The Non-Scuzzy and Totally True Story of How I Earned 6 Figures in 12 Months by Mastering the “Hidden Elance Economy”

A few months back, I caught a lucky break.

One of my most trusted mentors advised me that, if I wanted to make real money and have an enjoyable freelancing career, I shouldn’t waste my time on Elance.

But the lucky part wasn’t the warning. It was the fact that it came too late. I’d already been Elancing it up for the past 24 months, and had just closed a six-figure year. Yes, all from Elance.

If I’d gotten his tip a couple of years earlier, I probably would have listened. And it would have cost me a major matzoball o’ cash.

Note that the mentor in question does not have some weird criteria for evaluating time-wasting activity. Even as I’m riding Elance with my arms out and screaming “King of the world!” like Jack from Titanic. most pros still see the platform as something closer to the ship’s boiler room, a fiery pit where soulless freelancers mindlessly churn out drivel in exchange for tarnished pennies. Copywriting legend Bob Bly even likes to call Elance “the cesspool of freelance writing.” (I still can’t figure out where that is in relation to the boiler room, but either way, it’s pretty dang low.)

These people — including, strangely, many avid Elancers themselves — believe that Elance is nothing but a sucker bet. The gutshot straight draw of freelancing.

Popular arguments go like this…

The averages argument: The average Elancer brings home dog crap. If you check out the earnings on the site and divide it by the total number of freelancers, you’ll get an amount tinier than the universe immediately following the big bang.

The supply and demand argument: Elance is a stone cold buyer’s market. With scads of freelancers bidding on jobs, rates (and freelancer morale) tend to quickly disintegrate.

The starving writer argument: Most of the jobs posted on Elance pay well, IF your idea of a nice life is sleeping in your car and calling ketchup packets “meals.”

Now. I have just three things to say about these bold claims.

1) They are all true.

2) They will never change.

3) Not a one of them has got diddly shit to do with how I make money on Elance.

Put another way, all of the anti-Elance arguments are about what most freelancers and gurus observe when they look at the platform.

Unfortunately for them, there is plenty more they can’t see. And it’s precisely in this unseen area that the real money is being made on Elance, right under most people’s noses.

Welcome to Elance’s Invisible Game

Entrepreneur Brandon Gadoci says. “In life, there are two games that are always being played. One you can see, and one you can’t.”

Elance is no exception to this rule, and I’ve been using the term Hidden Elance Economy to describe Elance’s invisible game for the better part of two years.

Of course, most freelancers have no idea the Hidden Elance Economy exists. And the ones who do aren’t likely to talk about it for fear of giving away a key trade secret. Of all the Elance advice that’s been published (most of it junk), I’ve never once seen this idea so much as hinted at.

So, freelancers tend to land on Elance without any kind of plan. Then they quickly get discouraged when they see all the low paying jobs — and the morass of competitors they believe they have to beat for the privilege of actually winning one.

At this point many roll into the fetal position and give up for good. Others make the more unfortunate decision to linger on. They try to make the most of Elance’s harsh economy by working their asses off, capitulating on prices, and telling themselves that, hey, things could be worse.

But this pseudo-strategy never works.

The moment you try to win on Elance by doing what seems natural, you’ve already lost. It’s like trying to beat poker pros by just playing good cards, attempting to outwit a car dealer by haggling harder, or making a mad dash to escape the friend zone by simply being a nicer guy. Or, to put it into Erlich Bachman terms, trying to beat Elance without understanding the dynamics of the Hidden Elance Economy is like bringing piss to a shit fight .

Now I’m sure you’re probably wondering just what the Hidden Elance Economy actually looks like. Good question, especially given its invisibleness and all.

As I see it, the Hidden Elance Economy consists of 3 key parts that fly totally under most people’s radar — a sort of perfect storm for Elance badassery. (A word of caution: leave any ingredient out, and your Elance-based freelancing business is likely to collapse like an ill prepared angel food cake.)

Let’s discuss.

Hidden Elance Economy Component #1:

Sleeper Hit Clients

A Sleeper Hit Client is someone who — despite a nondramatic Elance debut — turns out to be a rockstar client who pays well, makes a good working partner, and is likely to keep hiring you in the future. Naturally, this type of client needs to be at the centerpiece of the Hidden Elance Economy. Otherwise, I’d be describing a Tootsie Roll Pop with no Tootsie Roll in the middle. And who wants that ?

