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How to Freelance to Your First Million, It's been done!

Expert Mod 100+
P: 2,327

According to India Times, there are groups of freelancers in India making over a millions dollars by providing development and IT services to their counterparts in the US.

The freelancers results were intriguing enough for us to dig a bit deeper and put together a nice fact sheet for opporutnities in freelancing.

Two freelancers featured in the piece were :
  • Synapse Communications, the number two provider on eLance. The provider grossed $2M USD in revenue and it was started by 26 year old with rented PCs and Rs 6 Lakhs( roughly $15,000 USD) of startup money.
  • Xicom Solutions, the number one provider on eLance grossed $600,000 USD. It charges a minimum of $20/hr for development work and was also started by a young indian who was tired of his job.

These figures are proving that freelancing is a valid and fruitful business model. It makes sense, why not leverage your talent as a technology expert to help other businesses achieve their goals and get paid well for it. Services like eLance have made it easier for providers(freelancers) to connect with people who want work done. We did a bit of digging around at the top 50 providers on eLance and found some interesting stats.

Freelancing @ eLance factiods:
  • Since 2006 eLance has sent freelancers more than $100M USD worth of business.
  • Each one of the top 50 providers has earnings of $65,000 USD or more.
  • The top 50 providers earnings average out to $127,443.00 USD.
  • India dominates as a source of freelancers. The country has 25 of the top 50 freelancers and accounts for 52% of the revenue generate by the top 50 freelancers.
  • India, Pakistan, Ukraine, Romania and United States make the top 5 countries where freelancers work from.
  • The minimum rate for the top 5 providers ranges from $20-$25/hr USD.
  • Repeat business and word of mouth marketing helps these providers generate even more revenue than listed on eLance.


Freelancing tips to make your first million:
  • Do quality work (if you want more work and referrals sent to you)
  • Charge by the hour not by the project. Unless you know that you can finish up the project under budget leaving you a margin.
  • Keep a margin, but don't get too greedy. Competition is always around the corner.
  • Deliver on time or ahead of time.
  • Support the product, but make sure to charge for the additional support work.
  • Be available to communicate. IM / Email / Phone when necessary.
  • Use a project management system and billing system to keep track of things.
  • Make sure your clients leave feeling happy with the results. Their success is your success.
  • Expand, grow and delegate. You won't be able to handle all the projects. Built a team, hire people and pay them well.
  • Use freelance sites a way to connect to prospective clients. Consider taking lower priced projects as away to get in with a client.
Sep 4 '08 #1
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dlite922
Expert 100+
P: 1,584
Uh....ya, India is the fastest declined when they hear you.

I don't know where you get your statistics from, but this will just hype a lot of people up and lead them down the wrong path.

The US will loosen up on their grip on needing other countries and a sense of getting everything done in house will moreover reduce this India free lancing.

The problem is, there are WAY too many Indians that think they're freelancers and screw it up for the rest of them that actually do quality work. (I'm guessing it's articles like these that do the trick)

I don't live in India, but speaking from experience I have not seen one client that was interested in over-seas. In fact I had a few that would never do it again and chose to go local this time.

Ya, the internet is making the world a smaller place, but don't forget soon this 6.5 billion people on earth will be all online. The internet won't be so small anymore.

I can't post one Craig's-list ad that STRICTLY says "NO TELECOMMUTING" and there's at least a couple of Indians that call me or email me.

Conclusion: decrease the hype, increase reality.



Dan
Sep 7 '08 #2

pbmods
Expert 5K+
P: 5,821
I agree with most of your tips at the bottom. The only one I would disagree with is taking on lower-priced projects to get "in" with the client.

Taking on lower-priced projects is a good way to set unfavorable client expectations. If you have a particular rate that you wish to charge, the best way to get clients to accept that rate is to charge that rate.

