Congratulations to Upwork

A huge congratulations to the entire Upwork team on a successful IPO! This exciting milestone for the freelance economy cements Upwork’s place as the dominant marketplace in the industry.

image

I was fortunate enough to be on the founding team of oDesk (now Upwork). When I joined, it was just 4 of us hacking away on crude systems with almost no budget. I remember when I made that first flight out to San Francisco from Boston to meet the team in 2004, the company was down to its last $20K in the bank. Since I was young and foolish, that didn’t deter me from joining full time.  

Very shortly after I joined, Greg Gretsch (now my partner at Jackson Square Ventures) co-led oDesk’s Series A along with Venky Ganesan (partner at Menlo Ventures and lead investor in Rev.com). Since then, the company has gone through an amazing journey.  To celebrate today’s public debut, I’d like to take a moment to reflect on the journey and share some of the lessons learned.

Discover Your Why

Simon Sinek is famous for his bestselling book, “Start with Why,” and the theory of acting with purpose. In my case, in the early days of oDesk, I didn’t start with why, but I quickly discovered it.  My first role was in sales and the buyers on the platform absolutely loved the access to global freelancers, the low hourly rates, and the full transparency and flexibility in the system. But it wasn’t until a little later when I spent more time with the freelancer side that I discovered the true power and potential significance of the platform.  

Early on, we would routinely get emails and chats from freelancers in Russia, Ukraine, India, Bangladesh, and the Philippines expressing tremendous thanks. Upwork had truly life-changing potential. These talented and diligent individuals were able to find work, increase their pay (sometimes by 5X), and gain the freedom and flexibility that comes with freelancing. That was the purpose, and still is to this day.

Upwork has built a global meritocracy, providing access to high-quality jobs and earning potential for the right people, anywhere in the world.

Simplify vs Complexify

I’m proud to have been a part of such an incredibly bright team. We would engage in some rigorous intellectual debates about the pros and cons of pretty much everything in the marketplace - many features or policies would benefit one side of the marketplace while potentially harming the other side. Sometimes this debate is good, but sometimes it is poisonous.

The catch 22 of working with very smart people is that they have an ability to understand a lot of complex information at once, which can translate into an overly complicated point of view. But you need simplicity to build a great enduring product and company. I remember one particularly heated debate over something as (seemingly) trivial as a default feedback rating for new freelancers on the platform. The argument was that a new “unproven” freelancer was actually better and should be ranked higher than a “proven” low-feedback freelancer.  Therefore, the new freelancer should receive a default rating somewhere in the middle of the pack.  Fortunately, we decided not to pursue this path as it would have provided misleading information. The correct answer is to closely manage the overall network – promote the good people and kick out the bad people. Simple.  

Mistakes of Hiring

Like most founding employees, people tend to ask me what lessons I learned throughout my tenure at the company (hence, this post). While it may seem obvious, I can say that hiring mistakes are what taught me the most. When you are in hyper-growth mode, recruitment takes place at a breakneck speed. I hired a lot of people in a short amount of time and consequently made many mistakes.

The most acute mistakes were made when I felt a ton of pressure to move quickly, so I’d hire who I thought to be the best of a batch of candidates. In retrospect, it was really just hiring within a local maximum. It would have been so much more productive and beneficial to the greater company and team if we had slowed down. Waiting until you find a truly amazing candidate to bring on board is always worth the wait.  

Realistically for entrepreneurs, no matter how hard you try, you’re going to make hiring mistakes. What’s important is to correct them quickly. As I grew to understand the careful and strategic practice of recruitment, I developed an ability to make tough decisions quickly. I remember when we had a candidate join the marketing team and even on the second day, it was clear the fit wasn’t right on either side. By the end of the week, we’d parted ways, and I was nervous how a hiring 180 would be received at the board level. To my surprise, I received praise for making the tough decision quickly, and it became a culturally-rooted practice at the organization.   

Time for Banter

Jason Chicola and I were both on the founding team at oDesk. We lived together in a crappy apartment in San Francisco and commuted together from SF down to the peninsula every day. We were effectively together 24/7.

The interesting thing that developed was a separation of time to discuss short term goals and long term brainstorming. When we were in the office together, it was all business and we were relentlessly focused on hitting quarterly KPIs and OKRs (although back then we just called them “goals”).  Anytime I would bring up a crazy idea during the day, Jason would typically throw something at me and tell me it was the dumbest idea ever. But then we would get in the car and begin our hour-long trek back to San Francisco, when we moved into “banter” mode. It became a dedicated time for far-out ideas, brainstorming, long-term vision discussions, and theoretical arguments. The whole branding of Upwork’s Hire, Manage, Pay came out of one of these banter sessions. It’s important to have time to talk about risky ideas, just as long as it doesn’t detract from the first priority of continuing to hit growth goals. Having an hour set aside per day helped us stick to that.

Getting Served

When I was running the sales and customer service team in the early days, like most services, we would have a variety of complaints come in from buyers, freelancers, and other disgruntled people. We would even get some “prank” phone calls – one local developer called up to tell me that we were worse than Saddam Hussein. A different disgruntled freelancer once got in a dispute with a buyer and then hijacked the DNS records to the website and put up some Islamic text on the homepage.

And one time, I personally got served with a claim that a freelancer had stolen IP and we were being sued for ~$60k. It turned out to be totally bogus, but it taught me an important lesson. At first all of these things bothered me to no end, but I gradually came to the realization that success in a marketplace will likely disrupt some incumbents, and there will be people that try to fight you along the way. Don’t let it disrupt your core vision and goals.There will be a much bigger majority of people that are cheering for your success, and a more vocal, but much smaller group hoping for your demise.

Full Circle

My time at oDesk / Upwork directly led to my current venture capital career. Greg Gretsch was and remains on the board and is my partner at Jackson Square Ventures. Back in 2004 - 2010, he would routinely send me early stage companies to check out as part of his diligence process. I would frequently sign up and test out the new services as one of a startup’s first customers. I’d then report my findings directly back to Greg. When I left in 2010, Greg invited me to lunch and said a) I can’t believe you left and b) since you did, I think you should join us in venture capital. That lunch began my career in venture and my focus on marketplace investments.

Congrats again to the Upwork team.  It was an absolute honor working with such talented founders Odysseas Tsatalos and Stratis Karamanlakis and CEOs Gary Swart and Stephane Kasriel.  I’m extremely proud of what Upwork has built and I’m thrilled for this milestone. .  

Onward,

-Josh

blog comments powered by Disqus
  1. jbreinlinger posted this