Wednesday, December 12, 2007

Elance: The Morning After

It's been a little over a week now since Elance instituted its changes. Right now I'm not doing much work on Elance, aside from a project that was initiated before the changes were set in motion. However, I've been monitoring the Water Cooler and keeping an eye out for other updates on the status of the work environment on Elance, and here's what I've noticed so far.

A select group of providers don't have to pay for verified credentials for "premier" status--yet. Elance's new "Premier" status has ticked off a lot of providers. Elance claims this little gold star next to your name is awarded based on merit--you can't earn one unless you maintain a high feedback rating. However, Elance has been doing everything it can to make this a service it can earn money on--after March, it will charge providers with a "premier" status $20 per month. It also requires providers to have two or more "verified credentials" to be eligible, and Elance charges for those, too.

According to a recent Water Cooler discussion, Elance has noticed providers invited to join the Premier program aren't taking advantage of it. They believed the "verified credentials" requirement was a roadblock for these providers, so they waived the requirement only for this select group. If you weren't invited, you still have to buy verified credentials. If you were, you don't have to--until March. Then, Elance will take away your gold star unless you fork over the cash to verify your credentials, on top of that $20-a-month fee.

Despite reports of complacent acceptance, many writers are still upset. I saw this article in Business Daily Journal recently, reporting on the possibility that Elance members would strike. There have been some rumblings about that on Elance, but I don't really think it will happen. If a large group strikes, the rest will undoubtedly take that as an opportunity to get more work in those months. In a thread where one provider suggested everyone drop their Elance membership for two months, another responded with something like "That's a great idea--more work for the rest of us!"

However, writers and other service providers on Elance are not pleased, and the comments I've seen so far have led me to believe that business here is drying up. The changes have made it more difficult for providers to put out the amount of bids they need to get worthwhile returns on Elance. As one provider put it, "I am sitting quietly because I am afraid to lose any more connects. Gone are the days when I used to bid aggressively and compete aggressively on Elance."

I don't think the writers on Elance are going to take a cue from the writers in Hollywood and start marching in the streets. They're just not unified enough. Also, a lot of writers (myself included) had just paid for another yearlong subscription when these changes went into effect. I think most disgruntled writers on Elance are taking a "wait and see" approach while they use up the money they've already paid there, and they'll start to leave the marketplace once that money is gone. I predict that Elance will see a gradual stream of their best providers leaving over time--not a big, dramatic strike.

Some things change, some remain the same. Elance has made a few meagre concessions for writers. But they have also refused to budge on several things that really put writers in a bind. Despite pleas to reconsider, Elance has no plans to refund connects bidders have spent on a project that goes unrewarded--and according to anecdotal reports from writers and my own experience, over half of projects posted on Elance do. You'll still have to pay cash for the Premier Provider program, either now or later. And Elance still does not seem to be exerting any effort to reduce lowball bids; providers are still seeing their competition offering lower rates in their bids than Elance's bid minimums allow.

Some buyers are leaving Elance, too. I came across a thread recently that highlights the problem from the buyer perspective. This provider had to turn down work from a long-time buyer who has proved reliable in the past. The buyer posted his project on Elance to find a new writer. Because the buyer had a less-than-stellar award rate--three unawarded and one awarded project--nobody bid on his posting. The buyer then took his business to Guru, where he received plenty of bids and found a new writer.

Not all buyers think a lack of bids is a good thing. Elance is now charging buyers a $10 non-refundable deposit to post a project. If nobody bids--or only a few people do, and the buyer doesn't see anyone he likes--that's a waste of money for the buyer. He's more likely not to award the project, mess up his Elance record further, and do less business in the marketplace.

Other providers have observed that even "featured" projects are barely attracting any bids. This may be because it costs more connects to place a bid on these projects.

There's a new discussion board in town. I found this tip on JCME Enterprises' blog about a new Yahoo! group started by service providers who want to discuss Elance changes freely and without censorship. Actually, it looks like this group has been around for some time--but it's still a place to discuss Elance issues freely. Personally, I advocate discussing these issues on blogs--it makes the problem public and might put some pressure on Elance to pay more attention to its providers.

