Photo Credit: Free Extras

Competition Is Good

I’ll preface this critique by stating I’ve got zero problem with competition! Competition is necessary and good. It’s also unavoidable.

Creative Flavor competes against other web development companies all the time and consistently wins about 3 out of every 4 projects we bid on. Typically, companies who request bids from us judge first our experience and competence. They bring their ideas and requirements, and we present our ideas and recommendations for getting them from Point A to Point B and beyond. Next they judge our like-ability because it’s important to enjoy the people you’ll be working with over the next few months. Project cost, while significant, is rarely the deciding factor in our experience. Cost is secondary and negotiable. Quality is not!

Coming from this type of environment, you can imagine my disappointment with Elance!

But This is Ridiculous

First, providers have to pay a fee if they want to submit more than 1-2 bids per month. I chose the $10 plan to try it out. That seems reasonable, but when you factor in the 6.75%-8.75% commission Elance takes on projects you win, it’s overkill.

After spending half an hour searching through projects, I observed a common theme among 99.3% of them:

“I want a website like [insert web address for any Fortune 100 company]. I have this great idea and it’s going to be huge. It has to look professional, have all the bells and whistles and be easy for me to update myself. I also need an awesome logo and SEO because I want this new site to rank #1 on all the search engines. I’m just starting this so I don’t have a big budget, but I’m willing to help you out by giving you a percentage of profits. There is also the possibility of more projects if you do a good job. I have some understanding about what it takes to do this so I expect a fair price. Also, would like this launched within 2 weeks. Serious Bidders Only. Budget: <$500.”

This would be roll-on-the-floor hilarious if it weren’t so common! There are pages and pages of people advertising a need for skilled design/development services at $5-$10 per hour! Some equate to even less. Are they serious? Sadly, yes.

What’s not laughable is that there are actually bids on these projects! Most bidders are from India and Pakistan where I suppose $5/hr is a living wage. There’s usually a bid by an American or two who I must assume is a starving college student desperate for any money he or she can get. Fine. This kind of global bidding system probably works well for some, but not for us.

I’ll Try It Anyway

Surely there are a couple good projects to bid on though, I think.

Searching on, it seems about .07% of project posters have some understanding of the real cost and value of web development. They have a reasonable budget and typically begin their posting with requirements that providers be fluent in English. I find a handful of projects that appear worth pursuing and spend most of the day writing 4 in-depth proposals. I’m a bit concerned that even those 4 are a waste of time because the proposals are written without the valuable input we collect in the 1-2 hour discussions we have with new clients. Yes, you can ask questions before bidding, but it’s just not the same as the pre-bid discussions we have on the phone and in-person.

The bids are submitted. I’m doubtful I’ll get a positive response as there are 30+ bids, mostly from India and Pakistan. My bids are 2-4 times as high as their highest bids! With this format, the cost factor seems more crucial than competence and like-ability.

Of the four bids, only one poster responded to let me know that the project was canceled as none of the bids he received met his requirements. Never heard a darn thing from the other 3 though. Not even a simple Thanks for the proposal, but… response.

I tried to chalk it up to a bad first round. I only submitted 4 bids. Maybe if I submitted 20 more I’d be able to call it a success, but that’s 20-40 hours of time which could be better spent closing better projects. I tried to convince myself that I should give it a better effort for the remainder of the month before making a judgment, but I discontinued membership anyway. It made me feel too dirty.

Conclusion: Elance is Not For Us

Companies who “do web design” for $199, low-ballers and desperate hacks have already demeaned the entire industry. They’ve turned what is a technical, thoughtful profession into a commodity that many now believe should come free with web hosting service. Ick.  Elance has found a way to contaminate it further. (Though probably not intentionally as evidenced by a comment on this blog from Elance’s Brad Porteus.)

Even though I did not win a project or perform any work, I feel like I’ve contributed to the decline of this industry’s image by participating briefly and giving $10 to Elance.  Elance and its providers who enjoy the format probably offer a decent service to a certain segment of the population, but not the segment we like to serve.

I let my company taste the dark side and there’s no desire to go back!  As penitence, we’ll do double-time supporting the professional design community that is working hard to evolve for the better as described by Vitaly Friedman in “Dear Web Design Community: Where Have You Gone?“

What’s your Elance experience?

My seven-year-old daughter was reading “There Was A Coyote Who Swallowed a Flea” to me the other night.

In case you’re too busy reading Seth Godin’s latest book to be aware of this children’s favorite, it’s basically about a coyote who swallows a flea. He then swallows a lizard to take care of the flea problem. Then a snake to take care of the lizard. And so on and so on. He swallows larger and larger items to take care of the previous thing he swallowed until he swallows the moon then burps.

As my daughter read this book to me, I noticed that many businesses behave much like the coyote when it comes to social media.

First, they hear that social media is hot and what they need to stay viable and compete in their industry. Then they swallow down the social media bug. To take care of the bug, they may sign up for a Twitter account. Then they realize they need followers to help out the Twitter account. Then they need a blog to publish useful information for all those yearning followers. Then they want a better website design to look more credible so more people will want to read their blog. Then they need someone to write for the blog. Then someone to respond to readers who comment on Twitter and the blog. And so on and so on.

Before long, they’ve swallowed bigger and bigger pieces of social media. They’re overwhelmed. They forget why the social media bug was tasty in the first place. Many eventually explode or quit.

So what’s the moral of the story? Don’t swallow the social media bug?

No. It’s clear that social media is valuable for business.

The lesson is to have a social media plan.

Know what social media is and what social media isn’t.

• Social media is great for engaging prospects…but it cannot close the deal for you.

• Social media can bring more exposure to your greatness….but it can’t make your business look good if it’s bad.

• Social media tools can help you achieve business goals…but social media tools can’t do the work for you.

For social media to add value to your business, customers, and prospects, you need goals and a plan for achieving those goals.

Take it from the coyote and don’t bite off more than you can chew!

To help you get started on the right foot with social media for your business, ifPeople has shared a great presentation about how to develop a social media strategy.