Life After Zirtual
When a virtual assistant platform went bust in August, the CEO invited ex-staffers to take the clients and strike out on their own. How has that worked out for everyone?
When Christopher Creech interviewed for Zirtual last spring, he was down to eating every other day. He’d been out of work for more than a year in Eastern Kentucky, a tough-ass place to not have a job. The coal industry is collapsing, thousands of miners have been laid off, and Creech’s small town of Cumberland — where he lives in a ranch house with his wife, grandpa, and “I’m not really sure” how many dogs (“I lost track at 20”) — is a portrait of Appalachia going out of business.
Still, 32-year-old Creech is a prime candidate to be your executive assistant. He’s computer savvy, courteous, a quick study, though that’s where the predictable particulars end. Throughout his twenties, he’d toured the Smoky Mountain pro wrestling circuit as Chris Creature, a Marilyn Manson-ish, 6-foot-4-inch flesh pounder in black nail polish and face paint. All those body slams ruined his back, leaving him unable to lift heavy things, another strike against him in the local job market. He’s worked at a mine as a security guard, in a call center, at a small-town newspaper, at a Speedway gas station, but, with his back getting worse, he’d started taking odd jobs on Mechanical Turk. Mostly, he and his fiancée were relying on her $7.75-an-hour paycheck from Dollar General.
The couple used food stamps to feed Creech’s 83-year-old grandpa first, and then ate whatever was left.
So you can imagine that Creech was pretty stoked when he was offered a job at Zirtual, the sharing economy’s run at secretaries. He’d make $11 an hour plus benefits as an actual employee — not as an independent contractor, which has been the common arrangement among so-called on-demand companies — and work from home. His pay rate was below minimum wage in Zirtual’s hometown of San Francisco, but it was a nice bump in one of the country’s poorest counties, where other job options cough up the federal minimum wage of $7.25 an hour.
His wife, Rebekkah, soon quit her Dollar General gig and joined Zirtual, too. They got caught up on bills and filled the fridge. They told more out-of-work friends to apply. Over the summer, the company sent them both brand-new HP Chromebooks to replace their old laptops.
“I was on cloud 9,” Creech says of the day he got hired. “At the time, we thought Zirtual was the greatest thing in the world.”
Five months later came the layoffs.
Life has been a roller coaster for the Creeches and some 400 former Zirtual staff in the months since the company shut down suddenly in mid-August and terminated everyone’s job without warning. After a company bought the business a day later, some chose to go back — only to face a new round of cuts last month. Other former workers worked out deals with their former Zirtual clients, or hunted for other jobs.
(The company’s financial problems have been well documented. In a Medium post published shortly after the company crashed, former CEO Maren Kate Donovan wrote a candid obituary. “The numbers were just fucked,” she told Fortune.)
The chaos reveals the gray market world of “off-ramping,” a common but frowned-on practice where contractors set up private deals with clients referred through online matchmakers like Zirtual. It also throws into sharp relief how the digital economy can harness have-nots into a ready workforce for the haves via digital, remote work — a familiar concept from offshoring service jobs to Indian phone banks, but more startling when the worker, like Creech, is sitting on his front porch in Kentucky.
Opening his laptop to work, Creech the Assistant would book a dozen tickets to fly luminaries into Singapore for a conference. Creech the Guy has only ridden on a plane once; until buying a used Taurus for $800 in July, he had bummed rides or walked for months. Creech the Guy had just gotten off food stamps. Creech the Assistant reserved tables at Soho House New York.
So yes, Creech was thankful for the work, but it certainly reminded him of the world on the other side of the Google Calendar he was booking. “I’m living vicariously because they’re going to all these places I’d love to go. I’m not envious of how much she [my client] works, but some of the people she’s met and talked to — it blows my mind.”
Currently, the term “virtual assistant” describes both computers and humans doing these tasks. Competitors with names fit for a wrestling bout with Chris Creature — Apple’s Siri, Microsoft’s Cortana, Google Now, and Facebook’s M — are all vying for the market, estimated to be a $5.1 billion global industry by 2022. Developers hope to cut business costs by building a purely AI-operated virtual assistant capable of ordering tickets, pizza, and even parrots (a work in progress). Yet many of these services currently use a human wizard of Oz behind the curtain, both to train the computers or to step in when a task is beyond AI’s smarts.
