IM1044 Humans on Demand: Coople's Staffing Platform at a Crossroads PDF

IMD-7-2162 25.02.2020 IM1044 HUMANS ON DEMAND:...

IMD-7-2162 25.02.2020 IM1044 HUMANS ON DEMAND: COOPLE’S STAFFING PLATFORM AT A CROSSROADS Natalia Monnard, Silvan MARCH 2019. Viktor Calabrò, the founder and executive chairman of Odermatt, Simon Rohrer and Coople, was leaving his office in Zürich, Switzerland, to meet his Kuresh Youdim (IMD EMBA investors for their annual briefing, starting with dinner that evening, and 2019) prepared this case under a half-day session the following morning. Coople’s on-demand staffing the supervision of Professor platform had seen some impressive growth over the last years. The jobs Howard Yu, LEGO Professor of supported by Coople were mainly blue collar – hospitality, retail, Management, and Innovation logistics, office and promotion and events, but it was time to think about as a basis for class discussion the next big step. Having investors onboard would be critical for rather than to illustrate either Coople’s future success. effective or ineffective handling of a business situation. As Viktor – one of Switzerland’s top entrepreneurs – was finalizing his opening dinner speech for the group of investors, he reflected on Coople’s journey to becoming the European leader in the provision of a flexible workforce – humans on demand. He remembered not only the success the company had achieved but also the challenges it had faced along the way. He anticipated some tough questions from the audience, but they would be the same as those he was already asking himself: Was Coople scaling fast enough to prevent copycats from attacking its leading position? Would competition come from traditional industry players or an external disruptor? Was Coople’s on-demand staffing platform armed with the right technology and automation to continue its growth and ensure profitability? What was the right next step for Coople – geographical expansion, adding new segments, offering new services? In closing his short opening speech to the investors and Coople’s management team, Viktor said:... our position is to continue supporting customers’ needs in an increasingly fast-paced world and enable Cooplers to have the lifestyle they want. We want to continue building a solid and defendable core model that competitors cannot easily copy, thereby enabling us to carry on creating value. With these last few words, Viktor had made it clear that Coople wanted to shape the future of the industry and that the needs of its clients and Cooplers (the on-demand employees on the platform), would be the driver. But the definitive next step to do that, remained an open question. Copyright © 2020 by IMD - International Institute for Management Development, Lausanne, Switzerland (www.imd.org). No part of this publication may be reproduced, stored in a retrieval system or transmitted in any form or by any means without the prior written permission of IMD. This document is authorized for use only in Fabio Busicchia's IMBAPT24 at MIP Politecnico di Milano from Oct 2024 to Apr 2025.  -2- IMD-7-2162 Company History During his time as an IT consultant and subsequently while managing his first start-up – the event agency La Folie Erlebniskultur, Viktor was routinely faced with the problem of staffing projects and events. Notably, those that required large numbers of people, for a short duration, on very short notice. Consequently, in 2007, Viktor set about outlining a business plan to address this challenge because he saw that this was perhaps a growing, unmet need, not just for him and La Folie Erlebniskultur, but perhaps other businesses too. In 2010, Viktor surveyed 50 of La Folie Erlebniskultur’s clients to assess if there was an unmet need to hire quality staff, on short notice, through an on-demand staffing platform. The positive response was overwhelming with almost all of the companies seeing the benefits of a staffing platform that would address many of their problems. The following year, Viktor left La Folie Erlebniskultur and founded Staff Finder together with two friends. Self-funding the business and paying themselves only CHF3,000 per month, their operational business model was mainly manual, staffing smaller short-term jobs for clients within their personal networks. By 2012, Staff Finder had grown rapidly, resulting in them needing to begin investing in automation, IT and personnel, which they achieved through a first round of seed financing with Swiss business angels. That same year, Staff Finder won the “most successful young enterprise” award from Venture Lab. Continued growth through 2013, saw the company ranked as #3 within the Top 100 Swiss ICT (information & communication technology) start- ups. Further capital investment came in 2015, following the conclusion of a Series A financing round. One Peak Partners, Goldman Sachs Private Capital Investing and Rothschild Paris Orléans had injected a further US$24 million to support further growth, including the company’s entry into the UK staffing market. Operations in the UK market began in London in 2016–17. However, Staff Finder was already a legal entity in the UK, so the company rebranded itself as “Coople,” a name that Viktor felt better reflected its platform character and disruptive business model – disruptive because Coople’s business model was largely automated without the burden of the numerous built-in administrative costs inherent in traditional employment agencies. The company’s expansion had not gone unnoticed. That same year Forbes recognized Coople as one of the 10 best businesses at London Technology Week. Coople subsequently completed its Series B Financing Round in 2018, raising an additional $21 million from One Peak Partners, Goldman Sachs Private Capital Investing and Harbert European Growth Capital. 