I used to work for a startup web development company that catered to lower-budget projects. There was always tremendous pressure to get projects out the door, more so than anywhere else I've ever worked. The reason for this was that our clients had the same expectations as higher-paying clients, but they weren't willing to pay as much, so if we weren't producing at 110% capacity, 60 hours a week, we were losing money.

My advice is to charge what you know you're worth. That way, you'll only attract clients that are willing to pay you what you're worth.
Sep 7 '08 #3

balabaster
Expert 100+
P: 797
I'd have to say I'd agree with the the previous poster - evaluate what you're worth, be realistic, stick to that. If a company isn't willing to pay you what you're worth, then politely decline. There are companies out there that are willing to pay you fairly, and you are doing yourself and industry a disservice by selling yourself short. The way forward is not by undercutting the competition, but by providing a higher quality product and a better quality experience for your client. At the end of the day, as a consultant and freelancer, your reputation and your work ethic is your meal ticket.

Lately, there seems to be an industry wide attitude that programmers are ten a penny and that you're expendable - sure, if all the company sees you as is a cheap resource, then of course you're expendable, but if you can deliver good quality products on tight deadlines, to spec and to budget, and you deliver an enjoyable customer experience, then you will notice that it doesn't matter what you quote. Once a company trusts that you are looking after their best interests ahead of your paycheque and that you provide real value to their team, your paycheque will take care of itself.

Beware of employers though, they can be cut-throat. If an employer treats you like gold, return the favour. But if an employer doesn't see your value beyond a dollar figure, in my experience, they're not worth working for, leave these projects for those that are willing to work for bottom dollar and move onto the next project. Sure 50% of the software engineering jobs are going overseas to India, China, Taiwan or wherever. I'm sure that at least some of the companies providing the work give the customer a satisfactory experience. I guarantee that many of those projects will be unsuccessful, and the customer will be unhappy with the service and/or the product provided.

There is no substitute for understanding, communication and group collaboration. If I were working for a client that didn't speak English, trying to send me work from overseas, whom I'd never met, in an industry I've never been part of and had goals and business processes that I couldn't understand without seeing them first hand, my ability to provide the exceptional customer experience that I strive for with every project would be seriously compromised.

My most important rule for freelancing - indeed, for life, is this: Enjoy what you do, never lose the fascination for it, find a way to nurture that fascination every day. When you enjoy what you do, and your employer finds value in it, it's a joy to go to work every day, you will enjoy life more, you won't find yourself watching the clock waiting for the end of the day and best of all your paycheque will take care of itself. You, like I will stop hunting for ways to make your next million and retire because when you truly enjoy something - paycheque or no paycheque, there's nothing you'd rather be doing.

Some days I think about retirement and often toy with the idea that I'd like to retire by the age of 35... but when I stop and think about it, and I mean really think about it, I try and imagine what it is I imagine myself doing... truth be known, I think I'll likely still be programming, and why? Because since the age of 3, what has always driven me? Solving puzzles. The only difference is that now I get paid for the solutions. It doesn't get any better than this. And what is more, if I retire - who will provide the puzzles?

So is keeping your eye on that first million the most important goal? I'd say that honest pursuit of a career you love is far more beneficial for your enjoyment of life, for your bank balance and for the industry as a whole.
Sep 8 '08 #4

P: 1
Not to rip the Indian companies that do deliver a good service, but I personally have been involved in lots of projects that were inhereted from India based freelancers, and not a single one of them ever delivered good work. Alot of our work is generated by mopping up the messes that these companies tend to generate (at double the price of the 'cheap' developers). It was not three years ago that we were constantly 'blackmailed' by clients wanting to offer as low as half rate. This was because the Indians just underquoted on everything without the slightest understanding of the job. So, for my count, I will advise people to be VERY wary of any freelance guys from Asia! Plus, as our clients found out, you very seldomly have legal recourse against overseas companies!
Sep 8 '08 #5

AaronL
P: 99
We need to stop outsourcing IT jobs completely and keep the jobs in the USA!!!! There are too many people losing jobs over this! I can't stand calling support for Cisco or Dell etc... and getting transferred to some idiot who can't even speak English. There are tons of talented people in the US losing their jobs because of corporate &#%(#% outsourcing jobs
Oct 7 '08 #6

pbmods
Expert 5K+
P: 5,821
WRT to outsourcing, if you can't compete on price, compete on quality.

