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How Twitter Became an Alternative to Small Claims Court

In July I did some freelance consulting work for a client who shall remain nameless.  If you’ve been following my posts, you will remember who this was.  You can imagine my dismay in October when, after many attempts to contact the client for payment, I filed a small claim in Worcester District Court.

The money was as good as gone.  The clerk at the backed-up small claims court said that it would be at least a year before the client would even be served.  Past that, there’s the hearing, then the judgment, then the execution.  It was a long, hopeless road.

Redemption

Enter Trevor Chang, an old friend and, as it turns out, a wise one.  He read my previous post and casually suggested over Facebook that I tweet to the client.  Twitter is, at its core, a public forum.  Maybe a modern day scarlet letter would get the client’s attention.  It seemed a good alternative to small claims court and a years-long wait.

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I proceeded timidly.  At first I tweeted directly @{insert client name here}, and only that I had sent an updated invoice.  I did this in October.  Then, on Thursday, November 14, I tweeted the following:

I wrote this blog article about @{insert client name here} a while ago.  Still no response. {link}

Friday afternoon, November 15, my inbox contained an email from the client.  This was his first communication with me since August 13, 2013.

The email was angry.  Vituperative can be your “word of the day.”  It was vituperative.  “How dare you break non-disclosure and defame my good name” etc. etc.  It ended with, “I’ll pay your invoice if you take down that blog article.”

I replied, in effect, “I’m sorry it took a blog article to get your attention. Deal.”

Within an hour money had changed hands — righteously, I might add — and the blog article, which never had done more than pose the question of malfeasance, had been taken down.

So, incidentally, have my tweets.

The blog article was search-engine optimized for effect.  I’m proud to say it was on the front page of Google search results for the client’s name and business name.  But that, combined with my dozen increasingly stern communications, had no effect whatsoever on the client.  Not even when I threatened small claims and then actually did file in small claims court was there so much as a peep from the client.  None of my growling had any effect.  What broke the logjam was the merest tweet.  “Hey, @{this guy} owes me money, take a look {link}.”

Reflection

I find Twitter incredible.  I look at my Twitter feed and I feel washed over in garbage.  But sometimes certain tweets pack a relevancy and a punch that makes me feel like I’ve found a diamond in a coal mine.

And because it’s one of basically three(ish) digital channels (website and Facebook being the other two), companies attach enormous importance to what others will see on Twitter.  Take the JP Morgan Tweetup Disaster as case in point.  Call it a “microblog” if you will.  It’s also a 17th century scaffold.

What’s the most memorable tweet you’ve ever written?  Did it accomplish something good? Let me know in the comments below.

An Entrepreneur Neither Loved nor Savvy

After leaving my corporate job last fall, I joined up with elance.com, a site designed to help freelancers find work.  I submitted 29 bids and got selected once, the one time I offered to work for less than minimum wage.  The economics are tough: elance is a global marketplace, so I was bidding with my high hourly rate against folks in parts of the world with much lower hourly rates.  Many of those folks have similar skillsets to what I’m able to offer via elance’s framework.

So I stopped bidding as an attempt to make money and I left my profile up as an invitation.  I want to meet and work with aspiring new businesses and stay engaged with companies of various shapes and descriptions.  Anyone on elance can invite me to bid their job along with all the many others around the world scanning the site regularly.

Here is an actual request (client’s name replaced with the word “Client”).

elance_client

Now right away, having done one or two sets of startup financials, I can see that it isn’t going to happen for $50.  I’ve found that when folks give a very narrow range like this, they know very well what they want to spend.  I have two choices:

  1. Decline the bid with one of elance’s woefully inadequate, unchangeable stock messages, like, “The budget is too low”; or
  2. Bid something that will fit within budget.

I pick option two, because for me, on elance, it’s all about meeting great new businesses, not making money, not yet anyway.  So here is what I bid:

elance_bid

That’s my bid.  Pretty tidy and friendly, if you ask me.  (Note: I use the word “we” because part of my advertising is, “If I can’t do the job myself, I can find the expert to do it for you.”  Also, I’m doing this somewhat like a realtor does it, with a mix of personal trust and business officialdom: my personal image is featured prominently but I’m working under a separate company set up for this purpose.  If they want to know more, they can view my profile on the site or reply to that message.)

