Hacking Elance – The Step by Step Guide to How I Made $23,700 in 4 Weeks

But preparing students for a comprehensive exam is no easy task. It’s actually quite exhausting. Gradually I began to wonder if there was anything I could do that would:

a.) Allow me to work remotely, so I could take my work with me and have much more freedom.

b.) Pay me more money in less time.

I thought about it for a few weeks…and then it came to me!

“Hey, I can make a basic website. Maybe I can make money doing that.”

Just the idea of a fresh pursuit was getting me excited. With the test prep business, I was always driving to clients. So the idea of being able to collect money with morning breath was extremely appealing. My girlfriend wasn’t going to be crazy about the breath, but she’d love the money.

I started thinking about all the obvious pros.

It was a viable skill set. Everyone needs a website these days, right? I could make my own hours and work from anywhere I wanted to. And even if there were some things I couldn’t handle at first, the learning curve was gradual enough for me to actually learn on the job.

Everything seemed perfect. I figured I could just hop on Elance (a site for remote freelancers), book some quick design jobs and get my business flowing.

Oh, Daniel. You’re so naïve it hurts.

I created my account, logged on to look for jobs and then….realized that I was in a waiting room with 2 million other freelancers from foreign countries. And they were all charging less.

I’d have a better shot at Kim Kardashian finally responding to all those letters I’ve been sending her.

As you read through this guide, think about it from your own perspective, with your own skills in mind. Web design is just an example/placeholder that can be changed out for almost any other skill set that you choose to leverage.

So how did I finally break through? Keep reading…

It’s not as easy as showing up

Outsourcing is one of the biggest challenges facing Americans in the growing international workforce. In every field, from manufacturing to technology, someone with a comparable (or superior) skill set is willing to do the same work as you for drastically lower cost. It’s just the way things are these days.

The minute I logged on to Elance, I was met with the crushing realization that there were literally over 200,000 other freelance designers (most of whom were more skilled), all looking for the same jobs at the same time.

This was going to be much harder than I thought.

How was I going to get clients when I was competing with all the freelance designers in the world not on the value and quality I provided , but on price? I couldn’t compete on price. My rent is $1,100. I really couldn’t afford to spend hours on a $300 website. I was at a loss.

And then, it occurred to me: I needed to become a “premium service provider”.

Is Mercedes Benz bashful about charging $80,000 for an E-Class? I think not. They are widely perceived as a luxury brand and come with ridiculous customer service to justify their price point.  That’s the bracket I needed to aim for.

But was it even possible? Could I even do something like that on Elance? I hoped so.

First, I needed to test my assumptions. Think about how you can apply testing to your unique situation.

Setting up the test

I designed a test to answer two primary questions:

1. “Exactly what strategies do my successful competitors use to stand out in the crowd?” and then
2. “How can I completely obliterate them by being ridiculously overprepared?”

Testing assumptions had worked pretty well for me in setting up the test prep endeavor – setting up small classes first, tweaking them and seeing what worked. But until I actually went out there and did it, I didn’t truly understand the value of feedback. Now I know that feedback is literally the difference between success and failure. Testing allows you to determine if a business will work without risking failure.

Here’s how I structured the test:

1.) I set up a dummy account in order to create a fake posting looking for web developers. The purpose behind this was to find out exactly what types of proposals other developers were submitting. Here’s what the posting looked like:

2.) None of the copy in the ad is random. Everything has a strategic purpose, meant to find something out about my competition. A few tactical things to notice here:

• The budget is high. According to Elance stats, most jobs go for around $1,000 across the board. So why put the price point so high? I wanted to attract the best possible candidates. What I’ve found anecdotally and through personal experience is that high prices often scare off underperformers. It’s part of the whole “the cream rises to the top” mentality. I wanted to see which contractors identified themselves as “worthy” of a $10,000 job, and see what they had to offer. Theoretically, these should be the best proposals.

• The job is marked as “fixed price” – I wanted to see what rates they would throw at me and what negotiation tactics they would use.

