The news of Zirtual closing operations and laying off 400 employees came as a shock not only to clients and the virtual assistants, but it made a ripple in the virtual assistant business community, well at least in my office.
I cannot believe the heartless way in which Maren Kate Donovan, CEO fired all 400 in one swoop; whether she was in trouble or not. She sent them a mass email telling them to cease all operations immediately. No more explanation and questionable arrival of the last paycheck.
This crass way of doing business, and for me personally as I do business in the virtual world, leaves room for some misinformation, but it also brings up a few opportunities to dissect their particular business model and determine what Zirtual did wrong so we could improve on it and make sure we don’t fall into the same downward spiral.
It seems from first glance that they just grew too quickly and didn’t have the capacity to handle all the work. Yes, that’s true.
It also seems that they promised too much for too little, but that’s false.
I’m sure there are other reasons which will come to light soon enough I’m sure. However, the interesting thing to me is their pricing structure and features that come with that.
Amazingly enough I’ve been in this business for nearly a decade and my clear understanding of the purpose and benefit of using a virtual assistant is very simple: you get things done more affordably than hiring someone off the street or out of college.
People don’t go to virtual assistants to have a marketing plan created or to discuss business strategies. No, they hire a VA so that the things that are simple and mundane can be handled by someone else at a price that is less than it costs for the business owner to do. AND on top of that, it frees the business owner up so he can stay focused on upper level decisions such as direction of the business and marketing strategies.
For the business owner who knows how to leverage his time, hiring a VA is key to growing his business but not draining his wallet.
Having said that, one of the major flaws I see in the Zirtual business structure is the low bang for the buck. They were charging WAY too much for their services offered that any English speaker with a smartphone could do.
To reiterate, the whole point of a Virtual Assistant is to save money for those who can’t afford to hire employees or do it themselves. The Zirtual model was $25USD per hour and for only 32 hours a month. How is that affordable?
What can that person do for you at that price point? To get quality work done, you would need to pay quality VA’s and if Zirtual were paying their employees well, which most would agree they were, then they would be losing money.
To contrast, our biggest plan is less than $500 USD for over double the packages Zirtual has to offer and we do even more tasks such as Social Media Management, Lead Generation, Online Research, Graphic Design, and WordPress Development.
People don’t want a virtual assistant at $25USD, most people are looking save money. $25USD for a virtual assistant to do some “virtual errands” for you is crazy. You can hire any college kid at a nearby campus for $10-$15 USD in person (or less).
After reading a little more into what we are told on the news sites, from Business Insider “When it started, Zirtual was a personal, virtual concierge service that charged only $99 a month for unlimited tasks, Donovan said on the show. The company has been loyal to some of those plans, though, and that may have cost it.” Donovan, CEO herself said that they had ‘grandfathered a crap load’ of these unlimited services for a flat fee. You know what people do with unlimited hours for a flat fee? Take advantage of it to their benefit. When you have people tasking out your VAs, of course you would need to hire more in order to keep up with the demand.
Enter the huge hiring spree they did where they went from 150 employees to 400. These are not contractors, these are employees; overhead. Zirtual paid insurance and other employee benefits and had a 300% increase in overhead in no time. Then you have training and can I add that I would have no idea how to keep track of 400 employees via computer only.
Here’s where I can give a shameless plug for what VA Staffer does and what confirms that we are ahead of the game already. The business model that was mentioned in Business Insider that presumably would have been the way to go was mentioned again in Business Insider, “Zirtual was beta-testing a teams product that could allow whole teams to sign up.” During their idea to raise the minimum wage of their virtual assistants from $11 to $15, they thought that allowing the VAs to team up for more leverage would be a good model. They were right and it’s what we’ve been doing for years.
VA Staffer has been using the team model and charging very close to virtual assistant pricing and it’s been a very successful model for us.
When you need more than just your email monitored and screened or your landing page built, you can receive a tailored package from us which includes several team members that are on board with your project based on your needs.
Our team in the Philippines has been trained by me personally and we bring them on slowly, vet them out on tasks and then put them on the team. There’s a clear process for ensuring they are quality VA material and that they have backup so the ball doesn’t get dropped.
Because we have a great leveraging system with a team model, we are able to work with few VAs and get things done quickly and completely. We offer the whole package as well as the task-oriented VA.
Come to VA Staffer, join our team or hire us for all your needs and we’ll earn your trust one task at a time.