In a tough economy, chances are you are trying to find other avenues for generating income and you may have considered joining an online freelance site.  That is not surprising because there has been much buzz about online freelancing websites.  You may have heard of Elance.com, Guru.com, Rentacoder.com, Freelance.com, oDesk.com and others.  There have been numerous articles and news pieces done about these sites, and they may have given you the impression that they are life/business savers helping freelancers find work in tough times.  Many of these news stories have come really close to touting these sites as a God sent venue for freelancers in tough times.  Many times, reporters find someone for whom using these websites have worked.  When we first saw these news stories, we too felt these freelance sites were viable options to bring in much needed income in tough economic times and were hoping that after testing the sites, we could recommend them as viable options to our clients.  Well, we have done our due diligence, and after four months of trying a few of these services, we have to warn you about using these venues.  We will not focus on the business practices of these sites or the tricks providers are allegedly using to boost their ratings, but rather, the viability of this type of venue for freelancers.  If you want more information on business practices or the tricks, all you need to do is do a search on the sites’ name along with the word “complaint”, and you will get many returns, but these are not what we are focusing on in this blog.

If you are not aware of what these sites provide, here is a breakdown. Basically, these freelance websites bring together companies or individuals that are willing to outsource projects with providers that are looking for projects. Employers can outsource many different areas of business from engineering, web design, writing, legal to marketing or administrative projects. Companies or individuals can bid on employer project.  As a provider, many times you have to pay to bid on projects, and if you are awarded a project, you pay a fee based on a certain percentage of your earnings from that project.

Because these sites are open venue, where anyone (literally anyone) can pay a few bucks and post a job, we figured we needed to devise a plan of attack that would lead us to the more serious employers.  To do this, we needed to determine a method for bidding or not to bidding on a given project. After much planning among our core group, we decided on the following plan of attack.  We would bid on projects when most of the following criteria were met:

• We will bid on projects where the employers have a good award rate history.
• We will bid on jobs where the employer has a good pay rate.
• We will bid on projects where the project is well defined.
• We will bid on projects with short bidding periods (21 days or less).  We figured that this shows that the employer is serious.  Longer bidding periods may indicate that the employer is “testing the waters” or buying time to find money for the project.
• We prefer to bid on projects where a budget is given.
• We will bid on projects where the estimated compensation range met our determination of a fair compensation for our services.
• We will bid on projects if we have the expertise to do the given project.  We don’t want our time wasted and we are sure they don’t want us to waste their time either.

With our method set, we set out to bid on projects.  We quickly found that any US based provider considering these sites may want to think again.  What we found were job postings and situations that are not favorable to reputable US providers and in many cases, any provider.  Here are a few examples of what we found.

• Many of buyers put their project on more than one freelance site.  This makes it more difficult to successfully bid on projects because as a bidder, you do not know who you are bidding against.  You may be bidding on a project that someone on another site may have already under bided on so much that it is not worth you wasting your time.
• Many times you are competing against foreign workers with lower overhead because of they are living in countries where the cost of living is extremely low.
• We saw employers that reposted jobs after awarding them in the past, on the same site.
• Too often, the employer expected something for nothing (by American standards and probably by anyone’s standards).  Some employers are estimating their jobs to be worth what we considered to be ridiculous rates.
• Too often, the employers seem to not understand what they needed. They are not able to describe or comprehend what they wanted.  Because of this, they think that a job is easy, not realizing the amount of work they are requesting for the compensation.
• This one frustrated us more than any of the others.  Many projects were never awarded to anyone.  In our time on the freelance websites, we noticed that more than 75% of the projects we bided on were never awarded despite the bidding strategy that we devised to weed out the “not so serious” employers.  Even more frustrating, the lowest bidders were awarded most of the awarded projects and sometimes the winner’s bid was below the employers estimated budget.

Let us take a closer look at some of the worst cases we encountered in our bidding adventures.  This is all we can call it, because that is what it is: an adventure.

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Example 1
Job Description from the Employer:
I need a white paper that explains a digital video recording solution used in the packaging industry for high speed machine vision.

Must be in English.
Experience with machine vision and high speed imaging.
Budget: Between $500 and $1,000

What we did:
My Ph.D. research background and current research background (close to 10 years total) is in image and video processing.  I wrote the employer a message letting him know that his budget is too low for this project and nonetheless the job posting is too vague for a true professional to bid on it.  Our “bid” was promptly rejected (Note:  We never placed a bid.)

Reason for being declined: Bid does not seem realistic.

Conclusion to our adventure:
The project was eventually awarded to a provider with no background in image or video processing.  In fact, the provider did not have a background in engineering at all.  The winning provider had, and I quote, “Diploma in of Collegial Studies in Creative Arts”.  And, by the way, the winning provider was the lowest bidder and his bid was $500.

My opinion:
This is an example of an employer that does not know the scope of the project.  If you are not familiar with white papers, I can tell you they are not just any sort of paper.  In the technical world, they are documents that explain research or arguments on a specific problem encountered.  The problems are researched, the problems are solved, and documents are often created to give authoritative figures some direction when they are trying to make major decisions or determine a plan of action.  In other words, we have a problem, we need you to figure it out, and then we need you to write a report that helps us determine what to do.