These new developments are really a shame, in my opinion. Elance was never perfect, but I started there and for a while it really was a good place to build a portfolio, make connections and pick up a few long-time, lucrative clients. Now, it's just not the same place it was. If you're interested in getting a start on Elance at this point, I'd advise against it. You have to compete pretty aggressively to get any work on Elance, particularly if you're a brand new provider with no feedback. The new changes are making cautious bidding more and more of a requirement.


Kathy@TheFlawlessWord said...

Wow, Jennifer, great bloggers think alike. ;o) I posted on the exact same topic today. I agree. Public blogs are the only place where Elancers get a real voice these days.

Anonymous said...

A correction and a comment or two:

"A select group of providers don't have to pay for verified credentials for "premier" status."

This is misleading. Some providers with high ratings and good, consistent reviews from satisfied customers were invited by eLance to the Premier program. Someone had to be the guinea pigs. Their monthly fee begins in March, and the free period is temporary. New providers don't (and shouldn't, IMO) receive invitations or cut rates.

"According to a recent Water Cooler discussion, Elance has noticed providers invited to join the Premier program aren't taking advantage of it."

Why should they? Doesn't their star rating and feedback score say enough?

"Despite reports of complacent acceptance, many writers are still upset."

They sure aren't doing anything much to change things, though…

"Because the buyer had a less-than-stellar award rate--three unawarded and one awarded project--nobody bid on his posting. The buyer then took his business to Guru, where he received plenty of bids and found a new writer."

Why should people want to do business with someone who doesn't award? (It seems Elance providers are more choosier than Guru ones… that isn't necessarily a bad thing, you know.)

"If you're interested in getting a start on Elance at this point, I'd advise against it."

I don't. The reviews and experiences of providers at Guru are resoundingly poor. Elance still remains a good place to learn the ropes, if you're cautious with your money, your connects, bid wisely, and do a good job.

Thanks for the link!

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Jennifer Williamson said...

@Kathy--the saga continues. Great post--I think it's important to voice these concerns in public, especially if Elance is censoring its own site.

@James--it's true that a select group doesn't have to pay for verified credentials--they waived this requirement, but only for people who've been invited. But, you're right, they're only free for a certain period. I think Premier status would be a great thing, if it weren't so pricey--in my opinion Elance should ditch the monthly fee entirely and make the status automatic once you meet their criteria for positive feedback. That would make it much more honest.

I'm not seeing much action in terms of changing things; it looks like a lot of people are taking a "wait and see" approach. And with good reason--some people have already paid for a year's subscription under the old plan and figure they might as well see how it goes while they use up the money they've already spent. In my opinion Elance will probably see a trickle of the best providers leaving the site over time, instead of a big dramatic strike or something like that.

It's smart for providers to bid judiciously now--we get so few connects. I wouldn't have bid on that client's project either, given his award rate. And it would have been unfortunate according to the seller who told the story; I'd be missing out on a lucrative long-term client. Before, I wouldn't pay too much attention to the buyer's award rate and I might have bid.

The problem with getting into Elance now as a new provider is exactly the advice you gave: you have to be cautious with your connects and bid wisely. This isn't a great strategy for Elance newbies; it takes a while and a lot of bidding to get those first few projects. Elance buyers put a lot of weight on your feedback rating, and if you don't have a track record it's more difficult to get work. You have to bid on a lot of projects (and try to underbid others) to land your first feedback rating. Before, this wasn't as expensive, as the plans available on Elance offered a lot more bids. Now, newbies will probably wind up spending a lot of money and time to land a few underpaying projects. It's just not the same ROI it once was.

Michele said...

Excellent post on Elance, Jennifer! So much information...

Writing the Cyber Highway

Ally (Allena Tapia) said...

HI Jennifer and James-- Here's my thoughts on the "premier" membership. I was invited and I accepted it because, yes, it's free...til March. However, I'm not sure it gets me much! Before the changes "select" members were automatically based at the TOP of the bid charts- that is the buyer saw them first. Well, it's not the same with the premier, so I don't see that much advantage to it...

I got some EXCELLENT clients on elance, high paying & returning clients.... I ALWAYS recommended it. I am now reconsidering. I just don't know.

Unfortuantely, I am also paid up for a bit, so....