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9d6dfbcc
Community Member

Feedback requested on using 1 milestone due upon job completion, plus an escrow firm question

Since one of my jobs will be large (15-20k area) and technical (with some unique knowledge needed by coder) I strongly prefer not paying more than 1 milestone and only due upon job completion. That job originally was 15k and some freelancers wanted several large milestones which I do not agree to.

 

To make just 1 large milestome more appealing I am also proposing increasing job to 20k as additional compensation involving 1 milestone and due upon completion. I can pay entire 20k into escrow in advance to again make job more attractive. Does that sound reasonable?

 

Also, I have a very well established acconut at EscrowDotCom for many years and know how they operate. Is there a way we can use them instead of Upwork escrow?  P.S. I think I have read about Payoneer escrow being used somehere on Upwork but not sure about that. Is it correct? 

65 REPLIES 65

David:

 

I will help you out.  Many in the thread have said it, but I just got my daily dose of Quara feed and this question was asked," How does a business person outsource a good developer/programmer/engineer on eLance or oDesk? I don'...

programming languages. What skill sets should I be looking for?"

 

If you have no prior experience in software development  you will definitely have difficulty navigating through Elance or oDesk. These are large marketplaces of software engineers, and even the most seasoned CTOs have trouble finding talent.

Before you begin the search, you may want to seek help from a software consultant to come up with a detailed framework before posting your ad. This will be help you be as clear-cut as possible about the expectations/technical details you are looking for. Also, if you're crunched for time and have a limited budget (hence, why you initially thought these sites would work for you), take into consideration that you may have to undergo some trial and error, and you may end up spending more time and money than you had anticipated.
Some good pointers…

 

Be proactive; respond quickly and post more than one ad for the same project. The more applicants you receive, the closer you will be to finding the best person for the job. If you’re having trouble narrowing it down, go through the applicants with a software consultant. They will help you weed out and interview applicants.

Also, always remember that skilled developers want to work with a client with great communication skills. If you are lackadaisical about responding, you’re going to attract the same type of developer.


If  you’re still unsure, give them a test-run by creating a much smaller project. This will give you a chance to see if they’re worth hiring for the real job. Look for bug-free software, timeliness, efficient communication, and professionalism.

 

I wouldn't put too much hope of attracting a good talent who will take you up on your offer.  Skilled developers are smart not stupid.

 

Remember your idea attracted zero positive response in your favor on this thread.

"Remember your idea attracted zero positive response in your favor on this thread."

 

Is it possible a reason for that is because it appears most replies are from freelancers and not from clients, with the FL's of course biased? .A reason I am posting here and not on FL forum is I assumed this was frequented mostly by clients who would likely feel the same way I do but they are not here from what I can see. 

 

The main issue is not my thinking most freelancers are not honest or trustworthy as I am sure they are, and most are I am sure also skilled. The real issue is if milestones are used the FL is more of less assured of getting anywhere from 1/3 to 2/3 of project cost using my 3-milestone example.

 

That cannot be refunded regardless of job never being finished to client full satisfactiuon. Thus, the client is assured of losing 1/3 to 2/3 or even more if not completed to full satisfaction however FL has considerable funds from the milestones. That is the issue.

 

It's simply NOT a level playing field. How can it be considered fair when client risks lots of cash but coder cannot be required to refund money upon non-perforamnce. The only change I can think of is changing Upwork business model so TOS says FL must provide refunds of all milestones if client is not satisfied with finished job.

 

That's the way escrow.com works. For example, if you buy a domain name via escrow.com they will not release any funds to seller unless buyer says OK. I am sure there would be far more employers here if that was the rule. Escrow should not be judge and jury, and should only release funds with clients authorization. Anything else means it's not a true escrow.

Well actually responses from freelancers is a better indicator.  I bet there is not a freelancer on this platform or any other platform who is not burned by buyers in one way or other with fixed price contract even when they were milestone based.

"Remember your idea attracted zero positive response in your favor on this thread."

 

That's only because this forum is frequented by freelancers I assume much more ao than by clients.

 

The issue is in using my 3 milestone example, with a non-satisfactory end product the FL got to keep 1/3 to 2/3 of the cash anyway, and client loses 1/3 or 2/3 or even more of his cash with no hope of a refund. That is the real issue.

