Online outsourcing changes lives and the way we do business

The website freelancer.com and Matt Barrie, its creator, match first-world jobs with educated people from poor countries in a move that's challenging the way we do business.

Matt Barrie's website, freelancer.com, is the world's largest outsourcing marketplace. Illustration by Lee McGorie/The National

The man behind freelancer.com is a legend. Not in his home country of Australia, nor indeed in any part of the western world. It is in countries such as the Philippines, Bangladesh, India and China that he has almost reached rock-star status.

Many people who live in developed countries may not have heard of him and if they haven't yet, then they probably soon will. Matt Barrie's website takes jobs from rich countries and gives them to the poor. He is the Robin Hood of the services industry and is praised and feared in equal parts.

"There's a huge shift in society, which is going to change the way that we live our lives and how we do business," Mr Barrie says. "The reason is simple - there are about two billion people currently using the internet, with the other five billion about to come on stream. When they do, these poor, hungry and yet highly educated people are going to want a job."

Mr Barrie's website, freelancer.com, is the world's largest outsourcing marketplace. The site's concept is simple. Businesses post work to the website that can be outsourced. It might be web development, transcription or graphic design. Freelancers from around the world bid for the work. The customer then compares the bids and selects a vendor. The average job on freelancer.com is completed for less than US$200 (Dh734).

Matching first-world jobs to third-world workers is a welcome boost to the world's poorer regions. Cheap, educated labour is now allowed to play on their wealthier counterparts' turf, an entire workforce of cut-price specialists arriving en masse. Not surprisingly, Mr Barrie's site is more popular than Amazon.com in places like the Philippines and Bangladesh.

A native of Sydney, the 38-year-old Mr Barrie realised that tendering for work offshore didn't have to be for the exclusive use of corporates - why couldn't individuals and small businesses who needed jobs done also seek help from emerging markets?

The result has not been just a growth in the numbers of freelancers and small businesses using the website, but an expansion in the types of jobs being tendered. Mr Barrie says there are now more than 400 job descriptions that freelancer.com has identified.

"People in the emerging economies can make more than their monthly wage by just completing a few jobs online," Mr Barrie says. "In some of these countries, the average daily wage is $10 or less."

The fear is that the high earners in wealthy countries will soon be under assault - the architects, accountants, lawyers, geologists, engineers and computer programmers who may be at risk from cheap, but competitive tenders from emerging countries.

Professor Julie Cogin, of the Australian School of Business, was recently quoted as saying that freelancer.com "is really, really scary". "You think of the next generation. There is going to be far less job security, maybe reduced conditions and pay and a casualisation of the workplace. This has huge implications for our children and even for us now," she said.

Mr Barrie laughs off the idea that he has come to take jobs away. Well, perhaps not quite yet, anyway. IT and graphic design remain the most outsourced of job types. "Graphic design used to be about people designing logos," Mr Barrie says. "Nowadays, it's more about the entire design of websites and blogs and the expertise needed to find traffic for a website. There's plenty of talent out there waiting to take on a job for a fraction of the price you'd pay at home."

Many of the jobs on offer tend to be one-off requests or mini commissions - a need for help on a mechanical engineering problem or extra research needed for a thesis. There is a plethora of translation jobs being requested through the site.

"It may be someone who needs to find good financial data quickly, has a tax job that needs to be done quickly or needs to know whether a product is developed in China," Mr Barrie says.

Mr Barrie brought freelancer.com into being after amalgamating a number of websites across the world. The site was fully up and running by 2009 and has grown to having about three million users. Last year, transactions worth more than $35 million passed through the site, of which Freelancer took about $7 million in commissions. Mr Barrie expects that figure to double this year. The site takes a 20 per cent commission on all completed jobs.

Mr Barrie is quick to point out the benefits for both customer and vendor. "You can now start your own business with a credit card," he says. "It's never been this cheap and the fact is, if you're unhappy with the job you've outsourced, you just don't pay until you are satisfied it has been successfully done."

Those in the West can now access skills at a fraction of the price, he says, and those in emerging economies can become service provider entrepreneurs.

The site has a client in India who has made more than $1m by simply selling $65 websites. He now has 80 people working for him and three design shops.

Another client in the UK was a recently divorced mother with no income. She decided to pitch for voice-over jobs. "She's now made an entire business out of this and has about 20 people she sends out to do voice work," Mr Barrie says.

A classic rags-to-riches story is the web design and development company, Panacea Infotech. Based in Pune, India, it is run by Vivek Ghai. Panacea gets half of its work by bidding for jobs through freelancer.com. The company now has annual revenue of about $150,000 a year and expects soon to win its first ISO certification, which will allow it to tender for subcontracting work from the local offices of Accenture and IBM. Jobs that these firms do for $30,000, Mr Ghai says his firm can do for a 10th of the price.

Mr Ghai says the firm now receives so much work from freelancer.com that he has to choose which project to do and which one to reject. "We decide the time and cost in which we do the project and are living life on our terms," he says.

Perhaps the most satisfying development, says Mr Barrie, is that former clients are now becoming vendors. The poachers have become so good at getting their jobs that they have transformed into gamekeepers.

Even freelancer.com uses itself to find people to do jobs. Mr Barrie says that using the site helps the team to see how it is developing and what ways it can be improved and optimised.

"If you're not a customer of your own product, then you have to ask why you are in the business in the first place," he says.

Pitching for a job

Simplicity of use appears to be the key to freelancer.com’s success. It has few rules and restrictions and presents opportunities to both vendor and client alike. Vivek Ghai, who runs Panacea Infotech, says when he started out, the best thing about freelancer.com was that it did not require credit cards to sign up or to bid on the projects. “It is very easy to use and there are plenty of real projects on which to bid,” he says.

Matt Barrie, who owns freelancer.com, says there is no guaranteed formula for success on freelancer.com, but perhaps the most important starting point is a willingness to do the work quickly and efficiently for next to nothing. You also have to be prepared not to be paid until the client is completely satisfied.

Freelancer.com is the eBay of the jobs market, except that the vendor hopes you will bid down, instead of up. Setting up a profile is the first stage, but the rewards come with the experience. Those able to build a profile on which feedback from other vendors can be posted will always move ahead. Vendors cannot only see what work has been completed and what is still in the pipeline, but can also check out the veracity of past vendors’ statements to confirm a freelancer’s quality.

Some vendors are asking almost impossible prices from bidders, but that’s a western point of view. One vendor asks for copywriters to produce a series of 500-word articles on a number of topics. There must be no plagiarism and he allots two hours per article. “You must be able to complete at least five to eight 500-word articles within a day. I will pay $US2 for each 500 word article,” says the vendor.

Mr Barrie says if you can inspire enough confidence in vendors from the start there is likely to be “much more work where that came from”. Clients who build strong relationships will inevitably find they are needing to bid less and being commissioned more. If a western company knows the job will be well done and still at a fraction of the price it would have had to pay locally, it will be prepared to pay progressively higher rates for bigger and more complex jobs.