6 ms·

The main issue Elance/oDesk needs to fix - is to eliminate `the race to the bottom` moment. Maybe set some minimum acceptable rates? (e.g. $50/hr) If this is f

by zerr 12y ago

The main issue Elance/oDesk needs to fix - is to eliminate `the race to the bottom` moment. Maybe set some minimum acceptable rates? (e.g. $50/hr) 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.

sumedh 12y ago
How would a new guy differentiate himself? A new guy can compete on price, get work, get good reviews and then increase his rates.
- zerr 12y ago
  The logic works the same way, but starting from e.g. 50 instead of 0. oDesk will benefit if rates will be 50 - 3-figures+.
  - sumedh 12y ago
    Well, if you put it that way then I agree but then cost of living is cheap in developing countries so an equally good developer there would be happy to do it at a lower rate compared to an American dev for the same work. How do you take care of such issues.
  - dragonwriter 12y ago
    Odesk won't benefit in that case if the higher minimum rate result in enough fewer deals to reduce their share of the total.
- dagw 12y ago
  Just being competent and knowing what you are talking about is a pretty good differentiator. I'm generally positive to odesk and have had mostly good experiences, but the truth is that I only end up hiring for about half the jobs I post there. For the other half I simply don't get applicants I feel comfortable with at any price.
- jspenke 12y ago
  I'm new to freelancing and a friend recently referred me to https://boonle.com https://boonle.com. It seems like a new service and the available projects look to be limited right now. However, I did complete two projects. It is different tho as you work for tips instead of setting an up front bid. I was nervous at first, but I received payment both times. I guess they are trying to target newbies? Not sure, but maybe worth a shot.
  - stefantalpalaru 12y ago
    Work for tips? What are you, a stripper?
- AJ007 12y ago
  From an employers standpoint, First evaluate the competition. As an example on oDesk, there are almost unlimited PHP developers, a large percentage who are novices. The reverse is true to some degree when it comes to Python. Identify skills which have less competition and higher rates. Next is focus on finding someone who hires for long term projects. If you are working for three people at once your quality will suffer and your output is going to be slower. If you are doing 3 hour projects a large percentage of your time is going to be spent trying to find work rather than being paid for work. You could look for how much the hirer has spent on total projects, for example. This is a guess, but you probably want someone with $10k+ spent. When it comes to oDesk & Freelancer one of your biggest advantages will be English comprehension fluency. Something to consider for non-native speakers. When I hire, I disregard the developer's profile history. I look at other things such as their English fluency. The first job is short and provides a fairly accurate indicator if they will work out. oDesk is mined for skilled developer talent. There are companies just posting test projects to find these developers and hire/contract them out full time. In that regards the pool of skilled developers is artificially lower than it otherwise would be. In my experience the guys billing higher amounts are either on par or worse developers than the ones charging lower amounts. In that respect, the skill shifts from developing to sales. If a non-tech person is doing hiring they are at high risk of being strung along. I would echo what others have commented in the thread -- it is much better to find a full time or part time dev position than chasing after mini projects. (And better yet, be paid in partially equity especially if your work is contributing to significant revenue growth for the employer.)
josephjrobison 12y ago
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.
Kurtz79 12y ago
Are there valid alternatives ? What is the preferred platform for freelances looking for remote work at decent rates, today ?
- zerr 12y ago
  I was in oDesk trap many years ago and got out of it just by applying directly to prospective clients. Since then, I always recommend to look for remote jobs/clients directly, rather than through these kinds of mediums. It works. HN remote jobs, and many other sites.
  - kashifzaidi1 12y ago
    I am in that same trap, any advice for someone to break the shackles? especially for someone located in Pakistan?
    - zerr 12y ago
      Just as I said above - find gigs on HN who is hiring thread, weworkremotely.com, stackoverflow remote jobs, wfh.io etc... just talk to clients directly. Oh, and needless to say - double/triple your rate, seriously - all it takes is to just ask. Also, I was after more or less niche remote jobs (C++). In case of web or mobile dev - there are literally tons of jobs out there.
- mbesto 12y ago
  Pick Crew is the only one I know of: https://pickcrew.com/ https://pickcrew.com/
  - kaolinite 12y ago
    Gun.io is another.
    - emptybee 12y ago
      To be honest I have not had great experiences with them (slow response time, lower number and quality of devs). I compared them side by side with Crew + Toptal, and would recommend either, but ended up going with the latter.
ryanworl 12y ago
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.
Crusoe123 12y ago
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)?
- zerr 12y ago
  While SV is an extreme, the sad true is that the cost of living is not as low as it seems from outside - but the people are used to low income. They just buy less goods, live frugally, etc... I'm myself from less developed eastern European country, and the last time I checked, groceries - eggs, meat, milk, etc.. had comparable prices to that of Californian cities, such as San Diego... And if we're talking about getting high quality education, healthcare, etc... in developing countries you have to go premium, and it costs even more than in western countries.
  - hluska 12y ago
    This is quite a surprising perspective. Thanks for sharing it!!
- EugeneOZ 12y ago
  Because it's a market and prices of their time should be as high as their skills can be priced, not as low as possible to survive. upd.: and when they don't understand it, their price demping hurts whole market.
  - dragonwriter 12y ago
    > Because it's a market and prices of their time should be as high as their skills can be priced, not as low as possible to survive. In an efficient competitive market, the expected behavior is that each seller will set the price they are willing to sell the next unit of what they are selling at the cost to them of providing that next unit (including the opportunity cost of what they give up to provide it.) > and when they don't understand it, their price demping hurts whole market. I think they do understand it. Its just that the people who have higher costs don't like that it prices those sellers out of the market. But welcome to a robust competitive market.
forgotAgain 12y ago
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.
- zerr 12y ago
  >Why would they want to eliminate the race to the bottom? To attract better clients and engineers. oDesk gets 10% cut, so I guess they will be happy to get 10% of some 3-figure/hr engineer rather than $10/hr one.
  - dragonwriter 12y ago
    Yeah, but they'd rather get a 10% cut of fifty $10/hr engineers than a 10% cut of one $300/hr engineer.
  - shoshd 12y ago
    That's well said. Upwork would rather get 10% of $100 than 10% of $10. And hourly rates are actually going up. US average hourly rate was up 18% (comparing Q1 2014 to Q1 2015).
manyxcxi 12y ago
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.
- adidash 12y ago
  Seems like a productized service opportunity - post, manage, & review technical projects on elance/odesk for non-technical folks.
  - tomjen3 12y ago
    It would probably be useful, but I don't see how you can make that a product. Wouldn't it have to be very individualized?
  - manyxcxi 12y ago
    I was thinking about that while responding but then you run into the same issue: how do you know the reviewer is any good? It's kind of like on the home improvement shows when the new home buyers buy a house and realize it's a money pit and they all say, "but we paid for an inspection!" At some point there needs to be a trusted party and I personally don't trust any vendor until they've proven their worth to me- then I go back to them without hesitation. eLance/ODesk try and address this with reputation and customer feedback, which is probably as useful and valuable as some third party of unknown reputation.
jasonkester 12y ago
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.
jusben1369 12y ago
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.
jasonlfunk 12y ago
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.
tomjen3 12y ago
What would be the point of doing that? 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.
john_horton 12y ago
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.
maouida 12y ago
I think oDesk already have a solution for this issue. When posting a job you can choose how much you are willing to pay: - 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.

