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How Upwork Hobbled the Business Elance Started

Upwork was created from the merger and rebranding of Elance and Odesk, two remote-work behemoths. At the outset I was concerned. Part of it was just my usual aversion to change. Elance had allowed MassLandlords to be born and worked very well. Why change it? But now almost four years after the announcement, it’s clear that Upwork is standing in MassLandlords’ way. Here’s why I won’t send any more work to their platform.

A Business is Born

First the short history. MassLandlords was created out of a club of frugal (read: cheap) landlords. There were 20 such clubs in Massachusetts. We united the first third of them, and we have two-thirds to go.

Elance allowed us to hire our first staff position, a bookkeeper at 2 hrs/mo in April 2014. This role constituted a “micro hire” that was impossible to fill locally. Now as we’ve grown 20x, that role has grown 20x, and similarly with all our other hires. Elance was an entrepreneurial godsend. We had complete control over our hiring and selection process, our business methods, and our cost structure. We were as fast or as slow as we needed to be. We were scalable without investment. We could bootstrap. This was key for us.

Hiring Strategy and Brand

I once tried freelancing, and I found it brutally hard to compete. So MassLandlords took some steps that were unusual, that differentiated us and allowed us to find the best talent:

  1. We would hire for every posting. A 100% hire rate showed that we were no tire-kicker. We were serious, and worth taking the time to reply to.
  2. We would hire for the long-term. Every relationship we started was intended to be a permanent staff position.
  3. We would offer minimums. If the job didn’t provide enough work, we would pay up to some minimum because we wanted you to keep us in mind.
  4. We would hire slowly. Every hire would have multiple chances to correspond with us, either on or off-platform, in a real work setting, so that we could differentiate the flashy proposals from the real deals.

We followed this strategy as well as we could given the restrictions on Upwork’s platform. Much of this was stuff we handled manually. For instance the minimums when we started were accounted for in Excel and paid as bonuses.

The Last Straw

Fast forward to this spring, when Elance-turned-Upwork issued the latest in a long string of slights.

We had created a job posting for a developer. We received a lot of responses, both good and bad. Apparently Upwork or some algorithm thought we weren’t going to hire, so the posting was deactivated. Although we could still see all the proposals, we could no longer contact any of the freelancers. All of that hiring work on both sides, ours and the elancers, was trashed. Also, our reputation was permanently dinged, now less than 100% hire rate.

Big deal, right? Well, I tried to get Upwork to reactivate the posting or fix our hire rate. I was escalated a couple times. Without understanding our hiring strategy and brand, they eventually gave me a $50 credit. They didn’t give our proposal freelancers anything, despite the work they had put into applying. And they said that our 100% reputation was forever gone, completely unfixable, and that the developers wished they could help but couldn’t. I found their answer less than credible.

Here is the Last Thing I Wrote to the Highest Level of Upwork Support

Request #19039855

“Amanda,

Very pleased to meet you and thank you for the detailed and thorough response.

Since Elance was converted into Upwork, I have been increasingly uncertain whether I can rely on Upwork to build our virtual business. Here are some comments from freelancers I have worked with on your platform:

  • “Upwork is a bit unpolished at the moment and seems too complicated”
  • “Upwork’s fees on new projects are ridiculous!”
  • “Upwork is deactivating freelancer accounts without talking to us.”

The experience from my point of view has been similar.

My first item of feedback to Upwork was, “Elance was an engineer with its sleeves rolled up. Upwork is a basset hound wearing a tie.” The site is all gloss and no guts.

Over the last 18 months, I have received 50 notification emails about idle contracts, all of which are long-term contracts that I wished to remain open. I have no ability to set a preference custom to my business. My freelancers work monthly, and every month their contracts fall idle. They are unable to log their time until I reactivate the contract.

When I log in, Upwork’s loading screen says something like, “It takes a client on average three days to hire via Upwork.” That does not describe my business. We hire slowly, for the long term. I cannot conceive of how we could make a hiring decision in so short a time. I have no ability to set a preference custom to my business.

A job posting which I specifically flagged as not to be indexed by google somehow resulted in a dozen out-of-Upwork communications, including one which was so base I reported it to the Attorney General of the State of New York. Clearly this person was not your responsibility, but the posting itself must have been seen and identified through some error.

And now, after a month’s calendar time of discussion on this one ticket:

— None of the freelancers who applied are being compensated for having to read our invite and re-submit a fresh proposal.

— Our reputation remains less than what it should be because of a unilateral decision by Upwork.