• I was very clear with my needs and the range of skill sets required to do the job. Ironically, these are the skill sets that I had and was trying to leverage, so I was looking for people with identical credentials to see what I was up against.

I sat back and popped a bag of Orville Redenbacher as things began to get interesting.

The results are in…

Within 30 minutes, I received 71 proposals from all over the world. All things being equal, this means that each applicant had a 1.4% chance of being hired. Of course, my goal was to figure out how to shift these odds dramatically, but more on that later.

Take a look at the breakdown by region:

Now it’s time to put ourselves in the shoes of a prospective client. So just based on initial impressions, before reading any of the actual proposals that were submitted, here are my observations:

1. The lions share (50+%) of the bids were from India and South Asia
2. North American applicants constituted about 25% of the bids
3. The rest of the world made up the last 25%

Now compare the sample data above with the lifetime hiring data provided by Elance:

With over 1.5 million jobs awarded since the site’s inception, North America completely blows every other country off the map. The next closest is Australia, with barely over 150,000 jobs awarded.

If we take a step back and think about what this means, it’s pretty easy to spot an imbalance between the types of people applying for jobs and the ones doing the hiring.

English speaking Americans do (mostly) all the hiring and every other country does (almost) all the labor. It’s actually a pretty familiar pattern, don’t you think?

Native English speakers WANT to work with other English speakers who can easily understand their needs. The problem most American freelancers run into on Elance is that since their rates are naturally higher due cost of living, they miss out on jobs by getting ruthlessly lowballed by foreigners using the volume approach.

I knew that the Americans doing the hiring WANTED to hire other Americans, but were resistant to higher American prices.

I was attempting to find out how could I remove this objection and make price a non-issue.

Reading the proposals

I’d already learned a ton of information just looking at the distribution curve of applicants, but now it was time to do the actual dirty work – read the proposals. Remember my first objective: figure out exactly what the successful competition was doing.

When I opened my Elance inbox, the first feelings I had were those of nausea. I knew right away that I didn’t want to and WASN’T going to read through all 71 proposals. I just couldn’t. But I did notice certain elements of proposals that made them stand out. Here’s what I found that helped me narrow down which ones I would even bother reading:

1. “Sponsored Proposals”: freelancers can buy monthly credits, which they use to be able to submit more proposals. These credits can also buy a “Sponsored Proposal” which sticks to the top of the page. No matter how many bids the job gets, their proposal will stay at the top. Only 3 contractors per job may be sponsored. I always looked at these for two reasons: First, I knew they were already making a small investment in me by paying to show their bid. Second, with almost 100 proposals to sift through, it was impossible to forget them.
2. Copy/Pitch: if they hooked me in the first line or two of their proposal with something interesting, I’d read the whole thing. This got harder as I went along, so it helped if they were on of the first 20ish applicants.
3. Specific reference to the project I posted, not a generic copy-paste job. This also gave me a good idea of how proficient they were at English. I just don’t feel like dealing with a communication barrier.
4. Price point: this is important, but for different reasons than you may expect. If someone was ridiculously low, I’d instantly forget about them. I’m not looking for bottom feeder prices and bottom feeder results. I can only speak for myself, but I suspect I’m not the only one. Lowballing me won’t work. High prices on the other hand, would sometimes catch my eye, first as more of a “are they out of their mind”? But more often than not, it would actually draw me to their pitch, then their profile to see if they met the other criteria listed above. Even if I wasn’t prepared to spend that much, it got my attention. It made me think “I wonder what makes them so special?” This realization was key when I was devising my strategy later.
5. Skill set: I didn’t think this would be the last thing I looked at, but it was. Surprisingly, I only considered people’s skills after they passed the other 4 criteria.

Just for fun, here are some of the worst proposals I got (with some notes):

This guy shot me TWO messages:

This girl…sweet, but no thanks:

Once I applied all of these criteria, my pool of applicants was cut down significantly. From an original pool of 71, to I’d say 10-12 who really had all the right qualities to take the project and run with it.