1 With this, Viktor chose to step down as chief executive officer (CEO) and assumed the position of president of the board of directors. This move allowed him to focus more on new business innovations and opportunities. Rinaldo Olivari, who was formerly the managing director of the UK operations, became the new CEO. By the beginning of 2019, Coople had become the European leader in on-demand staffing with over 200 employees, 20,000 registered client accounts in Switzerland and the UK and more than 400,000 job seekers enrolled on its platform. Viktor referred to these job seekers as “Cooplers,” which reflected the idea that they were not merely a commodity, but rather part of Coople’s community that lived the philosophy behind the concept. Towards the end of 2019, a successful Series C Financing Round saw Coople receive an additional $32 million in funding from One Peak Partners and Goldman Sachs Private Capital Investing group in support of its continuous investment in automation and forthcoming plans to expand into the Netherlands in 2020. In total, Coople had raised $76 million in funding by this point (www.coople.com). This document is authorized for use only in Fabio Busicchia's IMBAPT24 at MIP Politecnico di Milano from Oct 2024 to Apr 2025.  -3- IMD-7-2162 The Future of Work: The Flexible Workforce In his first venture, Viktor had quickly positioned La Folie Erlebniskultur in the market as a leading player in the field by having a selling proposition that had a story, something customers could connect to that other companies were not putting out in the market. Applying a similar strategy to Coople, Viktor was able to offer a different angle and value proposition (refer to Exhibit 1), in what was otherwise an industry filled with traditional players competing to cover similar client needs. Although the event agency yielded good profits, he experienced first-hand the challenges of finding on-demand staff and the significant amount of administrative burden it involved. This was the catalyst behind Coople’s inception. As he embarked on this journey, Viktor grew increasingly aware of the socio-cultural changes creating a growing demand to address new unmet needs in the staffing industry: Workers increasingly wanted to structure their work around their lives, as compared with the traditional notion of managing their lives around work (refer to Figure 1). It was clear that the number of people seeking flexible work was expanding. In 2010 alone, 43 new human cloud companies offering on-demand staffing had emerged, representing some 29% of the cumulative total that was known to exist (~150). 2 By 2018, this number had reached approximately 400 companies. Viktor was certain of one thing: Employees, particularly Millennials, were increasingly identifying flexibility as a top priority when job hunting. Working for a single company for a long time was becoming a discontinued model. A flexible workforce would fundamentally begin to change the way we see work. Figure 1: Traditional vs. emerging work structures Source: Authors What Viktor was seeing, was an emerging human cloud, a temporary workforce (summer interns, seasonal workers, freelancers) within the “gig economy,” looking to engage with organizations for an intentionally limited period of time. The gig economy represented all contingent work, including not only temporary agency workers provided through staffing agencies, but also temporary workers sourced directly by companies, independent contractors, consultants, as well as the emerging human-cloud workforce (refer to Exhibit 2). Collectively, the global gig economy revenue approached $3.5 trillion in 2017, with the human cloud workers making up less than 3% ($82 billion) but with high growth rates. This is where Viktor decided to build one of Coople’s core value propositions. This strategic decision paid off by capitalizing on a new generation of workers seeking more flexible jobs. This document is authorized for use only in Fabio Busicchia's IMBAPT24 at MIP Politecnico di Milano from Oct 2024 to Apr 2025.  -4- IMD-7-2162 I am 21 years old and I have a rock band, we have a real shot, but we need to practice. In my previous job, I could only practice over the weekend, so I decided to join an agency for temporary staffing positions to get more flexibility, but I still could not choose which shifts I wanted to work. The agency would call me, and I would have to go on the days they told me. Coople has completely changed that. Although, at the beginning, I had to apply to many shifts before being accepted for my first Coopler job, which was frustrating, I have now built a track record and reputation that gives me access to great shifts. Additionally, with them, I can choose the shifts I want to take on the days that are convenient for me, and it gives me the time to focus on my passion and the life I want to have. London-based Coopler Value