— Upwork remains presented as a finished product, for which there is no roadmap for improvement, no development, and certainly no interest in adapting to any customer’s needs.

You wrote, “I cannot imagine this would harm your ability to hire.” Well I cannot imagine why I _would_ hire on Upwork unless this issue is addressed. It is the final nuisance in a regrettably long list.

Where we might be business partners, growing MassLandlords together, I cannot help but feel expendable.

See what you can do with this. I will wait for the engineers.

Thank you for the time and effort.

Sincerely.”

 

I was hoping they would talk on their side and make an accommodation.

Here is what Upwork Said 30 Days Later

“I haven’t heard back from you in a few days, so I wanted to follow up to see how you’re doing with this issue. In the meantime, I’m going to mark this ticket as solved, but feel free to respond anytime if you need additional help, and this will re-open your ticket.”

Typical canned reply crap.

Alternatives to Upwork

Upwork may be huge, but fortunately, they don’t have the monopoly on finding talent. We’ve been very successful hiring remotely with craigslist, Harvest, and QuickBooks online to handle everything we valued in Upwork. Our hiring process runs the way we want it to. No one is deactivating our ability to contact our applicants.

Would I prefer to hire on Upwork again? Sure, because the truth is microhires are still harder on craigslist. But if the attitude Upwork has is “everyone should hire like we want to,” I think I’ll do my own thing. MassLandlords may have been temporarily hobbled by this issue, but it was only temporary. That developer we wanted to hire? We found them another way. It just took a little longer than we expected.

The Great Untasking (aka Truck Number ~1)

This update gives a little insight into a GTD fail and recovery.

Last November MassLandlords hired a key full-time employee. Before then, we were already heading into task-trouble. The graph below shows the terrible climax. On March 6, 2017, I had 617 items overdue. The oldest was 84 days late.

Task Queue Total and Days overdue as of 2017-07-26

Most of these items were MassLandlords tasks, but the graph shows everything on my plate. The data points were taken when I felt I had time or energy to take data, which sometimes meant when I was feeling particularly bad or good about the situation. (If it were possible to create the graph automatically, I might have been more regular or scientific about sampling.)

When MassLandlords hired in October, I didn’t anticipate what I later came to realize: we weren’t ready to hire for that role. That key hire was great, but they exposed some weaknesses in our processes and resulted in a lot of extra work for me. We survived the last nine months with most of our customers. Most significantly, it’s now fair to approximate our truck number as slightly greater than one. We may be still be in a tenuous situation, but we are nevertheless in the best situation to date.

What’s Different?

Certainly the primary improvement was the addition of our second full time equivalent, despite the surge in tasks their new role created.

Another improvement made during this period was to start migrating all customer service responsibilities out of asana, which has no customer-service features, and into groove. Groove has put up almost no adoption hurdles for the team. It has streamlined and created a sense of perspective that was lacking before. Many tickets ran through my inbox before. I intend to remain accessible to MassLandlords members, but for their sake as much as mine, we are slowly going to start directing their communications to me through Groove. Many routine items (most common complaints: password issues, message board access) can be triaged by team members while we work to eliminate root cause. The items that need my attention can still be forwarded to me.

Another improvement was when I started prioritizing emails from team members. I do not use gmail’s priority inbox. Instead, I have a Monday priority reminder to search my inbox for messages from each team member and provide what they need. I believe that expediting is the sign of a broken process — my process is broken — but this expediting has produced managerial leverage, in the Andrew Grove sense: each hour I spend expediting frees up many hours of team member time. There are currently ten people on my leverage list, putting out 50 to 90 hours each week in total. With team members in the US, Philippines, India, Africa, and Europe, a response one hour late can result in a calendar day’s worth of delay. A sticky note on my monitor reads, “When you manage people, it’s all about them.” This is a great quote from Jack Welch, and a reminder to work towards team dynamics that don’t require me in the loop at all.

Speaking of monitor stickies, another sticky reads, “hire every day.” There are three or four essential roles still needed at MassLandlords before we can declare victory on the bootstrapping challenge. This may take another year yet. When we originally set out in late 2013, early 2014, I estimated it would be about five years to stability. We can’t yet prove me wrong.

Two more factors just in the last 30 days have resulted in a general freeing.

First, one of our most demanding and harassing customers (not a landlord but an organization) finally cut the tether holding them to reality and set sail for the great political void. I bid them adieu, and bid welcome to the newly freed timeslots on my calendar.