So how was I supposed to choose between all those seemingly equally-qualified candidates and decide who I was going to award the job to?

Personal interaction. They had to sell me.

I found that when it came down to it, if everyone had similar qualifications, the only determining factor I could use to make a decision was personality.

I had to actually LIKE the person. To LIKE someone, I need to feel like I have a relationship with them, even if I’ve just met them..

Most applicants didn’t take my feelings into account and certainly didn’t seem to care about building a relationship. I’m not just a piece of man-meat. I have feelings too.

Once I realized that the secret to me hiring someone else was whether I liked them or not, I immediately got to work creating a strategy for my own campaign designed with one purpose only: to make myself completely irresistible to prospective clients as quickly as possible.

Identifying which clients to pitch a proposal to

Before I spent time and energy pitching randomly to every client that posted a job, I took time to narrow down the best candidates.

I’m not just looking for any client. I’m looking for the right client.

That’s a subtle distinction, but it’s very important.

I needed to find postings that showed evidence of reliable behavior on behalf of the client. I also needed to see indicators that I’d get the price I was looking for. Typically, I don’t find it worth my time to do a website for any less than $1,000. Here are some examples of ideal candidates that I would pitch to, along with notes:

Example 1:

Example 2:

Example 3:

Example 4:

Doing client research

After I selected who I was going to pitch to, I did detailed research so that I could approach them correctly.

Client history/research:

1.) Purchase history:

• Look especially for clients that have already used Elance frequently and have spent a decent amount of money.
• 3 and 4 green dots are a good indicator that they are serious buyers.

2.) Feedback history (extremely important):

If they have already purchased on Elance and have given feedback/reviews on past freelancers, this information is GOLD. Go to the profile of the potential client and look for information that will help you personalize the proposal as much as possible.

• Things they liked about past freelancers
• Complaints about past freelancers

3.) After you determine what they think about past freelancers, look for other personal details.

• Personal details to looks for:
• Their name
• Profession
• Location
• Likes/dislikes
• Hobbies
• Any other relevant info

Use this information to create a completely customized proposal. In your pitch, casually throw in information that’s highly relevant to them, but doesn’t seem like you’re doing it on purpose.

Making myself irresistible by being WAY overprepared

The basic premise of the next step is to create a personalized presentation for the prospective client that shows you’ve taken into careful consideration their needs, then proactively come up with solutions to their problems.

Now, you might think that since there’s no physical meeting between you and the prospective client, this type of technique wouldn’t be applicable. Dead wrong.

You know what I noticed after reviewing all the pitches I received during my test?

There was not ONE video proposal. Not a single one.

I don’t know why this is. Maybe people aren’t comfortable in front of the camera. Maybe nobody’s thought of it (in which case, I’m shooting myself in the foot with this article).

Either way, since I’d determined that building a relationship was the fastest way to book a job, and face-to-face is the fastest way to build a relationship, I started testing video proposals.

Holy shit. The results were insane.

But first, the formula…

Creating the video pitches — How to develop the right “feel” for your video submissions:

People love stories. You must create a story that they feel emotionally connected to. As you progress, you will find the right groove and your own personal narrative,  this basic framework is a great starting place and eventually you can improvise as you become more comfortable.

Creating the story arc:

a.) Introduction

• “My name (real or nickname or fake – doesn’t matter)”
• “I’m the lead developer of XYZ company”
• “I’m not part of some “big fancy firm”
• “I had my first “real” job, hated it, decided to form my own company doing what I love.”

b.) How to build comfort and familiarity

• Pretend that you’re talking to them over a lunch meeting. Be cool and at ease.
• “I see you’re working on a _______ type of website. That’s really cool because _________(insert relevant personal experience. Even if it’s a stretch. It’s all about creating a compelling story.)”
• Use customer research and feedback they’ve given to other freelancers to casually talk about some of your desirable characteristics — use exact wording from their profile page if possible. Go through several reviews.