Most freelancers think there aren’t enough clients like this on Elance to support a six-figure income, but remember, you

need to go beyond the obvious.

For starters, most Elancers would do better to reframe the question of “How can I make a full time living when there are so few high paying clients?” to “How many premium clients do I actually need to find on Elance in order to make six figures?”

Taking another look at my Company Snapshot (a misleading term, by the way, since I operate on Elance as a solo act) below, you can see that I was able to break the 100k barrier while working with 27 clients over the past 12 months. And four of those were repeat clients from the previous year, meaning I only had to find two clients per month to make these numbers work.

It ain’t easy, but it is doable.

Especially once you realize that there are far more great clients on Elance than you think. Hell, there are probably more than even I think. As I’ll explain soon, most of them are buried deep within the weeds of the Hidden Elance Economy, but many Sleeper Hit Clients are “hiding” right in plain sight.

See the thing is, very few clients jump on Elance and hire premium freelancers right off the bat. Most need to get their feet wet first. Yet sadly, the conventional wisdom is to instantly profile clients as “shrimp” if they haven’t spent a ton of money yet, or even if they do something like (gasp! ) choose “unsure” as their stated budget. Can you see the fatal flaw in this approach, or do you need Julia Roberts to go all Pretty Woman on your ass for good measure?

Check out the screenshot below for a perfect example of a high paying job I was recently awarded by an awesome Sleeper Hit Client who (up until that point) had a very average Elance history:

This is by no means an isolated occurrence. Forget about what clients spent yesterday, and start asking yourself how much they might be willing to invest in high quality work today .

Hidden Elance Economy Component #2:

Repeat Business

Maybe you glanced at Elance’s job marketplace this morning and saw only a bunch of low paying gigs.

But what you didn’t see were all the well-paying projects won by freelancers without the client even creating a post. These jobs were casually awarded after a message from client to freelancer that sounded a lot like this: “Hey Jane, want to do some more work?”

I’ve been winning work this way every single week for about two years. Yet, again, it’s totally invisible to anyone watching from the outside. Check out my repeat business percentage below:

You’ll see a similar pattern of high repeat biz from all of Elance’s top performers. It’s a huge part of why Elance can appear to be a dystopia to anyone following the game. while being pure cornucopia to freelancers playing the invisible game .

A very encouraging implication here is that the most talented Elancers are more likely to collect a modest amount of clients than constantly fight you for a bazillion new ones. Personally, I decline dozens of high quality job invites each month, and I know several other successful Elancers who do the same.

So if you’re someone who knows your shit (or you’re willing to learn it), there’s as much showroom space for you to shine on Elance as there is anywhere else. Probably more when you consider that most serious freelancers still steer clear of the joint. (Be sure to send them a thank-you note after you come in and clean up, will you?)

Hidden Elance Economy Component #3:

Invite-Only Jobs

Invite-only jobs represent the very essence of the Hidden Elance Economy.

While one of the biggest complaints about Elance is the flash mob of low bidders who descend on jobs like wedding crashers, invite-only postings are a far more exclusive party.

As it turns out, Elance’s top clients don’t necessarily put up public jobs and wait to see who applies. Instead, many silently shop around for a freelancer who fits the bill they’re looking for, and then reach out to that person privately, by inviting them — and often only them — to bid on their job.

Yes, you heard me right: you can easily be the only VIP on the guest list (like I was in the screenshot below).

Check out the opening words of the above post for added encouragement. If you’re used to writing proposals for public jobs, you’ll immediately notice how the roles are somewhat reversed; clients posting private jobs are usually already sold on working with you.

Over 90% of the clients I’ve picked up in the past year have come from people directly seeking me out in this way, making Elance — or, more exactly, the Hidden Elance Economy — the most powerful lead generation tool I’ve used to date.

Next Stop: Hidden Elance Economy, or…Bermuda Triangle?

In spite of everything I’ve just shown you, some people still insist that Elance isn’t a beatable game. That I’m an outlier. That the relatively small number of Elancers who are kicking ass are just a blip on an otherwise empty radar.

Y’all are a pretty cerebral crew; what say you ?

Hit me with your thoughts, opinions and questions in the comments below.


Category: Forex

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