Nathan Wenneker joined Elance, an online freelance marketplace, in August 2008 because he wanted to become a self-employed IT contractor. The web application developer had no interest in a traditional full-time IT job; he wanted control over when he worked, how much he worked and the kind of work he did.
Wenneker, 26, is one of more than 5,000 IT professionals who sign on with Elance every month. More than 50,000 IT contractors have joined Elance since January 2009. oDesk, another popular online freelance marketplace, is experiencing similar growth. In November 2009 alone, 14,000 technical providers signed up on oDesk, according to the company. Roughly 150,000 IT providers have signed up since the start of 2009.
IT professionals are flocking to Elance, oDesk and other sites such as Rent a Coder, guru.com and LimeExchange for a variety of reasons. Some have been laid off and want to pick up freelance projects while they search for a new full-time gig. Others, who may have been victims of pay cuts, need to supplement their income with contract work. Yet another group, like Wenneker, is forging new careers as independent IT contractors.
"If you get laid off or if you want a second income, Elance and other sites like it are an attractive option," says Nick Dalton, 43, who solicits work for his iPhone app development company, 360mind Inc., on Elance, Guru.com and Rent a Coder. "It's a great way to get your name out there and get proposals without doing any of your own marketing. If you're a small company or just starting up as a freelancer, you most likely don't have a big advertising budget."
There's plenty of business on these sites for IT contractors to land. About 30,000 jobs are posted on Elance and oDesk each month, those companies say. Hiring on Elance in 2009 was up 40 percent compared with 2008, according to CEO Fabio Rosati. He notes that more than 60,000 companies are hiring on Elance. oDesk boasts 85,000 buyers, according to CEO Gary Swart, and the number of hires on oDesk has grown by more than 70,000 during the last year.
"We're seeing massive growth on both the buyer and provider sides as more and more companies look for ways to get more done for less," Swart points out, "and as providers, tech workers, look to make more money."
The drawback to all the growth in service providers is that it's hard for new IT contractors to stand out in the sea of global competitors on these sites. Building a successful Elance or oDesk business requires hard work, patience and a distinct value proposition for prospective buyers.
In this get-started guide to IT contracting through Elance and oDesk, the CEOs of those two companies, along with experienced IT contractors using those sites, share 13 best practices for creating a user profile that will get you business.
1. Share Your Employment History.
Buyers of IT services on Elance and oDesk select contractors on the basis of feedback that other buyers have left on contractors' profiles. The more positive feedback your clients leave about you, the easier it will be for you to get business.
But when you're first starting out, you have no clients and thus no feedback, so the best thing you can do is post your credentials—your employment history, skills, certifications and educational background—on your profile, says oDesk CEO Swart. Sharing your employment history assures prospective buyers that you have a professional background and have held stable jobs in the past, adds web application developer Wenneker.
Robert Klein, a 23-year-old web designer and developer on Elance, says that contractors who showcase their professional and educational credentials on their profiles stand out since many profiles lack much in the way of background information.
2. Assess Your Skills.
Elance and oDesk offer a variety of skills assessments that IT contractors can take to demonstrate their proficiency with, say, PHP, Ruby on Rails or Active Directory. When you're new to Elance or oDesk and you have no feedback from clients to show to prospective buyers, the skills assessments can help demonstrate your capabilities. Taking these tests "allows contractors to prove [to potential buyers that] they have the skills they say they have," says Swart.
Klein gives the skills assessments two thumbs up. He's taken 10 of them, and he believes the results have helped garner new business.
"I have a bunch of pretty highly-rated, tested skills on there," he says, "and it sets me apart."
3. Start a Portfolio.
Another way to demonstrate your capabilities is by displaying work you've done in the past on your profile. Both Elance and oDesk profiles include a virtual portfolio where you can showcase your work.
4. Find Your Niche.
When you first start out on Elance or oDesk, you may be tempted to list all the IT work you've done and are capable of doing in your profile, thinking that if you mention everything you'll improve your odds of finding work faster, says Elance CEO Fabio Rosati.
In fact, the most effective approach to take with your profile is to focus on one or two core strengths, he says, because the organizations that are looking for IT contractors on Elance (and oDesk) are looking to assemble a team of superstars with specific skills that they don't have in-house.
"Employers want to know what special and unique skill you have," says Rosati. "Narrowing your presentation to your core strengths and the things you want and love to do is imperative."
Dalton's niche is developing high-end iPhone apps for large companies. He says specializing in this manner differentiates his firm, 360mind, from low-cost competitors.
"A global marketplace like Elance is extremely competitive in terms of pricing," says Dalton. "Find something you are really good at so people want to work with you specifically rather than get bids from all over the world."
5. Develop a Search-Engine Friendly Title.
Since buyers go to Elance and oDesk looking for providers with specific skills, whether it be PHP, quality assurance or Linux, your title should include keywords associated with your core skill. That way, if buyers search for specific skills, you can increase the odds of your profile appearing high up in their search results.