by zerr 12y ago

sumedh 12y ago

How would a new guy differentiate himself? A new guy can compete on price, get work, get good reviews and then increase his rates.

zerr 12y ago
The logic works the same way, but starting from e.g. 50 instead of 0. oDesk will benefit if rates will be 50 - 3-figures+.
- sumedh 12y ago
  Well, if you put it that way then I agree but then cost of living is cheap in developing countries so an equally good developer there would be happy to do it at a lower rate compared to an American dev for the same work. How do you take care of such issues.
- dragonwriter 12y ago
  Odesk won't benefit in that case if the higher minimum rate result in enough fewer deals to reduce their share of the total.
dagw 12y ago
Just being competent and knowing what you are talking about is a pretty good differentiator. I'm generally positive to odesk and have had mostly good experiences, but the truth is that I only end up hiring for about half the jobs I post there. For the other half I simply don't get applicants I feel comfortable with at any price.
jspenke 12y ago
I'm new to freelancing and a friend recently referred me to https://boonle.com https://boonle.com. It seems like a new service and the available projects look to be limited right now. However, I did complete two projects. It is different tho as you work for tips instead of setting an up front bid. I was nervous at first, but I received payment both times. I guess they are trying to target newbies? Not sure, but maybe worth a shot.
- stefantalpalaru 12y ago
  Work for tips? What are you, a stripper?
AJ007 12y ago
From an employers standpoint, First evaluate the competition. As an example on oDesk, there are almost unlimited PHP developers, a large percentage who are novices. The reverse is true to some degree when it comes to Python. Identify skills which have less competition and higher rates. Next is focus on finding someone who hires for long term projects. If you are working for three people at once your quality will suffer and your output is going to be slower. If you are doing 3 hour projects a large percentage of your time is going to be spent trying to find work rather than being paid for work. You could look for how much the hirer has spent on total projects, for example. This is a guess, but you probably want someone with $10k+ spent. When it comes to oDesk & Freelancer one of your biggest advantages will be English comprehension fluency. Something to consider for non-native speakers. When I hire, I disregard the developer's profile history. I look at other things such as their English fluency. The first job is short and provides a fairly accurate indicator if they will work out. oDesk is mined for skilled developer talent. There are companies just posting test projects to find these developers and hire/contract them out full time. In that regards the pool of skilled developers is artificially lower than it otherwise would be. In my experience the guys billing higher amounts are either on par or worse developers than the ones charging lower amounts. In that respect, the skill shifts from developing to sales. If a non-tech person is doing hiring they are at high risk of being strung along. I would echo what others have commented in the thread -- it is much better to find a full time or part time dev position than chasing after mini projects. (And better yet, be paid in partially equity especially if your work is contributing to significant revenue growth for the employer.)

josephjrobison 12y ago

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.

