Clickup, Fiverr, and GDP per capita convergence… huh?

The summary

• GDP per capita of highly developed countries like the US has converged quite a bit with countries like India and China in the past 20 years
• But a large gap remains despite the fact that there is now more or less a level playing field in the key economic efficiency gap levers like education and technology
• The brunt of this gap is what i call “Asynchronous work inefficiency” or the difficulty of hiring and working with a person many time zones away
• But COVID and platforms like Clickup are drilling away at this inefficiency
• And so eventually hiring will happen similar to the way I have learned to do on Fiverr and Upwork (for certain types of positions)…. just based on skills & price, regardless of where they are.
• And thus the doomed gdp per capita convergence that my Macroecon 101 professor predicted.. is now coming faster than i think many people had thought.

The context

In about 1996 I was sitting in my Macroeconomics 101 class at Cornell University staring at a chart the professor had on the board. I still remember that day vaguely in my head to this day as it had a massive impact on how I viewed things in future years. Basically it was a chart of GDP per capita of large countries. The US was at the top with probably around $25k+/year and countries in Asia like China and India were near the bottom with <$600. And the professor went on to explain how this would converge as economies developed and globalised, and that any remaining gap would be due to relative efficiency gaps.

Now from memory.. relative efficiency came down to two main things:

• Education
• Technology

These two core elements of efficiency have essentially completely disappeared. Workers in places like India and China now have as good (or often better) education than many Americans and have access to the same technology. And yet while countries like China have closed the gap significantly (see chart below), China still stands at just over $10k/year whereas the US is around $55k/year. So why hasn’t this completely converged yet?

The concept of “Asynchronous Work Inefficiency”

This is a name that I came up with myself to describe what i think was one of the main things holding the gap in gdp per capita. A company based in Silicon Valley, for example, would hesitate to hire a person in India with the same education and skills as a local, even if they were significantly cheaper, because it is HARD TO COORDINATE WITH A PERSON THAT IS 12+ TIME ZONES AWAY. Its just the reality of the situation.. you want to be able to have meetings and work things out quickly because that improves efficiency. And so the company hires the local person in SF and pays 2–3x or more for this benefit.

But here comes COVID and the rise of remote working

So what remote working did was open companies up to the fact that you could have people work from home.. and therefore if a person lived a few time zones away it was no issue as they could still participate in all of the calls. And so people, in particular in tech, got more accustomed to working with remote teams in a more asynchronous way. Plus they got a lot more accustomed to working with multi-cultural global teams.

Then comes my experience with Clickup

Clickup is a project management tool that i’ve used intensively for over a year now in three different companies i’ve consulted for. And as a structure & organization freak, I am in love with it deeply..haha. I’ve managed numerous remote teams using Clickup and have developed my own methodology for how to do it so that things are extremely transparent as to what people should do, when they should do it by, and how they update on their progress.

I’ve managed well over 30 different contractors from all parts of the world from Europe to Asia to the US on Clickup in the past year… and i’ve done so in a way that i regard to be almost seamlessly. Does this mean that we can all jump on the same call anytime you want? No. But it does mean that you plan for this in your project management and work around it so that it results in almost no inefficiency. And anyway, almost all projects that i have seen which are managed verbally just assigning tasks on calls, or writing things in Slack, have pretty consistently been run pretty poorly in my experience. In that that does not scale well beyond a couple people and a relatively limited scope.

How I have hired and recruited contractors

Another piece to the puzzle was when I discovered platforms like Upwork and Fiverr. There are massive amounts of freelancers on here who are available at the drop of a dime. Are they good at everything? No. But they are quite good at certain types of tasks.. where freelancers are often used. For example, setting up Shopify or Magento sites, doing tasks related to popular ERP’s, etc. And if you know what you’re looking for and have an approach that quickly weeds out the bad ones, this can be an extremely powerful tool.

The way that i typically hire on Fiverr looks something like this… If I’m looking for 2 good people that i eventually want to be almost full-time, i will start by writing to 10. I’ll weed out a bit further through some questions, and offer that about 6 start working… literally 1–2 days later. Then i’ll let go of 3–4 of them over the course of the next couple weeks (simply by not adding more hours.. ie. no dramatic firing of people that i spent months hiring) as I figured out who is most reliable and quickest.

And let’s look at how I hired them? Did I pay attention to what time zone they were in? Pretty much no. I mainly just looked at their skills, their reviews, and their price. I mean holy shit.. this is the purest form of the future that my econ 101 professor predicted.

What this means for GDP per capita convergency

Now imagine a world where people have learned what I have, namely that:

• You can hire good people very quickly from open platforms like Fiverr and Upwork from all over the world
• You can manage them on platforms like Clickup in a way that reduces asynchronous work efficiency to almost zero
• And therefore you can literally just hire the best person at the best price regardless of where in the world they live.

Meaning in other words…. 100% convergence of gdp per capita for certain types of jobs/industries where my rules hold true. Coming to a world near you :)