Ideas and Validation December 14, 2019

Pitch: An easy way to manage and pay freelancers

Erik Edin @321k

I'm building a freelancer management tool called payspresso, and feel like I've gotten to a pitch that could work.

I'd love to hear your thoughts. Would you use this?

Here's the pitch:

Are you hiring freelancers, but tired of going through Upwork? Payspresso makes it super easy to build a direct relationship with your freelancer staff.

Just add their email, and we take care of the rest. You remain in control with our approvals system.

How it works:

  1. Invite then to your account
  2. Your freelancers self onboard (we take care of w9 forms, payment info, business info)
  3. They invoice you on the platform
  4. You control when invoices are approved and paid
  5. Freelancers get updates throughout the process

Benefits:

  • Skip the Upwork fees and build a direct relationship with the people you work with
  • Automate your account payables. No more typing in invoice data or setting up payments manually
  • Multi user access and approvals makes it easy to share access with e.g. your accountant
  • For freelancers, our international payments are 10x cheaper to receive than paypal or Upwork (ask them, PayPal is super expensive for them)
  • Global payments coverage (thanks to TransferWise integration)

Things I'm thinking of adding:

  • Ratings and endorsements of freelancers from other companies
  • Escrow service
  • Messaging system between company and freelancer.

Looking forward to your honest feedback. Especially if you've worked as a freelancer, or have hired one.

Does this sound interesting?

  1. 2

    This is interesting. I've hired freelancers both on Upwork and directly.

    Caveat: I currently operate on too small a scale ($200/mo in wages) to be willing to pay for a service like this unless it's absurdly cheap, so I'm not your ideal customer. I would be willing to pay $20/mo for a service if I started paying ~$1000/mo in wages.

    For my non-Upwork contractor, my current flow is to have my freelancer fill out a spreadsheet. Then, every two weeks, I calculate their accrued hours and mail them a check through my business checking account.

    The things I miss from Upwork:

    • Automatic invoicing & payments: I have to spend 15 minutes every two weeks to calculate the amount owed from the spreadsheet and then sign into my bank and send the contractor a check.
    • Automatic handling of tax information: With Upwork, I don't have to collect W9s or send out 1099s. It's a pain to keep track of who I'm going to pay $600+ per year and remembering to do the tax stuff for them.

    I've looked at TopTracker, which is free and offers commission-free payments, but the spreadsheet is low enough friction that I'm reluctant to switch.

    One thing that bothers me about TopTracker (and other similar products I've evaluated) is that they make it difficult to see what my freelancers see. For example, if I have multiple freelancers, I don't want them to have access to any information about each other or even see who else is working with me. For example, if I'm hiring someone's replacement before firing them, they shouldn't be able to see it. Some time tracking systems give way too much visibility to everyone. Even the ones that protect privacy make it hard to understand what the freelancer experience is without just creating lots of dummy accounts yourself to test it out manually.

    Some other notes on your pitch:

    Skip the Upwork fees and build a direct relationship with the people you work with

    Skipping the fees is a big draw for me. The relationship thing, not so much. Even on Upwork, I communicate directly with my freelancers. Whether I'm communicating with them on Upwork or your platform doesn't make much of a difference (except I do hate that the Upwork interface whines every time you talk about talking over email).

    Automate your account payables. No more typing in invoice data or setting up payments manually

    Sounds good.

    Multi user access and approvals makes it easy to share access with e.g. your accountant

    Wouldn't be useful to me as a single person company. I don't see why I'd grant access to my accountant. The flow I'd expect is that my accounting software (QuickBooks, Xero, whatever) would import the transactions when they show up on my bank statement and then my accountant would process the information there. They shouldn't need direct access to my payment processor.

    For freelancers, our international payments are 10x cheaper to receive than paypal or Upwork (ask them, PayPal is super expensive for them)

    If you're pitching to the clients, I'd frame this in terms of the fact that they can save money because freelancers don't have to inflate their rates to compensate for PayPal's fees.

    Global payments coverage (thanks to TransferWise integration)

    Useful.

    Ratings and endorsements of freelancers from other companies
    Escrow service
    Messaging system between company and freelancer.

    I'd recommend staying away from these and just nailing the core time tracking and payment features.

    1. 1

      Thanks Michael,

      Really appreciate the detailed feedback. TopTracker looks interesting. I didn't realise that Toptal offered that service.

      For time tracking, I'm not planning any advanced tools like screen capture or stop watch. Just basic invoice for now. There are several others that are focusing on this already. Hubstaff, Time Doctor and Toggl are some I've tried.

      For your use case (with your caveats), would that be enough?

      There are three things I see myself differentiating on:

      • Focusing on the payments aspect of the client-freelancer relationship (ease, notifications, cost).
      • Providing more benefits to the freelancer (i.e. they get paid more, make it easier to skip paypal or upwork).
      • Positioning myself aggressively as an easy way to leave Upwork.

      The privacy angle, and seeing the freelancer experience, was also interesting to hear about. I hadn't thought of that before.

      1. 1

        For time tracking, I'm not planning any advanced tools like screen capture or stop watch. Just basic invoice for now. There are several others that are focusing on this already. Hubstaff, Time Doctor and Toggl are some I've tried.

        Yeah, screen capture is a big negative feature for me. I'd prefer a service that doesn't offer any screen capture at all.

        Stopwatch might be nice, but it's also easy for freelancers to do this on their own.

        For your use case (with your caveats), would that be enough?

        It's hard to say. Again, I'm not at the scale where it's worth my while to pay for any service on top of what I pay my freelancers. But if I reached $1k/mo in outgoing payments, I'd test your service out against TopTracker.

        One big disadvantage you have is that I'm reluctant to give you my banking details because you're a new company, so I know nothing about your trustworthiness or security. I assume you're a a trustworthy person, but TopTracker has more of a reputation to defend, so they have less incentive to act unscrupulously. Plus, they've existed for a while without reports of a security incident, so that provides more confidence than an unknown service.

        Positioning myself aggressively as an easy way to leave Upwork.

        Not sure if you're aware, but if a freelancer and client connect on Upwork, it's a violation of the Upwork ToS to pay them outside of Upwork (see Section 7). Clients and freelancers can move to a different platform after two years, but if Upwork catches you moving before then, they're allowed to bill the client a $3.5k penalty.

        I'm sure many people violate this and get away with it. Your company probably wouldn't be liable since you didn't sign the ToS, but you may want to keep in mind that customers who try to switch to your service could be breaking their ToS to Upwork. As a client, if I had a new freelancer propose that we move outside Upwork, I'd suspect something scammy and stop working with them.

        1. 1

          The trust side is definitely important. Convincing people to trust me with their money could take some doing.

          One way I thought of addressing it was through a payment file export, that lets you download a payments file compatible with your payments provider/bank. It's of course less automated, but means I don't need to gain the client's trust in the same way.

          With regards to screen capture, I hadn't considered the data leak issue with screen recordings. Thanks also for sharing the Upwork ToS. Some pretty punitive language in there.