The Demise of Upwork
It’s all going terribly wrong for Upwork. In what was supposed to be the power merger in the freelance industry has now become a case study of what NOT to do. The short back story is that Elance and oDesk merged into Upwork. It was slated and hyped to be the next greatest thing for freelancers and clients that engage in their services. Things were not all pretty. When the Elance community was informed of the change, the community as a whole voiced serious contempt for the change. It fell on deaf ears.
Upwork resisted any and all input from the community that they were alienating. They refused to listen to all the suggestions and comments made by the thousands that were utilizing their platform. At one point, I even made some comments and suggestions on their forum. I then received an email (see above) and basically threatened that if I made more posts like that then my account would be terminated. Christopherkoster.com was one of the top 1% earners on Elance, but even so – it made absolutely no difference to them. They continued to refuse to listen to their top earners and/or top freelancers.
What happens when you think you know it all? How many times have we seen where someone or something thinks they have all the answers and refuses to listen to any input? It almost always doesn’t turn out well. The same holds true for Upwork. It’s not turning out well for them.
Why? Take a few facts. In August of 2014, the company raised $30M in funding and seed capital. By March, of 2016, T. Rowe Price placed a valuation of the company at only $7M. That’s a really big hit. Also take the fact that the majority of the Elance executives have jumped ship. Both Elance CEO Fabio Rosetti and Odesk CEO Gary Swart left, along an extensive array of senior management including SVP Marketing Jaleh Bisharat, Sales VP Daniel Barrett, VP Enterprise Solutions Jonathan Diller, SVP Enterprise Daphne Li, Elance VP International Kjetil Olsen, SVP Categories & Geographies Rich Pearson, SVP & CFO Servaes Tholen, VP Labs & Cofounder Odysseas Tsatalos and Odesk VP International Matt Cooper.
The final straw for a lot of the freelancers that are/were using the site is Upwork’s increase in fees. They are now taking a full 20% of any new project under $500. That’s $110 that a freelancer is out of pocket right away. That’s a HUGE amount – with really no justification for it at all.
It’s only a matter of time for the entire platform to come crashing down. Or, more likely purchased by another platform and then absorbed into it and dissolved.