As someone who has used eLance (and is currently) I've found that the price is only a small factor in the quality you'll receive and -surprise surprise- you can weed out most candidates with up front communications before awarding the project. Once we've awarded a project to a developer (or a shop) we aggressively review code and their communication style. We've had good luck with devs at as little as $20/hr and failures with devs and shops (mostly shops) at as high as $75. The real failure is that non-technical people haven't a clue as to how to evaluate the work their receiving and think that they can go from having no relationship to a finished project in a couple of weeks. If I was completely non-technical and didn't have someone in my corner to evaluate my options for me, I would be scared to death- but then again I probably wouldn't know the pitfalls before me either so...
Our big thing is to fail fast. If you're new to us and giving us the heeby jeebies in the first week we'll cut our losses and find someone else.
If you're awarding a project purely to the lowest bidder then I feel you kind of get what you deserve.
It's a global market. Many quality devs earn less than that in less developed countries. Why would they not want to work for less money if it allows them to be competitive but is still a good amount of money for them?
Why would you undercut their pricing power in the market just because Sillicon Valley has insane costs of living (but also insane job availability)?
I don't know if that's their positioning, they've kind of just been a "come one, come all" type of system, letting the contractors and clients filter themselves out, for better or for worse. Newer entrants like Codeable, Awesome Web, and Envato Studio are focusing on the higher end. For WordPress work at around $50/hr, Codeable is great.
What if the job can be done by an engineer with a cost of living where $15/hr is viable and profitable? All this will do is drive clients to another marketplace where there is no "minimum wage." There are a ton of reasons to hire a local developer and tons of reasons to hire a foreign developer, and an American developer probably doesn't want the clients that can only afford $15/hr anyway.
There's no stopping people from racing to the bottom. There will always be developers and designers willing to give away their work for nearly free.
As a developer, this doesn't need to affect you at all. You're not racing to the bottom. The people in that race are not capable of competing with you on quality (or they wouldn't be fighting for $4/hr work). You can (and should) continue to charge several hundred dollars per hour for your services to clients who can tell the difference between you and those oDesk guys, and who are willing to pay for those services.
You're right though. It would be nice if there were a way to create a market that included neither those clients wanting to build a Facebook clone for $350 nor the developers willing to try. But nobody yet has come up with a way to do so.
Why would they want to eliminate the race to the bottom? That is the main service they provide to employers.
The whole thing about work status: "I am available to work and will respond to invites right away" is nothing but a surrender of negotiating leverage by contractors to employers.
Perhaps that's a new service. I think Upwork is the Reddit and you might build a very successful HN like version if you brand and focus on quality and price.
What you are proposing is analogous to the minimum wage argument. While the intentions may be good to help the lower paid workers make more money, what actually will happen is that anyone who isn't worth being paid $50/hr won't be able to get hired. It ends up hurting the very people you are trying to help.
Full disclosure: I worked at oDesk for 2 years as their staff economist and still consult with the company (I'm now a professor at NYU Stern).
A few points on issues raise in this thread:
(1) I can assure you---and I really should do some blog posts on this---but client/employers are not nearly as price sensitive as people believe. When you try to model employers choosing who to hire from their pool of applicants, you need to work really hard in specifying the model to get demand curves to slope downward. In other words, "price" often gets the wrong sign, meaning it looks like the higher the bid, the more likely an applicant is to get hired. What's going on is that clients can and will pay more for better, more experienced developers and these developers bid accordingly. However as a freelancer, finding those kinds of employers can be a challenge.
To help deal with this search problem, we asked employers up front to state their relative preferences over price and quality. For example, employers could state they were looking for high quality at a high price, or less experienced workers at a lower price. During the experimentation phase, we randomized whether these employer/client preferences were revealed to applying freelancers. We found that we could induce substantial sorting by freelancers to job/employers of the "right" type, raising wages and project sizes at the high end. This feature is now universal and helps freelancers get in front of clients that are a good fit for them.
(2) After very extensive experimentation, oDesk did in fact impose a minimum wage. It was set at price point that improved the quality of people getting hired, but was not so high that jobs weren't being filled. Obviously, this level of minimum wage doesn't touch the high-end of the market, but picking minimum wages is a real balancing act and setting it too high can definitely price some work out of the market. It also "pulls up the ladder" and prevents new workers from getting started in the market, which oDesk understandably wants to avoid.
(3) There is a problem with too many low quality applications. The problem is similar to what's going on in college admissions---because it's cheap to apply, people apply to almost every school, whether or not it's a good fit. oDesk recently started using the Elance "Connects" system that imposes a meaningful quota on applications, which in turn seems to be improving application quality. It is hard problem though, because if you set the quota to high, you get the bad spam equilibrium, and if you set it too low, you choke off liquidity.
