An $1,000 Investment to Millions in Profits: 4 Key Ways Entrepreneurs Can Use Freelancers to Profit
In this blog, I'm continuing my conversation with Matt Barrie, CEO of Freelancer.com, the global workforce site. Here, he talks about how entrepreneurs can use Freelancer to begin or expand their business, or make them much more efficient.
In my last blog, I introduced you to Matt Barrie, CEO of Freelancer.com, the global workforce site. I've been quite impressed by what Matt's been able to do with crowdsourcing, and specifically how his company enables you to start a company using the experience of a crowd. Here, Barrie looks at some of the ways an entrepreneur can kick off his or her next big, bold idea and quite literally become a global company by using the worldwide resources of Freelancer.com.
Freelancer actually has 600 categories of work, everything from astrophysics to aerospace engineering, genetic engineering, biotechnology and even quantum mechanics. Not to mention, design, writing, editing and data entry. "The sophistication and complexity of work we see is going through the roof," Barrie said. As the tools we have to interact continue to improve, he predicts that Freelancer will see even more diversity in the work it offers.
Barrie gave a few examples of recent projects:
- Someone requested a design for the schematics of a dune buggy that can reach 30 kilometers an hour; some 40 people bid on it for $300.
- A researcher on assignment studying pygmy hippos in Africa needed a poster designed for $100; he got it done within a week.
- Mobile phone applications can be created and delivered to the Apple store for an average of $650. (Barrie said that about 300 apps a day go through Freelancer.com.)
These small entrepreneurs "are all basically becoming little economic engines of growth in these countries," said Barrie.
Barrie explained that technical jobs in particular level the playing field in the developing world. "If you're a small business and you want to get things done – for example, you're in Kansas somewhere and you want to get a website built, or you want to get an iPhone application so you can deliver orders, or you want a new logo, or you want some ideas for new recipes, or you need someone to write the business plan for your café -- whatever it is, you're only limited now by your imagination. You can build a virtual multinational corporation on a shoestring budget at 4 a.m. in your underwear," he mused.
Barrie shared one success story of an India-based user who transformed his startup into a booming business using Freelancer.com. "We have a guy on our site who started eight years ago with two guys in a room as a service provider in India doing $65 websites for cafes and small businesses," he explained. "He now makes a million dollars a year building these $65 websites. He has 120 people working for him and they just churn out these basic websites for your business, wherever or whatever it may be."
As an entrepreneur with a vision and passion, you could use Freelancer to get every stage of your company executed to the point of starting revenue. Freelancer has users who specialize in everything from website building to business plans, copywriting and advertising.
Barrie also shared the impressive story of his business partner Simon Coulson, who bootstrapped his antivirus startup PC Tools into a company with $40 million in annual revenue. Coulson, one of Australia's top technology entrepreneurs, began outsourcing his first program for $1,000 to an Indian company, which developed the application. "He was using a competitive site – before Freelancer started up – but his success with this other freelancing crowd-sourcing company gave him the impetus to support the growth of Freelancer," Barrie said.
Why is crowdsourcing so effective? Barrie cites the 2 billion global Internet users in the marketplace. "Those 2 billion people are 2 billion potential customers," he explained. "So if you have a product or service that resonates, it can take off at astronomical speeds."
Barrie offered four pieces of advice to an entrepreneur considering using Freelancer, and how best to use it.
- 1. Do your research – everything's available online. "If you're going to start a company, there's never been a better time," Barrie said. "It's never been easier and it's never been cheaper to do so. Every company today is basically an Internet company and all the things you need to build an internet company today are free — all the software is free Linux and MySQL, voice-over-Internet-protocol, Gmail and so on. And the great thing about all these Internet technologies is freelancers are available. We've got millions of freelancers to help you use these tools and get them built into a business."
- "The best thing I would suggest you do is, first of all, browse the projects on Freelancer.com," he advised. "Look at the mobile phone section or the Web development section, or whatever your area might be, and see what other people are doing and how they're wording their projects and what they're paying and so forth. We're at ground zero on the Internet for the forefront of innovation for entrepreneurs and technology and small business. There's an amazing resource there."