Kurtz79 12y ago

Are there valid alternatives ? What is the preferred platform for freelances looking for remote work at decent rates, today ?

zerr 12y ago
I was in oDesk trap many years ago and got out of it just by applying directly to prospective clients. Since then, I always recommend to look for remote jobs/clients directly, rather than through these kinds of mediums. It works. HN remote jobs, and many other sites.
- kashifzaidi1 12y ago
  I am in that same trap, any advice for someone to break the shackles? especially for someone located in Pakistan?
  - zerr 12y ago
    Just as I said above - find gigs on HN who is hiring thread, weworkremotely.com, stackoverflow remote jobs, wfh.io etc... just talk to clients directly. Oh, and needless to say - double/triple your rate, seriously - all it takes is to just ask. Also, I was after more or less niche remote jobs (C++). In case of web or mobile dev - there are literally tons of jobs out there.
mbesto 12y ago
Pick Crew is the only one I know of: https://pickcrew.com/ https://pickcrew.com/
- kaolinite 12y ago
  Gun.io is another.
  - emptybee 12y ago
    To be honest I have not had great experiences with them (slow response time, lower number and quality of devs). I compared them side by side with Crew + Toptal, and would recommend either, but ended up going with the latter.

ryanworl 12y ago

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.

Crusoe123 12y ago

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)?

zerr 12y ago
While SV is an extreme, the sad true is that the cost of living is not as low as it seems from outside - but the people are used to low income. They just buy less goods, live frugally, etc... I'm myself from less developed eastern European country, and the last time I checked, groceries - eggs, meat, milk, etc.. had comparable prices to that of Californian cities, such as San Diego... And if we're talking about getting high quality education, healthcare, etc... in developing countries you have to go premium, and it costs even more than in western countries.
- hluska 12y ago
  This is quite a surprising perspective. Thanks for sharing it!!
EugeneOZ 12y ago
Because it's a market and prices of their time should be as high as their skills can be priced, not as low as possible to survive. upd.: and when they don't understand it, their price demping hurts whole market.
- dragonwriter 12y ago
  > Because it's a market and prices of their time should be as high as their skills can be priced, not as low as possible to survive. In an efficient competitive market, the expected behavior is that each seller will set the price they are willing to sell the next unit of what they are selling at the cost to them of providing that next unit (including the opportunity cost of what they give up to provide it.) > and when they don't understand it, their price demping hurts whole market. I think they do understand it. Its just that the people who have higher costs don't like that it prices those sellers out of the market. But welcome to a robust competitive market.

forgotAgain 12y ago

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.

zerr 12y ago
>Why would they want to eliminate the race to the bottom? To attract better clients and engineers. oDesk gets 10% cut, so I guess they will be happy to get 10% of some 3-figure/hr engineer rather than $10/hr one.
- dragonwriter 12y ago
  Yeah, but they'd rather get a 10% cut of fifty $10/hr engineers than a 10% cut of one $300/hr engineer.
- shoshd 12y ago
  That's well said. Upwork would rather get 10% of $100 than 10% of $10. And hourly rates are actually going up. US average hourly rate was up 18% (comparing Q1 2014 to Q1 2015).

manyxcxi 12y ago

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.

adidash 12y ago
Seems like a productized service opportunity - post, manage, & review technical projects on elance/odesk for non-technical folks.
- tomjen3 12y ago
  It would probably be useful, but I don't see how you can make that a product. Wouldn't it have to be very individualized?
- manyxcxi 12y ago
  I was thinking about that while responding but then you run into the same issue: how do you know the reviewer is any good? It's kind of like on the home improvement shows when the new home buyers buy a house and realize it's a money pit and they all say, "but we paid for an inspection!" At some point there needs to be a trusted party and I personally don't trust any vendor until they've proven their worth to me- then I go back to them without hesitation. eLance/ODesk try and address this with reputation and customer feedback, which is probably as useful and valuable as some third party of unknown reputation.

jasonkester 12y ago

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.

jusben1369 12y ago

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.

jasonlfunk 12y ago

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.

tomjen3 12y ago

What would be the point of doing that? 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.

john_horton 12y ago

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.

maouida 12y ago

I think oDesk already have a solution for this issue. When posting a job you can choose how much you are willing to pay: - 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.