Proposition: Beyond Just an App After dinner, Viktor was walking back to the office when he received a call from Mr Winter, general sales manager and deputy CEO of Globus, an upscale department store with an extensive delicatessen section. Globus had a long-standing and fruitful relationship with Coople as one of its clients. Mr Winter said: Viktor, I’ve been meaning to call you! Do you have a second? We’ve been discussing at the board level, the service we get from Coople. It is very good, and it has helped us increase staff productivity, but we would benefit even more if you would also offer Cooplers that are highly skilled or qualified that we could use, for example, in our luxury business. Our HR department is completely under water and having to spend time finding and interviewing candidates for roles that are sometimes only needed for a few weeks to a few months is a significant challenge, not to mention a burden. Viktor had already asked himself if Coople could entertain the idea of entering new market segments such as the highly skilled Cooplers Mr Winter was suggesting. It was most certainly one of the options for future growth and one he was seriously considering. Coople’s fast and consistent growth had been achieved by delivering a value proposition to both its Cooplers and clients – something that traditional staffing industries had not yet been able to deliver. The value brought by Coople leveraged both automated and manual processes (refer to Figure 2). The quality afforded to clients came from the sophisticated application process it employed, when enrolling a Coopler. People looking for on-demand jobs were unable to simply sign-up to the Coople app and start applying for shifts. They had to first complete a profile that would help Coople understand the skillset of the applicant. Once done and evaluated internally, the candidates were called in for an interview, and in the UK for an identification verification (a mandatory requirement of UK staffing regulations), to further assess their profile and ensure they got access to apply for shifts that matched their skills and expertise. As Coople was a pure business-to-business (B2B) platform, managing risk through ensuring compliance with labor and social security was a key element of its value proposition, a feature which few gig platforms were able to provide. When clients posted their vacancies (location, duration, salary), Cooplers were either proactively notified if a role matched their skills or they could independently submit their interest in a role via the platform. The choice of which Coopler to engage with then sat with the client. There was generally always somebody available for an open job, often within a few minutes of posting. This document is authorized for use only in Fabio Busicchia's IMBAPT24 at MIP Politecnico di Milano from Oct 2024 to Apr 2025.  -5- IMD-7-2162 Figure 2: Coople platform Source: Authors Working outside of its automated platform, there was a skilled team monitoring operations seven days a week (weekdays from 6 a.m. to 10 p.m., weekends from 8 a.m. to 8 p.m.). Skilled in knowing the key competencies required by clients, they were available to find the necessary resources, either by directly contacting Cooplers in close proximity to the role or, alternatively, from a defined “ad-hoc” pool of Cooplers. This was critical for addressing no-shows and ultra- urgent requests (especially those arising over weekends). As Viktor explained to Coople’s investors: This is also a field where your support has been important since part of our last series of funding has been invested in automating our cancelation process. Now Cooplers can cancel up to just an hour before the shift; the system will then automatically reopen the shift and look for and post job opportunities to Cooplers that are close by with the required skillset. Invoicing and payroll activities were managed through a combination of automated and manual processes after a job was completed. One key feature of the platform was that upon job completion, clients were able to tag excellent Cooplers as their “favorites.” When a Coopler was needed in the future, these favorites had priority and automatically got the job if they accepted the request. This brought with it significant time savings and ensured confidence about quality. Moreover, while Coople continuously looked into expanding the automation of its operational engine, it had at times been limited, not through a lack of aspiration, to be disruptive, but rather victims of regulations in the countries in which it was operating. For example, efforts to introduce digital signatures was hindered by Swiss law. Like other automated processes offered through the Coople platform, digital signatures could bring further efficiencies in support to its clients’ back-office activities: Maintaining this level of satisfaction and trust will continue to be our promise to our clients, providing flexibility and the opportunity to better embrace their lifestyles is the promise we continue holding for our Cooplers. Viktor Calabrò This document is authorized for use only in Fabio Busicchia's IMBAPT24 at MIP Politecnico di Milano from Oct 2024 to Apr 2025.  -6- IMD-7-2162 Moreover, the flexibility offered through the platform brought with it the key sense of empowerment to the Cooplers – where they could choose their shifts and meet the emerging need of the gig economy by controlling their work around the lives they wanted to lead: Coople’s unique selling points and key differentiators are the quality of our HR services, the coverage and scale of workers that we are able to provide and the convenience and flexibility that we offer via our platform. With us, Cooplers can pick and choose what they want to do. After we assess their profiles and skills, our platform will show them all the possible shifts they could work on; we don’t force them to work at a certain time and place, and this is why our Cooplers’ population has scaled so fast – people want that flexibility to fit their jobs into the lives they want to have. Yves Schneuwly, Coople Managing Director Switzerland Staffing Industry As the European leader in on-demand staffing, growth was definitely one of the key topics to be addressed, not only for Coople, but generally for the entire staffing industry. The next morning in Zürich, Viktor kicked off the investors’ briefing, sharing with them how the industry was evolving and with that, the challenges facing them. In 2017, the staffing industry was estimated to have generated worldwide revenue of $461 billion in 2017, 54% of which was generated in the US (31%), Japan (15%) and the UK (9%), with Switzerland contributing approximately 2% (refer to Exhibit 3). Looking at regional segmentation, the Americas were generating $161 billion, APAC (Asia-Pacific) $109 billion with the EMEA (Europe, the Middle East and Africa) the most with $191 billion, of which Europe made up almost $180 billion. Moreover, temporary staffing revenue contributed approximately 90% across these three regional categories, and the remainder was made up from place and search roles. 3 Of the temporary staffing global revenue, commercial roles such as clerical and industrial made up 58%, and the remaining 42% came from professional roles, including but not limited to IT, healthcare, finance and accounting, engineering and marketing. However, given these figures were based on revenue, the split of professional roles would be lower because it was based on the number of assignments and the higher remuneration for these professional occupations. The US made up the majority of revenue in the Americas, where the mix was somewhat different, with professional roles having a higher mix. Within the EMEA, commercial roles generated some 65% of revenue, but in the UK, the share was more evenly split. 4 This represented a significant market opportunity even if Coople could only manage to seize a fraction of the market or some selected geographies. Growth and Expansion With 20,000 registered client accounts and more than 400,000 Cooplers enrolled on its platform, Coople’s business had matured considerably since it began in Switzerland. Seventy- five percent of clients and Cooplers were Swiss-based, with some 5,000 to 10,000 new Cooplers subscribing every month (refer to Exhibits 4 and 5) across Switzerland and the UK. Coople’s job offerings continued to expand, spanning a large number of flexible jobs across profiles in gastronomy, hotel, office, events, promotion, aviation, retail and logistics (refer to Exhibit 6). Their average active subscription lasted around three years. Coople’s solid brand came as a result of it establishing long-lasting relationships with clients, by helping them gain This document is authorized for use only in Fabio Busicchia's IMBAPT24 at MIP Politecnico di Milano from Oct 2024 to Apr 2025.  -7- IMD-7-2162 efficiencies through cost reductions, but more importantly, exploiting automated and semi- automated processes that allocated the right people (profiles and competencies) to the right job. In doing so, Coople was able to embed its service offering as part of its clients’ core staffing value chain and, hence, part of their strategic outlook. Cooplers used multiple agents, and with the huge demand for workers, there were sometimes too few jobs and vice versa. With people fishing for extra wages and salary, Cooplers had some loyalty, but this needed to be gained every day. As such, it was critical to maintain communication with clients to get the best jobs and best prices for Cooplers. Clients also went to other providers, as such pricing needed to be fair for both sides, but also it needed to ensure that Coople’s margin was correct (i.e. it was charging a fair price for its service) which was an early operational challenge. To this end, the platform was able to build loyalty from the Coopler network by offering them flexibility and training (expanding their competencies to be able to support a broader range of job profiles (refer to Exhibit 6)) – two important competitive differentiators. Consequently, Coople was able to provide opportunities for on-demand jobs in a way traditional agencies were not able to. The flexibility it offered to its clients brought it the critical advantage of competitiveness, both in support for peak demand (reducing the demands on the workload of their internal workforce and reduced customer service) and down- times (higher cost as you still needed to pay employees who had free capacity). Management of edge cases (i.e. no-shows) was a key activity Coople had been able to address by ensuring it could deliver on its promise of quality to clients: Working with Coople has helped us reduce the