Outsourcing is a boon to many companies, especially in a recession economy because it's almost as good quality, but for a whole lot less.

As a freelancer, you need to show potential clients that the projects that they outsource might be cheaper up front, but it will ultimately cost them more down the road because the code they're paying for is lower quality and will require more maintenance and will be more difficult to scale.

Nobody owes you a job; you have to go out there and earn it.
Oct 9 '08 #7

P: 2
Nobody owes you a job; you have to go out there and earn it.
The most sensible post i read here.
Oct 12 '08 #8

danp129
Expert 100+
P: 321
Outsourcing is a boon to many companies, especially in a recession economy because it's almost as good quality, but for a whole lot less.
If it's worth doing, it's worth doing right, so why gamble with quality you cannot control?

Outsourcing is also a drain on the economy and education.
Oct 20 '08 #9

pbmods
Expert 5K+
P: 5,821
If it's worth doing, it's worth doing right, so why gamble with quality you cannot control?
I agree with you 100%, which is probably why they don't let me touch those kinds of decisions anywhere I've ever worked :P
Oct 20 '08 #10

P: 1
This s most definately the most reasonable article i have read on this site.
he facts and figures look good but maybe for the other displeased readers i just want to say...like it or not American or not... Outsourcing is the way to go nowadays and trends show that in coming years IT profesional wont even need to go to some office to do work they will just be rooted to thier laptops and cellphones doin all the work they want to do and THEN outsourcing is goin to be a culture and a lifestyle and Billions are going to be made all around the world.For your own information the US is not the only country that have people who want to outsource projects but this is a word wide Movement...
Nov 14 '08 #11

dafodil
100+
P: 392
We need to stop outsourcing IT jobs completely and keep the jobs in the USA!!!! There are too many people losing jobs over this! I can't stand calling support for Cisco or Dell etc... and getting transferred to some idiot who can't even speak English. There are tons of talented people in the US losing their jobs because of corporate &#%(#% outsourcing jobs

Some of you are being biased about this topic. All you have to do is prove that you got talent and you'll get the job you deserve. Most Japanese can't speak English but still they are able to compete with the industry quality standards. Stop pointing at other people like its their fault. Business is business. One of its primary goal is to earn money. Unless we understand this we'll never appreciate outsourcing.
Nov 16 '08 #12

P: 35
... So, for my count, I will advise people to be VERY wary of any freelance guys from Asia!

ugu.. That's a bit generalizing, neh? you have India and now use India for all of Asia.. I, for one, am an Asian. Not everyone delivers sloppy work. I believe in excellence, as most of my Asian counterparts do. So please do not discriminate..


And for the Sloppy working people... see what your work does... it makes the service payers to generalize. Don't include us in your own folly.

cheers!
Nov 18 '08 #13

numberwhun
Expert Mod 2.5K+
P: 3,503
@dafodil
See, that's just it, that is not completely true. I have see it too many times in the past few years where people who are exceptionally good at what they do get canned, and not because of cutbacks. No, because the job was moved over seas, usually to some place like India. The worst part is, is that most of the time, the work produced by the new person is consistently below par as compared to the person who was canned, but because they are paying the new person about 1/3 of the other guy, they stick with them and live with the quality of work they are now getting.

Its rather sick if you ask me. So, don't go believing that all you have to do is prove yourself when it is really $$$ that makes the world go around, and corporations prove that day in and day out.

Regards,

Jeff
Dec 11 '08 #14

pbmods
Expert 5K+
P: 5,821
The bottom line makes the world go round; you don't have to like it (I happen to), but you do have to accept it.

