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.

Elance Case Study: My Comment Moderation Peeves

I've already written about my position on Elance now that new changes have been made to the membership structure, and now they're at it again. Elance has an online forum where members can discuss issues and get answers from the staff. I've noticed a disturbing trend there lately: Elance is deleting posts it deems "inappropriate."

I think Elance is the perfect example of a site that gets it wrong when it comes to managing comments. The thread that was deleted was titled something like "How Many Service Providers are Considering Leaving Elance?" There were a few angry responses, but many of them were reasonable explanations of the reasons some providers were considering leaving and what it would take to get them to stay. In my opinion, it was valuable information for the Elance staff to understand exactly why providers were upset. When Elance deleted the post, it gave the impression that it was trying to stifle dissent--not a good move, especially when you've just ticked your customers off by making an unpopular change.

As a blogger myself, I understand the fine line bloggers and administrators face when it comes to censoring comments. Here are a few things I think Elance did wrong when it came to dealing with the forum discussions on their site.

Deleting posts or comments that question the company. When a company polices its forum and deletes posts that question their product or service in any way, it can make the users feel like they're in some sort of totalitarian state where the media is controlled by the evil dictator. It's definitely off-putting, especially if the dissenting comments are respectful and well-reasoned. Companies can make a better impression by standing up for themselves in a clear and non-defensive way.

Ignoring dozens of questions. There are plenty of responses from Elance staff on the Water Cooler forum, but what really bothered me about the discussions on the new changes was that for every response to a question, there were dozens of questions that went unanswered. Elance had just made a very unpopular change, and in my opinion the company could have worked harder to respond publicly to questions and criticism. The providers were owed some answers. Elance tended to ignore the more critical questions and respond more frequently to more neutral questions, such as "how do I sign up under the new plan?"

Being irregular about the threads it deleted. I understand that negative, abusive, and angry posts shouldn't be tolerated. But those weren't the posts Elance was targeting. Looking around the site, I found a lot of comments that are very negative and hostile left on, while a lot of thoughtful posts under threads like the one I mentioned earlier were deleted. Elance staff stated that they have a policy of removing posts they feel are too hostile or inappropriate, but it's tough to figure out what exactly their criteria is by looking at what they choose to delete.

Elance did do a few things right; they held a live discussion and they did make changes based on feedback, in a limited sense. But their policy of deleting dissenting views really bothers me. It makes the company look like it cares more about its image than it does about the people it serves--and that's never a good impression to make.

Nightmare on Elance II: Revenge of the "Connects"

It's been an interesting week. Elance dropped a bomb when it announced its new membership structure, and the change hit many providers hard--particularly in the Writing & Translation category. After a flood of angry postings on the Water Cooler--and a few outside bloggers covering the story as well--Elance has made changes to its new structure. To its credit, the company appears to be making an effort to listen to its providers.

An Elance representative (Lorenzo, who replied to the last post on this blog) actually called me last night to discuss the changes. Much of what he said was an attempt to explain to me why Elance was making the changes in the first place--nothing I hadn't heard from Elance already, to be honest--but he did tell me he was also looking for feedback. The feedback I gave him was this: I needed more "connects" to make a membership worthwhile; the Premier program can't claim to be merit-based if we have to pay for it; and I'm not wild about paying monthly.

I was happy to hear that Elance was taking our feedback into account, and today they announced some changes to the changes. Here's my impression.

The "connects" situation is just a little more reasonable. In the first installment of this horrow show, it cost three "connects" to bid on a project between $500 and $1,000 in budget. Since I bid on a lot of those projects and would only get about 25 "connects" maximum, that left me with about eight bids in a month--not enough to make my subscription worthwhile.

With the changes, some memberships have slighty more "connects;" not enough to make a real difference, in my opinion. But a few other adjustments make the plan a bit more reasonable. This time around, the "under $250" project category is gone, and all projects budgeted at $500 and under are worth one "connect." This means I can bid on more projects using just one "connect," and it's possible to work it so that my "connects" each buy me a bid and I might not have to buy more.

In addition, "connects" are now spent in multiples of two, not three--two for $500-$1,000 projects and four for higher-budgeted jobs. Spending in packs of three was problematic, as "connects" were only sold in packs of ten--ensuring you'd always have a few left over and would have to buy more to use them. Now there's no disconnect between how I spend my bids and how I buy more.

These changes are not huge, but they do make conditions a little better--and they make me think perhaps continuing my Elance membership might be doable, if I'm careful.

Premier status is free--for now. Elance has promised to make its Premier status free until March so providers are given time to judge its value. Here are my thoughts on that.

For a long time, I worked on Elance under the Professional membership. A year ago, I splurged and bought a Select membership. I saw my value in the marketplace go up significantly; I was winning more projects and commanding higher fees. I realized that buyers were seeing the Select category as an indication of quality, even though it just meant providers spent more money for their membership.