 

I am sure most FLs here are trustworthy and honest and also skilled which is why I came here..I am not doubting how good most are. It's simply not a level playing field with client taking on risk of losing lots of money with no satisfaction guaranty in the end..

 

The solution is changing busines model requiring FL gives full refund of all milestones if end-product not satisfactory. For example, if you buy a domain name via escrow.com they will not release any funds to seller unless buyer first approves it. That's how escrow should work. They are not judge and jury. Upwork escrow isn't a true escrow service.

"You appear to be innately distrustful and suspicious and convinced that freelancers are on platforms with the main purpose of ripping off defenseless clients."

 

That is NOT CORRECT Petra. The issue has absolutely nothing to do with trust or suspicion. I really do not understand why everyone here is thinking that. It is all about the fact FL gets guaranteed non-refundable cash with milestone payments but client has no assurance at all project will be completed to his satisfaction. If job not finished any milestones paid should be refunded, imo. Why does no one here seem to comprehend that and blames it wrongly on trust!

petra_r
Community Member

You know how the site works. It does not work in a way that allows you to feel safe. 

So surely the only possible conclusion can be that you don’t use it?

 

We can tell you until the cows come home that if you choose a well established freelancer with a long and successful track record and someone who would not risk their account for the sake of screwing you over, you are not comfortable to take that risk. You see danger of paying and not getting your project everywhere. 

 

So the only option you have, realistically, is not to use Upwork and get your project done locally.

 

 

David, the milestone system is intended to be used by clients checking the work at the end of each milestone, before proceeding to the next one. A client who uses the system that way is not taking the risk of wasting all his money, because he has verified at each milestone that he's getting what he's paying for.

 

It seems that you are unwilling (or feel unable) to work in that way, but instead want to only check the work at the end of the project. That's not a good way to run a software project of that size. As a programmer I would not be willing to work on that basis, regardless of the payment method. I want my client to check the progress of the work, to let me know if he's getting what he wants. I wouldn't want to go down the wrong path and have to redo a lot of work later, even if the client was paying me by the hour.

 

A recent Upwork client (on another sort of project) insisted that I do at most 3 hours work at a time, and then stop until he had reviewed the work. That was fine with me.

Thanks for the feedback. It sounds good however a problem is most work done during milestone 1 and 2 is not that important vs the final milestone-3 programming. Code done at milestone 1 or 2 is worthless to me unless job completed. Milestone 3 is when the complex, technical and signficant work is done.

Richard, your comments are equally relevant to writers, artists, etc. etc.   🙂

9d6dfbcc
Community Member

that sounds good Petra but "a well established freelancer with a long and successful track record" does NOT really assure the job will be finished because certain aspects may turn-out being too technical or complex for the FL, or he/she may go out of business, go bankrupt, or even get hit by a truck. However, if that happens to the client the coder has substantial funds from milestones which are non-refundable so the FL still did ok financially in the end. How can the freelancers here ignore that issue?

petra_r
Community Member


@David G wrote:

that sounds good Petra but "a well established freelancer with a long and successful track record" does NOT really assure the job will be finished because certain aspects may turn-out being too technical or complex for the FL, or he/she may go out of business, go bankrupt, or even get hit by a truck. However, if that happens to the client the coder has substantial funds from milestones which are non-refundable so the FL still did ok financially in the end. How can the freelancers here ignore that issue?


 David, we are going round in circles. If you don't want to work this way, simply don't. It is easy peasy. We don't need to discuss it for 5 pages.

 

You don't like this business model? Not a problem. Work with another platform that has a business model that is more to your liking, or hire someone locally.

 

Problem solved.

 

9d6dfbcc
Community Member

So are you saying Petra if something is not liked by a buyer they should not discuss it. I already spent $60 here hiring a talent consultant for 2 jobs. Is that money wasted? Should Trump haters move to Canada instead of discussing issues? The main reason this has gone on for 5-pages is the fact there are no employers here just freelancerss who are of course biased in favor of the non-level playing field which gives them major advantage if they are not able to complete a project. I am guessing it may be a reason so many FLs are well below 100% such as Prashant P who is only 81%.

petra_r
Community Member


@David G wrote:

So are you saying Petra if something is not liked by a buyer they should not discuss it. I already spent $60 here hiring a talent consultant for 2 jobs. Is that money wasted?