Zirtual was proudly on the side of team human. It marketed not just its service, but its U.S.-based “Zeople,” and recruited and trained the best it could find. Launching in 2013, Donovan first contracted overseas workers. But with the timezone and cultural differences killing the customer experience, she switched to U.S. assistants.
Aiming for “rock stars,” the company only hired four percent of applicants, with extra points given for college degrees. The assistants’ pedigrees — an MFA in cinema studies from NYU, or Donovan’s own assistant, who had an MBA — created rave testimonials.
While a full-time executive assistant costs an employer a median $58,000 salary, one “Zirtual Assistant” (“ZA” for short) would service some six or eight clients at a time, with a starting price of $399 a month. Long term, the company aspired to connect high-quality help to “every entrepreneur, every team, every Fortune 500 company…everyone,” according to an email sent out to the ZAs, describing its “Big Ass Vision.” Its goal was to become “an employer that rivals the numbers of UPS and Wal-Mart”:
Mid-summer, the business seemed to be going according to plan. In early August, one of Zirtual’s angel investors, Jason Calacanis, invited Donovan onto his This Week in Startups podcast. Sitting in a studio, he raved, “God, you’re such a great entrepreneur!” He seemed blown away by Donovan’s near-perfect founder origin story of moving into a San Francisco hostel from her native Nevada to launch her startup. “Of 150 investments [I’ve made], you’re definitely in top 10 percent of tenaciousness.”
“Yay!” Donovan replied, momentarily breaking her all-business demeanor.
Later in the podcast, Calacanis remarked that her financials were looking strong. “I think it is unicorn territory.”
Donovan agreed: “I feel it in my bones.”
Very soon after the podcast recording, an investor the company had been counting on to close its B round fell through. Zirtual broke the news to stunned ZAs in a pre-dawn Monday email, with an unexpected twist: Donovan encouraged the now former workers to contract directly with their old Zirtual clients.
The very next day, Zirtual was acquired by a customer, startups.co. By the time the new CEO Wil Schroter invited the ex-ZAs to come back as contractors, he says about 200 assistants had followed Donovan’s advice. (Donovan is now out of Zirtual, consulting on managing remote workforces. She didn’t want to comment for this story.)
Deeply embedded in most platforms’ terms of service (and even more deeply in their founders’ fears), is a prohibition on contacting customers off-platform. Uber and Lyft drivers can’t hand out cards for their personal driving company. Handy and TaskRabbit and a myriad other service marketplaces forbid users from extracurricular contracts.
That’s because, in a time when many startups are hunting unicorn status by offering a marketplace, not actual services, off-ramping poses a distant, far-fetched, but existential threat. The primary value of an on-demand platform is to offer some minimum level of background checks, built-in marketing, and efficiency in finding leads: that makes sense to an Uber driver picking up a dozen one-time fares every hour. But the more long-term the work, and the stronger customers’ and workers’ loyalties become to each other than to the platform, the more absurd paying a matchmaker becomes (the equivalent of OKCupid claiming a lifetime seat at your anniversary meals). That’s why now-defunct Homejoy’s low-paid home cleaners kept off-ramping with customers, why some handymen will professionally elope with repeat TaskRabbit clients. One appointment-booking platform, MyTime, even builds this probability into its business model — charging businesses a one-time commission for a user’s first booking, then nothing for repeat visits.
Zirtual brought a well-funded startup sheen to what might otherwise be a hodgepodge process of hunting down a virtual assistant: you know, the slick website with a promo video with a young CEO saying his assistant helped him focus on his core competency of providing drinking water to Ethiopia — all clean lines and upbeat guitar. There were the A-list corporate clients like Apple and TED, and this guy ← posing as your elite, sexy secretary. Then there were the requisite startup “community” labels for its workers: Zeople and Zirtual Assistants — non-words to forever confound your autocorrect and make typing this story an exercise in stone-cold persistence.
The stable of what eventually would be 400 ZAs draws from a few splintered trends:
- Technology enabling a remote workforce.
