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Synapse... used Elance.com to jumpstart his business...

Aug, 2004  
As the world goes belligerent 011 outsourcing, and big companies in India make money that would make traditional big ticket manufacturing outfits cringe, a diminutive company in New Delhi is quietly creating a small revolution. It is earning projects from across the world not by sending project and account managers on whirl-wind US trips, not by advertising on prominent online sites, and not by having a huge staff on it business development team.

It relies on the old faithful the World Wide Web for procuring new projects and earning money in dollars.

At last count, Synapse Communications, the company in question, had earned nearly $85,000 through overseas projects using a Web service called elance.com, a Web site that launched in 1999, and is today an acknowledged leader in the Services Procurement and Management market.

In English, this means that you, as an individual or a company, can bid for a project in various categories software, creative writing, photography, 3D graphics, image editing, Web site design, banner ads, logo design, the works. Think of any topic, and Elance Online allows you to place a project or bid for one.

Just about the right raw material you need to jumpstart your earnings as an individual or as a professional outfit. Synapse Communications, for instance,has been a software development company for over eight years, but as Chief Operating Officer Kapil Gupta says, "Elance provided us with a focused platform. We have been growing at a rapid pace, and Elance Online has provided us with good business opportunities."

Elance was set up by an IIT Bombay graduate Beerud Sheth in 1999, a year after two Harvard Business School scholars Thomas W Malone and Robert Laubacher published an article in the Harvard Business Review titled, "The Dawn of the E-Lance Economy."

Among other things, the article spoke about how "the devolution of large, permanent corporations into flexible, temporary networks of individuals" was already underway. They also wrote about how the Internet will lower business transaction costs, and how these lower costs will change the "economic equation." They bravely predicted that this kind of business will define work in the 21st century.

Based on this philosophy, Sheth (also a Massachusetts Institute of Technology postgraduate) and his Elance team created tl1eir first product the Elance Online Service Marketplace in 1999. Ever since, it has been the link between thousands of business and service providers from all over the world.

It is not easy getting a project, though. For every assignment, there are likely to be several bidders, and the experience each time may not be a pleasant one. Says Gupta, "Getting projects on Elance Online is a mixed bag. Because the client is on the other side of the world, and we never meet, it does create issues at times."

The process, although seem Qingly easy, is not fixed; it varies from project to project, and most times you end up disappointed as the project may be awarded to someone else. Your experience at Elance itself counts, and it usually takes that one break-through to get you set.

Mr. Gupta says: "Each project and each client is different. There is no single way that can describe the steps from start to finish."

Not that Elance Online is the only site that caters to freelancers from across the world. For software programmers and creative professionals, sites such as Guru.com and rentacoder.com have been around for ages. Guru.com, for instance, has a tie-up with remit2india.com where you can collect payments from clients abroad. Rentacoder is free, but is restricted to small projects that could be executed byindividual programmers. This is one reason why Synapse does not bid on rentacoder.com.

On Elance Online, the cost of bidding could be quite high, even if the returns over a period could be higher. Prices range from $12 (Rs 560) a month for writing and translation assignments to $1,195 (Rs 56,000) a year for soft-ware, technology, design and engineering categories. In addition, there is an 8.75 per cent service charge. Besides, even if the first wire transfer of funds is free, each incremental transaction would set you back by $10. This pricing mechanism allows Elance Online to keep the site free of any riffraff, although there are still some who do not honour their commitments.

Another problem, as Gupta points out, is that, Elance requires that payments be routed through them. "But Elance does not provide any guarantees since they simply act as a common meeting ground between the service providers and the buyers. About 40 per cent of payments on Elance result in defaults."

On the positive side, however, the site offers a well-defined selection of the most popular job categories from photography to developing .Net applications. And since most of the work is done through the Net without any human interaction, it does not really matter how educated you are, or how big your company is, as long as your work is credible and is of the highest quality.

Indians, especially, love this site because western project managers tend to give big projects to Indians, because they quote rates that are 50-70 per cent lower than their American counterparts for the same quality of work, if not better. Sounds familiar? The outsourcing debate just got a new point.
Source: www.thinkdigit.com


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