administrative burden of the hiring process, which is in any case not one of our core business competencies; we can leave this to Coople who are real experts on the topic. This also translated into a cost reduction; we used to have three dedicated HR FTEs, today we have none. Coople manages everything. This is efficiency! Dieter Streuli, CEO of Airline Assistance Switzerland Having entered the Swiss market in 2011, Coople’s easy-to-use app quickly became a favorite among students who had limited options when looking to earn some extra money. This, consequently, grew the Coopler network, catalyzing the two-sided network effects and accelerated growth. However, this rapid scaling of the business had, at times, come at the cost of efficiency and customer satisfaction. Viktor understood there was a need to make a tradeoff between Coople’s ability to scale fast, thus enabling it to position itself in the market, and its capability to make a profit and keep investors happy: Despite having established a new business model in Switzerland, we were working in an uncertain environment and not operating efficiently. We needed to get it right! We managed to fix most of our efficiency issues and then, through our investments, decided to expand operations in London, the entry point to the European staffing market, one where competition is and looks different and one that is crucial to win! Coople operations needed to balance the network sides and ensure diversity of Cooplers to have competencies for the various clients, i.e. the right people for the right role in the right place. Therefore, there was a need to have jobs where Cooplers were concentrated, and they needed to have the necessary skills, particularly in areas where clients were concentrated. This was particularly evident when considering expansion into London, which was a huge city and one where commuting from one side to other was not easy. Hence, operationalization of where Cooplers and clients were recruited was an important process. This document is authorized for use only in Fabio Busicchia's IMBAPT24 at MIP Politecnico di Milano from Oct 2024 to Apr 2025.  -8- IMD-7-2162 With core operational processes in place and running smoothly, Viktor and his team had thought about Coople’s next steps to ensure its growth. Aware that the UK represented the biggest on- demand staffing market in Europe and the most likely entry point for future competitors, particularly from the US, Coople embarked on building operations in London in 2016. Understanding the challenges to scale quickly and how this would impact Coople’s positioning in the UK, Coople leveraged some of the processes and learnings from the Swiss market to reduce the costs and time to enter the UK market. However, unlike Switzerland, the UK’s regulations forced Coople to physically meet the person before signing a contract, meaning the onboarding of Cooplers prevented this step from being fully automated. Further complexities around the UK Legal Employment framework, forced Coople to partner with a local provider to support the payroll process, to ensure alignment with UK regulations – a process that was managed internally in Switzerland. While this outsourcing came as an enabler to setting up its business quickly in London, it was a costly activity and one that Coople would need to review in the long-term. If anything, the venture into the UK showed that some level of adaptation would be needed each time Coople chose to enter a new country. Nonetheless, within a few years, Coople built up over 70,000 Cooplers and about 2,500 clients in London (refer to Exhibits 6 and 7), a population that was growing fast. Yet, competition was fierce, with almost 40,000 recruitment agencies registered as trading in the UK. 5 Consequently, in order to best manage this growth, Coople had to better integrate digital solutions to support each of these networks. Solutions were implemented where each network was able to easily see the offerings and competencies of the other network on offer. Little was gained by having jobs posted in an area in London where no Cooplers had enrolled or if they had, they lacked the skills to support the client needs. Ultimately this would risk the loss of confidence and satisfaction of both parties. Growth needed to be controlled, ensuring the right number of clients and Cooplers. The goal was simple – the right people for the right role in the right place. Failing to control this meant it would simply end up being a call center looking to fill jobs manually: The UK, being one of the biggest staffing markets in Europe, represents a great opportunity but also a significant challenge. The competition in the UK market, more importantly so in London, is significantly more intense than in Switzerland and, thus, establishing a clear differentiator and competitive advantage, potentially at the cost of efficiency and profitability, was crucial to be able to take a winner-takes-it-all position. This is why Cooplers are our number one asset, and we want to offer them what other agencies haven’t been able to – the ability to build the lifestyle they want while having a job that allows them to grow and earn a living. Antoine Debroye, Head of Business Administration, Coople UK Training soon evolved into an integral part of the benefits Cooplers would receive when they joined Coople. For example, training