- Employment dead zones (“I don’t know why this place exists,” one ex-ZA says of the small Indiana town she found herself in after moving for her husband’s job).
- Freedom-loving Millennials.
- A dearth of paid maternity leave and childcare subsidies, making mothers look for at-home work options.
Flexibility was a key benefit for many ZAs, as Zirtual learned when Donovan made the decision that so many on-demand startups have hesitated to follow: turning an independent contractor workforce into employees. At that moment, Donovan told Calacanis, “five to 10 percent of our workforce decided to say ‘sayonara.’”
Switching from contractor to employee came with much stricter oversight and a pay cut, making it unattractive to many ZAs. As independent contractors, they earned $20 an hour. Customers prepaid each month for a set number of hours, but typically only used 80 percent of them — meaning the workers made even more. Yet the company was legally limited in how much it could train and manage contractors. As Donovan would write one worker in an email: “Since Zirtual is a business, it only makes sense to pay our ZAs for when they work, not based on client load — because you could have 10 clients that never give you any work, then there is zero motivation to be proactive with them (in the old system).”
So in May 2014, the company switched course:
Donovan said Zirtual’s costs increased about 20–30 percent as a result of the switch, including picking up health benefits for those who worked more than 30 hours a week. To compensate, the company reduced salaries to $10–$12 an hour.
Stay-at-home moms were a huge part of the assistant workforce (which was 75 percent women, Donovan said). The lower pay and rigid hours undercut the flexibility that attracted Texas-based assistant Amanda Richards to working from home in the first place. “There wasn’t a lot of time to devote to my baby,” she told Backchannel over the phone. She would type emails in a rocking chair, or on a playmat. During the weekly Google Hangout with pod members, moms would tilt the screens up while they nursed off-screen, or schedule calls during their baby’s nap time.
When the lay-off email dropped on August 10, it didn’t take experienced ZAs long to realize they could call their own shots. Zirtual had tried to ensure its middleman status in one respect: owning the hardware and passwords to the accounts the workers used to serve their customers. Their Chromebooks? A “paperweight,” says Creech, right after he was laid off. Their Google office accounts? Disabled. Phone calls had been routed through Google Voice, with workers oftentimes not having their clients’ real-world phone numbers.
It was a momentary hangup: the assistants and clients tracked each other down and brokered direct deals, and Donovan’s layoff email had promised help in tracking them down if they had trouble. “I was much more loyal to her than the company she worked for,” says Brandon Eley, an ex-customer, of the assistant he met through Zirtual. “If I stayed with the company, I would have had to start the whole [on-boarding] process again, and do another three months just in training.”
Eley says he now pays his assistant the $750 a month, the same amount he used to pay Zirtual — which means more money for the worker. Some other assistants only asked clients for their original split, providing a steep discount for the customer. (But, or course, less money for the worker, who now has to pay their own taxes and insurance.)
ZAs shared grumbles and tips for going 1099 in a private Facebook group:
Zirtual tanked at a bad time for the Creeches in Kentucky. Their wedding was the following weekend at a nearby state park, wiping out half their final Zirtual checks. Rebekkah designed the website for their new assistant business, Versonal, and applied for unemployment.
Others have fared much better. For workers like Sharyn Richardson in Austin, a cinema studies grad from NYU, it wasn’t a head-scratcher to get on Squarespace to design her Knowmadic Assistant website that rivals Zirtual’s in its breezy design. She transferred three clients from her Virtual roster, and nabbed three new ones — earning more money and working fewer hours.
Some assistants who have gone out on their own have upgraded their services from the limited tasks Zirtual let them handle, breaking into social media marketing, or creating PowerPoint presentations, or even outsourcing the signing of thank-you cards to someone with better penmanship on Craigslist. Specializing allowed them to charge higher rates — to the tune of $35 an hour. Being forced into being a business is “scary and terrifying, but I think it’s definitely a blessing in disguise, absolutely,” says Indiana-based Rose Dukes, who named her new company Rising Phoenix Services.
Meanwhile, Zirtual’s new CEO Schroter moved the headquarters into his office in Columbus, OH. He claims he was okay with the assistants going solo.