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Here is another scenario we encountered .We got this message in our Inbox from an employer’s whose project we bided on a month earlier.  We were one of the highest bidders on the project.  No surprise but the employer chose the lowest bidder.

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Example 2
The Employer wrote:
Hi Clyde,

As the original provider that was selected has not responded, we were wondering if you are still interested in taking on this project. Our timeline has been shortened drastically, and we would require a final product on Sept. 20th. There is already pre-existing materials, and you will have full access to our two founders, of whom you will conduct interviews. Let me know if this project timeline is feasible for you.

Thanks,

D__ W___

Our response:
Hi D__,
The project time line is feasible but not at the rate we quoted before. The price we quoted was for a delivery date of 10 business days (2 weeks) after the start of the project. Based on your current time line, you will need the project completed in less than 3 business days. To get this done we will have to work on the weekend. Given the shortened time and the need to work on the weekend, it will cost more.

Has your budget increased? If not we will have to pass on the opportunity.

Regards,
Clyde A. Lettsome, Ph.D., P.E.

Conclusion to our adventure:
No surprise, but we never heard from them since.

My opinion:
I am guessing they thought we would do all that work in a shorten time period for nothing.  They should have chosen the right provider to begin with.
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Here is another one.  We saw this job posting.  The employer was looking for someone familiar with communication protocols.  (Note: Just a bit about my background.   My second technical area of study while I was doing my Ph.D. work was in communications.) .  So, I decided take the bait and ask for more information.   Their budget was less than $500.  I am thinking for this budget, they needed someone to answer a few questions and give some professional opinion on the subject matter.   Here is what I found out and here is our response.

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Example 3
Employer writes:
Thanks for your interests in this project!

I will give you some more details of this project and you can have an idea of what might be involved

This project is to look at possibilities of combining two existing modulation schemes and see its performance against other schemes.

This will be based on a research paper (attached), the authors proposed to use combination of PAM with DPPM to form DAPPM (please find explanation at the end), and follow this idea, we want to see what if we use the combination of PAM with PPM to form PAPM. And compare PAPM to other schemes as well.

All this project will involve are equation/formula formation and plot a few comparison graphs, as we got quite tight deadline (best within a week), early finishing will be appreciated and bonus will be added to the bid.

What results are expected from this project?

Reproduce the following with the PAPM scheme included if possible, with source code, equation/formula for calculation.

Table 1, Table2, Figure 2, Figure3, Figure4, Figure7, Figure8, Figure10

Most terms in the paper can be explained, and let me know if you’d prefer to take the whole project or maybe divide it into parts. Please give me a quote for a completed whole project, and I will get back to you shortly

Regards,

Y_

Our response:
Y_,
This project cannot be done in a week by any reputable researcher. Researchers are held to a high standard. This type of research is the type that takes anywhere from a few months to a few years. In addition, the work produced is novel and thus very little if any documentation is available to assist. Thus, many experiments would have to be performed to verify equations and generate graphs.

Furthermore, it cannot be done for less than $500 by any reputable person in the United States. The type of research you are trying to get done would cost a minimum of $25,000 to get a Ph.D. graduate student in the US to work on this for 4-5 months. In addition, any papers produced from the research would have to include the name of the graduate student and the research advisor.

At the budget price you have listed, all I can do is read the paper over and provide you three hours of consultation in which I make suggestions. At that price, you would have to perform all the work yourself with 3 hours worth of guidance from me.

Thanks and good luck.
Clyde A. Lettsome, Ph.D., P.E.

Conclusion to our adventure:
Strangely enough, after receiving more information, some providers actually did bid on this project.  However, the project was never awarded to anyone.

My Opinion:
My guess is that no reputable providers placed a bid on this project.   Anyone that understood what the employer was asking for was unreasonable .  Even if the time line was reasonable, a provider would be working at a rate close to pennies per hour.
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We can continue to do this, but I think you get the idea.  After 4 months of experience, I would caution anyone planning to use these freelance websites as a viable option of finding extra revenue streams.  When we considered the money spent to participate in the bidding and the opportunity cost, we think there are better ways to spend your money.  I equate our experience to playing the lottery.  There will be very few winners and those are the people that are featured in the news, but most people will lose.  Real stellar resumes and verifiable accolades cannot save you.  These sites are mostly filled with employers looking to get projects completed for next to nothing.  This maybe because the sites are filled with employers who, for the most part, do not know the amount of work, money, or dedication needed to see their project through completion.

If you are an employer, I would be cautious, also.  If you are thinking that this is an opportunity to get a project done really cheap, just realize that you may not find anyone reputable that would be willing to bid on your project.   Because these sites are open venue, anyone (again, literally anyone) can pay a few bucks and post a sparkling resume online with information you cannot verify.  Our resumes included verifiable information, but from what I saw, most providers’ backgrounds were unverifiable.

Given this economic recession we are in, this is the worst time to take the risks whether you are a provider or an employer.  I think, before the media posts these sites as being viable sources of income in these tough economies, they need to do some research into what they are presenting.