went from learning simple tasks such as “Silver Service” education to “Barista.” This allowed Cooplers to develop and broaden their skills to be able to take on more varied roles, while also expanding the skills available to clients across London. This increased the likelihood of recruiting a Coopler on short notice to fulfill a job and the Coopler having more job choices to which they could offer their support. Cooplers’ needs and satisfaction were seen as an important priority at Coople and entering the UK market made this even clearer. With many competitors and generally low switching costs, both clients and Cooplers often worked with several staffing agencies and, thus, differentiating to capture more and better Cooplers was key. This is why Coople was proud to be one of the few digital staffing companies that also maintained a human touch: This document is authorized for use only in Fabio Busicchia's IMBAPT24 at MIP Politecnico di Milano from Oct 2024 to Apr 2025.  -9- IMD-7-2162 If you are a Coopler on your way to a shift and something unexpected happens, you can call us and a person will answer, you won’t have to press 20 options before you are able to solve your problem. The customer center will also support clients, if they are having an issue with a Coopler, they don’t need to fill-out a form and wait 24 hours to get an answer. Traditional agencies only do that during working hours and you are usually redirected before getting a solution, if at all! Digital only staffing platforms have completely lost the human touch and the chat-bot can only do so much. Ignat Kostadinov, Head of Training and Quality, Coople UK Viktor knew that despite Coople’s growth to date, investors would not be ignorant of the threats posed by traditional agencies and new start-ups, but he also knew these companies were aware of the challenges they would face (refer to Exhibit 7). Traditional Agencies Among the business segments capturing the mentioned revenue were the traditional agencies typically active in construction, logistics, retail, hospitality and factory jobs. Here the employer paid agencies for the procurement of a suitably skilled worker in one of these areas. While such agencies were not in short supply, a few key global players had a tight grip on this sector. Kelly Services, founded as far back as 1946, continued to be an industry leader, offering a complete range of staffing solutions worldwide, managing the employment of in excess of one million workers, either directly or through supplier partners (www.kellyservices.com). Founded in 1948, Manpower was the third-largest staffing firm in the world operating out of ~2,700 offices in 80 countries, mainly supporting professional services (www.manpowergroup.com). Randstad, founded in 1960, was one of the largest staffing firms in the US, and it was the second-largest staffing firm worldwide with locations in 39 countries. It provided temporary, temporary-to-hire and permanent placement services each week to over 100,000 people (www.randstad.com). Adecco, the youngest sibling, had been in the staffing business for more than 50 years, during which time it had become the world’s largest staffing provider, with more than 5,000 offices and 70,000 workers in 60 countries (www.adeccogroup.com). Acting as third-party employers between the company providing the job and the temporary employee, these agencies managed remuneration, scheduling, complaints, taxes and other administrative parts of the relationship. In most cases, these agencies were paid a fixed percentage fee based on the remuneration the employee received. This could be as much as 15–20% of the first year’s full-time salary for permanent roles. By contrast, hourly and temp worker fees ranged from 15–35% depending on the role, engagement model and country. Temporary staffing had always been a commodity business, with a manual business model from staff selection to physical offices held close to client locations. Consequently, their personalization towards clients, brought not only additional costs, but the inherent challenges of scaling while maintaining their standards of quality. Woken up by companies like Coople that looked to bring this online, many of these traditional players were now beginning to employ technology to improve process efficiencies through shift scheduling software: We are not overly concerned with traditional agencies, many of whom are looking to catch the curve by integrating staffing software. Moving into the platform space requires them to adapt their cultural mindset; this will not happen overnight! The problem with most traditional agencies is that they are sales-driven more than product-driven companies. Viktor Calabrò This document is authorized for use only in Fabio Busicchia's IMBAPT24 at MIP Politecnico di Milano from Oct 2024 to Apr 2025.  - 10 - IMD-7-2162 Traditional agencies focused their efforts on addressing client needs for longer duration jobs and ones where the speed to fill open positions was less time-constrained. By contrast, Coople’s market segment occupied a space where clients, required a suitably trained/competent worker (not necessarily a professional) to support short-term jobs, with the added flexibility to recruit quickly, at times within hours of a job posting. One might argue Coople’s business model reflected the polar opposite of a traditional agency. Would traditional agencies be able to adapt to a different cultural mindset, accommodate the growing flexible working mindset of Millennials and transition beyond the typical bricks-and mortar physical presence to a digital one? Despite the management team’s confidence in Coople’s business model, they knew existing traditional staffing companies could present themselves as unstoppable forces if their inherent ability to build strong workforces could be combined with an on-demand platform concept (refer to Exhibit 8). Would Coople be able to loosen the grip-hold it had, or succumb to being victims of the critical mass the big traditional agencies controlled? The two giants in the industry –Adecco and Randstad – introduced copycat platforms with Adia and Ploy. Adecco invested €170 million in IT systems and digital initiatives such as Adia, which facilitated the search for temporary staff in food and beverage outlets, hotels and in the catering, events and promotion sector for small and medium enterprises. 6 While it impacted its margins, it was betting it would pay off in the future. In less than two years following its launch, Adecco’s Adia platform was active in Switzerland, the UK, Germany and the US, and its CEO Alain Dehaze suggested they were already the world market leader.7 However, rumors in the market suggested that the reality looked slightly different, which forced Adecco to put a hold on its rapid expansion, which led to the reintegration of the Adia platform in its existing temporary work business model in Germany. The other industry giant Randstad had withdrawn its app Ploy in just over a year following its launch. The reason, according to former Ploy boss Karin Habegger, was that many companies had trouble with using a purely app-based solution, having previously been used to desktop solutions. 8 Randstad quickly realized that developing a solution for mobile and desktop devices required a significant time investment. Manpower, number two in Switzerland behind Adecco, had not ventured into providing its own app-based solution. All three examples showed that despite heavy investments in their digital futures, these established players were struggling with acquiring new knowledge disciplines and getting a foothold on the fast-growing platform industry. Next Steps The investors’ briefing was coming to an end and Viktor was sharing his closing notes. Having established core business operations in both Switzerland and the UK, Viktor was conscious there was still much to be done: I want to make sure the upcoming strategic decisions we take revolve around the increasing pressure from emerging competitors and Coople’s ability to build a strong enough competitive advantage to address the growth vs. efficiency tradeoff. Also, we should take into account the socio-cultural changes that are redefining the needs on both sides of our platform and how to better align them to harness the opportunity. Thank you for your support in getting us here, it will continue to be crucial to develop our next strategic move and foster growth, scale and profitability. Let’s take Coople to the next level together. Meeting with investors always energized Viktor, who was still asking himself the same questions he did before the briefing session: Was Coople scaling fast enough to prevent This document is authorized for use only in Fabio Busicchia's IMBAPT24 at MIP Politecnico di Milano from Oct 2024 to Apr 2025.  - 11 - IMD-7-2162 copycats from attacking its market leading position? Would competition come from traditional industry players catching-up or would it come from an external disruptor? Was Coople’s on- demand staffing platform already well armed with the right technology and automation to continue growing and foster profitability? What was the right next step for Coople – geographical expansion, adding new segments, offering new services? A first option seemed to be Mr Winter’s idea of engaging a new client segment by expanding to hire highly skilled Cooplers. However, a second option also existed – geographical expansion. The management team was aware of the challenges ahead, particularly on the regulatory side, but they were confident that Coople had built enough expertise to try and conquer the rest of Europe, one country at a time, in the coming years. They also thought this would have a positive response from investors given the success Coople had shown in the UK in a short time. Additionally, many of the clients they served had operations in other European countries and they could start expansion by offering them a European-wide service that fostered a tighter client relationship. Coople’s management team members knew that in order to achieve this and truly scale, they would have to address their manual processes and invest heavily in automation. This would also allow them to become more efficient and faster as well as produce better insights and reports for their clients. The power and value of data had become undeniable across industries. Over time, Coople had gained a significant amount of information about its clients and Cooplers, and this had become a gold mine of data. However, given many of its processes still had manual components, extracting information would be time consuming. The team knew that providing clients with more information on the staff they hired would