Here is the first part of a short, increasingly unpleasant conversation that ensued before the client blocked me (yes, they blocked me):

elance_conversation_2

For the record, when I submitted my bid, 19 other bids had been proposed at an average price of $90, a high price of $548, and a low price of $22.  It would have been enough for this client to decline or ignore my bid and take one of the several that likely fell within her budget.  Instead, she accused me of wasting her time.  You’ll recall that she invited me to bid.

(As an aside, let me say that elance could do about ten times better than it does at screening and coaching clients.)

I wish I knew what business she was starting so we could track it, but here’s my prediction: it will fail.  In business, you want to be both loved and savvy.  If you can’t have both, you need at least one.  People who are loved will attract others who will make up for their deficiencies.  People who are very savvy make it work even if they’re loathed.  So you need one or the other.

I’m going to go out on a limb here and say that maybe this isn’t the first time she’s flown off the handle.  So who can she attract to work with her?  And it’s not the savviest thing for her to give her financial worksheets – the most important part of her startup planning – over to the low bidder.

What if you change your mind halfway through a negotiation?

10444556_s nyc upper west side

Inconsistent decision making sometimes leads to a crummy result.  Here’s a thought-provoking, quantifiable example from real life.

Two of us were preparing to drive from Boston to New York City.  We both wanted to go there, and if we didn’t drive together we would have gone separately.  We could take his car, a mid-size sedan that gets so-so mileage, or mine, a compact sedan that gets good mileage.

There’s this system we use to determine who takes on the burden of driving without switching up, without putting a driver in an unfamiliar car.   (I have to explain it quickly here with a single paragraph and a table, and then I can give you today’s story.)  One person drives the whole way, and the other pays a set rate per mile.  Any gas, tolls, or tickets paid have to be covered by that set rate.  The payer pays on only half the miles, because if we weren’t doing this complicated auction we’d be splitting costs.  This also prevents the suboptimal result that we don’t carpool. The table below shows a 100 mile trip, where Person A will drive.  His car will incur costs of $50.

auction_graph

Person B pays A half the costs at $0.60/mi, or $30.  Person A’s “hassle premium” is therefore $5 ($5 saved over a 50-50 split of costs, where each pays $25).

Whatever profit may be left over for the driver is compensation for their labor.  If the rate doesn’t cover half of the baseline expenses ($gas/mile plus depreciation) then the driver is paying more than half and doing all the work besides.  So there’s a floor below which a potential driver shouldn’t bid.

Here’s how it worked last time:

He said, “I’ll drive for half the costs at 80 cents per mile.”

That meant, if I agreed, then he’d do all the driving and I’d pay him 80 cents per mile, times all the miles there and back, divided by two (like the table above).

I generally don’t choose to drive in New York if someone else will do it, but I didn’t want to pay 80 cents per mile to get there.  So I said, “78 cents.”  (There’s a rule that you can only bid in increments of two cents.)  I add, “Remember that your car has GPS in case we get lost.”  What I’m doing here is bidding his price down while encouraging him to bid again.  He could accept my bid, in which case I’d be stuck with driving.  But if he wants GPS, he’ll bid lower.

It works.  He wants GPS for the drive, so he says, “76 cents.”  I’ve saved myself four cents per mile.

I think the price is still too high, though, so I say, “74.  Remember your car also has an audio input, so we can listen to podcasts.”

He says, “72.”

We continue like this for a bit.  I’m successful at driving down the price of his driving to 64 cents per mile.  Then suddenly I think to myself that maybe driving isn’t so bad, and I could use the lunch money.  So I change my mind and the kinds of things I’m saying.

I say, “You know, it’s a bit of a hassle to drive around in the city.  Sometimes drivers really cut you off.  I’ll drive for 62.”  Now I’m sincere.

He sees the change that has come over me and knows that I’m bidding now because I actually want to drive, not because I want to lower the price of his driving.  And he knows that my floor is lower than his.  In this situation, he can bid us all the way down to his floor and, if I really want to drive, the auction will stop when I bid just below his floor and he accepts.

This is just what happened.  It was facilitated by more unhelpful commentary from me, in which I reminded him how awful it would be for him to drive.  We settled at my driving for half the costs at 48 cents per mile.

The last time we held an auction to New York, the driver didn’t say anything manipulative to let on his true intentions and got $0.58/mile, over 20% more than what I had just won.

So The Moral Is

Before you enter a negotiation, know what you’re aiming for.  And don’t try to game it, because in some circumstances, it just drives your price to the floor.

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