In mid-2007, I was downsized from my job working as a web editor for a major dining and tourism site. The layoff gave my ego a hematoma, but in practical terms, it wasn’t a big loss. When I factored in commuting and healthcare costs, the job was barely making me a profit.
Indeed, the gig I’d had before that–a full-time contracting position with an Internet startup–made me so little money that when I factored in rent, food, and insurance, the job was actually losing me a few hundred dollars a month.
Something was awry. After losing that second job, I realized that taking the leap from salaried employee to freelancer wasn’t as big a risk as I’d initially thought. After all, my two previous jobs had either lost me money or netted me too little to make a difference.
So, having no clue what to do, I jumped into the world of freelancing with both feet, a small startup savings account, a mortgage, and the panicked determination that comes from a genetic fear of penury.
A friend had given me a place to start, a site called ELance.com. For a small monthly fee, I could put up a profile and bid for projects, eBay-style. I knew how to write a profile and enter a credit card number, so I did. Thus, my freelance career was launched.
After floundering around for a while, I did end up making some money, even winning a couple steady clients in the process. However, there were a few tricks I wish I’d known before diving in. Here they are, in no particular order:
1) When you browse Elance providers, you’ll see a list of prominent contractors in your field. Some of these people have made $100,000 or more. This list invokes envy and inspiration. They’re your competition–and Elance has ensured they’re loaded. You could be, too.
Right? Maybe. Bear in mind that ELance has been around since 1999. It’s more than likely that:
a) These people have been around just as long.
b) They have been working their butts off for that period of time.
c) They have a staff.
d) They work with the kinds of clients who give big, long-term contracts. In my industry, that would equate to ghostwriting a book ($10,000+) or writing a humungous website.
The big earners make ELance look extremely lucrative. It can be, but don’t be fooled. Lots of people make drops in the bucket. Some people make just enough to live off of. Others make a lot. It depends on your strategy and how much time you’re willing to devote to the world of ELance.
If you want to follow in the footsteps of your lucrative ELance forefathers, try contacting someone who’s not your competition and asking them how they did it. People are often willing to help out, especially if you’re not threatening their niche.
Take time to browse the project histories of successful people. What kinds of contracts did they have? What niche do they cover? How often do they do projects? What kind of feedback are they getting? Who are their clients? This will help you draft a plan for your own ELance success.
2) In the beginning, you will probably lose money. It’s a common practice to lowball when entering a new ELance market. Be prepared to either use up some of your savings or, if you don’t have anything saved up, live on credit for six months or so.
Lowballing is annoying, but if you’re diligent, this phase shouldn’t last long. ELance competition is intense, global, and informed by feedback. At the beginning, good feedback is crucial, and sometimes you have to lowball just to land a contract. Consider it overhead.
3) Study potential clients carefully. Don’t just bid on any project that looks good. Look through your potential clients’ history and feedback ratings. Investigate the feedback your clients have left for other service providers. Sometimes you can get enough background information to see if this person is worth your time.
Use your gut, too. I had a bad gut feeling about one client, but decided to contract with him anyway. My strategy at the time was to take on as much work as I could in order to accumulate clients and build a history on ELance.
Unfortunately, communication with this client was bad from the beginning. I turned in my project before it was due. He sent back a few revision notes. I immediately fixed them. This is typical for the writing industry: Writer writes, editor sends back feedback, writer revises. Unfortunately, this client thought that I should have done it perfectly the first time around, so he gave me a poor rating on ELance.
I was shocked and dismayed for about a week. Finally, I researched the issue of poor ratings, and found that even the most lucrative of ELancers had a few lemons here and there. They’re inevitable. However, you can mitigate the number you get by researching who you’re working for before accepting a project.
4) If you’re located somewhere with a high cost of living, know that low bidders won’t kill you. For example, ELance has a large number of talented, English-speaking Indian providers who will undercut your bid by frightening amounts of money. Their cost of living is low, so they can afford to do it.
For projects where low cost is the biggest priority, you won’t even be in the running. However, different clients have different needs. You could have a locational advantage (no 12-hour time difference). You could provide the kind of quality and communications that cheaper providers don’t bother to give. You could offer value-added services, such as additional improvement suggestions for your client’s project.
Think of what you can give that differentiates you from fast and cheap. That mentality will win you bids.
5) Be very patient. There’s a paradox around ELance. On the one hand, you can instantly win projects, turn them around in a couple days, and get cash deposited right into your account. No commuting, no meetings; oftentimes, you don’t even have to call clients.
On the other hand, your success will hardly be quick and easy, unless you’re lucky. Not all bidders actually have projects to provide–some just want quotes. Not everyone wants what you have to offer. And a good bid takes time to compose. Sometimes, your time investment hardly seems worth it. This is when things get frustrating.
When I started on ELance, I put down a hard-and-fast rule for myself. I would find five projects a day to bid on, write down intelligent bids, lowball, and hope for the best.
