Using Elance or oDesk as a source for IT consulting leads

IT consultant Chip Camden checked out Elance and oDesk freelancing services and found lowball estimates, what he calls nannyware, and more.

 In an extensive article on titled IT Contracting: How to Get Started on Elance, oDesk, Meridith Levinson discusses 13 tips for using those services to land new freelance work. I signed up for Elance and oDesk to see what they're about.

The first thing both sites require is that you establish a profile. The content of your profile matters far more on these sites than it does on LinkedIn, Facebook, or even TechRepublic because that will be how prospective clients evaluate your abilities when you bid on a job. Out of the 13 tips that Meridith provides, 11 of them directly relate to your profile.

Both services require that you pass an initial competency test regarding how to operate their service before you can bid on jobs. Elance's test requires serious study in advance. The oDesk version seems intended to instruct (or sell) more than to test existing knowledge -- it's open-book and quite easy (hint: if there's an "all of the above" option in response to a question about what oDesk provides, choose it).

Both sites also offer a large number of competency tests for various skills. There are many tests for competencies in programming in a specific language such as C, Java, JavaScript, Ruby, etc., as well as frameworks such as Rails and .NET. There are also more specific technologies, including Microsoft Office, Drupal, and various databases. Then there are tests for English language skills, accounting, business plans, and even creative writing.

The competency tests are very similar -- in fact, they appear to be provided by the same service. I took the WordPress test on both sites, and the questions and their layout appeared to be identical (I passed, by the way). These tests are timed, and the questions can be pretty advanced. Your score becomes publicly available on your profile by default, but on both sites, you can remove it and/or retake the test at a later time.

Now you're ready to search for work. I was shocked by what people offer for compensation. Many of the listings specify "under $500" or even less, and the project specifications often indicate that the requestor really doesn't know what they need.

The lowball estimates aren't helped by the expectations that many members set, either. Browsing through the Ruby developers on both sites, for example, you'll find minimum hourly rates listed from $15 to $40. I was shocked to see a developer whom I know and respect (and won't name) listed at under $20 per hour. In Meridith's article, she quotes Nathan Wenneker as saying you need to begin low in order to compete, and then work your way up. That will take a lot of working, folks. I went ahead and listed my rate at what I bill new clients. We'll see if the higher price creates an illusion of higher quality -- err, I mean, if anyone recognizes the higher quality represented by my price. It's a good thing that I don't need the business right now.

Elance and oDesk take their cut as well. Both sites require that you only bill for any services rendered through them; this is where they collect their service and payment processing fees. Elance deducts between 6.75% and 8.75%, based on volume. oDesk charges a flat 10%, which for hourly work, they try to hide by padding the rate that they quote to buyers. This means that the offshore developer who's listed at $15 an hour is really only getting $13.50.

Unlike Elance, oDesk guarantees payment for hourly-compensated assignments, but only for hours that you log via its oDesk Team application, which you must download and install on your computer. It comes in flavors for Windows, Mac, and Linux/Unix. oDesk offers an iPhone app, but you can't use it to log time because the other versions record activity levels, including the number of mouse clicks and keystrokes, the name of the active window, and even periodic screenshots while you're logging time. I don't know about you, but I don't really care for that kind of snooping over my shoulder. Besides, I could be using multiple systems to do the work, so I might not be working on the one that's running its nannyware. Perhaps buyers will find this micromanaging approach more attractive, but I can't imagine that it appeals to providers.

I might use one of these services to fill in some free time, but, personally, I wouldn't base an IT consulting business on them. Perhaps if you're just starting out in consulting, it would make sense to farm an initial client base from the services' offerings. But the low price expectation set by the vast majority of requests and providers means that, once you become established and you charge a decent fee, you'd have to spend a lot of time winnowing the chaff.

Have you used either Elance or oDesk for IT consulting leads? If so, what did you think of the services?

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