I have a feeling the Premier membership will do the same, except to an even greater degree because Elance will market it to buyers as a merit-based award. That's fine, if it really is. But Elance is still planning to charge us for it in a few months; plus you have to pay them extra to verify your credentials--a waste of money for writers, in my opinion, as your portfolio and feedback should be "credentials" enough. I think that soon it will be difficult to win bids as the high quality option without a premier star, which will cost us an extra $240 per year on top of our original plans. I don't want to pay that much for it and I can foresee having more difficulty winning bids without it--something that makes me believe Elance isn't going to work so well for me in the future, after all.

You can get a refund. No, you can't. Yes, you can. In the early Water Cooler discussions, a lot of people asked about refunds. Initially, Elance responded back that your remaining membership fees (if you've already bought a full year's subscription) could be applied toward a new subscription. No mention was made of refunds. So a lot of writers believed no refunds were being offered, and people were upset.

Later, I saw a few Elance people saying refunds were available on the Water Cooler. Then I got my call from Lorenzo (the Elance employee) who assured me that refunds were, in fact, being offered. I'm not sure if this was simply bad communication on Elance's part or if they truly did intend to discourage people from asking for refunds by not mentioning them, but it's strange how they didn't stress right away that refunds were an option.

You can't use money previously spent on Elance to buy connect packs. No wait, yes you can. When I found out what was going down at Elance, I considered rolling over to a cheaper plan and using my remaining paid membership funds to buy extra "connects." None of the plans offered enough "connects," so I knew I'd have to do that anyway if I wanted to stay. I emailed customer service to make sure it was an option, and I was told it wasn't--I would have to buy extra "connects" on top of my membership fees, no matter what plan I chose.

I wasn't too keen on throwing more money at Elance that way--especially since I'd thought I'd already bought a year's worth of bids. That pretty much clinched it--I didn't want to stay on Elance at all after I heard that news. I decided to roll over to the free plan and ask for a refund.

Later--after posting my thoughts on the Water Cooler--I heard back from customer service that they had made a mistake; that in fact you could use remaining funds to buy extra connects. Confusing, to say the least--but it again made the new Elance a little more palatable.

Low quality bids: are they really that big of a problem? One thing I kept hearing, in my phone conversations and on the Water Cooler, is that low quality bids are a big problem on Elance. Buyers are getting dozens of bids from low quality providers and don't like sorting through them to find the quality workers. I'd offer one piece of advice to those buyers right away: look for the higher prices. Quality workers don't make $5-an-article offers. But at any rate it never sounded quite right to me, this idea that buyers were being inundated with junk bids.

I just took a look in my project history to see how many bids were accumulating on these projects. In my most recent of round of bidding, here's what I saw:

35 bids: one project
20-30 bids: seven projects (mostly in the low twenties)
10-20 bids: fourteen projects
Under 10 bids: eight projects

In my bid history, most of the projects were getting between ten and twenty bids. That seems like a reasonable number--hardly an inundation. These changes seem to have been made to filter out the "junk" bids primarily--but I'm just not seeing that in the marketplace. Hm...curiouser and curiouser.

I'm not sure what to do about Elance at this point. I suspect that even if I do decide to stick it out for a few more months, I'll probably want to leave as soon as the Premier program becomes expensive. I have several great repeat clients on Elance that I wouldn't want to lose, but I can probably keep working with them if i keep a free (Basic) plan and let them get in touch with me. The new changes-to-the-changes have made things slightly better, but regardless of what I do in the short term, this situation has made me think that maybe it's best to cut the strings in the long term.

Why I'm Leaving Elance (And You Should, Too)

For those of you who haven't heard, Elance is changing its membership structure. And the change is so bad that I've decided to cancel my subscription.

Before, I paid an annual fee. Now, I can only subscribe on a monthly basis. Before, my annual fee gave me 120 free bids per month. Now, my monthly fee will give me anywhere from three to 25 "connects" each month. Before, a bid was a bid was a bid. Now, lower-budget projects will cost me one "connect;" medium-sized budgets cost three, and some "featured" projects cost six or even more.

I've worked on Elance since the beginning of my writing career. When I started, it was a great way to gain experience and make connections. The transaction fees were high, there were too many dummy projects, and there was always a lowballing problem; but for me the benefits outweighed the costs. With these new changes, the benefits are dwindling and the costs are rocketing into space.

Here's why I'm leaving, and why I'm no longer recommending Elance.

It's no longer a good place for beginners to get started. When I first got started on Elance, I signed up under the cheapest plan possible. This plan gave me only a handful of free bids. I thought they would be enough at first, but I soon found that nobody wanted to hire a newbie with no feedback rating. After quickly racking up a bill for extra bids that almost doubled my subscription cost, I bought a plan with an adequate number of bids. It took me about three months of unselected bids before I landed my first project.