“There’s no problem with doing that. We want to make sure people have jobs,” he says.
Still, the new owners sent emails asking customers to return, with a free month for the inconvenience. “We did [email them] for a brief period of time, frankly, a little bit inadvertently, and the ZAs were very quick to remind us of that fact,” Schroter says. “We definitely stepped on some toes.”
The new company hired back 120 ZAs as contractors, offering a 55 percent cut of their clients’ monthly plans.
Justin Vann was one of those workers — a 24-year-old outside Raleigh, NC. (He was was also serving four previous clients independently.) Under the new management, he was only assigned two clients — one of which dropped off. In October, he got a second layoff notice:
Schroter says of the 20-some layoffs, half hadn’t been awarded any clients at all, so they hardly count as layoffs. The other 10 had personnel issues, he says, though he declined to discuss specifics. He added he’s not concerned that the bad PR from the shutdown will dull their long-term success.
“It’s not that Zirtual was broken and the ZAs were terrible. It went under because it was mismanaged and under-capitalized.”
On a Monday afternoon this fall, Creech sits on his porch with a HP laptop a friend loaned him $250 to buy. (The Zirtual-issue Chromebook sits on a window sill — Zirtual offered to sell them to the old ZAs for $100, or to exchange them for a $50 Amazon gift card.) Two New York-based customers followed him into his 1099 business, a news agency director paying $800 a month and a coding consultant paying $400. Creech scrolls over the colored blocks of time in his clients’ Google calendars: “in London,” “in Italy,” “in Beirut/Istanbul.”
He checks email: The journalist is in San Francisco for the week, and needs a table at Les Clos, a Soma wine bar. Done. He then buys her a plane ticket for Reykjavik: “I’ve seen her spend more on a flight than we bring in in our company in a month,” he says.
Of the seven former ZAs interviewed for this story, three say they had found enough work on their own— they sometimes even subcontract out excess work to other ex-ZAs.
Ultimately, Schroter says the solo assistants don’t threaten a platform business, which has more built-in security and accountability. Plus they need the leads: “If ZAs can do customer acquisition as well as a platform, then it works the same, but the reality is that people can’t.”
Creech’s clients don’t know about Chris Creature, or this dog-scented porch, or that he wears donated black sneakers since he couldn’t find size 15’s anywhere in Harlan County. They don’t know that his life is spiraling into moderate chaos: Two weeks before, Creech had checked into the hospital with heart problems. (One client kept promising a care basket, but it never showed up.) He’s applying for food stamps. Virtual work makes that all invisible, of course, when he rings the United Nations to set up a meeting time in his polite Appalachian lilt.
Still, that day, Creech was optimistic. The couple wanted to on-board enough clients for full-time work, then provide jobs to unemployed friends. His very own Zirtual. Yet by early November, Creech still only had the same two clients, and was finding the market flooded with ex-ZAs as well as people in other countries charging as little as $5 an hour. He was starting to ponder other paths — maybe producing wrestling shows, even fighting encore bouts as Chris Creature. Rebekkah had started recording herself playing video games and loading them on YouTube in hopes of a Let’s Play business like the ones they’ve heard make millions in ad revenue. Last weekend, he and his wife counted their coins to see if they could make the phone bill. Just.
And then there’s the final insult. “On Thursday or Friday someone sent me an advertisement on LinkedIn, advertising a virtual assistant company to me,” Creech tells me over the phone.
The direct email read:
“If you are in business for yourself or thinking about going into business for yourself, then you are DEFINITELY going to want to get to know AO [Amplified Office]. I promise that you have never seen anything like it!”
A virtual assistant for his own virtual assistant business — a meta loop.
“I didn’t know whether to laugh about it or be mad about it. I just sat and stared at the screen.”
This is a one of a series of deep dives on subjects that illuminate issues concerning the future of the workplace. On November 12–13 in San Francisco, Medium and O’Reilly Media will co-host a conference on these issues called Next: Economy. You can find out more about it here.
Platform workers, have you off-ramped with clients? Former ZAs, how are you liking being your own boss? Tell us in responses below.