(4) There is a problem with inflated reputations---it's a general problem in online marketplaces, particularly those with bilateral reputation systems. However, oDesk has done something quite clever which seems to be working well, which is collecting private feedback from both workers and clients after a contract and then eventually disclosing non-identifiable aggregates of those ratings to future employers/workers. These ratings are far more truthful on a host of measures, are harder to subvert by begging for good feedback and so far, aren't getting inflated.
I wish they'd focus on improving the market by weeding out poor contractors and employers. The rating system doesn't work. If you're an employer you post a job and have to wade through dozens of messages from outsourcing companies who usually do a poor job. And if you're a contractor trying to get seen through that pile is a nightmare - the only way to succeed to is to watch for new job posts and immediately bid. If there are already a few bids you don't have a chance.
There are definite ways to succeed as a contractor without being the first to bid. A while back (when Elance was just Elance) I decided to do some digging to see how the buyer side looked and ended up with some key learnings that landed me most jobs I went for. Nothing too fancy or "hacky", but the majority of bidders - at the time, at least - were lazy and had messaging very similar to everyone else.
the only way to succeed to is to watch for new job posts and immediately bid. If there are already a few bids you don't have a chance.
Speaking as someone who occasionally hires people off of odesk, I've learnt to basically ignore any bids that come in the first few hours and give it at least 3-4 days before starting even to seriously evaluate candidates. I don't see how being the first bid vs the seventh bid should affect your chances of getting the job.
I've spent a bit of money (over $10k) on oDesk for my mobile app. I used a lot of translators and some artists (Illustrator), and did the programming myself.
Everyone wants you to review them with 5 stars because anything less is bad for business. The quality does greatly vary and so does the pricing. You can get good deals and you can get burned. I once had someone using a keep-active program so they could log more hours. Thankfully I looked close enough at the screenshots to notice.
I've noticed the same thing as a contractor. I only seem to get hired if I am one of the first few bidders. Otherwise there is a slim chance I will get noticed.
They could just have rebranded themselves as "cheap" or "bottom" because that's what those platforms promote. I appreciate the efforts they've tried to improve the platform(s) but they're dealing with something no one was able to fix yet: solve the lack of scalability of work-people matching.
Elance-oDesk aka UpWork vs Freelancer.com and the race to the bottom and dismal customer service but I think that when it comes to poor customer service Freelancer.com shines through as the heavyweight champion in this regard across the board.
Strangely the title just mentions a slack like feature whereas the article says the CEO desired is as a 'slack killer'. Although that part has no context whatsoever, they just took those words from some longer quote.
The live chat feature is a game-changer. We need things fast, tired of sending an inquiry and getting an answer a day later when I usually already settled my issue or found someone local ready to do it.
[+] [-] zerr|11 years ago|reply
If this is fixed, it will become attractive workplace for lot of qualified engineers, including those on HN.
This will be a radical move, but it will also eliminate "bad" clients.
[+] [-] manyxcxi|11 years ago|reply
Our big thing is to fail fast. If you're new to us and giving us the heeby jeebies in the first week we'll cut our losses and find someone else.
If you're awarding a project purely to the lowest bidder then I feel you kind of get what you deserve.
[+] [-] Crusoe123|11 years ago|reply
Why would you undercut their pricing power in the market just because Sillicon Valley has insane costs of living (but also insane job availability)?
[+] [-] josephjrobison|11 years ago|reply
[+] [-] ryanworl|11 years ago|reply
[+] [-] jasonkester|11 years ago|reply
As a developer, this doesn't need to affect you at all. You're not racing to the bottom. The people in that race are not capable of competing with you on quality (or they wouldn't be fighting for $4/hr work). You can (and should) continue to charge several hundred dollars per hour for your services to clients who can tell the difference between you and those oDesk guys, and who are willing to pay for those services.
You're right though. It would be nice if there were a way to create a market that included neither those clients wanting to build a Facebook clone for $350 nor the developers willing to try. But nobody yet has come up with a way to do so.
[+] [-] forgotAgain|11 years ago|reply
The whole thing about work status: "I am available to work and will respond to invites right away" is nothing but a surrender of negotiating leverage by contractors to employers.
[+] [-] maouida|11 years ago|reply
- Entry Level: I am looking for freelancers with the lowest rates
- Intermediate Level: I am looking for a mix of experience and value
- Expert Level: I am willing to pay higher rates for the most experienced freelancers
You can simple target jobs which require Expert Level. You'll most likely find clients who are willing to pay you $30-$50/hr.