Now that would no longer be feasible. New providers would have to spend a great deal of money on extra "connects" before landing even one project. And that project is likely to be extremely underpaid, as you usually have to underbid everyone else to get work as a newbie provider. It might take you a year or more to make back the money you spend in "connects" landing those first few jobs.

"Connects" are costly--no matter how you look at it. Elance claims that under its new plan, prices would go down for 80% of its providers. While this may be true in some other categories--programming, administration, graphics, etc--that are more highly paid, writers get the shaft. The "writing and translation" category was cheaper than others under the old plan, but writing jobs paid much less on Elance than jobs listed in other categories. But if I paid for a plan equivalent to the one I have now under Elance's new structure, I'd pay around $1,200 per year--that's nearly four times what I pay now. And that's not including the 8.75% transaction fee Elance charges on each project. And I'll be bidding on the same low-paying jobs, for the most part; payment won't go up along with costs.

The monthly costs may be lower for some providers in some categories. I've found them to be roughly equivalent, and often a little higher, to what you'd pay for an annual plan in the writing and translation category. But that's not what makes it so expensive. What Elance's new plan does, essentially, is force providers to buy extra "connects." Their most expensive plan provides 25 free "connects" per month. A single "connect" might be worth one bid for a low-budgeted project, but for a medium-sized budget you might have to spend three. I usually bid on medium- and high-budgeted projects, so this plan would only allow me three to six bids per month.

It's no longer feasible to be the "high-quality option." My strategy on Elance was to offer professional rates for high-quality work. There were plenty of low-balling writers from third-world countries out there who were offering substandard writing for substandard rates, and a lot of buyers went with the cheap option. But there were still a handful of buyers who were looking for quality, and I tended to find one of them for every ten to twenty bids I made. I spent a lot of bids to land a single job.

Now it's just not realistic to do that. I'd have to pay extra for every bid I made, so every bid would have to count. I can't take the chance that hundreds of my bids would go unchosen to land a few projects--it just isn't financially viable.

The new system will make underbidding worse. Elance claims that by asking writers to pay more, it will squeeze out the lowballers who bid pennies on dollar projects. The idea is that these writers can't afford the new costs, so they'll leave. But I usually bid higher than most other bidders--and I can't afford the changes, either.

In reallty, I think the change will make the lowballing problem worse. Before, I could afford to spend twenty or thirty bids to land one project. Now, every bid will count--I can't afford to waste any. If I stayed, I'd be forced to lower my prices considerably in the hope that more of my bids would result in paid projects and help me recoup my losses.

Elance isn't addressing the real problems. Elance states that the reason for the change is to combat several different problems the site has been dealing with ever since I joined. One is the problem of "non-serious" bids--providers simply throwing a lowball bid on every project they find in the hopes of getting work. Some high-budget projects attract dozens of bids, not all of them serious. If each bid costs money, providers will bid more carefully.

Some buyers may get an influx of bids, but on most I've seen only a maximum of twenty or so. The bigger problem on Elance, in my experience, is dummy projects. Some buyers post projects simply to get an idea of the cost or to try to find free work. Others simply don't follow up on their projects. Today I'd say nearly half the projects I bid on never go awarded. Under the new plan, about half my "connects" would be wasted on projects never intended to be awarded at all--and Elance has no plan to reimburse writers for those "connects."

Elance essentially railroaded these changes down the throats of providers. The new change goes into effect on December 4, and I received an email about this at the beginning of the week. We didn't even get a month's notice. Even worse, many providers who renewed their memberships recently under the old plan (myself included) are seeing their old membership terms evaporate. Elance isn't being clear on its refund policy; I received notice that Elance would not be offering refunds on old memberships that have not expired, but Jon Diller, the president, did say in the forums that refunds would be available. I have a feeling that it will take a lot of phone time and arguing with sales reps before I see any money back for my membership, if I ever do.

So, for any new writers out there looking to get a start in Elance: don't do it. The new model will not be kind to you. You'll be forced to pay extra for every bid, and it'll take months to land your first feedback rating.

Here are a few other blogs that are covering the Elance changes. I'll add more to this as I find new sites; if you're a blogger and you have a post up on the Elance changes, leave a comment here and I will add you to the list.

The Hidden Writer
JCM Enterprises
Irreverent Freelancer
Swan's Blog
Words on the Page
Fab Freelance Writing

Job Bidding Sites: Love Them or Hate Them?

Cruising around Anne Wayman's About Freelancing forum the other day, I found a post from a new freelancer asking about Elance in particular and paid bidding sites in general: good idea, or not so good? Most of the responders said that paid bidding sites were the lowest of the low--"you should never pay for job listings," as one poster said. Most of those who responded agreed.