Second, I have had a total break from the demanding cycle of MassLandlords events. We are attempting to hire for a major event role before the 2017-2018 season begins. We also hope to reduce my attendance at some events with video. Events took up more time than I realized, and since there are no events in July or August, I have been able to close out a wide variety of tasks. There are currently 102 projects and focus areas in various states of need. Many of the projects will be closed out, and we will continue to offload focus areas as we hire.

So that’s the GTD fail and recovery. This fall, when events resume, we shall see whether I have made a lasting improvement.

Bootstrapped Startup Update: Leveraged Management vs Individual Contributions

Starting 18 months ago, I began more detailed timetracking for MassLandlords, which is a bootstrapped startup. I started noting the difference between what Andrew Grove called “high leverage” activities and what Pratt and Whitney called “individual contributor” activities. This is the first time I’ve made a graph of the results. It’s a prime example of “what you don’t measure doesn’t get better.” It shows that I haven’t been unburying myself the way I imagined.

Leveraged management time vs individual contributor time in a bootstrapped startup. Each point is a 4-day interval. Graph shows level of effort for the MassLandlords project.

Leveraged management time vs individual contributor time in a bootstrapped startup. Each point is a ten-period moving average of a 4-day interval. Graph shows level of effort for the MassLandlords project.

The graph shows percent “level of effort” (what percent of time I spend on just these two activities) vs time. Each point is four days’ worth of time data, averaged over the last 40 days so it looks smoother. I track my time in four-day intervals because I use a piece of paper on a clipboard that I keep with me at all times, because only four days fit on a sheet, and because weekends are not very relevant anyway =(. I quickly note what I’m doing on paper. I don’t need to use any company-specific information systems like harvest, where maybe I’m not logged in or I need to switch accounts or who knows what is going wrong. (I love harvest for team-level perspectives, but paper is like harvest just for me.)

The blue portion represents time spent doing “leveraged management.” The idea is that one or two hours spent with a direct report, employee, or contractor will enable them to do eight or more hours of work on their own. In the last 18 months, MassLandlords has brought on about 50 hours of work each week (one big and several smaller hires). So I somewhat expected that I would add about ten hours of high leveraged work each week and lose a lot of unleveraged work. The red portion of the graph is “individual contributor,” or things that an employee should be hired to do.

The new hires are definitely working out, but they are exposing weaknesses in customer service, event logistics, and financial controls. All of these areas are largely my “individual contributor” responsibility. On our bootstrapped trajectory, it has been undesirable to lose touch with our customers by hiring for service, and impossible to hire adequately for logistics or controls (these positions seem to require some degree of scale because of the physical nature of the logistics work, and great degree of trust required to hand over financial controls). The increased effort for event marketing, event planning, and advertising have certainly been helpful, but they are generating more customer interactions, more events, and more transactions.

Leveraged management time vs individual contributor time in a bootstrapped startup. Each point is a 4-day interval.

Leveraged management time vs individual contributor time in a bootstrapped startup. Each point is a ten-day moving average of 4-day intervals.

The graph showing total hours gives more insight. The red “individual contributor” line has been climbing as MassLandlords has grown. Our major hire started fall 2016. During their training, the blue “leveraged management” line spiked. It has been declining as they (and other team members) gain experience and ability. The blue line should have stayed high after that major hire. Except with the weaknesses in service, logistics, and controls, the red line shows a lot has landed back on my plate. This has distracted me from focusing on scaling and the next hire.

The trick here seems to be to make sure that some portion of the blue line includes time spent scaling and focusing on the next hire. If that’s the case, then we will eventually successfully pull ourselves up by the bootstraps. On the other hand, if the blue line is being spent just to keep the existing team going, then we must be caught in limbo. Not only will no one be working on scaling, but also, because I am just one person, the red line will eventually max out, customers will go unhappy, churn will increase, and the organization will rebound downward. Understanding this graph is of the first importance. And anyone with a bootstrapped startup probably should be making their own graph, because so much of starting up is “the grind” that produces so little value compared to high-leverage activities.

Random Grumbles and Advice

Service: Knowing what I know now, I would have implemented a customer service process much sooner, maybe at the outset. It would have been possible for me to maintain contact with customers even from inside a framework like zendesk. Now we have a situation where customers are emailing the last team email address they saw, which is pretty much not working out for anyone.