That strategy got me a modest start on ELance. But it was a panic strategy, not a rational one. The strict self discipline helped me feel like I was making progress. It also built me a track record of $200 projects–short, fast, low profit margin.
It was the same niche low-cost providers love to specialize in. That kind of market usually doesn’t get you on the vaunted $100,000 provider list. If I could start over, I’d take a couple of days to draft a solid, redundant strategy using three solid skill sets. For example:
Plan A: Write SEO-friendly websites for clients with 2-week to 1 month turnaround times. Try this for two months. If I don’t make at least $1,500, divert to Plan B.
Plan B: Target Web ad and marketing clients with copywriting projects. Offer proposals to people looking for AdWords campaigns, product descriptions, and company websites. If this doesn’t net me X amount in a month, divert to Plan C.
Plan C: Write blogs for people. Target clients looking for quality, not linkspam schwag. If this doesn’t net me X among per blog, re-draft strategy.
I would have adapted the strategy as I gained experience, but left the basic template in place to remind myself that though my niche may evolve, I command the direction I want to take. I would have been flexible, but with standards.
Considering how panicked I felt when I started freelancing, I also may have developed a drinking problem. It’s hard to keep a cool head without experience on your side.
One final note about ELance. It’s a source of income, but not an end-all. Most freelancers diversify. A freelance writer, for example, can target print media (magazines and newspapers), websites, and corporations. Her income could come from all three.
If one client or market falters, have another in mind. You’ll be able to steady your income–and your sanity–by incubating several different sources.
Good luck!
I have hired many people on Elance and have had only one super experience. They followed the strategy you outlined - in particular researching out us first. So they new we were very serious clients, and they serviced us that way.
Subsequently with have done a large volume of work exclusively with them. Both sides are VERY happy.
- Mike Michalowicz
I don’t agree with Mike Michalowicz, because my experience on Elance was bad. I prefer GetACoder.com because you find lots of skilled programmers and their escrow service is great, if you use it right it’s impossible that you get ripped off.
I have tried and tried with my ideas on elance. My new philosophy is keep trying before I end up at the bottom of the bottle.
I’ll keep it up
ben
I’ve been considering signing up with Elance for some time now, so I have been diligently watching the process of requests for bids and the responses. But no one has provided so much useful insight into the “reality” of the Elance environment as has Business Pundit. Thank you very much.
Great post! I’ve been using rentacoder for the past year and had decent success with it. I’ve just recently decided to give eLance a shot. I like the fact that they limit how many bids you can make, preventing the 3rd world country developers from lowballing 5000 projects a day :-/ . I’m a little bit worried about having 0 feedback/history there, I’m not used to the lowballing tactic and don’t really want to resort to it.
Thanks for your tips and insight!
-Andrew
I have been using Elance for a few months and I am starting to make a living. If you don’t want to low ball go in confident from the outset and stress quality. I tried low balling and no-one bit, when I changed my profile and bids to reflect the fact that I was a quality writer who did not write crap for peanuts things started to get moving.
You can’t compete with the developing country writers so I just stay out of their niche. I have blogged a bit about it.
I use ProFriend to collect all new post jobs on these websites, save me a lot of time.
After going through the above comments, it seems that afterall Elance might be an interesting place to be .
Atleast and as far as making money is concerned.
great advice,
I think the emphasis on quality is key as you point out.
I don’t think there is any point trying to compete with the low cost (cheap) providers.
If you want quality work you have to pay.
Good buyers know that - the others are not worth working for!
cheers
Tony
Seems to me the only people looking for creative work on eLance are looking for a free lunch, not a truly qualified creative partner. Consequently, those applying for work on eLance are desperate and/or generally unqualified to do truly professional creative work. No doubt there are exceptions, but it’s just common sense. If you had the option to design a site for $5000 or one for “less than $500″ which would you choose?
There is an old adage in my business: The client always gets the creative work they deserve. There are no long term short cuts. If you believe in your company and have a solid business plan, you should budget to hire qualified creative people who can take your fair budget and multiply it due to their experience, connections and savvy. If you truly believe great work can be done for pennies, then you are simply not experienced enough to know otherwise.
Very helpful post. I’ve been on elance about a month and a half and this is as good a summary of the provider’s experience as I’ve read.
As someone new to using elance providers, I can agree with the ‘if you are serious about business, then you should be prepared to pay’, however, I would guess that a lot of people like me are not in a position to pay a lot, and that’s why they consider elance.
I have a significant amount of design, presentations, sales and other writing needs on an ongoing basis that I look to ‘under $500 providers’ for. I don’t yet have a successful business or large income/pool of cash to call on, however the work I and people like me need done, probably amounts to a lot of the work, the bread and butter income, that some providers offer.
Maybe a double profile would help? One for lowend work, one for higher end work? Doubles your cost on elance though of course, but I bet some people do it.
I also use Elance for the majority of my freelance work. I follow this blog: http://freelancemoney.wordpress.com/
Sometimes it can be a little “salesy” but he gives invaluable advice for anyone serious about making money on Elance.