For instance, if you go to the client’s profile page and see something like THIS:

You might want to Say something like THIS in your narrative:

“I guess one of the things we love best about doing this type of work is getting clients ‘unstuck’. Sometimes you just need reliable pros who really undertand your needs to step in and get amazing work done quickly. That’s the name of the game here at XYZ. We want to makeworking together again a no-brainer!”

As you can see, the bold text shows where I used the client’s exact wording again in the pitch process. With this type of language, you don’t even need to sell them. You’re speaking to them in their own voice.

c.) Benefits and invitation to learn more:

The idea of the entire process is a “soft sell”. You’ll never mention pricing or any type of money in the initial pitch. You must create the value first.

After you’ve noted the specific features they are looking for in their site, make sure to mention that we excel at those things, and a handful of others when appropriate. I like to use rich, colorful product descriptions to really make people feel the pull. You can mention things like:

• “All the sites we build are fully responsive for all devices”
• “Breathtaking, beautiful Custom CSS (or PHP/Java/whatever is appropriate for the posting)”
• “Easy-to-manage CMS that requires little maintenance”
• “SEO/Conversion optimized”
• Anything else that fits with the scope of their project that we can fulfill. Keep it ethical, but don’t hold back.
• Use descriptive words – “beautiful, flowing, clean, responsive, sexy, stunning” and paint the picture.

As you close, keep the lines of communication open and leave the ball in their court by saying things like:

• “Let’s keep the conversation going — I’d love to hear more about what you’re working on.”
• “Even if we don’t end up working together, maybe I can help point you in the right direction or answer some questions. I’m at the computer all day anyway!”
• “Thanks for sharing some screen time with me — I look forward to talking soon.”

As you get better, you’ll develop your own style – this is just a framework.

This type of soft close usually gets at least some feedback and you can feel them out to see if they are good to work with. It also comes off as very secure — you’re not begging for the job here. By suggesting that you are completely comfortable with helping “even if we don’t end up working together” it makes you sound like you don’t need to do the work — you just want to.

Below are 3 different examples of successful pitches I’ve made that resulted in sales of over $1,000 each. Some of these videos run a little long, buteach video should only be between 2:30 and 3:30 max! I’ve become so effective that these days, some of my videos are around 90 seconds. It’s not about length, it’s about delivery. Notice the customization and approach I took to understanding the specific clients needs and the personal approach I took by creating a story arc. The goal isn’t to copy what I said, but to think about how you can create something similar using your own story. Remember, no matter what field you’re in, it’s all about creating a relationship with the potential customer.:

What your pitch on Elance should look like:

At this point you’ve picked out your prospect, done your research and shot the quick video.

Here are some samples of how I word the actual proposals in the Elance platform. It’s pretty simple and straight-forward, but I’ve also developed what appears to be a winning formula.

Sometimes you can just keep it simple and get straight to the point, like in this example:

The negotiation process and the $23,700 results

Closing the deals

After they contact you, it’s your job to reel them in using the same charismatic personality that attracted them in the first place. They will most likely have one or two of a few common questions. Whatever your specific field of expertise is, think about possible objections from potential clients WAY AHEAD of time. Really put yourself in their shoes and create a “If they say this, I’ll say that” map in your head. Be so ridiculously overprepared to answer objections that they’re left completely awestruck and ready to buy.

Here are the 3 most common barriers I ran into trying to close the deal.

1.) Client: “I see you’re new on Elance — are you a new company.”

“We’re not a new company, we get most of our business from referrals stemming from our old jobs in corporate…but we’ve decided to branch out and try online platforms like Elance. This isn’t our first rodeo.”

Insert some details from the personalized story you told in your intro video, then refer them back to the portfolio website and reassure them that your work is awesome.

2.) Client: “Why should I pick you when I can get the work outsourced for cheaper?”