- 2. Start working with Freelancer. "Just give it a go," Barrie said. "It's free to sign up on Freelancer. It's free to post a project. People from all around the world will start bidding on it. And once you start talking to the freelancers looking through their samples of work, they'll give you ideas. They'll tell you, 'Hey, I've done similar sort of projects. Why don't you do it like this or why don't you do it like that?' and so forth. Really, as with all things regarding entrepreneurship, it's really just a matter of giving it a go and proceeding through trial and error."
- 3. Communicate clearly and often with your freelance community. "The greater the description you can provide of what you want, the better outcome you'll have, because when you're working with someone on the other side of the world there is room for interpretation," Barrie explained. "If you just write a one-line sentence — 'I need a website' — that could mean anything. The more you put into your description, the better outcome you'll get in terms of the bids. Then the key after that is really communication with the freelancers."
- 4. Go for quality first, then price. "The way it works is, you put a budget range down," Barrie said. "The average project on Freelancer goes for $200. For that you get about $2,000 worth of work you would get locally if you have to hunt around and find someone in the West. Put a budget range down and then it's a free market: The freelancers will bid on the project and tell you what they want to be paid. It may be an hourly rate, if it's that sort of a model, or it may be a fixed price You can look through the bids but the most important thing is go for quality first, because the prize going to be so cheap anyway that you're going to have tremendous cost savings. That gives you tremendous leverage in terms of what you can do with your starting capital."
How should entrepreneurs price their projects? Barrie recommends letting the crowd inform your final figure. "The freelancers will tell you the price discovery occurs in the market as you post the job, when you'll see the bids coming in," he said. "You'll be able to negotiate with the freelancers. They'll tell you what they can do and what they can't do and that's how you discover the price."
With the right blend of clear communication, high quality and free online tools, the possibilities are endless -- and exciting. "The other day I was in London and I met a financial analyst working from home doing financial models for pension funds on things like infrastructure projects. He needed a mathematician to develop these models in mathematics lab to be able to do his research and present his findings," Barrie said.
"He hired a guy in a PhD student in Pakistan who was doing these mathematical models," he continued. "They set up a chat on Skype. The streaming video quality now to somewhere like Pakistan is unbelievable. It was just like the guy was in the room with him. He'd get up in the morning, have his cup of tea, sit down, put the iPad there, do the video call and then they'd sit there and talk all day like as if were in the same room together. The ability to communicate now with anyone on the planet is getting better and better and better and better."
But the implications of Freelancer are far greater than just replicating an office model virtually, as Barrie pointed out. "You get someone to analyze the data, put together beautiful figures and graphs, crunch the numbers, do mathematical modeling. It's as sophisticated as you think. I want to say I've seen actually jobs in quantum mechanics. I've seen Pakistani quantum physicists bid on jobs from people in the U.S. I've seen aerospace jobs go through. And people are moonlighting. The information space now it's really frictionless, seamless… it's virtual, it can be anywhere."
In my next blog, I'm going to continue my talk with Matt Barrie about how corporations can profit from using Freelancer. Matt will also talk about what Freelancer means to the future of the workforce.
NOTE: Over the next year, I'm embarking on a BOLD mission -- to speak to top CEOs and entrepreneurs to find out their secrets to success. My last book Abundance, which hit No. 1 on Amazon, No. 2 on the New York Times and was at the top of Bill Gates' personal reading list, shows us the technologies that empower us to create a world of Abundance over the next 20 to 30 years. BOLD, my next book, will provide you with tools you can use to make your dreams come true and help you solve the world's grand challenges to create a world of Abundance. I'm going to write this book and share it with you every week through a series of blog posts. Each step of the way, I'll ask for your input and feedback. Top contributors will be credited within the book as a special "thank you," and all contributors will be recognized on the forthcoming BOLD book website. To ensure you never miss a message, sign up for my newsletter here.