[+] [-] jusben1369|11 years ago|reply
[+] [-] jasonlfunk|11 years ago|reply
[+] [-] sumedh|11 years ago|reply
A new guy can compete on price, get work, get good reviews and then increase his rates.
[+] [-] Kurtz79|11 years ago|reply
What is the preferred platform for freelances looking for remote work at decent rates, today ?
[+] [-] john_horton|11 years ago|reply
A few points on issues raise in this thread:
(1) I can assure you---and I really should do some blog posts on this---but client/employers are not nearly as price sensitive as people believe. When you try to model employers choosing who to hire from their pool of applicants, you need to work really hard in specifying the model to get demand curves to slope downward. In other words, "price" often gets the wrong sign, meaning it looks like the higher the bid, the more likely an applicant is to get hired. What's going on is that clients can and will pay more for better, more experienced developers and these developers bid accordingly. However as a freelancer, finding those kinds of employers can be a challenge.
To help deal with this search problem, we asked employers up front to state their relative preferences over price and quality. For example, employers could state they were looking for high quality at a high price, or less experienced workers at a lower price. During the experimentation phase, we randomized whether these employer/client preferences were revealed to applying freelancers. We found that we could induce substantial sorting by freelancers to job/employers of the "right" type, raising wages and project sizes at the high end. This feature is now universal and helps freelancers get in front of clients that are a good fit for them.
(2) After very extensive experimentation, oDesk did in fact impose a minimum wage. It was set at price point that improved the quality of people getting hired, but was not so high that jobs weren't being filled. Obviously, this level of minimum wage doesn't touch the high-end of the market, but picking minimum wages is a real balancing act and setting it too high can definitely price some work out of the market. It also "pulls up the ladder" and prevents new workers from getting started in the market, which oDesk understandably wants to avoid.
(3) There is a problem with too many low quality applications. The problem is similar to what's going on in college admissions---because it's cheap to apply, people apply to almost every school, whether or not it's a good fit. oDesk recently started using the Elance "Connects" system that imposes a meaningful quota on applications, which in turn seems to be improving application quality. It is hard problem though, because if you set the quota to high, you get the bad spam equilibrium, and if you set it too low, you choke off liquidity.
(4) There is a problem with inflated reputations---it's a general problem in online marketplaces, particularly those with bilateral reputation systems. However, oDesk has done something quite clever which seems to be working well, which is collecting private feedback from both workers and clients after a contract and then eventually disclosing non-identifiable aggregates of those ratings to future employers/workers. These ratings are far more truthful on a host of measures, are harder to subvert by begging for good feedback and so far, aren't getting inflated.
[+] [-] tomjen3|11 years ago|reply
The people looking for 10 usd/hr payment would simply go elsewhere. They aren't going to pay 50 usd/hr and you aren't going to accept 10 usd/hr.
A much better solution would be to have a better search functionality.
[+] [-] k-mcgrady|11 years ago|reply
[+] [-] Disruptive_Dave|11 years ago|reply
I wrote about it here: https://medium.com/@disruptivedave/how-im-gaming-elance-guru...
[+] [-] dagw|11 years ago|reply
Speaking as someone who occasionally hires people off of odesk, I've learnt to basically ignore any bids that come in the first few hours and give it at least 3-4 days before starting even to seriously evaluate candidates. I don't see how being the first bid vs the seventh bid should affect your chances of getting the job.
[+] [-] melling|11 years ago|reply
Everyone wants you to review them with 5 stars because anything less is bad for business. The quality does greatly vary and so does the pricing. You can get good deals and you can get burned. I once had someone using a keep-active program so they could log more hours. Thankfully I looked close enough at the screenshots to notice.
If anyone can recommend a great mobile designer on oDesk, I'd like to redesign my iOS app: https://itunes.apple.com/us/app/h4-spanish-lite/id388918463?...
My account on oDesk is h4labs, not sure how to link to it.
[+] [-] freedrull|11 years ago|reply
[+] [-] EugeneOZ|11 years ago|reply
[+] [-] EugeneOZ|11 years ago|reply
[+] [-] father_of_two|11 years ago|reply
[+] [-] 123qwe123qwe|11 years ago|reply
I agree with most parts, not about price (nver liked odesk payment way)
[+] [-] no1publicenemy|11 years ago|reply
[+] [-] Brushfire|11 years ago|reply
Why do journalists feel the need to artificially position articles like this?
[+] [-] sumedh|11 years ago|reply
[+] [-] k-mcgrady|11 years ago|reply
[+] [-] jspenke|11 years ago|reply
[+] [-] 123qwe123qwe|11 years ago|reply
[deleted]
[+] [-] laurentsabbah|11 years ago|reply
[+] [-] krakensden|11 years ago|reply