Controls: I also would have prioritized a relationship with a bank that gave granular access controls. Most small business banks — and even quickbooks online, which I otherwise much admire — have laughable separation of controls. The person who enters vendors must not be the person who pays them, and this must not be the person who records the debts in the first place. Most small business systems make all of this accessible to the same user. Thereby, any dishonest schmuck can enter a fake vendor bill, enter the fake vendor billpay, and pay the fake bill to themselves or to their cousin. Sure, they will eventually get caught, but only after much stress and financial loss on our side. I think Avidia Bank will be our partial salvation but until we implement it, I can’t say for sure. QuickBooks online is still not compliant, and I don’t see a way around that yet, so we’re waiting to hire an employee who can be paid enough to come with high “trust factor.”

Logistics: This is a problem particular to MassLandlords, where we basically need to have 23 physical locations one night a month. I don’t think I have any insight to share at this time.

So that’s the latest timetracking update on our bootstrapped startup. I see now why people take capital: just go hire all the people you need.

How Should Cofounders Split Equity? A Cofounder Vesting Riddle

Here’s a cofounder riddle:

Cofounders A and B start a company around A’s idea. There are 10 million shares authorized. A gets 2 million unrestricted for the “idea.” A and B each get 4 million subject to vesting.

Due to unforeseen circumstances, A immediately quits. A’s unvested shares return to the company. B presses forward alone and vests all 4 million shares. The company succeeds without further investment.

At liquidation, A has 2 million of the 6 million outstanding. B has 4 million. A gets 2 million divided by 6 million = 33% of the proceeds. A’s idea premium was lofted from the 20% agreed-upon to 33%. B feels snookered.

What could A and B have agreed to on “day one” so that A would have ended up with just the 20% idea premium?

I posted this to the MIT Venture Mentoring Services forum. Here’s a summary of what was proposed by others:

  • A, the departing founder, could be
    • subjected to steeper vesting
    • given a contractual claim or special class of shares, instead of common, that convert to 20% of the liquidation proceeds
  • B, the remaining founder, could be
    • granted additional stock or options
    • signed onto a “bear hug” right of first refusal to purchase cofounder shares
    • given a loan from the company to purchase cofounder shares
  • Or we could do one of the following:
    • forget idea premiums;
    • accept ownership changes as a risk in starting up;
    • forget the whole “riddle” as an impossible problem.

The type of solution we’re looking for is:

  • Not predictive: we shouldn’t have to know whether A will actually quit;
  • Prescriptive: if A does quit, or participates less fully than B desired, there is no disagreement on how A or B should be penalized/compensated;
  • Smooth: the spectrum of A’s non-participation and B’s compensation, from “A quit” to “A is fully engaged,” should have no step changes;
  • Tax-free: founders can still declare an 83(b) election to pay relatively zero tax on their founder stock; and
  • Cash-free: founders should not have to come up with lots of money to maintain an agreement made early.

Many of the ideas above have either tax or cash consequences, or are not smooth, or are predictive.

The “bear hug” concept combined with an idea sent to me privately, issuing warrants that expire as the co-founder’s stock vests, seems to me to be an implementable solution with few tax or cashflow consequences. So that’s what I’ve been working on this week.

I will report back and/or blog about it if we produce anything interesting. Certainly the name of this scheme would be, “a completely warranted bear hug.” Stay tuned.

Pixaby "bear hug" graphic to accompany "cofounder riddle"

My Favorite Part of the Work Week is Saturday at 7:30am

Saturdays at 7:30 am (5:00 or 6:00 pm India time depending on daylight saving) I call the MassLandlords bookkeepers in India. I love it.

I actually get up at 6:30 to prepare for the call and to review our “treasury dashboard.” I love getting up early on a weekend. It feels so productive. Plus, this phone call represents two-and-a-half years of process development. We review income and expense reporting for MassLandlords and two MassLandlords partners. We use asana for linear processes, skype for the call and screen sharing, Google Drive for file transfer, and Google Docs for the dashboard itself.

MassLandlords Treasury Dashboard

 

The idea for the dashboard comes from my training in operations. You want to quickly see a visual status of the entire organization. One of these boxes updates via an API, most are manual and take 30 seconds to update, maybe five minutes for the whole week’s work. I can update them or the team in India can.

The other thing I really like about the team in India is their combination of hard working and good attitude. They have had no end of challenges, from power outages to dengue, and yet we have continually taken care of our people and our jobs. We’ve had language skills training to the point where we’re talking politics, technological innovation to automate a lot of our work, and a mindset of continuous improvement to leave us all feeling productive and headed in the right direction.

I’m lucky to work with their team leader, who is receptive to suggestions and candid with feedback. It’s a great team, almost three years in the making, and checking in on their progress is certainly my favorite part of the week.