Occasionally I'm on the opposite side of the fence when it comes to advice that most people agree on--and bidding sites are one of those things. I got my first few paying jobs through Elance, and under certain circumstances I do recommend it. If you've been wondering whether or not to give bidding sites a try, here are my responses to some common objections. I can't really speak as an expert on all bidding sites--I'm just relaying my own experiences. Because I've only worked with Elance, most of my responses reference that site.

You should never pay for job listings. In general, I agree that you should never pay for anything you can get for free. However, I joined Elance when I was a beginning writer with a day job in an office. I didn't have much in the way of clips or experience, and I wasn't getting hired when I applied to traditional job listings.

This is probably because online job postings often get hundreds of responses within hours. When you're one out of a hundred, many of whom have samples and websites and a track record, it's tough to stand out. On Elance, most postings only attract around ten or twenty bids. It's a smaller pool, and it's a bit easier to compete if you're a rookie. Your off-Elance experience isn't as important as your feedback rating, and it only takes one or two high ratings to make you competitive. Some of the highest-earning providers on Elance only have two or three pieces in their portfolios.

I think that one reason why most writers believe that bidding sites aren't worth the money is that the up-front cost can be steep and the payback doesn't come right away. It takes time to build up a reputation that allows you to attract higher-paying work--and you have to underbid other people until you do it. It took me about three months of underbidding everyone else to get my first paying work on Elance, but after that I got jobs more often.

The bidding system drives prices down. This is true. But when everyone else is offering bargain-basement prices, you have an opportunity to differentiate yourself as the "high-quality alternative." I've made decent money on Elance by selling myself as high-priced and worth every penny. So far it's worked--my feedback is 100% positive, and I rarely compromise on my prices anymore. Of course, it does take time to build up the kind of reputation that allows you to do this.

You can only find lousy keyword-article jobs on bidding sites. Also not true. There is plenty of keyword article work on Elance--and I've gotten paid reasonable prices for articles there; not all keyword article work is underpaid. But if that's not your thing, there are plenty of other projects to bid on--including brochures and sales letters, ghostwriting and editing, web copy, print articles, newsletters, white papers, transcription and scripts.

When I started writing, I really hadn't done that much. I didn't know what I liked, where my talents lay, and how to sell myself as a writer. Elance allowed me to try many different types of copywriting and decide what I liked and where I should start to specialize.

Elance buyers are dishonest and shady. I've heard horror stories from writers who say their buyers never paid them, their feedback ratings were trashed unfairly, and so on. I'm not saying this never happens, but it's never happened to me. I've worked with hundreds of people on Elance and so far (knock on wood), nobody has failed to pay me.

I actually believe that in some cases, working through bidding sites can be safer than working solo. I don't get all my work via Elance now--I use them only rarely as a stopgap. But many of my clients are online--I find them all over the place. Some are in different countries. If my latest client, in South Africa, decided not to pay me, how would I drag him into small claims court? It can be difficult to extract payment out of online clients in far-flung locations.

Elance gives you some protection from no-pay clients. They have a dispute-resolution system in place, so as long as you document your agreement you have someone to back it up if it's broken. There's also the feedback system--you can leave feedback for buyers too. This is a powerful incentive to resolve disputes to everyone's satisfaction, because leaving negative feedback for a buyer can limit them from attracting the best providers for their projects in the future.

When to use Elance: I think that Elance is a good way to get a start in freelancing. It's pricey, but I've earned much more each year than the cost of my membership. If you have a day job and can afford to underbid to attract buyers while you work to accumulate feedback, it's not such a bad way to get started.

When not to use Elance: I don't think that Elance is such a great deal if you're already established, with a long list of satisfied clients and a website full of great-looking samples. You probably won't have much trouble getting work on free listings or by contacting potential clients directly.

Elance isn't a great idea if you're looking for an immediate payoff, either. It takes time to gather feedback, and you have to be willing to be the low-cost option for a while until you do get work. For a beginner with a day job and no immediate financial need, this isn't such a problem. But for an experienced professional with high rates, it's not the best option--everyone starts as a "beginner" on Elance, no matter how many years of experience they have outside of it.

I think the reason why I did well on Elance--and the reason I continue to use it--has to do with timing. I started using it at the right point in my career, when the benefits in experience and contacts outweighed the cost of earning feedback. Now, I've used it enough to build up a great rating, and I can earn decent prices there. I don't use it often anymore, and wouldn't recommend anyone use it as their sole method of doing business. But I do use it as a stopgap when other options aren't working, and so far it's worth it to me to hang onto my membership a little longer.

If you're wondering about bidding sites in general or Elance in particular, think about your particular position first. Weigh the costs and benefits for you. Contact people who already use the site, and ask them about the pros and cons. Conventional wisdom may be well-meaning, but only you can decide what opportunities are worth your time.