(it can be a shorter variation of this, but this is how I explain it)…

“You’re right, we’re not the cheapest firm on Elance. And we battle with getting our legs cut out from under us every single day by good firms in India and Asia who do the work for a fraction of a price. So if you’re in a bind and you’re basing your decision solely on price, we might not be the right fit for you. But we see design a little differently. To us, creating a design is like two people working on a painting at the same time. Both of you want the painting to come out looking like a masterpiece, both of you want to create something beautiful…but there’s a huge communication gap there. After all, you are two very different people, with different visions. Yes, we’re masters at design work, but where we really excel…where we really shine, is taking your ideas an interpreting them — understanding them and translating them onto the page, using our expertise, so that the end result looks like it came not from two people…but directly from your imagination. It’s almost as if we’re an extension of your creativity, not just outside numbskulls fumbling to get things right. I don’t think you can expect that perspective from anybody who is going to lowball you.”

3.) Dealing with further price resistance

If they are still hesitant to purchase at the lowest price you offer (mine is $750 rock bottom), be understanding and little flexible, while still demonstrating your confidence. This is a sample script I’ve used in the past:

“Typically speaking we work in a “our price is our price” type of mindset. This has come from a few years of working with dozens of different individuals and organizations who want all want the same service (design, implementation, optimization) and the same high level of service, but all at different prices.

It get’s very tricky and in the end 1 of 2 things usually happens: either you start becoming too “flexible” with your prices, stop considering time/effort and end up working yourself into the $12/hour bracket with ten low budget projects OR you do essentially the same services for two different people, while charging one person $500 and the next person $1000, and those people talk.

Not good.

Because of that, we are pretty firm. Our base price is always $995. We’d add the Elance fees of 8.75% on to that to protect our costs.

Now, that being said, I know you’re a startup, don’t have unlimited cash and need to get the most value for your money. I also appreciate you considering us because, let’s face it…..there a lot of people overseas willing to do this work cheaply –although that cheapness would probably show! Totally get it.

So we would be willing to break the price up and space out payments to lessen the financial burden on you over a period over a period of 4-6 weeks in installments.”

Bottom line: you have to be the same person in your messages that you were in your video. Upbeat, engaged, causal.

The results

I’ve been getting as high as a 70% response rate from prospective clients using all the elements above, and this is a very good thing. Since there are so many people applying for many of these jobs, it is a good sign just to be contacted.

Over the course of a month, I was able to land 7 jobs, one of which was a $15,000 retainer just to do occasional touch ups. All in all, I cleared about $24,000. I kept meticulous track of how the proposals were working, so that I could track and tweak. After a certain point, I had to stop taking clients because the workload was too high. Here’s a shot of my Excel sreadsheet from the first 2 weeks. I may not have always booked the job, but even getting a response means I’m doing the right thing:

The Takeaway

So what did I learn from all this?

First, I learned the value of testing, testing, testing. When you’re trying to diagnose a problem with a system, it’s literally impossible to guess the right course of action by just staring at the outside machinery. You have to dig deep and probe the inner workings so that you can validate your assumptions. If something doesn’t work, tweak it.

Finally, I was reminded how powerful human interaction can be. In the sea of noise and confusion that is the internet, it’s still very possible to get noticed and, as a result, make a living. Usually the only way to do this is to spark an interaction that leads to a relationship. Video is a simple way to leverage that.

I hope this guide serves you well. There’s plenty of room out there for all of us, so get to work!

Your opportunity: how to use this information

Well, the first obvious way you can use this information is just to copy what I did. If you use this method on Elance, or in any other remote freelance capacity, it WILL WORK. I’ve gotten enough responses from readers and friends to validate this.

But I also want you to think about the bigger questions that this raises, and how they apply to you:

• Is there an untapped resource inside you that has value, that other people will pay for? If you haven’t tried to leverage it before, why not?

• How could you implement simple tests like the ones above to determine if your idea is viable?

• What simple step can you take TOMORROW to get your first test up and running?

• Are you ready to seize your opportunity immediately and stop waiting for somebody to give you permission to start your own shit?

Let me know your thoughts in the comments.

Daniel DiPiazza teaches young people how to stop doing shit that they hate and break free of 9 to 5 boredom by starting their own businesses at his blog Rich20Something. Click here to join his tribe of hungry young entrepreneurs and get free coaching.