For example, software developer Tim Lytle* recently changed his title on oDesk so that it was more specific and contained keywords. Before it was "Internet Technology Consultant." Now it's: "PHP Web Application Developer, Internet Technology Consultant - Freelance Programmer/Developer, United States."
"After seeing different job postings on oDesk and a list of the candidates bidding on them, I noticed that my title was kind of generic [compared to other bidders]," says Lytle, 27. "I had no problem getting bids in the past with my old job title, but it seemed like another thing I could do to boost my profile."
6. Mitigate Buyers' Concerns.
Web application developer Wenneker's Elance profile includes a concise list of five reasons buyers should hire him to develop database-driven web applications. The list, he says, is designed to mitigate buyers' fears about hiring freelance software developers.
"When a buyer is trying to find a programmer, one way to look at it is that they are choosing based on fear," says Wenneker, echoing the wisdom of a mentor. "They're afraid of choosing the wrong person. They're afraid the code will have a lot of bugs. They're afraid the programmer will never be available on the phone. They're afraid the programmer won't make the deadline. If you can convince them you're not the wrong person, you take away their fears."
7. State What You Can and Cannot Do.
Wenneker lists the specific technologies he likes to use, as well as technologies he doesn't tend to use, in his profile for two reasons: to communicate what he likes to do so buyers can more easily determine if he's a good match for their projects, and to prevent requests from buyers for work that's outside of his skillset.
8. Start Low Then Grow.
Three of the four IT contractors interviewed for this story said they initially had to set low rates to compete for work when they first joined these sites. Once they had some projects and feedback under their belts, they increased their rates, and buyers never batted an eyelash.
PHP developer Lytle says he started charging $18 per hour when he first joined oDesk in September 2006, then he moved up to $32.50 an hour. Now his rate is $65 an hour.
The same went for Wenneker. "To be competitive at the beginning, I had to lower the rate [at which] I was bidding projects," he says. "As I continued to get feedback, I've been able to gradually increase the rate at which I bid projects, and the work has kept up."
9. Don't Sweat the Global Competition.
You'll find plenty of IT professionals on Elance and oDesk providing the same services as you at remarkably low rates, and you'll think, How can I possibly compete and make a living? The truth is, once you're established on these sites, you don't need to offer rock bottom prices to get business.
"Stick to what you feel is your fair wage and keep looking for someone who will find your offering valuable and be willing to pay what you think you deserve," says Elance CEO Rosati. "We're seeing a new level of sophistication from employers. They're no longer getting seduced by the lowest cost and the lowest hourly rate. They've been there and learned all the hidden costs associated with managing people remotely."
Lytle agrees: "I still bid my hourly rate without having to worry about the fact that there are people bidding the same jobs I am for far, far lower [rates]."
Editor's Note: An earlier version of this story misspelled Tim Lytle's name. The mistake has since been corrected.
10. Emphasize Your Character.
Just as employers evaluate potential hires on the basis of their character and cultural fit, so too do many buyers on Elance and oDesk. As important as it is to play up your skills on these sites, it's also important to give buyers a sense of your character. That's why uploading a photo is another best practice for creating a winning profile.
You can also work your personality into a profile by stressing certain personal traits that you think employers would value. For instance, Wenneker created a tagline for himself that reads, "Reliable. Trustworthy. Competent."
"A lot of profiles just say, 'I'm a really good programmer,'" says Wenneker. "I wanted to focus my tagline on other attributes. What good is it if you have a great PHP developer, but you can't rely on them to meet deadlines or you can't trust them. The character attributes are what a buyer has to consider first and foremost when they're hiring for anything."
11. Join Groups.
On Elance and oDesk, contractors can join professional groups, in much the same way you can join a professional group on LinkedIn. Lytle, for example, is a member of three groups on oDesk: Phone.com, pinnaclecart and Zend Certified Engineer. He believes being a member of these groups can help him get business, since buyers looking for providers with certain skills or certifications might proceed directly to one of these groups to find a contractor.
12. Get Verified.
Web designer and developer Klein paid $15 to have a third-party verify that he did, in fact, earn the four BrainBench certifications he lists on his Elance profile. The third-party also verified his college degree. The verification appears on his profile as a little green box that says "verified" next to each certification and his education.
Klein is also a member of Elance's Premier Provider program, which indicates to buyers that he has Elance's seal of approval. The little purple star next to his name tells buyers that he's a member of this program, and he believes it sets him apart.
"The little star next to your name is sometimes what it takes [to get work]," he says.
13. Update Your Profile.
You don't need to update your profile every day as you would with LinkedIn or Facebook. But you should update it when you have a new skill or certification. You might also wish to update your profile with your availability, as Wenneker does, since he frequently gets booked with projects.
"Today there are a lot of people being laid off and jobs aren't secure," says Wenneker. "If done right, freelancing can be more secure than traditional employment. If you have a good profile and reputation, you can schedule projects in advance. Rather than worrying about your boss coming in and firing you one morning, you have your eggs in several baskets."
Follow Meridith Levinson on Twitter at @meridith.