission as you are). Fractionals are precision workers, committed to delivering on a scope — that’s to say, scoping the role’s deliverables is key to getting the value, even for the most generalist of roles.

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That’s a wrap for today! Over the next 2 weeks, I’ll continue with a deep dive on the last two Big Ideas in their own posts. I hope you’ll read along, and I hope you’ll share your feedback with me as it’ll help me fine tune these ideas even more.

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I’m a sucker for a list of links, and always want MORE LINKS, so if you want to go deeper into these ideas, here’s a glimpse into what I’ve been reading, watching, and listing to this week.

• Highly desired growth baddie Elena Verna writes a deeply personal essay on why she quit full-time roles. The whole thing is worth a read as I know so many of you will relate to her story.

• Andy Johns, one of Downshift’s team members, and former high growth tech startup exec, wrote an epic piece recently similar to Elena’s above. He talks about his own health journey that lead him to take a pause from full-time high growth startup leadership. What’s incredible about the essay is the frameworks he gives — there’s a lot, and each one is fascinating to try on for yourself.

• Totally unrelated to all of this, but have you listened to Amy Poehler’s new podcast yet? I spent the afternoon yesterday (procrastinating writing this) truly laughing out loud (there was snorting) to the new episodes. On her episode with Martin Short, she plugs his Jiminy Glick interview with Bill Hader, which had me crying I was laughing so hard. The world needs more joy! Do yourself the favor.

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Be well! Until next week, Shaina