The Worst GTD Backlog Since Tracking Began

This afternoon I’m at the worst backlog of “things to do” since GTD tracking began in late 2014. I have 333 items in my inbox, on my desk, and in my task list that all demand attention yesterday. What’s astonishing is that “days overdue” is only 8, which means none of these things really originated before the last week. That’s 300 things to do since last week.

graph of task queue and average overdue

I can take a lot of pressure, this is getting near the limit.

A big part of it is the MassLandlords meeting cycle, which holds back a lot of ideas and issues over the summer and then many of our 1,200 members start sending them in. That’s wonderful, but also difficult to manage. I’m lucky we have new part time staff in Springfield to help with some of these requests. But then again, the Springfield group’s dissolving and folding in has taken a lot of my capacity the last two weeks, contributing to the backlog.

The other thing that’s happening is I’ve implemented a really great expediting system, which is a sure sign of flow failure if ever there was one. Expediting certain tasks ahead of older ones in the queue signals my lack of bandwidth. It keeps the fires from raging but it builds up pressure on the overdue items and creates stress. The right way to schedule is to create excess capacity or flex capacity so that things like phone calls don’t send us off on a tangent that we didn’t have time for.

Clearly we need more staff at MassLandlords. I’m working on it. But as I’ve learned over the summer, it can be worse to put the wrong person in the job than to have no one at all. The wrong person can cause more harm than good.

My average pace has been 57 hrs/wk. I had a nice relaxing summer, where the average went down to only 37 hrs/wk. In the big scheme of things, I still exercise, and eat right, and sleep adequately. And I’ve put in harder hours in the past. But boy, I really could use another Friday right about now.

One thing I carry every workday

It has been over nine months since the last update. I have been busy. I may write an update soon. In the meantime, it occurs to me to share this strange fact: every workday, everywhere I go, I carry the final pages of Andrew Grove’s High Output Management. Lame but true.

High Output Management is a soft skills book written by an engineer-at-heart. Grove was CEO of Intel during their rise to prominence. Possibly he’s the reason you know the name Intel.

At the end of the book, he lists out homework. “You have trusted me enough to buy my book and read it. Now let me say a final thing: if you do at least 100 points worth of what you find here, you’ll be a distinctly better manager for it.”

I’ve been chipping away at his assignments since May 2012. So far I’ve earned 70 points. Every time I do an assignment, I write the date. I aspire to do one every two months. I guess the average assignment is worth ten points. So I’m doing less than two each year. Not brilliant. Here’s what I’ve done:

  • 8-21-14 What are my outputs? 0 points (I made this one up)
  • 2-25-15 Identify half a dozen new indicators for your group’s output. They should measure both quantity and quality of the output. 10 points
  • 6-20-16 Install these new indicators as a routine in your work area, and establish their regular review in your staff meetings. 20 points.
  • 10-11-15 and 12-17-15: Look at your calendar for the last week. Classify your activities as low/medium/high leverage. Generate a plan of action to do more of the high-leverage category. (What activities will you reduce?) 10 points each time
  • 5-10-12 Forecast the demand on your time for the next week. What portion of your time is likely to be spent in meetings? Which of these are process-oriented meetings? Mission-oriented meetings? If the latter are over 25 percent of your total time, what should you do to reduce them? 10 points
  • 8-13-12 List the various forms of task-relevant feedback your subordinates receive. How well can they gauge their progress through them? 10 points
  • 8-11-15 GTD reread, review, and revamp 0 points (I made this one up)

Most of this work has been done for MassLandlords. The 2012 bullets were Terrafugia.

The December 17, 2015 assignment still is not done. This is the reason why I’ve been so busy. I am trying to get all of my time into high leverage activities. I can’t be mowing the lawn. Problem solved. I can’t be coding the website. Problem solved. I can’t be answering phone calls from customers. Problem soon to be solved.

Overall, this assignment has shown me that I am the biggest problem with MassLandlords. I’m the long pole in the tent, holding everything up. I’m supporting but I’m also delaying by being integral to every process.

The work to unload has been painful. Since last winter, I terminated two employees that didn’t work out. I also lost a cofounder on a side project. I missed (or am missing) two huge opportunities that I just don’t have time for. Every setback is another sharp turn downward on the startup roller coaster.

This is why I carry Andrew Grove around with me everywhere I go. I’m not yet where I need to be. But I will learn from him and others, and I will get there.

Andrew Grove's High Output Management One More Thing

Picture taken in the orange glow of the MBTA Commuter Rail lighting.

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