This means that (like it or not):
  • Businesses do not care about the quality of your code.
  • Businesses do not care about whether your code follows standards or "validates".
  • Businesses also do not care about whether you will save them money in the long run if they don't think what they are paying for will be relevant in the long run.

This puts a tremendous amount of pressure on you to prove that:
  • You can deliver something of value to the business that the other guy can't.
    • (on projects where my client is also a developer, I offer free "code consultation" on code that the client produces that is relevant to the project)
  • You're a better value for the money.
    • (I might cost twice as much as everyone else, but I get the work done in half the time)
  • You possess knowledge or skills that will help the company save money *right away*.
    • (I'm proficient with caching theory and methodology and can increase script efficiency by a factor of 2 (or better!) right from the start)
Dec 12 '08 #15

100+
P: 270
India Rocks!!

Just wait until 2012 and see at what position india will be!!
Dec 15 '08 #16

100+
P: 270
Do you thing that IT will bring india at top???


if yes then you are wrong!!
Jan 13 '09 #17

P: 2
By out-sourcing projects to the poorer Nations the USA, the UK and all programmers in the Western world will suffer.

The cost of living in the West is 10 - 100 times more expensive than India where one can live quite comfortably on $1000 a year. In the States that wouldn’t pay the rent for a month let alone food and electricity.

We are giving our skills away for free. In fact why get anything done at all in the West when there always someone who will provide your source of labour at a fraction of the cost? It will not become viable for anyone to live in the West.

The Indian can have a huge building for $1000 a month, his company expanding more rapidly with each passing day, the number of employees growing and his company leaping from strength to strength.

The American would be living in a roach infested hovel, scrounging through the filth searching for another dime to pay for electricity. The majority of America barely able to eat, broken families, the lives of its people in ruins - as 'fair' competition from overseas grinds the very heart and soul of Americans into the very dust shaken from the souls of the feet of the greedy and selfish - IT'S PAYBACK TIME!! The lust for even cheaper resources and to maximise profits even further will be America's undoing and will trigger a catastrophe that can only be stopped by those who are profiting from its suffering - and they will not heed the cries of their own people.

The U.S.A used to be known for its slave trade. What is happening now with globalisation is anyone in the West providing goods and services, clothing, manufacturing or labour will be out of a job because there will ALWAYS be someone in the poorer countries who will do the work for less.

The people who are in trouble are the Americans & Europeans. This has been brought about by the corporate policy of selfishness and greed, screwing every penny, nickel and dime out of a country that has been bled to death by C.E.O's who think only of themselves and their bottom line and screw the consequences.

Anyone not paying heed to my words is a fool.
Feb 19 '09 #18

freelance programmer
P: 11
I know hundreds of freelance programmers across continents who fail to bag even a single project per month and at the maximum makes less than $100 per month. Slowdown has hit this industry badly .
Feb 23 '09 #19

P: 1
Instead of complaining about jobs going overseas do what America has always done best... Adapt. The biggest difficulty in outsourcing is the communication. Programmers in India, for the most part, have never been to the US and don't know how things work here. Make yourself an integral part in that communication. You will find that you suddenly have a better job than the one you lost to India or anywhere else.

When I graduated from college my professor gave me a great piece of advice that works for any job. Donít try to hold on to your job. I will explain. Most people think that if they teach someone else how to do their job they will suddenly be replaced by the new person and are out of a job. Instead what usually happens is they are replaced by that person and are now managing that person and others. The only way you can ever move up is to have someone take over what you are currently doing. If you simply hold on to the job you are doing it will eventually go away and you will be out of work.