have an impact on productivity and efficiency gains through data analytics. With the regulatory requirements in place, this could be an added value and competitive advantage for Coople or even an entire side business, which would integrate Coople in its clients’ value chains. Finally, more opportunities would arise because of the investment Coople was making to boost its automation. One of its key priorities was to improve its matching algorithm through machine learning. Coople had already built an important network of clients within various industries, and its algorithm was efficiently matching Cooplers to jobs based on industry background and past jobs. For example, different hotels had different needs, i.e. a Four Seasons was not an Ibis. The personalized service that a client of a five-star hotel receives requires different skills than those a Coopler might need in order to work for a different client segment such as that of a two-star hotel. Improving its algorithm through machine learning would allow Coople to better cluster Cooplers skills and use that information to better anticipate and predict the needs of its clients. This would better enable it to proactively recommend those Cooplers it knew would be the best fit for its clients’ jobs: At least as important as our geographical expansion is our ability to improve the skills matching of our algorithm through machine learning. The more accurate we do the matching, the more value we provide to both sides of our platform, which will help us strengthen our competitive advantage. Rinaldo Olivari, CEO, Coople Coople’s management team members agreed they would address these options in the following weeks and work on defining the next steps forward for Coople. It was going to be a busy few weeks for the management team but at the same time an exciting time full of opportunities to continue growing and creating value for all sides of Coople’s platform This document is authorized for use only in Fabio Busicchia's IMBAPT24 at MIP Politecnico di Milano from Oct 2024 to Apr 2025.  - 12 - IMD-7-2162 Exhibit 1 Coople at a Glance Source: Company information Exhibit 2 Human Cloud Framework and Taxonomy Source: Adapted from Francis, D. (2018). “The Gig Economy and Human Cloud Landscape: 2018 Update.” Staffing Industry Analysis; Core Skill Sectors and Industry Segments.. This document is authorized for use only in Fabio Busicchia's IMBAPT24 at MIP Politecnico di Milano from Oct 2024 to Apr 2025.  - 13 - IMD-7-2162 Exhibit 3 Map Showing Top 10 Global Staffing Markets by Percentage of 2017 Global Staffing Revenue (US$461 billion) Source: Source: Adapted from Gregoire, T. (2018). Global Staffing Industry Market Estimates and Forecast. Market Information and Forecasts. Exhibit 4 Coopler Registrations Switzerland & UK Source: Coople This document is authorized for use only in Fabio Busicchia's IMBAPT24 at MIP Politecnico di Milano from Oct 2024 to Apr 2025.  - 14 - IMD-7-2162 Exhibit 5 Company Registrations Switzerland & UK Source: Coople Exhibit 6 Job Profiles Recruited within Coople’s Platform Source: www.Coople.com This document is authorized for use only in Fabio Busicchia's IMBAPT24 at MIP Politecnico di Milano from Oct 2024 to Apr 2025.  - 15 - IMD-7-2162 Exhibit 7 Swiss Providers of Platform-Work According to Work Type Source: Authors Exhibit 8 Temporary Staffing Market by Fulfilment Speed and Job Duration Source: Authors based on interviews with Coople founder Viktor Calabrò This document is authorized for use only in Fabio Busicchia's IMBAPT24 at MIP Politecnico di Milano from Oct 2024 to Apr 2025.  - 16 - IMD-7-2162 References 1 Coople website (2018). Press release, October 25. “Coople erhält Finanzmittel in der Höhe von 21 Millionen US-Dollar und kündigt Veränderungen im Management Team an. ” www.coople.com: https://www.coople.com/ch/in-the-news/coople-erhaelt-finanzmittel/. 2 Francis, D. (2018). “The Gig Economy and Human Cloud Landscape: 2018 Update.” Staffing Industry Analysis; Core Skill Sectors and Industry Segments. 3 Gregoire, T. (2018). “Global Staffing Industry Market Estimates and Forecast.” Market Information and Forecasts. 4 Gregoire, T. (2018). “Global Staffing Industry Market Estimates and Forecast.” Market Information and Forecasts. 5 Wilson, R. (2018). “Recruitment industry edges closer to 40,000-agency mark.” https://www.recruitment-international.co.uk/blog/2018/05/recruitment-industry-edges-closer-to- 40000-agency-mark. 6 Adecco website (2017). Press release, May 16. “The Adecco Group introduces a new brand structure and launches Spring Professional and Adia in Switzerland.” http://adeccogroup.ch/wp- content/uploads/2017/05/170516_MM_TAG_launch_e.pdf. Retrieved from http://adeccogroup.ch. 7 Gratwohl, N. (2018). “Internet companies are pushing into the recruitment market.” [in German] Neue Zürcher Zeitung, August 10. https://www.nzz.ch/wirtschaft/internetfirmen-draengen-in-den-markt-der- personalvermittler-ld.1410318. 8 Hämmerli, F. (2019). “Pure online intermediaries are mixing up the temporary industry. The established companies are defending themselves – with consistent success.” [in German] Handelszeitung, March 27. https://www.handelszeitung.ch/management/die-gig-economy-erfasst-die- temporarbranche This document is authorized for use only in Fabio Busicchia's IMBAPT24 at MIP Politecnico di Milano from Oct 2024 to Apr 2025.