Yani
you could always use other freelance sites. There are some upcoming, no crowded sites, where you could built some good feedbacks before they become well-known- Because that’s where competition starts. I think this site (http://www.ivoireconsultancy.org) started in February 2009 and they already have more than 1000 providers. They must be doing something interesting. I have already been awarded 2 projects so far worth more than $700.
I use Guru.com for few years with some successes. I spent about $50k so far there. I wanted to try elance this time because I failed to find anyone who can do my java profiling job. I am quite disappointed there also.
I am 100% rated at guru.com, and use those who can deliver as they promise for a long time. The proposals that I found are generally lowball proposals wo much careful response to my project requirements. Not a least, be specific to what skills that one must have to solve my problem.
My suggestion to the free lancers is to be honest with what you truly good at and ask for a reasonable rate. I as a buyer for services will come to you because of your credentials, references and reliability, not because of your lowball prices. That is my personal opinion, hopefully it is of some help for both sides of this type of service market to consider.
You are welcome to email me for further comments.
Jim
I am one of those top tier providers. I am in the Engineering and Manufacturing Section. Matter of fact I have been the top level provider in that market segment for over a year.
As noted in the original blog. Working Elance takes a lot of time hard work and effort. Also to be successful you MUST deliver a cost effect product to your Buyer / Client.
I know lots of people on both sides of the “Elance is Great” and “Elance is Horrible” fence. Most of them are correct, a lot depends on your point of view.
The key to remember, it is a business tool. If you can learn how to use it successfully you can go far. If not it can be a real nighmare.
Here is one of the key things that keeps me on Elance, my billing success rate in the last 4 years since I reentered the Freelancing business. I have only had two minor problems with Buyers paying me what I was due. One went to arbitration and the baby was split down the middle. The other I got everything I was owed.
I can not say I have the same level of hassle free success with direct clients. Over 2/3 have required that I chase down payments for services. Several still have outstanding bills that I never expect to see paid in full.
Niel
I’ve been an Elance provider for 3 years and am just trying to get established on Guru so I can get off Elance. I actually started a Facebook group for Elance users concerned about the direction they’re going in, particularly since it seems there is no place for freelancing individuals anymore. You can check it out here: http://tinyurl.com/cklm42
Hope to see some of you there!
Hi Guys,
Honestly saying Elance is the worst company i have ever worked with. They don’t have any ethics, no customer service at all and they would never abide by what they say.
Their executives would promise you something and the next day their VP Policy team would take bribe and would decide on favor of the other company. Then they would give you silly reasons that they took it for because of their poor english….In todays electronic age they would ask you to send a mail to their physical address in US and then they would say that they have not received it…..
The fact i am saying is true…their VP policy team actually asks for bribe…we had all the proofs that we are genuine but he took bribe from the other company( see this its important : the other company has 3 accounts on elance but even then they are allowed ) …on complaining we got a reply from elance saying that the problem is in your account and not theirs…..i am in the process of setting up a web page with all the communications i had with elance so that you can decide for yourself whether they are genuine or not…..its time we shlould stand against such companies and tell the government about their unfair practices.
Steve
Steve, please do so. I am actually interested in joining elance after a friend of mine wants me to be part of his team but im a bit skeptical as I have to shell out some money. I am actually with oDesk and I am doing great with the financial transactions. its a little tough on landing a job as there are a lot of applicants from the asian countries.
Great article. This really describes what 90% of the successful Elance users are experiencing. Just don’t forget to fire your worst clients once you are out of panic mode. I’ve described my technique for doing that on my most recent blog post: http://www.elance-professional.info/elance-tips-fire-your-clients/
I have used both elance and oDesk, I found a lot more paying jobs on odesk and the jobs were for longer terms. I had trouble getting paid for the work I did on elance and when I was trying to get people to help me with a quick firefox plugin job the providers i found on elance never really got done with the work. I’d recomend oDesk but not elance.
Elance wanted me to pay them to be able to submit more bids, wtf? They spammed me even when I unsubscribed.
I’ve done web consulting on the side since 2004 and web development since 1998. I decided I don’t need these jokers.
Hi,
I think this blog post is just fantastic.
My firm began work on Elance only a couple of months ago and we are already ranked 201 among all other providers.
In our 5 months, we have exactly been through the same things, lowballing, rethinking strategies and we emerged as winners cuz we went for providing quality work, service rather than think of money at the time. We are now 7 employees and its amazing how a simple blog post can describe 5 months of our experiences.
Also I only wish I would have read this 5 months ago, it could have saved so much of our time to progress, well, atleast new Elancers can benefit from this.
- Tejas
I have been using rentacoder from quite a while. It’s a great site. Two years ago I was scammed by Getacoder.com after thay took money of my account stating the money was invalid from another buyer. Such left me without $170 and hours of free work. Getacoder.com is the worst of freelance sites and their managers help scammers to rob honest freelancers. Don’t use getacoder. Getacoder is BAD!!!