Last night, millions of people tuned into the Academy Awards to find out who wore what, who sat next to whom, and which stars walked away with little gold statuettes.
But there was another reason to train our eyes on Hollywood last night, and it had little to do with the movies: The film industry offers the closest example in existence right now of what the future of work will be like for the rest of us.
For starters, that doesn't mean we'll all be throwing on suits and gowns a few times a year and steering BMWs through a traffic-choked Los Angeles. I’m talking about the way movie productions are organized and how everyone involved in them works and gets paid as a result.
It used to be that the vast majority of Hollywood movies were created by studios—big, controlling corporations with huge payrolls. At the peak of the studio system, a single studio could churn out up to 350 films every year, thanks to production efficiencies.
Like a factory, the studio had centralized management, efficient allocation of resources like camera and lighting equipment, and a rational division of labor among actors, directors, set decorators, camera operators, and so on. (In fact, it's this system of Hollywood production that the Coen brothers' new movie, Hail, Caesar!, pokes wry fun at.)
For a variety of reasons, including federal antitrust violations, the studios started to decline in the late 1940s, and their influence waned over the next couple of decades. Studios like 20th Century Fox and Sony Pictures still exist, but they control far less of the industry than the studios of prewar Hollywood once did.
What filled the vacuum they left behind was a variety of independent and ad-hoc companies created more or less on the spot—call it "on-demand"—for each new production. And it's that approach that reigns today. A group of producers raises funds to make a film and incorporates a new production company for the sole purpose of making that film.
Then it hires all the subcontractors and personnel, from the director and leading actors to the gaffers, caterers, and accountants. And talent agencies like CAA, WME, ICM, and Paradigm act as "matchmakers" between talent and movie producers.
In other words, there's now a robust economy of professionals who work in the movie business but rarely have the same sources of income year by year or even month by month. What makes that possible is the endless interpersonal networking that Hollywood is known for: All those power lunches and meetings over drinks add up to a tightly woven web of relationships that help connect talent with those who need it. And it works partly because the film industry is relatively small.
After all, scale matters. Other industries are now undergoing shakeups that resemble the collapse of the Hollywood studio system decades ago. Many businesses are finding that sheer size isn’t the advantage it used to be. The overhead associated with large payrolls isn't always conducive to efficiency; the best talent isn't often available except on a contract basis; and businesses' needs aren't predictable enough to just hire a dedicated team and keep it staffed continuously. The watchword of any business that's trying to stay innovative and competitive is "flexibility."
At the same time, increasing numbers of professionals are finding that they don’t actually want to work for the same company month after month, year after year.
Hollywood has its power lunches, and the rest of us have online networks. Talented people can use the relationship-building and connection-maintaining power of the Internet to stay in touch with other professionals, including those who want to hire them. Digital platforms are already helping workers find companies that need work done and vice versa. Modern accounting tools like Bill.com and Expensify make it easy to collect invoices, pay them, and track expenses for a large number of contractors. And that's not to mention flexible office space companies like WeWork and Rocketspace that make it easy to scale your physical footprint up or down and rent conference rooms on demand, according to your needs.
So there’s less reason than ever for professionals and companies to stick with the same rigid employment system that's characterized the American economy for decades. And in fact, many companies already realize this. The venture capital firm Andreessen Horowitz has explicitly modeled its approach on a Hollywood talent agency created by Michael Ovitz, essentially renting sales and marketing teams to its client startups.
For the most talented workers, there’s another benefit: long-term employment with the same company tends to undervalue your talent. We’ve all heard about "10x" engineers, who are 10 times as productive as their peers. But it’s a rare company that's willing to pay an engineer 10 times as much as her coworkers.
For top-shelf talent, striking out on your own may be the best way to maximize your earning potential, letting you sell your services on an open market that's willing to pay you what you're worth. And like movie stars, some of these super-talented technologists have even hired agents.
In and outside tech, it seems likely that working teams will soon be a lot more like movie crews. This shift may be unsettling to some, but it can benefit companies as well as the people who work for them. Businesses will gain efficiency and flexibility. Professionals will gain a better lifestyle, more control over their work, and in many cases better income.
As Hollywood shows, the death of the studio system didn’t mean the end of amazing movies, great stars, and fabulous parties—far from it. So as you scroll Oscar recaps and watch clips of last night's ceremony today, remind yourself: "Freelancers made this."
Stephane Kasriel is the chief executive of Upwork, where he built and led a distributed team of more than 300 engineers located around the world as SVP of engineering before becoming CEO. Stephane holds an MBA from INSEAD, an MSc in computer science from Stanford, and a BS from École Polytechnique in France. Follow him on Twitter at @skasriel.