Everyone who is complaining about the corporate greed, please step back and look at what you are saying. Is it not just as greedy to expect someone to pay more money for the same service just because you do not want to adapt. They are always going to do what is best for their business. Help them and they will reward you, fight them and you will find you have nothing.
Mar 5 '09 #20

P: 1
The good thing about the economic downturn of late is that professionals like us make less money. Even the "hotshots" - Like Wall Street and like politicians, we have been charging the max- pushing the envelope as long as we could get away with it. If you started long enough ago, you have savings, if your new, you dont. Irrespective, prices had come down. Reality sets in, good companies survive, the excess capacity- MBA's and IT outsourcing recipients alike now need to look closer to home. Ask yourself : What can I do in my own community, be it Mumbai or New York. Stop leeching of other countries- earn your money locally.
Mar 19 '09 #21

Expert 100+
P: 750
PRR
At the end of day US and Europe remain leaders/ innovators in IT ... Ever heard of a killer application/ OS/Game being made in Asia or other cost effective place?
US and Europe have better education system.. (no wonder bright students from Asia go there) US is 40 yrs ahead in research and development... The top 30 places for innovation probably belongs to US... the kind of funding that goes into research is amazing..(have heard of Japan catching up).
Outsourcing works out for those jobs that don't require technical expertise... Quality is not cheap... its easy to build application of any kind.. (with a little googling)... what matters is how scalable maintainable and robust application is....

You find great programmers everywhere not a particular place or region...
If you look at the Asian companies most of them are service based... The kind of hype that is generated is a little too much....

P.S. i am from Asia...
Apr 13 '09 #22

P: 1
@DeepBlue
Disagree on education system. After having lived in India and US for considerable period of time, I can confidently say that for anything upto graduate degree, in general education in India is certainly a level above US. Ofcourse I stress on "in general" because the best schools in US will be way better than some village primary school in India and vice versa. For post graduate and up, India just doesn't have the facilities or infrastructure like US.

Regarding applications/games etc coming out >> You have to consider that during the last decade or so, the guys who study well and successfully graduate always put job or higher studies as first priority. This has more to do with peer- pressure/social-setup because if one were to become a maverick and try to start a business venture etc, instead of aiming for job/higher-studies he will probably be considered a loser compared to his peers (who start of with a decent job at that point). Ofcourse the rewards of innovating and trying to make a product etc will be more in the long term if the venture is successfull, but the risk is also high. And for most, that risk is not taking. Unless and until one has supportive family/parents and is financially stable, can he think of "not going with the herd". The current generation has gone through this phase and hopefully will realize what they missed out and let the next generation choose their career path instead of expecting them to be either a doctor or engineer and land a job as soon as they graduate...Thats all it takes to make products.
Apr 17 '09 #23

P: 14
One of the most interesting "point of views" I've seen on this board!

What makes a country differ than another with highly-spanned levels?

@dafodil
I think, yes!

Remember: it's politics, it's always politics. Politics bring economy! If I want to do it right, for this topic at least, I would write a book.

A country, its top-tier "politicians", and its economy is made of what?
May 28 '09 #24

P: 1
Decision on outsourcing is not always made based on quality/cost ratio.
Sometimes it is just the cost. Because managers accountable for application services are looking to reduce the cost to please their managers and shareholers with the numbers.They are not taking into account the downsides of poor code - those gonna realize themeselves in rather distant future.
In addition, poor quality can always be masked somehow - quite often it is rather difficult to understand negative impact on the business and attribute it to bad outsourcing decision. So that generally leads to good programmers losing their jobs, outsorcing companies not developing quality of their services, customer business suffering, and of course, executive managers getting their bonuses and promotions for cutting the budgets down (but not actually adding value for their shareholders).
Jun 2 '09 #25

freelance programmer
P: 11
@stubborn
Are you comparing B.Tech from india with BS from US ? I think BS is far superior degree.
Jun 3 '09 #26

probably clueless
P: 5
i have worked with eastern culture programmers - for one thing, i think they actually believe they are smarter than american programmers - second: have u seen some of the stuff they write - who in the h*ll writes a routine with 318 lines? - what is that stuff? - charles dickens code - it's no wonder ms windows takes 20 minutes 2 load ... and finally $25/hr? - u can drive a city bus and earn $40/hr - lets see here: 1 mil @ $25... u can retire to morocco after 40,000 hours of coding
if u want 2 get rich in the software business, the best thing 2 do:
is go for ur own startup or be a freeloader and get somebody else 2 do the coding (ie: india) & then take a cut - the www is full of companies doing that
Jun 23 '09 #27