 Considering your mindset, I would say that money was wasted. You don't like the way the system works. You want complete control. You foresee trouble and failure at every turn. You'd almost certainly not be a bundle of laughs to work with. Experienced freelancers can usually smell a difficult client a mile against the wind.

 

This going round in circles is a waste of your time. NOT because things can't get discussed or should not get discussed, but because I honestly do not think it would be a happy experience for either you as the client or the freelancer you would hire. I'd not accept a contract from you for example. Not even a small one (No offence)

 

I would hazard a guess it would become a self-fulfilling prophecy as you'd likely end up with a freelancer who failed to spot the warning signs.

 

Most successful freelancers choose their clients very carefully and turn down a large number of offered contracts. Any "red flags" during the interview period (and such freelancers interview their clients as carefully as clients interview their freelancers) and it's a "Thanks, but No Thanks!"

 

So you may well end up with the exact sort of freelancer you don't want, because most of the ones who would work out just great (provided they don't get hit by a bus) won't work with you.

 

 

 

 

9d6dfbcc
Community Member

Thanks for feedback Petra, and raising some good points. As stated before, the work done during milestone 1 and 2 is not  important vs the final milestone-3 programming. Code done at milestones 1 and 2 is basically worthless to me unless job is completed (1 & 2 work cannot be used on its own). Milestone 3 is where all complex, technical and signficant work is performed, which blends-in with 1 & 2 work.

gilbert-phyllis
Community Member

Am I the only one beginning to wonder whether this whole thread is some kind of research exercise, to see how long commenters will continue engaging in a circular, dead-end discussion?

tlsanders
Community Member

The problem you're facing is that a lot of dishonest clients promise a big payoff as a means of delaying payment and then never pay. You can sweeten the pot from $15k to $20k to $150k and it won't make any difference if the freelancer's concern is that he won't get paid.

 

A lot of freelancers also simply can't afford to work for 2-3 months without payment.

 

Your repeated restatement that there is no risk on the freelancer and the escrow funds are non-refundable demonstrates a fundamental misunderstanding of how Upwork functions--perhaps escrow.com is different. On Upwork, escrow funds are summarily returned to the client on a regular basis. 

Thanks for feedback. To make things more interestiing there was an ad for Upwork Pro membership upgrade where you pay $499 up front fee plus 10% extra on the project. Not a lot extra on a big job. I thought I would end-up signing-up because with such high fees there could be less employer risk so I asked PRO Chat about this issue today. Their answer was if milestones were already paid out my option is to ask the freelancer to refund the money. LOL.

 

BTW, over the past 20 plus years I have successfully hired programmers to work for me, all without problems and all paid in full, with none of them working on a written milestone system so Petra and others it's not true that I am difficult to work with. You are probably saying that because you are a FL yourself (not an employer) who likes the FL favored and biased non-refundable milestone system.

 

P.S. I don't mind using milestones on small jobs i.e. $500 or less.

David, what's interesting is that if you go to the freelancer side, you'll see hundreds of laments about the client-biased system. I use Upwork as both a client and a freelancer, and I think that the system is actually pretty well balanced except in one area...and it's this one.

 

The fixed price escrow system provides exactly zero protection to a freelancer unless that freelancer is willling and able to pay for arbitration. This is less of a problem in large jobs like yours, since it is worthwhile for the freelancer to pay $291 for arbitration, but it's a complete roadblock for many freelancers.

 

This is how the system works:

 

-Freelancer submits work and requests payment on milestone

-Client can approve, leave to auto-approve, request revisions, or reject and request a refund of escrow

-If the client requests a refund of escrow, Upwork's "dispute team" tries to broker an agreement, but has no enforcement power. Proof that the freelancer successfully completed the job is useless at this stage.

-If a resolution isn't reached, the freelancer is offered the opportunity to pay $291 to initiate arbitration. If he doesn't, or can't, the escrow funds are automatically returned to the client.

 

Presumably with $20,000 at stake, the freelancer would arbitrate, but there's still a risk involved and even if he wins at arbitration, there's a time delay in receiving funds for what may have been the only project he worked on for 30-60 days.

 

You seem to be asserting that breaking the project into milestones would force you to pay for work that was completely without value if the job weren't completed successfully. I don't know enough about your project to know whether that's true, though it sounds pretty unusual. But, even assuming that it is true, this aspect is confusing to me: You don't want to take a chance on releasing a $5,000 milestone "for nothing" if the freelancer for some reason doesn't get past the first milestone, yet you're willing to pay $5,000 extra just to get the freelancer to accept payment at the end?

 

I'm definitely not suggesting that this is what you're doing, but surely you can see how it looks to a freelancer as if you might be making big promises in order to extract work you don't intend to pay for--especially since freelancers are well aware that Upwork's escrow system doesn't protect them.

 

 

Thanks for feedbackTiffany and others, and raising some good points. As stated before, the work done during milestone 1 and 2 is not  important vs the final milestone-3 programming. Code done at milestones 1 and 2 is basically worthless to me unless job is completed (1 & 2 work cannot be used on its own). Milestone 3 is where all complex, technical and signficant work is performed, which blends-in with 1 & 2 work.

If the primary concern is not knowing until the end, whether or not the person you hired has the capability to complete the job to spec, then spend the $5k on hiring a consultant who can vet candidates for you.

 

If the primary concern is that the programmer might get hit by a bus or win Powerball and disappear, then don't hire an independent contractor, go with a firm that has more than one person on staff who can finish the job.

tta192
Community Member

Taking risk is a service. The bigger the risk someone takes for you, the higher the price will be.


So if you estimate the project to require 15K worth of effort, then you’ll need to offer at least 60k (maybe even more) to make it look appealing, when factoring in the conditions you are describing. 

Sorry, but "zero risk" and "budget" cannot coexist!

 
Of course, just because a freelancer considers the proposition financially appealing does not automatically mean that they can afford it! Remember, they need to be able to invest the time for the worst case scenario (delays, rework…) and also be comfortable with the possibility of not getting paid at all (you refusing to pay, them failing to complete all the requirements, etc.).

petra_r
Community Member


David G wrote:so Petra and others it's not true that I am difficult to work with. You are probably saying that because you are a FL yourself (not an employer) who likes the FL favored and biased non-refundable milestone system.

 David, I also hire. Not for 20k projects, granted, but I am also a client and had 100% success with my (much smaller) projects.

 

As a freelancer I've completed projects from under $ 10 to over $ 80.000

I've not yet bailed on a client or got hit by a bus before finishing a contract.

None of the people I hired were hit by any buses either and I was thrilled with every single one of them so far.

 

There is always a degree of risk with most things in life.

 

I really think you are essentially paralysing yourself with all the fear of all the "but what if...." stuff.

 

And again: It is not a problem. You don't like how it works here?

NO PROBLEM!!!!!!!! Use a different avenue to get your stuff done!

 

And finally: With freelancers you are not an "employer" - you are a client. BIG difference.

 

It is useless to comment on this thread.  Either the OP has a very closed vision or as Phyllis said he may be conducting a reasesrch on some 'Game Theory' project.

 

Bottom line, if he is serious-he ain't going to find a freelancer either on this platform or any place else who would work on a large custom project with no in between payments.  If he desires a solution that is guranteed get it off the shelf.  Even in a vending machine you plop the coins first then get that sugar water can.  Here he wants the can first then plop the coins.


@Prashant P wrote:

It is useless to comment on this thread.  Either the OP has a very closed vision or as Phyllis said he may be conducting a reasesrch on some 'Game Theory' project.

 

Bottom line, if he is serious-he ain't going to find a freelancer either on this platform or any place else who would work on a large custom project with no in between payments.  If he desires a solution that is guranteed get it off the shelf.  Even in a vending machine you plop the coins first then get that sugar water can.  Here he wants the can first then plop the coins.


 Sadly (for both him and the freelancer), he probably will. We've all seen the type of freelancer who responds to the promise of big money if only he invests a bunch of time up front for little or nothing...they're the ones who really, really need money and are having a hard time finding work.

 

That means the freelancer who agrees to do this probably WON'T be qualified to finish the job, and David and the freelancer will both suffer.

petra_r
Community Member


@David G wrote:

BTW, over the past 20 plus years I have successfully hired programmers to work for me, all without problems and all paid in full, with none of them working on a written milestone system


 So, what's the sudden panic now?

 

9d6dfbcc
Community Member

That was years ago and I am no longer in touch with the old programmers or know how to contact them. At that time it was done on a handshake or on the phone (if out of state, or another nation like a programmer in Australia, with nothing in writing or pre-payments. Maybe things have changed with time.

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