100+
P: 115
Outsourcing is just a means of exploiting and enslaving the cheap markets of the world to get them to write "codes" for you while the "on site" companies make huge cuts. It's true that over 90% of the original codes are written here in the US and these codes are outsourced for troubleshoots, remedial modifications, real-time testing, etc..
Jul 23 '10 #28

P: 1
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Many thanks beforehand.
Aug 8 '10 #29

Expert 100+
P: 145
If we all understand that business esteems profits above all else quality, employees, contry, God. How can we not understand the impetus to outsource the most time intensive (simply & repetitive) and costly (High skill) components of IT? Programmers are learning what automotive industry workers learned decades ago.

There's no such thing as outsourcing.

Distance is becoming almost completely irrelevant in today's IT world. Each morning when you set at your desk, you're competing with programmers from around the world. Just because you can't see them doesn't mean they aren't there. National boundaries are a poor axis to divide the IT world. IT professionals battle across age (young v old), technology (java v .net v ruby v whatever), and deployment (web app v desktop).

Answer me this:How far away does the next developer have be to in order for it to be considered out sourcing? If two programmers in Seattle loose their jobs, one to a guy in Vancouver and the other to a guy in New York city, which of the two Seattle programmers still have a job?

You have the ability,as an individual, to actively participate in economies around the world, if you fail to adopt a global view in your career you will always be mystified by the ebb and flow in the IT industry. If you're not globally connected as an individual, you will always be at the whim of your company. In general, Americans are often times more shielded from international contact and fail to see their part in the global economy.

We American developers are hit hard because we are also American consumers and spend our money almost as fast as we make it, because its "uncivilized" to ration electricity/light, cook out doors, walk to work,reduce our wardrobes to one Star Wars shirt, ect. The savings would be astronomical, IT professionals would work for only 20 yrs then retire. Americans accept taking on huge lifetime debts for cheap cars and cookie cutter houses, because it's the status quo here.

Let's be honest here, 99% of IT work is based on using someone else's IDE, compiler, data engine ect. When I design a database I don't create a custom data engine for each customer.I use the existing tools. I'm basically paid to know the more esoteric components of a piece of software. The more obscure the knowledge the more I'm paid. We can't pretend it takes genius to work in IT. The API for everything is freely available to anyone that wants it. So how do you get an edge?

Unfortunately, in the end we are all salesmen/saleswomen. We have to promote our own pet technologies as the best solution for any project we want to be included in. Promoting what you do isn't good enough these days, you have to shoot down the competition too (even if you're not a guru in the "opposing" technologies). "Classic ASP could never deliver you a secure site", "Linux isn't a viable platform for business in a Windows world", "It's too risky too develop with open-source because they fold and leave you high and dry","Ruby on Rails is the flavor of the month". The biggest most sweeping statements are often made by those with the least experience in the technology. The bottom line is the truth of any of those statements does not matter if you can convince the person holding the purse strings it's true.
Aug 26 '10 #30

MMcCarthy
Expert Mod 10K+
P: 14,534
That's a great post Jerry. I agree with your comments totally. I'd further add that in the current worldwide economic climate an enterprising developer can do very well.

Companies are not in a position to hire onsite development teams for long term contracts in the way they once were but they still need to develop technologies to give them a better chance to operate in this market. For the enterprising developer this is an opportunity to put themselves out there delivering alternative, competitive (not cheap) solutions.
Sep 11 '10 #31